<PAGE> 1
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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
</TABLE>
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
THE COVENTRY GROUP
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
PRELIMINARY PROXY MATERIALS - FOR SEC USE ONLY
UNITED STATES TRUST COMPANY OF BOSTON
40 COURT STREET
BOSTON, MASSACHUSETTS 02108
December __, 1999
Dear Shareholder:
I am writing to inform you of the upcoming special meeting of the
shareholders of each of the six mutual funds which are advised by United States
Trust Company of Boston (the "Adviser"): Boston Balanced Fund; Boston Equity
Fund; Walden Social Balanced Fund; Walden Social Equity Fund; Walden/BBT
Domestic Social Index Fund and Walden/BBT International Social Index Fund
(collectively, the "Funds"). The meeting is being called in connection with the
proposed change in control of the Adviser as a result of the acquisition of the
Adviser by Citizens Financial Group, Inc. ("Citizens"). Upon the completion of
the transaction, the Adviser will become a wholly-owned subsidiary of Citizens
and the current Portfolio Managers for each of the Funds will be retained by the
Adviser to continue serving as Portfolio Managers for the Funds. The completion
of the transaction between the Adviser and Citizens will cause the current
investment advisory agreement between the Adviser and the Funds to terminate.
For this reason, shareholders of the Funds are being asked to approve a new
investment advisory agreement between the Funds and the Adviser which will take
effect upon the completion of the acquisition transaction involving the Adviser
and Citizens. It is currently expected that the transaction will be consummated
on or about January 11, 2000.
PLEASE REVIEW THIS PROXY STATEMENT AND SIGN AND RETURN THE PROXY CARD
TODAY. Please be sure to sign and return each proxy card regardless of how many
you receive.
The Board of Trustees of the Funds has unanimously approved this
proposal and recommends a vote "FOR" the proposal. If you have any questions
regarding the issues to be voted on or need assistance in completing your proxy
card, please contact Lucia Santini at (617) 726-7250.
Sincerely,
[Signature block]
-----------------
Eric Fischer
Secretary
<PAGE> 3
BOSTON BALANCED FUND
BOSTON EQUITY FUND
WALDEN SOCIAL BALANCED FUND
WALDEN SOCIAL EQUITY FUND
WALDEN/BBT DOMESTIC SOCIAL INDEX FUND
WALDEN/BBT INTERNATIONAL SOCIAL INDEX FUND
(THE "FUNDS")
40 COURT STREET
BOSTON, MASSACHUSETTS 02108
--------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 28, 1999
---------------------
To the Shareholders of the Funds:
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of the Funds will be held at 11:00 a.m., Eastern Time, on December
28, 1999, at the offices of BISYS Fund Services ("BISYS"), 3435 Stelzer Road,
Columbus, Ohio 43219, for the following purposes:
I. To vote upon the approval of a new Investment Advisory Agreement
between each Fund and United States Trust Company of Boston (to be
voted on separately by each Fund).
II. To transact such other business as may come properly before the Meeting
and any adjournment thereof.
Shareholders of record at the close of business on November 30, 1999
are entitled to notice of, and to vote at, the Meeting.
By Order of the Board of Trustees
[Signature block]
George L. Stevens
Secretary
<PAGE> 4
PLEASE RESPOND --- YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED PROXY OR PROXIES IN
THE ENCLOSED ENVELOPE SO THAT YOU WILL BE REPRESENTED AT THE MEETING.
ii
<PAGE> 5
BOSTON BALANCED FUND
BOSTON EQUITY FUND
WALDEN SOCIAL BALANCED FUND
WALDEN SOCIAL EQUITY FUND
WALDEN/BBT DOMESTIC SOCIAL INDEX FUND
WALDEN/BBT INTERNATIONAL SOCIAL INDEX FUND
(THE "FUNDS")
40 COURT STREET
BOSTON, MASSACHUSETTS 02108
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
INTRODUCTION
This Proxy Statement is being furnished in connection with the
solicitation of proxies from shareholders of the Funds in connection with a
Special Meeting of Shareholders to be held at 11:00 a.m., Eastern Time, on
December 28, 1999 and any adjournment thereof (the "Meeting"), at the offices of
BISYS Fund Services ("BISYS"), 3435 Stelzer Road, Columbus, Ohio 43219. The cost
of the solicitation (including printing and mailing this Proxy Statement, Notice
of Meeting and Proxy, as well as any supplementary solicitation) will be borne
by United States Trust Company of Boston, each Fund's investment adviser (the
"Adviser"). The Notice of the Meeting, Proxy Statement and Proxies are being
mailed to shareholders on or about December 17, 1999.
