As filed with the Securities and Exchange Commission
on March 24, 2003
Securities Act File No. ______________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. /_____/
Post-Effective Amendment No. /_____/
MONARCH FUNDS
(Exact Name of Registrant as Specified in Charter)
Two Portland Square, Portland, Maine 04101
(Address of Principal Executive Offices) (Zip Code)
(207) 879-1900
(Registrant's Area Code and Telephone Number)
Leslie K. Klenk
Forum Administrative Services, LLC
Two Portland Square
Portland, ME 04101
Copies of Communications to:
Robert J. Zutz, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue NW 2nd Floor
Washington, DC 20036-1800
Approximate Date of Proposed Public Offering:
As soon as practicable after this
Registration Statement becomes effective.
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Title of securities being registered:
Universal Shares, Institutional Service Shares and Investor Shares of Daily
Assets Government Fund and Daily Assets Cash Fund and Universal Shares and
Institutional Service Shares of Daily Assets Treasury Fund.
Pursuant to Rule 429, a filing fee is not required because the Registrant has
previously registered an indefinite number of its Shares under the Securities
Act of 1933, as amended, pursuant to Rule 24f-2 under the Investment Company Act
of 1940, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
IMPORTANT NOTICE: PLEASE COMPLETE THE
ENCLOSED PROXY BALLOT AND RETURN IT AS SOON AS POSSIBLE.
- --------------------------------------------------------------------------------
FORUM FUNDS
Two Portland Square
Portland, Maine 04101
_________, 2003
Dear Valued Shareholder:
Enclosed is a Notice of Special Meeting of Shareholders of Daily Assets
Treasury Obligations Fund ("Forum Treasury Fund"), Daily Assets Government
Obligations Fund ("Forum Government Fund"), and Daily Assets Cash Fund ("Forum
Cash Fund") (each a "Forum Series"), each a series of Forum Funds (the "Trust"),
to be held on _________________, 2003 at the offices of Forum Financial Group,
LLC, Two Portland Square, Second Floor Conference Room, Portland, Maine 04101.
At the meeting, you will be asked to approve an Agreement and Plan of
Reorganization between the Trust, on behalf of each Forum Series, and Monarch
Funds ("Monarch"), another registered investment company, on behalf of its
series Daily Assets Treasury Fund ("Monarch Treasury Fund"), Daily Assets
Government Fund ("Monarch Government Fund"), and Daily Assets Cash Fund
("Monarch Cash Fund") (the "Plan"). Under the Plan, each of Forum Treasury Fund,
Forum Government Fund, and Forum Cash Fund will transfer its assets and
liabilities to Monarch Treasury Fund, Monarch Government Fund, and Monarch Cash
Fund, respectively (each a "Monarch Series"), in exchange for shares of that
corresponding Monarch Series and the corresponding Monarch Series' assumption of
the applicable Forum Series' liabilities. Each Forum Series will then distribute
the shares received from the Monarch Series proportionately to its shareholders
and then terminate. Each Forum Series' shareholder holding Institutional,
Institutional Service, and Investor Shares will receive Universal, Institutional
Service, and Investor Shares, respectively, of the corresponding Monarch Series.
Each Forum Series and the corresponding Monarch Series invest substantially
all of their assets in the same portfolio of Core Trust (Delaware) ("Core
Trust"), another registered investment company. After the Plan is consummated,
each Monarch Series will redeem its investment in Core Trust and invest directly
in portfolio securities.
The Board of Trustees of the Trust (the "Board") unanimously approved the
Plan and believes that it is in the best interests of the shareholders of each
Forum Series. In evaluating the Plan with respect to the Forum Series in which
you invest, please note that:
o Each Forum Series and its corresponding Monarch Series invest
substantially all of their assets in the same portfolio of Core Trust.
o Each Forum Series and its corresponding Monarch Series pursue the same
investment objective and have the same investment strategies and
policies.
o Although certain service provider fees of each Monarch Series are
higher than those currently charged to its corresponding Forum Series,
the economies of scale that will result from the combination of the
assets of each Forum Series with the corresponding Monarch Series will
result in lower gross expenses for the shareholders of each Forum
Series after its reorganization.
o As a result of the transactions contemplated under the Plan, the
performance of each Forum Series will reflect the performance of the
corresponding Monarch Series.
Shareholders are being asked to approve the Plan only with respect to the
Forum Series in which they own shares. The approval of the Plan by the
shareholders of one Forum Series is not contingent on the approval of the Plan
by the shareholders of any other Forum Series.
The Board believes that the Plan is important and recommends that you read
the enclosed materials carefully and then vote FOR the proposal. Please choose
one of the following options to vote:
o BY MAIL: Complete the enclosed proxy card and return it in the
postage-paid envelope provided.
o BY TELEPHONE: Call the Toll-Free number on your proxy card.
o IN PERSON: Attend the Special Meeting (details enclosed).
Forum Financial Group, LLC and/or its affiliates (collectively, "FFG") have
agreed to pay the audit, legal, and proxy solicitation costs of the transactions
contemplated under the Plan. FFG currently provides administrative, transfer
agency, fund accounting and custody services to each Forum Series and each
Monarch Series.
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WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES (UNLESS YOU ARE VOTING BY
TELEPHONE). NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED
STATES. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE.
- --------------------------------------------------------------------------------
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT/ PROSPECTUS OR THE
PROCEDURES TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT FORUM
SHAREHOLDER SERVICES, LLC AT (800) 943-6786.
Very truly yours,
/s/ JOHN Y. KEFFER
--------------------
John Y. Keffer
President and Chairman of
the Board of Trustees
2
FORUM FUNDS
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
DAILY ASSETS CASH FUND
Two Portland Square
Portland, Maine 04101
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
________, 2003
To the Shareholders:
A special meeting of shareholders of Daily Assets Treasury Obligations Fund
("Forum Treasury Fund), Daily Assets Government Obligations Fund ("Forum
Government Fund"), and Daily Assets Cash Fund ("Forum Cash Fund"), each a series
of Forum Funds (the "Trust"), will be held at the offices of Forum Financial
Group, LLC, Two Portland Square, Second Floor Conference Room, Portland, Maine
04101 on _________, 2003 at 10:00 a.m. (Eastern time) to consider the following:
1. A proposal to approve an Agreement and Plan of Reorganization between
the Trust, on behalf of Forum Treasury Fund, Forum Government Fund,
and Forum Cash Fund (each a "Forum Series"), and Monarch Funds
("Monarch"), another registered investment company, on behalf of its
series, Daily Assets Treasury Fund, Daily Assets Government Fund, and
Daily Assets Cash Fund (the "Plan"). Under the Plan, each of Forum
Treasury Fund, Forum Government Fund, and Forum Cash Fund will
transfer its assets to Daily Assets Treasury Fund ("Monarch Treasury
Fund"), Daily Assets Government Fund ("Forum Government Fund"), and
Daily Assets Cash Fund ("Monarch Cash Fund"), respectively (each a
"Monarch Series"), in exchange for shares of that corresponding
Monarch Series and the corresponding Monarch Series' assumption of the
applicable Forum Series' liabilities. Each Forum Series will then
distribute the shares received from the Monarch Series proportionately
to its shareholders and terminate. Each Forum Series' shareholder
holding Institutional, Institutional Service, and Investor Shares will
receive Universal, Institutional Service, and Investor Shares,
respectively, of the corresponding Monarch Series; and
2. Any other business that properly comes before the meeting.
Each Forum Series and the corresponding Monarch Series invest substantially
all of their assets in the same portfolio of Core Trust (Delaware), another
registered investment company. After the Plan is consummated, each Monarch
Series will redeem its investment in Core Trust and invest directly in portfolio
securities.
The approval of the Plan by shareholders of one Forum Series is not
contingent on the approval of the Plan by the shareholders of another Forum
Series. If shareholders of a Forum Series approve the Plan, that Forum Series
will reorganize into the corresponding Monarch
Series regardless of whether shareholders of any other Forum Series shareholders
vote to approve the Plan.
Enclosed with this notice is a Proxy Statement/Prospectus, which includes
information relevant to the proposed transaction. A form of the Plan is attached
as Exhibit A to the Proxy Statement/Prospectus.
Shareholders of record of each Forum Series as of the close of business on
_____________, 2003 are entitled to vote at the meeting and at any postponement
or adjournment thereof. This notice and related Proxy Statement/Prospectus are
first being mailed to shareholders of each Forum Series on or about ______,
2003. This Proxy is being solicited by the Trust's Board of Trustees.
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WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES (UNLESS YOU ARE VOTING BY
TELEPHONE). NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED
STATES. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE.
- --------------------------------------------------------------------------------
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT/ PROSPECTUS OR THE
PROCEDURES TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT FORUM
SHAREHOLDER SERVICES, LLC AT (800) 943-6786.
By Order of the Board of Trustees,
/s/ LESLIE K. KLENK
-------------------------
Leslie K. Klenk
Secretary
Forum Funds
YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE
NUMBER OF SHARES THAT YOU OWNED ON THE RECORD DATE.
2
PROXY STATEMENT/PROSPECTUS
__________, 2003
Acquisition of the Assets of
DAILY ASSETS TREASURY OBLIGATIONS FUND ("FORUM TREASURY FUND")
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND ("FORUM GOVERNMENT FUND")
DAILY ASSETS CASH FUND ("FORUM CASH FUND"),
each a series of
FORUM FUNDS
Two Portland Square
Portland, Maine 04101
(800) 943-6786
By and In Exchange for Shares of Beneficial
Interest of
DAILY ASSETS TREASURY FUND ("MONARCH TREASURY FUND")
DAILY ASSETS GOVERNMENT FUND ("MONARCH GOVERNMENT FUND")
DAILY ASSETS CASH FUND ("MONARCH CASH FUND"),
respectively
each a series of
MONARCH FUNDS
Two Portland Square
Portland, Maine 04101
(800) 754-8757
On February 11, 2003, the Board of Trustees of Forum Funds (the "Trust"), a
registered investment company, unanimously approved the Agreement and Plan of
Reorganization between Forum Funds, on behalf of its series, Forum Treasury
Fund, Forum Government Fund, and Forum Cash Fund, and Monarch Funds ("Monarch"),
another registered investment company, on behalf of its series, Monarch Treasury
Fund, Monarch Government Fund, and Monarch Cash Fund (the "Plan").
Under the Plan, each of Forum Treasury Fund, Forum Government Fund, and
Forum Cash Fund (each a "Forum Series") will transfer its assets to Monarch
Treasury Fund, Monarch Government Fund, and Monarch Cash Fund, respectively
(each a "Monarch Series"), in exchange for shares of that corresponding Monarch
Series and the corresponding Monarch Series' assumption of the applicable Forum
Series' liabilities. Each Forum Series will then distribute the shares received
from the Monarch Series proportionately to its shareholders and then terminate.
Each Forum Series shareholder holding Institutional, Institutional Service, and
Investor Shares will receive Universal, Institutional Service, and Investor
Shares, respectively, of the corresponding Monarch Series.
1
Each Forum Series and the corresponding Monarch Series invest substantially
all of their assets in the same portfolio of Core Trust (Delaware) ("Core
Trust"), another registered investment company. After the Plan is consummated,
each Monarch Series will redeem its investment in Core Trust and invest directly
in portfolio securities.
Please read the Proxy Statement/Prospectus carefully and retain it for
future reference. The Proxy Statement/Prospectus sets forth concisely the
information that you should know before investing in a Monarch Series. A
Statement of Additional Information dated _________, 2003 containing additional
information about the Plan and the transactions contemplated thereunder has been
filed with the Securities and Exchange Commission ("SEC") and is incorporated by
reference into, and is legally part of, this Proxy Statement/Prospectus. The
Statement of Additional Information to this Proxy Statement/Prospectus is
available upon request, without charge, by writing or calling:
Forum Shareholder Services, LLC
P.O. Box 446
Portland, Maine 04101
(800) 943-6786
[Additional information to be incorporated by reference shall be included by
pre-effective amendment.]
2
Shareholders may also view or obtain copies of this Proxy
Statement/Prospectus, the materials incorporated by reference herein or
additional information regarding a Forum Series or a Monarch Series from the
Securities and Exchange Commission's ("SEC") Website, HTTP://WWW.SEC.GOV.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
AN INVESTMENT IN A FORUM SERIES OR A MONARCH SERIES IS NOT A DEPOSIT OR
OBLIGATION OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, AND ANY OTHER
U.S. GOVERNMENT AGENCY. AN INVESTMENT IN BOTH A FORUM SERIES AND A MONARCH
SERIES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
3
TABLE OF CONTENTS
SUMMARY......................................................................5
The Proposed Agreement and Plan of Reorganization..........................5
Comparison of Fees.........................................................6
Comparison of Investment Objectives and Principal Investment Strategies....10
Comparison of Investment Advisory Services and Fees........................12
Comparison of Other Service Providers......................................12
Comparison of Class Structure..............................................13
Comparison of Purchase, Redemption, and Exchange Privileges................14
Comparison of Distribution Policies........................................16
Comparison of Distribution and Shareholder Service Fees....................16
Comparison of Net Asset Value Calculation Procedures.......................17
Tax Matters Relating to the Reorganization.................................17
INVESTMENT RISKS.............................................................17
INFORMATION ABOUT THE PLAN...................................................18
General Description of the Plan............................................18
Securities to be Issued....................................................19
Reasons for the Plan.......................................................20
TAXATION.....................................................................22
Tax Consequences of Distributions..........................................22
Tax Consequence of the Transactions Contemplated under the Plan............22
CAPITALIZATION...............................................................23
VOTING INFORMATION...........................................................20
Instructions for Signing Proxy Cards.......................................26
Information Regarding Shares of each Forum Series Outstanding..............27
Information Regarding Shares of each Monarch Series Outstanding............28
ADDITIONAL INFORMATION.......................................................29
Legal Matters..............................................................29
Experts....................................................................29
Information Filed with the Securities and Exchange Commission..............29
EXHIBIT A: Form of Agreement and Plan of Reorganization.....................A-1
4
SUMMARY
This section summarizes the important terms of the proposed Plan between
the Trust, on behalf of each Forum Series, and Monarch, on behalf of each
Monarch Series (the "Plan"). This section also summarizes certain information
regarding each Forum Series as well as each Monarch Series. As discussed below,
the Trust's Board of Trustees (the "Board") believes that the Plan is in the
best interest of the shareholders of each Forum Series.
The information set forth in this section is only a summary of and is
qualified in its entirety by the information contained elsewhere in this Proxy
Statement/Prospectus or in the documents incorporated by reference herein.
For a detailed discussion of the topics discussed in this Summary regarding
the Monarch Series, see [Information to be incorporated by reference will be
added by pre-effective amendment]. For a detailed discussion of the topics
discussed in this Summary regarding each Forum Series, see [Information to be
incorporated by reference will be added by pre-effective amendment].
THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
On February 11, 2003, the Board unanimously voted to approve the Plan with
respect to each Forum Series.
Under the Plan, each of Forum Treasury Fund, Forum Government Fund, and
Forum Cash Fund will: (1) transfer its assets and liabilities to Monarch
Treasury Fund, Monarch Government Fund, and Monarch Cash Fund, respectively, in
exchange for shares of that corresponding Monarch Series and the corresponding
Monarch Series' assumption of the applicable Forum Series' liabilities and (2)
each Forum Series will then distribute the shares received from the Monarch
Series proportionately to its shareholders and terminate (each a
"Reorganization," collectively, the "Reorganizations"). Each Forum Series'
shareholder holding Institutional, Institutional Service, and Investor Shares
will receive Universal, Institutional Services, and Investor Shares,
respectively, of the corresponding Monarch Series. A Reorganization of a Forum
Series will occur as of the Effective Date designated in the Plan or at a later
date as agreed upon by the Board and the Monarch Board of Trustees ("Monarch
Board") and only after the Plan is approved by the shareholders of the Forum
Series and all contigencies of the Plan are satisfied.
The Plan is the second stage of a larger transaction to consolidate the
money markets series of the Trust, Core Trust, and Monarch (collectively, the
"Money Fund Assets") in order to take advantage of the economies of scale and
operational efficiencies
5
that would result from the combination of the Money Fund Assets into one
registrant. The first stage involved the reorganization of Monarch from a
Delaware business trust into a Massachusetts business trust on April __, 2003.
The final stage includes the redemption of each Monarch Series investment in
Core Trust after the consummation of the Plan.
For the reasons set forth in the section entitled "Information about the
Plan - Reasons for the Plan," the Board, including the Trustees who are not
"interested persons" as that term is defined in the Section 2(a)(19) of
Investment Company Act of 1940, as amended (the "Independent Trustees"),
unanimously approved the Plan, concluded that the transactions contemplated by
the Plan with respect to each Forum Series was in the best interests of the
shareholders of the Forum Series, and recommended that you approve the Plan with
respect to the Forum Series in which you own shares. The Board, including the
Independent Trustees, also unanimously concluded that the economic interests of
each Forum Series' shareholders would not be diluted as a result of the
transactions contemplated by the Plan. The Board considered a variety of
different factors prior to forming these conclusions including, but not limited
to: (1) the similarities of the investment objective and investment policies of
each Forum Series and the corresponding Monarch Series; (2) the expenses of each
Forum Series and the corresponding Monarch Series; (3) the tax-free nature of
each Reorganization; and (4) the fact that Forum Financial Group, LLC and/or its
affiliates (collectively, "FFG") have agreed to pay all audit, legal, and proxy
solicitation costs associated with the Reorganizations.
COMPARISON OF FEES
Like all mutual funds, each Forum Series and Monarch Series incur certain
expenses in their operations and, as a shareholder, you pay these expenses
indirectly. The following tables compare the various fees and expenses that a
shareholder bore from an investment in each Forum Series as of the fiscal year
ended August 31, 2002 and the Pro Forma expenses of the corresponding Monarch
Series, as of August 31, 2002, assuming the Reorganization is approved.
