-----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, LaiLandRT+cho3XL73BXxEoX5t6214Dp5D8qLxQZ+3Yh2mdwC7FR7gzR+/fGM41x kBv6daI0rpAvZBjc2FMM6g== 0001004402-97-000088.txt : 19970918 0001004402-97-000088.hdr.sgml : 19970918 ACCESSION NUMBER: 0001004402-97-000088 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19970915 EFFECTIVENESS DATE: 19970915 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: 485BPOS SEC ACT: SEC FILE NUMBER: 033-52850 FILM NUMBER: 97680353 BUSINESS ADDRESS: STREET 1: TWO PORTLAND SQUARE STREET 2: C/O FORUM FINANCIAL SERVICES INC CITY: PORTLAND STATE: ME ZIP: 04101 BUSINESS PHONE: 2078791900 MAIL ADDRESS: STREET 1: TWO PORTLAND SQUARE CITY: PORTLAND STATE: ME ZIP: 04101 485BPOS 1 485BPOS AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 15, 1997 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. 7 and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 9 - -------------------------------------------------------------------------------- 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: __X__ immediately upon filing pursuant to Rule 485, paragraph (b) _____ on [ ] pursuant to Rule 485, paragraph (b) _____ 60 days after filing pursuant to Rule 485, paragraph (a)(i) _____ on [ ] pursuant to Rule 485, paragraph (a)(i) _____ 75 days after filing pursuant to Rule 485, paragraph (a)(ii) _____ on [ ] pursuant to Rule 485, paragraph (a)(ii) _____ this post-effective amendment designates a new effective date for a previously filed post-effective amendment Registrant has registered an indefinite amount of securities under the Securities Act of 1933 pursuant to Section 24(f) under the investment Company Act of 1940; accordingly, no fee is payable herewith. A Rule 24f-2 Notice for the Registrant's fiscal year ending June 30, 1997 was filed with the Commission on or about August 27, 1997. CROSS REFERENCE SHEET (as required by Rule 404(a)) PART A Form N-1A Location in Prospectus Item No. (Caption) - --------- ---------------------- Item 1. Cover Page Cover Page Item 2. Synopsis Expenses of Investing in the Trust Item 3. Condensed Financial Financial Highlights Information Item 4. General Description of Investment Objectives Registrant and Policies; The Trust and its Shares Item 5. Management of the Fund Management of the Trust Item 5A. Management's Discussion of Not Applicable Fund Performance Item 6. Capital Stock and Investment Objectives and Other Securities Policies; Dividends and Tax Matters; The Trust and its Shares; Management of the Trust - Shareholder Servicing Item 7. Purchase of Securities Purchases and Redemptions Being Offered of Shares; Management of the Trust - Manager Item 8. Redemption or Purchases and Redemptions Repurchase of Shares Item 9. Pending Legal Not Applicable Proceedings PART B Location in Statement Form N-1A of Additional Information Item No. (Caption) - -------- ------------------------- Item 10. Cover Page Cover Page Item 11. Table of Contents Cover Page Item 12. General Information and History Not Applicable Item 13. Investment Objectives Investment Policies; and Policies Investment Limitations Item 14. Management of the Management of the Trust; The Trust Registrant and its Share-holders Item 15. Control Persons and Management of the Trust; The Trust Principal Holders of and its Shareholders Securities Item 16. Investment Advisory and Management of the Trust Other Services Item 17. Brokerage Allocation Portfolio Transactions and Other Practices Item 18. Capital Stock and Other Determination of Net Securities Asset Value; The Trust and its Shareholders Item 19. Purchase, Redemption Determination of Net and Pricing of Securities Asset Value; Additional Being Offered Purchase and Redemption Information Item 20. Tax Status Taxation Item 21. Underwriters Management of the Trust -Manager and Distributor Item 22. Calculation of Performance Data Performance Data Item 23. Financial Statements Financial Statements THE CUTLER TRUST - ------- PROSPECTUS SEPTEMBER 15, 1997 This Prospectus relates to CUTLER EQUITY INCOME FUND CUTLER APPROVED LIST EQUITY FUND The Cutler Trust (the "Trust") is an open-end, management investment company (a mutual fund). The Cutler Equity Income Fund and Cutler Approved List Equity Fund (individually a "Fund" and collectively the "Funds") are each diversified no-load portfolios of the Trust. The CUTLER EQUITY INCOME FUND seeks as generous a current income as is consistent with diversification and long-term capital appreciation by investing selectively within the Cutler & Company Approved List. The CUTLER APPROVED LIST EQUITY FUND seeks current income and long-term capital appreciation by investing in at least 90% of the common stocks within the Cutler & Company Approved List. As the future is unknown, obviously there can be no assurance that either Fund will achieve its investment objectives. This Prospectus sets forth concisely the information concerning the Trust and the Funds that a prospective investor should know before investing. The Trust has filed with the Securities and Exchange Commission a Statement of Additional Information dated September 15, 1997. It contains more detailed information about the Trust and the Funds and is incorporated into this Prospectus by reference. The Statement of Additional Information is available without charge by contacting Cutler & Company or the Trust's Distributor at the addresses or numbers listed above. CONTENTS Page 1. Expenses of Investing in the Trust.........................................3 2. Financial Highlights.......................................................4 3. Investment Objectives and Policies.........................................6 4 Risk Considerations........................................................7 5. Management of the Trust....................................................7 6. Purchases and Redemptions of Shares........................................9 7. Dividends and Tax Matters.................................................12 8. Performance Information...................................................13 9. The Trust and Its Shares..................................................14 - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- (This Page Intentionally Left Blank) 2 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. Cutler Cutler Equity Approved List ANNUAL FUND OPERATING EXPENSES Income Equity (as a percentage of average net assets) Fund Fund ------------------------------------- ---- ---- Investment Advisory Fee 0.75% 0.75% Other Expenses 0.42% 0.50% ----- ----- Total Annual Fund Operating Expenses 1.17% 1.25%
For a further description of the various expenses incurred in the operation of the Fund, see "Management of the Trust - Expenses." EXAMPLE You would pay the following expenses on a $1,000 investment in a Fund, assuming a 5% annual return and redemption at the end of each period: One Year Three Years Five Years Ten Years -------- ----------- ---------- --------- Cutler Equity Income Fund $12 $37 $64 $142 Cutler Approved List Equity Fund $13 $40 $69 $151
The example is based on the expenses listed in the table above and assumes the reinvestment of all dividends. The 5% annual return is not a prediction of and does not represent the Funds' projected returns; rather, the assumed 5% annual return is required by government regulation. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURN. ACTUAL EXPENSES AND RETURN MAY BE GREATER OR LESS THAN INDICATED. 3 FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- The following tables represent selected data for a single outstanding share of each Fund for the periods shown. Information for the periods was audited by Deloitte & Touche LLP, independent auditors. The Funds' financial statements for the fiscal year ended June 30, 1997 and independent auditors' report thereon are contained in the Annual Report of the Funds and are incorporated by reference into the Statement of Additional Information. Further information about each Fund's performance is contained in the Funds' Annual Report to shareholders, which may be obtained from the Trust without charge. CUTLER EQUITY INCOME FUND ---------------------------------------------------------------------- Year Ended June 30, ---------------------------------------------------------------------- 1997 1996 1995 1994 1993(a) ----------- ----------- ---------- ----------- ----------- Net Asset Value, Beginning of Period $12.95 $10.96 $9.56 $9.95 $10.00 ----------- ----------- ---------- ----------- ----------- Investment Operations: Net Investment Income (Loss) 0.24 0.35 0.36(b) 0.27 0.10 Net Realized and Unrealized Gain (Loss) on Investments 4.30 2.13 1.40 (0.40) (0.05) ----------- ----------- ---------- ----------- ----------- Total from Investment Operations 4.54 2.48 1.76 (0.13) 0.05 ----------- ----------- ---------- ----------- ----------- Distributions From: Net Investment Income (0.24) (0.35) (0.34) (0.26) (0.10) Net Realized Gain on Investments (1.19) (0.14) (0.02) 0.00 0.00 ----------- ----------- ---------- ----------- ----------- Total Distributions (1.43) (0.49) (0.36) (0.26) (0.10) ----------- ----------- ---------- ----------- ----------- Net Asset Value, End of Period $16.06 $12.95 $10.96 $9.56 $9.95 =========== =========== ========== =========== =========== Total Return 37.65% 22.93% 18.63% (1.37%) 0.90%(c) Ratio/Supplementary Data: Net Assets at End of Period (000's omitted) $62,523 $46,285 $41,470 $19,706 $2,583 Ratios to Average Net Assets: Expenses Including Reimbursement/Waiver 1.17% 0.98% 0.97% 1.00% 0.98%(c) Expenses Excluding Reimbursement/Waiver 1.17% 0.98% 0.97% 1.45% 3.69%(c) Net Investment Income (Loss) Including Reimbursement/Waiver 1.67% 2.81% 3.49% 3.49% 2.23%(c) Portfolio Turnover Rate 23.22% 57.08% 43.37% 42.83% 32.04% Average Commission Rate(d) $0.0509 $0.0525 - - - (a) The Fund commenced operations on December 30, 1992. (b) Calculated using the weighted average shares outstanding. (c) Annualized. (d) For the fiscal years beginning on or after September 1, 1995, the Fund is required to disclose average commission per share paid to brokers on the purchase or sale of equity securities.
4 FINANCIAL HIGHLIGHTS (CONTINUED) - -------------------------------------------------------------------------------- CUTLER APPROVED LIST EQUITY FUND ---------------------------------------------------------------------- Year Ended June 30, ---------------------------------------------------------------------- 1997 1996 1995 1994 1993(a) ----------- ----------- ---------- ----------- ----------- Net Asset Value, Beginning of Period $14.18 $11.71 $9.78 $10.09 $10.00 ----------- ----------- ---------- ----------- ----------- Investment Operations: Net Investment Income (Loss) 0.18 0.21 0.24(b) 0.21 0.08 Net Realized and Unrealized Gain (Loss) on Investments 4.20 2.47 1.92 (0.31) 0.09 ----------- ----------- ---------- ----------- ----------- Total from Investment Operations 4.38 2.68 2.16 (0.10) 0.17 ----------- ----------- ---------- ----------- ----------- Distributions From: Net Investment Income (0.18) (0.21) (0.23) (0.21) (0.08) Net Realized Gain on Investments (0.05) 0.00 0.00 0.00 0.00 ----------- ----------- ---------- ----------- ----------- Total Distributions (0.23) (0.21) (0.23) (0.21) (0.08) ----------- ----------- ---------- ----------- ----------- Net Asset Value, End of Period $18.33 $14.18 $11.71 $9.78 $10.09 =========== =========== ========== =========== =========== Total Return 31.18% 23.01% 22.33% (1.07%) 3.31%(c) Ratio/Supplementary Data: Net Assets at End of Period (000's omitted) $35,277 $30,248 $21,890 $12,620 $3,618 Ratios to Average Net Assets: Expenses Including Reimbursement/Waiver 1.25% 1.05% 1.00% 1.00% 0.98%(c) Expenses Excluding Reimbursement/Waiver 1.25% 1.13% 1.23% 1.78% 4.53%(c) Net Investment Income (Loss) Including Reimbursement/Waiver 1.15% 1.65% 2.20% 2.43% 2.27%(c) Portfolio Turnover Rate 3.86% 8.97% 23.42% 22.27% 10.88% Average Commission Rate(d) $0.0600 $0.0569 - - - (a) The Fund commenced operations on December 30, 1992. (b) Calculated using the weighted average shares outstanding. (c) Annualized. (d) For the fiscal years beginning on or after September 1, 1995, the Fund is required to disclose average commission per share paid to brokers on the purchase or sale of equity securities.
5 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 at least 90% of the common stocks within the Approved List. As the future is unknown, obviously there can be no assurance that any of these objectives will be achieved. INVESTMENT POLICIES CUTLER EQUITY INCOME FUND AND CUTLER APPROVED LIST EQUITY FUND. The Funds will invest only in the equity securities of the companies on Cutler & Company's Approved List. Each company on the Approved List is listed on the New York Stock Exchange and meets the following specific criteria. Each of the companies or its predecessor (i) paid dividends continuously for at least 20 years, without any reduction in the rate; (ii) has commercial paper rated Prime-1 and senior debt rated at least A by Moody's Investors Service, Inc. or similarly rated by another rating agency, or if no ratings are published, determined to be of similar quality by Cutler & Company; (iii) has annual sales, assets and market value of at least $1 billion; and (iv) in Cutler & Company's opinion has wide ownership among major institutional investors and very liquid markets. In addition, each company is subjected to such other analysis as may appear prudent including but not limited to the company's historical yield patterns, payout ratios and debt coverage ratios. The current Approved List and its entire history are available to any shareholder by contacting Cutler & Company or the Trust. Trades by the Funds normally are made by Cutler & Company primarily to maintain quality (adhering to the Approved List) and to rebalance the portfolio; the Cutler Equity Income Fund will also trade within the Approved List to improve its yield. The Funds normally will remain as fully invested as possible, considering cash flow and possible transactional delays, and may invest their cash holdings in high-quality, short-term money market instruments as described below. The Funds will be rebalanced periodically to maintain holdings weighted to reflect the anticipated total return of each Fund's portfolio securities. Such rebalancing may result in substantial "tilts" (a heavier weighting on some issues). Whereas the Cutler Approved List Equity Fund holds at least 90% of common stocks within the Approved List, the Cutler Equity Income Fund will hold approximately 20 to 30 of those stocks. Under normal conditions, each Fund will invest at least 65% of its total assets in the income producing equity securities in the Approved List. OTHER POLICIES. Unless approved by the holders of a majority of a Fund's outstanding voting securities, a Fund may not change its investment objective, borrow money, invest in the securities of foreign issuers or purchase securities through a foreign market, invest in options or futures contracts, sell securities short, lend its securities, invest in repurchase agreements or engage in certain other activities, as more fully described in the Fund's Statement of Additional Information. Except as otherwise indicated, investment policies of a Fund may be changed by the Trust's Board of Trustees (the "Board") without shareholder approval. Each Fund's net asset value will fluctuate. For temporary defensive purposes, each Fund may invest in cash or in the following types of high quality, short-term money market instruments: (i) certificates of deposit and interest-bearing savings deposits of domestic commercial banks, (ii) money market mutual funds and (iii) short-term U.S. Government Securities. The frequency of each Fund's portfolio transactions will vary from year to year and is driven by the investment policies of each Fund as described above. For more details about the portfolio turnover rate of each Fund, see "Financial Highlights". 6 RISK CONSIDERATIONS - -------------------------------------------------------------------------------- CUTLER EQUITY INCOME FUND AND CUTLER APPROVED LIST EQUITY FUND invest only in the equity securities of the companies on Cutler & Company's Approved List. Over time, stocks have shown greater growth potential than other types of securities. Although the companies on the Approved List meet specific criteria for stability, credit quality and the prospect of good earnings, their stock prices can fluctuate dramatically in response to company, market, or economic news. These Funds alone do not constitute a balanced investment plan. When you sell your fund shares, they may be worth more or less than you paid for them. MANAGEMENT OF THE TRUST - -------------------------------------------------------------------------------- The business of the Trust is managed under the direction of the Board of Trustees. The Board formulates the general policies of the Funds and generally meets quarterly to review the results of the Funds, monitor investment activities and practices and discuss other matters affecting the Funds and the Trust. INVESTMENT ADVISER Cutler & Company serves as investment adviser to each Fund pursuant to an Investment Advisory Agreement with the Trust. Subject to the general control of the Board, Cutler & Company makes and executes investment decisions for each Fund. For its services, Cutler & Company receives an advisory fee from each Fund at an annual rate of 0.75% of each Fund's average daily net assets. Cutler & Company has agreed to waive its fees or reimburse expenses of the Funds to the extent the Approved List or Equity Income Fund's expenses exceed 1.25% of its annual average daily net until December 31, 1997. Cutler & Company is a registered investment adviser and provides investment management services to various individual and institutional clients, including financial institutions, public and private pension funds, profit-sharing plans, charitable corporations and private trust funds. As of the date of this Prospectus, Cutler & Company provided investment management services with respect to assets of approximately $1.2 billion, including the Funds. Mr. Kenneth R. Cutler, who is primarily responsible for investment decisions for the Funds, entered the investment business in 1945; between 1953 and 1962 he was principal operating and investment officer of two mutual funds; between 1962 and 1977 he held various investment positions; in 1977 he founded Cutler & Company, Inc. Mr. Cutler is the Chairman and Vice President of the Trust. Effective December 31, 1995, Cutler & Company, Inc. reorganized as a limited liability company, Cutler & Company, LLC. As of the date of this Prospectus, Mrs. Brooke Cutler Ashland (Kenneth Cutler's daughter owned 64% and Geoffrey W. Cutler (Kenneth Cutler's son) owned 18% of the outstanding limited liability company interests in Cutler & Company, with the balance held by other employees of the firm. ADMINISTRATION AND DISTRIBUTION ADMINISTRATOR. Pursuant to a management agreement with the Trust, Forum Administrative Services, LLC ("FAS") located at Two Portland Square, Portland, Maine 04101 supervises the overall management of the Trust, including overseeing the Trust's receipt of services, advising the Trust and the Trustees on matters concerning the Trust and its affairs, and, at the Board's request, providing the Trust with general office facilities and certain persons to serve as officers. For its administrative services, FAS receives a fee from the Trust with respect to each Fund at an annual rate of 0.10% of each Fund's average daily net assets. DISTRIBUTOR. Forum Financial Services, Inc. ("FFSI"), serves as the Trust's distributor and, as agent of the Trust, offers for sale shares of the Funds. FFSI, whose address is Two Portland Square, Portland, Maine 04101, is a registered broker-dealer and a member of the National Association of Securities Dealers, Inc. 7 MANAGEMENT OF THE TRUST (CONTINUED) - -------------------------------------------------------------------------------- SHAREHOLDER SERVICES TRANSFER AGENT. Shareholder inquiries and communications concerning a Fund may be directed to Forum Financial Corp. ("FFC"), Two Portland Square, Portland, Maine 04101, which acts as the Funds' transfer agent and dividend disbursing agent. FFC maintains for each shareholder of record, an account (unless such accounts are maintained by sub-transfer agents or processing agents) to which all shares purchased are credited, together with any distributions that are reinvested in additional shares. FFC also performs other transfer agency and shareholder-related functions. The Trust has adopted a shareholder services plan providing that the Trust may obtain the services of the Adviser and other qualified financial institutions to act as shareholder servicing agents for their customers. Under this plan, the Trust has authorized FAS to enter into agreements pursuant to which the shareholder servicing agents perform certain shareholder services not otherwise provided by FAS. For these services, the Trust may pay the shareholder servicing agent a fee of up to 0.25% of the average daily net assets of the shares of a Fund owned by investors for which the shareholder servicing agent maintains a servicing relationship. Among the services that may be provided by FAS or by shareholder servicing agents are: answering customer inquiries regarding account matters; assisting shareholders in designating and changing various account options; aggregating and processing purchase and redemption orders and transmitting and receiving funds for shareholder orders; transmitting, on behalf of the Trust, proxy statements, prospectuses and shareholder reports to shareholders and tabulating proxies; processing dividend payments and providing subaccounting services for Fund shares held beneficially; and providing such other services as the Trust or a shareholder may request. ACCOUNTING SERVICES. Forum Accounting Services, LLC, ("FAcS") performs portfolio accounting services for the Funds, including determination of each Fund's net asset value per share. FORUM FINANCIAL GROUP FAS, FFSI, FFC and FAcS are members of the Forum Financial Group ("FFG") of companies which together provide a full range of services to the investment company and financial services industry. As of the date of this Prospectus, FFG provided services to registered investment companies and collective investment funds with assets of approximately $19 billion. FAS, FFSI and FFC are controlled by John Y. Keffer, a trustee and the President of the Trust. EXPENSES The Adviser has agreed to reimburse the Trust for certain of the Funds' operating expenses (exclusive of interest, taxes, brokerage fees and organization expenses, all to the extent permitted by applicable state law or regulation) which in any year exceed the limits prescribed by any state in which the Funds' shares are qualified for sale. The Trust may elect not to qualify its shares for sale in every state. For the purpose of this obligation to reimburse expenses, a Fund's annual expenses are estimated and accrued daily, and any appropriate estimated payments will be made by the Adviser monthly. Subject to the above obligations, the Trust is obligated to pay all of the Trust's other expenses. 