
<PAGE>
 
                                                                      EXHIBIT 20


                               FIRST AMENDMENT TO
                        AGREEMENT AND IRREVOCABLE PROXY


          THIS FIRST AMENDMENT TO AGREEMENT AND IRREVOCABLE PROXY (this
"AMENDMENT") dated as of March 21, 1996 by and among MARRIOTT INTERNATIONAL,
INC., a Delaware corporation ("PARENT"), FG ACQUISITION CORP., an Indiana
corporation and a subsidiary of Parent ("PURCHASER"), FORUM HOLDINGS, L.P., a
Texas limited partnership ("SHAREHOLDER"), and FORUM GROUP, INC., an Indiana
corporation (the "COMPANY"), amends the Agreement and Irrevocable Proxy dated as
of February 15, 1996 (the "ORIGINAL AGREEMENT"; the Original Agreement, as
amended by this Amendment, the "AGREEMENT") by and among Parent, Purchaser,
Shareholder and the Company.


                              W I T N E S S E T H:
                              ------------------- 

          WHEREAS, pursuant to the Original Agreement, Shareholder agreed to
exercise the Citicorp Warrants (as defined in the Original Agreement) it holds
and to tender the Citicorp Warrant Shares (as defined in the Original Agreement)
acquired upon such exercise into the Offer (as defined in the Original
Agreement); and

          WHEREAS, Shareholder now wishes to sell the Citicorp Warrants to
Purchaser and Purchaser is willing to buy the Citicorp Warrants for an aggregate
purchase price of $3,455,553.26 (the "CITICORP WARRANT PURCHASE PRICE"), which
is equal to the difference between the aggregate price that would have been paid
for the Citicorp Warrant Shares pursuant to the Offer and the aggregate exercise
price of such Citicorp Warrants.

          NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, covenants and agreements contained herein, the parties hereto,
intending to be legally bound hereby, agree as follows:

          1.  Capitalized terms used and not defined herein have the respective
meanings ascribed to them in the Original Agreement.

          2.  Section 2(b) of the Original Agreement is hereby deleted in its
entirety and replaced with the following paragraphs:

          "(b)  (i) Prior to the expiration of the Offer, Shareholder shall
     deliver the Citicorp Warrants to Purchaser pending the acquisition of such
     Citicorp Warrants by Purchaser for the Citicorp Warrant Purchase Price, as
     set forth in clause (ii) of this Section 2(b).

               "(ii)  Promptly after First Chicago Trust Company of New York, as
     Depositary for the Offer, has issued payment in exchange for all of the
     Company

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     Common Stock tendered in the Offer, Purchaser shall acquire the Citicorp
     Warrants by paying the Citicorp Warrant Purchase Price to Shareholder by
     wire transfer, provided that instructions for such wire transfer shall have
                    --------                                                    
     been delivered by Shareholder to Purchaser."

          3.   Section 2(c) of the Original Agreement is hereby deleted in its
entirety and replaced with the following paragraph:

          "(c) Prior to the expiration of the Offer, Shareholder shall deliver
the Investor Warrants to Purchaser to be held in escrow pending the consummation
of the Offer. The Company and Shareholder agree that, notwithstanding any
provision of the Investor Warrants or the Acquisition Agreement to the contrary,
upon expiration of the Offer and without any further action whatsoever, the
Investor Warrants held by Shareholder shall be deemed cancelled and
extinguished, for no additional consideration whatsoever. The Company shall mark
the Investor Warrants cancelled upon receipt thereof. Prior to the expiration of
the Offer, Shareholder will neither transfer nor exercise any Investor Warrants
for any reason whatsoever."

          4.   The following paragraph shall be added as Section 2(e) of the
Agreement:

          "(e) Upon payment of the Citicorp Warrant Purchase Price pursuant to
Section 2(b)(ii), the Company shall cause the transfer of the Citicorp Warrants
from Shareholder to Purchaser to be recorded on the record books of the
Company."

          5.   Miscellaneous.
               ------------- 

          (a) The Agreement, as amended hereby, constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.

          (b) All costs and expenses incurred in connection with this Amendment
and the transactions contemplated hereby shall be paid by the party incurring
such expenses, and each of Parent and Purchaser, on the one hand, and
Shareholder, on the other hand, shall indemnify and hold the other harmless from
and against any and all claims, liabilities or obligations with respect to any
brokerage fees, commissions or finders' fees asserted by any person on the basis
of any act or statement alleged to have been made by such party or its
Affiliates.

          (c) This Amendment shall be governed and construed in accordance with
the Laws of the State of Delaware (regardless of the Laws that might otherwise
govern under applicable principles of conflict of laws) as to all matters,
including matters of validity, construction, effect, performance and remedies.

                                       2
<PAGE>
 
          (d) The descriptive headings used herein are inserted for convenience
of reference only and are not intended to be part of or to affect the meaning or
interpretation of this Amendment.

          (e) This Amendment may be executed in counterparts, each of which
shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same instrument.

                                       3
<PAGE>
 
          IN WITNESS WHEREOF, Parent, Purchaser, Shareholder and the Company
have caused this Amendment to be duly executed as of the day and year first
above written.

                         MARRIOTT INTERNATIONAL, INC.


                         By: /s/ Joseph Ryan
                             ----------------------------------
                             Name:  Joseph Ryan
                             Title: Executive Vice President


                         FG ACQUISITION CORP.


                         By: /s/ Edward L. Bednarz
                             ---------------------------------
                             Name:  Edward L. Bednarz
                             Title: Vice President


                         FORUM HOLDINGS, L.P.

                         By: HRP Management, Ltd.,
                             Its General Partner

                             By:  HH Genpar Partners,
                                Its General Partner

                                By: Hampstead Associates, Inc.,
                                    Its Managing General Partner

                                By: /s/ Richard M. FitzPatrick
                                    --------------------------
                                    Name:  Richard M. FitzPatrick
                                    Title: Vice President


                         FORUM GROUP, INC.


                         By: /s/ Mark Pacala
                             ----------------------------------
                             Name:  Mark Pacala
                             Title: Chairman and Chief Executive Officer

                                      S-1