FORUM TREASURY FUND/MONARCH TREASURY FUND
- ----------------------------------------- ----------------- ---------------- -- ----------------- ----------------
PRO FORMA PRO FORMA
FORUM MONARCH FORUM MONARCH
TREASURY TREASURY TREASURY TREASURY
FUND(1) FUND(2) FUND(1) FUND(2)
----------------- ---------------- -- ----------------- ----------------
INSTITUTIONAL INSTITUTIONAL
INSTITUTIONAL UNIVERSAL SERVICE SERVICE
SHARES SHARES SHARES SHARES
- ----------------------------------------- ----------------- ---------------- -- ----------------- ----------------
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND
ASSETS)
- ----------------------------------------- ----------------- ---------------- -- ----------------- ----------------
Management Fees 0.13% 0.14% 0.13% 0.14%
- ----------------------------------------- ----------------- ---------------- -- ----------------- ----------------
Distribution (12b-1) Fees None None None None
- ----------------------------------------- ----------------- ---------------- -- ----------------- ----------------
Other Expenses 0.16% 0.11% 0.58% 0.36%
- ----------------------------------------- ----------------- ---------------- -- ----------------- ----------------
TOTAL ANNUAL FUND OPERATING
EXPENSES 0.29% (3) 0.25%(4) 0.71%(3) 0.50%(4)
- ----------------------------------------- ----------------- ---------------- -- ----------------- ----------------
(1) Based on amounts incurred during Forum Treasury Fund's fiscal year ended
August 31, 2002 stated as a percentage of the average daily net assets
assets.
6
(2) Pro Forma amounts based on combined net assets of Forum Treasury Fund and
Monarch Treasury Fund as if the Reorganization had occurred on August 31,
2002.
(3) Certain service providers of Forum Treasury Fund have voluntarily agreed to
waive a portion of their fees and reimburse fund expenses in order to limit
Total Annual Fund Operating Expenses of Institutional Shares and
Institutional Service Shares to 0.20% and 0.45%, respectively, of that
class' average daily net assets. Fee waivers and expense reimbursements may
be reduced or eliminated at any time.
(4) Certain service providers of Monarch Treasury Fund have voluntarily
agreed to waive a portion of their fees and reimburse fund expenses in
order to limit Total Annual Fund Operating Expenses of Universal Shares and
Institutional Service Shares to 0.20% and 0.45%, respectively, of that
class' average daily net assets. Fee waivers and expense reimbursements may
be reduced or eliminated at any time.
FORUM GOVERNMENT FUND/MONARCH GOVERNMENT FUND
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
PROFORMA PROFORMA PROFORMA
FORUM MONARCH FORUM MONARCH FORUM MONARCH
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
FUND(1) FUND(2) FUND(1) FUND(2) FUND(1) FUND(2)
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
INSTITUTIONAL INSTITUTIONAL
INSTITUTIONAL UNIVERSAL SERVICE SERVICE INVESTOR INVESTOR
SHARES SHARES SHARES SHARES SHARES SHARES
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
ANNUAL FUND
OPERATING
EXPENSES (EXPENSES
DEDUCTED FROM
FUND ASSETS)
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
Management Fees 0.13% 0.14% 0.13% 0.14% 0.13% 0.14%
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
Distribution (12b-1)
Fees None None None None 0.30% 0.25%
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
Other Expenses 0.19% 0.11% 0.49% 0.36% 4.05% 0.46%
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
TOTAL ANNUAL FUND
OPERATING
EXPENSES 0.32%(3) 0.25%(4) 0.62%(3) 0.50%(4) 4.48%(3) 0.85%(4)
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
(1) Based on amounts incurred during Forum Government Fund's fiscal year ended
August 31, 2002 stated as a percentage of the average daily net assets.
(2) Pro Forma amounts based on combined net assets of Forum Government Fund and
Monarch Government Fund as if the Reorganization had occurred on August 31,
2002.
(3) Certain service providers of Forum Government Fund have voluntarily agreed
to waive a portion of their fees and reimburse fund expenses in order to
limit Total Annual Fund Operating Expenses of Institutional, Institutional
Service, and Investor Shares to 0.20%, 0.45%, and 0.90%, respectively, of
that class' average daily net assets. Fee waivers and expense
reimbursements may be reduced or eliminated at any time.
(4) Certain service providers of Monarch Government Fund have voluntarily
agreed to waive a portion of their fees and reimburse fund expenses in
order to limit Total Annual Fund Operating Expenses of Universal,
Institutional Service and Investor Shares to 0.20%, 0.45%, and 0.85%,
respectively, of that class' average daily net assets. Fee waivers and
expense reimbursements may be reduced or eliminated at any time.
7
FORUM CASH FUND/MONARCH CASH FUND
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
PROFORMA PROFORMA PROFORMA
FORUM MONARCH FORUM MONARCH FORUM MONARCH
CASH FUND(1) CASH FUND(2) CASH FUND(1) CASH FUND(2) CASH FUND(1) CASH FUND2)
--------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
INSTITUTIONAL INSTITUTIONAL
INSTITUTIONAL UNIVERSAL SERVICE SERVICE INVESTOR INVESTOR
SHARES SHARES SHARES SHARES SHARES SHARES
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
ANNUAL FUND
OPERATING
EXPENSES (EXPENSES
DEDUCTED FROM
FUND ASSETS)
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
Management Fees 0.13% 0.14% 0.13% 0.14% 0.13% 0.14%
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
Distribution (12b-1)
Fees None None None None 0.30% 0.25%
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
Other Expenses 0.18% 0.10% 0.50% 0.35% 3.38% 0.45%
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
TOTAL ANNUAL FUND
OPERATING
EXPENSES 0.31%(3) 0.24%(4) 0.63%(3) 0.49%(4) 3.81%(3) 0.84%(4)
- ------------------------- --------------- ---------------- -- ---------------- --------------- -- ---------------- ---------------
(1) Based on amounts incurred during Forum Cash Fund's fiscal year ended August
31, 2002 stated as a percentage of the average daily net assets.
(2) Pro Forma amounts based on combined net assets of the Forum Cash Fund and
Monarch Cash Fund as if the Reorganization had occurred on August 31, 2002.
(3) Certain service providers of Forum Cash Fund have voluntarily agreed to
waive a portion of their fees and reimburse fund expenses in order to limit
Total Annual Fund Operating Expenses of Institutional, Institutional
Service, and Investor Shares to 0.20%, 0.45%, and 0.90%, respectively, of
that class' average daily net assets. Fee waivers and expense
reimbursements may be reduced or eliminated at any time.
(4) Certain service providers of Monarch Cash Fund have voluntarily agreed to
waive a portion of their fees and reimburse fund expenses in order to limit
Total Annual Fund Operating Expenses of Universal, Institutional Service,
and Investor Shares to 0.20%, 0.45%, and 0.85%, respectively, of that
class' average daily net assets. Fee waivers and expense reimbursements may
be reduced or eliminated at any time.
EXAMPLE OF EFFECT ON FUND EXPENSES
The following is a hypothetical example intended to help you compare the
cost of investing in each Forum Series with the costs of investing in the
corresponding Monarch Series after their Reorganization. This example assumes
that you invest $10,000 in a specified fund and class for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% annual rate of return, that
the Total Annual Fund Operating Expenses of the specified fund and class remain
the same as stated in the above tables and that all dividends and distributions
are reinvested. Although your actual costs may be higher or lower, under these
assumptions your costs would be:
8
FORUM TREASURY FUND/MONARCH TREASURY FUND
- ------------------------------ -------------------- -------------------- -- -------------------- --------------------
FORUM PRO FORMA FORUM PRO FORMA
TREASURY MONARCH TREASURY TREASURY MONARCH
FUND FUND FUND TREASURY FUND
-------------------- -------------------- -- -------------------- --------------------
INSTITUTIONAL UNIVERSAL INSTITUTIONAL INSTITUTIONAL
SHARES SHARES SERVICE SHARES SERVICE SHARES
- ------------------------------ -------------------- -------------------- -- -------------------- --------------------
1 Year $30 $26 $73 $51
- ------------------------------ -------------------- -------------------- -- -------------------- --------------------
3 Years $93 $80 $227 $160
- ------------------------------ -------------------- -------------------- -- -------------------- --------------------
5 Years $163 $141 $395 $280
- ------------------------------ -------------------- -------------------- -- -------------------- --------------------
10 Years $368 $318 $883 $628
- ------------------------------ -------------------- -------------------- -- -------------------- --------------------
FORUM GOVERNMENT FUND/MONARCH GOVERNMENT FUND
- -------------- --------------- --------------- --- --------------- ---------------- -- --------------- ----------------
PROFORMA PROFORMA PROFORMA
FORUM MONARCH FORUM MONARCH FORUM MONARCH
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
FUND FUND FUND FUND FUND FUND
- -------------- --------------- --------------- --- --------------- ---------------- -- --------------- ----------------
INSTITUTIONAL INSTITUTIONAL
INSTITUTIONAL UNIVERSAL SERVICE SERVICE INVESTOR INVESTOR
SHARES SHARES SHARES SHARES SHARES SHARES
- -------------- --------------- --------------- --- --------------- ---------------- -- --------------- ----------------
1 Year $33 $26 $63 $51 $449 $78
- -------------- --------------- --------------- --- --------------- ---------------- -- --------------- ----------------
3 Years $103 $80 $199 $160 $1,355 $271
- -------------- --------------- --------------- --- --------------- ---------------- -- --------------- ----------------
5 Years $180 $141 $346 $280 $2,269 $471
- -------------- --------------- --------------- --- --------------- ---------------- -- --------------- ----------------
10 Years $406 $318 $774 $628 $4,598 $1,049
- -------------- --------------- --------------- --- --------------- ---------------- -- --------------- ----------------
FORUM CASH FUND/MONARCH CASH FUND
- -------------- --------------- ---------------- -- --------------- ---------------- -- --------------- ----------------
PROFORMA PROFORMA PROFORMA
FORUM MONARCH FORUM MONARCH FORUM MONARCH
CASH FUND CASH FUND CASH FUND CASH FUND CASH FUND CASH FUND
- -------------- --------------- ---------------- -- --------------- ---------------- -- --------------- ----------------
INSTITUTIONAL INSTITUTIONAL
INSTITUTIONAL UNIVERSAL SERVICE SERVICE INVESTOR INVESTOR
SHARES SHARES SHARES SHARES SHARES SHARES
- -------------- --------------- ---------------- -- --------------- ---------------- -- --------------- ----------------
1 Year $32 $25 $64 $50 $383 $86
- -------------- --------------- ---------------- -- --------------- ---------------- -- --------------- ----------------
3 Years $100 $77 $202 $157 $1,164 $268
- -------------- --------------- ---------------- -- --------------- ---------------- -- --------------- ----------------
5 Years $174 $135 $351 $274 $1,962 $466
- -------------- --------------- ---------------- -- --------------- ---------------- -- --------------- ----------------
10 Years $393 $306 $786 $616 $4,045 $1,037
- -------------- --------------- ---------------- -- --------------- ---------------- -- --------------- ----------------
COMPARISON OF INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
The investment objective of each Forum Series and its corresponding Monarch
Series is the same - to provide high current income to the extent consistent
with preservation of capital and the maintenance of liquidity.
Each Forum Series and its corresponding Monarch Series seeks to maintain a
stable net asset value of $1.00 per share by investing substantially all of
their assets in the same portfolio of Core Trust (each a "Portfolio,"
collectively, the "Portfolios") pursuant to a Core and Gateway(R) structure.
Each Portfolio (1) invests in a diversified portfolio of money market securities
which are high credit quality, short-term, U.S.
9
dollar denominated debt securities ("Money Market Securities"); (2) invests in
securities with remaining maturities of 397 days or less; and (3) maintains a
dollar weighted average maturity of its investments of 90 days or less.
The investment policies of each Forum Series and its corresponding Monarch
Series and the Portfolio in which they invest are the same and are summarized in
the following table:
- ------------------------------------------------------ ----------------------------------------------------
FUND/PORTFOLIO PRIMARY INVESTMENTS
- ------------------------------------------------------ ----------------------------------------------------
Forum Treasury Fund At least 80% of net assets invested in securities
Monarch Treasury Fund issued or guaranteed by the U.S. Treasury
Treasury Cash Portfolio ("Treasury Securities") and Repurchase agreements
backed by Treasury Securities. Repurchase agreements
are transactions in which securities are purchased
and simultaneously committed to be resold to another
party at an agreed-upon date and at a price
reflecting a market rate of interest ("Repurchase
Agreements").
- ------------------------------------------------------ ----------------------------------------------------
Forum Government Fund At least 80% of net assets in securities issued
Monarch Government Fund or guaranteed by the U.S. Government, its
Cash Portfolio agencies, or instrumentalities ("Government
Securities") and Repurchase Agreements backed by
Government Securities.
- ------------------------------------------------------ ----------------------------------------------------
Forum Cash Fund Invests in a broad spectrum of Money Market
Monarch Cash Fund Securities including:
Cash Portfolio o Securities issued by financial institutions, such
as certificates of deposit, bankers' acceptances
and time deposits
o Securities issued by domestic companies, such as
commercial paper
o Government Securities
o Repurchase Agreements
- ------------------------------------------------------ ----------------------------------------------------
Immediately after each Reorganization, each Monarch Series will redeem its
investment in Core Trust and will receive its pro-rata share of the assets of
the Portfolio in which it is invested. Thereafter, Forum Investment Advisors,
LLC ("FIA"), each Portfolio's investment adviser, will manage each Monarch
Series directly. Each Monarch Series will thereafter be managed in the same
manner as the corresponding Portfolio as set forth in the above table. Each
Monarch Series, like its corresponding Portfolio, will also continue to invest
in Money Market Securities with maturities of 397 days or less and will
maintains a dollar weighted average maturity of its investments of 90 days or
less.
THE ADVISER'S INVESTMENT PROCESS. FIA continuously monitors economic
factors such as interest rate outlooks and technical factors such as prevailing
interest rates and Federal Reserve policy to determine an appropriate maturity
profile for a Portfolio's investments. FIA searches for securities that satisfy
the maturity profile of a Portfolio and that provide the greatest potential
return relative to the risk of the security. FIA will continue to utilize the
same investment process with respect to each Monarch Series after each Monarch
Series redeems its interest in Core Trust immediately after the Reorganizations.
The Adviser may sell a Money Market Security held by a Portfolio if:
10
o Revised economic forecasts or interest rate outlook requires a
repositioning of a Portfolio or a Monarch Series;
o The security subsequently fails to meet FIA's investment criteria; or
o Funds are needed for another purpose.
The Adviser will follow the same process to sell securities on behalf of each
Monarch Series after each Monarch Fund redeems its interest in Core Trust
immediately after the Reorganizations.
COMPARISON OF INVESTMENT ADVISORY SERVICES AND FEES
Each Forum Series and its corresponding Monarch Series invests in the same
Portfolio. FIA is the investment adviser for each Portfolio and is located at
Two Portland Square, Portland, Maine 04101. FIA is a privately owned company
controlled by John Y. Keffer, the chairman of the Trust and of Monarch. In
addition to the Portfolios, FIA manages one other money market fund, one taxable
bond fund, and three tax-free bond funds.
Since their inception, Anthony R. Fischer, Jr., has been the portfolio
manager responsible for the day-to-day management of the Portfolios. Mr. Fischer
has over 25 years of experience in the money market industry.
No Forum Series or Monarch Series incurs investment advisory fees directly.
Rather, each Forum Series and its corresponding Monarch Series pay their
pro-rata share of the investment advisory fee of the Portfolio in which they
invest. Under an Investment Advisory Agreement with Core Trust (the "Core
Advisory Agreement"), FIA is entitled to receive the following annual fee from
the Portfolios:
- ------------------------------------------------------- ---------------------------------------------------
FEE AS A % OF THE
ANNUAL AVERAGE DAILY NET ASSETS
PORTFOLIOS OF THE PORTFOLIOS COMBINED
- ------------------------------------------------------- ---------------------------------------------------
Treasury Cash Portfolio, 0.06% for the first $200 million in assets,
Cash Portfolio and 0.04% of the next $300 million in assets,
Government Cash Portfolio and 0.03% of the remaining assets.
- ------------------------------------------------------- ---------------------------------------------------
For the fiscal year ended August 31, 2002, the aggregate advisory fee paid
to the Adviser from each Portfolio, as a percentage of its average net assets,
were:
- --------------------------------- -------------------- -------------------- --------------------
TREASURY CASH GOVERNMENT CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------- -------------------- -------------------- --------------------
Advisory Fee 0.03% 0.03% 0.03%
- --------------------------------- -------------------- -------------------- --------------------
Immediately after each Reorganization, each Monarch Series will withdraw
its investment in its corresponding Portfolio and FIA, through Mr. Fischer, will
manage the Monarch Series directly under an Investment Advisory Agreement with
Monarch (the "Monarch Advisory Agreement"). The Monarch Advisory Agreement will
be substantially similar to the Core Advisory Agreement and FIA will receive the
same advisory fee from each of the Monarch Series, collectively, that it did
from the Portfolios.
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COMPARISON OF OTHER SERVICE PROVIDERS
The following FFG affiliates serve as service providers to both the Trust
and Monarch: (1) Forum Administrative Services, LLC ("FAdS") serves as
administrator; (2) Forum Fund Services, LLC ("FFS") serves principal
underwriter; (3) Forum Shareholder Services, LLC ("FSS") serves as transfer
agent; (4) Forum Accounting Services, LLC serves as fund accountant; and (5)
Forum Trust, LLC serves as custodian (collectively, the "Forum Companies"). Each
of the Forum Companies is an indirect wholly owned subsidiary of FFG and is
controlled by John Y. Keffer, the Chairman and President of the Trust and
Monarch.
FFG is indirectly controlled by John Y. Keffer. FFG and Mr. Keffer stand to
benefit financially from each Reorganization in that the consolidation of the
Money Market Assets under one registrant is expected to provide certain
economies of scale that will effectively decrease the level of fee waivers
required of FFG to maintain the net expenses of each Monarch Series at
pre-Reorganization levels. Fee waivers are voluntary and may be reduced or
eliminated at any time.
COMPARISON OF CLASS STRUCTURES
Each Monarch Series offers five (5) share classes - Preferred, Universal,
Institutional, Institutional Service and Investor Shares. Each Forum Series
offers three (3) share classes - Institutional, Institutional Service, and
Investor Shares except Forum Treasury Fund which offers (2) share classes -
Institutional and Institutional Service Shares.
