As filed with the Securities and Exchange Commission on April 14, 2000
Registration No. 33-44964
Investment Company Act File No. 811-6526
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 2054 9
-------------------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
Pre-Effective Amendment No. __ / /
Post-Effective Amendment No. 67 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
AMENDMENT NO. 69 / X /
(Check appropriate box or boxes)
THE COVENTRY GROUP
(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road, Columbus, Ohio 43219
(Address of Principal Executive Office)
Registrant's Telephone Number: (614) 470-8000
-------------------------------------
Jane A. Kanter, Esq.
Dechert Price & Rhoads
1775 Eye Street, NW
Washington, DC 20006
-------------------------------------
(Name and Address of Agent for Services)
Copies to:
Walter B. Grimm
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
It is proposed that this filing will become effective 60 days
after filing pursuant to paragraph (a)(1) of Rule 485.
<PAGE>
WILLAMETTE VALUE FUND
(a series of The Coventry Group)
CONTENTS OF REGISTRATION STATEMENT
This registration statement consists of the following papers and documents:
o Cover page
o Contents of Registration Statement
o Introduction
o Supplement to the July 31, 1999 Prospectus of Willamette Value Fund and
Supplement to the March 1, 2000 Statement of Additional Information for
the Willamette Funds
o Part C - Other Information and Signature Page
o Exhibits
Introduction
This amendment, filed pursuant to Rule 485(a) under the Securities Act of 1933,
is filed in order to add disclosure about a new sub-advisory arrangement for
Willamette Value Fund ("Fund") and new investment policies for the Fund. This
amendment incorporates by reference the Fund's Prospectus dated July 31, 1999
and the Statement of Additional Information dated March 1, 2000.
Except to the extent that the Prospectus and Statement of Additional Information
are modified by the supplements included with this amendment, no changes are
being made or are viewed as being made by this amendment.
WILLAMETTE VALUE FUND
(a series of The Coventry Group)
Supplement dated May 10, 2000 to
Prospectus dated July 31, 1999
At a May 9, 2000 meeting, the Fund's shareholders approved an amendment to the
Fund's investment advisory contract permitting Willamette Asset Managers, Inc.
("Adviser") to appoint a sub-adviser at no additional cost to the Fund. At that
meeting, shareholders also approved a new sub-investment advisory agreement with
The Bank of New York ("Sub-Adviser"). As described in the proxy statement sent
to shareholders for that meeting, it was intended that certain changes to the
Fund's investment policies would be implemented upon appointment of the
Sub-Adviser. The prospectus for Willamette Value Fund ("Fund"), dated
July 31, 1999, is amended as follows to reflect these management and policy
changes.
1. The sections of the "Risk/Return Summary and Fund Expenses" headed
"Principal Investment Strategies" and "Fund Performance" are amended to
read as follows:
Principal Investment Strategies
The Fund follows a "value" investment strategy that employs two portfolio
components. The first component, consisting of about one-half of the
Fund's total assets, is normally allocated by the Sub-Adviser to the ten
highest dividend-yielding stocks in the Dow Jones Industrial Average
("DJIA"). With the second component, also consisting of about one half of
the Fund's assets, the Sub-Adviser pursues a value strategy through active
management. Thus, under normal market conditions, the Sub-Adviser will
invest this second component primarily in equity securities that the
Sub-Adviser believes have certain characteristics of "value" stocks. These
characteristics include: low price to normalized earnings ratio,
above-average dividend yield, low price relative to net asset value, low
valuation relative to the security's historic average, and other factors.
These two components are rebalanced annually.
. Fund Performance
The bar chart and table provide an indication of the risks of an
investment in the Fund by showing its performance from year to year and as
compared to a broad-based securities index. Past performance does not
indicate how the Fund will perform in the future.
Total return for the calendar year ended December 31, 1999.
[Insert one-year bar chart showing total return for calendar year ended December
31, 1999 of 4.78%.]
Best Quarter: 11.75% 2nd Quarter
Worst Quarter: -6.28% 3rd Quarter
Total Return for the Calendar Year Ended 12/31/99:
Past Year Since Inception**(5/26/98)
--------- -------------------------
Willamette Value Fund: 0.07% -0.01%
Dow Jones 65 Composite Average* 11.97% 8.51%
____________________
* Dow Jones 65 Composite Average - a price-weighted average consisting of the
65 stocks that make up the Dow Jones Industrial Average, the Dow Jones
Transportation Average, and the Dow Jones Utility Average.
** "Since Inception" data for the Fund is for the period 5/26/98 to 5/31/99,
and for the Index is for the period 6/1/98 to 12/31/99.
2. The section headed "Policies and Strategies" is amended to read as
follows:
The Fund follows a "value" investment strategy that employs two portfolio
components. The first component, consisting of about one-half of the
Fund's total assets, is normally allocated by the Sub-Adviser to the ten
highest dividend-yielding stocks in the Dow Jones Industrial Average
("DJIA"). With the second component, also consisting of about one-half the
Fund's assets, the Sub-Adviser pursues a value strategy through active
management. Thus, under normal market conditions, the Sub-Adviser will
invest this second component primarily in equity securities that the
Sub-Adviser believes have certain characteristics of "value" stocks. These
characteristics include: low price to normalized earnings ratio,
above-average dividend yield, low price relative to net asset value, low
valuation relative to the security's historic average, and other factors.
The Sub-Adviser is subject to certain limitations with respect to
investment of each component because the Fund has elected to be a
"diversified investment company." A diversified investment company is
restricted in the amount it can invest in securities of a single issuer.
Additionally, the assets allocated to the above components will be reduced
to the extent needed to maintain some portion of the Fund's total assets
in cash or cash equivalents to satisfy redemption requests, to pay Fund
expenses and for other contingencies. However, under normal market
conditions, at least 65% (and generally more substantial portions) of the
Fund's assets will be invested in accordance with the above two components
of its value strategy. The Fund's portfolio will be rebalanced annually so
that approximately one-half the Fund's assets, subject to the foregoing
limitations, will be allocated to each component. In the event of
bankruptcy, pending bankruptcy, a dividend cut, or other significant event
affecting a security in the DJIA component of the Fund's portfolio, the
Sub-Adviser may, but is not required to, replace the security with the
next highest dividend-yielding stock in the DJIA. Under abnormal market
conditions, the Fund may invest without limit in money market instruments
and debt securities rated A or better by Moody's Investors Service, Inc.
("Moody's") or Standard and Poor's Corporation ("S&P"), or deemed by the
Sub-Adviser to be of comparable quality, including debt instruments of
certain non-U.S. banks and other non-U.S. issuers. If an instrument falls
below this quality, the Fund will sell the instrument unless the
Sub-Adviser determines that a sale is not in the Fund's best interest.
The Fund invests primarily in stock of U.S. issuers but it may also invest
in stock of foreign issuers in the form of sponsored or unsponsored
depositary receipts. The Fund may additionally invest in put and call
options, futures contracts and options on futures contracts, and in
restricted or illiquid securities. It may also lend its portfolio
securities and may invest in securities of other investment companies,
which would result in some duplication of expenses for Fund shareholders.
3. The section entitled "The Investment Adviser" is amended to read as
follows:
The Investment Adviser and The Sub-Adviser
Willamette Asset Managers, Inc., 220 NW 2nd Avenue, Suite 950, Portland,
Oregon 97209, is the investment adviser for the Fund. The Adviser is an
affiliate of two registered broker-dealers -- Phillips & Company
Securities Inc. and Willamette Securities, Inc. The Adviser is responsible
for general management of the Fund. The Fund pays fees to the Adviser at
an annual rate of 1.00% of the Fund's average daily net assets. The
Adviser pays fees of the Sub-Adviser out of its fees from the Fund, at no
additional cost to the Fund.
The Bank of New York, 1 Wall Street, New York, New York 10286, provides
portfolio management services to the Fund, as Sub-Adviser. The
Sub-Adviser, founded by Alexander Hamilton in 1784, is one of the largest
U.S. commercial banks, with assets over $____ billion as of December 31,
1999. As of that date the Sub-Adviser also provided administrative or
advisory services for about $____ billion in assets.
Portfolio managers for the DJIA portion of the Fund's portfolio are Kurt
Zyla and Tracy Hemmi. Charles Foley and Henry Wilmerding are portfolio
managers for the actively managed portion of the Fund's portfolio.
Mr. Zyla is responsible for all aspects of the Sub-Adviser's passive
investment management group. His additional responsibilities include
equity derivative product strategy, analysis and trading for the
Sub-Adviser's Investment and Trust sectors. Prior to joining the
Sub-Adviser in _________, he worked in the Specialty Chemicals division of
Engelhard Corporation, in the areas of technical sales and product
management. Mr. Zyla has a B.S. in chemical engineering from New Jersey
Institute of Technology and an MBA from New York University's Stern School
of Business.
Ms. Hemmi joined the Sub-Adviser's Special Investment & Index Management
department in July 1999. She is responsible for the day-to-day management
and trading of equity index portfolios for the Sub-Adviser's Investment
and Trust sectors. Prior to joining the Sub-Adviser, she worked as the
index portfolio manager at Key Asset Management, and as a financial
analyst and funds management trader for KeyCorp. Ms. Hemmi holds a B.A. in
Economics from the University of Rochester and an M.B.A. from Case Western
Reserve University's Weatherhead School of Management.
Mr. Foley has been associated with the Sub-Adviser since _________, and is
President and Portfolio Manager of its subsidiary, Estabrook Capital
Management LLC, with which he has been associated since 1970. From 1966 to
1970, he was with Brown Brotheres Harriman & Co. in their Investment and
Bond Department. Mr. Foley holds a B.A. from Manhattan College and an
M.B.A. from Columbia University Graduate School of Business. He is a
Chartered Financial Analyst and a member of the New York Society of
Security Analysts.
Mr. Wilmerding has been associated with the Sub-Adviser since ________ and
is currently a Director and Portfolio Manager of the Sub-Adviser's
subsidiary, Estabrook Capital Management, which he joined in 1995. Mr.
Wilmerding began his career in 1992 in the Investment Advisory Department
of Brown Brothers Harriman & Co. He holds a B.A. from Colby College and an
M.B.A. from Columbia University Graduate School of Business.
* * * * *
Investors should retain this Supplement for future reference.
WILLAMETTE VALUE FUND
WILLAMETTE SMALL CAP GROWTH FUND
WILLAMETTE PHARMACEUTICAL AND BIO-TECHNOLOGY FUND
WILLAMETTE TECHNOLOGY FUND
Supplement dated May 10, 2000 to
Statement of Additional Information dated March 1, 2000
1. The Section entitled "Investment Adviser and Sub-Advisers" is amended to
read as follows:
Investment Adviser and Sub-Advisers
Willamette Asset Managers, Inc., 220 NW 2nd Avenue, Suite 950, Portland,
Oregon 97209, acts as investment adviser to the Funds pursuant to
Investment Advisory Agreements dated _________, 2000 for Willamette Value
Fund (Value Fund), April 1, 1999 for Willamette Small Cap Growth Fund
(Growth Fund), February 17, 2000 for Willamette Pharmaceutical and
Bio-Technology Fund (Pharmaceutical Fund) and February 17, 2000 for
Willamette Technology Fund (Technology Fund). Each Fund pays the Adviser
fees for its services under these agreements. The fees, which are computed
daily and paid monthly, are at the following annual rates for each Fund,
calculated as a percentage of the particular Fund's average daily net
assets: Value Fund, 1.00%; Growth Fund, 1.20%; Pharmaceutical Fund, 1.20%;
and Technology Fund, 1.20%. The Adviser may periodically waive all or a
portion of its advisory fee to increase the net income of a Fund available
for distribution as dividends or to limit a Fund's total operating
expenses.
For each of the Funds, the Adviser has retained a Sub-Adviser to provide
portfolio management services. The Adviser pays the fees of each
Sub-Adviser, at no additional cost to a Fund.
Investment advisory fees earned by the Adviser for services to Value Fund
for the fiscal years ended March 31, 1999 and March 31, 2000 totalled
$90,925.33 and $_________, respectively, and the Adviser waived advisory
fees in the amount of $27,500 and $________, respectively, for those years.
For its services to Growth Fund, which commenced operations on April 1,
1999, the Adviser earned fees of $_________ during the fiscal year ended
March 31, 2000 and the Adviser waived fees in the amount of $_________ for
that period. For its services to Technology Fund, which commenced
operations on March 1, 2000, the Adviser earned fees of $________ for the
fiscal year ended March 31, 2000 and waived fees totalling $_______. The
Adviser earned no fees from Pharmaceutical Fund as of March 31, 2000, since
that Fund had not commenced operations as of that date.