The presence in person or by proxy of the holders of record of a
majority of the outstanding shares of a Fund shall constitute a quorum at the
Meeting, permitting action to be taken on matters related to that Fund. If,
however, such quorum shall not be present or represented at the Meeting or if
fewer votes are present in person or by proxy than the minimum required to
approve any proposal presented at the Meeting, the holders of a majority of the
votes attributable to the shares present in person or by proxy shall have the
power to adjourn the Meeting, from time to time, without notice other than
announcement at the Meeting, until the requisite number of votes shall be
present at the Meeting. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of the
Proposal and will vote against any such adjournment those proxies required to be
voted against such Proposal. At any such adjourned Meeting, if the relevant
quorum is subsequently constituted, any business may be transacted which might
have been transacted at the Meeting as originally called.
The Board of Trustees of the Funds has fixed the close of business on
November 30, 1999, as the record date (the "Record Date") for the determination
of shareholders entitled to notice of and to vote at the Meeting and at any
adjournments thereof. The numbers of outstanding shares of each Fund as of the
Record Date, are as follows:
3
<PAGE> 6
<TABLE>
<CAPTION>
Fund Number of Shares
- ---- ----------------
<S> <C>
Boston Balanced Fund............................................
Boston Equity Fund..............................................
Walden Social Balanced Fund.....................................
Walden Social Equity Fund.......................................
Walden/BBT Domestic Social Index Fund...........................
Walden/BBT International Social Index Fund......................
</TABLE>
VOTING
Approval of the Proposals described herein requires the affirmative
vote of a majority of a Fund's outstanding shares which is defined in the 1940
Act to mean the vote (i) of 67 percent or more of the voting securities present
at the meeting if the holders of more than 50 percent of the outstanding voting
securities of the Fund are present or represented by proxy, or (ii) of more than
50 percent of the outstanding voting securities of the Fund, whichever is less.
All shares represented by the enclosed form of proxy will be voted in accordance
with the instructions indicated on the proxy if it is completed, dated, signed
and returned in time to be voted at the Meeting and is not subsequently revoked.
If the proxy is returned properly signed and dated, but no instructions are
given, the shares represented will be voted in favor of the applicable Proposal.
Any proxy may be revoked by the timely submission of a properly executed,
subsequently dated proxy; by delivery to the Fund of a timely written
revocation; or otherwise by giving notice of revocation in open meeting prior to
the finalization of the vote on a Proposal. Execution and submission of a proxy
does not affect a shareholder's right to attend the Meeting in person.
In addition to the solicitation of proxies by use of the mail, proxies
may be solicited by officers of the Fund, or by officers and employees of the
Funds' investment adviser and administrator, personally or by telephone or
telegraph, without special compensation.
At present, only Boston Balanced Fund has completed at least one full
year of operations and therefore only that Fund has made financial reports
available to its shareholders. The most recent annual report of Boston Balanced
Fund, including financial statements, for the year ended June 30, 1999, has been
mailed previously to its SHAREHOLDERS. If you are a shareholder of Boston
Balanced Fund and you have not received this report or would like to receive
additional copies free of charge, please contact the Fund at the address set
forth on the first page of this proxy statement or by calling (617) 726-7250 and
it will be sent within three business days by first class mail.
4
<PAGE> 7
PROPOSAL I
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT FOR EACH FUND
The Board of Trustees of the Funds is proposing that shareholders
approve a new Investment Advisory Agreement (the "New Agreement") to be entered
into between each Fund and the Adviser. A form of the New Agreement is attached
hereto as EXHIBIT A. The Adviser currently serves as investment adviser for each
Fund pursuant to the existing Investment Advisory Agreement between the Funds
and the Adviser (the "Current Agreement"). It is proposed that the New Agreement
be entered into effective at the time of the completion of the acquisition
transaction involving the Adviser (the "Transaction") that is described in
greater detail below in the section titled "The Proposed Change in Control of
the Adviser".
The New Agreement is being proposed because, under the Investment
Company Act of 1940 (the "1940 Act"), the Transaction could be regarded as
involving an "assignment" of the Current Agreement. The 1940 Act generally
provides that an investment advisory agreement relating to a mutual fund
automatically terminates upon its "assignment." The New Agreement is being
proposed in order to ensure that the Adviser can continue to act as the
investment adviser to each of the Funds beginning at the time of the
consummation of the Transaction, which is expected to occur on or about January
11, 2000. Management of the Funds made a proposal to the Trustees at a meeting
held on November 18, 1999, for the adoption of the New Agreement. The New
Agreement is substantially identical to the Current Agreement and differs only
with respect to certain non-material matters. The Trustees at this meeting
accepted this recommendation for the adoption of the New Agreement and the
Trustees are recommending that shareholders approve the New Agreement.