The following classes of each Forum Series will reorganize with and into
the below referenced classes of the corresponding Monarch Series:
- ---------------------------------------------------------- -------------------------------------------------------
FORUM SERIES/CLASS MONARCH SERIES/CLASS
- ---------------------------------------------------------- -------------------------------------------------------
Forum Treasury Fund Monarch Treasury Fund
- ---------------------------------------------------------- -------------------------------------------------------
Institutional Shares Universal Shares
- ---------------------------------------------------------- -------------------------------------------------------
Institutional Service Shares Institutional Service Shares
- ---------------------------------------------------------- -------------------------------------------------------
Forum Government Fund Monarch Government Fund
- ---------------------------------------------------------- -------------------------------------------------------
Institutional Shares Universal Shares
- ---------------------------------------------------------- -------------------------------------------------------
Institutional Service Shares Institutional Service Shares
- ---------------------------------------------------------- -------------------------------------------------------
Investor Shares Investor Shares
- ---------------------------------------------------------- -------------------------------------------------------
Forum Cash Fund Monarch Cash Fund
- ---------------------------------------------------------- -------------------------------------------------------
Institutional Shares Universal Shares
- ---------------------------------------------------------- -------------------------------------------------------
Institutional Service Shares Institutional Service Shares
- ---------------------------------------------------------- -------------------------------------------------------
Investor Shares Investor Shares
- ---------------------------------------------------------- -------------------------------------------------------
Institutional Shares of each Forum Series and Universal Shares of each
Monarch Series are available for purchase by institutional investors.
Institutional Service Shares of each Forum Series and Monarch Series are
available for purchase by banks, trust companies, and certain other financial
institutions for their own and customer accounts. Investor Shares of each Forum
Series and Monarch Series are available for purchase by retail investors.
The minimum initial investment for Institutional Shares of each Forum
Series and Universal Series of each Monarch Series is $1 million while the
minimum initial investment for Institutional Service Shares of each Forum Series
and Monarch Series is $100,000. Institutional
12
and Institutional Service Shares of each Forum Series and Institutional Service
Shares of each Monarch Series also have a minimum subsequent investment of $250.
The minimum initial investment for Investor Shares of each Forum Series is
as follows:
- ------------------------------------------------ -------------------------------- -----------------------------
MINIMUM INITIAL INVESTMENT MINIMUM SUBSEQUENT
INVESTMENT
- ------------------------------------------------ -------------------------------- -----------------------------
Standard Accounts $10,000 $500
- ------------------------------------------------ -------------------------------- -----------------------------
Traditional and Roth IRA Accounts $2,000 $250
- ------------------------------------------------ -------------------------------- -----------------------------
Accounts with Systematic Investment Plans $250 $250
- ------------------------------------------------ -------------------------------- -----------------------------
Exchanges $2,000 $250
- ------------------------------------------------ -------------------------------- -----------------------------
The minimum initial investment for Investor Shares of each Monarch Series is
$5,000. There is no minimum subsequent investment requirement for Investor
Shares of a Monarch Series.
KEY DIFFERENCES. In contrast to Institutional Shares and Investor Shares of
each Forum Series, Universal Shares and Investor Shares of each Monarch Series
do not have a minimum subsequent investment requirement. Moreover, the minimum
initial investment for purchases of Investor Shares of a Forum Series ranges
from $250 to $10,000 depending on the type of account or transaction involved
whereas the minimum initial investment for all accounts and/or transaction types
for investments in Investor Shares of a Monarch Series is $5,000.
COMPARISON OF PURCHASE, REDEMPTION, AND EXCHANGE PRIVILEGES
PURCHASE PROCEDURES. Each Forum Series and Monarch Series continuously
offers its shares through FFS. You may purchase shares of each Forum Series and
Monarch Series by check, wire, ACH payment, systematic investment, or through
financial institutions. All checks must be made payable in U.S. dollars and
drawn on U.S. financial institutions. No Forum Series or Monarch Series may
accept purchases made by cash, cash equivalents (for instance, you may not pay
by money order, cashier's check, bank draft or traveler's check), or credit card
check.
Purchases of Investor Shares of each Forum Series may also be made through
systematic investments. Under a Forum Series' systematic investment plan, you
may invest a specified amount of money in the Forum Series once or twice a month
on specified dates. These payments are taken from your bank account by ACH
payment. Systematic investments must be for at least $250. No Monarch Series
offers a systematic investment plan with respect to Investor Shares.
If you purchase shares directly from a Forum Series, you will receive
monthly statements and a confirmation of each transaction. If you purchase
shares directly from a Monarch Series, you will only receive monthly statements.
If you purchase shares of either a Forum Series or a Monarch Series through a
financial institution, the policies and fees charged by that institution may be
different from those charged by the Forum Series or the Monarch Series.
Purchases of shares of a Forum Series and a Monarch Series may be made on
each weekday except on Federal holidays and other days that the Federal Reserve
Bank of San Francisco is closed ("Business Day").
13
You may purchase shares of a Forum Series or a Monarch Series at the net
asset value ("NAV") of each class next calculated after FSS receives your
request in proper form. Investments are not accepted or invested by a Forum
Series or a Monarch Series during the period before receipt of funds on deposit
at a Federal Reserve Bank ("Federal Funds"). Shares of a Forum Series or a
Monarch Series become entitled to receive distributions on the day of purchase
if the order and payment are received in proper form by FSS as follows:
- ------------------------------------- -----------------------------------
ORDER MUST BE RECEIVED BY PAYMENT MUST BE RECEIVED BY
- ------------------------------------- -----------------------------------
2:00 p.m., Eastern time/ 4:00 p.m., Eastern time/
11:00 a.m., Pacific time 1:00 p.m., Pacific time
- ------------------------------------- -----------------------------------
KEY DIFFERENCES. Each Forum Series offers a systematic investment plan for
investments in Investor Shares while its corresponding Monarch Series does not
offer a similar plan with respect to its Investor Shares. Additionally, if you
purchase shares directly from a Forum Series, you will receive monthly
statements and confirmations of each transaction while if you purchase shares
directly from a Monarch Series, you will only receive monthly statements.
EXCHANGE PROCEDURES. Shareholders of a Forum Series may exchange their
Institutional, Institutional Service, and Investor Shares for Institutional,
Institutional Service and Investor Shares, respectively, of another Forum
Series, or for Institutional, Institutional Service and Investor Shares of Daily
Assets Government Fund, another money market series of the Trust, or for certain
other Trust Series.
Shareholders of a Monarch Series may exchange their Universal,
Institutional Service, and Investor Shares for Universal, Institutional Service,
and Investor Shares of another Monarch Series. Shareholders of a Monarch Series
may also exchange their Institutional Service Shares for Institutional Service
Shares of Daily Assets Government Obligations Fund, another Monarch Series.
Not all classes of a Forum Series or a Monarch Series may be available for
purchase in every state. Shares of the Trust's Daily Assets Government Fund,
other series of the Trust, and Monarch's Daily Assets Government Obligations
Fund also may not be available for purchase in every state. The Trust's Daily
Assets Government Fund and Monarch's Daily Assets Government Obligations Fund
have the same objective and investment policies and the Trust's Daily Assets
Government Fund is expected to reorganize with and into Monarch's Daily Assets
Government Obligations Fund, a newly organized series, prior to August 31, 2003.
It is anticipated that Investor Shares and Institutional Shares of the Trust's
Daily Assets Government Fund will cease operations prior to the reorganization
of the fund with and into Monarch's Daily Assets Government Obligations Fund.
REDEMPTION PROCEDURES. You may redeem shares of a Forum Series and a
Monarch Series at the NAV next calculated for the shares after FSS receives your
request in proper form. Shares of a Forum Series and a Monarch Series are not
entitled to receive distributions declared on or after the day on which a
redemption order is accepted by FSS.
You may redeem shares of a Forum Series or a Monarch Series by mail,
wire, or telephone. If FSS receives your wire redemption order with respect to
shares of a Forum Series
14
or a Monarch Series after 2:00 p.m., Eastern time/11:00 a.m., Pacific time, FSS
will wire proceeds to you on the next Business Day.
Redemptions of Investor Shares of a Forum Series may also be made through
systematic withdrawal. Under a Forum Series systematic withdraw plan, you may
redeem a specified amount of money once a month on a specified date. These
payments are sent from your shareholder account to a designated bank account by
ACH payment. Systematic withdraws must be for at least $250.
Redemptions of Investor Shares of a Monarch Series may be made by writing
checks provided by the Monarch Series against your account balance. Monarch
Series charge a $10 fee for all checks presented in amounts of less than $500
and deducts this fee directly from your shareholder account.
KEY DIFFERENCES. In addition to redeeming shares by mail, wire, or by
phone, you may redeem Investor Shares of a Forum Series pursuant to systematic
withdrawals and you may redeem Investor Shares of a Monarch Series by writing
checks provided by the Monarch Series against your account.
COMPARISON OF DISTRIBUTION POLICIES
Each Forum Series and Monarch Series declares distributions from its net
investment income daily and pays those distributions monthly. In addition, each
Forum Series and Monarch Series pays capital gain distributions at least
annually.
All distributions of each Forum Series and Monarch Series are reinvested in
additional shares unless a shareholder elects to receive distributions in cash.
COMPARISON OF DISTRIBUTION AND SHAREHOLDER SERVICING FEES
The Trust has adopted a Shareholder Service Plan with respect to
Institutional Service Shares and Investor Shares of each Forum Series. Under the
Shareholder Service Plan, the Trust may pay FAdS a shareholder service fee of up
to 0.20% and 0.25%, respectively, of the average daily net assets of
Institutional Service Shares and Investor Shares of each Forum Series. FAdS may
pay any or all of these fees to various financial institutions that provide
shareholder servicing to their customers who hold Institutional Service Shares
and Investor Shares of a Forum Series.
Similarly, Monarch has adopted a Shareholder Service Agreement with respect
to Institutional Service Shares and Investor Shares of each Monarch Series.
Under the Shareholder Service Agreement, Monarch may pay FAdS a shareholder
service fee of up to 0.20% of the average daily net assets of each of
Institutional Service Shares and Investor Shares of each Monarch Series. FAdS
may pay any or all of these fees to various financial institutions that provide
shareholder servicing to their customers who hold Institutional Service Shares
and Investor Shares of a Monarch Series.
15
The Trust has also adopted a Distribution Plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended (the "1940 Act") under which the
Trust pays FFS a distribution fee at an annual rate of up to 0.50% of the
average daily net assets of the Investor Shares of each Forum Series. The
Board's approval of the Distribution Plan was subject to the condition that FFS
would not charge a distribution fee at an annual rate of more than 0.30% of the
average daily net assets of Investor Shares of a Forum Series without additional
Board approval.
Similarly, Monarch has adopted a Distribution Plan pursuant to Rule 12b-1
under the 1940 Act under which Monarch pays FFS a distribution fee at an annual
rate of up to 0.25% of the average daily net assets of the Investor Shares of
each Monarch Series.
KEY DIFFERENCES. The shareholder servicing fee authorized under the Monarch
Shareholder Service Agreement for Investor Shares of a Monarch Series is 0.05%
lower than the shareholder servicing fee authorized under the Trust's
Shareholder Service Plan for Investor Shares of a Forum Series. Additionally,
the distribution fee authorized under the Monarch Distribution Plan for Investor
Shares of a Monarch Series is 0.05% lower than the distribution fee authorized
by the Board with respect to the Trust's Distribution Plan for Investor Shares
of a Forum Series.
COMPARISON OF NET ASSET VALUE CALCULATION PROCEDURES
Each Forum Series and Monarch Series calculates its NAV as of 4:00 p.m.,
Eastern time/1:00 p.m., Pacific time on each Business Day. The time at which NAV
is calculated may be changed in case of an emergency. In order to maintain a
stable NAV of $1.00 per share, each Forum Series and Monarch Series values
securities in its portfolio on an amortized cost basis.
TAX MATTERS RELATING TO THE REORGANIZATION
The Trust will receive an opinion from __________________________, counsel
to Monarch and Monarch's Independent Trustees, to the effect that each
Reorganization will constitute a tax-free reorganization within the meaning of
Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended (the
"Code"). Consequently, no gain or loss will be recognized for federal income tax
purposes by a Forum Series, the corresponding Monarch Series, or their
respective shareholders as a result of a Reorganization. There is additional
information about the federal income tax consequences of the Reorganizations
under "Taxation."
INVESTMENT RISKS
An investment in a Forum Series or a Monarch Series is not a deposit in a
bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. Although each Forum Series and
Monarch Series seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in a Forum Series or Monarch
Series. There is also no assurance that any Forum Series or Monarch Series will
achieve its investment objective. An investment in a Forum Series or a Monarch
Series is not by itself a complete or balanced investment program.
16
The principal risks of investing in a Forum Series and a Monarch Series
and the Portfolio in which they invest are:
INTEREST RATE RISK. Interest rates may affect the value of a Portfolio's
investments. Increases in interest rates may cause a decline in the value of a
Portfolio's investments. In addition, those increases may cause the investment
performance of the corresponding Forum Series and Monarch Series to underperform
currently available investments.
CREDIT RISK. The value of a security held by a Portfolio may decline if the
security's credit rating is downgraded or credit quality otherwise falls. In the
worst case, an issuer of a security or a Repurchase Agreement counterparty may
default or otherwise be unable to make timely payments of interest or principal.
Not all Government Securities are supported by the full faith and credit of the
U.S. Government. Generally, credit risk is greatest for Cash Portfolio/Forum
Cash Fund/Monarch Cash Fund followed by Government Cash Portfolio/Forum
Government Fund/Monarch Government Fund and then Treasury Cash Portfolio/Forum
Treasury Fund/Monarch Treasury Fund.
MANAGEMENT RISK. As with all mutual funds, the Portfolio's investment adviser
may make poor investment decisions.
The above risks can result in a decrease in the value of a security or all
the securities owned by a Portfolio and, therefore, cause a change in the $1.00
per share value of the corresponding Forum Series and Monarch Series. These
risks also can result in lower investment performance of the applicable Forum
Series and Monarch Series.
As discussed previously, immediately after the Reorganizations, each
Monarch Series will withdraw its investment in Core Trust and invest directly in
securities. The risks associated with an investment in each Monarch Series will
remain unchanged as a result of the underlying Reorganization and the subsequent
withdraw of its investment in Core Trust.
INFORMATION ABOUT THE PLAN
This section summarizes the material terms of the Plan. This section is
qualified in its entirety by the terms and conditions contained in the Plan, a
form of which is attached as Exhibit A to this Proxy Statement/Prospectus.
GENERAL DESCRIPTION OF THE PLAN
The Plan is the second stage of a larger transaction to consolidate the
Money Market Assets of the Trust, Core Trust and Monarch in order to take
advantage of the economies of scale and operational efficiencies that would
result from the combination of the Money Fund Assets into one registrant. The
first stage involved the reorganization of Monarch from a Delaware business
trust into a Massachusetts business trust on April __, 2003. The final stage
includes the redemption of each Monarch Series investment in Core Trust after
the consummation of the Plan.
17
Under the Plan, each Forum Series will transfer its assets to a
corresponding Monarch Series with the same investment objective, policies and
risks in exchange for shares of the Monarch Series and the Monarch Series'
assumption of applicable Forum Series' liabilities. Each Forum Series will
distribute the shares received from the Monarch Series proportionately to its
shareholders and then terminate. Each Forum Series' shareholder holding
Institutional, Institutional Service, and Investor Shares will receive
Universal, Institutional Service, and Investor Shares, respectively, of the
corresponding Monarch Series.
The Plan contains customary representations, warranties, and conditions
designed to ensure that a Reorganization is fair to the applicable Forum Series
and its shareholders. The Plan provides that the consummation of a
Reorganization is contingent upon, among other things, approval of the Plan by
the applicable Forum Series' shareholders. The Plan may be terminated with
respect to a Reorganization if, on the Closing Date, any of the applicable
conditions have not been met or if the representations and warranties are not
true, or if the Board determines that consummation of a Reorganization is not in
the best interest of the applicable Forum Series. The Plan also provides that
all of the audit, legal and proxy solicitation costs of each Reorganization will
be borne by FFG. FFG currently provides administrative, transfer agency, fund
accounting and custody services to each Forum Series and Monarch Series.
The Closing Date of each Reorganization is ____________, 2003. The Board
and the Monarch Board, by agreement, may change the Closing Date of a
Reorganization.
The approval of the Plan by shareholders of one Forum Series is not
contingent on the approval of the Plan by the shareholders of another Forum
Series. If shareholders of a Forum Series vote to approve the Plan, that Forum
Series will reorganize into the corresponding Monarch Series regardless of
whether shareholders of another Forum Series approve the Plan. If the
shareholders of a Forum Series do not approve the Plan, the Reorganization
related to that Forum Series will not take place.
If a Forum Series' shareholders approve the Plan, shares of the Forum
Series will no longer be offered for sale, except for the reinvestment of
dividend and capital gain distributions or through established automatic
investment plans. From the date of Shareholder approval until the close of
business on the Closing Date, shareholders may continue to add to their existing
account only through an established automatic investment plan or through the
reinvestment of dividend and capital gain distributions.
If shareholders of a Forum Series approve the Plan, the stock transfer
books of that Forum Series will be permanently closed as of 4:00 p.m., Eastern
time, on the Closing Date. The Forum Series' will only accept requests for
redemption received in proper form before 4:00 p.m., Eastern time, on the
business day immediately preceding the Closing Date. Requests received after
that time will be considered requests to redeem shares of the corresponding
Monarch Series.
18
SECURITIES TO BE ISSUED
The Trust, a Delaware business trust, is subject to Delaware law while
Monarch, a Massachusetts business trust, is subject to Massachusetts' law.
Delaware law provides that the Trust's shareholders are entitled to the same
limitations of personal liability extended to stockholders of private
corporations for profit. The Trust's Trust Instrument contains an express
disclaimer of shareholder liability for the debts, liabilities, obligations and
expenses of each Forum Series and provides for indemnification out of each Forum
Series' property of any shareholder or former shareholder held personally liable
for the obligations of the Forum Series. The Trust's Trust Instrument also
provides that each Forum Series shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the Forum Series
and satisfy any judgment thereon. Thus, the risk of a shareholder of a Forum
Series 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 Forum Series is unable to meet its
obligations. Under Massachusetts law, shareholders of a Monarch Series may,
under certain circumstances, be held personally liable for the obligations of
the Monarch Series. Monarch's Agreement and Declaration of Trust, however,
provides substantially similar shareholder indemnification coverage as that
which is included in the Trust's Trust Instrument.
Both the Trust and Monarch are authorized to issue an unlimited number of
authorized shares of beneficial interest, no par value. The Board and the
Monarch Board may, without shareholder vote, divide the authorized shares into
an unlimited number of separate portfolios or series. The Board and the Monarch
Board may also, without shareholder approval, divide series into two or more
classes of shares.