Unless sooner terminated, each Advisory Agreement will continue in effect
until ______, 2002, (Value Fund), March 31, 2001 (Growth Fund), and
February 17, 2002 (Pharmaceutical Fund and Technology Fund), respectively,
and from year to year thereafter, if such continuance is approved at least
annually by the Group's Board of Trustees or by vote of a majority of the
outstanding Shares of the applicable Fund (as defined under "Investment
Restrictions," above), and a majority of the Trustees who are not parties
to the Advisory Agreement or interested persons (as defined in the 1940
Act) of any party to the Advisory Agreement by votes cast in person at a
meeting called for such purpose. Each Advisory Agreement is terminable at
any time on 60 days' written notice without penalty by the Trustees, by
vote of a majority of the outstanding Shares of the particular Fund, or by
the Adviser. Each Advisory Agreement also terminates automatically in the
event of any assignment, as defined in the 1940 Act.
Each Advisory Agreement provides that the Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the
applicable Fund in connection with the performance of the Advisory
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
Adviser in the performance of its duties, or from reckless disregard by the
Adviser of its duties and obligations thereunder.
The Bank of New York (BONY), 48 Wall Street, New York, New York 10286,
provides portfolio management services, as Sub-Adviser, to Value Fund and
Growth Fund pursuant to Sub-Investment Advisory Agreements with the Group
and the Adviser, dated as of _______, 2000 (Value Fund) and April 1, 1999
(Growth Fund). For its services to Value Fund, the Adviser pays BONY a fee,
calculated daily and paid monthly, at an annual rate equal to the following
amounts based on Value Fund's average daily net assets: (a) for that
portion of Value Fund's portfolio, generally about 50% of Value Fund's
assets, that is invested in the ten highest dividend yielding stocks in the
Dow Jones Industrial Average, the annual fee rate is equal to the following
percentages of Value Fund's average daily net assets: 0.10% on assets up to
$50,000,000; 0.07% on assets from $50,000,001 to $100,000,000; 0.05% on
assets in excess of $100,000,000, with a minimum annual fee of $10,000 for
this portion of Value Fund's portfolio; (b) for that portion of Value
Fund's portfolio, generally about 50% of Value Fund's assets, that is
actively managed, the annual fee rate is equal to 0.45%, with a minimum
annual fee of $10,000 for this portion of Value Fund's portfolio. BONY
commenced its services as Sub-Adviser as of _________, 2000, so BONY
received no Sub-Advisory fees from Value Fund during the fiscal year ended
March 31, 2000. For its services to Growth Fund, which commenced operations
on April 1, 1999, the Adviser pays BONY a fee computed daily and paid
monthly at an annual rate calculated as a percentage of Growth Fund's
average daily net assets, of 0.45%. For the fiscal year ended March 31,
2000, BONY received fees of $_____________ for its services to Growth Fund
U.S. Bank National Association (U.S. Bank), 601 Second Avenue South,
Minneapolis, Minnesota 55480, serves as Sub-Adviser to Pharmaceutical Fund
and Technology Fund pursuant to Sub-Investment Advisory Agreements dated as
of February 17, 2000. For its services to Pharmaceutical Fund and
Technology Fund, the Adviser pays U.S. Bank a fee computed daily and paid
monthly at an annual rate with respect to each of those Funds of 0.50%
calculated as a percentage of the particular Fund's average daily net
assets. Subsequent to such first year, the rate of fees payable by the
Adviser to U.S. Bank with respect to each of Pharmaceutical Fund and
Technology Fund is 0.50%. For its services to Technology Fund, which
commenced operations on March 1, 2000, U.S. Bank received fees totalling
$__________ for the fiscal year ended March 31, 2000. Pharmaceutical Fund
had not commenced operations as of March 31, 2000, so no fees were paid to
U.S. Bank during the fiscal year ended March 31, 2000.
Each Sub-Investment Advisory Agreement will continue in effect, unless
sooner terminated, for two years from its effective date, and has
provisions for continuation and termination similar to those of the
Investment Advisory Agreements. Each Sub-Investment Advisory Agreement may
also be terminated by the Adviser.
The Value Fund Advisory Agreement and Sub-Investment Advisory Agreement
were approved by both the Trustees and the Independent Trustees at a
meeting held February 17, 2000 and by Value Fund shareholders at a meeting
held May 9, 2000. The Growth Fund Advisory Agreement and Sub-Investment
Advisory Agreement were so approved at a meeting held November 13, 1998.
The Advisory Agreements and Sub-Investment Advisory Agreements for
Pharmaceutical Fund and Technology Fund were so approved at a meeting held
February 17, 2000.
2. The following paragraph is added after the foregoing sections:
Code of Ethics
The Coventry Group, the Adviser, each Sub-Adviser and the Distributor have
each adopted a Code of Ethics, pursuant to Rule 17j-1 under the Investment
Company Act of 1940, applicable to securities trading activities of its
personnel. Each Code permits covered personnel to trade in securities in
which a Fund may invest, subject to certain restrictions and reporting
requirements.
* * * * *
Investors should retain this supplement for future reference.
<PAGE>
PART C
-----------
OTHER INFORMATION
-----------------
ITEM 23. EXHIBITS
- ------- --------
(a)(1) Declaration of Trust(1)
(a)(2) Establishment and Designation of Series of Shares(3)
(b) By-Laws(2)
(c) Certificates for Shares are not issued. Articles
IV, V, VI and VII of the Declaration of Trust,
previously filed as Exhibit (a) hereto, define
rights of holders of Shares
(d)(1) Investment Advisory Agreement between Registrant
and Willamette Asset Managers, Inc.
(d)(2) Investment Advisory Agreement between Registrant
and Willamette Asset Managers, Inc.(3)
(d)(3) Investment Advisory Agreement between Registrant
and Willamette Asset Managers, Inc.(4)
(d)(4) Investment Advisory Agreement between Registrant
and Willamette Asset Managers, Inc.(4)
(d)(5) Sub-Investment Advisory Agreement among Registrant,
Willamette Asset Managers, Inc. and Bank of New York.(3)
(d)(6) Sub-Investment Advisory Agreement among Registrant,
Willamette Asset Managers, Inc. and First American Asset
Management.(4)
(d)(7) Sub-Investment Advisory Agreement among Registrant,
Willamette Asset Managers, Inc. and First American Asset
Management.(4)
(d)(8) Sub-Investment Advisory Agreement among Registrant,
Willamette Asset Managers, Inc. and Bank of New York.
(e) Distribution Agreement between Registrant and BISYS Fund
Services LP(2)
(f) Not Applicable
(g) Custody Agreement between Registrant and Union Bank of
California(2)
(h)(1) Administration Agreement between the Registrant
and BISYS Fund Services Ohio, Inc.(2)
(h)(2) Fund Accounting Agreement between the Registrant
and BISYS Fund Services Ohio, Inc.(2)
<PAGE>
(h)(3) Transfer Agency Agreement between the Registrant and
BISYS Fund Services, Inc.(2)
(i) Legal opinion
(j) Consent of Ernst & Young LLP
(k) Not Applicable
(l) Not Applicable
(m) Amended Service and Distribution Plan(3)
(n) Not Applicable
(o) Not Applicable
(p)(1) Code of Ethics of Registrant
(p)(2) Code of Ethics of Willamette Asset Managers, Inc.
(p)(3) Code of Ethics of BISYS Fund Services
(p)(4) Code of Ethics of The Bank of New York, to be filed
by amendment
(p)(5) Code of Ethics of U.S. Bank National Association
- ------------------
1. Filed with initial Registration Statement on January 8, 1992.
2. Incorporated by reference to Post-Effective Amendment No. 33 to
Registrant's Registration Statement (File No. 33-44964) filed electronically
with the Securities and Exchange Commission on March 13, 1998.
3. Incorporated by reference to Post-Effective Amendment No. 43 to Registrant's
Registration Statement (File No. 33-44964) filed electronically with the
Securities and Exchange Commission on December 17, 1998.
4. Incorporated by reference to Post-Effective Amendment No. 66 to Registrant's
Statement (File No. 33-44964) filed electronically with the Securities and
Exchange Commission on March 1, 2000.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
- ------- -------------------------------------------------------------
Not applicable.
ITEM 25. INDEMNIFICATION
- ------- ---------------
Article IV of the Registrant's Declaration of Trust states as
follows:
SECTION 4.3. MANDATORY INDEMNIFICATION.
(a) Subject to the exceptions and limitations
contained in paragraph (b)below:
(i) every person who is, or has been, a
Trustee or officer of the Trust shall be
indemnified by the Trust to the fullest
extent permitted by law against all
liability and against all expenses
reasonably incurred or paid by him
in connection with any claim, action,
suit or proceeding in which he becomes
involved as a party or otherwise by virtue
of his being or having been a Trustee or
officer and against amounts paid or incurred
<PAGE>
by him in the settlement thereof; and (ii)
the words "claim," "action," "suit," or
"proceeding" shall apply to all claims,
actions, suits or proceedings (civil,
criminal, administrative or other, including
appeals), actual or threatened; and the
words "liability" and "expenses" shall
include, without limitation, attorneys
fees, costs, judgments, amounts paid in
settlement, fines, penalties and other
liabilities.
(b) No indemnification shall be
provided hereunder to a Trustee or
officer:
(i) against any liability to the
Trust, a Series thereof, or the
Shareholders by reason of a final
adjudication by a court or other
body before which a proceeding was
brought that he engaged in willful
misfeasance, bad faith, gross
negligence or reckless disregard of
the duties involved in the conduct
of his office;
(ii) with respect to any matter as
to which he shall have been finally
adjudicated not to have acted in
good faith in the reasonable belief
that his action was in the best
interest of the Trust; or
(iii) in the event of a settlement
or other disposition not involving
a final adjudication as provided in
paragraph (b)(i) or (b)(ii)
resulting in a payment by a Trustee
or officer, unless there has been a
determination that such Trustee or
officer did not engage in willful
misfeasance, bad faith, gross
negligence or reckless disregard of
the duties involved in the conduct
of his office:
(A) by the court or other body
approving the settlement or
other disposition; or
(B) based upon a review of
readily available facts (as
opposed to a full trial-type
inquiry) by (1) vote of a
majority of the disinterested
Trustees acting on the matter
(provided that a majority of
the Disinterested Trustees
<PAGE>
then in office acts on the
matter) or (2) written opinion
of independent legal counsel.
(C) The rights of indemnification herein
provided may be insured against by
policies maintained by the Trust, shall
be severable, shall not affect any other
rights to which any Trustee or officer
may now or hereafter be entitled, shall
continue as to a person who has ceased
to be such Trustee or officer and shall
inure to the benefit of the heirs,
executors, administrators and assigns of
such person. Nothing contained herein
shall affect any rights to
indemnification to which personnel of
the Trust other than Trustees and
officers may be entitled by contract or
otherwise under law.
(D) Expenses of preparation and presentation
of a defense to any claim, action, suit
or proceeding of the character described
in paragraph (a) of this Section 4.3 may
be advanced by the Trust prior to final
disposition thereof upon receipt of an
undertaking by or on behalf of the
recipient to repay such amount if it is
ultimately determined that he is not
entitled to indemnification under this
Section 4.3, provided that either:
(i) such undertaking is secured by a
surety bond or some other appropriate
security provided by the recipient, or
the Trust shall be insured against
losses arising out of any such advances;
or
(ii) a majority of the Disinterested
Trustees acting on the matter (provided
that a majority of the Disinterested
Trustees acts on the matter) or an
independent legal counsel in a written
opinion shall determine, based upon a
review of readily available facts (as
opposed to a full trial-type inquiry),
that there is reason to believe that the
recipient ultimately will be found
entitled to indemnification
<PAGE>
As used in this Section 4.3, a "Disinterested Trustee" is one who is not (i) an
Interested Person of the Trust (including anyone who has been exempted from
being an Interested Person by any rule, regulation or order of the Commission),
or (ii) involved in the claim, action, suit or proceeding.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the Registrant by the Registrant pursuant to
the Declaration of Trust or otherwise, the Registrant is aware that in
the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act, and
therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities controlling persons of the
Registrant in connection with the successful defense of any act, suit
or proceeding) is asserted by such trustees, officers or controlling
persons in connection with the shares 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 issues.
ITEM 26. Business and Other Connections of Investment Adviser and its
Officers and Directors
- ------- -------------------------------------------------------------
Name & Address Position with WAM Principal Occupation for past 5 yrs.
- -------------- ----------------- ------------------------------------
James T. Smith COO Compliance Officer (1995)
220 NW 2nd #950 and CFO(1997) for Phillips
Portland, OR 97209 & Co. Securities, Inc. and COO
(1999) for Willamette Securities,
Inc. Joined Phillips & Co. in
October 1994 and Willamette
Securities, Inc. in January 1999.
Supervisor of payroll & billing
services for Interim Services, Inc.,
October 1992 to September 1994.
S. Christopher Clark Director/Owner Executive VP(1993) and
220 NW 2nd #950 Managing Director(1997) for
Portland, OR 97209 Phillips & Co. Securities, Inc. and
Managing Director of Willamette
Securities, Inc. (since January
1999).
Timothy C. Phillips Director/Owner CEO of Phillips & Co. Securities,
220 NW 2nd #950 CEO Inc. and of Willamette Securities,
Portland, OR 97209 Inc. since February 1992 and
January 1999, respectively.
* The business address of Phillips & Co. Securities, Inc. is 220 N.W. 2nd
#950, Portland, Oregon 97209. The business address for Willamette Securities,
Inc. is 700 N.E. Multnomah, Suite 500, Portland, Oregon 97232.