The Trustees were advised that, in connection with carrying out the
Transaction, the Adviser intends to rely on Section 15(f) of the 1940 Act which
provides a non-exclusive safe harbor for an investment adviser to an investment
company, and any of the investment adviser's affiliated persons (as defined in
the 1940 Act) to receive any amount or benefit in connection with a change in
control of the investment adviser so long as two conditions are met. First, for
a period of three years after the Transaction, at least 75% of the Trustees must
be persons who are not "interested persons" of the predecessor or successor
adviser. The Adviser has indicated that it intends to comply with this 75%
requirement with respect to the Trustees of the Funds for the three year period
following the Transaction. The second condition of Section 15(f) is that, for a
period of two years following an acquisition, there must not be imposed on the
Fund any "unfair burden" as a result of the acquisition or any express or
implied terms, conditions or understandings related to it. An "unfair burden"
would include any arrangement whereby an adviser, or any interested person of
the adviser, would receive or be entitled to receive any compensation, directly
or indirectly, from a Fund or its shareholders (other than fees for bona fide
investment advisory or other services) or from any person in connection with the
purchase or sale of securities or other property to, from or on behalf of the
Fund (other than bona fide ordinary
5
<PAGE> 8
compensation as principal underwriter for the Fund). In this regard, the
Trustees noted that no special compensation arrangements were contemplated in
connection with the Transaction.
The Proposed Change in Control of the Adviser
- ---------------------------------------------
The Adviser is a Massachusetts chartered banking and trust company and
a wholly-owned subsidiary of UST Corp., a Massachusetts bank holding company.
UST Corp. has entered into an agreement to be acquired by Citizens Financial
Group, Inc. ("Citizens"), a Delaware corporation and a wholly-owned subsidiary
of The Royal Bank of Scotland plc, a banking company organized under the laws of
Scotland and one of the 100 largest banking organizations in the world. Citizens
is headquartered in Providence, Rhode Island and offers a wide range of
commercial and consumer banking services through its bank subsidiaries which
currently operate in Rhode Island, Massachusetts, Connecticut, and New
Hampshire. Upon the completion of the transaction, the Adviser will become a
wholly-owned subsidiary of Citizens and the current Portfolio Managers for each
of the Funds will be retained by the Adviser to continue serving as Portfolio
Managers for the Funds.
The acquisition of UST Corp. by Citizens is expected to occur on or
about January 11, 2000, however, the consummation of this transaction is subject
to the satisfaction of a number of conditions and it can therefore not be
assured when the Transaction will actually be completed.
The Current Agreement and the New Agreement
- -------------------------------------------
Under the terms of the Current Agreement, the Adviser manages each
Fund's investments and each Fund pays the Adviser investment advisory fees based
on a percentage of a Fund's average daily net assets as follows: Boston Balanced
Fund, Boston Equity Fund, Walden Social Balanced Fund and Walden Social Equity
Fund each pay the Adviser an investment advisory fee of 0.75% of its average
daily net assets and Walden/BBT Domestic Social Index Fund and Walden/BBT
International Social Index Fund each pay the Adviser an investment advisory fee
of 0.50% of its average daily net assets. Under the terms of the New Agreement,
the fees payable to the Adviser will remain the same.
In addition, pursuant to the terms of an expense limitation agreement
relating to the Funds, the Adviser has undertaken to limit the total operating
expenses of each of the Funds until March 31, 2000, as follows: the total
operating expenses of Boston Balanced Fund, Boston Equity Fund, Walden Social
Balanced Fund, Walden Social Equity Fund and Walden/BBT International Social
Index Fund will be limited to 1.00% of each such Fund's average daily net assets
and the total operating expenses of Walden/BBT Domestic Social Index Fund will
be limited to 0.75% of that Fund's average daily net assets. In connection with
the transaction, the Adviser has agreed to extend the term of the expense
limitation agreement until March 31, 2001.
As of the date hereof, the Adviser does not provide investment advisory
services to any other investment companies other than the Funds.
6
<PAGE> 9
The Trustees' Considerations and Recommendations
- ------------------------------------------------
In approving the New Agreement and determining to submit it to
shareholders for approval, the Trustees concluded that the compensation to be
paid by the Funds to the Adviser under the New Agreement is fair and reasonable.