Each share of each series of the Trust and Monarch, regardless of the share
class, has equal distribution, liquidation and voting rights, and fractional
shares have these rights proportionately. Each share class of the Trust and of
Monarch bears its own expenses related to the distribution of the shares (and
certain other expenses such as transfer agency, shareholder service and
administration expenses). Generally, shares of the Trust and Monarch will be
voted separately by individual series except if: (1) the 1940 Act requires
shares to be voted in the aggregate and not by individual series; (2) the 1940
Act requires a class vote; or (3) the Board or the Monarch Board, as applicable,
determines that the matter affects more than one series and all affected series
must vote.
Neither Delaware nor Massachusetts law requires the Trust or Monarch,
respectively, to hold annual meetings of shareholders, and generally the Trust
and Monarch will hold shareholder meetings only when required by federal or
state law. Shareholders of the Trust or Monarch representing 10% or more of the
Trust's or Monarch's (or a series thereof) shares may, as set forth in their
respective organizational documents, call meetings of the Trust or Monarch (or a
series thereof), as applicable, for any purpose related to the Trust or Monarch
(or a series thereof), as applicable, including, the removal of one or more
Trustees.
19
There are no conversion or preemptive rights in connection with shares of
the Trust or Monarch. All shares of the Trust and Monarch are fully paid and
non-assessable. A shareholder of a Forum Series or a Monarch Series is entitled
to the shareholder's pro-rata share of all distributions arising from that
series' assets and, upon redeeming shares, will receive the portion of the
series' net assets represented by the redeemed shares.
KEY DIFFERENCE. In contrast to the Forum Series, a Monarch Series may
reorganize into or merge with another registered, open-end investment company
without a shareholder vote.
REASONS FOR THE PLAN
At a meeting held on February 11, 2003, the Board, including the
Independent Trustees, unanimously approved the Plan and determined that each
Reorganization contemplated by the Plan would be in the best interests of the
applicable Forum Series' shareholders.
In considering the Plan, the Board considered that FFG would no longer
support fee waivers required to maintain the expenses of each Forum Series at
prior levels. The Board, including the Independent Trustees, also concluded
(with the advice and assistance of independent legal counsel) that each
Reorganization would provide certain benefits to the shareholders of each Forum
Series based on the following information provided during the meeting:
1. Cost Savings: Each Reorganization would eliminate the marketing and
management overlap arising from operating different funds with the
same investment objective in a Core and Gateway structure.
2. Dilution: The Plan includes provisions intended to avoid dilution of
shareholders' interests of the shareholders of each Forum Series.
Under the Plan, each Forum Series shareholder will receive shares of a
corresponding class of the Monarch Series equal in value to its share
of the net assets of the class of the Forum Series held. Consequently,
the Board, including the Independent Trustees, determined that the
Reorganizations would not dilute the interests of the shareholders of
the applicable Forum Series.
3. Similarity of Investment Objectives and Policies: Each Forum Series
and its corresponding Monarch Series have the same investment
objective - to provide high current income consistent with
preservation of capital and the maintenance of liquidity. Each Forum
Series and its corresponding Monarch Series also share the same
investment policies.
4. Expenses: Although certain service provider fees of each Monarch
Series are higher than those currently charged to its corresponding
Forum Series counterpart, the Reorganization will result in lower
gross expenses for the Forum Series and the same net expenses. The
consolidation of Money Market Assets under one registrant is expected
to provide certain economies of scale that will effectively decrease
the level of fee waivers required of FFG to maintain the net expenses
of each Monarch Series at pre-Reorganization levels. The Board noted,
20
however, that fee waivers are voluntary and may be reduced or
eliminated at any time.
5. Portfolio Management: Each Reorganization would result in a continuity
of portfolio management. Prior to each Reorganization, each Forum
Series and its corresponding Monarch Series will invest substantially
all of their assets in the same series of Core Trust managed by FIA.
Immediately after the Reorganizations, each Monarch Series will
withdraw its investment from Core Trust and be managed directly by
FIA.
6. Tax-Free Nature of the Reorganization: It is anticipated that each
Reorganization will be accomplished without federal tax consequences
for the Forum Series, Monarch Series and their respective
shareholders.
7. Transaction Costs: The audit, legal and proxy solicitation costs of
each Reorganization will be borne by FFG.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY
RECOMMENDS APPROVAL OF THE PLAN.
TAXATION
Each Forum Series and Monarch Series has similar tax treatment and each
intends to qualify each fiscal year to be treated as a regulated investment
company (a "RIC") under the Code. As a RIC, each Forum Series and Monarch Series
generally will not be liable for federal income taxes on the net investment
income and capital gain distributed to its shareholders. Each Forum Series and
Monarch Series intends to distribute all of its net income and net capital gains
each year. Accordingly, no Forum Series or Monarch Series should be subject to
federal income or excise taxes.
TAX CONSEQUENCES OF DISTRIBUTIONS
The distribution of net income (including short-term capital gain) by a
Forum Series or a Monarch Series is taxable as ordinary income. The distribution
of long-term capital gain, if any, by a Forum Series or a Monarch Series is
taxable as long-term capital gain regardless of how long shares are held. Each
Forum Series and Monarch Series expects that its distributions will primarily
consist of net income or short-term capital gain, if any, as opposed to
long-term capital gain. Distributions by a Forum Series and a Monarch Series may
also be subject to certain state and local taxes.
Shareholders of a Forum Series or a Monarch Series that are not U.S.
citizens or residents and that are not considered to be engaged in a U.S. trade
or business under the Code generally will be subject to withholding tax at a 30%
rate on distributions of either Series' net income, including net short-term
capital gains. This rate may be reduced under an applicable income tax treaty.
Net capital gain distributions by either Series generally will not be subject to
withholding tax for such shareholders.
21
TAX CONSEQUENCES OF THE TRANSACTIONS CONTEMPLATED BY THE PLAN
As a condition to the consummation of each Reorganization, the Trust and
Monarch will receive an opinion from __________________ to the effect that,
based on the facts and assumptions stated in the Plan as well as certain
representations by the Trust and Monarch including those in the Plan, for
federal income tax purposes:
(1) Each Monarch Series' acquisition of its corresponding Forum Series'
assets in exchange solely for that Monarch Series' shares and its
assumption of that Forum Series' liabilities, followed by that Forum
Series' distribution of those shares PRO RATA to its shareholders
constructively in exchange for their Forum Series shares, will
constitute a "reorganization" (as defined in section 368(a)(1)(C) of
the Code), and each Forum Series and Monarch Series will be "a party
to a reorganization" (within the meaning of section 368(b) of the
Code);
(2) Each Forum Series will recognize no gain or loss on the transfer of
its assets to its corresponding Monarch Series in exchange solely for
that Monarch Series' shares and that Monarch Series' assumption of
that Forum Series' liabilities or on the subsequent distribution of
those shares to that Forum Series' shareholders in constructive
exchange for their Forum Series shares:
(3) Each Monarch Series will recognize no gain or loss on its receipt of
the transferred assets in exchange solely for its shares and its
assumption of its corresponding Forum Series' liabilities;
(4) Each Monarch Series' basis in the transferred assets will be the same
as its corresponding Forum Series' basis therein immediately before
the Reorganization, and each Monarch Series' holding period for those
assets will include its corresponding Forum Series' holding period
therefor;
(5) Each Forum Series shareholder will recognize no gain or loss on the
constructive exchange of all its Forum Series shares solely for the
corresponding Monarch Series' shares pursuant to the Reorganization;
and
(6) Each Forum Series shareholder's aggregate basis in the corresponding
Monarch Series' shares it receives in the Reorganization will be the
same as the aggregate basis in its Forum Series shares it
constructively surrenders in exchange for those Monarch Series shares,
and its holding period for those Monarch Series shares will include
its holding period for those Forum Series shares, provided the
shareholder holds them as capital assets on the Closing Date.
The tax opinion will state that no opinion is expressed as to the effect of
a Reorganization on each Forum Series and Monarch Series or any shareholder
thereof with respect to any asset as to which any unrealized gain or loss is
required to be recognized for federal income tax purposes at the end of a
taxable year (or on the termination or transfer thereof) under a mark-to-market
system of accounting.
22
Shareholders of each Forum Series should consult their tax advisers
regarding the effect on them, if any, of the Reorganization in which that Forum
Series is participating in light of their individual circumstances. Because the
foregoing discussion only relates to the federal income tax consequences of the
Reorganizations, those shareholders also should consult their tax advisers about
state and local tax consequences, if any, of that Reorganization.
CAPITALIZATION
The following tables set forth the capitalization of each class of each
Forum Series as of August 31, 2002 and, on a pro forma combined basis, the
capitalization of each applicable class of the corresponding Monarch Series as
of August 31, 2002, assuming that the Plan is approved and the applicable
Reorganization is consummated.
FORUM TREASURY FUND/MONARCH TREASURY FUND
------------------- ----------------- -- ------------------ ------------------
PRO FORMA PRO FORMA
FORUM MONARCH FORUM MONARCH
TREASURY FUND TREASURY FUND TREASURY FUND TREASURY FUND
------------------- ----------------- -- ------------------ ------------------
INSTITUTIONAL UNIVERSAL INSTITUTIONAL INSTITUTIONAL
SHARES SHARES SERVICE SHARES SERVICE SHARES
- --------------------------------------- ------------------- ----------------- -- ------------------ ------------------
Net Assets
- --------------------------------------- ------------------- ----------------- -- ------------------ ------------------
Net Asset Value Per Share
- --------------------------------------- ------------------- ----------------- -- ------------------ ------------------
Shares Outstanding
- --------------------------------------- ------------------- ----------------- -- ------------------ ------------------
FORUM GOVERNMENT FUND/MONARCH GOVERNMENT FUND
- ------------------- ---------------- ----------------- -- ---------------- ----------------- -- ---------------- -----------------
PROFORMA PROFORMA PROFORMA
FORUM MONARCH FORUM MONARCH FORUM MONARCH
GOVERNMENT FUND GOVERNMENT FUND GOVERNMENT FUND GOVERNMENT FUND GOVERNMENT FUND GOVERNMENT FUND
---------------- ----------------- -- ---------------- ----------------- -- ---------------- -----------------
INSTITUTIONAL INSTITUTIONAL
INSTITUTIONAL UNIVERSAL SERVICE SERVICE INVESTOR INVESTOR
SHARES SHARES SHARES SHARES SHARES SHARES
- ------------------- ---------------- ----------------- -- ---------------- ----------------- -- ---------------- -----------------
Net Assets
- ------------------- ---------------- ----------------- -- ---------------- ----------------- -- ---------------- -----------------
Net Asset
Value Per
Share
- ------------------- ---------------- ----------------- -- ---------------- ----------------- -- ---------------- -----------------
Shares
Outstanding
- ------------------- ---------------- ----------------- -- ---------------- ----------------- -- ---------------- -----------------
FORUM CASH FUND/MONARCH CASH FUND
- ------------------- ----------------- ---------------- -- ----------------- ---------------- -- ----------------- ----------------
PROFORMA PROFORMA PROFORMA
FORUM CASH FUND MONARCH CASH FORUM CASH FUND MONARCH CASH FORUM CASH FUND MONARCH CASH
FUND FUND FUND
----------------- ---------------- -- ----------------- ---------------- -- ----------------- ----------------
INSTITUTIONAL INSTITUTIONAL
INSTITUTIONAL UNIVERSAL SERVICE SERVICE INVESTOR INVESTOR
SHARES SHARES SHARES SHARES SHARES SHARES
- ------------------- ----------------- ---------------- -- ----------------- ---------------- -- ----------------- ----------------
Net Assets
- ------------------- ----------------- ---------------- -- ----------------- ---------------- -- ----------------- ----------------
Net Asset
Value Per
Share
- ------------------- ----------------- ---------------- -- ----------------- ---------------- -- ----------------- ----------------
Shares
Outstanding
- ------------------- ----------------- ---------------- -- ----------------- ---------------- -- ----------------- ----------------
VOTING INFORMATION
This Proxy Statement/Prospectus is being furnished by the Board in
connection with the solicitation of proxies for the Special Meeting of Forum
Series shareholders. Solicitation of proxies will be primarily by mail. Officers
of the Trust may also solicit proxies by telephone, facsimile, or in person. The
costs of solicitation will be borne by the FFG and are estimated to be under
$___.
23
Each share of each Forum Series is entitled to one vote. Approval of the
Plan by each Forum Series requires the affirmative vote of the lesser of (a) 67%
or more of the shares of the Forum Series present at the Special Meeting or
represented by proxy if the holders of more than 50% of the outstanding shares
are present or represented by proxy at the Special Meeting or (b) more than 50%
of the outstanding shares of the Forum Series. Shareholders holding one third of
the outstanding shares of each Forum Series as of the Record Date present in
person or by proxy will constitute a quorum for the transaction of business at
the Special Meeting.
For purposes of determining the presence of a quorum and counting votes on
the matters presented, shares represented by abstentions and "broker non-votes"
will be counted as present, but not votes cast at the Special Meeting and
therefore will have the effect of voting "AGAINST" the proposal. Broker
non-votes are shares held in street name for which the broker indicates that
instructions have not been received from the beneficial owners and other persons
entitled to vote for which the broker lacks discretionary voting authority.
You may vote on the Plan on behalf of a Forum Series in which you invest by
utilizing one of the following options:
BY MAIL: Complete the proxy card enclosed with the Proxy
Statement/Prospectus ("Proxy Card") and return it in the
postage paid envelope provided.
BY TELEPHONE: Call the Toll-Free number on your proxy card.
IN PERSON: Attend the Special Meeting in person at 10:00 a.m. (Eastern
time) on _________, 2003 at the offices of Forum Financial
Group, LLC, Two Portland Square, 2nd Floor Conference Room,
Portland, Maine 04101.
If you plan to vote by mail, you should complete the Proxy Card by:
1. Indicating whether you vote "FOR", "AGAINST", or "ABSTAIN" from voting
on the Plan by checking the appropriate box on the Proxy Card;
2. Signing and dating the Proxy Card; and
3. Returning it to FSS in the enclosed postage-paid envelope.
Any shareholder may revoke his or her proxy at any time before it is voted
by giving written notice of revocation or by executing and delivering a later
dated proxy to FSS at Two Portland Square, Portland, Maine, 04101, or by
personally casting a vote at the Meeting. To change a vote by written notice of
revocation, you must provide FSS with a "Revocation Letter" that:
1. Identifies yourself;
2. States that as shareholder of a Forum Series, you revoke your prior
decisions as set forth in the previously returned Proxy Card; and
3. Indicates your approval, disapproval or abstention from voting on the
Plan.
If you do not specify a choice on a proxy card that is properly executed
and returned in time to be voted at the Special Meeting, it will be voted "FOR"
the approval of the Plan.
24
If you do not plan to attend the Special Meeting of Shareholders of the
Forum Series in which you invest on _________, 2003, FSS must receive your vote
by mail or telephone on or before _________, 2003. If you do not return your
Proxy Card by that date or you abstain from voting, you will be treated as
having voted "AGAINST" the Plan.
It is not anticipated that any matters other than the approval of the Plan
will be brought before the meeting. Should other business be brought before the
meeting, it is intended that all proxies will be voted in accordance with the
judgment of the persons named as proxies. If sufficient votes in favor of
approving the Plan are not received by the time scheduled for the meeting, the
persons named as proxies may propose one or more adjournments of the meeting for
a reasonable period of time to permit further solicitation of proxies. Any
adjournment will require the affirmative vote of a majority of the votes cast on
the question in person or by proxy at the session of the meeting to be
adjourned. The persons named as proxies will vote "FOR" adjournment those
proxies required to be voted "FOR" the approval of the proposal. The persons
named as proxies will vote "AGAINST" adjournment those proxies required to be
voted "AGAINST" the proposal. The costs of any additional solicitation and of
any adjourned session will be paid by FFG.
INSTRUCTIONS FOR SIGNING PROXY CARDS The following general rules for
signing proxy cards may be of assistance to you and avoid the time and expense
to the Forum Series involved in validating your vote if you fail to sign your
proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration
on the proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of
registration. For example:
REGISTRATION VALID SIGNATURE
------------ ---------------
CORPORATE ACCOUNTS
------------------
(1) ABC Corp...................................... ABC Corp.
John Doe, Treasurer
(2) ABC Corp...................................... John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer............. John Doe
(4) ABC Corp. Profit Sharing Plan................. John Doe, Director
PARTNERSHIP ACCOUNTS
--------------------
(1) The XYZ Partnership........................... Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership.......... Jane B. Smith,
General Partner
TRUST ACCOUNTS
--------------
(1) ABC Trust Account............................. Jane B. Doe, Director
(2) Jane B. Doe, Director u/t/d 12/28/78.......... Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
----------------------------
(1) John B. Smith, Cust. f/b/o John B. Smith, Jr.
25
UGM/UTMA...................................... John B. Smith
(2) Estate of John B. Smith....................... John B. Smith, Executor
INFORMATION REGARDING SHARES OF EACH FORUM SERIES OUTSTANDING
Only shareholders of a Forum Series on ____________, 2003 (the "Record
Date") are entitled to notice of and to vote at the Special Meeting. As of
___________, 2003, shares outstanding of each Forum Series were:
TRUST SERIES CLASS OUTSTANDING SHARES
Forum Treasury Fund Institutional Shares
Forum Treasury Fund Institutional Service Shares
Forum Government Fund Institutional Shares
Forum Government Fund Institutional Service Shares
Forum Government Fund Investor Shares
Forum Cash Fund Institutional Shares
Forum Cash Fund Institutional Service Shares
Forum Cash Fund Investor Shares
As of _____, 2003, the Trust's officers and Trustees, as a group, owned
less than 1% of each class of each Forum Series.
From time to time, certain shareholders may own a large percentage of the
shares of a Forum Series. Accordingly, those shareholders may be able to greatly
affect (if not determine) the outcome of a shareholder vote. As of
______________, 2003, and to the best of the Trust's knowledge and belief, the
following persons beneficially owned 25% or more of the shares of a Forum Series
and may be deemed to control the Forum Series. For each person that is a
company, the jurisdiction under the laws of which the company is organized and
the company's parents are listed.