<PAGE>
Business and Other Connections of The Bank of New York
------------------------------------------------------
Name Title/Company
- ---- -------------
Richard Barth.................. Retired; Formerly Chairman and Chief
Executive Officer of Ciba-Geigy Corporation
(diversified chemical products)
Frank J. Biondi, Jr............ Chairman and Chief Executive Office of
Universal Studios (diversified entertainment
operator)
Harold E. Sells................ Retired; Formerly Chairman and Chief Executive
Office of Woolworth Corporation (retailing)
William R. Chaney.............. Chairman and Chief Executive Officer of
Tiffany & Co., (international designers,
manufacturers and distributors of jewelry and
fine goods)
Ralph E. Gomory................ President of Alfred P. Sloan Foundation, Inc.
(private foundation)
Richard J. Kogan............... President and Chief Executive Officer of
Schering-Plough Corporation (manufacturer of
pharmaceutical and consumer products)
John A. Luke, Jr............... Chairman, President and Chief Executive
Officer of Westvaco Corporation (manufacturer
of paper, packaging, and specialty chemicals)
John C. Malone................. President and Chief Executive Officer of
Tele-Communications, Inc., (cable television
multiple system operator)
Donald L. Miller............... Chief Executive Officer and Publisher of Our
World News, LLC (media)
H. Barclay Morley.............. Retired; Formerly Chairman and Chief Executive
Officer of Stauffer Chemical Company
(chemicals)
Catherine A. Rein.............. Senior Executive Vice President of
Metropolitan Life Insurance Company (insurance
and financial services)
Business of Other Connections of U.S. Bank National Association
---------------------------------------------------------------
Name Title/Company
- ---- -------------
John F. Grundhofer............. Chairman and Chief Executive Officer of
U.S. Bancorp
Robert L. Dryden............... President and Chief Executive Officer of
ConneXt, Inc.
Edward J. Phillips............. Chairman and Chief Executive Officer of
Phillips Beverage Company
Linda L. Ahlers................ President of Dayton's, Marshall Field's,
Hudson's
Joshua Green III............... Chairman and Chief Executive Officer of
Joshua Green Corporation
Paul A. Redmond................ Retired Chairman and Chief Executive
Officer of Avista Corp.
Harry L. Bettis................ Rancher
Delbert W. Johnson............. Vice President of Safeguard Scientifics, Inc.
Richard G. Reiten.............. President and Chief Executive Officer of
Northwest Natural Gas Company
Arthur D. Collins.............. President and Chief Operating Officer of
Medtronic, Inc.
Joel W. Johnson................ Chairman, President and Chief Executive
Officer of Hormen Foods Corporation
S. Walter Richey............... Former Chairman and Chief Executive Officer
of Meritex, Inc.
Peter H. Coors................. Vice Chairman and Chief Executive Officer of
Coors Brewing Company
Jerry W. Levin................. Chairman and Chief Executive Officer of
Sunbeam Corporation
Warren R. Staley............... President and Chief Executive Officer of
Cargill, Inc.
ITEM 27. PRINCIPAL UNDERWRITER
- ------- ---------------------
(a) BISYS Fund Services, Limited Partnership ("BISYS Fund
Services") acts as distributor for Registrant. BISYS
Fund Services also distributes the securities of Alpine
Equity Trust, American Independence Funds Trust,
American Performance Funds, AmSouth Funds, The BB&T
Mutual Funds Group, other funds of The Coventry Group,
The Eureka Funds,Fifth Third Funds, Governor Funds,
Hirtle Callaghan Trust, HSBC Funds Trust and HSBC Mutual
Funds Trust, The Infinity Mutual Funds, Inc., Magna
Funds, Mercantile Mutual Funds, Inc., Metamarkets.com,
Meyers Investment Trust, MMA Praxis Mutual Funds,
M.S.D.&T. Funds, Pacific Capital Funds, Republic Advisor
Funds Trust, Republic Funds Trust, Sefton Funds Trust,
Summit Investment Trust, USAllianz Funds, USAllianz
Funds Variable Insurance Products Trust, Variable
Insurance Funds, The Victory Portfolios, The Victory
Variable Insurance Funds, and Vintage Mutual Funds, Inc.
(b) Information about Directors and officers of BISYS Fund
Services Limited Partnership is set forth below:
Name Position with Underwriter Position with Fund
- ---- ------------------------- ------------------
WC Subsidiary Corporation Sole Limited Partner None
150 Clove Road
Little Falls, NJ 07424
BISYS Fund Services, Inc. Sole General Partner None
3435 Stelzer Road
Columbus, OH 43219
Other BISYS distributors
- ------------------------
In addition to the following officers of the BISYS related distributors listed
below, each distributor has additional officers listed to the right ( business
address for each person and distributor unless noted otherwise is 3435 Stelzer
Road, Columbus, OH 43219 and unless noted otherwise each person holds no
position with the Fund):
Lynn Mangum Director
Dennis Sheehan Director
Kevin Dell Vice President/Secretary
William Tomko Sr Vice President
Robert Tuch Assistant Secretary
*Barr Rosenberg Funds Distributor, Inc. Irimga McKay- President
Barr Rosenberg Funds Greg Maddox -Vice President(1)
BNY Hamilton Distributors, Inc. William J. Tomko- President(2)
BNY Hamilton Funds, Inc. Richard Baxt -Sr Vice President(3)
<PAGE>
99
*Centura Funds Distributor, Inc. Walter B. Grimm- President
Centura Funds William J. Tomko- Sr Vice President
CFD Fund Distributors, Inc. Richard Baxt- President
Chase Funds
Concord Financial Group, Inc. Walter B. Grimm- President
ProFunds-
*Evergreen Distributor, Inc. D'Ray Moore- President
Evergreen Funds
*Performance Funds Distributor, Inc. Walter B. Grimm-President(4)
Performance Funds William J. Tomko- Sr Vice President
The One Group Services Company Mark Redman- President(5)
The One Group of Funds William Tomko-Sr Vice President(2)
Vista Funds Distributors, Inc. Richard Baxt- President
Chase Vista Funds Lee Schultheis-Sr Vice President
William J. Tomko- Sr Vice President
Kent Funds Distributors, Inc.
Mentor Distributors, LLC D'Ray Moore, President
*IBJ Funds Distributor, Inc. Walter B. Grimm, SVP
* address is 90 Park Avenue, NY, NY
(1 Serves as Assistant Treasurer to Centura Funds
(2) Serves as President to BNY Hamilton Funds and Treasurer to One Group of
Funds
(3) Serves as Vice President to BNY Hamilton Funds
(4) Serves as President of Performance Funds
(5) Serves as President to One Group of Funds
Non-BISYS Distributors
- ----------------------
(see Part C of post-effective amendments for indicated funds for directors and
officers of distributors listed below.)
Glickenhaus & Company
The Empire Builder Tax-Free Bond Fund
Integrity Investments
Valiant Funds
Shay Financial Services, Inc.
MSB Fund. Inc.
Asset Management Fund, Inc.
Institutional Investors Capital Appreciation Fund, Inc.
(c) Not Applicable.
<PAGE>
ITEM 28. Location of Accounts and Records
- -------- --------------------------------
The accounts, books, and other documents required to be
maintained by Registrant pursuant to Section 31(a) of the
Investment Company Act of 1940 and rules promulgated thereunder
are in the possession of Willamette Asset Managers, Inc. 220 NW
2nd Avenue, Suite 950, Portland, Oregon 97209, (records relating
to its function as Adviser); The Bank of New York, 1 Wall Street,
New York, New York 10286 (records relating to its functions as
Sub-Adviser to Value Fund and Growth Fund); U.S. Bank National
Association, 601 Second Avenue South, Minneapolis, Minnesota
55402, (records relating to its functions as Sub-Adviser to
Pharmaceutical Fund and Technology Fund); BISYS Fund Services,
Limited Partnership, 3435 Stelzer Road, Columbus, Ohio 43219
(records relating to its functions as General Manager,
Administrator and Distributor); and BISYS Fund Services Ohio,
Inc., 3435 Stelzer Road, Columbus, Ohio 43219 (records relating
to its functions as Transfer Agent).
ITEM 29. MANAGEMENT SERVICES
- ------- -------------------
Not Applicable.
ITEM 30. UNDERTAKINGS
- ------- ------------
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 67 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Washington in the District of Columbia on the 14th day of April, 2000.
THE COVENTRY GROUP
By: /s/ Walter B. Grimm
---------------------
Walter B. Grimm
By: /s/ Patrick W.D. Turley
--------------------------
Patrick W.D. Turley, as attorney-in-fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
Signature Title Date
- --------- ----- ----
/s/Walter B. Grimm President and Trustee April 14, 2000
- ------------------------ (Principal Executive Officer)
Walter B. Grimm**
/s/ John H. Ferring IV Trustee April 14, 2000
- ------------------------
John H. Ferring IV***
/s/ Maurice G. Stark Trustee April 14, 2000
- ------------------------
Maurice G. Stark*
/s/ Michael M. Van Buskirk Trustee April 14, 2000
- ------------------------
Michael M. Van Buskirk*
/s/ R. Jeffrey Young
- ------------------------- Chairman and Trustee April 14, 2000
R. Jeffrey Young****
/s/ Nadeem Yousaf Treasurer (Principal Financial April 14, 2000
- ------------------------ and Accounting Officer)
Nadeem Yousaf****
By: /s/ Patrick W.D. Turley
--------------------------------------
Patrick W.D. Turley, as attorney-in-fact
* Pursuant to power of attorney filed with Pre-Effective Amendment
No. 3 on April 6, 1992.
** Pursuant to power of attorney filed with Post-Effective Amendment
No. 26 on May 1, 1996.
*** Pursuant to power of attorney filed with Post-Effective Amendment
No. 39 on July 31, 1998.
**** Pursuant to power of attorney filed with Post-Effective Amendment
No. 63 on November 30, 1999.
THE COVENTRY GROUP
on behalf of
WILLAMETTE VALUE FUND
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, effective commencing on , 2000 between Willamette Asset Managers,
Inc. (the "Adviser") and The Coventry Group (the "Trust") on behalf of
Willamette Value Fund (the "Fund").
WHEREAS, the Trust is a Massachusetts business trust of the series type
organized under a Declaration of Trust dated January 8, 1992, (the
"Declaration") and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end, diversified management investment
company, and the Fund is a new series of the Trust;
WHEREAS, the Trust wishes to retain the Adviser to render investment advisory
services to the Fund, and the Adviser is willing to furnish such services to the
Fund;
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the Trust and the Adviser as follows:
1. Appointment. The Trust hereby appoints the Adviser to act as investment
adviser to the Fund for the periods and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth, for the compensation herein provided.
2. Investment Advisory Duties; Authority to Delegate to Sub-Adviser. Subject
to the supervision of the Trustees of the Trust, the Adviser will (a) provide a
program of continuous investment management for the Fund in accordance with the
Fund's investment objectives, policies and limitations as stated in the Fund's
prospectus and Statement of Additional Information included as part of the
Trust's Registration Statement filed with the Securities and Exchange
Commission, as they may be amended from time to time, copies of which shall be
provided to the Adviser by the Trust; (b) make investment decisions for the
Fund; and (c) place orders to purchase and sell securities for the Fund. The
Adviser is authorized, at its own expense, to delegate to a sub-adviser such of
its responsibilities hereunder as may be specified in an agreement with such
sub-adviser, subject to such approvals by the Trustees and shareholders of the
Fund as are required by the 1940 Act. In the event the Adviser does so delegate
to a sub-adviser, the Adviser is further responsible for supervising the
activities and performance of the sub-adviser, for taking reasonable steps to
assure that the sub-adviser complies with the Fund's investment policies and
procedures and with applicable legal requirements, and for reporting to the
Trustees regarding these matters.
In performing its investment management services to the Fund hereunder, the
Adviser will provide the Fund with ongoing investment guidance and policy
direction, including oral and written research, analysis, advice, statistical
and economic data and judgments regarding individual investments, general
economic conditions and trends and long-range investment policy. The Adviser
will determine the securities, instruments, repurchase
<PAGE>
agreements, options and other investments and techniques that the Fund will
purchase, sell, enter into or use, and will provide an ongoing evaluation of the
Fund's portfolio. The Adviser will determine what portion of the Fund's
portfolio shall be invested in securities and other assets, and what portion if
any, should be held uninvested.