In making this determination, the Trustees considered several factors. The
factors considered by the Trustees included: (1) the investment management fees
payable under the Current Agreement and those payable under the New Agreement;
(2) the efforts and expenses of the Adviser in rendering its services to the
Funds; (3) the nature, quality and extent of the services as currently provided
by the Adviser to the Funds and as to be provided by the Adviser under the New
Agreement; (4) the experience, background, capabilities and general reputation
of the Adviser; and (5) the fees charged by investment managers operating funds
with similar investment objectives.
In addition, in considering whether to approve the New Agreement, the
Board placed special emphasis on the fact that each of the current Portfolio
Managers will be retained by the Adviser to continue serving as the Portfolio
Managers of the Funds.
In the event that the New Agreement is not approved by the shareholders
of the Funds, the Trustees will consider what other action is appropriate based
upon their determination of the best interests of the shareholders of the Funds.
Similarly, in the event that the Adviser and Citizens fail to complete the
Transaction for any reason even though the requisite votes sought hereunder are
received, the Trustees will consider various options available to them with
respect to the continued operation of the Funds including continuing to operate
the Funds under the terms of the Current Agreement.
Required Vote
- -------------
Each Fund will vote separately on the New Agreement. The approval of
the New Agreement requires the affirmative vote of a majority of each Fund's
outstanding voting securities, which, for these purposes, means the vote (i) of
67 percent or more of the voting securities present at the meeting, if the
holders of more than 50 percent of the outstanding voting securities of a Fund
are present or represented by proxy, or (ii) of more than 50 percent of the
outstanding voting securities of a Fund, whichever is less.
THE BOARD OF TRUSTEES OF THE TRUST,
INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMEND APPROVAL
OF PROPOSAL I.
7
<PAGE> 10
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth certain information as of November 30,
1999 for each Fund with respect to each person or group known to the Fund to be
the beneficial owner of more than 5% of a Fund's outstanding voting securities:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
NAME OF FUND BENEFICIAL OWNER OWNERSHIP CLASS
- ------------ ---------------------------- ---------- --------
<S> <C> <C> <C>
Boston Balanced Fund........................
Boston Equity Fund..........................
Walden Social Balanced Fund.................
Walden Social Equity Fund...................
Walden/BBT Domestic Social Index Fund.......
Walden/BBT International Social Index Fund..
</TABLE>
OTHER MATTERS
The Board does not currently know of any matters to be presented at the
Meeting other than those mentioned in this Proxy Statement. If any other matters
come properly before the Meeting, the shares represented by proxies will be
voted with respect thereto in accordance with the best judgement of the person
or persons voting the proxies.
The Funds do not hold annual or regular meetings of their shareholders.
Proposals of shareholders which are intended to be presented at a future
shareholders' meeting must be received by the Funds by a reasonable time prior
to the solicitation of proxies relating to such future meeting. Shareholder
proposals must meet certain requirements and there is no guarantee that any
proposal will be presented at a shareholders' meeting.
Respectfully submitted,
George L. Stevens
Secretary of the Trust
8
<PAGE> 11
EXHIBIT A
---------
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of _______________, 2000 between THE COVENTRY
GROUP, a Massachusetts business trust (the "Trust"), and United States Trust
Company of Boston, a Massachusetts chartered banking and trust company (the
"Investment Adviser"), a wholly-owned subsidiary of Citizens Financial Group,
Inc. ("Citizens").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Investment Adviser is a wholly-owned subsidiary of
Citizens and the Investment Adviser previously provided investment advisory
services to the Trust prior to the time that the Investment Adviser became a
wholly-owned subsidiary of Citizens; and
WHEREAS, the Trust desires to retain the Investment Adviser to provide,
or to arrange for the provision of, investment advisory services to certain
investment portfolios of the Trust and may retain the Investment Adviser to
serve in such capacity to certain additional investment portfolios of the Trust,
all as now or hereafter may be identified in Schedule A hereto (such current
investment portfolios and any such additional investment portfolios together
called the "Funds") and the Investment Adviser represents that it is willing and
possesses legal authority to so furnish such services without violation of
applicable laws and regulations;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
Section 1. APPOINTMENT. The Trust hereby appoints the Investment
Adviser to act as investment adviser to the Funds for the period and on the
terms set forth in this Agreement. The Investment Adviser accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided. Additional investment portfolios may from time to
time be added to those covered by this Agreement by the parties executing a new
Schedule A which shall become effective upon its execution and shall supersede
any Schedule A having an earlier date.