- ---------------------------------------- -------------------------------------- -------------------------------------
NAME NUMBER OF SHARES PERCENTAGE OF FUND SHARES OWNED
ADDRESS OWNED
- ---------------------------------------- -------------------------------------- -------------------------------------
- ---------------------------------------- -------------------------------------- -------------------------------------
As of ____________, 2003, and to the best of the Trust's knowledge, the
following shareholders owned beneficially or of record 5% or more of a Forum
Series or a class thereof:
- --------------------------- ----------------------------- ----------------------------- -----------------------------
NAME NUMBER OF SHARES OWNED PERCENTAGE OF CLASS OWNED PERCENTAGE OF FUND SHARES
ADDRESS OWNED
- --------------------------- ----------------------------- ----------------------------- -----------------------------
- --------------------------- ----------------------------- ----------------------------- -----------------------------
INFORMATION REGARDING SHARES OF EACH MONARCH SERIES OUTSTANDING
As of ______, 2003, shares outstanding of each Monarch Series were:
TRUST SERIES CLASS OUTSTANDING SHARES
Monarch Treasury Fund Universal Shares
Monarch Treasury Fund Institutional Service Shares
Monarch Government Fund Universal Shares
Monarch Government Fund Institutional Service Shares
Monarch Government Fund Investor Shares
Monarch Cash Fund Universal Shares
Monarch Cash Fund Institutional Service Shares
Monarch Cash Fund Investor Shares
As of _____, 2003, Monarch's officers and Trustees as a group owned less
than 1% of each class of each Monarch Series.
From time to time, certain shareholders may own a large percentage of the
shares of a Monarch Series. Accordingly, those shareholders may be able to
greatly affect (if not determine) the outcome of a shareholder vote. As of
______________, 2003, and to the best of Monarch's knowledge and belief, the
following persons beneficially owned 25% or more of the shares of a Monarch
Series and may be deemed to control the Monarch Series. For each person that is
a company, the jurisdiction under the laws of which the company is organized and
the company's parents are listed.
26
- ---------------------------------------- -------------------------------------- -------------------------------------
NAME NUMBER OF SHARES PERCENTAGE OF FUND SHARES OWNED
ADDRESS OWNED
- ---------------------------------------- -------------------------------------- -------------------------------------
- ---------------------------------------- -------------------------------------- -------------------------------------
As of ____________, 2003, and to the best of Monarch's knowledge, the
following shareholders owned beneficially or of record 5% or more of a Monarch
Series or a class thereof:
- ---------------------------- ----------------------------- ----------------------------- ----------------------------
NAME NUMBER OF SHARES OWNED PERCENTAGE OF CLASS OWNED PERCENTAGE OF FUND SHARES
ADDRESS OWNED
- ---------------------------- ----------------------------- ----------------------------- ----------------------------
- ---------------------------- ----------------------------- ----------------------------- ----------------------------
ADDITIONAL INFORMATION
LEGAL MATTERS
Seward & Kissel LLP ("S&K") serves as counsel for each Forum Series and the
Trust. S&K does not represent FIA or FFS regarding the Plan or any related
transaction. Kirkpatrick & Lockhart LLP ("K&L") serves as counsel to the Trust's
Independent Trustees and does not represent FIA or FFS regarding the Plan or any
related transaction. K&L also serves as counsel to Monarch and its Independent
Trustees.
EXPERTS
__________ are the independent accountants for each Forum Series and each
Monarch Series. _________ is considered to be an expert due to its experience in
auditing and accounting.
Please refer to Exhibits B and C to this Proxy Statement/Prospectus for
financial highlight information for Institutional, Institutional Service, and
Investor Shares of each Forum Series and for Universal, Service (now known as
Institutional Service), and Investor Shares of each Monarch Series,
respectfully.
INFORMATION FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
This Proxy Statement/Prospectus and the related Statement of Additional
Information does not contain all of the information set forth in the
registration statements and exhibits of each Forum Series or Monarch Series
filed with the SEC under the Securities Act of 1933, as amended, and the 1940
Act. [Information to be incorporated by reference to be added by pre-effective
amendment].
The Trust, on behalf of each Forum Series, and Monarch, on behalf of each
Monarch Series, file proxy materials, reports and other information with the SEC
in accordance with the informational requirements of the Securities Act of 1934,
as amended, and the 1940 Act. These materials can be inspected and copied at the
SEC's Public Reference Room at 450 Fifth Street NW, Washington, D.C. 20549, and
at the SEC's regional and district offices located at 73 Tremont Street, Suite
600, Boston, MA 02108-3912, 601 Walnut Street, Suite 1120E, Philadelphia, PA
19106 3475 Lenox Road, N.E., Suite 1000, Atlanta, GA 30326 and 175 Jackson
Boulevard, Suite 900, Chicago, IL 60604. Copies of such materials can also be
obtained
27
by mail from the Public Reference Branch, Office of Consumer Affairs and
Information Services, SEC, Washington, D.C. 20549 at prescribed rates.
28
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "PLAN") is made as of this
___ day of _______, 2003, by and between Monarch Funds (the "Trust"), a
Massachusetts business trust, for itself and on behalf of its series listed in
the Acquiring Funds column below (each an "Acquiring Fund") and Forum Funds
("Forum"), a Delaware statutory trust, for itself and on behalf of its series
listed in the Target Funds column below (each a "Target Fund").
- ------------------------------------------------------------ ---------------------------------------------------------
Acquiring Funds TARGET FUNDS
- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
Daily Assets Treasury Fund Daily Assets Treasury Obligations Fund
- ------------------------------------------------------------ ---------------------------------------------------------
Daily Assets Government Fund Daily Assets Government Obligations Fund
- ------------------------------------------------------------ ---------------------------------------------------------
Daily Assets Cash Fund Daily Assets Cash Fund
- ------------------------------------------------------------ ---------------------------------------------------------
WHEREAS, the parties desire that each Acquiring Fund acquire the assets and
assume the liabilities of the Target Fund listed opposite the Acquiring Fund
("Corresponding Target Fund") in exchange for shares of equal value of the
Acquiring Fund and the distribution of the shares of the Acquiring Fund to the
shareholders of the Corresponding Target Fund in connection with the dissolution
and liquidation of the Corresponding Target Fund (each a "REORGANIZATION"); and
WHEREAS, the parties, for convenience, have structured this Plan so that it
generally refers to a single Reorganization between a single Acquiring Fund and
its Corresponding Target Fund, but intend for this Plan and its terms and
conditions to apply to each Reorganization; and
WHEREAS, the parties intend that the Reorganization qualify as a
"reorganization," within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "CODE"), and that the Acquiring Fund and the
Target Fund each be a "party to a reorganization," within the meaning of Section
368(b) of the Code, with respect to the Reorganization;
NOW, THEREFORE, in accordance with the mutual promises described herein,
the parties agree as follows:
1. DEFINITIONS.
The following terms shall have the following meanings:
1940 ACT The Investment Company Act of 1940, as amended.
ACQUIRING CLASS The class of the Acquiring Fund whose shares
that the Trust will issue to the shareholders of
the Corresponding Target Class set forth in
Schedule A.
ASSETS All property and assets of any kind and all
interests, rights, privileges and powers of or
attributable to the Target Fund whether or not
determinable at the Effective Time and wherever
located. Assets include all cash, cash
equivalents, securities, claims (whether
absolute or contingent, Known or unknown,
accrued or unaccrued or conditional or
unmatured), contract rights and receivables
(including dividend and interest receivables)
owned by or attributed to the Target Fund and
any deferred or prepaid expense shown as an
asset on the Target Fund's books.
ASSETS LIST A list of securities and other Assets and Known
Liabilities of or attributable to the Target
Fund as of the date provided to the Trust.
CLOSING DATE A date that the parties agree to in writing.
A-1
CORRESPONDING TARGET CLASS The Target Fund share class set forth opposite
the Acquiring Class in Schedule A.
EFFECTIVE TIME 9:00 a.m. Eastern time on the business day
following the Closing Date, or such other time
as the parties may agree to in writing.
FUND The Acquiring Fund or the Target Fund as the
context may require.
KNOW, KNOWN OR KNOWLEDGE Known after reasonable inquiry.
LIABILITIES All liabilities of, allocated or attributable to
the Target Fund, whether Known or unknown,
accrued or unaccrued, absolute or contingent or
conditional or unmatured.
N-14 REGISTRATION STATEMENT The Trust's Registration Statement on Form N-14
under the 1940 Act that will register the shares
of the Acquiring Fund to be issued in the
Reorganization and will include the proxy
materials necessary for shareholders of the
Target Fund to approve the Reorganization.
NET VALUE OF ASSETS Value of Assets net of Liabilities.
REORGANIZATION DOCUMENTS Such bills of sale, assignments and other
instruments as desirable for the Target Fund to
transfer to the Acquiring Fund all right and
title to and interest in the Target Fund's
Assets and for the Acquiring Fund to assume the
Target Fund's Liabilities.
SCHEDULE A Schedule A to this Plan.
TARGET FINANCIAL STATEMENTS The audited financial statements of the Target
Fund for its most recently completed fiscal year
and, if applicable, the unaudited financial
statements of the Target Fund for its most
recently completed semi-annual period.
VALUATION TIME The time on the Closing Date, the business day
immediately preceding the Closing Date if the
Closing Date is not a business day, or such
other date as the parties may agree to in
writing, that the Trust determines the net asset
value of the shares of the Acquiring Fund and
determines the net value of the Assets of or
attributable to the Target Fund. Unless
otherwise agreed to in writing, the Valuation
Time shall be at the time of day then set forth
in the Target Fund's Registration Statement on
Form N-1A as the time of day at which net asset
value is calculated.
2. REGULATORY FILINGS AND SHAREHOLDER ACTION.
(a) The Trust shall promptly prepare and file the N-14 Registration
Statement with the SEC. The Trust and Forum shall promptly
prepare and file any other appropriate regulatory filings,
including, without limitation, filings with federal, state or
foreign securities regulatory authorities.
(b) The parties shall seek an order of the SEC, if appropriate,
providing them with any necessary relief from Section 17 of the
1940 Act to permit them to consummate the transactions
contemplated by this Plan.
(c) As soon as practicable after the effective date of the N-14
Registration Statement, the Target Fund shall hold a shareholder
meeting to consider and approve this plan, the Reorganization and
such other matters as the Target Fund's Board of Trustees may
determine.
A-2
3. TRANSFER OF ASSETS. The Trust and Forum shall take the following steps
with respect to the Reorganization:
(a) On or prior to the Closing Date, Forum shall endeavor to pay or
make reasonable provision to pay out of the Assets all of the
Liabilities, expenses, costs and charges of or attributable to
the Target Fund that are Known to the Target Fund and that are
due and payable as of the Closing Date.
(b) At the Effective Time, Forum shall assign, transfer, deliver and
convey all of the Assets to the Acquiring Fund, subject to all of
the Liabilities. The Trust shall then accept the Assets and
assume the Liabilities such that at and after the Effective Time
(i) all of the Assets at or after the Effective Time shall become
and be the assets of the Acquiring Fund and (ii) all of the
Liabilities at the Effective Time shall attach to the Acquiring
Fund, enforceable against the Acquiring Fund to the same extent
as if initially incurred by the Acquiring Fund.
(c) Forum shall assign, transfer, deliver and convey the Assets to
the Acquiring Fund at the Effective Time on the following bases:
(1) In exchange for the transfer of the Assets, the Trust shall
simultaneously issue and deliver to the Target Fund full and
fractional shares of beneficial interest of each Acquiring
Class. The Trust shall determine the number of shares of the
Acquiring Class to be issued by dividing the Net Value of
Assets of the Corresponding Target Class by the net asset
value of one Acquiring Class share. Based on this
calculation, the Trust shall issue shares of beneficial
interest of each Acquiring Class with an aggregate net asset
value equal to the Net Value of the Assets of the
Corresponding Target Class.
(2) The parties shall determine, as of the Valuation Time, the
net asset value of the Acquiring Fund shares to be delivered
and the net asset value of the Assets to be conveyed,
substantially in accordance with the Trust's current
valuation procedures. The parties shall make all
computations to the fourth decimal place or such other
decimal place as the parties may agree to in writing.
(3) Forum shall transfer the Assets with good and marketable
title to the Trust for the benefit the Acquiring Fund. Forum
shall transfer all cash in the form of immediately available
funds payable to the order of the Trust for the benefit of
the Acquiring Fund. Forum shall transfer any of the Assets
that were not transferred to the Trust at the Effective Time
to the Trust at the earliest practicable date thereafter.
(d) Promptly after the Closing Date, Forum will deliver to the Trust
a Statement of Assets and Liabilities of the Target Fund as of
the Closing Date (usually within one week).
4. DISSOLUTION AND LIQUIDATION OF THE TARGET FUND, REGISTRATION OF SHARES
AND ACCESS TO RECORDS. The Trust and Forum also shall take the
following steps in connection with the Reorganization:
(a) At or as soon as reasonably practical after the Effective Time,
the Target Fund shall dissolve and liquidate by transferring to
shareholders of record of each Corresponding Target Class full
and fractional shares of beneficial interest of the Acquiring
Class equal in value to the shares of the Corresponding Target
Class held by the shareholder. Each Corresponding Target Class
shareholder also shall have the right to receive any unpaid
dividends or other distributions that the Target Fund declared
with respect to the shareholder's Corresponding Target Class
shares before the Effective Time. The Trust
A-3
shall record on its books the ownership by the shareholders of
the respective Acquiring Fund shares; the Target Fund shall
simultaneously redeem and cancel on its books all of its issued
and outstanding shares of each Corresponding Target Class. The
Target Fund shall then wind up its affairs and dissolve as soon
as is reasonably possible after the Effective Time and in
accordance with all applicable laws and regulations.
(b) If a former Target Fund shareholder requests a change in the
registration of the shareholder's Acquiring Fund shares to a
person other than the shareholder, the Acquiring Fund shall
require the shareholder to (i) furnish the Acquiring Fund with an
instrument of transfer properly endorsed, accompanied by any
required signature guarantees and otherwise in proper form for
transfer; (ii) if any of the shares are outstanding in
certificate form, deliver to the Acquiring Fund the certificate
representing such shares; and (iii) pay to the Acquiring Fund any
transfer or other taxes required by reason of such registration
or establish to the reasonable satisfaction of the Acquiring Fund
that such tax has been paid or does not apply.
(c) At and after the Closing Date, Forum shall provide the Trust and
its transfer agent with immediate access to: (i) all records
containing the names, addresses and taxpayer identification
numbers of all of the Target Fund shareholders and the number and
percentage ownership of the outstanding shares of the
Corresponding Target Classes owned by each shareholder as of the
Effective Time and (ii) all original documentation (including all
applicable Internal Revenue Service forms, certificates,
certifications and correspondence) relating to the Target Fund
shareholders' taxpayer identification numbers and their liability
for or exemption from back-up withholding. The Target Fund shall
preserve and maintain, or shall direct its service providers to
preserve and maintain, its records as required by Section 31 of
and Rules 31a-1 and 31a-2 under the 1940 Act.
5. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF FORUM. Forum, on
behalf of itself and, as appropriate, the Target Fund, represents and
warrants to, and agrees with, the Trust as follows:
(a) Forum is a statutory trust, validly existing and in good standing
under the laws of the State of Delaware. Forum's Board of
Trustees duly established and designated each class of the Target
Fund as a class of the Target Fund. Forum is registered with the
SEC as an open-end management investment company under the 1940
Act, and such registration is in full force and effect.
(b) Forum has the power and all necessary federal, state and local
qualifications and authorizations to own all of its properties
and Assets, to carry on its business as now being conducted and
described in its currently effective Registration Statement on
Form N-1A, and to enter into this Plan and to consummate the
transactions contemplated herein.
(c) Forum's Board of Trustees has duly authorized the execution and
delivery of the Plan and the transactions contemplated herein.
Duly authorized officers of Forum have executed and delivered the
Plan. The Plan represents a valid and binding contract,
enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium, and other similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles. The execution and delivery of this
Plan does not, and, subject to the approval of shareholders
referenced in Section 2(c), the consummation of the transactions
contemplated by this Plan will not, violate Forum's Trust
Instrument or By-Laws. Except for obtaining the approval of
Target Fund shareholders, Forum does not need to take any other
action to authorize its officers to effectuate this Plan and the
transactions contemplated herein.
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(d) The Target Fund has qualified as a regulated investment company
under Part I of Subchapter M of Subtitle A, Chapter 1, of the
Code, in respect of each taxable year since the commencement of
its operations and qualifies and shall continue to qualify as a
regulated investment company for its taxable year which includes
the Effective Time.
(e) The materials included within the N-14 Registration Statement
when filed with the SEC, when Part A of the N-14 Registration
Statement is distributed to shareholders, at the time of the
Target Fund shareholder meeting and at the Effective Time of the
Reorganization, insofar as they relate to Forum and the Target
Fund (i) shall comply in all material respects with the
applicable provisions of the 1933 Act and the 1940 Act, the rules
and regulations thereunder and state securities laws, and (ii)
shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading.
(f) Forum has duly authorized and validly issued all of its issued
and outstanding shares and all of the shares are validly
outstanding, fully paid and non-assessable, and are offered for
sale and sold in conformity with the registration requirements of
all applicable federal and state securities laws. There are no
outstanding options, warrants or other rights to subscribe for or
purchase the Target Fund shares, nor are there any securities
convertible into Target Fund shares.
(g) Forum shall operate the business of the Target Fund in the
ordinary course between the date hereof and the Effective Time,
it being agreed that such ordinary course of business will
include the declaration and payment of customary dividends and
distributions and any other dividends and distributions deemed
advisable in anticipation of the Reorganization.
(h) At the Effective Time, the Target Fund will have good and
marketable title to the Assets and full right, power and
authority to assign, transfer, deliver and convey the Assets.
(i) The Target Financial Statements, copies of which have been
previously delivered to the Trust, fairly present the financial
position of the Target Fund as of the Target Fund's most recent
fiscal year-end and the results of the Target Fund's operations
and changes in its net Assets for the periods indicated. The
Target Financial Statements are in accordance with generally
accepted accounting principles consistently applied.
(j) To the Knowledge of the Trust, the Target Fund has no
liabilities, whether or not determined or determinable, other
than the Liabilities disclosed or provided for in the Target
Financial Statements or Liabilities incurred in the ordinary
course of business subsequent to the date of the Target Financial
Statements, and Liabilities set forth in the Assets List.