8 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. Eastern Time except days when the New York Stock Exchange is closed, normally, New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas ("Fund Business Day"). The net asset values of the Funds are calculated at 4:00 p.m., Eastern Time on each Fund Business Day. SEE "Determination of Net Asset Value." PURCHASES. Fund shares are issued at a price equal to the net asset value per share next determined after an order in proper form is received and accepted. The Trust reserves the right to reject any subscription for the purchase of its shares and may, in the Adviser's discretion, accept portfolio securities in lieu of cash as payment for Fund shares. Fund shares become entitled to receive dividends on the day after the shares are issued to an investor. REDEMPTIONS. There is no redemption charge, no minimum period of investment, and no restriction on frequency of redemptions. Shares are redeemed at a price equal to the net asset value per share next determined following acceptance by FFC of the redemption order in proper form (and any supporting documentation which FFC may require). Shares redeemed are not entitled to participate in dividends declared after the day on which a redemption becomes effective. The date of payment of redemption proceeds may not be postponed for more than seven days after shares are tendered to FFC for redemption by a shareholder of record. The right of redemption may not be suspended except in accordance with the provisions of the Investment Company Act. MINIMUM INVESTMENTS. There is a $25,000 ($2,000 for IRA's) minimum for initial investments in the Fund. There is no minimum for subsequent investments. The Trust and the Administrator each reserve the right to waive the minimum investment requirement. ACCOUNT STATEMENTS. Shareholders will receive from the Trust periodic statements listing account activity during the statement period. SHARE CERTIFICATES. FFC maintains a shareholder account for each shareholder. The Trust does not issue share certificates. PURCHASE AND REDEMPTION PROCEDURES You may obtain the account application necessary to open an account by calling toll free 888-CUTLER4 or by writing The Cutler Trust at P.O. Box 446, Portland, Maine 04112. INITIAL PURCHASE OF SHARES MAIL. Investors may send a check made payable to "The Cutler Trust" with a completed account application to: The Cutler Trust P.O. Box 446 Portland, Maine 04112 Checks are accepted at full value subject to collection. All checks must be drawn on a United States bank. If a check is returned unpaid, the purchase will be canceled, and the investor will be liable for any resulting losses or fees incurred by the Fund, the Adviser or FFC. BANK WIRE. To make an initial investment in a Fund using the fedwire system for transmittal of money between banks, you should first telephone FFC at 207-879-0001 or toll free at 888-CUTLER4 to obtain an account number. You should then instruct a member commercial bank to wire your money immediately to: BankBoston Boston, Massachusetts ABA # 011000390 For Credit to: Forum Financial Corp. Account # 541-54171 The Cutler Trust: (Name of Fund) (Investor's Name) (Investor's Account Number) 9 PURCHASES AND REDEMPTIONS OF SHARES (CONTINUED) - -------------------------------------------------------------------------------- You should then promptly complete and mail the account application. If you plan to wire funds, you should instruct your bank early in the day so the wire transfer can be accomplished the same day. Your bank may assess charges for transmitting the money by bank wire and for use of Federal Funds. The Trust does not charge investors for the receipt of wire transfers. Payment in the form of a bank wire received prior to 4:00 p.m., Eastern Time on a Fund Business Day will be treated as a Federal Funds payment received before that time. THROUGH FINANCIAL INSTITUTIONS. You may purchase and redeem shares of the Funds through brokers, and other financial institutions that have entered into sales agreements with FFSI. These institutions may charge a fee for their services and are responsible for promptly transmitting purchase, redemption and other requests to the Trust. The Trust is not responsible for the failure of any institution to promptly forward these requests. If you purchase shares through a broker-dealer or financial institution, your purchase will be subject to its procedures, which may include charges, limitations, investment minimums, cutoff times and restrictions in addition to, or different from, those applicable to shareholders who invest in a Fund directly. You should acquaint yourself with the institution's procedures and read this Prospectus in conjunction with any materials and information provided by your institution. If you purchase Fund shares in this manner, you may or may not be the shareholder of record and, subject to your institution's and the Fund's procedures, may have Fund shares transferred into your name. There is typically a one to five day settlement period for purchases and redemptions through broker-dealers. SUBSEQUENT PURCHASES OF SHARES You may purchase additional shares of a Fund by mailing a check or sending a bank wire as indicated above. Shareholders using the wire system for subsequent purchases should first telephone FFC at 207-879-0001 or toll free at 888-CUTLER4 to notify it of the wire transfer. All payments should clearly indicate the shareholder's name and account number. REDEMPTION OF SHARES Redemption requests will not be effected unless any check used for investment has been cleared by the shareholder's bank, which may take up to 15 calendar days. This delay may be avoided by investing in a Fund through wire transfers. If FFC receives a redemption request by 4:00 p.m. Eastern Time, the redemption proceeds normally are paid on the next business day, but in no event later than seven days after redemption, by check mailed to the shareholder of record at his or her record address. Shareholders that wish to redeem shares by telephone or by bank wire must elect these options by properly completing the appropriate sections of their account application. These privileges may be modified or terminated by the Trust at any time. Due to the cost to the Trust of maintaining smaller accounts, the Trust reserves the right to redeem, upon not less than 60 days' written notice, all shares in any Fund account with an aggregate net asset value of less than $10,000 ($2,000 for IRAs). The Fund will not redeem accounts that fall below these amounts solely as a result of a reduction in net asset value of the Fund's shares. REDEMPTION BY MAIL. You may redeem all or any number of your shares by sending a written request to FFC at the address above. You must sign all written requests for redemption and provide a signature guarantee. SEE "Other Redemption Matters." TELEPHONE REDEMPTIONS. A shareholder that has elected telephone redemption privileges may make a telephone redemption request by calling FFC at 207-879-0001 or toll free at 888-CUTLER4. In response to the telephone redemption instruction, the Fund will mail a check to the shareholder's record address. If the shareholder has elected wire redemption privileges, FFC may wire the proceeds as set forth below under "Bank Wire Redemptions." In an effort to prevent unauthorized or fraudulent redemption requests by telephone, the Trust and FFC will employ reasonable procedures to confirm that such 10 PURCHASES AND REDEMPTIONS OF SHARES (CONTINUED) - -------------------------------------------------------------------------------- instructions are genuine. Shareholders must provide FFC with the shareholder's account number, the exact name in which the shares are registered and some additional form of identification such as a password. The Trust or FFC may employ other procedures such as recording certain transactions. If such procedures are followed, neither FFC nor the Trust will be liable for any losses due to unauthorized or fraudulent redemption requests. Shareholders should verify the accuracy of telephone instructions immediately upon receipt of confirmation statements. During times of drastic economic or market changes, it may be difficult to make a redemption by telephone. If you cannot reach FFC by telephone, you may mail or hand-deliver your request to FFC at Two Portland Square, Portland, Maine 04101. OTHER REDEMPTION MATTERS. A signature guarantee is required for any written redemption request and for any endorsement on a stock certificate. In addition, a signature guarantee also is required for instructions to change a shareholder's record name or address, designated bank account for wire redemptions or automatic investment or redemption, dividend election, telephone redemption or exchange option election or any other option election in connection with the shareholder's account. Signature guarantees may be provided by any eligible institution, including a bank, a broker, a dealer, a national securities exchange, a credit union, or a savings association that is authorized to guarantee signatures, acceptable to the Transfer Agent. Whenever a signature guarantee is required, the signature of each person required to sign for the account must be guaranteed. Such guarantee must have "Signature Guaranteed" stamped under each signature and must be signed by the eligible institution. The Transfer Agent will deem a shareholder's account "lost" if correspondence to the shareholder's address of record is returned for six months, unless the Transfer Agent determines the shareholder's new address. When an account is deemed lost all distributions on the account will be reinvested in additional shares of the Fund. In addition, the amount of any outstanding (unpaid for six months or more) checks for distributions that have been returned to the Transfer Agent will be reinvested and the checks will be canceled. BANK WIRE REDEMPTIONS. If you have elected wire redemption privileges, the Fund will, upon request, transmit the proceeds of any redemption greater than $10,000 by Federal Funds wire to a bank account designated on your account application. If you wish to request bank wire redemptions by telephone, you must also elect telephone redemption privileges. EXCHANGE PRIVILEGE Shareholders of a Fund may exchange their shares for shares of the other Fund, the Daily Assets Treasury Fund, a money market fund managed by FAS and a separate series of Forum Funds or the Investors Bond Fund, also a separate series of Forum Funds managed by FAS. You may receive a copy of the prospectus for the Daily Assets Treasury Fund or the Investors Bond Fund by writing FFC or calling toll free at 888-CUTLER4. No sales charges are imposed on exchanges between a Fund and the Daily Assets Treasury Fund. Exchanges into the Investors Bond Fund are subject to the fees charged by that fund as set forth in the Investor Bond Fund's prospectus. EXCHANGE PROCEDURES. You may request an exchange by writing to FFC at Two Portland Square, Portland, Maine 04101. The minimum amount for an exchange to open an account in the Daily Assets Treasury Fund or the Investors Bond Fund is $2,500. Exchanges may only be made between identically registered accounts. You do not need to complete a new account application, unless you are requesting different shareholder privileges for the new account. The Trust reserves the right to reject any exchange request and may modify or terminate the exchange privilege at any time. There is no charge for the exchange privilege or limitation as to frequency of exchanges. An exchange of shares in the Fund pursuant to the exchange privilege is, in effect, a redemption of Fund shares (at net asset value) followed by the purchase of shares of the investment company into which the exchange is made (at net asset value) and may result in a shareholder realizing a taxable gain or loss for Federal income 11 PURCHASES AND REDEMPTIONS OF SHARES (CONTINUED) - -------------------------------------------------------------------------------- tax purposes. The exchange privilege is available to shareholders residing in any state in which shares of the Daily Assets Treasury Fund or the Investors Bond Fund, as applicable, may legally be sold. TELEPHONE EXCHANGES. If you have elected telephone exchange privileges, you may request an exchange by calling FFC toll free at 888-CUTLER4. Neither the Trust nor FFC are responsible for the authenticity of telephone instructions or losses, if any, resulting from unauthorized telephone exchange requests. The Trust employs reasonable procedures to insure that telephone orders are genuine and, if it does not, may be liable for any losses due to unauthorized transactions. Shareholders should verify the accuracy of telephone instructions immediately upon receipt of confirmation statements. RETIREMENT ACCOUNTS The Fund may be a suitable investment for part or all of the assets held in retirement such as IRAs, SEP-IRAs, Keoghs, or other types of retirement accounts. The minimum initial investment for investors opening a retirement account or investing through an IRA is $2,000. There is no minimum for subsequent investments. For information on investing in the Funds for retirement, and retirement account plans, call FFC toll free at 888-CUTLER4, or write to Two Portland Square, Portland, Maine 04101. DETERMINATION OF NET ASSET VALUE The Trust determines the net asset value per share of each Fund as of the close of regular trading on the New York Stock Exchange (currently 4:00 P.M., Eastern Time) on each Fund Business Day by dividing the value of the Fund's net assets (the value of its portfolio securities and other assets less its liabilities) by the number of the Fund's shares outstanding at the time the determination is made. Securities owned by a Fund for which market quotations are readily available are valued at current market value, or, in their absence, at fair value as determined by the Board. DIVIDENDS AND TAX MATTERS - -------------------------------------------------------------------------------- DIVIDENDS Dividends of each Fund's net investment income are declared and paid quarterly. Distributions of capital gain, if any, realized by each Fund are made annually. Fund shares become entitled to receive dividends and distributions on the day after the shares are issued. Shares redeemed are not entitled to receive dividends or distributions declared after the day on which the redemption becomes effective. Shareholders may choose either to have dividends and distributions reinvested in shares of the Fund or received in cash. All dividends and distributions are treated in the same manner for Federal income tax purposes whether received in cash or reinvested in shares of the Fund. If reinvested, income dividends generally are invested at the Fund's net asset value as of the last day of the quarter or month with respect to which the dividends are paid. Capital gain distributions are reinvested at the net asset value of the Fund on the record date for the distribution. Unless a shareholder elects otherwise, all dividends and distributions are reinvested. TAXES Each Fund intends to qualify and continue to qualify for each fiscal year to be taxed as a "regulated investment company" under the Internal Revenue Code of 1986. As such, and because the Funds intend to distribute all of their net investment income and net capital gain each year, the Funds should each avoid all Federal income and excise taxes. Dividends paid by a Fund out of its net investment income (including any realized net short-term capital gain) are taxable to shareholders as ordinary income. Distributions by a Fund of net capital gain which the Fund 12 DIVIDENDS AND TAX MATTERS (CONTINUED) designates as "capital gain dividends" are taxable to shareholders as long-term capital gain, regardless of the length of time the shareholder may have held his shares in the Fund. If Fund shares are sold at a loss after being held for six months or less, the loss will be treated as long-term capital loss to the extent of any capital gain distribution received on those shares. Any dividend or distribution from a Fund received by a shareholder reduces the net asset value of the shareholder's shares by the amount of the dividend or distribution. To the extent that the income or gain comprising a dividend or distribution was accrued by the Fund before the shareholder purchased the shares, the dividend or distribution would be in effect a return of capital to that shareholder. All dividends and distributions (including those that operate as a return of capital), however, are taxable as described above to the shareholder receiving them regardless of the length of time the shareholder may have held the shares prior to the dividend or distribution. It is expected that a portion of each Fund's dividends to shareholders will qualify for the dividends received deduction for corporations. Each Fund may be required by Federal law to withhold 31% of reportable payments (which may include dividends, capital gain distributions and redemption proceeds) paid to individuals and certain other non-corporate shareholders. Withholding is not required if a shareholder certifies that the shareholder's social security or tax identification number provided to the Fund is correct and that the shareholder is not subject to backup withholding for prior under-reporting to the Internal Revenue Service. Reports containing appropriate information with respect to the Federal income tax status of dividends and distributions paid during the year by the Funds will be mailed to shareholders shortly after the close of each year. The foregoing is only a summary of some of the important Federal tax considerations generally affecting the Funds and their shareholders. There may be other Federal, state or local tax considerations applicable to a particular investor. Prospective investors are urged to consult their tax advisers. PERFORMANCE INFORMATION - -------------------------------------------------------------------------------- The Funds may quote their performance in advertising in terms of yield or total return. Both types are based on historical results and are not intended to indicate future performance. A Fund's yield is a way of showing the rate of income earned by the Fund as a percentage of the Fund's share price. Yield is calculated by dividing the net investment income of a Fund for a stated period by the average number of shares entitled to receive dividends and expressing the result as an annualized percentage rate based on the Fund's share price at the end of the period. Total Return refers to the average annual compounded rates of return over some representative period that would equate an initial amount invested at the beginning of a stated period to the ending redeemable value of the investment, after giving effect to the reinvestment of all dividends and distributions and deductions of expenses, if any, during the period. Because average annual returns tend to smooth out variations in a Fund's returns, shareholders should recognize that they are not the same as actual year-by-year results. The Funds' advertisements may refer to ratings and rankings among similar funds by independent evaluators such as Lipper Analytical Services, Inc. or CDA/Wiesenberger. In addition, the performance of a Fund may be compared to recognized indices of market performance. The comparative material found in the Funds' advertisements, sales literature or reports to shareholders may contain performance ratings. These are not to be considered representative or indicative of future performance. 13 THE TRUST AND ITS SHARES - -------------------------------------------------------------------------------- The Trust was organized as a Delaware business trust on October 2, 1992. The trustees of the Trust have the authority to issue an unlimited number of shares of beneficial interest of separate series, with no par value per share. Except for the Funds, no other series of shares are currently authorized. The Board may, without shareholder approval, issue the shares in an unlimited number of separate series and may in the future divide existing series into two or more classes. Shares issued by the Trust have no conversion, subscription or preemptive rights. Shareholders of a Fund have equal and exclusive rights to dividends and distributions declared by that Fund and to the net assets of that Fund upon liquidation or dissolution. Voting rights are not cumulative and the shares of each series (the Funds) of the Trust will be voted separately except when an aggregate vote is required by law. The Trust does not hold annual meetings of shareholders, and it is anticipated that shareholder meetings will be held only when specifically required by law. Shareholders have available certain procedures for the removal of trustees. The Trust will call a shareholder meeting for the purpose of removing a trustee when 10% of the outstanding shares call for a meeting and will assist in certain shareholder communications. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE STATEMENT OF ADDITIONAL INFORMATION AND THE FUNDS' OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFERING OF THE FUNDS' SHARES, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER MAY NOT LAWFULLY BE MADE. 14 INVESTMENT ADVISER: Cutler & Company, LLC 503 Airport Road Medford, Oregon 97504 (541) 770-9000 (800) 228-8537 ADMINISTRATOR: Forum Administrative Services, LLC Two Portland Square Portland, Maine 04101 (800) 237-3113 DISTRIBUTOR: Forum Financial Services, Inc. Two Portland Square Portland, Maine 04101 (800) 237-3113 SHAREHOLDER ACCOUNT INFORMATION: Forum Financial Corp. Two Portland Square Portland, Maine 04101 Toll free (888) CUTLER4 [GRAPHIC OF CRATER LAKE, OR] THE CUTLER TRUST PROSPECTUS SEPTEMBER 15, 1997 CUTLER EQUITY INCOME FUND CUTLER APPROVED LIST EQUITY FUND CUTLER EQUITY INCOME FUND CUTLER APPROVED LIST EQUITY FUND INVESTMENT ADVISER: ADMINISTRATOR: DISTRIBUTOR: SHAREHOLDER ACCOUNT Cutler & Company, LLC Forum Administrative Forum Financial Services, INFORMATION: 503 Airport Road Services, LLC Inc. Forum Financial Corp. Medford, Oregon 97504 Two Portland Square Two Portland Square Two Portland Square (541) 770-9000 Portland, Maine 04101 Portland, Maine 04101 Portland, Maine 04101 (800) 228-8537 (800) 237-3113 (800) 237-3113 Toll free (888) CUTLER4