Section 2. DELIVERY OF DOCUMENTS. The Trust has furnished the
Investment Adviser with copies properly certified or authenticated of each of
the following:
(a) the Trust's Declaration of Trust, and any and all
amendments thereto or restatements thereof (such Declaration, as
presently in effect and as it shall from time to time be amended or
restated, is herein called the "Declaration of Trust");
(b) the Trust's By-Laws and any amendments thereto;
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<PAGE> 12
(c) resolutions of the Trust's Board of Trustees authorizing
the appointment of the Investment Adviser and approving this Agreement;
(d) the Trust's Notification of Registration on Form N-8A
under the 1940 Act as filed with the Securities and Exchange Commission
and all amendments thereto;
(e) the Trust's Registration Statement on Form N-lA under the
Securities Act of 1933, as amended ("1933 Act"), and under the 1940 Act
as filed with the Securities and Exchange Commission and the most
recent amendment thereto; and
(f) the most recent Prospectus and Statement of Additional
Information of each of the Funds (such Prospectus and Statement of
Additional Information, as presently in effect, and all amendments and
supplements thereto, are herein collectively called the "Prospectus").
The Trust will furnish the Investment Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
Section 3. MANAGEMENT. Subject to the supervision of the Trust's Board
of Trustees, the Investment Adviser will provide, or arrange for the provision
of, a continuous investment program for each of the Funds, including investment
research and management with respect to all securities and investments and cash
equivalents in the Funds. The Investment Adviser will determine, or arrange for
others to determine, from time to time what securities and other investments
will be purchased, retained or sold by the Trust with respect to the Funds and
will implement, or arrange for others to implement, such determinations through
the placement, in the name of the Funds, of orders for the execution of
portfolio transactions with or through such brokers or dealers as it may select.
The Investment Adviser will provide, or arrange for the provision of, the
services under this Agreement in accordance with each of the Fund's investment
objectives, policies, and restrictions as stated in the Prospectus and
resolutions of the Trust's Board of Trustees.
Subject to the provisions of this Agreement, the Declaration of Trust
and the 1940 Act, the Investment Adviser may select and enter into contracts
with one or more qualified investment advisers ("Sub-Advisers") to provide to
the Trust some or all of the services required by this Agreement. With respect
to any such appointment by the Investment Adviser of any of the Sub-Advisers,
the Investment Adviser will, as appropriate:
(a) advise the Sub-Advisers with respect to economic
conditions and trends;
(b) assist Sub-Advisers with the placement of orders for the
purchase and sale of securities;
(c) assist and consult with the Sub-Advisers in connection
with the Funds' continuous investment programs; and
(d) periodically review, evaluate and report to the Trust's
Board of Trustees with respect to the performance of the Sub-Advisers.
10
<PAGE> 13
In fulfilling its responsibilities hereunder, the Investment Adviser
further agrees that it will, or, with respect to services provided to the Trust
by any of the Sub-Advisers appointed by the Investment Adviser, that it will
require that each of the Sub-Advisers:
(a) use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which it has
investment responsibilities;
(b) conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and in addition will conduct its
activities under this Agreement (or any applicable sub-investment
advisory agreement) in accordance with any applicable regulations of
any governmental authority, state or federal, pertaining to the
investment advisory activities of the Investment Adviser;
(c) not make loans to any person to purchase or carry shares
of beneficial interest in the Trust or make loans to the Trust;
(d) place orders pursuant to its investment determinations for
the Funds either directly with the issuer or with any broker or dealer.
In placing orders with brokers and dealers, the Investment Adviser will
attempt to obtain, or require that each of the Sub-Advisers obtain,
prompt execution of orders in an effective manner at the most favorable
price. In assessing the best execution available for any transaction,
the Investment Adviser or any of the Sub-Advisers shall consider all
factors it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and
execution capability of the broker-dealer and the reasonableness of the
commission, if any (for the specific transaction and on a continuing
basis). Consistent with this obligation, the Investment Adviser and any
of the Sub-Advisers may, in its discretion and to the extent permitted
by law, purchase and sell portfolio securities to and from brokers and
dealers who provide brokerage and research services (within the meaning
of Section 28(e) of the Securities Exchange Act of 1934) to or for the
benefit of the Funds and/or other accounts over which the Investment
Adviser or any of the Sub-Advisers exercises investment discretion.