(k) Forum does not Know of any claims, actions, suits, investigations
or proceedings of any type pending or threatened against the
Target Fund or the Assets or businesses. Forum does not Know of
any facts that it currently has reason to believe are likely to
form the basis for the institution of any such claim, action,
suit, investigation or proceeding against the Target Fund. For
purposes of this provision, investment underperformance or
negative investment performance shall not be deemed to constitute
such facts, provided all required performance disclosures have
been made. The Target Fund is not a party to or subject to the
provisions of any order, decree or judgment of any court or
governmental body that adversely affects, or is reasonably likely
to adversely affect, its financial condition, results of
operations, business, properties or the Assets or its ability to
consummate the transactions contemplated by the Plan.
(l) Except for contracts, agreements, franchises, licenses, or
permits entered into or granted in the ordinary course of its
business in each case under which no material default exists,
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Forum is not a party to or subject to any material contract, debt
instrument, employee benefit plan, lease, franchise, license or
permit of any kind or nature whatsoever on behalf of the Target
Fund.
(m) Forum has filed its federal income tax returns of the Target
Fund, copies of which have been previously delivered to the
Trust, for all taxable years to and including the Target Fund's
most recent taxable year, and has paid all taxes payable pursuant
to such returns. No such return is currently under audit and no
assessment has been asserted with respect to such returns.
(n) Since the date of the Target Financial Statements, there has been
no material adverse change in the financial condition, results of
operations, business, properties or Assets of the Target Fund.
For all purposes under this Plan, investment underperformance,
negative investment performance and/or investor redemptions shall
not be considered material adverse changes, provided all required
performance disclosures have been made.
6. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE TRUST. The
Trust, on behalf of itself and, as appropriate, the Acquiring Fund,
represents and warrants to, and agrees with Forum as follows:
(a) The Trust is organized as a business trust duly created, validly
existing and in good standing under the laws of the Commonwealth
of Massachusetts. The Trust's Board of Trustees has duly
established and designated the Acquiring Fund as a series of the
Trust and each Acquiring Class as a class of the Acquiring Fund.
Upon the Closing Date, the Trust will be registered with the SEC
as an open-end management company under the 1940 Act.
(b) The Trust has the power and all necessary federal, state and
local qualifications and authorizations to own all of its
properties and assets, to enter into this Plan and to consummate
the transactions contemplated herein.
(c) The Trust's Board of Trustees has duly authorized the execution
and delivery of the Plan and the transactions contemplated
herein. Duly authorized officers of the Trust have executed and
delivered the Plan. The Plan represents a valid and binding
contract, enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles. The execution and delivery of this
Plan does not, and the consummation of the transactions
contemplated by this Plan will not, violate the Trust's Trust
Instrument or By-Laws. The Trust does not need to take any other
action to authorize its officers to effectuate the Plan and the
transactions contemplated herein.
(d) The Acquiring Fund shall qualify as a regulated investment
company under Part I of Subchapter M of Subtitle A, Chapter 1, of
the Code, in respect of its current taxable year.
(e) The materials included within the N-14 Registration Statement
when filed with the SEC, when Part A of the N-14 Registration
Statement is distributed to shareholders, at the time of the
Target Fund shareholder meeting and at the Effective Time of the
Reorganization, insofar as they relate to the Trust and the
Acquiring Fund (i) shall comply in all material respects with the
applicable provisions of the 1933 Act and the 1940 Act, the rules
and regulations thereunder and state securities laws, and (ii)
shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading.
(f) The Trust shall duly authorize the Acquiring Fund shares to be
issued and delivered to the Corresponding Target Fund as of the
Effective Time. When issued and delivered, the
A-6
Acquiring Fund shares shall be duly and validly issued, fully
paid and non-assessable, and no shareholder of the Acquiring Fund
shall have any preemptive right of subscription or purchase in
respect of them. There are no outstanding options, warrants or
other rights to subscribe for or purchase the Acquiring Fund
shares, nor are there any securities convertible into Acquiring
Fund shares.
(g) The Trust does not Know of any claims, actions, suits,
investigations or proceedings of any type pending or threatened
against the Acquiring Fund or its assets or businesses. There are
no facts that the Trust currently has reason to believe are
likely to form the basis for the institution of any such claim,
action, suit, investigation or proceeding against it. The
Acquiring Fund is not a party to or subject to the provisions of
any order, decree or judgment of any court or governmental body
that adversely affects, or is reasonably likely to adversely
affect, its financial condition, results of operations, business,
properties or assets or its ability to consummate the
transactions contemplated herein.
(h) Except for contracts, agreements, franchises, licenses or permits
entered into or granted in the ordinary course of its business,
in each case under which no material default exists, the Trust is
not a party to or subject to any material contract, debt
instrument, employee benefit plan, lease, franchise, license or
permit of any kind or nature whatsoever on behalf of the
Acquiring Fund.
(i) The Trust has made all state filings to register each Acquiring
Class in each jurisdiction that the Corresponding Target Class is
currently registered and all necessary steps have been taken
under all relevant jurisdictions' securities laws to consummate
the Reorganization.
(j) Since August 31, 2002, there has been no material adverse change
in the financial condition, business, properties or assets of the
Acquiring Fund.
7. CONDITIONS TO FORUM'S OBLIGATIONS. The obligations of Forum with
respect to the Reorganization shall be subject to the following
conditions precedent:
(a) The Trust shall have duly executed and delivered the applicable
Reorganization Documents to Forum.
(b) The Target Fund's shareholders shall have approved the
Reorganization in the manner required by Forum's Trust Instrument
and applicable law. If the Target Fund shareholders fail to
approve the Reorganization, that failure shall release the
obligations of the Trust with respect to the Target Fund under
this Plan.
(c) The Trust shall have delivered to Forum a certificate dated as of
the Closing Date and executed in its name by the Secretary or
Assistant Secretary of the Trust, in a form reasonably
satisfactory to Forum, stating that the representations and
warranties of the Trust in this Plan that apply to the
Reorganization are true and correct in all material respects at
and as of the Valuation Time.
(d) Forum shall have received an opinion of _____________ with
respect to the tax matters specified in Section 8(d) addressed to
Forum and the Trust in form and substance reasonably satisfactory
to them, and dated as of the Closing Date.
(e) The N-14 Registration Statement shall have become effective under
the 1933 Act as to the Acquiring Fund's shares and the SEC shall
not have instituted or, to the Knowledge of the Trust,
contemplated instituting, any stop order suspending the
effectiveness of the N-14 Registration Statement.
A-7
(f) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other relief
in connection with the Reorganization.
(g) The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any proceeding
seeking to enjoin consummation of the Reorganization under
Section 25(c) of the 1940 Act.
(h) The Trust shall have performed and complied in all material
respects with each of its agreements and covenants required by
this Plan to be performed or complied with by it prior to or at
the Reorganization's Valuation Time and Effective Time.
(i) Forum shall have received from the Trust a duly executed
instrument whereby the Acquiring Fund assumes all of the
Liabilities of or attributable to the Target Fund.
(j) Neither party shall have terminated this Plan with respect to the
Reorganization pursuant to Section 10 of this Plan.
(k) The parties shall have received any necessary order of the SEC
exempting the parties from the prohibitions of Section 17 of the
1940 Act or any similar relief necessary to permit the
Reorganization.
(l) The parties shall have received a certificate from Forum
Financial Group, LLC stating that it and/or its affiliates will
pay all audit, legal, and proxy solicitation costs incurred by
the Acquiring Fund and the Target Fund in connection with the
Reorganization.
(m) Forum's Board of Trustees shall have determined that the Target
Fund's participation in the Reorganization is in the best
interests of the Target Fund.
(n) The Parties shall have received such assurances as they deem
appropriate with respect to the audited and pro forma financial
information of the Acquiring Fund and the Target Fund contained
in the N-14 Registration Statement.
8. CONDITIONS TO THE TRUST'S OBLIGATIONS. The obligations of Trust with
respect to the Reorganization shall be subject to the following
conditions precedent:
(a) Forum shall have duly executed and delivered its applicable
Reorganization Documents to the Trust.
(b) The Target Fund's shareholders shall have approved the
Reorganization in the manner required by the Trust's Trust
Instrument and applicable law. If the Target Fund shareholders
fail to approve the Reorganization, that failure shall release
the Acquiring Fund of its obligations under this Plan.
(c) The Target Fund shall have delivered to the Trust a certificate
dated as of the Closing Date executed in its name by its
Secretary or Assistant Secretary, in a form reasonably
satisfactory to the Trust, stating that the representations and
warranties of Forum and the Target Fund in this Plan that apply
to the Reorganization are true and correct in all material
respects at and as of the Valuation Time.
(d) The Trust shall have received an opinion of _______________
addressed to the Trust and Forum in form and substance reasonably
satisfactory to them, based upon representations made in
certificates provided by them, their affiliates and/or principal
shareholders and dated as of the Closing Date, substantially to
the effect that, for federal income tax purposes:
A-8
(1) The Reorganization will constitute a "reorganization" within
the meaning of Code Section 368(a). The Acquiring Fund and
the Target Fund each will be a "party to a reorganization."
Code Section 368(b).
(2) The Target Fund shareholders will recognize no gain or loss
on their receipt of voting shares of the Acquiring Fund in
exchange for their voting shares of the Target Fund pursuant
to the Reorganization. Code Section 354(a)(1).
(3) The Target Fund will not recognize gain or loss on the
transfer of all of the Assets to the Acquiring Fund solely
in exchange for voting shares of the Acquiring Fund and the
assumption by the Acquiring Fund of the Liabilities pursuant
to the Reorganization. Code Sections 357(a) and 361(a).
(4) The Target Fund will not recognize gain or loss on its
distribution of voting shares of the Acquiring Fund to its
shareholders pursuant to the liquidation of the Target Fund.
Code Section 361(c).
(5) The Acquiring Fund will not recognize gain or loss on its
acquisition of all of the Assets solely in exchange for
voting shares of the Acquiring Fund and the assumption by
the Acquiring Fund of the Liabilities. Code Section 1032(a).
(6) The aggregate tax basis of the voting shares of the
Acquiring Fund received by each of the Target Fund's
shareholders pursuant to the Reorganization will equal the
aggregate tax basis of the voting shares of the Target Fund
surrendered in exchange therefor. Code Section 358(a)(1).
(7) The holding period of the voting shares of the Acquiring
Fund received by each of the Target Fund's shareholders
pursuant to the Reorganization will include the period that
the shareholder held the voting shares of the Target Fund
exchanged therefor, provided that the shareholder held such
shares as a capital asset on the date of the Reorganization.
Code Section 1223(1).
(8) The Acquiring Fund's basis in the Assets received pursuant
to the Reorganization will equal the Target Fund's basis in
the Assets immediately before the Reorganization. Code
Section 362(b).
(9) The Acquiring Fund's holding period in the Assets received
pursuant to the Reorganization will include the period
during which the Target Fund held the Assets. Code Section
1223(2).
(10) The Acquiring Fund will succeed to and take into account the
items of the Target Fund described in Code Section 381(c),
including the earnings and profits, or deficit in earnings
and profits, of the Target Fund as of the date of the
Reorganization. The Acquiring Fund will take these items
into account subject to the conditions and limitations
specified in Code Sections 381, 382, 383 and 384 and
applicable regulations thereunder.
(e) The N-14 Registration Statement shall have become effective under
the 1933 Act as to the Acquiring Fund's shares and no stop order
suspending the effectiveness of the N-14 Registration Statement
shall have been instituted or, the Knowledge of the Trust,
contemplated by the SEC.
(f) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit or obtain damages or other relief
in connection with the Reorganization.
A-9
(g) The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any proceeding
seeking to enjoin consummation of the Reorganization under
Section 25(c) of the 1940 Act.
(h) Forum shall have performed and complied in all material respects
with each of its agreements and covenants required by this Plan
to be performed or complied with by it prior to or at the
Valuation Time and Effective Time.
(i) Neither party shall have terminated this Plan with respect to the
Reorganization pursuant to Section 10 of this Plan.
(j) The parties shall have received any necessary order of the SEC
exempting the parties from the prohibitions of Section 17 of the
1940 Act or any similar relief necessary to permit the
Reorganization.
(k) The parties shall have received a certificate from Forum
Financial Group, LLC stating that it and/or its affiliates will
pay all audit, legal, and proxy solicitation costs incurred by
the Acquiring Fund and the Target Fund in connection with the
Reorganization.
(l) The Board of Trustees of the Trust shall have determined that the
Acquiring Fund's participation in the Reorganization is in the
best interests of the Acquiring Fund.
(m) The parties shall have received such assurances as they deem
appropriate with respect to the audited and pro forma financial
information of the Acquiring Fund and the Target Fund contained
in the N-14 Registration Statement.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the parties hereto shall survive the completion of the
transactions contemplated herein.
10. TERMINATION OF PLAN. A majority of a party's Board of Trustees may
terminate this Plan with respect to the Acquiring Fund or Target Fund,
as appropriate, at any time before the applicable Effective Time if:
(i) the party's conditions precedent set forth in Sections 7 or 8, as
appropriate, are not satisfied or (ii) the Board of Trustees
determines that the consummation of the Reorganization is not in the
best interests of shareholders and gives notice to the other party.
11. GOVERNING LAW. This Plan and the transactions contemplated hereby
shall be governed, construed and enforced in accordance with the laws
of the State of Delaware, except to the extent preempted by federal
law, without regard to conflicts of law principles.
12. BROKERAGE FEES. Each party represents and warrants that there are no
brokers or finders entitled to receive any payments in connection with
the transactions provided for in the Plan.
13. AMENDMENTS. The parties may, by agreement in writing authorized by its
respective Boards of Trustees, amend this Plan at anytime before or
after the Target Fund's shareholders approve the Reorganization.
However, after the Target Fund's shareholders have approved the
Reorganization, the parties may not amend this Plan in a manner that
materially alters the obligations of either party with respect to the
Reorganization. The parties shall not deem this Section to preclude
them from changing the Closing Date or the Effective Time by mutual
agreement.
14. WAIVERS. At any time prior to the Closing Date, either party may by
written instrument signed by it (i) waive the effect of any
inaccuracies in the representations and warranties made to it
contained herein and (ii) waive compliance with any of the agreements,
covenants or conditions made for its benefit contained herein. The
parties agree that any waiver shall apply only to the particular
inaccuracy or requirement for compliance waived, and not any other or
future inaccuracy or lack of compliance.
A-10
15. COOPERATION AND FURTHER ASSURANCES. Each party will cooperate with the
other in fulfilling its obligations under this Plan and will provide
such information and documentation as is reasonably requested by the
other in carrying out this Plan's terms. Each party will provide such
further assurances concerning the performance of obligations under
this Plan and the consummation of the Reorganization as the other
shall deem necessary, advisable or appropriate.
16. UPDATING OF N-14 REGISTRATION STATEMENT. If at any time prior to the
Effective Date, a party becomes aware of any material information that
is not reflected in the N-14 Registration Statement, the party
discovering the information shall notify the other party and the
parties shall cooperate in promptly preparing, filing and clearing
with the SEC, and, if appropriate, distributing to shareholders
appropriate disclosure with respect to the information.
17. LIMITATION ON LIABILITIES. The obligations of Forum and the Target
Fund or the Trust and the Acquiring Fund shall not bind any of their
respective Trustees, shareholders, nominees, officers, agents, or
employees of Forum or the Trust personally, but shall bind only the
assets and property of the Target Fund and Acquiring Fund,
respectively. The execution and delivery of this Plan by the parties'
officers shall not be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but
shall bind only the Assets and the property of the Target Fund or the
Acquiring Fund, as appropriate.
18. NOTICES. Any notice, report, statement, certificate or demand required
or permitted by any provision of this Plan shall be in writing and
shall be given by prepaid telegraph, telecopy, certified mail or
overnight express courier to:
For Forum:
Leslie K. Klenk
Forum Financial Group, LLC
Two Portland Square
Portland, Maine 04101
With copies to:
Anthony C.J. Nuland, Esq.
Seward & Kissel LLP
1200 G Street, N.W., Suite 350
Washington, D.C. 20005
For Monarch:
Patrick J. Keniston
Forum Financial Group, LLC
Two Portland Square
Portland, ME 04101
A-11
With copies to:
Robert J. Zutz, Esq.
Kirkpatrick & Lockart LLP
1800 Massachusetts Avenue, NW
Washington, D.C. 20036-1800
19. GENERAL. This Plan supersedes all prior agreements between the parties
(written or oral), is intended as a complete and exclusive statement
of the terms of the agreement between the parties and may not be
changed or terminated orally. The parties may execute this Plan in
counterparts, which shall be considered one and the same agreement,
and shall become effective when the counterparts have been executed by
and delivered to both parties. The headings contained in this Plan are
for reference only and shall not affect in any way the meaning or
interpretation of this Plan. Nothing in this Plan, expressed or
implied, confers upon any other person any rights or remedies under or
by reason of this Plan. Neither party may assign or transfer any right
or obligation under this Plan without the written consent of the other
party.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers designated below to execute this Plan as of the date first written
above.
FORUM FUNDS, FOR ITSELF AND ON BEHALF OF EACH
OF DAILY ASSETS TREASURY OBLIGATIONS FUND, DAILY
ASSETS GOVERNMENT OBLIGATIONS FUND, AND DAILY ASSETS
CASH FUND
ATTEST:
____________________________________________ By: ______________________________________________
Name: Name:
Title: Title:
MONARCH FUNDS, FOR ITSELF AND ON BEHALF OF
EACH OF ITS SERIES
ATTEST:
____________________________________________ By: ______________________________________________
Name: Name:
Title: Title:
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SCHEDULE A
CORRESPONDING CLASS TABLE
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
ACQUIRING CLASS CORRESPONDING TARGET
CLASS
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
Daily Assets Treasury Fund Universal Shares Daily Assets Treasury Institutional Shares
Obligations Fund
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
Institutional Service Shares Institutional Service Shares
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
Daily Assets Government Fund Universal Shares Daily Assets Government Institutional Shares
Obligations Fund
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
Institutional Service Shares Institutional Service Shares
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
Investor Shares Investor Shares
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
Daily Assets Cash Fund Universal Shares Daily Assets Cash Fund Institutional Shares
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
Institutional Service Shares Institutional Service Shares
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
Investor Shares Investor Shares
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
- ------------------------------- ----------------------------- ------------------------------ ------------------------------
A-13
EXHIBIT B
FINANCIAL HIGHLIGHTS
FORUM TREASURY FUND
FORUM GOVERNMENT FUND
FORUM CASH FUND
[TO BE INSERTED BY PRE-EFFECTIVE AMENDMENT]
EXHIBIT C
FINANCIAL HIGHLIGHTS
MONARCH TREASURY FUND
MONARCH GOVERNMENT FUND
MONARCH CASH FUND
[TO BE INSERTED BY PRE-EFFECTIVE AMENDMENT]
STATEMENT OF ADDITIONAL INFORMATION
MONARCH FUNDS
DAILY ASSETS TREASURY FUND ("MONARCH TREASURY FUND")
DAILY ASSETS GOVERNMENT FUND ("MONARCH GOVERNMENT FUND")
DAILY ASSETS CASH FUND ("MONARCH CASH FUND")
_________________, 2003
This Statement of Additional Information supplements the Combined Proxy
Statement/Prospectus dated _______________, 2003 relating to:
1. A proposal to approve an Agreement and Plan of Reorganization between
Forum Funds, another registered investment company, on behalf of Daily
Assets Treasury Obligations Fund ("Forum Treasury Fund"), Daily Assets
Government Obligations Fund ("Forum Government Fund"), and Daily
Assets Cash Fund ("Forum Cash Fund") (each a "Forum Series"), and
Monarch Funds ("Monarch"), on behalf of its series, Monarch Treasury
Fund, Monarch Government Fund, and Monarch Cash Fund (the "Plan").