- -------------------------------------------------------------------------------- STATEMENT OF ADDITIONAL INFORMATION September 15, 1997 This Statement of Additional Information supplements the Prospectus offering shares of the Cutler Equity Income Fund and the Cutler Approved List Equity Fund (each a "Fund" and collectively the "Funds"), two portfolios of The Cutler Trust (the "Trust"), and should be read only in conjunction with the applicable Prospectus, a copy of which may be obtained by an investor without charge by contacting the Trust's Shareholder Servicing Agent at the address listed above. TABLE OF CONTENTS Page 1. Investment Policies......................................................2 2. Investment Limitations...................................................3 3. Management of the Trust..................................................4 Cutler & Company Administrator and Distributor Transfer Agent Custodian and Auditor Expenses 4. Determination of Net Asset Value.........................................8 5. Portfolio Transactions...................................................8 6. Additional Purchase and Redemption Information..........................10 Exchanges Between Funds Additional Redemption Matters 7. Taxation................................................................11 8. The Trust and its Shareholders..........................................11 9. Performance Data........................................................12 Yield Calculations Total Return Calculations 10. Financial Statements....................................................14 THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. 1. INVESTMENT POLICIES Except for cash balances, the Cutler Equity Income Fund and the Cutler Approved List Equity Fund invest in securities on the Cutler & Company Approved List (the "Approved List"). Each Fund may invest in shares of other investment companies to the extent permitted under the 1940 Act, in which case a Fund would bear its pro rata portion of the other investment company's expenses. As a fundamental policy of each Fund, no portfolio transactions may be executed with Cutler & Company or any of its affiliates. See "Portfolio Transactions." 2. INVESTMENT LIMITATIONS Each Fund has adopted the following fundamental investment limitations. These limitations, along with any investment policies deemed to be fundamental, cannot be changed without the affirmative vote of the lesser of (i) more than 50% of the outstanding shares of the Fund or (ii) 67% of the shares of the Fund present or represented at a shareholders meeting at which the holders of more than 50% of the outstanding shares of the Fund are present or represented. Each Fund may not: (1) With respect to 75% of its assets, purchase a security other than an obligation issued or guaranteed as to principal and interest by the United States Government, its agencies or instrumentalities ("U.S. Government Securities") if, as a result, more than 5% of the Fund's total assets would be invested in the securities of a single issuer. (2) Purchase a security other than a U.S. Government Security if, immediately after the purchase, more than 25% of the value of the Fund's total assets would be invested in the securities of issuers having their principal business activities in the same industry. (3) Underwrite securities of other issuers, except to the extent that the Fund may be considered to be acting as an underwriter in connection with the disposition of portfolio securities. (4) Purchase or sell real estate or any interest therein, except that the Fund may invest in debt obligations secured by real estate or interests therein or issued by companies that invest in real estate or interests therein. (5) Purchase or sell physical commodities or contracts relating to physical commodities; borrow money; invest in the securities of foreign issuers or purchase securities through a foreign market; purchase or write options or invest in futures contracts; or purchase securities on margin or make short sales of securities, except for the use of short-term credit necessary for the clearance of purchases and sales of portfolio securities. (6) Issue senior securities except as appropriate to evidence indebtedness that the Fund may be permitted to incur, and provided that the Fund may issue shares of series or classes that the Board of Trustees (the "Board") may establish. (7) Enter into repurchase agreements, lend securities or otherwise make loans; except through the purchase of debt securities that may be purchased by the Fund. Each Fund has adopted the following nonfundamental investment limitations that may be changed by the Board without shareholder approval. Each Fund may not: (a) Invest in securities (other than fully-collateralized debt obligations) issued by companies that have conducted continuous operations for less than three years, including the operations of predecessors 2 (unless guaranteed as to principal and interest by an issuer in whose securities the Fund could invest) if, as a result, more than 5% of the value of the Fund's total assets would be so invested. (b) Invest in or hold securities of any issuer other than the Fund if, to the Fund's knowledge, those Trustees and officers of the Trust or the Fund's investment adviser, individually owning beneficially more than 1/2 of 1% of the securities of the issuer, in the aggregate own more than 5% of the issuer's securities. (c) Invest in oil, gas or other mineral exploration or development programs, or leases, or in real estate limited partnerships; provided that the Fund may invest in securities issued by companies engaged in such activities. (d) Acquire securities that are not readily marketable ("illiquid") or are subject to restrictions on the sale of such securities to the public without registration under the Securities Act of 1933. Except as required by the 1940 Act, if a percentage restriction on investment or utilization of assets is adhered to at the time an investment is made, a later change in percentage resulting from a change in the market values of the Fund's assets, the change in status of a security or purchases and redemptions of shares will not be considered a violation of the limitation. 3. MANAGEMENT OF THE TRUST The Trustees and officers of the Trust and their principal occupations during the past five years are set forth below. * BROOKE C. ASHLAND, Trustee (age 46). Ms. Ashland is currently Chief Executive Officer and Manager of Cutler & Company, LLC. Prior thereto she was President, Trustee Investment Services, Inc. (financial services marketing firm) 1990-1994. Ms. Ashland has been associated with Cutler & Company, Inc. since 1977 in various capacities such as Assistant to the Chairman, CFO and Secretary. Her address is 503 Airport Road, Medford, Oregon 97504. * KENNETH R. CUTLER, Trustee, Chairman of the Board and Vice President (age 77). Principal Portfolio Manager of the Funds and Investment Committee Member, Cutler & Company, LLC (registered investment adviser). His address is 503 Airport Road, Medford, Oregon 97504. * JOHN Y. KEFFER, Trustee and President (age 55). President and Director, Forum Financial Services, Inc. (registered broker-dealer), Forum Financial Corp. (registered transfer agent) and Forum Advisors, Inc. (registered investment adviser). Mr. Keffer is also a director and/or officer of various registered investment companies for which Forum Administrative Services, LLC serves as manager or administrator. His address is Two Portland Square, Portland, Maine 04101. DR. HATTEN S. YODER, JR., Trustee (age 76). Director Emeritus, Geophysical Laboratory, Carnegie Institution of Washington and consultant to the Los Alamos National Laboratory. Dr. Yoder has been a director of the Geophysical Laboratory and consultant to the Los Alamos National Laboratory since 1971. His address is 6709 Melody Lane, Bethesda, Maryland 20817. ROBERT B. WATTS, JR., Trustee (age 66). 3 Counsel, Northhaven Associates (private legal practice) since 1990. His address is 2230 Brownsboro Highway Eagle Point, Oregon 97524. CAROL FISCHER, Vice President, Assistant Secretary and Assistant Treasurer (age 41). Chief Operating Officer of Cutler & Company, LLC (registered investment adviser). Prior thereto, Ms. Fischer was associated with Cutler & Company, Inc., in various capacities. Her address is 503 Airport Road, Medford, Oregon 97504. MAX BERUEFFY, Vice President and Secretary (age 45). Counsel, Forum Financial Services, Inc., with which he has been associated since May 1994. Prior to that, Mr. Berueffy was a member of the staff of the U.S. Securities and Exchange Commission. Mr. Berueffy is also an officer of various registered investment companies for which Forum Administrative Services, LLC serves as manager or administrator. His address is Two Portland Square, Portland, Maine 04101. DAVID I. GOLDSTEIN, Assistant Secretary (age 36). Counsel, Forum Financial Services, Inc., with which he has been associated since 1991. Prior thereto, Mr. Goldstein was associated with the law firm of Kirkpatrick & Lockhart. Mr. Goldstein is also an officer of various registered investment companies for which Forum Administrative Services, LLC serves as manager or administrator. His address is Two Portland Square, Portland, Maine 04101. TRACI E. BLOCK, Assistant Secretary (age 41). Fund Administrator, Forum Financial Services, Inc., with which she has been associated since 1995. Prior thereto, Ms. Block was a legal assistant with the law firm of Pierce, Atwood in Portland, Maine. Ms. Block is also an officer of various registered investment companies for which Forum Administrative Services, LLC serves as manager or administrator. Her address is Two Portland Square, Portland, Maine 04101. Robert Campbell, Treasurer (age 36) Director of Fund Accounting, Forum Financial Corp., with which he has been associated since April 1997. Prior thereto, Mr. Campbell was the Vice President of Domestic Operations for State Street Fund Services in Toronto, Ontario, and prior to that, Mr. Cambell served as Assistant Vice President/Fund Manager of Mutual Fund, State Street Bank & Trust in Boston, Massachusetts. Mr. Campbell is also treasurer of various registered investment companies for which Forum Administrative Services, LLC or Forum Financial Services, Inc. serves as manager, administrator and/or distributor. His address is Two Portland Square, Portland, Maine 04101. Enya H. Carter, Assistant Treasurer (age 29) Accounting Manager, Forum Financial Corp., with which she has been associated Since November 1993. Before that, Ms. Carter was an accountant and office manager for Operations Management, Inc., a restaurant holding company. Her address is Two Portland Square, Portland, Maine 04101. Cheryl O. Tumlin, Assistant Secretary (age 31) Assistant Counsel, Forum Financial Services, Inc., with which she has been associated since July 1996. Prior thereto, Ms. Tumlin was on the staff of the U.S. Securities and Exchange Commission as an attorney in the Division of Market Regulation and prior thereto Ms. Tumlin was an associate with the law firm of Robinson Silverman Pearce Aronsohn & Berman in New York, New York. Ms. Tumlin is also Assistant Secretary of various registered investment companies for which Forum Administrative Services, LLC or Forum Financial Services, Inc. serves as manager, administrator and/or distributor. Her address is Two Portland Square, Portland, Maine 04101. * John Y. Keffer, Brooke C. Ashland and Kenneth R. Cutler are interested persons of the Trust as that term is defined in the 1940 Act. Kenneth R. Cutler is Brooke C. Ashland's father. 4 For the fiscal year ended June 30, 1997, the aggregate compensation paid to the Trustees of the Trust by the funds is as follows: Dr. Hatten S. Yoder, Jr., $10,833; Mr. Robert B. Watts, Jr., $10,833. Messrs. Cutler and Keffer received no compensation for their services as Trustee for the past year and no officer of the Trust is compensated by the Trust. Non-interested Trustees are reimbursed for travel and related expenses incurred in attending meetings of the Board. CUTLER & COMPANY Under an Investment Advisory Agreement with the Trust (the "Agreement"), Cutler & Company furnishes at its own expense all services, facilities and personnel necessary in connection with managing each Fund's investments and effecting portfolio transactions for each Fund. The Agreement provides for an initial term of twelve months from its effective date with respect to a Fund and for its continuance in effect for successive twelve-month periods thereafter, provided the Agreement is specifically approved at least annually by the Board or by vote of the shareholders, and in either case, by a majority of the Trustees who are not parties to the Agreement or interested persons of any such party at a meeting called for the purpose of voting on the Agreement. The Agreement is terminable without penalty by the Trust with respect to a Fund on 60 days' written notice when authorized either by vote of the Fund's shareholders or by a vote of a majority of the Board, or by Cutler & Company on 60 days' written notice, and will automatically terminate in the event of its assignment. The Agreement also provides that, with respect to each Fund, Cutler & Company shall not be liable for any error of judgment or mistake of law or for any act or omission in the performance of its duties to the Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of reckless disregard of its obligations and duties under the Agreement. The following table shows the dollar amount of fees payable under the Investment Advisory Agreements between Cutler & Company and the Trust with respect to each Fund, the amount of fee that was waived by Cutler & Company, if any, and the actual fee received by Cutler & Company. The data are for the past three fiscal years. Advisory Fee Advisory Fee Advisory Fee Payable Waived Retained ------------ ------------ ------------ CUTLER EQUITY INCOME FUND Year Ended June 30, 1997 $385,655 $0 $385,655 Year Ended June 30, 1996 244,542 0 244,542 Year Ended June 30, 1995 163,051 0 163,051 CUTLER APPROVED LIST EQUITY FUND Year Ended June 30, 1997 $230,877 $0 $230,877 Year Ended June 30, 1996 147,509 4,351 143,158 Year Ended June 30, 1995 83,557 15,411 68,146
ADMINSTRATOR AND DISTRIBUTOR Forum Administrative Services, LLC ("FAS") supervises the overall management of the Trust (which includes, among other responsibilities, monitoring of performance and billing of the transfer agent and custodian and arranging for maintenance of books and records of the Trust), and provides the Trust with 5 general office facilities pursuant to a Management Agreement with the Trust. The Management Agreement provides for an initial term of twelve months from its effective date with respect to a Fund and for its automatic renewal each year thereafter for an additional term of one year. The Management Agreement terminates automatically if it is assigned and may be terminated without penalty with respect to any Fund by vote of that Fund's shareholders or by either party on not more than 60 days' written notice. The Management Agreement also provides that FAS shall not be liable for any error of judgment or mistake of law or for any act or omission in the administration or management of the Trust, except for willful misfeasance, bad faith or gross negligence in the performance of FAS's duties or by reason of reckless disregard of its obligations and duties under the Management Agreement. At the request of the Board, FAS provides persons satisfactory to the Board to serve as officers of the Trust. Those officers, as well as certain other employees and Trustees of the Trust, may be directors, officers or employees of FAS, Cutler & Company or their affiliates. The following table shows the dollar amount of fees payable under the Management Agreements between FAS and the Trust with respect to each Fund, the amount of fee that was waived by FAS, if any, and the actual fee received by FAS. The data are for the past three fiscal years. Management Fee Management Fee Management Fee Payable Waived Retained -------------- -------------- --------------- CUTLER EQUITY INCOME FUND Year Ended June 30, 1997 $51,421 $0 $51,421 Year Ended June 30, 1996 45,027 0 45,027 Year Ended June 30, 1995 32,610 0 32,610 CUTLER APPROVED LIST EQUITY FUND Year Ended June 30, 1997 $30,783 $0 $30,783 Year Ended June 30, 1996 26,997 0 26,997 Year Ended June 30, 1995 16,711 7,613 9,098
Forum Financial Services, Inc. ("FFSI") is the Trust's distributor and acts as the agent of the Trust in connection with the offering of shares of the Funds pursuant to a separate Distribution Agreement. The Distribution Agreement provides for an initial term of twelve months from its effective date and for its continuance in effect for successive twelve-month periods thereafter, provided the agreement is specifically approved at least annually by the Board or by vote of the shareholders, and in either case, by a majority of the Trustees who are not parties to the Distribution Agreement or interested persons of any such party at a meeting called for the purpose of voting on the Distribution Agreement. All subscriptions for Shares obtained by Forum are directed to the Trust for acceptance and are not binding on the Trust until accepted by it. FFSI receives no compensation or reimbursement of expenses for the distribution services provided pursuant to the Distribution Agreement. The Distribution Agreement provides that FFSI shall not be liable for any error of judgment or mistake of law or for any act or omission in the administration or management of the Trust, except for willful misfeasance, bad faith or gross negligence in the performance of FFSI's duties or by reason of reckless disregard of its obligations and duties under the Distribution Agreement. The Distribution Agreement also provides for certain indemnification of FFSI. 6 The Distribution Agreement is terminable with respect to a Fund without penalty by the Trust on 60 days' written notice when authorized either by vote of the Fund's shareholders or by a vote of a majority of the Board, or by FFSI on 60 days' written notice, and will automatically terminate in the event of its assignment. TRANSFER AGENT Forum Financial Corp. ("FFC") acts as transfer agent, dividend disbursing agent and fund accountant for the Trust pursuant to a Transfer Agency and Fund Accounting Agreement. The Transfer Agency and Fund Accounting Agreement provides for an initial term of twelve months from its effective date with respect to a Fund and for its automatic renewal for successive twelve month periods thereafter. Cutler & Company may act as a sub-transfer agent or processing agent. For its services, FFC is paid a transfer agent fee at an annual rate of $12,000 per year plus certain account charges and is reimbursed for certain expenses incurred on behalf of the Funds. FFC is paid an additional fee for its portfolio accounting services of $36,000 per year for each Fund, subject to adjustments for the number and type of portfolio transactions. The following table shows the dollar amount of fees payable under the Transfer Agency and Fund Accounting Agreements between Forum and the Trust with respect to each Fund, the amount of fee that was waived by Forum, if any, and the actual fee received by Forum. The data are for the past three fiscal years. Transfer Agent and Transfer Agent and Transfer Agent and Accounting Fee Accounting Fee Accounting Fee Payable Waived Retained ------------------ ------------------ ------------------ CUTLER EQUITY INCOME FUND Year Ended June 30, 1997 $52,479 $0 $52,479 Year Ended June 30, 1996 54,422 0 54,422 Year Ended June 30, 1995 50,716 0 50,716 CUTLER APPROVED LIST EQUITY FUND Year Ended June 30, 1997 $58,317 $1,780 $56,537 Year Ended June 30, 1996 63,471 12,000 51,471 Year Ended June 30, 1995 60,989 0 60,989