The Adviser further agrees that, in performing its duties hereunder, it will:
(a) comply with the 1940 Act and all rules and regulations thereunder, the
Advisers Act, the Internal Revenue Code (the "Code") and all other applicable
federal and state laws and regulations, and with any applicable procedures
adopted by the Trustees;
(b) use reasonable efforts to manage the Fund so that it will qualify, and
continue to qualify, as a regulated investment company under Subchapter M of
the Code and regulations issued thereunder;
(c) place orders pursuant to its investment determinations for the Fund
directly with the issuer, or with any broker or dealer, in accordance with
applicable policies expressed in the Fund's prospectus and/or Statement of
Additional Information and in accordance with applicable legal requirements;
(d) furnish to the Trust, or to the Fund's administrator, BISYS Fund
Services, ("Administrator") if so directed, whatever statistical information
the Trust may reasonably request with respect to the Fund's assets or
contemplated investments. In addition, the Adviser will keep the Trust and the
Trustees informed of developments materially affecting the Fund's portfolio
and shall, on the Adviser's own initiative, furnish to the Trust from time to
time whatever information the Adviser believes appropriate for this purpose;
(e) make available to the Administrator, and the Trust, promptly upon their
request, such copies of its investment records and ledgers with respect to the
Fund as may be required to assist the Administrator and the Trust in their
compliance with applicable laws and regulations. The Adviser will furnish the
Trustees with such periodic and special reports regarding the Fund as they may
reasonably request;
(f) immediately notify the Trust in the event that the Adviser or any of its
affiliates: (1) becomes aware that it is subject to a statutory
disqualification that prevents the Adviser from serving as investment adviser
pursuant to this Agreement; or (2) becomes aware that it is the subject of an
administrative proceeding or enforcement action by the Securities and Exchange
Commission ("SEC") or other regulatory authority. The Adviser further agrees
to notify the Trust immediately of any material fact known to the Adviser
respecting or relating to the Adviser that is not contained in the Trust's
Registration Statement regarding the Fund, or any amendment or supplement
thereto, but that is required to be disclosed therein, and of any statement
contained therein that becomes untrue in any material respect;
(g) in making investment decisions for the Fund, use no inside information
that may be in its possession or in the possession of any of its affiliates,
nor will the Adviser seek to obtain any such information.
3. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 3, the Adviser shall pay the compensation and expenses
of all its directors, officers and employees who serve as officers and executive
employees of the Trust or Fund (including the Trust's or Fund's share of payroll
taxes), and the Adviser shall make available, without expense to the Fund, the
service of its directors, officers and employees who may be duly elected
officers of the Trust, subject to their individual consent to serve and to any
limitations imposed by law. The Adviser shall also pay the fees of any
sub-adviser.
The Adviser shall not be required to pay any expenses of the Fund or Trust
other than those specifically allocated to the Adviser in this section 3. In
particular, but without limiting the generality of the foregoing, the Adviser
shall not be responsible, except to the extent of the reasonable compensation of
such of the Trust's orFund's employees as are officers or employees of the
Adviser whose services may be involved, for any expenses of other series of the
Trust or for the following expenses of the Fund or Trust: organization and
certain offering expenses of the Fund (including out-of-pocket expenses, but not
including the Adviser's overhead and employee costs); fees payable to the
Adviser and to any other Fund advisers or consultants; legal expenses; auditing
and accounting expenses; interest expenses; telephone, telex, facsimile, postage
and other communications expenses; taxes and governmental fees; fees, dues and
expenses incurred by or with respect to the Fund in connection with membership
in investment company trade organizations; cost of insurance relating to
fidelity coverage for the Trust's officers and employees; fees and expenses of
the Fund's Administrator or of any custodian, subcustodian, transfer agent, fund
accounting agent, registrar, or dividend disbursing agent of the Fund; payments
for portfolio pricing or valuation services to pricing agents, accountants,
bankers and other specialists, if any; expenses of preparing share certificates,
if any; other expenses in connection with the issuance, offering, distribution
or sale of securities issued by the Fund; expenses relating to investor and
public relations; expenses of registering shares of the Fund for sale and of
compliance with applicable state notice filing requirements; freight, insurance
and other charges in connection with the shipment of the Fund's portfolio
securities; brokerage commissions or other costs of acquiring or disposing of
any portfolio securities or other assets of the Fund, or of entering into other
transactions or engaging in any investment practices with respect to the Fund;
expenses of printing and distributing prospectuses, Statements of Additional
Information, reports, notices and dividends to shareholders; costs of stationery
or other office supplies; any litigation expenses; costs of shareholders' and
other meetings; the compensation and all expenses (specifically including travel
expenses relating to the Fund's business) of officers, Trustees and employees of
the Trust who are not interested persons of the Adviser; and travel expenses (or
an appropriate portion thereof) of officers or Trustees of the Trust who are
officers, Trustees or employees of the Adviser to the extent that such expenses
relate to attendance at meetings of the Board of Trustees of the Trust with
respect to matters concerning the Fund, or any committees thereof or advisers
thereto.
4. Compensation. As compensation for the services provided and expenses
assumed by the Adviser under this Agreement, the Trust will arrange for the Fund
to pay the Adviser at the end of each calendar month an advisory fee computed
daily at an annual rate equal to 1.00% of the Fund's average daily net assets.
The "average daily net assets" of the Fund shall mean the average of the values
placed on the Fund's net assets as of 4:00 p.m. (New York time) on each day on
which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully determines
the value of its net assets as of some other time on each business day, as of
such other time. The value of net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Declaration and the Registration
Statement. If, pursuant to such provisions, the determination of net asset value
is suspended for any particular business day, then for the purposes of this
section 4, the value of the net assets of the Fund as last determined shall be
deemed to be the value of its net assets as of the close of the New York Stock
Exchange, or as of such other time as the value of the net assets of the Fund's
portfolio may lawfully be determined, on that day. If the determination of the
net asset value of the shares of the Fund has been so suspended for a period
including any month end when the Adviser's compensation is payable pursuant to
this section, then the Adviser's compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month). If the Fund determines
the value of the net assets of its portfolio more than once on any day, then the
last such determination thereof on that day shall be deemed to be the sole
determination thereof on that day for the purposes of this section 4.
5. Books and Records. The Adviser agrees to maintain such books and records
with respect to its services to the Fund as are required by Section 31 under the
1940 Act, and rules adopted thereunder, and by other applicable legal
provisions, and to preserve such records for the periods and in the manner
required by that Section, and those rules and legal provisions. The Adviser also
agrees that records it maintains and preserves pursuant to Rules 31a-1 and Rule
31a-2 under the 1940 Act and otherwise in connection with its services hereunder
are the property of the Trust and will be surrendered promptly to the Trust upon
its request. And the Adviser further agrees that it will furnish to regulatory
authorities having the requisite authority any information or reports in
connection with its services hereunder which may be requested in order to
determine whether the operations of the Fund are being conducted in accordance
with applicable laws and regulations.
6. Standard of Care and Limitation of Liability. The Adviser shall exercise
its best judgment in rendering the services provided by it under this Agreement.
The Adviser shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund or the holders of the Fund's shares in
connection with the matters to which this Agreement relates, provided that
nothing in this Agreement shall be deemed to protect or purport to protect the
Adviser against any liability to the Trust, the Fund or to holders of the Fund's
shares to which the Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or by reason of the Adviser's reckless disregard of its obligations and
duties under this Agreement. As used in this Section 6, the term "Adviser" shall
include any officers, directors, employees or other affiliates of the Adviser
performing services with respect to the Fund.
7. Services Not Exclusive. It is understood that the services of the Adviser
are not exclusive, and that nothing in this Agreement shall prevent the Adviser
from providing similar services to other investment companies or to other series
of investment companies, including the Trust (whether or not their investment
objectives and policies are similar to those of the Fund) or from engaging in
other activities, provided such other services and activities do not, during the
term of this Agreement, interfere in a material manner with the Adviser's
ability to meet its obligations to the Fund hereunder. When the Adviser
recommends the purchase or sale of a security for other investment companies and
other clients, and at the same time the Adviser recommends the purchase or sale
of the same security for the Fund, it is understood that in light of its
fiduciary duty to the Fund, such transactions will be executed on a basis that
is fair and equitable to the Fund. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Adviser nor any of
its Trustees, officers or employees shall act as a principal or agent or receive
any commission. If the Adviser provides any advice to its clients concerning the
shares of the Fund, the Adviser shall act solely as investment counsel for such
clients and not in any way on behalf of the Trust or the Fund.
8. Duration and Termination. This Agreement shall continue until , 2002, and
thereafter shall continue automatically for successive annual periods, provided
such continuance is specifically approved at least annually by (i) the Trustees
or (ii) a vote of a "majority" (as defined in the 1940 Act) of the Fund's
outstanding voting securities (as defined in the 1940 Act), provided that in
either event the continuance is also approved by a majority of the Trustees who
are not parties to this Agreement or "interested persons" (as defined in the
1940 Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. Notwithstanding the
foregoing, this Agreement may be terminated: (a) at any time without penalty by
the Fund upon the vote of a majority of the Trustees or by vote of the majority
of the Fund's outstanding voting securities, upon sixty (60) days' written
notice to the adviser or (b) by the Adviser at any time without penalty, upon
sixty (60) days' written notice to the Trust. This Agreement will also terminate
automatically in the event of its assignment (as defined in the 1940 Act).
9. Amendments. 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, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) a majority of the outstanding
voting securities of the Fund, and (ii) a majority of the Trustees, including a
majority of Trustees who are not interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, if such approval is required by applicable law.
10. Proxies. Unless the Trust gives written instructions to the contrary, the
Adviser shall vote all proxies solicited by or with respect to the issuers of
securities in which assets of the Fund may be invested. The Adviser shall use
its best good faith judgment to vote such proxies in a manner which best serves
the interests of the Fund's shareholders.
11. Name Reservation. The Trust acknowledges and agrees that the Adviser has
property rights relating to the use of the term "Willamette" and has permitted
the use of such term by the Trust and the Fund. The Trust agrees that, unless
otherwise authorized by the Adviser: (i) it will use the term "Willamette" only
as a component of the name of the Fund and for no other purposes; (ii) it will
not purport to grant to any third party any rights in such name; (iii) at the
request of the Adviser, the Trust will take such action as may be required to
provide its consent to use of the term by the Adviser, or any affiliate of the
Adviser to whom the Adviser shall have granted the right to such use; and (iv)
the Adviser may use or grant to others the right to use the term, or any
abbreviation thereof, as all or a portion of a corporate or business name or for
any commercial purpose, including a grant of such right to any other investment
company. Upon termination of this Agreement, the Trust shall, upon request of
the Adviser, cease to use the term "Willamette" as part of the name of the Fund,
or in connection with the Trust or any series of the Trust. In the event of any
such request by the Adviser that use of the term "Willamette" shall cease, the
Trust shall cause its officers, directors and shareholders to take any and all
such actions which the Adviser may request to effect such request and to
reconvey to the Adviser any and all rights to the term "Willamette."
12. Miscellaneous.
(a) This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC
thereunder.
(b) The captions of this Agreement are included for convenience only and in no
way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
(c) 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 hereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Adviser as an agent
of the Trust or the Fund.
(e) The names "The Coventry Group" and "Trustees of the Coventry Group" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Agreement and
Declaration of Trust dated as of January 8, 1992 to which reference is hereby
made and a copy of which is on file at the office of the Secretary of State of
the Commonwealth of Massachusetts and elsewhere as required by law, 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, or in the name or
on behalf of any series or class of shares of the Trust, by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders or representatives of the
Trust personally, but bind only the assets of the Trust, and all persons dealing
with any series or class of shares of the Trust must look solely to the assets
of the Trust belonging to such series or class 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 , 2000.
THE COVENTRY GROUP
By: _________________________________
President
WILLAMETTE ASSET MANAGERS, Inc.
By: _________________________________
President
THE COVENTRY GROUP
on behalf of
WILLAMETTE VALUE FUND
SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT, effective commencing on , 2000 among Willamette Asset Managers,
Inc. (the "Adviser"), The Bank of New York ("Sub-Adviser"), and The Coventry
Group (the "Trust") on behalf of Willamette Value Fund (the "Fund").
WHEREAS, the Trust is a Massachusetts business trust of the series type
organized under a Declaration of Trust dated January 8, 1992, (the
"Declaration") and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end, diversified management investment
company, and the Fund is a new series of the Trust;
WHEREAS, the Trust and the Adviser wish to retain the Sub-Adviser to render
sub-investment advisory services to the Fund, and the Sub-Adviser is willing to
furnish such services to the Fund;
WHEREAS, the Sub-Adviser is a bank under the laws of the State of New York, as
defined in Section 202(a)(2) of the Investment Advisers Act of 1940, as amended
("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed among the Adviser, the Trust and the Sub-Adviser as
follows:
1. Appointment. The Trust and the Adviser hereby appoint the Sub-Adviser to
act as sub-investment adviser to the Fund for the periods and on the terms set
forth in this Agreement. The Sub-Adviser accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein provided.
2. Sub-Investment Advisory Duties. Subject to the supervision of the Adviser
and the Trustees of the Trust, the Sub-Adviser will (a) provide a program of
continuous investment management for the Fund in accordance with the Fund's
investment objectives, policies and limitations as stated in the Fund's
prospectus and Statement of Additional Information included as part of the
Trust's Registration Statement filed with the Securities and Exchange
Commission, as they may be amended from time to time, copies of which shall be
provided to the Adviser and to the Sub-Adviser by the Trust; (b) make investment
decisions for the Fund; and (c) place orders to purchase and sell securities for
the Fund.