Under the Plan, each of Forum Treasury Fund, Forum Government Fund,
and Forum Cash Fund will (a) transfer its assets to Monarch Treasury
Fund, Monarch Government Fund, and Monarch Cash Fund, respectively
(each a "Monarch Series"), in exchange for shares of that
corresponding Monarch Series and the corresponding Monarch Series'
assumption of the applicable Forum Series' liabilities and (b) then
distribute the shares received from the Monarch Series proportionately
to its shareholders and terminate (collectively, the
"Reorganizations").
This Statement of Additional Information consists of this cover page and
the Pro Forma financial statements for each Monarch Series after the
Reorganization and as of August 31, 2002, which follows as Appendix A.
The following documents, each of which has been filed with the Securities
and Exchange Commission, are incorporated herein by reference.
[Items to be incorporated by reference shall be included in a pre-effective
amendment]
This Statement of Additional Information is not a Prospectus; a Combined
Proxy Statement/Prospectus dated August 15, 2002, relating to the
Reorganizations may be obtained without charge by writing Forum Shareholder
Services, LLC at P.O. Box 446, Portland, Maine 04112 or calling (800) 754-8757.
This Statement of Additional Information relates to, and should be read in
conjunction with, such Combined Prospectus/Proxy Statement.
APPENDIX A
PRO FORMA FINANCIAL STATEMENTS OF EACH MONARCH SERIES POST-
REORGANIZATION AND AS OF AUGUST 31, 2002
PRO FORMA STATEMENTS OF ASSETS AND LIABILITIES - MONARCH TREASURY FUND
AUGUST 31, 2002
- --------------------------------------------------------------------------------
PRO FORMA
MONARCH
MONARCH FORUM TREASURY
TREASURY OBLIGATIONS FUND
FUND FUND ADJUSTMENTS TOTAL
---------------- ---------------- ---------------- ----------------
Assets
Investments
Securities at amortized cost $ 156,553,029 $ 115,111,061 $ (75,567,894) $ 196,096,196
Repurchase agreements at amortized cost - - 75,550,000 75,550,000
Total investment, at amortized cost 156,553,029 115,111,061 (17,894) 271,646,196
Cash - - 39,274 39,274
Receivables:
Interest and other receivables - - 7,817 7,817
Receivable from Administrator 1,147 - - 1,147
Organization costs, net of amortization - 457 - 457
Prepaid expenses 1,590 4,432 7,624 13,646
---------------- ---------------- ---------------- ----------------
Total Assets 156,555,766 115,115,950 36,821 271,708,537
---------------- ---------------- ---------------- ----------------
Liabilities
Payables:
Fund shares redeemed - - 2,509,198 1 2,509,198
Dividends 10,892 159,620 - 170,512
Accrued Liabilities:
Investment advisory fees - - 9,534 9,534
Administration fees 9,904 - 13,686 23,590
Transfer agent fees 35,630 6,383 - 42,013
Custodian fees - - 5,999 5,999
Shareholder Service Agent fees 18,789 1,780 - 20,569
Distributor fees 35,198 - - 35,198
Other 5,618 9,717 7,602 22,937
---------------- ---------------- ---------------- ----------------
Total Liabilities 116,031 177,500 2,546,019 2,839,550
---------------- ---------------- ---------------- ----------------
Net Assets $ 156,439,735 $ 114,938,450 $ (2,509,198) $ 268,868,987
================ ================ ================ ================
Components of Net Assets
Paid in capital $ 156,414,732 $ 114,929,437 $ (2,509,198)1 $ 268,834,971
Undistributed (distributions in excess of) net investment income 24,951 9,002 - 33,953
Accumulated net realized gain 52 11 - 63
---------------- ---------------- ---------------- ----------------
Net Assets $ 156,439,735 $ 114,938,450 $ (2,509,198) $ 268,868,987
================ ================ ================ ================
Net Assets by Class of Shares
Universal Shares $ 104,336 $ - $ 103,281,355 $ 103,385,691
Institutional Service Shares - 11,657,095 20,067,958 31,725,053
Institutional Shares 20,067,958 103,281,355 (123,349,313) -
Investor Shares 133,758,243 - - 133,758,243
Service Shares 2,509,198 - (2,509,198)1 -
Net Assets $ 156,439,735 $ 114,938,450 $ (2,509,198) $ 268,868,987
================ ================ ================ ================
Shares of Beneficial Interest
Universal Shares 104,334 - 103,273,820 103,378,154
Institutional Service Shares - 11,655,616 20,058,874 31,714,490
Institutional Shares 20,058,874 103,273,820 (123,332,694) -
Investor Shares 133,742,691 - - 133,742,691
Service Shares 2,508,834 - (2,508,834)1 -
---------------- ---------------- ---------------- ----------------
156,414,733 114,929,436 (2,508,834) 268,835,335
Net Asset Value Per Share (Offering and Redemption
Price per Share) for each Class $ 1.00 $ 1.00 $ - $ 1.00
1 Reflects the redemption of Service Share Class
A-1
PRO FORMA STATEMENTS OF OPERATIONS - MONARCH TREASURY FUND
YEAR ENDED AUGUST 31, 2002
- --------------------------------------------------------------------------------
PRO FORMA
FORUM MONARCH
MONARCH TREASURY TREASURY
TREASURY OBLIGATIONS FUND
FUND FUND ADJUSTMENTS TOTAL
--------------- ---------------- ------------------ ---------------
Investment Income
Interest income allocated from Core Portfolio $ 4,716,486 $ 3,265,698 $ (7,982,184) $ -
Interest income - - 7,982,184 7,982,184
Net expenses allocated form Core Portfolio (296,248) (205,563) 501,811 -
--------------- ---------------- ------------------ ---------------
Net Investment Income 4,420,238 3,060,135 501,811 7,982,184
--------------- ---------------- ------------------ ---------------
Expenses
Investment Advisory - - 128,396 128,396
Custody - - 72,831 72,831
Administration
Universal Shares 56 - 149,964 150,020
Institutional Service Shares - 6,823 49,989 56,812
Institutional Shares 21,691 72,416 (94,107) -
Investor Shares 97,467 - 90,332 187,799
Service Shares 4,350 - (4,350) -
Transfer Agency
Universal Shares 7,753 - 79,491 87,244
Institutional Service Shares - 26,202 35,710 61,912
Institutional Shares 92,146 86,707 (178,853) -
Investor Shares 386,084 - 7,566 393,650
Service Shares 16,204 - (16,204) -
Shareholder services
Institutional Service Shares - 34,113 75,662 109,775
Institutional Shares 82,485 - (82,485) -
Investor Shares 362,872 - - 362,872
Service Shares 10,569 - (10,569) -
Distribution
Investor Shares 453,590 - - 453,590
Service Shares 31,708 - (31,708) -
Professional services 8,753 20,211 (490) 28,474
Accounting 3,000 25,900 34,100 63,000
Trustees 7,797 7,178 (9,240) 5,735
Compliance 9,441 2,395 (5,673) 6,163
Reporting 772 1,760 (668) 1,864
Amortization of organization costs - 1,173 - 1,173
Insurance expense - 3,077 (3,077) -
Miscellaneous 13,888 19,340 (959) 32,269
--------------- ---------------- ------------------ ---------------
Total Expenses 1,610,626 307,295 285,658 2,203,579
Expenses reimbursed and fees waived (127,307) (155,281) 173,335 (109,253)
--------------- ---------------- ------------------ ---------------
Net Expenses 1,483,319 152,014 458,993 2,094,326
--------------- ---------------- ------------------ ---------------
Net Investment Income 2,936,919 2,908,121 42,818 5,887,858
Net Realized Gain on Investments Allocated from Portfolios 54 11 - 65
--------------- ---------------- ------------------ ---------------
Net Increase in Net Assets from Operations $ 2,936,973 $ 2,908,132 $ 42,818 $ 5,887,923
=============== ================ ================== ===============
A-2
PRO FORMA STATEMENTS OF ASSETS AND LIABILITIES - MONARCH GOVERNMENT FUND
AUGUST 31, 2002
- --------------------------------------------------------------------------------
PRO FORMA
MONARCH FORUM MONARCH
GOVERNMENT GOVERNMENT GOVERNMENT
FUND FUND ADJUSTMENTS FUND
------------- ------------- -------------- --------------
Assets
Investments
Securities at amortized cost $ 270,911,188 $ 109,815,103 $ (113,380,630)$ 267,345,661
Repurchase agreements at amortized cost - - 111,210,000 111,210,000
Total investment, at amortized cost 270,911,188 109,815,103 (2,170,630) 378,555,661
Cash - - 15,872 15,872
Receivables:
Interest and other receivables - - 2,179,199 2,179,199
Receivable from Administrator 3,566 - - 3,566
Organization costs, net of amortization - 601 - 601
Prepaid expenses 2,710 13,042 16,165 31,917
------------- ------------- -------------- --------------
Total Assets 270,917,464 109,828,746 40,606 380,786,816
------------- ------------- -------------- --------------
Liabilities
Payables:
Fund shares redeemed - - 1,379,113 1 1,379,113
Dividends 98,740 107,739 - 206,479
Accrued Liabilities:
Investment advisory fees - - 12,224 12,224
Administration fees 14,779 - 17,548 32,327
Transfer agent fees 33,458 4,317 - 37,775
Custodian fees - - 8,091 8,091
Shareholder Service Agent fees 23,978 10,360 - 34,338
Distributor fees 14,885 - - 14,885
Other 12,723 4,739 2,743 20,205
------------- ------------- -------------- --------------
Total Liabilities 198,563 127,155 1,419,719 1,745,437
------------- ------------- -------------- --------------
Net Assets $ 270,718,901 $ 109,701,591 $ (1,379,113) $ 379,041,379
============= ============= ============== ==============
Components of Net Assets
Paid in capital $ 270,738,860 $ 109,690,578 $ (1,379,113)1$ 379,050,325
Undistributed (distributions in excess of) net investment income (31,162) 8,445 - (22,717)
Accumulated net realized gain 11,203 2,568 - 13,771
------------- ------------- -------------- --------------
Net Assets $ 270,718,901 $ 109,701,591 $ (1,379,113) $ 379,041,379
============= ============= ============== ==============
Net Assets by Class of Shares
Preferred Shares $ 12,041,343 $ - $ - $ 12,041,343
Universal Shares 81,425,667 - 51,619,928 133,045,595
Institutional Service Shares - 57,519,745 - 57,519,745
Institutional Shares 117,475,462 51,619,928 (51,619,928) 117,475,462
Investor Shares 58,397,316 561,918 - 58,959,234
Service Shares 1,379,113 - (1,379,113)1 -
Net Assets $ 270,718,901 $ 109,701,591 $ (1,379,113) $ 379,041,379
============= ============= ============== ==============
Shares of Beneficial Interest
Preferred Shares 12,040,678 - - 12,040,678
Universal Shares 81,462,046 - 51,614,191 133,076,237
Institutional Service Shares - 57,514,503 - 57,514,503
Institutional Shares 117,467,521 51,614,191 (51,614,191) 117,467,521
Investor Shares 58,390,207 561,882 - 58,952,089
Service Shares 1,378,408 - (1,378,408)1 -
------------- ------------- -------------- --------------
270,738,860 109,690,576 (1,378,408) 379,051,028
Net Asset Value Per Share (Offering and Redemption
Price per Share) for each Class $ 1.00 $ 1.00 $ - $ 1.00
1 Reflects the redemption of Service Share Class
A-3
PRO FORMA STATEMENTS OF OPERATIONS - MONARCH GOVERNMENT FUND
YEAR ENDED AUGUST 31, 2002
- --------------------------------------------------------------------------------
PRO FORMA
MONARCH FORUM MONARCH
GOVERNMENT GOVERNMENT GOVERNMENT
FUND FUND ADJUSTMENTS FUND
---------------- ---------------- ------------------ ----------------
Investment Income
Interest income allocated from Core Portfolio $ 12,875,100 $ 2,568,209 $ (15,443,309) $ -
Interest income - - 15,443,309 15,443,309
Net expenses allocated form Core Portfolio (610,556) (129,594) 740,150 -
---------------- ---------------- ------------------ ----------------
Net Investment Income 12,264,544 2,438,615 740,150 15,443,309
---------------- ---------------- ------------------ ----------------
Expenses
Investment Advisory - - 207,950 207,950
Custody - - 117,957 117,957
Administration
Preferred Shares 15,745 - 14,823 30,568
Universal Shares 77,719 - 123,852 201,571
Institutional Service Shares - 28,814 30,835 59,649
Institutional Shares 136,034 25,055 111,013 272,102
Investor Shares 39,287 241 35,726 75,254
Service Shares 8,739 - (8,739) -
Transfer Agency
Preferred Shares 8,154 - (5,043) 3,111
Universal Shares 86,090 - 33,262 119,352
Institutional Service Shares - 71,260 (7,207) 64,053
Institutional Shares 543,819 37,928 (26,644) 555,103
Investor Shares 154,397 13,271 (13,350) 154,318
Service Shares 24,722 - (24,722) -
Shareholder Services
Preferred Shares - - - -
Universal Shares - - - -
Institutional Service Shares - 144,071 (28,815) 115,256
Institutional Shares 525,766 - - 525,766
Investor Shares 144,444 1,206 (241) 145,409
Service Shares 21,409 - (21,409) -
Distribution
Investor Shares 180,555 1,448 (242) 181,761
Service Shares 64,227 - (64,227) -
Professional services 24,644 15,659 (2,200) 38,103
Accounting 3,000 37,900 46,100 87,000
Trustees 18,633 4,710 (14,055) 9,288
Compliance 9,625 9,527 (9,171) 9,981
Reporting 2,557 1,556 (1,094) 3,019
Amortization of organization costs - 1,461 - 1,461
Insurance expense - 1,904 (1,904) -
Miscellaneous 27,536 14,015 11,150 52,701
---------------- ---------------- ------------------ ----------------
Total Expenses 2,117,102 410,026 503,605 3,030,733
Expenses reimbursed and fees waived (144,661) (171,291) 108,537 (207,415)
---------------- ---------------- ------------------ ----------------
Net Expenses 1,972,441 238,735 612,142 2,823,318
---------------- ---------------- ------------------ ----------------
Net Investment Income 10,292,103 2,199,880 128,008 12,619,991
Net Realized Gain on Investments Allocated from Portfolios 16,108 3,058 - 19,166
---------------- ---------------- ------------------ ----------------
Net Increase in Net Assets from Operations $ 10,308,211 $ 2,202,938 $ 128,008 $ 12,639,157
================ ================ ================== ================
A-4
PRO FORMA STATEMENTS OF ASSETS AND LIABILITIES - MONARCH CASH FUND
AUGUST 31, 2002
- --------------------------------------------------------------------------------
PRO FORMA
MONARCH FORUM MONARCH
CASH CASH CASH
FUND FUND ADJUSTMENTS FUND
----------------- ----------------- ----------------- -----------------
Assets
Investments
Securities at amortized cost $ 1,061,932,382 $ 85,901,295 $ (382,094,432) $ 765,739,245
Repurchase agreements at amortized cost 381,300,000 381,300,000
Total investment, at amortized cost 1,061,932,382 85,901,295 (794,432) 1,147,039,245
Cash - - 14,931 14,931
Receivables:
Interest and other receivables - - 858,037 858,037
Receivable from Administrator 2,452 - - 2,452
Prepaid expenses 9,695 3,085 26,811 39,591
----------------- ----------------- ----------------- -----------------
Total Assets 1,061,944,529 85,904,380 105,347 1,147,954,256
----------------- ----------------- ----------------- -----------------
Liabilities
Payables:
Fund shares redeemed - - 7,695,178 1 7,695,178
Dividends 30,797 39,821 - 70,618
Accrued Liabilities:
Investment advisory fees - - 33,361 33,361
Administration fees 51,217 - 47,890 99,107
Transfer agent fees 164,929 1,958 - 166,887
Custodian fees - - 22,596 22,596
Shareholder Service Agent fees 161,784 9,899 - 171,683
Distributor fees 129,740 - - 129,740
Other 28,862 7,618 1,500 37,980
----------------- ----------------- ----------------- -----------------
Total Liabilities 567,329 59,296 7,800,525 8,427,150
----------------- ----------------- ----------------- -----------------
Net Assets $ 1,061,377,200 $ 85,845,084 $ (7,695,178) $ 1,139,527,106
================= ================= ================= =================
Components of Net Assets
Paid in capital $ 1,061,339,332 $ 85,840,154 $ (7,695,178)1 $ 1,139,484,308
Undistributed (distributions in excess of) net investment income - 797 - 797
Accumulated net realized gain 37,868 4,133 - 42,001
----------------- ----------------- ----------------- -----------------
Net Assets $ 1,061,377,200 $ 85,845,084 $ (7,695,178) $ 1,139,527,106
================= ================= ================= =================
Net Assets by Class of Shares
Preferred Shares $ 13,095,274 $ - $ - 13,095,274
Universal Shares 46,833,306 - 35,199,174 82,032,480
Institutional Service Shares - 49,965,409 - 49,965,409
Institutional Shares 347,468,889 35,199,174 (35,199,174) 347,468,889
Investor Shares 646,284,553 680,501 - 646,965,054
Service Shares 7,695,178 - (7,695,178)1 -
Net Assets $ 1,061,377,200 $ 85,845,084 $ (7,695,178) $ 1,139,527,106
================= ================= ================= =================
Shares of Beneficial Interest
Preferred Shares 13,092,899 - - 13,092,899
Universal Shares 46,831,876 - 35,196,905 82,028,781
Institutional Service Shares - 49,962,783 - 49,962,783
Institutional Shares 347,458,274 35,196,905 (35,196,905) 347,458,274
Investor Shares 646,262,172 680,466 - 646,942,638
Service Shares 7,694,108 - (7,694,108)1 -
----------------------------------- ----------------- -----------------
1,061,339,329 85,840,154 (7,694,108) 1,139,485,375
Net Asset Value Per Share (Offering and Redemption
Price per Share) for each Class $ 1.00 $ 1.00 $ - $ 1.00
1 Reflects the redemption of Service Share Class
A-5
PRO FORMA STATEMENTS OF OPERATIONS - MONARCH CASH FUND
YEAR ENDED AUGUST 31, 2002
- --------------------------------------------------------------------------------
PRO FORMA
MONARCH FORUM MONARCH
CASH CASH CASH
FUND FUND ADJUSTMENTS FUND
--------------- ---------------- ------------------ ---------------
Investment Income
Interest income allocated from Core Portfolio $ 32,013,680 $ 2,504,922 $ (34,518,602) $ -
Interest income - - 34,518,602 34,518,602
Net expenses allocated form Core Portfolio (1,542,845) (119,822) 1,662,667 -
--------------- ---------------- ------------------ ---------------
Net Investment Income Allocated 30,470,835 2,385,100 1,662,667 34,518,602
--------------- ---------------- ------------------ ---------------
Expenses
Investment Advisory - - 488,010 488,010
Custody - - 276,818 276,818
Administration
Preferred Shares 37,898 - 31,094 68,992
Universal Shares 25,540 - 76,556 102,096
Institutional Service Shares - 26,753 28,630 55,383
Institutional Shares 284,274 25,933 245,374 555,581
Investor Shares 372,094 324 345,450 717,868
Service Shares 17,885 - (17,885) -
Transfer Agency
Preferred Shares 8,527 - (3,948) 4,579
Universal Shares 33,278 - 26,489 59,767
Institutional Service Shares - 68,366 (9,049) 59,317
Institutional Shares 1,098,548 38,993 (24,901) 1,112,640
Investor Shares 1,419,424 14,591 12,193 1,446,208
Service Shares 44,030 - (44,030) -
Shareholder services
Institutional Service Shares - 133,767 (26,754) 107,013
Institutional Shares 1,073,516 - - 1,073,516
Investor Shares 1,385,796 1,620 (324) 1,387,092
Service Shares 43,810 - (43,810) -
Distribution
Investor Shares 1,732,245 1,944 (323) 1,733,866
Service Shares 131,429 - (131,429) -
Professional services 56,589 14,889 523 72,001
Accounting 3,000 37,900 46,100 87,000
Trustees 46,017 4,643 (28,863) 21,797
Compliance 12,401 11,865 (842) 23,424
Reporting 3,636 1,376 2,073 7,085
Insurance expense - 1,797 (1,797) -
Miscellaneous 57,990 17,108 52,008 127,106
--------------- ---------------- ------------------ ---------------
Total Expenses 7,887,927 401,869 1,297,363 9,587,159
Expenses reimbursed and fees waived (122,567) (166,991) 123,231 (166,327)
--------------- ---------------- ------------------ ---------------
Net Expenses 7,765,360 234,878 1,420,594 9,420,832
--------------- ---------------- ------------------ ---------------
Net Investment Income 22,705,475 2,150,222 242,073 25,097,770
Net Realized Gain on Investments Allocated from Portfolios 54,031 4,150 - 58,181
--------------- ---------------- ------------------ ---------------
Net Increase in Net Assets from Operations $ 22,759,506 $ 2,154,372 $ 242,073 $ 25,155,951
=============== ================ ================== ===============
A-6
PART C
OTHER INFORMATION
ITEM 15 - INDEMNIFICATION.