CUSTODIAN AND AUDITOR Pursuant to a Custodian Agreement with the Trust, BankBoston, 100 Federal Street, Boston, Massachusetts 02106, acts as the custodian of the Trust's assets. The custodian's responsibilities include safeguarding and controlling the Funds' cash and securities, determining income and collecting interest on the Funds' investments. Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts 02110, independent auditors, has been chosen by the Board to act as auditor for the Trust. EXPENSES Each Fund's expenses comprise Trust expenses attributable to the Fund that are allocated to the Fund, and those not attributable to a particular Fund that are allocated among all Funds in proportion to their average net assets. Cutler & Company voluntarily agreed to waive its fees or reimburse each Fund to the extent a 7 Fund's total expenses exceed the amounts indicated in the Prospectus until December 31, 1997. This voluntary limit may be discontinued at any time after that date. Any waivers or reimbursements have the effect of increasing the Funds' yield and may not be recouped at a later date. Cutler & Company also has agreed to reimburse the Trust for certain of each Fund's operating expenses (exclusive of interest, taxes, brokerage fees and organization and extraordinary expenses, all to the extent permitted by applicable state law or regulation) which in any year exceed the limits prescribed by any state in which the Fund's shares are qualified for sale. Forum believes that currently the most restrictive expense limitation imposed by any state is 2-1/2% of the first $30 million of each Fund's average net assets, 2% of the next $70 million of its average net assets and 1-1/2% of its average net assets in excess of $100 million. For the purpose of this obligation to reimburse expenses, each Fund's annual expenses are estimated and accrued daily, and any appropriate estimated payments are made monthly. Subject to any fee waiver or expense reimbursement arrangements, the Trust pays all of its expenses, including: interest charges, taxes, brokerage fees and commissions; expenses of issue, repurchase and redemption of shares; premiums of insurance for the Trust, its Trustees and officers and fidelity bond premiums; applicable fees, interest charges and expenses of third parties, including Cutler & Company, Forum, FFC, the Trust's custodian and shareholder servicing agents; fees of pricing, interest, dividend, credit and other reporting services; costs of membership in trade associations; telecommunications expenses; funds transmission expenses; auditing, legal and compliance expenses; costs of forming the Trust and maintaining its existence; costs of preparing and printing the Trust's prospectuses, statements of additional information and shareholder reports and delivering them to existing shareholders; expenses of meetings of shareholders and proxy solicitations therefor; costs of maintaining books and accounts and preparing tax returns; costs of reproduction, stationery and supplies; fees and expenses of the Trust's Trustees; compensation of the Trust's officers and employees who are not officers of Cutler & Company, Forum or their respective affiliates; costs of other personnel who may be employees of Cutler & Company, Forum or their respective affiliates performing services for the Trust; costs of Trustee meetings; Securities and Exchange Commission registration fees and related expenses; and state or foreign securities laws registration fees and related expenses. 4. DETERMINATION OF NET ASSET VALUE The Trust does not determine net asset value on the following holidays: New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. Purchases and redemptions are effected as of the next determined net asset value following the receipt of any purchase or redemption order. In determining the approximate market value of portfolio investments, the Funds may employ outside organizations, which may use a matrix or formula method that takes into consideration market indices, matrices, yield curves and other specific adjustments. This may result in the securities being valued at a price different from the price that would have been determined had the matrix or formula method not been used. All cash, receivables and current payables are carried at their face value. 5. PORTFOLIO TRANSACTIONS The Funds will effect purchases and sales through brokers who charge commissions. Allocations of transactions to brokers and the frequency of transactions are determined by Cutler & Company in its best judgment and in a manner deemed to be in the best interest of shareholders of the Funds rather than by any formula. The primary consideration is prompt execution of orders in an effective manner and at the most favorable price available to the Funds. No portfolio transactions are executed with Cutler & Company or any of its affiliates. 8 Any Fund may not always pay the lowest commission or spread available. Rather, in determining the amount of commission, including certain dealer spreads, paid in connection with Fund transactions, the Adviser takes into account such factors as size of the order, difficulty of execution, efficiency of the executing broker's facilities (including the services described below) and any risk assumed by the executing broker. The Adviser may also take into account payments made by brokers effecting transactions for the Fund (i) to the Fund or (ii) to other persons on behalf of the Fund for services provided to it for which it would be obligated to pay. Consistent with section 28(e) of the Securities and Exchange Act, the exercise of the Adviser's fiduciary duties under its Investment Advisory agreement with the Trust, and any other applicable law, the Adviser may allocate brokerage on behalf of the Trust to brokers who provide research services and may cause the Fund to pay these brokers a higher amount of commission than may be charged by other brokers. Such research and analysis may be used by the Adviser in connection with services to clients other than the Fund, and the Adviser's fee is not reduced by reason of the Adviser's receipt of the research services. Investment decisions for each Fund will be made independently from those for any other account (including another Fund) that is or may in the future become managed by Cutler & Company or its affiliates. When a Fund and other accounts managed by Cutler & Company are contemporaneously engaged in the purchase or sale of the same security, however, the transactions may be averaged as to price and allocated equitably to each account. In some cases, this policy might adversely affect the price paid or received by a Fund or the size of the position obtainable for the Fund. In addition, when purchases or sales of the same security for a Fund and for other accounts managed by Cutler & Company occur contemporaneously, the purchase or sale orders may be aggregated in order to obtain any price advantages available to large denomination purchases or sales. The following table shows the aggregate brokerage commissions with respect to each Fund. The data are for the past three fiscal years. Aggregate Commissions Paid ----------- CUTLER EQUITY INCOME FUND Year Ended June 30, 1997 $25,693 Year Ended June 30, 1996 50,146 Year Ended June 30, 1995 42,374 CUTLER APPROVED LIST EQUITY FUND Year Ended June 30, 1997 $ 9,110 Year Ended June 30, 1996 10,983 Year Ended June 30, 1995 19,824 During the fiscal year ended June 30, 1997, the Cutler Approved List Equity Fund acquired securities of its regular brokers or dealers (as defined in Rule 10b-1 under the 1940 Act) or their parents; the value of the aggregate holdings were as follows: $524,700 in Merrill Lynch & Company, Inc. 9 6. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION Shares of each Fund are sold on a continuous basis by the distributor at net asset value without any sales charge. Shareholders may effect purchases or redemptions or request any shareholder privilege in person at FFC's offices located at Two Portland Square, Portland, Maine 04101. EXCHANGES BETWEEN FUNDS Shareholders of a Fund may exchange their shares for shares of the other Fund or for shares of the Daily Assets Treasury Fund, a money market fund managed by FAS and a separate series of Forum Funds, or the Investors Bond Fund, also a separate series of Forum Funds managed by FAS. Exchange transactions will be made on the basis of relative net asset value per share at the time of the exchange transaction. For Federal tax purposes, exchange transactions are treated as sales on which a purchaser will realize a capital gain or loss depending on whether the value of the shares redeemed is more or less than his basis in such shares at the time of the transaction. Proceeds of an exchange transaction may be invested only in another Fund account for which the share registration is the same as the account from which the exchange is made. The terms of the exchange privilege are subject to change, and the privilege may be terminated by any Fund or the Trust. However, the privilege will not be terminated, and no material change that restricts the availability of the privilege to shareholders will be implemented, without 60 days' notice to shareholders, to the extent required by applicable regulation. ADDITIONAL REDEMPTION MATTERS Proceeds of redemptions normally are paid in cash. However, payments may be made wholly or partly in portfolio securities if the Board of Trustees determines economic conditions exist which would make payment in cash detrimental to the best interests of the Fund. If payment for shares redeemed is made wholly or partly in portfolio securities, brokerage costs may be incurred by the shareholder in converting the securities to cash. The Trust has filed an election with the Securities and Exchange Commission pursuant to which each Fund may only effect a redemption in portfolio securities if the particular shareholder is redeeming more than $250,000 or 1% of the Fund's total net assets, whichever is less, during any 90-day period. In addition to the situations described in the Prospectus under "Purchases and Redemptions of Shares," the Trust may redeem shares involuntarily to reimburse each Fund for any loss sustained by reason of the failure of a shareholder to make full payment for shares purchased by the shareholder or to collect any charge relating to transactions effected for the benefit of a shareholder which is applicable to the Fund's shares as provided in the Prospectus from time to time. Shareholders' rights of redemption may not be suspended, except (i) for any period during which the New York Stock Exchange, Inc. is closed (other than customary weekend and holiday closings) or during which the Securities and Exchange Commission determines that trading thereon is restricted, (ii) for any period during which an emergency (as determined by the Securities and Exchange Commission) exists as a result of which disposal by a Fund of its securities is not reasonably practicable or as a result of which it is not reasonably practicable for the Fund fairly to determine the value of its net assets, or (iii) for such other period as the Securities and Exchange Commission may by order permit for the protection of the shareholders of the Fund. Fund shares are normally issued for cash only. In the Adviser's discretion, however, each Fund may accept portfolio securities that meet the investment objective and policies of the Fund as payment for Fund shares. The Fund will only accept securities that (i) are not restricted as to transfer either by law or 10 liquidity of market and (ii) have a value which is readily ascertainable (and not established only by valuation procedures). 7. TAXATION Qualification as a regulated investment company under the Internal Revenue Code of 1986 does not involve governmental supervision of management or investment practices or policies. Investors should consult their own counsel for a complete understanding of the requirements the Funds must meet to qualify for such treatment. The information set forth in the Prospectus and the following discussion relate solely to Federal income taxes on dividends and distributions by the Funds. Investors should consult their own counsel for further details and for the application of state and local tax laws to the investor's particular situation. In order to qualify for treatment as a regulated investment company under the Internal Revenue Code, each Fund must distribute to its shareholders for each taxable year at least 90% of its net investment income (which includes dividends, interest and the excess of net short-term capital gain over net long-term capital losses) and must meet several additional requirements. Among these requirements are the following: (1) each Fund must derive at least 90% of its gross income each taxable year from dividends, interest, gains from the sale or other disposition of securities and certain other income; (2) each Fund must derive less than 30% of its gross income each taxable year from the sale or other disposition of securities held for less than three months; (3) at the close of each quarter of the Fund's taxable year, at least 50% of the value of its total assets must be represented by cash and cash items, U.S. Government Securities, securities of other regulated investment companies and other securities, with these other securities limited, in respect of any one issuer, to an amount that does not exceed 5% of the value of the Fund's total assets or 10% of the outstanding voting securities of the issuer; and (4) at the close of each quarter of the Fund's taxable year, not more than 25% of the value of its total assets may be invested in securities (other than U.S. Government Securities or securities of other regulated investment companies) of any one issuer. 8. THE TRUST AND ITS SHAREHOLDERS The Trust is a business trust organized under Delaware law. Delaware law provides that shareholders shall be entitled to the same limitations of personal liability extended to stockholders of private corporations for profit. The courts of some states, however, may decline to apply Delaware law on this point. The Trust Instrument contains an express disclaimer of shareholder liability for the debts, liabilities, obligations and expenses of the Trust and requires that a disclaimer be given in each contract entered into or executed by the Trust or the Trustees. The Trust Instrument provides for indemnification out of each series' property of any shareholder or former shareholder held personally liable for the obligations of the series. The Trust Instrument also provides that each series shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the series and satisfy any judgment thereon. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which Delaware law does not apply, no contractual limitation of liability was in effect, and the portfolio is unable to meet its obligations. The Trust believes that, in view of the above, the risk of personal liability to shareholders is remote. The Trust Instrument further provides that the Trustees shall not be liable to any person other than the Trust or its shareholders; moreover, the Trustees shall not be liable for any conduct whatsoever, provided that a Trustee is not protected against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. 11 Each series' capital consists of shares of beneficial interest. Shares are fully paid and nonassessable, except as set forth above with respect to Trustee and shareholder liability. Shareholders representing 10% or more of the Trust or a series may, as set forth in the Trust Instrument, call meetings of the Trust or series for any purpose related to the Trust or series, as the case may be, including, in the case of a meeting of the entire Trust, the purpose of voting on removal of one or more Trustees. The Trust or any series may be terminated upon the sale of its assets to, or merger with, another open-end management investment company or series thereof, or upon liquidation and distribution of its assets. Generally such terminations must be approved by the vote of the holders of a majority of the outstanding shares of the Trust or the series; however, the Trustees may, without prior shareholder approval, change the form of organization of the Trust by merger, consolidation or incorporation. If not so terminated or reorganized, the Trust and its series will continue indefinitely. Under the Trust, the Trustees may, without shareholder vote, cause the Trust to merge or consolidate into one or more trusts, partnerships or corporations or cause the Trust to be incorporated under Delaware law, so long as the surviving entity is an open-end management investment company that will succeed to or assume the Trust's registration statement. Although each Fund is offering only its own shares, it is possible that a Fund might become liable for any misstatement in the Prospectus of another Fund. The Board has considered this factor in approving the use of a single combined Prospectus. As of August 31, 1997, the officers and trustees of the Trust owned as a group less than 1% of the outstanding shares of each Fund. Also as of that date, the following persons owned of record 5% or more of the outstanding shares of each Fund: CUTLER EQUITY INCOME FUND - ------------------------- ENTERPRISE TRUST & INVESTMENT CO. TTEE THE KARL KIRCHGESSNER FOUNDATION FBO BIG CREEK LUMBER PROFIT SHARING 1278 Glenneyre, Suite 311 3654 Highway 1 Laguna Beach, CA 92651 Davenport, CA 95014 8.89% 9.53% CUTLER APPROVED LIST EQUITY FUND - -------------------------------- THE KARL KIRCHGESSNER FOUNDATION LORRAINE Y. PERRIN TESTAMONTARY TRUST 1278 Glenneyre, Suite 311 500 Eastgate Lane Laguna Beach, CA 92651 Santa Barbara, CA 93108 13.82% 5.80% Bank of Boston - IRA Custodian FBO Harold E. Gray 810 Whitney Visalia, CA 93277 5.10% 9. PERFORMANCE DATA Each Fund may quote performance in various ways. All performance information supplied by a Fund in advertising is historical and is not intended to indicate future returns. A Fund's net asset value, yield and 12 total return fluctuate in response to market conditions and other factors, and the value of Fund shares when redeemed may be more or less than their original cost. In performance advertising a Fund may compare any of its performance information with data published by independent evaluators such as Lipper Analytical Services, Inc., CDA/Wiesenberger or other companies that track the investment performance of investment companies ("Fund Tracking Companies"). A Fund may also compare any of its performance information with the performance of recognized stock, bond and other indexes, including but not limited to the Standard & Poor's 500 Composite Stock Price Index, the Dow Jones Industrial Average, U.S. Treasury bonds, bills or notes, the Salomon Brothers Bond Index, the Shearson Lehman Bond Index, and changes in the Consumer Price Index as published by the U.S. Department of Commerce. A Fund may refer to general market performances over past time periods such as those published by Ibbotson Associates. A Fund may also refer in such materials to mutual fund performance rankings and other data published by Fund Tracking Companies. Performance advertising may also refer to discussions of a Fund and comparative mutual fund data and ratings reported in independent periodicals, such as newspapers and financial magazines. For the one year period ended June 30, 1997, the average annual total returns of the Cutler Equity Income Fund and Cutler Approved List Equity Fund were 37.65% and 31.18%, respectively. Since commencement of operations on December 30, 1992, the average annual total returns of the Cutler Equity Income Fund and Cutler Approved List Equity Fund were 16.49% and 16.44%, respectively. YIELD CALCULATIONS Yields for a Fund used in advertising are computed by dividing the Fund's interest income for a given 30 days or one-month period, net of expenses, if any, by the average number of shares entitled to receive distributions during the period, dividing this figure by the Fund's net asset value per share at the end of the period and annualizing the result (assuming compounding of income) in order to arrive at an annual percentage rate. Capital gain and loss generally are excluded from these calculations. Income calculated for the purpose of determining a Fund's yield differs from income as determined for other accounting purposes. Because of the different accounting methods used, and because of the compounding assumed in yield calculations, the yield quoted for a Fund may differ from the rate of distribution the Fund paid over the same period or the rate of income reported in the Fund's financial statements. Although published yield information is useful to investors in reviewing a Fund's performance, investors should be aware that a Fund's yield for any given period is not an indication or representation by the Fund of future yields or rates of return on the Fund's shares. The yields of the Funds are not fixed or guaranteed, and an investment in the Funds is not insured or guaranteed. Accordingly, yield information may not necessarily be used to compare shares of the Funds with investment alternatives which, like money market instruments or bank accounts, may provide a fixed rate of interest. Also, it may not be appropriate to compare a Fund's yield information directly to similar information regarding investment alternatives that are insured or guaranteed. TOTAL RETURN CALCULATIONS Each Fund may advertise its total return. Total returns quoted in advertising reflect all aspects of a Fund's return, including the effect of reinvesting dividends and capital gain distributions, and any change in the Fund's net asset value per share over the period. Average annual returns are calculated by determining the growth or decline in value of a hypothetical historical investment in a Fund over a stated period, and then calculating the annually compounded percentage rate that would have produced the same result if the rate of 13 growth or decline in value had been constant over the period. Whereas average annual returns are a convenient means of comparing investment alternatives, investors should realize that the performance is not constant over time but changes from year to year, and that average annual returns represent averaged figures as opposed to the actual year-to-year performance of a Fund. Average annual total return is calculated by finding the average annual compounded rates of return of a hypothetical investment over a given period according to the following formula: P(1+T)n = ERV, where: P = a hypothetical initial payment of $1,000; T = average annual total return; n = number of years; and ERV = ending redeemable value (ERV is the value, at the end of the applicable period, of a hypothetical $1,000 payment made at the beginning of the applicable period). In addition to average annual returns, the Funds may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Total returns may be broken down into their components of income and capital (including capital gain and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. Period total return is calculated according to the following formula: PT = (ERV/P-1), where: PT = period total return. The other definitions are the same as in average annual total return above. 10. FINANCIAL STATEMENTS The financial statements of the Trust for its fiscal year ended June 30, 1997 (which include statements of assets and liabilities, statements of operations, statements of changes in net assets, notes to financial statements, financial highlights, statements of investments and the auditors' report thereon) are included in the Annual Report to Shareholders of the Trust delivered along with this Statement of Additional Information, and are incorporated herein by reference. 14 PART C OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS. ---------------------------------- (a) Financial Statements. Included in the Prospectus: Financial Highlights. Included in each Statement of Additional Information: Audited financial statements for the fiscal year ended June 30, 1997 including Statements of Assets and Liabilities, Statements of Operations, Statements of Changes in Net Assets, Notes to Financial Statements, Financial Highlights, Portfolio of Investments and Report of Independent Auditors (for each Fund, filed via EDGAR, Accession No. 0000912057-97-029546 with the Securities and Exchange Commission on August 29, 1997 for such Fund pursuant to Rule 30b2-1 under the Investment Company Act of 1940, as amended, and incorporated herein by reference. (b) EXHIBITS. --------- NOTE: * INDICATES THAT THE EXHIBIT IS INCORPORATED HEREIN BY REFERENCE. ALL REFERENCES TO A POST-EFFECTIVE AMENDMENT ("PEA") OR PRE-EFFECTIVE AMENDMENT ("PREEA") ARE TO PEAS AND PREEAS TO REGISTRANT'S REGISTRATION STATEMENT ON FORM N-1A, FILE NO. 33-52850. (1)* Copy of Registrant's Trust Instrument (filed as Exhibit 1 to PEA No. 4 via EDGAR on March 8, 1996, accession number 0000912057-97-004156). (2)* Copy of Registrant's By-Laws (filed as Exhibit 2 to PEA No. 4 via EDGAR on March 8, 1996, accession number 0000912057-97-004156). (3) None. (4) None. (5)* Copy of Investment Advisory Agreement between Registrant and Cutler & Company, LLC (filed as Exhibit 5 to PEA No. 4 via EDGAR on March 8, 1996, accession number 0000912057-97-004156). (6)* Copy of Distribution Agreement between Registrant and Forum Financial Services, Inc. (filed as Exhibit 6 to PEA No. 4 on March 8, 1996, accession number 0000912057-97-004156). (7) None. (8)* Copy of Custodian Agreement between Registrant and The First National Bank of Boston (filed as Exhibit 8 to PEA No. 4 on March 8, 1996, accession number 0000912057-97-004156). (9) (a)* Copy of Management Agreement between Registrant and Forum Administrative Services, LLC (filed as Exhibit 9(a) to PEA No. 4 via EDGAR on March 8, 1996, accession number 0000912057-97-004156). (b) Form of Transfer Agency and Services Agreement between Registrant and Forum Financial Corp.