Subject to the review of the Trust's Board of Trustees from time to
time with respect to the extent and continuation of the policy, the
Investment Adviser and any of the Sub-Advisers are authorized to pay a
broker or dealer who provides such brokerage and research services a
commission for effecting a securities transaction for any of the Funds
which is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if, but only if, the
Investment Adviser or Sub-Advisers determine in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of
either that particular transaction or the overall responsibilities of
the Investment Adviser or Sub-Advisers with respect to the accounts as
to which it exercises investment discretion. In placing orders with
brokers and dealers, consistent with applicable laws, rules and
regulations, the Investment Adviser may consider the sale of shares of
the Trust. Except as otherwise permitted by applicable laws, rules and
regulations, in no instance will portfolio securities be purchased from
or sold to BISYS Fund Services Limited Partnership, the Investment
Adviser, any Sub-Adviser, or any
11
<PAGE> 14
affiliated person of the Trust, BISYS Fund Services Limited
Partnership, the Investment Adviser or any Sub-Adviser;
(e) will maintain, or select others to maintain on its behalf,
all books and records with respect to the securities transactions of
the Funds and will furnish the Trust's Board of Trustees such periodic
and special reports as the Board may request;
(f) will treat confidentially and as proprietary information
of the Trust all records and other information relative to the Trust
and the Funds and prior, present, or potential shareholders, and will
not use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Trust, which
approval shall not be unreasonably withheld and may not be withheld
where the Investment Adviser or any Sub-Adviser may be exposed to civil
or criminal proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so
requested by the Trust; and
(g) will maintain its policy and practice of conducting its
fiduciary functions independently. In making investment recommendations
for the Funds, the Investment Adviser's or Sub-Adviser's personnel will
not inquire or take into consideration whether the issuers of
securities proposed for purchase or sale for the Trust's account are
customers of the Investment Adviser or any Sub-Adviser or of their
respective parents, subsidiaries or affiliates. In dealing with such
customers, the Investment Adviser or any Sub-Adviser and their
respective parents, subsidiaries, and affiliates will not inquire or
take into consideration whether securities of those customers are held
by the Trust.
Section 4. SERVICES NOT EXCLUSIVE. The investment management services
furnished by the Investment Adviser and any Sub-Adviser hereunder are not to be
deemed exclusive, and the Investment Adviser and any Sub-Adviser shall be free
to furnish similar services to others so long as its services under this
Agreement or any sub-advisory agreement are not impaired thereby.
Section 5. BOOKS AND RECORDS. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, the Investment Adviser hereby agrees that all
records which it maintains for the Funds are the property of the Trust and
further agrees to surrender promptly, and to require each of the Sub-Advisers to
surrender promptly, to the Trust any of such records upon the Trust's request.
The Investment Adviser further agrees to preserve, and to require each of the
Sub-Advisers to preserve, for the periods prescribed by Rule 31a-2 under the
1940 Act, the records required to be maintained by Rule 31a-l under the 1940
Act.
Section 6. EXPENSES. During the term of this Agreement, the Investment
Adviser will pay all expenses, including as applicable, the compensation of any
Sub-Advisers appointed by it, incurred by it in connection with its activities
under this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Funds.
12
<PAGE> 15
Section 7. COMPENSATION. For the services provided and the expenses
assumed pursuant to this Agreement, each of the Funds will pay the Investment
Adviser and the Investment Adviser will accept as full compensation therefor a
fee as set forth on Schedule A hereto. The obligations of the Funds to pay the
above-described fee to the Investment Adviser will begin as of the respective
dates of the initial public sale of shares in the Funds; provided, however, that
the Investment Adviser may from time to time waive some or all of such fees
until such time as it notifies the Trust that it has terminated such waiver.
Section 8. LIMITATION OF LIABILITY. The Investment Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Funds in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Investment Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
Section 9. DURATION AND TERMINATION. This Agreement will become
effective as of the date first written above (or, if a particular Fund is not in
existence on that date, on the date a registration statement relating to that
Fund becomes effective with the Securities and Exchange Commission and Schedule
A hereto is amended to add such Fund), provided that it shall have been approved
by vote of a majority of the outstanding voting securities of such Fund, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect until _______________,
2001.
Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Fund for successive periods of twelve months each ending on
____________, of each year, provided such continuance is specifically approved
at least annually (a) by the vote of a majority of those members of the Trust's
Board of Trustees who are not parties to this Agreement or interested persons of
any party to this Agreement, cast in person at a meeting called for the purpose
of voting on such approval, and (b) by the vote of a majority of the Trust's
Board of Trustees or by the vote of a majority of all votes attributable to the
outstanding Shares of such Fund. Notwithstanding the foregoing, this Agreement
may be terminated as to a particular Fund at any time on sixty days' written
notice, without the payment of any penalty, by the Trust (by vote of the Trust's
Board of Trustees or by vote of a majority of the outstanding voting securities
of such Fund) or by the Investment Adviser. This Agreement will immediately
terminate in the event of its assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested persons" and
"assignment" shall have the same meanings as ascribed to such terms in the 1940
Act.)
Section 10. INVESTMENT ADVISER'S REPRESENTATIONS. The Investment
Adviser hereby represents that it is willing and possesses all requisite legal
authority to provide the services contemplated by this Agreement without
violation of applicable laws and regulations.