In performing its investment management services to the Fund hereunder, the
Sub-Adviser, in accordance with the directions of the Adviser, will provide the
Fund with ongoing investment guidance and policy direction, including oral and
written research, analysis, advice, statistical and economic data and judgments
regarding individual investments, general economic conditions and trends and
long-range investment policy. Subject to the Fund's investment objective and
policies, the Sub-Adviser will determine the securities, instruments, repurchase
agreements, options and other investments and techniques that the Fund will
purchase, sell, enter into or use, and will provide an ongoing evaluation of the
Fund's portfolio. The Sub-Adviser will determine what portion of the Fund's
portfolio shall be invested in securities and other assets, and what portion if
any, should be held uninvested.
<PAGE>
The Sub-Adviser acknowledges that, pursuant to the Investment Advisory
Agreement between the Adviser and the Trust with respect to the Fund, the
Adviser is responsible for supervising the activities and performance of the
Sub-Adviser, for taking reasonable steps to assure that the Sub-Adviser complies
with the Fund's investment policies and procedures and with applicable legal
requirements, and for reporting to the Trustees of the Trust regarding these
matters. In this regard, the Sub-Adviser agrees to facilitate the Adviser's
implementation of its "Supervisory Procedures for Sub-Advisors" attached hereto
as Exhibit A [not included with this Proxy Statement].
The Sub-Adviser further agrees that, in performing its duties hereunder, it
will:
(a) comply with the 1940 Act and all rules and regulations thereunder, the
Internal Revenue Code (the "Code") and all other applicable federal and state
laws and regulations, and with any applicable procedures adopted by the
Trustees;
(b) use reasonable efforts to manage the Fund so that it will qualify, and
continue to qualify, as a regulated investment company under Subchapter M of
the Code and regulations issued thereunder;
(c) place orders pursuant to its investment determinations for the Fund
directly with the issuer, or with any broker or dealer, in accordance with
applicable policies expressed in the Fund's prospectus and/or Statement of
Additional Information and in accordance with applicable legal requirements;
(d) furnish to the Trust, the Adviser, or to the Fund's administrator, BISYS
Fund Services, ("Administrator") if so directed, whatever statistical
information the Trust, Adviser or Administrator may reasonably request with
respect to the Fund's assets or contemplated investments. In addition, the
Sub-Adviser will keep the Adviser, the Trust and the Trustees informed of
developments materially affecting the Fund's portfolio and shall, on the
Sub-Adviser's own initiative, furnish to the Adviser and the Trust from time
to time whatever information the Sub-Adviser believes appropriate for this
purpose;
(e) make available to the Adviser, the Administrator, and the Trust,
promptly upon their request, such copies of its investment records and ledgers
with respect to the Fund as may be required to assist the Adviser, the
Administrator and the Trust in their compliance with applicable laws and
regulations. The Sub-Adviser will furnish the Adviser and the Trustees with
such periodic and special reports regarding the Fund as they may reasonably
request.
(f) immediately notify the Adviser and the Trust in the event that the
Sub-Adviser or any of its affiliates: (1) becomes aware that it is subject to
a statutory disqualification that prevents the Sub-Adviser from serving as
sub-investment adviser pursuant to this Agreement; or (2) becomes aware that
it is the subject of an administrative proceeding or enforcement action by the
Securities and Exchange Commission ("SEC") or other regulatory authority. The
Sub-Adviser further agrees to notify the Trust immediately of any material
fact known to the Sub-Adviser respecting or relating to the Sub-Adviser that
is not contained in the Trust's Registration Statement regarding the Fund, or
any amendment or supplement thereto, but that is required to be disclosed
therein, and of any statement contained therein that becomes untrue in any
material respect; and
(g) in making investment decisions for the Fund, use no inside information
that may be in its possession, nor will the Sub-Adviser seek to obtain any
such information.
3. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 3, the Sub-Adviser shall pay the compensation and
expenses of all its directors, officers and employees who serve as officers and
executive employees of the Trust or Fund (including the Trust's or Fund's share
of payroll taxes), and the Sub-Adviser shall make available, without expense to
the Fund, the service of its directors, officers and employees who may be duly
elected officers of the Trust, subject to their individual consent to serve and
to any limitations imposed by law.
<PAGE>
The Sub-Adviser shall not be required to pay any expenses of the Fund or Trust
other than those specifically allocated to the Sub-Adviser in this section 3. In
particular, but without limiting the generality of the foregoing, the
Sub-Adviser shall not be responsible, except to the extent of the reasonable
compensation of such of the Trust's or Fund's employees as are officers or
employees of the Sub-Adviser whose services may be involved, for any expenses of
other series of the Trust or for the following expenses of the Fund or Trust:
organization and certain offering expenses of the Fund (including out-of-pocket
expenses, but not including the Sub-Adviser's overhead and employee costs); fees
payable to the Adviser and Sub-Adviser and to any other Fund advisers or
consultants; legal expenses; auditing and accounting expenses; interest
expenses; telephone, telex, facsimile, postage and other communications
expenses; taxes and governmental fees; fees, dues and expenses incurred by or
with respect to the Fund in connection with membership in investment company
trade organizations; cost of insurance relating to fidelity coverage for the
Trust's officers and employees; fees and expenses of the Fund's Administrator or
of any custodian, subcustodian, transfer agent, fund accounting agent,
registrar, or dividend disbursing agent of the Fund; payments for portfolio
pricing or valuation services to pricing agents, accountants, bankers and other
specialists, if any; expenses of preparing share certificates, if any; other
expenses in connection with the issuance, offering, distribution or sale of
securities issued by the Fund; expenses relating to investor and public
relations; expenses of registering shares of the Fund for sale and of compliance
with applicable state notice filing requirements; freight, insurance and other
charges in connection with the shipment of the Fund's portfolio securities;
brokerage commissions or other costs of acquiring or disposing of any portfolio
securities or other assets of the Fund, or of entering into other transactions
or engaging in any investment practices with respect to the Fund; expenses of
printing and distributing prospectuses, Statements of Additional Information,
reports, notices and dividends to shareholders; costs of stationery or other
office supplies; any litigation expenses; costs of shareholders' and other
meetings; the compensation and all expenses (specifically including travel
expenses relating to the Fund's business) of officers, Trustees and employees of
the Trust who are not "interested persons," as defined in Section 2(a)(19) of
the 1940 Act, of the Sub-Adviser; and travel expenses (or an appropriate portion
thereof) of officers or Trustees of the Trust who are officers, Trustees or
employees of the Sub-Adviser to the extent that such expenses relate to
attendance at meetings of the Board of Trustees of the Trust with respect to
matters concerning the Fund, or any committees thereof or advisers thereto.
4. Compensation. As compensation for the services provided and expenses
assumed by the Sub-Adviser under this Agreement, the Adviser will pay to the
Sub-Adviser, out of the Adviser's own resources at no additional cost to the
Fund, at the end of each calendar month a sub-advisory fee computed daily at an
annual rate equal to the following amounts based on the Fund's average daily net
assets: (a) for that portion of the Fund's portfolio, generally 50% of the
Fund's assets, that is invested in the ten highest dividend yielding stocks in
the Dow Jones Industrial Average, the annual fee rate is equal to the following
percentages of the Fund's average daily net assets--0.10% on assets up to
$50,000,000; 0.07% on assets from $50,000,001 to $100,000,000; 0.05% on assets
in excess of $100,000,000, with a minimum annual fee of $10,000 for this portion
of the Fund's portfolio; (b) for that portion of the Fund's portfolio, generally
50% of the Fund's assets, that is actively managed, the annual fee rate is equal
to 0.45%, with a minimum annual fee of $10,000. The "average daily net assets"
of the Fund shall mean the average of the values placed on the Fund's net assets
as of 4:00 p.m. (New York time) on each day on which the net asset value of the
Fund is determined consistent with the provisions of Rule 22c-1 under the 1940
Act or, if the Fund lawfully determines the value of its net assets as of some
other time on each business day, as of such other time. The value of net assets
of the Fund shall always be determined pursuant to the applicable provisions of
the Declaration and the Registration Statement. If, pursuant to such provisions,
the determination of net asset value is suspended for any particular business
day, then for the purposes of this section 4, the value of the net assets of the
Fund as last determined shall be deemed to be the value of its net assets as of
the close of the New York Stock Exchange, or as of such other time as the value
of the net assets
<PAGE>
of the Fund's portfolio may lawfully be determined, on that day. If the
determination of the net asset value of the shares of the Fund has been so
suspended for a period including any month end when the Sub-Adviser's
compensation is payable pursuant to this section, then the Sub-Adviser's
compensation payable at the end of such month shall be computed on the basis of
the value of the net assets of the Fund as last determined (whether during or
prior to such month). If the Fund determines the value of the net assets of its
portfolio more than once on any day, then the last such determination thereof on
that day shall be deemed to be the sole determination thereof on that day for
the purposes of this section 4.
5. Books and Records. The Sub-Adviser agrees to maintain such books and
records with respect to its services to the Fund as are required by Section 31
under the 1940 Act, and rules adopted thereunder, and by other applicable legal
provisions, and to preserve such records for the periods and in the manner
required by that Section, and those rules and legal provisions. The Sub-Adviser
also agrees that records it maintains and preserves pursuant to Rules 31a-1 and
Rule 31a-2 under the 1940 Act and otherwise in connection with its services
hereunder are the property of the Trust and will be surrendered promptly to the
Trust upon its request. And the Sub-Adviser further agrees that it will furnish
to regulatory authorities having the requisite authority any information or
reports in connection with its services hereunder which may be requested in
order to determine whether the operations of the Fund are being conducted in
accordance with applicable laws and regulations.
6. Standard of Care and Limitation of Liability. The Sub-Adviser shall
exercise its best judgment in rendering the services provided by it under this
Agreement. The Sub-Adviser shall not be liable to the Adviser, the Trust, the
Fund or to any holder of the Fund's shares, for any error of judgment or mistake
of law or for any loss suffered by the Fund or the holders of the Fund's shares
in connection with the matters to which this Agreement relates, provided that
nothing in this Agreement shall be deemed to protect or purport to protect the
Sub-Adviser against any liability to the Adviser, the Trust, the Fund or to
holders of the Fund's shares to which the Sub-Adviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or by reason of the Sub-Adviser's reckless
disregard of its obligations and duties under this Agreement. As used in this
Section 6, the term "Sub-Adviser" shall include any officers, directors,
employees or other affiliates of the Sub-Adviser performing services with
respect to the Fund.
7. Services Not Exclusive. It is understood that the services of the Sub-
Adviser are not exclusive, and that nothing in this Agreement shall prevent the
Sub-Adviser from providing similar services to other investment companies or to
other series of investment companies, including the Trust (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities, provided such other services and activities do
not, during the term of this Agreement, interfere in a material manner with the
Sub-Adviser's ability to meet its obligations to the Fund hereunder. When the
Sub-Adviser recommends the purchase or sale of a security for other investment
companies and other clients, and at the same time the Sub-Adviser recommends the
purchase or sale of the same security for the Fund, it is understood that in
light of its fiduciary duty to the Fund, such transactions will be executed on a
basis that is fair and equitable to the Fund. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither the
Sub-Adviser nor any of its directors or officers (or persons acting in similar
capacities) or employees shall act as a principal or agent or receive any
commission. If the Sub-Adviser provides any advice to its clients concerning the
shares of the Fund, the Sub-Adviser shall act solely as investment counsel for
such clients and not in any way on behalf of the Trust or the Fund.
8. Duration and Termination. This Agreement shall continue until ___________,
2002, and thereafter shall continue automatically for successive annual periods,
provided such continuance is specifically approved at least annually by (i) the
Trustees or (ii) a vote of a "majority of the Fund's outstanding voting
securities" (as defined in the 1940 Act), provided that in either event the
continuance is also approved by a majority of the Trustees who are not parties
to this Agreement or "interested persons" (as defined in the 1940 Act) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. Notwithstanding the foregoing, this
Agreement may be terminated: (a) at any time without penalty by the Adviser or
by the Fund upon the vote of a majority of the Trustees or by vote of the
majority of the Fund's outstanding voting securities, upon sixty (60) days'
written notice to the adviser or (b) by the Sub-Adviser at any time without
penalty, upon sixty (60) days' written notice to the Trust. This Agreement will
also terminate automatically in the event of its assignment (as defined in the
1940 Act).
9. Amendments. 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, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) a majority of the outstanding
voting securities of the Fund, and (ii) a majority of the Trustees, including a
majority of Trustees who are not interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, if such approval is required by applicable law.
10. Proxies. Unless the Trust or the Adviser gives written instructions to the
contrary, the Sub-Adviser shall vote all proxies solicited by or with respect to
the issuers of securities in which assets of the Fund may be invested. The
Sub-Adviser shall use its best good faith judgment to vote such proxies in a
manner which best serves the interests of the Fund's shareholders.