(filed herewith). (c) Form of Fund Accounting Agreement between Registrant and Forum Accounting Services, Limited Liability Company (filed herewith). (d)* Copy of Shareholder Service Plan (filed as Exhibit 9(c) to PEA No. 4 on March 8, 1996, accession number 0000912057-97-004156). (e)* Copy of Form of Shareholder Service Agreement (filed as Exhibit 9(d) to PEA No. 4 on March 8, 1996, accession number 0000912057-97-004156. (10)* Opinion of counsel (filed as Exhibit 10 to PEA No. 4 on March 8, 1996, accession number 0000912057-97-004156). (11) Consent of independent auditors (filed herewith). (12) None. (13)* Investment Representation letter (filed as Exhibit 13 to PEA No.4 on March 8, 1996, accession number 0000912057-97-004156). (14) None. (15) None. (16) Schedule of Sample Performance Calculations (filed herewith as Exhibit 16). (17) Financial Data Schedule (filed herewith as Exhibit 17). Other Exhibits: (A)* Power of Attorney, Brooke R. Ashland, Trustee of Registrant (filed as Other Exhibit (A) to PEA No. 4 on March 8, 1996, accession number 0000912057-97-004156). (B)* Power of Attorney, Kenneth R. Cutler, Trustee of Registrant (filed as Other Exhibit (B) to PEA No. 4 on March 8, 1996, accession number 0000912057-97-004156). (C)* Power of Attorney, Hatten S. Yoder, Jr., Trustee of Registrant (filed as Other Exhibit (C) to PEA No. 4 on March 8, 1996, accession number 0000912057-97-004156). (D)* Power of Attorney, John Y. Keffer, Trustee of Registrant (filed as Other Exhibit (D) to PEA No. 4 on March 8, 1996, accession number 0000912057-97-004156). (E) Power of Attorney, Robert B. Watts, Jr., Trustee of Registrant (filed herewith). ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT. -------------------------------------------------------------- None. ITEM 26. NUMBER OF HOLDERS OF SECURITIES AS OF AUGUST 31, 1997. ------------------------------------------------------ Title of Class of Shares Of Beneficial Interest Number Of Holders ------------------------ ----------------- Cutler Equity Income Fund 213 Cutler Approved List Equity Fund 333 ITEM 27. INDEMNIFICATION. ---------------- The general effect of Section 10.02 of the Registrant's Trust Instrument is to indemnify existing or former trustees and officers of the Trust to the fullest extent permitted by law against liability and expenses. There is no indemnification if, among other things, any such person is adjudicated liable to the Registrant or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. This description is modified in its entirety by the provisions of Section 10.02 of the Registrant's Trust Instrument contained in the Registration Statement as Exhibit 1, filed herewith. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing 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 Core Trust (Delaware), The CRM Funds, The Cutler Trust, Forum Funds, The Highland Family of Funds, Monarch Funds, Norwest Advantage Funds, Norwest Select Funds and Sound Shore Fund, Inc. (b) John Y. Keffer, President of Forum Financial Services, Inc., is the President of the Registrant. Sara M. Morris is the Treasurer of Forum Financial Services. David I. Goldstein, Secretary of Forum Financial Services, Inc., is the Assistant Secretary of the Registrant. Margaret J. Fenderson is the Assistant Treasurer of Forum Financial Services, Inc. and Dana Lukens is the Assistant Secretary of Forum Financial Services, Inc. Their business address is Two Portland Square, Portland, Maine 04101. (c) Not Applicable. ITEM 30. LOCATION OF BOOKS AND RECORDS. ------------------------------ The majority of the accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder are maintained at the offices of Forum Administrative Services, LLC, Two Portland Square, Portland, Maine 04101, and Forum Financial Corp., Two Portland Square, Portland, Maine 04101. The records required to be maintained under Rule 31a-1(b)(1) with respect to journals of receipts and deliveries of securities and receipts and disbursements of cash are maintained at the offices of the Registrant's custodian. The records required to be maintained under Rule 31a-1(b)(5), (6) and (9) are maintained at the offices of the Registrant's adviser, as listed in Item 28 hereof. ITEM 31. MANAGEMENT SERVICES. -------------------- Not Applicable. ITEM 32. UNDERTAKINGS. ------------ Registrant undertakes to: (i) furnish each person to whom a prospectus is delivered with a copy of Registrant's latest annual report to shareholders relating to the portfolio or class thereof to which the prospectus relates upon request and without charge. Notwithstanding any undertaking to the contrary in previous filings of its Registration Statement, the Registrant does not undertake to hold any meetings of shareholders except as required by applicable federal or state law or the provisions of its Trust Instrument. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this amendment to its Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Portland, and State of Maine on the 12th day of September, 1997. THE CUTLER TRUST By: /S/ John Y. Keffer ---------------------- John Y. Keffer President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registrant's Registration Statement has been signed below by the following persons on the 12th day of September, 1997. SIGNATURES TITLE ---------- ----- (a) Principal Executive Officer /S/ John Y. Keffer President ------------------ John Y. Keffer (b) Principal Financial and Accounting Officer /S/ Robert B. Campbell Treasurer ------------------- Robert B. Campbell (c) All of the Trustees /S/ John Y. Keffer Trustee ------------------ John Y. Keffer Brooke R. Ashland* Trustee Kenneth R. Cutler* Trustee Hatten S. Yoder, Jr.* Trustee Robert B. Watts, Jr.* Trustee By: /S/ John Y. Keffer ------------------ John Y. Keffer *Attorney in Fact INDEX TO EXHIBITS Sequential Exhibit Page Number - ------ ----------- 9(b)* Form of Transfer Agency and Services Agreement between Registrant and Forum Financial Corp. 9(c)* Form of Fund Accounting Agreement between Registrant and Forum Accounting Services, Limited Liability Company. 11 Consent of Independent Auditors Other Exhibit (E) Power of Attorney, Robert B. Watts, Jr., Trustee of Registrant 16 Schedule of Performance Quotations 17 Financial Data Schedule EX-99.B9 2 FORM OF TRANSFER AGENCY & SERVICES AGREEMENT EXHIBIT 9(B) FORM OF THE CUTLER TRUST TRANSFER AGENCY AND SERVICES AGREEMENT AGREEMENT made as of the ____________ day of ______________, 199__, by and between The Cutler Trust, a Delaware business trust, with its principal office and place of business at Two Portland Square, Portland, Maine (the "Trust"), and Forum Financial Corp., a Delaware corporation with its principal office and place of business at Two Portland Square, Portland, Maine 04101 ("Forum"). WHEREAS, the Trust is authorized to issue shares in separate series, with each such series representing interests in a separate portfolio of securities and other assets, and is authorized to divide those series into separate classes; WHEREAS, the Trust offers shares in various series as listed in Appendix A hereto (each such series, together with all other series subsequently established by the Trust and made subject to this Agreement in accordance with Section 13, being herein referred to as a "Fund," and collectively as the "Funds") and the Trust may in the future offer shares of various classes of each Fund as listed in Appendix A hereto (each such class together with all other classes subsequently established by the Trust in a Fund being herein referred to as a "Class," and collectively as the "Classes"); and WHEREAS, the Trust on behalf of the Funds desires to appoint Forum as its transfer agent and dividend disbursing agent and Forum desires to accept such appointment; NOW THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, the Trust and Forum hereby agree as follows: SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS (a) APPOINTMENT. The Trust, on behalf of the Funds, hereby appoints Forum to act as, and Forum agrees to act as, (i) transfer agent for the authorized and issued shares of beneficial interest of the Trust representing interests in each of the respective Funds and Classes thereof ("Shares"), (ii) dividend disbursing agent and (iii) agent in connection with any accumulation, open-account or similar plans provided to the registered owners of shares of any of the Funds ( "Shareholders") and set out in the currently effective prospectuses and statements of additional information (collectively "prospectus") of the applicable Fund, including, without limitation, any periodic investment plan or periodic withdrawal program. (b) DOCUMENT DELIVERY. The Trust has delivered to Forum copies of (i) the Trust's Trust Instrument and Bylaws (collectively, as amended from time to time, "Organic Documents"), (ii) the Trust's Registration Statement and all amendments thereto filed with the U.S. Securities and Exchange Commission ("SEC") pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or the Investment Company Act of 1940, as amended ("1940 Act")(the "Registration Statement"), (iii) the Trust's current Prospectus and Statement of Additional Information of each Fund (collectively, as currently in effect and as amended or supplemented, the "Prospectus"), (iv) each current plan of distribution or similar document adopted by the Trust under Rule 12b-1 under the 1940 Act ("Plan") and each current shareholder service plan or similar document adopted by the Trust ("Service Plan"), and (v) all procedures adopted by the Trust with respect to the Funds (i.e., repurchase agreement procedures), and shall promptly furnish Forum with all amendments of or supplements to the foregoing. The Trust shall deliver to Forum a certified copy of the resolution of the Board of Trustees of the Trust (the "Board") appointing Forum and authorizing the execution and delivery of this Agreement. SECTION 2. DUTIES OF FORUM (a) SERVICES. Forum agrees that in accordance with procedures established from time to time by agreement between the Trust on behalf of each of the Funds, as applicable, and Forum, Forum will perform the following services: (i) provide the services of a transfer agent, dividend disbursing agent and, as relevant, agent in connection with accumulation, open-account or similar plans (including without limitation any periodic investment plan or periodic withdrawal program) that are customary for open-end management investment companies including: (A) maintaining all Shareholder accounts, (B) preparing Shareholder meeting lists, (C) mailing proxies to Shareholders, (D) mailing Shareholder reports and prospectuses to current Shareholders, (E) withholding taxes on U.S. resident and non-resident alien accounts, (F) preparing and filing U.S. Treasury Department Forms 1099 and other appropriate forms required by federal authorities with respect to distributions for Shareholders, (G) preparing and mailing confirmation forms and statements of account to Shareholders for all purchases and redemptions of Shares and other confirmable transactions in Shareholder accounts, (H) preparing and mailing activity statements for Shareholders, and (I) providing Shareholder account information; (ii) receive for acceptance orders for the purchase of Shares and promptly deliver payment and appropriate documentation therefor to the custodian of the applicable Fund (the "Custodian") or, in the case of Fund's operating in a master-feeder or fund of funds structure, to the transfer agent or interestholder recordkeeper for the master portfolios in which the Fund invests; (iii) pursuant to purchase orders, issue the appropriate number of Shares and hold such Shares in the appropriate Shareholder account; (iv) receive for acceptance redemption requests and deliver the appropriate documentation therefor to the Custodian or, in the case of Fund's operating in a master-feeder or fund of funds structure, to the transfer agent or interestholder recordkeeper for the master portfolios in which the Fund invests; (v) as and when it receives monies paid to it by the Custodian with respect to any redemption, pay the redemption proceeds as required by the prospectus pursuant to which the redeemed Shares were offered and as instructed by the redeeming Shareholders; (vi) effect transfers of Shares upon receipt of appropriate instructions from Shareholders; (vii) prepare and transmit to Shareholders (or credit the appropriate Shareholder accounts) payments for all distributions declared by the Trust with respect to Shares; (viii) issue share certificates and replacement share certificates for those share certificates alleged to have been lost, stolen, or destroyed upon receipt by Forum of indemnification satisfactory to Forum and protecting Forum and the Trust and, at the option of Forum, issue replacement certificates in place of mutilated share certificates upon presentation thereof without requiring indemnification; (ix) receive from Shareholders or debit Shareholder accounts for sales commissions, including contingent deferred, deferred and other sales charges, and service fees (i.e., wire redemption charges) and prepare and transmit payments to underwriters, selected dealers and others for commissions and service fees received; (x) prepare and transmit payments to underwriters, selected dealers and others for trail commissions, Rule 12b-1 fees, shareholder service fees and other payments based on the amount of assets in Shareholder accounts in accordance with any Plan or Service Plan of the Trust; (xi) maintain records of account for and provide reports and statements to the Trust and Shareholders as to the foregoing; (xii) record the issuance of Shares of the Trust and maintain pursuant to Rule 17Ad-10(e) under the Securities Exchange Act of 1934, as amended ("1934 Act") a record of the total number of Shares of the Trust, each Fund and each Class thereof, that are authorized, based upon data provided to it by the Trust, and are issued and outstanding and provide the Trust on a regular basis a report of the total number of Shares that are authorized and the total number of Shares that are issued and outstanding; and (xiii) provide a system which will enable the Trust to calculate the total number of Shares of each Fund and Class thereof sold in each State. (b) BLUE SKY MATTERS. The Trust or its administrator or other agent (i) shall identify to Forum in writing those transactions and assets to be treated as exempt from reporting for each state and territory of the United States and for each foreign jurisdiction (collectively "States") and (ii) shall monitor the sales activity with respect to Shareholders domiciled or resident in each State. The responsibility of Forum for the Trust's State registration status is solely limited to the reporting of transactions to the Trust, and Forum shall have no obligation, when recording the issuance of Shares, to monitor the issuance of such Shares or to take cognizance of any laws relating to the issue or sale of such Shares, which functions shall be the sole responsibility of the Trust. (c) SAFEKEEPING. Forum shall establish and maintain facilities and procedures reasonably acceptable to the Trust for the safekeeping, control, preparation and use of share certificates, check forms, and facsimile signature imprinting devices. Forum shall establish and maintain facilities and procedures reasonably acceptable to the Trust for safekeeping of all records maintained by Forum pursuant to this Agreement. (d) COOPERATION WITH ACCOUNTANTS. Forum shall cooperate with each Fund's independent public accountants and shall take reasonable action to make all necessary information available to the accountants for the performance of the accountants' duties. (e) RESPONSIBILITY FOR COMPLIANCE WITH LAW. Except as otherwise specifically provided herein, the Trust assumes all responsibility for ensuring that the Trust complies with all applicable requirements of the Securities Act, the 1940 Act and any laws, rules and regulations of governmental authorities with jurisdiction over the Trust. All references to any law in this Agreement shall be deemed to include reference to the applicable rules and regulations promulgated under authority of the law and all official interpretations of such law or rules or regulations. SECTION 3. RECORDKEEPING (a) PREDECESSOR RECORDS. Prior to the commencement of Forum's responsibilities under this Agreement, if applicable, the Trust shall deliver or cause to be delivered over to Forum (i) an accurate list of Shareholders of the Trust, showing each Shareholder's address of record, number of Shares owned and whether such Shares are represented by outstanding share certificates and (ii) all Shareholder records, files, and other materials necessary or appropriate for proper performance of the functions assumed by Forum under this Agreement (collectively referred to as the "Materials"). The Trust shall on behalf of each applicable Fund or Class indemnify and hold Forum harmless from and against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liability arising out of or attributable to any error, omission, inaccuracy or other deficiency of the Materials, or out of the failure of the Trust to provide any portion of the Materials or to provide any information in the Trust's possession or control reasonably needed by Forum to perform the services described in this Agreement. (b) RECORDKEEPING. Forum shall keep records relating to the services to be performed under this Agreement, in the form and manner as it may deem advisable and as required by applicable law. To the extent required by Section 31 of the 1940 Act, and the rules thereunder, Forum agrees that all such records prepared or maintained by Forum relating to the services to be performed by Forum under this Agreement are the property of the Trust and will be preserved, maintained and made available in accordance with Section 31 of the 1940 Act and the rules thereunder, and will be surrendered promptly to the Trust on and in accordance with the Trust's request. The Trust and the Trust's authorized representatives shall have access to Forum's records relating to the services to be performed under this Agreement at all times during Forum's normal business hours. Upon the reasonable request of the Trust, copies of any such records shall be provided promptly by Forum to the Trust or the Trust's authorized representatives. (c) CONFIDENTIALITY OF RECORDS. Forum and the Trust agree that all books, records, information, and data pertaining to the business of the other party which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law. (d) INSPECTION OF RECORDS BY OTHERS. In case of any requests or demands for the inspection of the Shareholder records of the Trust, Forum will endeavor to notify the Trust and to secure instructions from an authorized officer of the Trust as to such inspection. Forum shall abide by the Trust's instructions for granting or denying the inspection; provided, however, that Forum may grant the inspection without instructions if Forum is advised by counsel to Forum that failure to do so will result in liability to Forum. SECTION 4. ISSUANCE AND TRANSFER OF SHARES (a) ISSUANCE OF SHARES. Forum shall make original issues of Shares of each Fund and Class thereof in accordance with the Trust's then current prospectus only upon receipt of (i) instructions requesting the issuance, (ii) a certified copy of a resolution of the Board authorizing the issuance, (iii) necessary funds for the payment of any original issue tax applicable to such Shares, and (iv) an opinion of the Trust's counsel as to the legality and validity of the issuance, which opinion may provide that it is contingent upon the filing by the Trust of an appropriate notice with the SEC, as required by Section 24 of the 1940 Act or the rules thereunder. If the opinion described in (iv) above is contingent upon a filing under Section 24 of the 1940 Act, the Trust shall indemnify Forum for any liability arising from the failure of the Trust to comply with that section or the rules thereunder. (b) TRANSFER OF SHARES. Transfers of Shares of each Fund and Class thereof shall be registered on the Shareholder records maintained by Forum. In registering transfers of Shares, Forum may rely upon the Uniform Commercial Code as in effect in the State of Delaware or any other statutes that, in the opinion of Forum's counsel, protect Forum and the Trust from liability arising from (i) not requiring complete documentation, (ii) registering a transfer without an adverse claim inquiry, (iii) delaying registration for purposes of such inquiry or (iv) refusing registration whenever an adverse claim requires such refusal. As Transfer Agent, Forum will be responsible for delivery to the transferor and transferee of such documentation as is required by the Uniform Commercial Code. SECTION 5. SHARE CERTIFICATES (a) CERTIFICATES. The Trust shall furnish to Forum a supply of blank share certificates of each Fund and Class thereof and, from time to time, will renew such supply upon Forum's request. Blank share certificates shall be signed manually or by facsimile signatures of officers of the Trust authorized to sign by the Organic Documents of the Trust and, if required by the Organic Documents, shall bear the Trust's seal or a facsimile thereof. Unless otherwise directed by the Trust, Forum may issue or register Share certificates reflecting the manual or facsimile signature of an officer who has died, resigned or been removed by the Trust. (b) ENDORSEMENT; TRANSPORTATION. New Share certificates shall be issued by Forum upon surrender of outstanding Share certificates in the form deemed by Forum to be properly endorsed for transfer and satisfactory evidence of compliance with all applicable laws relating to the payment or collection of taxes. Forum shall forward Share certificates in "non-negotiable" form by first-class or registered mail, or by whatever means Forum deems equally reliable and expeditious. Forum shall not mail Share certificates in "negotiable" form unless requested in writing by the Trust and fully indemnified by the Trust to Forum's satisfaction. (c) NON-ISSUANCE OF CERTIFICATES. In the event that the Trust informs Forum that any Fund or Class thereof does not issue share certificates, Forum shall not issue any such share certificates and the provisions of this Agreement relating to share certificates shall not be applicable with respect to those Funds or Classes thereof. SECTION 6. SHARE PURCHASES; ELIGIBILITY TO RECEIVE DISTRIBUTIONS (a) PURCHASE ORDERS. Shares shall be issued in accordance with the terms of a Fund's or Class' prospectus after Forum or its agent receives either: (i) (A) an instruction directing investment in a Fund or Class, (B) a check (other than a third party check) or a wire or other electronic payment in the amount designated in the instruction and (C), in the case of an initial purchase, a completed account application; or (ii) the information required for purchases pursuant to a selected dealer agreement, processing organization agreement, or a similar contract with a financial intermediary. (b) DISTRIBUTION ELIGIBILITY. Shares issued in a Fund after receipt of a completed purchase order shall be eligible to receive distributions of the Fund at the time specified in the prospectus pursuant to which the Shares are offered. (c) DETERMINATION