Section 11. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement' may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
13
<PAGE> 16
Section 12. NAME. The Trust hereby-acknowledges that the name "Boston
Trust/Walden" is a property right of the Investment Adviser. The Investment
Adviser agrees that the Trust and the Funds may, so long as this Agreement
remains in effect, use "Boston Trust" as part of its name. The Investment
Adviser may permit other persons, firms or corporations, including other
investment companies, to use such name and may, upon termination of this
Agreement, require the Trust and the Funds to refrain from using the name
"Boston Trust/Walden" in any form or combination in its name or in its business
or in the name of any of its Funds, and the Trust shall, as soon as practicable
following its receipt of any such request from the Investment Adviser, so
refrain from using such name.
Section 13. MISCELLANEOUS. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the law of the Commonwealth of Massachusetts.
The Coventry Group is a business trust organized under the laws of the
Commonwealth of Massachusetts and under a Declaration of Trust, to which
reference is hereby made and a copy of which is on file at the office of the
Secretary of State of Massachusetts, and to any and all amendments thereto so
filed or hereafter filed. The obligations of "The Coventry Group" entered into
in the name or on behalf thereof by any of the Trustees, officers, employees or
agents are made not individually, but in such capacities, and are not binding
upon any of the Trustees, officers, employees, agents or shareholders of the
Trust personally, but bind only the assets of the Trust, and all persons dealing
with any of the Funds of the Trust must look solely to the assets of the Trust
belonging to such Fund for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
THE COVENTRY GROUP
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
UNITED STATES TRUST COMPANY OF BOSTON
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
14
<PAGE> 17
Dated: __________, 2000
Schedule A
to the
Amended and Restated
Investment Advisory Agreement
between The Coventry Group and
United States Trust Company of Boston dated __________, 2000
<TABLE>
<CAPTION>
NAME OF FUND COMPENSATION(1)
- ------------ ------------
<S> <C>
Boston Balanced Fund .75 % of average daily net assets
Boston Equity Fund .75 % of average daily net assets
Walden Social Equity Fund .75 % of average daily net assets
Walden Social Balanced Fund .75 % of average daily net assets
Walden/BBT International Social Index Fund .50 % of average daily net assets
Walden/BBT Domestic Social Index Fund .50 % of average daily net assets
THE COVENTRY GROUP UNITED STATES TRUST COMPANY OF BOSTON
By: By:
----------------------------------------- ------------------------------------------------------
Name: Name:
--------------------------------------- ----------------------------------------------------
Title: Title:
-------------------------------------- ---------------------------------------------------
</TABLE>
- ---------------
1. All Fees are computed daily and paid monthly.
15
<PAGE> 18
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
BOSTON BALANCED FUND
SPECIAL MEETING OF SHAREHOLDERS
December 28, 1999
The undersigned hereby appoints Eric Fischer, Domenic Colasacco and
Lucia Santini, or any one of them, his attorney and proxy with full power of
substitution to vote and act with respect to all shares of Boston Balanced Fund
(the "Fund") held by the undersigned at the Special Meeting of Shareholders of
the Fund to be held at 11:00 a.m., Eastern Time, on December 28, 1999, at the
offices of BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio 43219 and at
any adjournment thereof (the "Meeting"), and instructs each of them to vote as
indicated on the matters referred to in the Proxy Statement for the Meeting,
receipt of which is hereby acknowledged, with discretionary power to vote upon
such other business as may properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND. THE BOARD
OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING PROPOSAL:
Approval of a new Investment Advisory Agreement for the Fund.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE PROPOSAL.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _____________________, 1999
-------------------------------------
Name of Shareholder(s) -- Please print or type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
16
<PAGE> 19
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
17
<PAGE> 20
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
BOSTON EQUITY FUND
SPECIAL MEETING OF SHAREHOLDERS
December 28, 1999
The undersigned hereby appoints Eric Fischer, Domenic Colasacco and
Lucia Santini, or any one of them, his attorney and proxy with full power of
substitution to vote and act with respect to all shares of Boston Equity Fund
(the "Fund") held by the undersigned at the Special Meeting of Shareholders of
the Fund to be held at 11:00 a.m., Eastern Time, on December 28, 1999, at the
offices of BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio 43219 and at
any adjournment thereof (the "Meeting"), and instructs each of them to vote as
indicated on the matters referred to in the Proxy Statement for the Meeting,
receipt of which is hereby acknowledged, with discretionary power to vote upon
such other business as may properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND. THE BOARD
OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING PROPOSAL:
Approval of a new Investment Advisory Agreement for the Fund.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE PROPOSAL.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _____________________, 1999
-------------------------------------
Name of Shareholder(s) -- Please print or type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