11. Name Reservation. The Sub-Adviser acknowledges and agrees that the Adviser
has property rights relating to the use of the terms "Willamette," "Willamette
Family of Funds," "Willamette Value Fund," "Willamette Small Cap Growth Fund,"
"Willamette Technology Fund" and "Willamette Pharmaceutical and Bio-Technology
Fund" ("Willamette Names") and has permitted the use of the Willamette Names by
the Trust and its series. The Sub-Adviser agrees that, unless otherwise
authorized by the Adviser: (i) it will use the term "Willamette" only as a
component of the name of the Fund and for no other purposes; (ii) it will not
purport to grant to any third party any rights in any Willamette Name; and (iii)
the Adviser may use or grant to others the right to use a Willamette Name, or
any abbreviation thereof, as all or a portion of a corporate or business name or
for any commercial purpose, including a grant of such right to any other
investment company. Upon termination of this Agreement, the Sub-Adviser shall,
at the request of the Adviser, cease to use all Willamette Names in any of its
materials or in any manner except with the consent of the Adviser, which shall
not be unreasonably withheld. In the event of any such request by the Adviser
that use by the Sub- Adviser of a Willamette Name shall cease and in the absence
of any such consent, the Sub-Adviser shall cause its officers, directors and
employees to take any and all such actions which the Adviser may reasonably
request to effect such request.
12. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State of New York,
provided that nothing herein shall be construed in a manner inconsistent with
the 1940 Act, or rules or orders of the SEC thereunder.
(b) The captions of this Agreement are included for convenience only and in no
way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
<PAGE>
(c) 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 hereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Sub-Adviser as an
agent of the Adviser, the Trust or the Fund.
(e) The names "The Coventry Group" and "Trustees of the Coventry Group" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Agreement and
Declaration of Trust dated as of January 8, 1992 to which reference is hereby
made and a copy of which is on file at the office of the Secretary of State of
the Commonwealth of Massachusetts and elsewhere as required by law, 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, or in the name or
on behalf of any series or class of shares of the Trust, by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders or representatives of the
Trust personally, but bind only the assets of the Trust, and all persons dealing
with any series or class of shares of the Trust must look solely to the assets
of the Trust belonging to such series or class 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 , 2000.
THE COVENTRY GROUP
By:---------------------------------
President
WILLAMETTE ASSET MANAGERS, Inc.
By:---------------------------------
President
THE BANK OF NEW YORK
By:---------------------------------
Title:
[DECHERT PRICE & RHOADS LETTERHEAD]
April 5, 2000
The Coventry Group
3435 Stelzer Road
Columbus, OH 43219
Re: The Coventry Group - Willamette Value Fund
Dear Sirs:
We have acted as counsel for The Coventry Group ("Registrant") and its
series, Willamette Value Fund ("Fund"), and are familiar with Registrant's
registration statement with respect to the Fund under the Investment Company
Act of 1940, as amended, and with the registration statement relating to its
shares under the Securities Act of 1933, as amended (collectively, "Registration
Statement"). Registrant is organized as a business trust under the laws of
Massachusetts.
We have examined Registrant's Declaration of Trust and other materials
relating to the authorization and issuance of shares of beneficial interest of
Registrant, Post-Effective Amendment No. 67 to the Registration Statement and
such other documents and matters as we have deemed necessary to enable us to
give this opinion.
Based upon the foregoing, we are of the opinion the Fund's shares
proposed to be sold pursuant to Post-Effective Amendment No. 67 to the
Registration Statement, when it is made effective by the Securities and Exchange
Commission, will have been validly authorized and, when sold in accordance with
the terms of such Amendment and the requirements of applicable federal and state
law and delivered by Registrant against receipt of the net asset value of the
shares of the Fund, as described in Post-Effective Amendment No. 67 to the
Registration Statement, will have been legally and validly issued and will be
fully paid and non-assessable by Registrant.
We hereby consent to the filing of this opinion as an exhibit to
Post-Effective Amendment No. 67 to the Registration Statement, to be filed with
the Securities and Exchange Commission in connection with the continuous
offering of the Fund's shares of beneficial interest, as indicated above, and to
references to our firm, as counsel to Registrant, in the Fund's prospectus and
Statement of Additional Information to be dated as of the effective date of
Post-Effective Amendment No. 67 to the Registration Statement and in any revised
or amended versions thereof, until such time as we revoke such consent.
Very truly yours,
DECHERT PRICE & RHOADS
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Independent Auditors" in the Statement of
Additional Information, both included in Post-Effective Amendment No. 59 to the
Registration Statement on Form N-1A (No. 811-6526) of Willamette Value Fund of
The Coventry Group and to the use of our report dated April 28, 1999,
incorporated therein by reference which is incorporated by reference into
Post-Effective Amendment No. 67 to the Registration Statement on Form N-1A (No.
811-6526) of Willamette Value Fund of The Coventry Group.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Columbus, Ohio
April 13, 2000
THE COVENTRY GROUP
Code of Ethics
A. Legal Requirements
Rule 17j-1(a) under the Investment Company Act of 1940 (the "Act") makes it
unlawful for any officer or trustee, as well as other persons of The Coventry
Group (the "Group"), in connection with the purchase or sale by such person of a
security "held or to be acquired" by any investment portfolio of the Group (a
"Fund");
(1) To employ any device scheme or artifice to defraud the Group or a
Fund;
(2) To make to the Group or a Fund any untrue statement of a material
fact or omit to state to the Group or a Fund a material fact
necessary in order to make the statements made, in light of the
circumstances under which they are made, not misleading;
(3) To engage in any act, practice, or course of business which operates
or would operate as a fraud or deceit upon the Group or a Fund; or
(4) To engage in any manipulative practice with respect to the Group
or a Fund.
A security is "held or to be acquired" if within the most recent 15 days
it (i) is or has been held by the Group or a Fund, or (ii) is being or
has been considered by the Group or a Fund or the investment adviser for
the Group or the Fund for purchase by the Group or the Fund. A purchase
or sale includes the writing of an option to purchase or sell.
B. Group Policy
1. It is the policy of the Group that no "access person"1 of the Group
or of a Fund shall engage in any act, practice or course of conduct
that would violate the provisions of Rule 17j-1(a) set forth above.
2. It is the policy of the Group that no "access person" shall engage
in any of the following practices (provided, however, that access
persons who are affiliated persons of an investment adviser or
principal underwriter to the Group shall not be subject to these
prohibitions since such persons are subject to the Code of Ethics of
either the investment adviser or the principal underwriter):
(a) purchasing or selling, for his or her own account, a security
on a day on which a Fund has, to the actual knowledge of such
access person, a pending buy or sell order in that same
security;
(b) serve as a director of any public company without disclosing
such fact to the President of the Group.
C. Procedures
1. In order to provide the Group with information to enable it to
determine with reasonable assurance whether the provisions of Rule
17j-1(a) are being observed by its access persons:
(a) Each access person of the Group or of a Fund, other than a
trustee who is not an "interested person" (as defined in
the Act), shall submit reports in the form attached hereto
as Exhibit A ("Securities Transactions Reports") to the
Group's legal counsel, showing all transactions in
"reportable securities" in which the person has, or by
reason of such transaction acquires, any direct or indirect
beneficial ownership.2 Such reports shall be filed no
later than 10 days after the end of each calendar quarter,
but need not show transactions over which such person had
no direct or indirect influence or control.
Notwithstanding the foregoing, any access person who is an officer,
director or employee or otherwise an affiliated person of an
investment adviser or the principal underwriter of the Group, shall
submit reports in accordance with such adviser's or such
underwriter's Code of Ethics, as the case may be, and not this Code.
(b) Each trustee who is not an "interested person" of the Group
shall submit the same quarterly report as required under
paragraph (a), but only for a transaction in a reportable
security where he knew at the time of the transaction or,
in the ordinary course of fulfilling his official duties as
a trustee, should have known that during the 15-day period
immediately preceding or after the date of the transaction,
such security is or was purchased or sold, or considered
for purchase or sale, by the Group or the Fund. No report
is required if the trustee had no direct or indirect
influence or control over the transaction.
In light of the present investment objectives and policies of the respective
Funds of the Group, the Group does not believe that personal transactions by its
access persons in any securities other than securities which the Group or a Fund
is permitted to purchase would be prohibited by Rule 17j-1(a). Accordingly, for
purposes of subparagraphs (a) and (b) above, a "reportable security" includes
only securities which the Group or a Fund would be permitted to acquire under
its investment objectives and policies set forth in its then current
prospectuses under the Securities Act of 1933, and does not include securities
issued or guaranteed by the United States Government, its agencies or
instrumentalities, bankers' acceptances, bank certificates of deposit, and
commercial paper, and shares of registered open-end investment companies. In the
event the aforementioned investment objectives and policies change in the
future, the Board would reconsider the scope of this reporting requirement in
light of such change and Rule 17j-1.
2. Dechert Price & Rhoads shall notify each "access person" of the
Group or of a Fund who may be required to make reports pursuant to
this Code that such person is subject to this reporting requirement
and shall deliver a copy of this Code to each such person.
3. Dechert Price & Rhoads shall report to the Board of Trustees:
(a) at the next meeting following the receipt of any Securities
Transaction Report with respect to each reported
transaction in a security which was held or acquired by the
Group or a Fund within 15 days before or after the date of
the reported transaction or at a time when, to the
knowledge of Dechert Price & Rhoads, the Group, a Fund, or
the respective investment adviser for the Group or a Fund,
was considering the purchase or sale of such security,
unless the amount involved in the transaction was less than
$50,000;
(b) with respect to any transaction not required to be reported to
the Board by the operation of subparagraph (a) that counsel
believes nonetheless may evidence a violation of this Code;
and
(c) any apparent violation of the reporting requirement.
4. The Board shall consider reports made to it hereunder and shall
determine whether the policies established in section B above have
been violated, and what sanctions, if any, should be imposed. The
Board shall review the operation of this policy at least once a
year.
5. This Code, a copy of each Securities Transaction Report by an access
person and lists of all persons required to make reports shall be
preserved with the Group's records for the period required by Rule
17j-1.
Adopted:
The Board of Trustees
THE COVENTRY GROUP
Willamette Asset Managers
Code of Ethics
(Rule 17j-1 Policy)
Governing Purchase and Sale of Securities by Each
Officer, Director, Trustee and Employee
I. Legal Requirement
-----------------
Rule 17j-I under the Investment Company Act of 1940 makes it unlawful for any
director, trustee, officer or employee of a fund in the Willamette Family of
Funds (each a "Fund") or of its investment adviser (as well as other persons),
in connection with the purchase and sale by such person of a security "held or
to be acquired" by the Fund:
1. To employ any device, scheme or artifice to defraud the Fund;
2. To make to the Fund any untrue statement of a material fact or omit to state
to the Fund a material fact necessary in order to make the statements made, in
light of the circumstances under which they are made, not misleading;
3. To engage in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon the Fund; or
4. To engage in any manipulative practice with respect to the Fund.
A security is "held or to be acquired" if within the most recent 15 day it (I)
is or has been held by a Fund, or (ii) is being considered by a Fund or
Willamette Asset Managers (the "Adviser") for purchase by the Fund.
To assure compliance with these restrictions, each Fund and the Adviser adopt
and agree to be governed by the provisions contained in this Code of Ethics,
provided that the Adviser shall provide to the Compliance Officer, information
regarding any violations of the Code of Ethics of the Adviser, involving persons
who would otherwise be Access Persons hereunder whose violations were relevant
to the Fund.
II. General Principles
------------------
Each Fund shall be governed by the following principles and shall apply them to
their directors, trustees, officers, employees and "Access Persons," as
applicable.1
____________________
1 An "Access Person" is (1) each director, trustee, or office of the
particular Fund, or the Adviser; (2) any natural person in a control
relationship (25% ownership) to the particular Fund, or the Adviser; (3)
each of those employees of a Fund, or the Adviser who in connection with
his or her regular duties obtains information about the purchase or sale
of a security by the Fund or whose functions relate to the making of such
recommendations.
<PAGE>
A. No Access Person shall engage in any act, practice or course of conduct that
would violate the provisions of Rule 17j-1 set forth above.
B. The interests of the Funds and their shareholders are paramount and come
before the interests of any Access Person or employee.
C. Personal investing activities of all Access Persons and employees shall be
conducted in a manner that shall avoid actual or potential conflicts of interest
with the Funds and their shareholders.
D. Access persons shall not use such positions, or any investment opportunities
presented by virtue of such positions, to the detriment of the Funds and their
shareholders.
III. Substantive Restrictions
------------------------
A. The price paid or received by a Fund for any security should not be affected
by a buying or selling interest on the part of an Access Person, or otherwise
result in an inappropriate advantage to the Access Person. To that end:
(a) no Access Person shall enter an order for the purchase or sale of a
security which a Fund is, or is considering, purchasing or selling until
the day after the Fund's transactions in that security have been completed
unless the Compliance Officer determines that it is clear that, in view of
the nature of the security and the market for such security, the order of
the Access Person will not affect the price paid or received by the Fund,
provided that the provisions of this paragraph III.A ------------- shall
not apply to any director or trustee of a Fund who is not an "interested
person" of the Fund (as defined in Section 2(a)(19) of the Investment
Company Act of 1940) except with respect to securities transactions where
such director or trustee knew or, in the ordinary course of fulfilling his
or her official duties as a director or trustee of the Fund, should have
known that such security was being purchased or sold by that Fund or a
purchase or sale of such security was being considered by or with respect
to the Fund; and
(b) a Portfolio Manager of a Fund may not buy or sell a security within
seven days before or after that Fund trades in the security within seven
days before or after that Fund trades in the security.2
B. No "Investment Person" may acquire any securities issued as part of an
initial public offering of the issuer.3
C. Each Investment Person must seek prior approval from the Compliance Officer
for private placement transactions. Such approval shall take into account, among
other factors, whether the investment opportunity should be reserved for a Fund
and whether the opportunity is being offered to such person because of his or
her position with a Fund. Any such Investment Person who has been authorized to
acquire securities in a private placement must disclose his or her interest if
he or she is involved in a Fund's consideration of an investment in such issuer.
