Exhibit 5(a)
FORUM FUNDS
INVESTMENT ADVISORY AGREEMENT
December 18, 1995
X. X. Xxxxxx & Co.
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Dear Sirs:
We, the undersigned Forum Funds, herewith confirm our agreement with
you as follows:
1. We propose to engage in the business of investing and reinvesting
our assets in securities of the type and in accordance with the limitations
specified in our Trust Instrument, By-Laws and registration statement filed with
the Securities and Exchange Commission under the Investment Company Act of 1940
(the "Investment Company Act") and the Securities Act of 1933 (the "Securities
Act"), including any representations made in our prospectuses and statements of
additional information, all in such manner and to such extent as may from time
to time be authorized by our Board of Trustees. We are currently authorized to
issue twelve classes of shares and our Board of Trustees is authorized to
reclassify and issue any unissued shares to any number of additional classes or
series each having its own investment objective, policies and restrictions. We
enclose copies of the documents listed above and will from time to time furnish
you with any amendments thereof.
2. We hereby employ you, subject to the direction and control of our
Board of Trustees, to manage the investment and reinvestment of the assets in
our Payson Value Fund and Payson Balanced Fund (the "Funds") as specified below,
and, without limiting the generality of the foregoing, to provide management and
other services specified below.
(a) You will make decisions with respect to all purchases and
sales of securities in the Funds. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact, for our account and at our risk
and in our name, to place orders for the investment and reinvestment of the
assets of the Funds. In all purchases, sales and other transactions in
securities in the Funds you are authorized to exercise full discretion and act
for us in the same manner and with the same force and effect as we might or
could do with respect to such purchases, sales or other transactions, as well as
with respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales or other transactions.
(b) You will report to our Board of Trustees at each meeting
thereof all changes in the Funds since the prior report, and will also keep us
in touch with important developments affecting the Funds and on your own
initiative will furnish us from time to time with such information as you may
believe appropriate for this purpose, whether concerning the individual
companies whose securities are included in the Funds, the industries in which
they engage, or the conditions prevailing in the economy generally. You will
also furnish us with such statistical and analytical information with respect to
securities in the Funds as you may believe appropriate or as we reasonably may
request. In making such purchases and sales of securities in the Funds, you will
bear in mind the policies set from time to time by our Board of Trustees as well
as the limitations imposed by our Articles of Incorporation and in our
Registration Statements under the Act and the Securities Act of 1933, the
limitations in the Act and of the Internal Revenue Code in respect of regulated
investment companies and the investment objective, policies and restrictions for
the Funds.
(c) It is understood that you will from time to time employ or
associate with yourselves such persons as you believe to be particularly fitted
to assist you in the execution of your duties hereunder, the cost of performance
of such duties to be borne and paid by you. No obligation may be incurred on our
behalf in any such respect.
3. It is further agreed that, subject to paragraph 4 of the Management
and Distribution Agreement between us and Forum Financial Services, Inc. that
relates to the Funds (the "Management and Distribution Agreement"), we shall be
responsible and hereby assume the obligation for payment of all our other
expenses, including: (a) payment of the fee payable to you under paragraph 5
hereof, the fee payable to Forum Financial Services, Inc. pursuant to the
Management and Distribution Agreement between Forum Financial Services, Inc. and
us and fees payable to investment advisers who manage our other investment
portfolios; (b) interest charges, taxes, brokerage fees and commissions; (c)
certain insurance premiums; (d) fees, interest charges and expenses of our
custodian, transfer agent and dividend disbursing agent; (e) telecommunications
expenses; (f) auditing, legal and compliance expenses; (g) costs of our
formation and maintaining our corporate existence; (h) costs of preparing and
printing our Prospectuses, Statements of Additional Information, account
application forms and shareholder reports and their delivery to existing and
prospective shareholders; (i) costs of maintaining books of original entry for
portfolio and fund accounting and other required books and accounts and of
calculating the net asset value of our shares; (j) costs of reproduction,
stationery and supplies; (k) compensation of our trustees, officers and
employees and costs of other personnel performing services for us who are not
your officers or officers of Forum Financial Services, Inc., or your and its
respective affiliates; (l) costs of corporate meetings; (m) Securities and
Exchange Commission registration fees and related expenses; (n) state securities
laws registration fees and related expenses and (o) all fees and expenses paid
by us in accordance with any distribution plan adopted by us pursuant to Rule
12b-1 under the Act.
4. We shall expect of you, and you will give us the benefit of, your
best judgment and efforts in rendering these services to us, and we agree as an
inducement to your undertaking these services that you shall not be liable
hereunder for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, you against any liability to us or and to our security
holders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties
hereunder, or by reason of your reckless disregard of your obligations and
duties hereunder.
5. In consideration of the foregoing we will pay you, with respect to
the Payson Value Fund, a fee at an annual rate of .80% of the Fund's average
daily net assets and, with respect to the Payson Balanced Fund, a fee at an
annual rate of .60% of the Fund's average daily net assets. Such fees shall be
accrued by us daily and shall be payable monthly in arrears on the first day of
each calendar month for services performed hereunder during the prior calendar
month. Payment of the advisory fees will be reduced or postponed, if necessary,
with any adjustments made within three months after the end of the year.
6. This agreement shall become effective immediately upon approval by a
majority of the outstanding voting securities (as defined in the Investment
Company Act) of each Fund and shall remain in effect for a period of two years
from the date of such approval and shall continue in effect thereafter for
successive twelve-month periods (computed from each anniversary date of the
effective date) with respect to each Fund, provided that such continuance is
specifically approved at least annually by our Board of Trustees or by majority
vote of the holders of the outstanding voting securities (as defined) of each
Fund, and, in either case, by a majority of our trustees who are not parties to
this agreement or interested persons, as defined in the Act, of any such party
(other than as our trustees), provided further, however, that if this agreement
or its continuation is not so approved as to a Fund, you may continue to render
to such Fund the services described herein in the manner and to the extent
permitted by the Act and the rules and regulations thereunder. Upon the
effectiveness of this agreement, it shall supersede all previous agreements
between us covering the subject matter hereof. This agreement may be terminated
with respect to any Fund at any time, without the payment of any penalty, by
vote of a majority of the outstanding voting securities (as so defined) of such
Fund, or by a vote of a majority of our entire Board of Trustees on 60 days'
written notice to you, or by you with respect to any Fund on not more than 60
days' nor less than 30 days' written notice to us.
7. This agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by you and this agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer," "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and any
interpretation thereof contained in rules or regulations promulgated by the
Securities and Exchange Commission thereunder.
8. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your officers, trustees or employees who may also be a
trustee, officer or employee of ours, or persons otherwise affiliated with us
(within the meaning of the Act) to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, trust, firm, individual or association.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
FORUM FUNDS
By /S/XXXX X. XXXXXX
Xxxx X. Xxxxxx
Accepted: December 18, 1995
X. X. XXXXXX & CO.
By /S/XXXX X. XXXXXXX
Xxxx X. Xxxxxxx