18
<PAGE> 21
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
19
<PAGE> 22
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
WALDEN SOCIAL BALANCED FUND
SPECIAL MEETING OF SHAREHOLDERS
December 28, 1999
The undersigned hereby appoints Eric Fischer, Domenic Colasacco and
Lucia Santini, or any one of them, his attorney and proxy with full power of
substitution to vote and act with respect to all shares of Walden Social
Balanced Fund (the "Fund") held by the undersigned at the Special Meeting of
Shareholders of the Fund to be held at 11:00 a.m., Eastern Time, on December 28,
1999, at the offices of BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio
43219 and at any adjournment thereof (the "Meeting"), and instructs each of them
to vote as indicated on the matters referred to in the Proxy Statement for the
Meeting, receipt of which is hereby acknowledged, with discretionary power to
vote upon such other business as may properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND. THE BOARD
OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING PROPOSAL:
Approval of a new Investment Advisory Agreement for the Fund.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE PROPOSAL.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _____________________, 1999
-------------------------------------
Name of Shareholder(s) -- Please print or type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
20
<PAGE> 23
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
21
<PAGE> 24
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
WALDEN SOCIAL EQUITY FUND
SPECIAL MEETING OF SHAREHOLDERS
December 28, 1999
The undersigned hereby appoints Eric Fischer, Domenic Colasacco and
Lucia Santini, or any one of them, his attorney and proxy with full power of
substitution to vote and act with respect to all shares of Walden Social Equity
Fund (the "Fund") held by the undersigned at the Special Meeting of Shareholders
of the Fund to be held at 11:00 a.m., Eastern Time, on December 28, 1999, at the
offices of BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio 43219 and at
any adjournment thereof (the "Meeting"), and instructs each of them to vote as
indicated on the matters referred to in the Proxy Statement for the Meeting,
receipt of which is hereby acknowledged, with discretionary power to vote upon
such other business as may properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND. THE BOARD
OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING PROPOSAL:
Approval of a new Investment Advisory Agreement for the Fund.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE PROPOSAL.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _____________________, 1999
-------------------------------------
Name of Shareholder(s) -- Please print or type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
22
<PAGE> 25
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
23
<PAGE> 26
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
WALDEN/BBT DOMESTIC SOCIAL INDEX FUND
SPECIAL MEETING OF SHAREHOLDERS
December 28, 1999
The undersigned hereby appoints Eric Fischer, Domenic Colasacco and
Lucia Santini, or any one of them, his attorney and proxy with full power of
substitution to vote and act with respect to all shares of Walden/BBT Domestic
Social Index Fund (the "Fund") held by the undersigned at the Special Meeting of
Shareholders of the Fund to be held at 11:00 a.m., Eastern Time, on December 28,
1999, at the offices of BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio
43219 and at any adjournment thereof (the "Meeting"), and instructs each of them
to vote as indicated on the matters referred to in the Proxy Statement for the
Meeting, receipt of which is hereby acknowledged, with discretionary power to
vote upon such other business as may properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND. THE BOARD
OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING PROPOSAL:
Approval of a new Investment Advisory Agreement for the Fund.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE PROPOSAL.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _____________________, 1999
-------------------------------------
Name of Shareholder(s) -- Please print or type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
24
<PAGE> 27
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
25
<PAGE> 28
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
WALDEN/BBT INTERNATIONAL SOCIAL INDEX FUND
SPECIAL MEETING OF SHAREHOLDERS
December 28, 1999
The undersigned hereby appoints Eric Fischer, Domenic Colasacco and
Lucia Santini, or any one of them, his attorney and proxy with full power of
substitution to vote and act with respect to all shares of Walden/BBT
International Social Index Fund (the "Fund") held by the undersigned at the
Special Meeting of Shareholders of the Fund to be held at 11:00 a.m., Eastern
Time, on December 28, 1999, at the offices of BISYS Fund Services, 3435 Stelzer
Road, Columbus, Ohio 43219 and at any adjournment thereof (the "Meeting"), and
instructs each of them to vote as indicated on the matters referred to in the
Proxy Statement for the Meeting, receipt of which is hereby acknowledged, with
discretionary power to vote upon such other business as may properly come before
the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND. THE BOARD
OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING PROPOSAL:
Approval of a new Investment Advisory Agreement for the Fund.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE PROPOSAL.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _____________________, 1999
-------------------------------------
Name of Shareholder(s) -- Please print or type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
26
<PAGE> 29
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
27