Any decision to acquire such issuer's securities on behalf of a Fund shall be
____________________
2 "Portfolio Managers" include those employees of a Fund, or the Adviser
authorized to make investment decisions on behalf of the Fund.
3 An "Investment Person" includes any Portfolio Manager or employee of a
Fund, or the Adviser, such as a securities analyst and trader, who advises
Portfolio Managers or executes their decisions.
<PAGE>
subject to review by Investment Persons with no personal interest in the issuer.
D. An Investment Person may not profit from the purchase and sale or sale and
purchase of the same or equivalent securities within sixty calendar days.
Nothing in this restriction shall be deemed to prohibit avoidance of a net loss
from a purchase and sale or sale and purchase of the same or equivalent
securities within a period shorter than sixty calendar days.
E. An Investment Person must not accept gifts in excess of limits contained in
Section 10(a) of the Rules of Fair Practice of the National Association of
Securities Dealers from any entity doing business with or on behalf of a Fund,
the Adviser or the Distributor.
F. An Investment Person must not serve on the boards of directors of publicly
traded companies, or in any similar capacity, absent the prior approval of such
service by the Compliance Officer following the receipt of a written request for
such approval. IN the event such a request is approved, procedures shall be
developed to avoid potential conflicts of interest.
G. Any profits derived from securities transactions in violation of paragraphs
A, B, C or D, above, shall be forfeited and paid to the appropriate Fund or
Funds for the benefit of its or their shareholders. Gifts accepted in violation
of paragraph E shall be forfeited, if practicable, and/or dealt with in any
manner determined appropriate and in the best interests of any affected Fund and
its shareholders.
H. The restrictions of this Section III shall not apply to the following
transactions unless the Compliance Officer determines that such transactions
violate the General Principles of this Code:
1. reinvestments of dividends pursuant to a plan;
2. transactions in: short-term securities issued or guaranteed by an agency
or instrumentality of the U.S. Government; bankers' acceptances; U.S. bank
certificates of deposit; and commercial paper;
3. transactions in which direct or indirect beneficial ownership is not
acquired or disposed of;
4. transactions in accounts as to which an Access Person has no investment
control, subject, as applicable, to subparagraph IV.A4(e);
5. transactions in accounts of an Access Person for which investment
discretion is not maintained by the Access Person but is granted to any of
the following that are unaffiliated with the Adviser or Manager: a
registered broker-dealer, registered investment adviser or other investment
manager acting in a similar fiduciary capacity, provided the following
conditions are satisfied:
(a) The terms of this agreement ("Agreement") must be in writing and
filed with the Compliance Officer prior to any transactions;
(b) Any amendment to the Agreement must be filed with the Compliance
Officer prior to its effective date;
(c) The Agreement must require the account manager to comply with the
reporting provisions of paragraph 3 of this Section IV.A;
(d) The exemption provided by this Section IV.A4(e) shall not be
available for a transaction or class of transactions which is suggested
or directed by the Access Person or as to which the Access Person
acquires advance information; and
6. Transactions in securities in connection with an employer sponsored or
other tax qualified plan, such as a 401(k) plan, an IRA, or ESOP, in an
amount not exceeding $1,000 in any calendar month.
IV. Procedures
----------
A. To enable each Fund to determine with reasonable assurance whether the
provisions of Rule 17j-1(a) and this Code of Ethics are being observed by its
Access Persons:
1. Upon commencement of employment by a Fund, the investment adviser, or
otherwise assuming the status of "Access Person", and annually thereafter,
each Access Person shall disclose in writing, in a form acceptable to the
Compliance Officer, all direct or indirect "Beneficial Ownership" interests
of such Access Person in "Reportable Securities."4
2. Each Access person shall obtain the prior approval of the Compliance
Officer of all personal securities transactions in Reportable Securities.
3. Each Access Person shall notify the Compliance Officer of all brokerage
accounts in which he or she has any beneficial interest (a) within two
weeks of receipt of this Code or (b) promptly after the later opening of
any such account.
4. Each Access Person, with respect to each brokerage account in which such
Access Person has any beneficial interest shall arrange that the broker
shall mail directly to the Compliance Officer at the same time they are
mailed or furnished to such Access person (a) duplicate copies of brokers'
advice covering each transaction in Reportable Securities in such account
and (b) copies of periodic statements with respect to the account.
5. The provisions of this Section IV.A shall not apply to any director or
trustee of a Fund who is not an "interested person" of the Fund (as defined
in Section 2(a)(19) of the Investment Company Act of 1940) except with
respect to reporting of securities transactions where such director or
trustee knew or, in the ordinary course of fulfilling his or her official
duties as a director or trustee of a Fund, should have known that during
the 15-day period immediately preceding or after the date of a transaction
in a security by the director or trustee, such security was purchased or
sold by the Fund or a purchase or sale of such security by the director or
trustee, such security was purchased or sold by the Fund or a purchase or a
sale of such security was considered by the Fund or the Adviser.
- -----------------------------
4/ (a) "Beneficial Ownership" generally means having a direct or indirect
pecuniary interest in a security and is legally defined to be beneficial
ownership as used in Rule 16a-1(a)(2) under Section 16 of the Securities
Exchange Act of 1934. Beneficial ownership is presumed regarding securities
and accounts held in the name of a spouse or any other family member living
in the same household. Beneficial ownership extends to transactions by
entities over which a person has ownership, voting or investment control
including corporations (and similar entities), trusts and foundations.
(b) "Reportable Securities" include generally all securities, and financial
instruments related to securities, except: securities issued by, or that
are direct obligations of, the United States Government; bankers'
acceptances; bank certificates of deposit; commercial paper; and shares of
registered open-end investment companies.
<PAGE>
B. The Compliance Officer shall notify each Access Person that he or she is
subject to this reporting requirement, and shall deliver a copy of this policy
to each Access Person. The Compliance Officer shall annually obtain written
assurances from each Access Person that he or she is aware of his or her
obligations under this Code of Ethics and has complied with the Code and with
its reporting requirements.
C. The Compliance Officer shall cause a system of monitoring personal investment
activity by Access Persons to be designed that would identify abusive or
inappropriate trading patterns or other practices of Access Persons
D. The Compliance Officer shall report to the Board of Directors at each meeting
regarding the following matters not previously reported:
1. Any information pursuant to Sections IV.A.4 and 5 with respect to each
reported transaction in a security which was held or acquired by the Fund
within 15 days before or after the date of the reported transaction or at a
time when, to the knowledge of the individual responsible for monitoring
compliance with the Code of Ethics, the Fund or the investment adviser was
considering the purchase or sale of such security, unless the transaction
was a reinvestment of dividends pursuant to a plan.
2. With respect to any transaction not required to be reported to the Board
of Directors by the operation of subparagraph (1) that he believes
nonetheless may evidence violation of this policy.
3. Apparent violations of the reporting requirement.
4. Other material violations of this Code of Ethics of which the Compliance
Officer has become aware since the previous report was issued.
5. Any violations of the Code of Ethics of the Adviser reported by the
Adviser in accordance with Section I hereof.
6. The results of monitoring of personal investment activities of Access
Persons in accordance with the procedures referred to in Section IV.C
hereof.
E. The Compliance Officer shall have discretion not to make a report to the
Board of Directors Under paragraph IV.D if he or she finds that by reason of the
size of the transaction, the circumstances or otherwise, no fraud or deceit or
manipulative practice could reasonably be found to have been practiced on a Fund
in connection with its holding or acquisition of the security or that no other
material violation of this Code has occurred.
F. The Board of Directors shall consider reports made to it hereunder and upon
discovering that a violation of this Code has occurred, the Board of Directors
may impose such sanctions, in addition to any forfeitures imposed pursuant to
Section III.G. hereof, as it deems appropriate, including, among other things, a
letter of sanction or suspension or termination of the employment of the
violator.
G. The Compliance Officer shall report to the Board of Directors on an annual
basis concerning existing personal investing procedures, violations during the
prior year and any recommended changes in existing restrictions or procedures.
H. The Board of Directors shall review the Code and it operation at least once a
year.
I. This Code and any related procedures, a copy of each report by (or duplicate
brokers' advice for the account of) an Access Person, any written report or
memorandum hereunder by the Compliance Officer, and lists of all persons
required to make reports shall be preserved with each Funds' records for the
period required by Rule 17j-1.
BISYS FUND SERVICES
CODE OF ETHICS
I. INTRODUCTION
This Code of Ethics (the "Code") sets forth the basic policies of ethical
conduct for all directors, officers and associates (hereinafter referred to as
"Covered Persons") of the BISYS Fund Services companies listed on Exhibit A
hereto (hereinafter collectively referred to as "BISYS").
Rule 17j-1(b) under the Investment Company Act of 1940, as amended, (the
"1940 Act") makes it unlawful for BISYS companies operating as a principal
underwriter of a registered investment company (hereinafter referred to
individually as a "Fund" or collectively as the "Funds"), or any affiliated
person of such principal underwriter, in connection with the purchase or sale by
such person of a security "held or to be acquired"(1) by any Fund:
(1) to employ any device, scheme or artifice to defraud the Fund;
(2) to make to the Fund any untrue statement of a material fact or omit to
state to the Fund a material fact necessary in order to make the
statements made, in light of the circumstances under which they are
made, not misleading;
(3) to engage in any act, practice or course of business that operates or
would operate as a fraud or deceit upon the Fund; or
(4) to engage in any manipulative practice with respect to the Fund.
Any violation of this provision by a Covered Person shall be deemed to be
a violation of this Code.
II. RISKS OF NON-COMPLIANCE
Any violation of this Code may result in the imposition by BISYS of
sanctions against the Covered Person, or may be grounds for the immediate
termination of the Covered Person's position with BISYS. In addition, in some
cases (e.g., the misuse of inside information), a violation of federal and state
civil and criminal statutes may subject the Covered Person to fines,
imprisonment and/or monetary damages.
_______________
(1) A security "held or to be acquired" is defined under Rule 17j-l(a)(10) as
any Covered Security which, within the most recent fifteen (15) days: (A)
is or has been held by a Fund, or (B) is being or has been considered by a
Fund or the investment adviser for a Fund for purchase by the Fund. A
purchase or sale includes the writing of an option to purchase or sell and
any security that is convertible into or exchangeable for, any security
that is held or to be acquired by a Fund. "Covered Securities", as defined
under Rule 17j-1(a)(4), do not include: (i) securities issued by the United
States Government; (ii) bankers' acceptances, bank certificates of deposit,
commercial paper and high quality short-term debt instruments, including
repurchase agreements; (iii) shares of open-end investment companies; (iv)
transactions which you had no direct or indirect influence or control; (v)
transactions that are not initiated, or directed, by you; and (vi)
securities acquired upon the exercise of rights issued by the issuer to all
shareholders pro rata.
<PAGE>
III. ETHICAL STANDARDS
The foundation of this Code consists of basic standards of conduct
including, but not limited to, the avoidance of conflicts between personal
interests and interests of BISYS or its Fund clients. To this end, Covered
Persons should understand and adhere to the following ethical standards:
(a) The duty at all times to place the interests of Fund shareholders
first;
This duty requires that all Covered Persons avoid serving their own
personal interests ahead of the interests of the shareholders of any
Fund for which BISYS serves as the administrator, distributor,
transfer agent or fund accountant.
(b) The duty to ensure that all personal securities transactions be
conducted in a manner that is consistent with this Code to avoid any
actual or potential conflict of interest or any abuse of such
Covered Person's position of trust and responsibility; and
Covered Persons should study this Code and ensure that they
understand its requirements. Covered Persons should conduct their
activities in a manner that not only achieves technical compliance
with this Code but also abides by its spirit and principles.
(c) The duty to ensure that Covered Persons do not take inappropriate
advantage of their position with BISYS.
Covered Persons engaged in personal securities transactions should
not take inappropriate advantage of their position or of information
obtained during the course of their association with BISYS. Covered
Persons should avoid situations that might compromise their judgment
(e.g., the receipt of perquisites, gifts of more than de minimis
value or unusual investment opportunities from persons doing or
seeking to do business with BISYS or the Funds).
A "personal securities transaction" is considered to be a
transaction in a Covered Security of which the Covered Person is
deemed to have "beneficial ownership."(2) This includes, but is not
limited to, transactions in accounts of the Covered Person's spouse,
minor children, or other relations residing in the Covered Person's
household, or accounts in which the Covered Person has discretionary
investment control.