OF FEDERAL FUNDS. Shareholder payments shall be considered Federal Funds no later than on the day indicated below unless other times are noted in the prospectus of the applicable Class or Fund: (i) for a wire received, at the time of the receipt of the wire; (ii) for a check drawn on a member bank of the Federal Reserve System, on the second Fund Business Day following receipt of the check; and (iv) for a check drawn on an institution that is not a member of the Federal Reserve System, at such time as Forum is credited with Federal Funds with respect to that check. SECTION 7. FEES AND EXPENSES (a) FEES. For the services provided by Forum pursuant to this Agreement, the Trust, on behalf of each Fund, agrees to pay Forum the fees set forth in clauses (i) and (ii) of Appendix B hereto. Fees will begin to accrue for each Fund on the latter of the date of this Agreement or the date of commencement of operations of the Fund. If fees begin to accrue in the middle of a month or if this Agreement terminates before the end of any month, all fees for the period from that date to the end of that month or from the beginning of that month to the date of termination, as the case may be, shall be prorated according to the proportion that the period bears to the full month in which the effectiveness or termination occurs. Upon the termination of this Agreement with respect to a Fund, the Trust shall pay to Forum such compensation as shall be payable prior to the effective date of termination. (b) EXPENSES. In connection with the services provided by Forum pursuant to this Agreement, the Trust, on behalf of each Fund, agrees to reimburse Forum for the expenses set forth in Appendix B hereto. In addition, the Trust, on behalf of the applicable Fund, shall reimburse Forum for all expenses and employee time (at 150% of salary) attributable to any review of the Trust's accounts and records by the Trust's independent accountants or any regulatory body outside of routine and normal periodic reviews. Should the Trust exercise its right to terminate this Agreement, the Trust, on behalf of the applicable Fund, shall reimburse Forum for all out-of-pocket expenses and employee time (at 150% of salary) associated with the copying and movement of records and material to any successor person and providing assistance to any successor person in the establishment of the accounts and records necessary to carry out the successor's responsibilities. (c) PAYMENT. All fees and reimbursements are payable in arrears on a monthly basis and the Trust, on behalf of the applicable Fund, agrees to pay all fees and reimbursable expenses within five (5) business days following receipt` of the respective billing notice. SECTION 8. REPRESENTATIONS AND WARRANTIES (a) REPRESENTATIONS AND WARRANTIES OF FORUM. Forum represents and warrants to the Trust that: (i) It is a corporation duly organized and existing and in good standing under the laws of the State of Delaware. (ii) It is duly qualified to carry on its business in the State of Maine. (iii) It is empowered under applicable laws and by its Article of Incorporation and By-Laws to enter into this Agreement and perform its duties under this Agreement. (iv) All requisite corporate proceedings have been taken to authorize it to enter into this Agreement and perform its duties under this Agreement. (v) It has access to the necessary facilities, equipment, and personnel to perform its duties and obligations under this Agreement. (vi) This Agreement, when executed and delivered, will constitute a legal, valid and binding obligation of Forum, enforceable against Forum in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties. (vii) It is registered as a transfer agent under Section 17A of the 1934 Act. (b) REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust represents and warrants to Forum that: (i) It is a business trust duly organized and existing and in good standing under the laws of Delaware. (ii) It is empowered under applicable laws and by its Organic Documents to enter into this Agreement and perform its duties under this Agreement. (iii) All requisite [corporate] proceedings have been taken to authorize it to enter into this Agreement and perform its duties under this Agreement. (iv) It is an open-end management investment company registered under the 1940 Act. (v) This Agreement, when executed and delivered, will constitute a legal, valid and binding obligation of the Trust, enforceable against the Trust in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties. (vi) A registration statement under the Securities Act is currently effective and will remain effective, and appropriate State securities law filings have been made and will continue to be made, with respect to all Shares of the Funds and Classes of the Trust being offered for sale. SECTION 9. PROPRIETARY INFORMATION (a) PROPRIETARY INFORMATION OF FORUM. The Trust acknowledges that the databases, computer programs, screen formats, report formats, interactive design techniques, and documentation manuals maintained by Forum on databases under the control and ownership of Forum or a third party constitute copyrighted, trade secret, or other proprietary information (collectively, "Proprietary Information") of substantial value to Forum or the third party. The Trust agrees to treat all Proprietary Information as proprietary to Forum and further agrees that it shall not divulge any Proprietary Information to any person or organization except as may be provided under this Agreement. (b) PROPRIETARY INFORMATION OF THE TRUST. Forum acknowledges that the Shareholder list and all information related to Shareholders furnished to Forum by the Trust or by a Shareholder in connection with this Agreement (collectively, "Customer Data") constitute proprietary information of substantial value to the Trust. In no event shall Proprietary Information be deemed Customer Data. Forum agrees to treat all Customer Data as proprietary to the Trust and further agrees that it shall not divulge any Customer Data to any person or organization except as may be provided under this Agreement or as may be directed by the Trust. SECTION 10. INDEMNIFICATION (a) INDEMNIFICATION OF FORUM. Forum shall not be responsible for, and the Trust shall on behalf of each applicable Fund or Class thereof indemnify and hold Forum harmless from and against, any and all losses, damages, costs, charges, reasonable counsel fees, payments, expenses and liability arising out of or attributable to: (i) all actions of Forum or its agents or subcontractors required to be taken pursuant to this Agreement, provided that such actions are taken in good faith and without [gross] negligence or willful misconduct; (ii) the Trust's lack of good faith or the Trust's gross negligence or willful misconduct; (iii) the reliance on or use by Forum or its agents or subcontractors of information, records, documents or services which have been prepared, maintained or performed by the Trust or any other person or firm on behalf of the Trust, including but not limited to any previous transfer agent or registrar; (iv) the reasonable reliance on, or the carrying out by Forum or its agents or subcontractors of, any instructions or requests of the Trust on behalf of the applicable Fund; and (v) the offer or sale of Shares in violation of any requirement under the Federal securities laws or regulations or the securities laws or regulations of any State that such Shares be registered in such State or in violation of any stop order or other determination or ruling by any federal agency or any State with respect to the offer or sale of such Shares in such State. (b) INDEMNIFICATION OF TRUST. Forum shall indemnify and hold the Trust and each Fund or Class thereof harmless from and against any and all losses, damages, costs, charges, reasonable counsel fees, payments, expenses and liability arising out of or attributed to any action or failure or omission to act by Forum as a result of Forum's lack of good faith, gross negligence or willful misconduct with respect to the services performed under or in connection with this Agreement. (c) RELIANCE. At any time Forum may apply to any officer of the Trust for instructions, and may consult with legal counsel to the Trust or to Forum with respect to any matter arising in connection with the services to be performed by Forum under this Agreement, and Forum and its agents or subcontractors shall not be liable and shall be indemnified by the Trust on behalf of the applicable Fund for any action taken or omitted by it in reasonable reliance upon such instructions or upon the advice of such counsel. Forum, its agents and subcontractors shall be protected and indemnified in acting upon (i) any paper or document furnished by or on behalf of the Trust, reasonably believed by Forum to be genuine and to have been signed by the proper person or persons, (ii) any instruction, information, data, records or documents provided Forum or its agents or subcontractors by machine readable input, telex, CRT data entry or other similar means authorized by the Trust, and (iii) any authorization, instruction, approval, item or set of data, or information of any kind transmitted to Forum in person or by telephone, vocal telegram or other electronic means, reasonably believed by Forum to be genuine and to have been given by the proper person or persons. Forum shall not be held to have notice of any change of authority of any person, until receipt of written notice thereof from the Trust. Forum, its agents and subcontractors shall also be protected and indemnified in recognizing share certificates which are reasonably believed to bear the proper manual or facsimile signatures of the officers of the Trust, and the proper countersignature of any former transfer agent or former registrar or of a co-transfer agent or co-registrar of the Trust (d) RELIANCE ON ELECTRONIC INSTRUCTIONS. If the Trust has the ability to originate electronic instructions to Forum in order to (i) effect the transfer or movement of cash or Shares or (ii) transmit Shareholder information or other information, then in such event Forum shall be entitled to rely on the validity and authenticity of such instruction without undertaking any further inquiry as long as such instruction is undertaken in conformity with security procedures established by Forum from time to time. (e) USE OF FUND/SERV AND NETWORKING. The Trust has authorized or in the future may authorize Forum to act as a "Fund/SERV" and "Networking" processing agent for the Trust or various Funds. Fund/SERV and Networking are services sponsored by National Securities Clearing Corporation ("NSCC") and as used herein have the meanings as set forth in the then current edition of the Rules of the SCC Division of NSCC or such other similar publication as may exist from time to time. The Trust shall indemnify and hold Forum harmless from and against any and all losses, damages, costs, charges, reasonable counsel fees, payments, expenses and liability arising directly or indirectly out of or attributed to any action or failure or omission to act by NSCC. (f) NOTIFICATION OF CLAIMS. In order that the indemnification provisions contained in this Section shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party who may be required to indemnify shall have the option to participate with the party seeking indemnification in the defense of such claim or to defend against said claim in its own name or in the name of the other party. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party's prior written consent. SECTION 11. EFFECTIVENESS, DURATION AND TERMINATION (a) EFFECTIVENESS. This Agreement shall become effective with respect to each Fund or Class on the later of the date on which the Trust's Registration Statement relating to the Shares of the Fund or Class becomes effective or the date of the commencement of operations of the Fund or Class. Upon effectiveness of this Agreement, it shall supersede all previous agreements between the parties hereto covering the subject matter hereof insofar as such Agreement may have been deemed to relate to the Funds. (b) DURATION. This Agreement shall continue in effect with respect to a Fund until terminated; provided, that continuance is specifically approved at least annually (i) by the Board or by a vote of a majority of the outstanding voting securities of the Fund and (ii) by a vote of a majority of Trustees of the Trust who are not parties to this Agreement or interested persons of any such party (other than as Trustees of the Trust). (c) TERMINATION. This Agreement may be terminated with respect to a Fund at any time, without the payment of any penalty (i) by the Board on 60 days' written notice to Forum or (ii) by Forum on 60 days' written notice to the Trust. Any termination shall be effective as of the date specified in the notice. Upon notice of termination of this Agreement by either party, Forum shall promptly transfer to the successor transfer agent the original or copies of all books and records maintained by Forum under this Agreement including, in the case of records maintained on computer systems, copies of such records in machine-readable form, and shall cooperate with, and provide reasonable assistance to, the successor transfer agent in the establishment of the books and records necessary to carry out the successor transfer agent's responsibilities. (d) SURVIVAL. The obligations of Sections 7, 9 and 10 shall survive any termination of this -------- Agreement. SECTION 12. ADDITIONAL FUNDS AND CLASSES. In the event that the Trust establishes one or more series of Shares or one or more classes of Shares after the effectiveness of this Agreement, such series of Shares or classes of Shares, as the case may be, shall become Funds and Classes under this Agreement. Forum or the Trust may elect not to make and such series or classes subject to this Agreement. SECTION 13. ASSIGNMENT. Except as otherwise provided in this Agreement, neither this Agreement nor any rights or obligations under this Agreement may be assigned by either party without the written consent of the other party. This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns. Forum may, without further consent on the part of the Trust, subcontract for the performance hereof with any entity, including affiliated persons of Forum; provided however, that Forum shall be as fully responsible to the Trust for the acts and omissions of any subcontractor as Forum is for its own acts and omissions. SECTION 14. FORCE MAJEURE. Forum shall not be responsible or liable for any failure or delay in performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control including, without limitation, acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdowns, flood or catastrophe, acts of God, insurrection, war, riots or failure of the mails or any transportation medium, communication system or power supply. SECTION 15. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS, OFFICERS, EMPLOYEES AND AGENTS. The trustees of the Trust and the shareholders of each Fund shall not be liable for any obligations of the Trust or of the Funds under this Agreement, and Forum agrees that, in asserting any rights or claims under this Agreement, it shall look only to the assets and property of the Trust or the Fund to which Forum's rights or claims relate in settlement of such rights or claims, and not to the trustees of the Trust or the shareholders of the Funds. SECTION 16. TAXES. Forum shall not be liable for any taxes, assessments or governmental charges that may be levied or assessed on any basis whatsoever in connection with the Trust or any Shareholder or any purchase of Shares, excluding taxes assessed against Forum for compensation received by it under this Agreement. SECTION 17. MISCELLANEOUS (a) NO CONSEQUENTIAL DAMAGES. Neither party to this Agreement shall be liable to the other party for consequential damages under any provision of this Agreement. (b) AMENDMENTS. No provisions of this Agreement may be amended or modified in any manner except by a written agreement properly authorized and executed by both parties hereto. (c) CHOICE OF LAW. This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of the State of Delaware. (d) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof whether oral or written. (e) COUNTERPARTS. This Agreement may be executed by the parties hereto on any number of counterparts, and all of the counterparts taken together shall be deemed to constitute one and the same instrument. (f) SEVERABILITY. If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid. (g) HEADINGS. Section and paragraph headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement. (h) NOTICES. Notices, requests, instructions and communications received by the parties at their respective principal addresses, or at such other address as a party may have designated in writing, shall be deemed to have been properly given. (i) BUSINESS DAYS. Nothing contained in this Agreement is intended to or shall require Forum, in any capacity hereunder, to perform any functions or duties on any day other than a Fund Business Day. Functions or duties normally scheduled to be performed on any day which is not a Fund Business Day shall be performed on, and as of, the next Fund Business Day, unless otherwise required by law. (j) DISTINCTION OF FUNDS. Notwithstanding any other provision of this Agreement, the parties agree that the assets and liabilities of each Fund of the Trust are separate and distinct from the assets and liabilities of each other Fund and that no Fund shall be liable or shall be charged for any debt, obligation or liability of any other Fund, whether arising under this Agreement or otherwise. (k) NONLIABILITY OF AFFILIATES. No affiliated person (as that term is defined in the 1940 Act), employee, agent, director, officer or manager of Forum shall be liable at law or in equity for Forum's obligations under this Agreement. (l) REPRESENTATION OF SIGNATORIES. Each of the undersigned expressly warrants and represents that they have full power and authority to sign this Agreement on behalf of the party indicated and that their signature will bind the party indicated to the terms hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers, as of the day and year first above written. [NAME] By: [Officer name] [Title] FORUM FINANCIAL CORP. By: John Y. Keffer President - A1 - THE CUTLER TRUST TRANSFER AGENCY AND SERVICE AGREEMENT APPENDIX A FUNDS AND CLASSES AS OF SEPTEMBER 10, 1997 Cutler Equity Income Fund Cutler Approved List Equity Fund THE CUTLER TRUST TRANSFER AGENCY AND SERVICE AGREEMENT APPENDIX B FEES AND EXPENSES (I) BASE FEE: Fee per Fund: $1,000/month plus $ 500/month for each Class over one. The rates set forth above shall remain fixed through December 31, 1998. On January 1, 1999, and on each successive January 1, the rates may be adjusted automatically by Forum without action of the Trust to reflect changes in the Consumer Price Index for the preceding calendar year, as published by the U.S. Department of Labor, Bureau of Labor Statistics. Forum shall notify the Trust each year of the new rates, if applicable. (II) SHAREHOLDER ACCOUNT FEES: $12.00 per Shareholder account per year. Shareholder account fees are based upon the number of Shareholder accounts as of the last Fund Business Day of the prior month. (III) OUT-OF-POCKET AND RELATED EXPENSES The Trust, on behalf of the applicable Fund, shall reimburse Forum for all out-of-pocket and ancillary expenses in providing the services described in this Agreement, including but not limited to the cost of (or appropriate share of the cost of): (i) statement, confirmation, envelope and stationary stock, (ii) share certificates, (iii) printing of checks and drafts, (iv) postage, (v) telecommunications, (vi) banking services (DDA account, wire and ACH, check and draft clearing and lock box fees and charges), (vii) NSCC Fund/SERV and Networking fees and expenses, (viii) outside proxy solicitors and tabulators, (ix) proxy solicitation fees and (ix) microfilm and microfiche. In addition, any other expenses incurred by Forum at the request or with the consent of the Trust, will be reimbursed by the Trust on behalf of the applicable Fund. EX-99.B9 3 FORM OF FUND ACCOUNTING AGREEMENT EXHIBIT 9(c) FORM OF THE CUTLER TRUST FUND ACCOUNTING AGREEMENT AGREEMENT made as of the ____________ day of ______________, 199__, by and between The Cutler Trust, a Delaware business trust, with its principal office and place of business at Two Portland Square (the "Trust"), and Forum Accounting Services, Limited Liability Company, a Delaware limited liability company with its principal office and place of business at Two Portland Square, Portland, Maine 04101 ("Forum"). WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company and may issue its shares of beneficial interest, no par value (the "Shares"), in separate series and classes; and WHEREAS, the Trust offers shares in various series as listed in Appendix A hereto (each such series, together with all other series subsequently established by the Trust and made subject to this Agreement in accordance with Section 6, being herein referred to as a "Fund," and collectively as the "Funds") and the Trust may in the future offer shares of various classes of each Fund as listed in Appendix A hereto (each such class together with all other classes subsequently established by the Trust in a Fund being herein referred to as a "Class," and collectively as the "Classes"); WHEREAS, the Trust intends initially to offer shares in [Number of Initial Series] series as listed in Appendix A hereto (each such series, together with all other series subsequently established by the Trust and made subject to this Agreement in accordance with Section 6, being herein referred to as a "Fund," and collectively as the "Funds") and the Trust intends initially to offer shares of various classes of each Fund as listed in Appendix A hereto (each such class together with all other classes subsequently established by the Trust in a Fund being herein referred to as a "Class," and collectively as the "Classes"); WHEREAS, the Trust desires that Forum perform certain fund accounting services for each Fund and Class thereof and Forum is willing to provide those services on the terms and conditions set forth in this Agreement; NOW THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, the Trust and Forum hereby agree as follows: SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS SECTION 1. APPOINTMENT (a) The Trust hereby appoints Forum, and Forum hereby agrees, to act as fund accountant of the Trust for the period and on the terms set forth in this Agreement. (b) In connection therewith, the Trust has delivered to Forum copies of (i) the Trust's its Trust Instrument and Bylaws (collectively, as amended from time to time, "Organic Documents"), (ii) the Trust's Registration Statement and all amendments thereto filed