CURRENT TRUST INSTRUMENT; FORM OF AGREEMENT AND DECLARATION OF TRUST
The Registrant's current Trust Instrument and the Registrant's form of Agreement
and Declaration of Trust effective after Registrant's reorganization into a
Massachusetts business trust on or about April 11, 2003 requires the Registrant
to indemnify existing or former trustees and officers of the Registrant 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 qualified in its entirety by the contents of the
current Trust Instrument and the form of Agreement and Declaration of Trust
included in this Registration Statement as Exhibit 16(1)(b) and Exhibit
16(1)(a), respectively, and which are incorporated herein by reference.
CURRENT DISTRIBUTION AGREEMENT; FORM OF DISTRIBUTION AGREEMENT
The Registrant's current Distribution Agreement and the Registrant's form of
Distribution Agreement effective after Registrant's reorganization into a
Massachusetts business trust on or about April 11, 2003 require the Registrant's
distributor to indemnify, defend and hold the Registrant and its several
officers and trustees free and harmless from and against any and all claims,
demands, actions, suits, judgments, liabilities, losses, damages, cots, charges,
reasonable counsel fees and other expenses of ever nature and character
(including the cost of investigating or defending such claims, demands, actions,
suits or liabilities and any reasonable counsel fees incurred in connection
therewith) (collectively, "Damages") but only if such Damages arise out of or
are based upon:
(i) any alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus or any alleged omission of a material
fact required to be stated or necessary to make the statements therein not
misleading, if such statement or omission was made in reliance upon, and in
conformity with, information furnished to the Trust in writing in
connection with the preparation of the Registration Statement or Prospectus
by or on behalf of the distributor; or
(ii) any error of judgment or mistake of law, for any loss arising out of
any investment, or for any action or inaction of the distributor in the
absence of bad faith, willful misfeasance or gross negligence in the
performance of the distributor's duties or obligations under this Agreement
or by reason or the distributor's reckless disregard of its duties and
obligations under this Agreement.
This description is qualified in its entirety by the contents of the current
Distribution Agreement and the form of Distribution Agreement included in this
Registration Statement as Exhibit 16(7)(b) and Exhibit 16(7)(a), respectively,
and which are incorporated herein by reference.
FORM OF INVESTMENT ADVISORY AGREEMENT
The Registrant's form of Investment Advisory Agreement effective after
Registrant's reorganization into a Massachusetts business trust on or about
April 11, 2003 provides the adviser will be liable to the Registrant for error
of judgment or mistake of law, for any loss arising out of any investment, or in
any event due resulting from willful misfeasance, bad faith or gross negligence
in the performance of its duties under the agreement, or by reason of reckless
disregard of its obligations and duties under the agreement.
This description is qualified in its entirety by the contents of the form of
Investment Advisory Agreement included in this Registration Statement as Exhibit
16(6) and which is incorporated herein by reference.
OTHER AGREEMENTS OF THE REGISTRANT
The Registrant's current Administration Agreement and the Registrant's form of
Administration Agreement effective after Registrant's reorganization into a
Massachusetts business trust on or about April 11, 2003 require the
2
Registrant's administrator to indemnify and hold harmless the Registrant, its
employees, agents, trustees, and officers against and from any and all claims,
demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses of ever nature and character
(collectively, "Damages") arising out of the administrator's actions taken or
failures to act with respect to a series of the Registrant due to bad faith,
willful misfeasance or gross negligence in the performance of the
administrator's duties or obligations under the agreement or by reason of the
administrator's reckless disregard of its duties and obligations under the
agreement.
The Registrant's current and form of Transfer Agency Agreement and the
Registrant's current and form of Fund Accounting Agreement contain similar
indemnification language.
This description is qualified in its entirety by the contents of the current
Administration Agreement, form of Administration Agreement, current Transfer
Agency Agreement, form of Transfer Agency Agreement, current Fund Fund
Accounting Agreement, and the form of Fund Accounting Agreement included in this
Registration Statement as Exhibit 16(13)(b), Exhibit 16(13)(a), Exhibit
16(13)(d), Exhibit 16(13)(c), Exhibit 16(13)(h), and Exhibit 16(13)(g),
respectively, and which are incorporated herein by reference.
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 againnst 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 16 - EXHIBITS.
(1) (a) Form of Agreement and Declaration of Trust for Registrant effective
after reorganization into a Massachusetts business trust on or about April
11, 2003 (filed herewith).
(b) Trust Instrument for Registration effective prior to reorganization
into a Massachusetts business trust on or about April 11, 2003 (Exhibit
incorporated by reference as filed in Post-Effective Amendment No. 15 via
EDGAR on December 19, 1997, accession number 0001004402-97-000264).
(2) (a) Form of By-Laws for Registrant effective after reorganization into a
Massachusetts business trust on or about April 11, 2003 (filed herewith).
(b) By-Laws for Registrant prior to reorganization into a Massachusetts
business trust on or about April 11, 2003 (Exhibit incorporated by
reference as filed in Post-Effective Amendment No. 15 via EDGAR on December
19, 1997, accession number 0001004402-97-000264).
(3) None.
(4) Form of Agreement and Plan of Reorganization between Registrant, after
reorganization into a Massachusetts business trust, and Forum Funds is
filed herewith as Exhibit A to the Proxy Statement/Prospectus.
(5) Sections 2.10 and 10.3 and Article VII of the Form of Agreement and
Declaration of Trust filed as Exhibit 1(a) and of the Trust Instrument
filed as Exhibit 1(b).
(6) Form of Investment Advisory Agreement between Registrant and Forum
Investment Advisors, LLC (filed herewith).
(7) (a) Form of Distribution Agreement between the Registrant and Forum Fund
Services, LLC effective after reorganization into a Massachusetts business
trust on or about April 11, 2003 ( (filed herewith).
(b) Current Distribution Agreement between the Registrant and Forum Funds
Services, LLC effective prior to reorganization into a Massachusetts
business trust on or about April 11, 2003
(b) Form of Selected Dealer Agreement between Forum Fund Services, LLC and
securities brokers
3
(Exhibit incorporated herein by reference as filed as Exhibit (e)(1) in PEA
105 via EDGAR on November 2, 2001, accession number 0001004402-01-500277).
(8) None.
(9) None.
(10) (a) Form of Distribution Plan for Investor Shares after Registrant's
effective after reorganization into a Massachusetts business trust on or
about April 11, 2003 (filed herewith).
(b) Investor Class Distribution Plan effective prior to reorganization into
a Massachusetts business trust on or about April 11, 2003 (Exhibit
incorporated by reference as filed in Post-Effective Amendment No. 15 via
EDGAR on December 19, 1997, accession number 0001004402-97-000264).
(c) Service Class Distribution Plan effective before Registrant's
reorganization into a Massachusetts business trust on or about April 11,
2003 (Exhibit incorporated by reference as filed in Post-Effective
Amendment No. 24 via EDGAR on August 31, 2000, accession number
0001004402-00-000307).
(d) Form of Multiclass (Rule 18f-3) Plan effective after Registrant's
reorganization into a Massachusetts business trust on or about April 11,
2003 (filed herewith).
(e) Multiclass (Rule 18f-3) Plan effective before Registrant's
reorganization into a Massachusetts business trust on or about April 11,
2003 (Exhibit incorporated by reference as filed in Post-Effective
Amendment No. 28 via EDGAR on June 27, 2001, accession number
0001004402-01-500123).
(11) Opinion and consent of Kirkpatrick & Lockhart l LLP regarding legality of
securities (to be filed by pre-effective amendment).
(12) Opinion and consent of ______________ regarding the tax consequences of
each reorganization (to be filed pursuant to a post-effective amendment).
(13) (a) Form of Administration Agreement between Registrant and Forum
Administrative Services, LLC effective after Registrant's reorganization
into a Massachusetts business trust on or about April 11, 2003 (filed
herewith).
(b) Administration Agreement between Registrant and Forum Administrative
Services, LLC effective prior to Registrant's reorganization into a
Massachusetts business trust on or about April 11, 2003 (Exhibit
incorporated by reference as filed in Post-Effective Amendment No. 15 via
EDGAR on December 19, 1997, accession number 0001004402-97-000264).
(c) Form of Transfer Agency Agreement between Registrant and Forum
Administrative Services, LLC effective after Registrant's reorganization
into a Massachusetts business trust on or about April 11, 2003 (filed
herewith).
(d) Transfer Agency Agreement between Registrant and Forum Shareholder
Services, LLC effective prior to Registrant's reorganization into a
Massachusetts business trust on or about April 11, 2003 (Exhibit
incorporated by reference as filed in Post-Effective Amendment No. 17 via
EDGAR on November 30, 1998, accession number 0001004402-98-000616).
(e) Form of Shareholder Service Agreement between Registrant and Forum
Administrative Services, LLC effective after Registrant's reorganization
into a Massachusetts business trust on or about April 11, 2003 relating to
Institutional Shares, Institutional Service Shares, and Investor Shares
(filed herewith).
(f) Shareholder Service Agreement between Registrant and Forum
Administrative Services, LLC effective prior to Registrant's reorganization
into a Massachusetts business trust on or about April 11, 2003 relating, to
Institutional Shares, Service Shares, and Investor Shares (Exhibit
incorporated by reference as filed in Post-Effective Amendment No. 24 via
EDGAR on August 31, 2000, accession number 0001004402-00-000307).
(g) Form of Fund Accounting Agreement between Registrant and Forum
Accounting Services, LLC effective after Registrant's reorganization into a
Massachusetts business trust on or about April 11, 2003 (filed herewith).
4
(h) Fund Accounting Agreement between Registrant and Forum Accounting
Services, LLC effective prior to Registrant's reorganization into a
Massachusetts business trust on or about April 11, 2003 (Exhibit
incorporated by reference as filed in Post-Effective Amendment No. 15 via
EDGAR on December 19, 1997, accession number 0001004402-97-000264).Consent
of independent auditor (to be filed by pre-effective amendment)
(14) None.
(15) None.
(16) (a) Powers of Attorney, Maurice J. DeWald, John Y. Keffer, Christine M.
McCarthy, Robert M. Franko and Rudolph I. Estrada, Trustees of Registrant
(filed herewith).
(b) Powers of Attorney, John Y. Keffer, James C. Cheng, J. Michael Parish
and Costas Azariadis, Trustees of Core Trust (Delaware) (filed herewith).
(17) (a) Form of Proxy Card for Daily Assets Treasury Obligations Fund (filed
herewith).
(b) Proxy Card for Daily Assets Government Obligations Fund (filed
herewith).
(c) Proxy Card for Daily Assets Cash Fund (filed herewith).
ITEM 17 - UNDERTAKINGS
(1) The undersigned registrant agrees that prior to any public re-offering of
the securities registered through the use of a prospectus which is a part of
this registration statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act [17 CFR
230.145c], the re-offering prospectus will contain the information called for by
the applicable registration form for re-offerings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(2) The undersigned registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the registration
statement and will not be used until the amendment is effective, and that, in
determining any liability under the Securities Act, each post- effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
(3) The undersigned Registrant agrees to file copies of the tax opinions
required to be filed as an exhibit to the registration statement by Item 16 (12)
of Form N-14 under the Securities Act of 1933, as amended, by means of a
post-effective amendment to the registration statement.
5
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has
been signed on behalf of the Registrant in the city of Portland and State of
Maine, March 24, 2003.
MONARCH FUNDS
By: /S/ JOHN Y. KEFFER
---------------------------
John Y. Keffer
President
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated:
SIGNATURE TITLE DATE
Principal Executive Officer
/S/ JOHN Y. KEFFER Chairman March 24, 2003
- ---------------------------
John Y. Keffer and President
Principal Financial
and Accounting Officer
/S/ STACEY A. HONG Treasurer March 24, 2003
- ---------------------------
Stacey A. Hong
A majority of the Trustees
/S/ JOHN Y. KEFFER March 24, 2003
- ---------------------------
John Y. Keffer
Rudolph I. Estrada, Trustee
Maurice J. DeWald, Trustee
Christine M. McCarthy, Trustee
Robert M. Franko, Trustee
Jack J. Singer, Trustee
/S/ JOHN Y. KEFFER March 24, 2003
- ---------------------------
By: John Y. Keffer
(Attorney-in-fact)
6
SIGNATURES
On behalf of Core Trust (Delaware), being duly authorized, I have duly caused
this Registration Statement of Monarch Funds to be signed in the City of
Portland, State of Maine on March 24, 2003.
CORE TRUST (DELAWARE)
By: /S/ JOHN Y. KEFFER
-----------------------------
John Y. Keffer, President
On behalf of Core Trust (Delaware), this Registration Statement of Monarch Funds
has been signed below by the following persons in the capacities indicated on
March 24, 2003.
(a) Principal Executive Officer
/S/ JOHN Y. KEFFER
--------------------------------------------
John Y. Keffer, Chairman and President
(b) Principal Financial Officer
/S/ STACEY E. HONG
--------------------------------------------
Stacey E. Hong, Treasurer
(c) A majority of the Trustees
/S/ JOHN Y. KEFFER
--------------------------------------------
John Y. Keffer, Chairman
Costas Azariadis, Trustee
J. Michael Parish, Trustee
James C. Cheng, Trustee
By: /S/ JOHN Y. KEFFER
-----------------------------------------
John Y. Keffer, Attorney in fact*
* Pursuant to powers of attorney previously filed as an Exhibit to this
Registration Statement.
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INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
16(1)(a) Form of Agreement and Declaration of Trust
16(2)(a) Form of By-Laws
16(4) Form of Agreement and Plan of Reorganization
16(6) Form of Investment Advisory Agreement
16(7)(a) Form of Distribution Agreement
16(10)(a) Form of Distribution Plan for Investor Shares
16(10)(d) Form of Multiclass (Rule 18f-3) Plan
16(13)(a) Form of Administration Agreement
16(13)(c) Form of Transfer Agency Agreement
16(13)(e) Form of Shareholder Service Agreement
16(13)(g) Form of Fund Accounting Agreement
16(16)(a) Powers of Attorney for Trustees of Monarch Funds
16(16)(b) Powers of Attorney for Trustees of Core Trust (Delaware)
16(17)(a) Form of Proxy Card for Daily Assets Treasury Obligations Fund.
16(17)(b) Proxy Card for Daily Assets Government Obligations Fund.
16(17)(c) Proxy Card for Daily Assets Cash Fund.
8