with the U.S. Securities and Exchange Commission ("SEC") pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or the 1940 Act (the "Registration Statement"), (iii) the Trust's and the current Prospectus and Statement of Additional Information of each Fund (collectively, as currently in effect and as amended or supplemented, the "Prospectus") and (iv) all procedures adopted by the Trust with respect to the Funds (i.e., repurchase agreement procedures), and shall promptly furnish Forum with all amendments of or supplements to the foregoing. The Trust shall deliver to Forum a certified copy of the resolution of the Board of Trustees of the Trust (the "Board") appointing Forum and authorizing the execution and delivery of this Agreement. shall promptly furnish Forum with all amendments of or supplements to the foregoing. SECTION 2. DUTIES OF FORUM (a) Forum and the Trust's administrator, Forum Administrative Services, LLC (the "Administrator"), may from time to time adopt such procedures as they agree upon to implement the terms of this Section. With respect to each Fund, Forum shall perform the following services: (i) calculate the net asset value per share with the frequency prescribed in each Fund's then-current Prospectus; (ii) calculate each item of income, expense, deduction, credit, gain and loss, if any, as required by the Trust and in conformance with generally accepted accounting practice ("GAAP"), the SEC's Regulation S-X (or any successor regulation) and the Internal Revenue Code of 1986, as amended (or any successor laws)(the "Code"); (iii) Mmaintain each Fund's general ledger and record all income, expenses, capital share activity and security transactions of each Fund; (iv) calculate the yield, effective yield, tax equivalent yield and total return for each Fund, and each Class thereof, as applicable, and such other measure of performance as may be agreed upon between the parties hereto; (v) provide the Trust and such other persons as the Administrator may direct with the following reports (A) a current security position report, (B) a summary report of transactions and pending maturities (including the principal, cost, and accrued interest on each portfolio security in maturity date order), and (C) a current cash position and projection report; (vi) prepare and record, as of each time when the net asset value of a Fund is calculated or as otherwise directed by the Trust, either (A) a valuation of the assets of the Fund (unless otherwise specified in or in accordance with this Agreement, based upon (based upon the use of outside services normally used and contracted for this purpose by Forum in the case of securities for which information and market price or yield quotations are readily available and based upon evaluations conducted in accordance with the Trust's instructions in the case of all other assets) or (B) a calculation confirming that the market value of the Fund's assets does not deviate from the amortized cost value of those assets by more than a specified percentage; (vii) make such adjustments over such periods as Forum deems necessary to reflect over-accruals or under-accruals of estimated expenses or income; (viii) request any necessary information from the Administrator and the Trust's transfer agent and distributor in order to prepare, and prepare, the Trust's Form N-SAR; (ix) provide appropriate records to assist the Trust's independent accountants and, upon approval of the Trust or the Administrator, any regulatory body in any requested review of the Trust's books and records maintained by Forum; (x) prepare semi-annual financial statements and oversee the production of the semi-annual financial statements and any related report to the Trust's shareholders prepared by the Trust or its investment advisers, as applicable; (xi) file the Funds' semi-annual financial statements with the SEC or ensure that the Funds' semi-annual financial statements are filed with the SEC; (xii) provide information typically supplied in the investment company industry to companies that track or report price, performance or other information with respect to investment companies; (xiii) provide the Trust or Administrator with the data requested by the Administrator that is required to update the Trust's registration statement; (xiv) provide the Trust or independent accountants with all information requested with respect to the preparation of the Trust's income, excise and other tax returns; (xv) prepare or prepare, execute and file all Federal income and excise tax returns and state income and other tax returns, including any extensions or amendments, each as agreed between the Trust and Forum; (xvi) produce quarterly compliance reports for investment advisers, as applicable, to the Trust and the Trust's Board of Trustees (the Board") and provide information to the Administrator, investment advisers to the Trust and other appropriate persons with respect to questions of Fund compliance; (xvii) determine the amount of distributions to shareholders as necessary to, among other things, maintain the qualification of each Fund as a regulated investment company under the Code, and prepare and distribute to appropriate parties notices announcing the declaration of dividends and other distributions to shareholders; (xviii) transmit to and receive from each Fund's transfer agent appropriate data to on a daily basis and daily reconcile Shares outstanding and other data with the transfer agent; (xiv) periodically reconcile all appropriate data with each Fund's custodian; and (xv) verify investment trade tickets when received from an investment adviser, as applicable, and maintain individual ledgers and historical tax lots for each security ; and (xvi) perform such other recordkeeping, reporting and other tasks as may be specified from time to time in the procedures adopted by the Board; provided, that Forum need not begin performing any such task except upon 65 days' notice and pursuant to mutually acceptable compensation agreements. (b) Forum shall prepare and maintain on behalf of the Trust the following books and records of each Fund, and each Class thereof, pursuant to Rule 31a-1 under the 1940 Act (the "Rule"): (i) Journals containing an itemized daily record in detail of all purchases and sales of securities, all receipts and disbursements of cash and all other debits and credits, as required by subsection (b)(1) of the Rule; (ii) Journals and auxiliary ledgers reflecting all asset, liability, reserve, capital, income and expense accounts, as required by subsection (b)(2) of the Rule (but not including the ledgers required by subsection (b)(2)(iv); (iii) A record of each brokerage order given by or on behalf of the Trust for, or in connection with, the purchase or sale of securities, and all other portfolio purchases or sales, as required by subsections (b)(5) and (b)(6) of the Rule; (iv) A record of all options, if any, in which the Trust has any direct or indirect interest or which the Trust has granted or guaranteed and a record of any contractual commitments to purchase, sell, receive or deliver any property as required by subsection (b)(7) of the Rule; (v) A monthly trial balance of all ledger accounts (except shareholder accounts) as required by subsection (b)(8) of the Rule; and (VI) ADD RULE 2A-7 RECORDS HERE (vii) Other records required by the Rule or any successor rule or pursuant to interpretations thereof to be kept by open-end management investment companies, but limited to those provisions of the Rule applicable to portfolio transactions and as agreed upon between the parties hereto. (c) The books and records maintained pursuant to Section 2(b) shall be prepared and maintained in such form, for such periods and in such locations as may be required by the 1940 Act. The books and records pertaining to the Trust that are in possession of Forum shall be the property of the Trust. The Trust, or the Trust's authorized representatives, shall have access to such books and records at all times during Forum's normal business hours. Upon the reasonable request of the Trust or the Administrator, copies of any such books and records shall be provided promptly by Forum to the Trust or the Trust's authorized representatives at the Trust's expense. In the event the Trust designates a successor that shall assume any of Forum's obligations hereunder, Forum shall, at the expense and direction of the Trust, transfer to such successor all relevant books, records and other data established or maintained by Forum under this Agreement. (d) In case of any requests or demands for the inspection of the records of the Trust maintained by Forum, Forum will endeavor to notify the Trust and to secure instructions from an authorized officer of the Trust as to such inspection. Forum shall abide by the Trust's instructions for granting or denying the inspection; provided, however, that Forum may grant the inspection without instructions if Forum is advised by counsel to Forum that failure to do so will result in liability to Forum. (d) Nothing contained herein shall be construed to require Forum to perform any service that could cause Forum to be deemed an investment adviser for purposes of the 1940 Act or the Investment Advisers Act of 1940, as amended, or that could cause a Fund to act in contravention of the Fund's Prospectus or any provision of the 1940 Act. Except as otherwise specifically provided herein, the Trust assumes all responsibility for ensuring that the Trust complies with all applicable requirements of the Securities Act, the 1940 Act and any laws, rules and regulations of governmental authorities with jurisdiction over the Trust. All references to any law in this Agreement shall be deemed to include reference to the applicable rules and regulations promulgated under authority of the law and all official interpretations of such law or rules or regulations. SECTION 3. STANDARD OF CARE; RELIANCE (a) Forum shall be under no duty to take any action except as specifically set forth herein or as may be specifically agreed to by Forum in writing. Forum shall use its best judgment and efforts in rendering the services described in this Agreement. Forum shall not be liable to the Trust or any of the Trust's shareholders for any action or inaction of Forum relating to any event whatsoever in the absence of bad faith, willful misfeasance or gross negligence in the performance of Forum's duties or obligations under this Agreement or by reason of Forum's reckless disregard of its duties and obligations under this Agreement. (b) The Trust agrees to indemnify and hold harmless Forum, its employees, agents, directors, officers and managers and any person who controls Forum within the meaning of section 15 of the Securities Act or section 20 of the Securities Exchange Act of 1934, as amended, ("Forum Indemnitees") against and from any and all claims, demands, actions, suits, judgments, liabilities, losses, damages, costs, charges, reasonable counsel fees and other expenses of every nature and character arising out of or in any way related to Forum's actions taken or failures to act with respect to a Fund that are consistent with the standard of care set forth in Section 3(a) or based, if applicable, on good faith reliance upon an item described in Section 3(c)(a "Claim"). The Trust shall not be required to indemnify any Forum Indemnitee if, prior to confessing any Claim against the Forum Indemnitee, Forum or the Forum Indemnitee does not give the Trust written notice of and reasonable opportunity to defend against the claim in its own name or in the name of the Forum Indemnitee. (c) A Forum Indemnitee shall not be liable for any action taken or failure to act in good faith reliance upon: (i) the advice of the Trust or of counsel, who may be counsel to the Trust or counsel to Forum, and upon statements of accountants, brokers and other persons reasonably believed in good faith by Forum to be expert in the matters upon which they are consulted; (ii) any oral instruction which it receives and which it reasonably believes in good faith was transmitted by the person or persons authorized by the Board to give such oral instruction (Forum shall have no duty or obligation to make any inquiry or effort of certification of such oral instruction.); (iii) any written instruction or certified copy of any resolution of the Board, and Forum may rely upon the genuineness of any such document or copy thereof reasonably believed in good faith by Forum to have been validly executed; or (iv) any signature, instruction, request, letter of transmittal, certificate, opinion of counsel, statement, instrument, report, notice, consent, order, or other document reasonably believed in good faith by Forum to be genuine and to have been signed or presented by the Trust or other proper party or parties; and no Forum Indemnitee shall be under any duty or obligation to inquire into the validity or invalidity or authority or lack thereof of any statement, oral or written instruction, resolution, signature, request, letter of transmittal, certificate, opinion of counsel, instrument, report, notice, consent, order, or any other document or instrument which Forum reasonably believes in good faith to be genuine. (d) Notwithstanding anything to the contrary in this Agreement, Forum shall not be liable for the errors of other service providers to the Trust, including the errors of pricing services (other than to pursue all reasonable claims against the pricing service based on the pricing services' standard contracts entered into by Forum) and errors in information provided by an investment adviser (including prices and pricing formulas and the untimely transmission of trade information), custodian or transfer agent to the Trust. (e) With respect to Funds which do not value their assets in accordance with Rule 2a-7 under the 1940 Act, notwithstanding anything to the contrary in this Agreement, Forum shall not be liable to the Trust or any shareholder of the Trust for (i) any loss to the Trust if an NAV Difference for which Forum would otherwise be liable under this Agreement is less than or equal to 0.001 (1/10 of 1%) or (ii) any loss to a shareholder of the Trust if the NAV Difference for which Forum would otherwise be liable under this Agreement is less than or equal to 0.005 (1/2 of 1%) or if the loss in the shareholder's account with the Trust is less than or equal to $10. Any loss for which Forum is determined to be liable hereunder shall be reduced by the amount of gain which inures to shareholders, whether to be collected by the Trust or not. (f) For purposes of this Agreement, (i) the NAV Difference shall mean the difference between the NAV at which a shareholder purchase or redemption should have been effected ("Recalculated NAV") and the NAV at which the purchase or redemption is effected, divided by the Recalculated NAV, (ii) NAV Differences and any Forum liability therefrom are to be calculated each time a Fund's (or class's) NAV is calculated, (iii) in calculating any NAV Difference for which Forum would otherwise be liable under this Agreement for a particular NAV error, Fund losses and gains shall be netted and (iv) in calculating any NAV Difference for which Forum would otherwise be liable under this Agreement for a particular NAV error that continues for a period covering more than one NAV determination, Fund losses and gains for the period shall be netted. (g) Nothing contained herein shall be construed to require Forum to perform any service that could cause Forum to be deemed an investment adviser for purposes of the 1940 Act or the Investment Advisers Act of 1940, as amended, or that could cause a Portfolio to act in contravention of a Portfolio's Offering Document or any provision of the 1940 Act. Except as otherwise specifically provided herein, the Trust assumes all responsibility for ensuring that the Trust complies with all applicable requirements of the Securities Act, the 1940 Act and any laws, rules and regulations of governmental authorities with jurisdiction over the Trust. All references to any law in this Agreement shall be deemed to include reference to the applicable rules and regulations promulgated under authority of the law and all official interpretations of such law or rules or regulations. SECTION 4. COMPENSATION AND EXPENSES (a) In consideration of the services provided by Forum pursuant to this Agreement, the Trust shall pay Forum, with respect to each Fund, the fees set forth in Clause (i) of Appendix B hereto. In consideration of the services provided by Forum to begin the operations of a new Fund, the Trust shall pay Forum, with respect to each Fund, the fees set forth in clause (ii) of Appendix B hereto. In consideration of additional services provided by Forum to perform certain functions, the Trust shall pay Forum, with respect to each Fund the fees set forth in clause (iii) of Appendix B hereto. Nothing in this Agreement shall require Forum to perform any of the services listed in Section 2(a)(xiv) and clause (iii) of Appendix B hereto, as such services may be performed by the Fund's independent accountant if appropriate in the judgment of Forum. All fees payable hereunder shall be accrued daily by the Trust. The fees payable for the services listed in clauses (i) and (iii) of Appendix B hereto shall be payable monthly in advance on the first day of each calendar month for services to be performed during the following calendar month. The fees payable for the services listed in clause (ii) and for all reimbursements as described in Section 4(b) shall be payable monthly in arrears on the first day of each calendar month (the first day of the calendar month after the Fund commences operations in the case of the fees listed in clause (ii) of Appendix B hereto) for services performed during the prior calendar month. If fees payable for the services listed in clause (i) begin to accrue in the middle of a month or if this Agreement terminates before the end of any month, all fees for the period from that date to the end of that month or from the beginning of that month to the date of termination, as the case may be, shall be prorated according to the proportion that the period bears to the full month in which the effectiveness or termination occurs. Upon the termination of this Agreement with respect to a Fund, the Trust shall pay to Forum such compensation as shall be payable prior to the effective date of termination. (b) In connection with the services provided by Forum pursuant to this Agreement, the Trust, on behalf of each Fund, agrees to reimburse Forum for the expenses set forth in Clause (iv) of Appendix B hereto. In addition, the Trust, on behalf of the applicable Fund, shall reimburse Forum for all expenses and employee time (at 150% of salary) attributable to any review of the Trust's accounts and records by the Trust's independent accountants or any regulatory body outside of routine and normal periodic reviews. Should the Trust exercise its right to terminate this Agreement, the Trust, on behalf of the applicable Fund, shall reimburse Forum for all out-of-pocket expenses and employee time (at 150% of salary) associated with the copying and movement of records and material to any successor person and providing assistance to any successor person in the establishment of the accounts and records necessary to carry out the successor's responsibilities. (d) Forum may, with respect to questions of law relating to its services hereunder, apply to and obtain the advice and opinion of counsel to the Trust or counsel to Forum. The costs of any such advice or opinion shall be borne by the Trust. SECTION 5. EFFECTIVENESS, DURATION, TERMINATION AND ASSIGNMENT (a) This Agreement shall become effective with respect to each Fund or Class on the later of the date on which the Trust's Registration Statement relating to the Shares of the Fund or Class becomes effective or the date of the commencement of operations of the Fund or Class. Upon effectiveness of this Agreement, it shall supersede all previous agreements between the parties hereto covering the subject matter hereof insofar as such Agreement may have been deemed to relate to the Funds. (b) This Agreement shall continue in effect with respect to a Fund until terminatedfor a period of one year from its effectiveness and shall continue in effect for successive one year periods; provided, that continuance is specifically approved at least annually (i) by the Board or by a vote of a majority of the outstanding voting securities of the Fund and (ii) by a vote of a majority of Trustees of the Trust who are not parties to this Agreement or interested persons of any such party (other than as Trustees of the Trust). (c) This Agreement may be terminated with respect to a Fund at any time, without the payment of any penalty (i) by the Board on 60 days' written notice to Forum or (ii) by Forum on 60 days' written notice to the Trust. The obligations of Sections 3 and 4 shall survive any termination of this Agreement. (d) This Agreement and the rights and duties under this Agreement otherwise shall not be assignable by either Forum or the Trust except by the specific written consent of the other party. All terms and provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto. SECTION 6. ADDITIONAL FUNDS AND CLASSES In the event that the Trust establishes one or more series of Shares or one or more classes of Shares after the effectiveness of this Agreement, such series of Shares or classes of Shares, as the case may be, shall become Funds and Classes under this Agreement. Forum or the Trust may elect not to make anyd such series or classes subject to this Agreement. SECTION 7. CONFIDENTIALITY. Forum agrees to treat all records and other information related to the Trust as proprietary information of the Trust and, on behalf of itself and its employees, to keep confidential all such information, except that Forum may (a) prepare or assist in the preparation of periodic reports to shareholders and regulatory bodies such as the SEC; (b) provide information typically supplied in the investment company industry to companies that track or report price, performance or other information regarding investment companies; and (c) release such other information as approved in writing by the Trust, which approval shall not be unreasonably withheld and may not be withheld where Forum may be exposed to civil or criminal contempt proceedings for failure to release the information, when requested to divulge such information by duly constituted authorities or when so requested by the Trust. SECTION 8. FORCE MAJEURE Forum shall not be responsible or liable for any failure or delay in performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control including, without limitation, acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdowns, flood or catastrophe, acts of God, insurrection, war, riots or failure of the mails, transportation, communication or power supply. In addition, to the extent Forum's obligations hereunder are to oversee or monitor the activities of third parties, Forum shall not be liable for any failure or delay in the performance of Forum's duties caused, directly or indirectly, by the failure or delay of such third parties in performing their respective duties or cooperating reasonably and in a timely manner with Forum. SECTION 9. ACTIVITIES OF FORUM (a) Except to the extent necessary to perform Forum's obligations under this Agreement, nothing herein shall be deemed to limit or restrict Forum's right, or the right of any of Forum's managers, officers or employees who also may be a trustee, officer or employee of the Trust, or persons who are otherwise affiliated persons of the Trust to engage in any other business or to devote time and attention to the management or other aspects of any other business, whether of a similar or dissimilar nature, or to render services of any kind to any other corporation, trust, firm, individual or association. (b) Forum may subcontract any or all of its responsibilities pursuant to this Agreement to one or more corporations, trusts, firms, individuals or associations, which may be affiliated persons of Forum, who agree to comply with the terms of this Agreement; provided, that any such subcontracting shall not relieve Forum of its responsibilities hereunder. Forum may pay those persons for their services, but no such payment will increase Forum's compensation from the Trust. (b) Forum may subcontract any or all of its functions or responsibilities pursuant to this Agreement to one or more corporations, trusts, firms, individuals or associations, which may be affiliated persons of Forum, who agree to comply with the terms of this Agreement. Forum may pay those persons for their services, but no such payment will increase Forum's compensation from the Trust. SECTION 10. COOPERATION WITH INDEPENDENT ACCOUNTANTS Forum shall cooperate, if applicable, with each Fund's independent public accountants and shall take reasonable action to make all necessary information available to the accountants for the performance of the accountants' duties. SECTION 11. SERVICE DAYS Nothing contained in this Agreement is intended to or shall require Forum, in any capacity under this Agreement, to perform any functions or duties on any day other than a business day of the Trust or of a Fund. Functions or duties normally scheduled to be performed on any day which is not a business day of the Trust or of a Fund shall be performed on, and as of, the next business day, unless otherwise required by law. SECTION 12. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY The trustees of the Trust and the shareholders of each Fund shall not be liable for any obligations of the Trust or of the Funds under this Agreement, and Forum agrees that, in asserting any rights or claims under this Agreement, it shall look only to the assets and property of the Trust or the Fund to which Forum's rights or claims relate in settlement of such rights or claims, and not to the trustees of the Trust or the shareholders of the Funds. SECTION 13. MISCELLANEOUS (a) Neither party to this Agreement shall be liable to the other party for consequential damages under any provision of this Agreement. (b) Except for Appendix A to add new Funds and Classes in accordance with Section 6, no provisions of this Agreement may be amended or modified in any manner except by a written agreement properly authorized and executed by both parties hereto. (c) This Agreement shall be governed by, and the provisions of this Agreement shall be construed and interpreted under and in accordance with, the laws of the State of Delaware. (d) This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof, whether oral or written. (e) This Agreement may be executed by the parties hereto on any number of counterparts, and all of the counterparts taken together shall be deemed to constitute one and the same instrument. (f) If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid. (g) Section headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement. (h) Notices, requests, instructions and communications received by the parties at their respective principal places of business, or at such other address as a party may have designated in writing, shall be deemed to have been properly given. (i) Notwithstanding any other provision of this Agreement, the parties agree that the assets and liabilities of each Fund of the Trust are separate and distinct from the assets and liabilities of each other Fund and that no Fund shall be liable or shall be charged for any debt, obligation or liability of any other Fund, whether arising under this Agreement or otherwise. (j) No affiliated person, employee, agent, director, officer or manager of Forum shall be liable at law or in equity for Forum's obligations under this Agreement. (k) Each of the undersigned warrants and represents that they have full power and authority to sign this Agreement on behalf of the party indicated and that their signature will bind the party indicated to the terms hereof and each party hereto warrants and represents that this Agreement, when executed and delivered, will constitute a legal, valid and binding obligation of the party, enforceable against the party in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties. (l) The terms "vote of a majority of the outstanding voting securities," "interested person" and "affiliated person" shall have the meanings ascribed thereto in the 1940 Act. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers, as of the day and year first above written. [NAME] By: [Officer name] [Title] FORUM ACCOUNTING SERVICES, LIMITED LIABILITY COMPANY By: Forum Advisors[ ], Inc., as Manager By: John Y. Keffer President THE CUTLER TRUST FUND ACCOUNTING AGREEMENT APPENDIX A FUNDS AND CLASSES OF THE TRUST AS OF SEPTEMBER 10, 1997 Cutler Equity Income Fund Cutler Approved List Equity Fund THE CUTLER TRUST FUND ACCOUNTING AGREEMENT APPENDIX B FEES AND EXPENSES (I) BASE FEE
A. Standard Fee Fee per Fund................................................................... $3,000/month Fee for each additional Class of the Fund above one............................ $1,000/month B. Plus additional surcharges for each of: (i) Portfolios with asset levels exceeding $100 million................... $500/month Portfolios with asset levels exceeding $250 million................... $1000/month Portfolios with asset levels exceeding $500 million................... $1,500/month Portfolios with asset levels exceeding $1,000 million................. $2,000/month (ii) Portfolios requiring international custody............................ $1,000/month (iii) Portfolios with more than 30 international positions ................. $1,000/month (iv) Tax free money market Funds........................................... $1,000/month (v) Portfolios with more than 25% of net assets invested in asset backed securities............................................... $1,000/month Portfolios with more than 50% of net assets invested in asset backed securities............................................... $2,000/month (vii) Portfolios with more than 100 security positions...................... $1,000/month (viii) Portfolios with a monthly portfolio turnover rate of 10% or greater............................................................ $1,000/month C. Standard Fee per Gateway Fund (a Fund operating pursuant to Section 12(d)(1)(E) of the 1940 Act) Standard Fee per Fund.......................................................... $1,000/month Standard Fee per Fund that invests inone or more instruments in addition to the fund in which it invests.................................... $2,000/month Fee for each additional Class of a Fund above one.............................. $1,000/month Additional surcharges listed above do not apply D. Standard Fee per Gateway Fund (a Fund operating pursuant to Section 12(d)(1)(G) of the 1940 Act or in a similar structure) Standard Fee per Fund.......................................................... $1,000/month Fee for each additional Class of a Fund above one.............................. $1,000/month Plus additional surcharges listed above if the Fund invests in securities other than investment companies (calculated as if the securities were the Fund's only assets)
Note 1: Surcharges are determined based upon the total assets, security positions or other factors as of the end of the prior month and on the portfolio turnover rate for the prior month. Portfolio turnover rate shall have the meaning ascribed thereto in SEC Form N-1A. Note 2: The rates set forth above shall remain fixed through December 31, 1998. On January 1, 1999, and on each successive January 1, the rates may be adjusted automatically by Forum without action of the Trust to reflect changes in the Consumer Price Index for the preceding calendar year, as published by the U.S. Department of Labor, Bureau of Labor Statistics. Forum shall notify the Trust each year of the new rates, if applicable. (II) START-UP FEE Fund Start-Up Fee ...................................................................... $2,000 (III) OTHER SERVICES (payable in equal installments monthly) TAX SERVICES. Preparation of Federal income and excise tax returns and preparation, execution and filing of state income tax returns, including any extensions or amendments Standard Fee.................................................. $3,000/fiscal period Fee per Gateway Fund (a Fund described in (i)(C) or (D) above)....................................... $1,500/fiscal period Fee per Gateway Fund (a Fund described in (i)(C) or (D) above) that invests in more than one instrument in addition to the fund(s) in which it invests.................................................... $3,000/fiscal period
(IV) OUT-OF-POCKET AND RELATED EXPENSES The Trust, on behalf of the applicable Fund, shall reimburse Forum for all out-of-pocket and ancillary expenses in providing the services described in this Agreement, including but not limited to the cost of (or appropriate share of the cost of): (i) pricing, paydown, corporate action, credit and other reporting services, (ii) taxes, (iii) postage and delivery services, (iv) telephone services, (v) electronic or facsimile transmission services, (vi) reproduction, (vii) printing and distributing financial statements, (xiii) microfilm and microfiche and (ix) Trust record storage and retention fees. In addition, any other expenses incurred by Forum at the request or with the consent of the Trust, will be reimbursed by the Trust on behalf of the applicable Fund. EX-99.B11 4 AUDITOR CONSENT EXHIBIT (11) CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by refernece in this Post-Effective Amendment No. 7 to Registration Statement ( File No. 33-52850) of The Cutler Trust on behalf of the Cutler Income Equity Fund and Cutler Approved List Equity Fund of our reports dated July 22, 1997, and to the references to us under the headings "Financial Highlights" in the Prospectus, and "Custodian and Auditor" in the Statements of Additional Information which are a part of such Registration Statement. /s/ Deloitte & Touche LLP - ------------------------- Deloitte & Touche LLP Boston, Massachusetts September 12, 1997 EX-99 5 POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that Robert B. Watts, Jr. constitutes and appoints John Y. Keffer, Max Berueffy, David I. Goldstein and William Goodwin, and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign the Registration Statement on Form N-1A and any or all amendments thereto of The Cutler Trust and to file the same with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. /s/ Robert B. Watts, Jr. Robert B. Watts, Jr. Dated: February , 1996 EX-99.B16 6 SAMPLE PERFORMANCE EXHIBIT 16 EXHIBIT 16 SCHEDULE OF SAMPLE PERFORMANCE QUOTATION CALCULATIONS CUTLER EQUITY INCOME FUND Note: All performance is for the period ended: JUNE 30, 1997 ------------------------ 1. AVERAGE ANNUAL TOTAL RETURN (PURSUANT TO SEC STANDARDIZED FORMULA) SEC Formula: T = ({{[((ERV/P) - 1)(1 - S) - S](1 - R) - R} + 1}1 / n )-1 where: T = average annual total return P = initial payment of $1,000 n = number of years ERV = ending redeemable value of the initial payment at the end of the period a. Average Annual Total Return (assuming deduction of the maximum sales/ --------------------------- purchase/redemption charges) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- N(YR) 1/12 1/4 1/2 1 3 5 10 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- ERV - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- S - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- R - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- T(%) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
b. Average Annual total Return (assuming no deduction of sales/purchase/ --------------------------- redemption charges) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- N(YR) 1/2 1/12 1/4 1/2 1 3 5 10 4.5 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- ERV 1225.70 1052.30 1159.80 1225.70 1376.50 2007.50 - - 1988.70 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- T(%) 50.23 84.27 80.96 50.23 37.65 26.12 - - 16.49 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
2. CUMULATIVE TOTAL RETURN (PURSUANT TO NON-STANDARDIZED FORMULA) Formula: C = {{[(T + 1)n - 1 - R]/(1 - R)} + S}/(1 - S) where: C = cumulative total return of the investment over the specified period T = average annual total return (see above) P = initial payment of $1,000 n = number of years ERV = ending redeemable value of the initial payment at the end of the period S = Maximum initial sales charge R = Maximum redemption charge (calculated based on ____) (i.e., lower of purchase amount or redemption amount) a. Cumulative Total Return (assuming deduction of the maximum sales/ ----------------------- purchase/redemption charges) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- N(YR) 1/12 1/4 1/2 1 3 5 10 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- ERV - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- S - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- R - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- C(%) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
b. Cumulative Or Aggregate Total Return (assuming no deduction of sales/ ------------------------------------ purchase/redemption charges) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- N(YR) 1/2 1/12 1/4 1/2 1 3 5 10 4.5 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- ERV 1225.70 1052.30 1159.80 1225.70 1376.50 2007.50 - - 1988.70 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- C(%) 22.57 5.23 15.98 22.57 37.65 100.75 - - 98.87 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
3. 30 DAY YIELD (PURSUANT TO SEC STANDARDIZED FORMULA) SEC Formula: Y = 2{[(a - b)/(cd) + 1]6 - 1]} where: Y = 30 day yield a = dividends and interest earned during the period b = expenses accrued for the period (net of reimbursements) c = the average daily number of shares outstanding during the period that were entitled to receive dividends d = the maximum offering price per share on the last day of the period - ------------------------ ---------------------- ---------------------- ----------------------- ---------------------- A($) B($) C D($) Y(%) - ------------------------ ---------------------- ---------------------- ----------------------- ---------------------- 130,076.35 43,944.44 3,857,286.95 16.06 1.67 - ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
4. 30 DAY TAX-EQUIVALENT YIELD (PURSUANT TO SEC STANDARDIZED FORMULA) SEC Formula: TEY = Y/(1 - TR) where: TEY = 30 day tax-equivalent yield Y = 30 day yield (see above) TR = assumed applicable tax rate - ----------------------------------------------------------- --------------------------------------------------------- TR(%) TEY(%) - ----------------------------------------------------------- --------------------------------------------------------- NA NA - ----------------------------------------------------------- ---------------------------------------------------------
5. 30-DAY DISTRIBUTION RATE (PURSUANT TO NON-STANDARDIZED FORMULA) Formula: 30 Day Distribution Rate ("Rate")= (ab)/c where: Rate = 30 day distribution rate a = distributions in last 30 days b = number of 30 day periods in year c = maximum offering price per share on last day of period - ----------------------------- ----------------------------- ---------------------------- ---------------------------- A B C RATE(%) - ----------------------------- ----------------------------- ---------------------------- ---------------------------- - ----------------------------- ----------------------------- ---------------------------- ----------------------------
EXHIBIT 16 SCHEDULE OF SAMPLE PERFORMANCE QUOTATION CALCULATIONS CUTLER APPROVED LIST FUND Note: All performance is for the period ended: JUNE 30, 1997 ------------------------ 1. AVERAGE ANNUAL TOTAL RETURN (PURSUANT TO SEC STANDARDIZED FORMULA) SEC Formula: T = ({{[((ERV/P) - 1)(1 - S) - S](1 - R) - R} + 1}1 / n )-1 where: T = average annual total return P = initial payment of $1,000 n = number of years ERV = ending redeemable value of the initial payment at the end of the period S = Maximum initial sales charge R = Maximum redemption charge (calculated based on _______)(i.e., lower of purchase amount or redemption amount) a. Average Annual Total Return (assuming deduction of the maximum sales/ --------------------------- purchase/redemption charges) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- N(YR) 1/12 1/4 1/2 1 3 5 10 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- ERV - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- S - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- R - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- T(%) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
b. Average Annual Total Return (assuming no deduction of sales/purchase/ --------------------------- redemption charges) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- N(YR) 1/2 1/12 1/4 1/2 1 3 5 10 4.5 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- ERV 1204.70 1051.50 1162.70 1204.70 1311.80 1974.00 - - 1985.10 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- T(%) 45.13 82.72 82.73 45.13 31.18 25.42 - - 16.44 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
2. CUMULATIVE TOTAL RETURN (PURSUANT TO NON-STANDARDIZED FORMULA) Formula: C = {{[(T + 1)n - 1 - R]/(1 - R)} + S}/(1 - S) where: C = cumulative total return of the investment over the specified period T = average annual total return (see above) P = initial payment of $1,000 n = number of years ERV = ending redeemable value of the initial payment at the end of the period a. Cumulative Total Return (assuming deduction of the maximum sales/ ----------------------- purchase/redemption charges) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- N(YR) 1/12 1/4 1/2 1 3 5 10 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- ERV - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- S - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- R - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- C(%) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
b. Cumulative Or Aggregate Total Return (assuming no deduction of sales/ ------------------------------------ purchase/redemption charges) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- N(YR) 1/2 1/12 1/4 1/2 1 3 5 10 4.5 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- ERV 1204.70 1051.50 1162.70 1204.70 1311.80 1974.00 - - 1985.10 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- C(%) 20.47 5.15 16.27 20.47 31.18 97.40 - - 98.51 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
3. 30 DAY YIELD (PURSUANT TO SEC STANDARDIZED FORMULA) SEC Formula: Y = 2{[(a - b)/(cd) + 1]6 - 1]} where: Y = 30 day yield a = dividends and interest earned during the period b = expenses accrued for the period (net of reimbursements) c = the average daily number of shares outstanding during the period that were entitled to receive dividends d = the maximum offering price per share on the last day of the period - ------------------------ ---------------------- ---------------------- ----------------------- ---------------------- A($) B($) C D($) Y(%) - ------------------------ ---------------------- ---------------------- ----------------------- ---------------------- 61,750.70 35,626.81 1,915,782.54 18.33 0.89 - ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
4. 30 DAY TAX-EQUIVALENT YIELD (PURSUANT TO SEC STANDARDIZED FORMULA) SEC Formula: TEY = Y/(1 - TR) where: TEY = 30 day tax-equivalent yield Y = 30 day yield (see above) TR = assumed applicable tax rate - ----------------------------------------------------------- --------------------------------------------------------- TR(%) TEY(%) - ----------------------------------------------------------- --------------------------------------------------------- N/A N/A - ----------------------------------------------------------- ---------------------------------------------------------
5. 30-DAY DISTRIBUTION RATE (PURSUANT TO NON-STANDARDIZED FORMULA) Formula: 30 Day Distribution Rate ("Rate")= (ab)/c where: Rate = 30 day distribution rate a = distributions in last 30 days b = number of 30 day periods in year c = maximum offering price per share on last day of period - ----------------------------- ----------------------------- ---------------------------- ---------------------------- A B C RATE(%) - ----------------------------- ----------------------------- ---------------------------- ---------------------------- - ----------------------------- ----------------------------- ---------------------------- ----------------------------
EX-27 7 FDS SCHEDULE
6 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CUTLER TRUST ANNUAL REPORT DATED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT. 010 CUTLER EQUITY INCOME FUND YEAR JUN-30-1997 JUN-30-1997 41,643,624 62,453,728 174,871 0 0 62,628,599 0 0 105,665 105,665 0 39,934,871 3,893,863 3,573,490 14,978 0 1,762,981 0 20,810,104 62,522,934 1,337,812 120,667 0 600,120 858,359 2,878,813 13,036,026 16,773,198 0 869,845 4,115,498 0 5,928,772 6,406,222 4,927,163 16,237,568 20,754 3,005,370 0 0 385,655 0 600,120 51,420,712 12.95 .24 4.30 .24 1.19 0 16.06 1.17 0 0
EX-27 8 FDS SCHEDULE
6 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CUTLER TRUST ANNUAL REPORT DATED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT. 020 CUTLER APPROVED LIST EQUITY FUND YEAR JUN-30-1997 JUN-30-1997 20,940,529 35,935,638 53,297 0 0 35,988,935 657,044 0 54,510 711,554 0 19,480,940 1,924,574 2,132,571 2,749 0 798,583 0 14,995,109 35,277,381 699,184 38,061 0 384,285 352,960 817,421 7,342,804 8,513,185 0 361,715 94,208 0 2,668,009 6,144,099 448,402 5,029,574 11,504 75,370 0 0 230,877 0 386,065 30,783,534 14.18 .18 4.20 .18 .05 0 18.33 1.25 0 0
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