_______________
(2) "Beneficial ownership" of a security is defined under Rule 16a-1(a)(2) of
the Securities Exchange Act of 1934, which provides that a Covered Person
should consider himself/herself the beneficial owner of securities held by
his/her spouse, his/her minor children, a relative who shares his/her home,
or other persons, directly or indirectly, if by reason of any contract,
understanding, relationship, agreement or other arrangement, he/she obtains
from such securities benefits substantially equivalent to those of
ownership. He/she should also consider himself/herself the beneficial owner
of securities if he/she can vest or revest title in himself/herself now or
in the future.
<PAGE>
IV. RESTRICTIONS AND PROCEDURES
This section is divided into two (2) parts. Part A relates to restrictions
and procedures applicable to all Covered Persons in addition to the
aforementioned Rule 17j-1(b) provisions. Part B imposes additional restrictions
and reporting requirements for those Covered Persons who are listed on Exhibit B
hereto (hereinafter referred to as "Access Persons"(3)).
A. Restrictions and Procedures for all Covered Persons:
1. Prohibition Against Use of Material Inside Information
Covered Persons may have access to information about Funds that is
confidential and not available to the general public, such as (but
not limited to) information concerning securities held in, or traded
by, Fund portfolios, information concerning certain underwritings of
broker/dealers affiliated with a Fund that may be deemed to be
"material inside information", and information which involves a
merger or acquisition that has not been disclosed to the public.
"Material inside information" is defined as any information about a
company which has not been disclosed to the general public and which
either a reasonable person would deem to be important in making an
investment decision or the dissemination of which is likely to
impact the market price of the company's securities.
Covered Persons in possession of material inside information must
not trade in or recommend the purchase or sale of the securities
concerned until the information has been properly disclosed and
disseminated to the public.
2. Initial and Annual Certifications
Within ten (10) days following the commencement of their employment
or otherwise becoming subject to this Code and at least annually
following the end of the calendar year, all Covered Persons shall be
required to sign and submit to the Code Compliance Officer a written
certification, in the form of Exhibit C hereto, affirming that
he/she has read and understands this Code to which he/she is
subject. In addition, the Covered Person must certify annually that
he/she has complied with the requirements of this Code and has
disclosed and reported all personal securities transactions that are
required to be disclosed and reported by this Code. The Code
Compliance Officer will circulate the Annual Certifications and
Holdings Reports for completion following the end of each calendar
year.
_______________
(3) An "Access Person" is defined under Rule 17j-1(a)(1)(ii) to include any
director, officer or general partner of a principal underwriter for a Fund
who, in the ordinary course of business, makes, participates in or obtains
information regarding the purchase or sale of securities for such Fund or
whose functions or duties in the ordinary course of business relate to the
making of any recommendation to such Fund regarding the purchase or sale of
securities. This Code has included BISYS associates that are not directors,
officers or general partners of any BISYS Fund Services company but would
otherwise be deemed Access Persons for purposes of this Code.
<PAGE>
B. Restrictions and Reporting Requirements for all Access Persons:
-------------------------------------------------------------------
Each Access Person must refrain from engaging in a personal
securities transaction when the Access Person knows, or in the
ordinary course of fulfilling his/her duties would have reason to
know, that at the time of the personal securities transaction a Fund
has a pending buy or sell order in the same Covered Security.
1. Initial and Annual Holdings Reports
All Access Persons must file a completed Initial and Annual Holdings
Report, in the form of Exhibit D hereto, with the Code Compliance
Officer within ten (10) days of commencement of their employment or
otherwise becoming subject to this Code and thereafter on an annual
basis following the end of the calendar year in accordance with
Procedures established by the Code Compliance Officer.
2. Transaction/New Account Reports
All Access Persons must file a completed Transaction/New Account
Report, in the form of Exhibit E hereto, with the Code Compliance
Officer within ten (10) days after (i) opening an account with a
broker, dealer or bank in which Covered Securities are held; or (ii)
entering into any personal securities transaction in which an Access
Person has any direct or indirect beneficial ownership. Personal
securities transactions are those involving any Covered Security1 in
which the person has, or by reason of such personal securities
transaction acquires, any direct or indirect, "beneficial
ownership."2
3. Confirmations and Statements
In order to provide BISYS with information to determine whether the
provisions of this Code are being observed, each Access Person shall
direct his/her broker, dealer or bank to supply to the Code
Compliance Officer, on a timely basis, duplicate copies of
confirmations of all personal securities transactions and copies of
monthly statements for all Covered Securities accounts. The
confirmations should match the Transaction/New Account Reports.
These confirmations and statements should be mailed, on a
confidential basis, to the Code Compliance Officer at the following
address:
<PAGE>
ATTN: Code Compliance Officer
Regulatory Services
BISYS Fund Services
3435 Stelzer Road, Suite 1000
Columbus, Ohio 43219-8001
C. Review of Reports and Assessment of Code Adequacy:
The Code Compliance Officer shall review and maintain the Initial
and Annual Certifications, Initial and Annual Holdings Reports and
Transaction/New Account Reports (the "Reports") with the records of
BISYS. Following receipt of the Reports, the Code Compliance Officer
shall consider in accordance with Procedures designed to prevent
Access Persons from violating this Code:
(a) whether any personal securities transaction evidences an
apparent violation of this Code; and
(b) whether any apparent violation of the reporting requirement
has occurred pursuant to Section B above.
Upon making a determination that a violation of this Code, including
its reporting requirements, has occurred, the Code Compliance
Officer shall report such violations to the General Counsel of BISYS
Fund Services who shall determine what sanctions, if any, should be
recommended to be taken by BISYS. The Code Compliance Officer shall
prepare quarterly reports to be presented to the Fund Boards of
Directors/Trustees with respect to any material trading violations
under this Code.
This Code, a copy of all Reports referenced herein, any reports of
violations, and lists of all Covered and Access Persons required to
make Reports, shall be preserved for the period(s) required by Rule
17j-1. BISYS shall review the adequacy of the Code and the operation
of its related Procedures at least once a year.
V. REPORTS TO FUND BOARDS OF DIRECTORS/TRUSTEES
BISYS shall submit the following reports to the Board of
Directors/Trustees for each Fund for which it serves as principal underwriter:
A. BISYS Fund Services Code of Ethics
A copy of this Code shall be submitted to the Board of each Fund no
later than September 1, 2000 or for new Fund clients, prior to BISYS
commencing operations as principal underwriter, for review and
approval. Thereafter, all material changes to this Code shall be
submitted to each Board for review and approval not later than six
(6) months following the date of implementation of such material
changes.
B. Annual Certification of Adequacy
The Code Compliance Officer shall annually prepare a written report
to be presented to the Board of each Fund detailing the following:
1. Any issues arising under this Code or its related Procedures
since the preceding report, including information about
material violations of this Code or its related Procedures and
sanctions imposed in response to such material violations; and
2. A Certification to Fund Boards, in the form of Exhibit F
hereto, that BISYS has adopted Procedures designed to be
reasonably necessary to prevent Access Persons from violating
this Code.
<PAGE>
BISYS FUND SERVICES
CODE OF ETHICS
EXHIBIT A
The following companies are subject to the BISYS Fund Services Code of Ethics1:
Barr Rosenberg Funds Distributor, Inc.
BISYS Fund Services, Inc.
BISYS Fund Services Limited Partnership
BISYS Fund Services Ohio, Inc.
BNY Hamilton Distributors, Inc.
CFD Fund Distributors, Inc.
Centura Funds Distributor, Inc.
Concord Financial Group, Inc.
Kent Funds Distributors, Inc.
Evergreen Distributor, Inc.
IBJ Funds Distributor, Inc..
Mentor Distributors, LLC
The One Group Services Company
Performance Funds Distributor, Inc.
VISTA Fund Distributors, Inc.
- -------------------------
1 The companies listed on this Exhibit A may be amended from time to time, as
required.
As of January 11, 2000
A-1
<PAGE>
BISYS FUND SERVICES
CODE OF ETHICS
EXHIBIT B
The following Covered Persons are considered Access Persons under the BISYS Fund
Services Code of Ethics1:
Client Services - all associates
CFD Fund Distributors, Inc. - all directors, officers and employees
Directors/Officers of each BISYS entity listed on Exhibit A that met the
statutory definition of Access Person under Rule17j-1
Financial Services (Fund Accounting and Financial Administration) - all
associates
Fund Administration - all associates
Information Systems - all associates
Legal Services - all paralegals and attorneys
The One Group Services Company - all directors, officers and employees
Tax Services - all associates
VISTA Fund Distributors, Inc.- all officers, directors and employees
All wholesalers and telewholesalers employed by the BISYS companies listed on
Exhibit A
- -------------------------
1 The Access Persons listed on this Exhibit B may be amended from time to time,
as required.
As of January 11, 2000
B-1
<PAGE>
BISYS FUND SERVICES
CODE OF ETHICS
EXHIBIT C
INITIAL AND ANNUAL CERTIFICATIONS
I hereby certify that I have read and thoroughly understand and agree to
abide by the conditions set forth in the BISYS Fund Services Code of Ethics. I
further certify that, during the time of my affiliation with BISYS, I will
comply or have complied with the requirements of this Code and will
disclose/report or have disclosed/reported all personal securities transactions
required to be disclosed/reported by the Code.
If I am deemed to be an Access Person under this Code, I certify that I
will comply or have complied with the Transaction/New Account Report
requirements as detailed in the Code and submit herewith my Initial and Annual
Holdings Report. I further certify that I will direct or have directed each
broker, dealer or bank with whom I have an account or accounts to send to the
BISYS Code Compliance Officer duplicate copies of all confirmations and
statements relating to my account(s).
- --------------------------------
Print or Type Name
- ---------------------------------
Signature
- ---------------------------------
Date
C-1
<PAGE>
BISYS FUND SERVICES
CODE OF ETHICS
EXHIBIT D
INITIAL AND ANNUAL HOLDINGS REPORT
<TABLE>
<CAPTION>
Name and Address of Account Number(s) If New Account,
Broker, Dealer or Bank(s) Date Established
<S> <C> <C>
- -------------------------------------- ------------------ ------------------
- -------------------------------------- ------------------ ------------------
- -------------------------------------- ------------------ ------------------
- -------------------------------------- ------------------ ------------------
- -------------------------------------- ------------------ ------------------
- -------------------------------------- ------------------ ------------------
- -------------------------------------- ------------------ ------------------
- -------------------------------------- ------------------ ------------------
- -------------------------------------- ------------------ ------------------
- -------------------------------------- ------------------ ------------------
</TABLE>
Attached are the Covered Securities beneficially owned by me as of the date of
this Initial and Annual Holdings Report.
- --------------------------------
Print or Type Name
- ---------------------------------
Signature
- ---------------------------------
Date
D-1
<PAGE>
Security Number of Principal Amount
Description Covered
(Symbol/CUSIP) Securities/
Shares Held
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
- ------------------ ---------------- ----------------
D-2
<PAGE>
BISYS FUND SERVICES CODE OF ETHICS -TRANSACTION/NEW ACCOUNT
REPORT EXHIBIT E
I hereby certify that the Covered Securities described below (or attached
hereto in the annual statement from my broker, dealer or bank) were purchased or
sold on the date(s) indicated. Such Covered Securities were purchased or sold in
reliance upon public information lawfully obtained by me through independent
research. I have also listed below the account number(s) for any new account(s)
opened in which Covered Securities are held. My decision to enter into any
personal securities transaction(s) was not based upon information obtained as a
result of my affiliation with BISYS.
COVERED SECURITIES PURCHASED/ACQUIRED OR SOLD/DISPOSED
<TABLE>
<CAPTION>
Security Trade Number of Per Share Principal Interest Maturity Name of Broker, Dealer Bought (B) or Sold (S)
Description Date Shares Price Amount Rate (If Rate (If or Bank (and Account
(Symbol/CUSIP) Applicable) Applicable) Number and Date
Established, If New)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------- ----- --------- --------- --------- ----------- ----------- ---------------------- ----------------------
- -------------- ----- --------- --------- --------- ----------- ----------- ---------------------- ----------------------
- -------------- ----- --------- --------- --------- ----------- ----------- ---------------------- ----------------------
- -------------- ----- --------- --------- --------- ----------- ----------- ---------------------- ----------------------
- -------------- ----- --------- --------- --------- ----------- ----------- ---------------------- ----------------------
- -------------- ----- --------- --------- --------- ----------- ----------- ---------------------- ----------------------
- -------------- ----- --------- --------- --------- ----------- ----------- ---------------------- ----------------------
- -------------- ----- --------- --------- --------- ----------- ----------- ---------------------- ----------------------
</TABLE>
This Transaction/New Account Report is not an admission that you have or
had any direct or indirect beneficial ownership in the Covered Securities listed
above.
- --------------------------------
Print or Type Name
- -------------------------------- -------------------
Signature Date
E-1
<PAGE>
BISYS FUND SERVICES
CODE OF ETHICS
EXHIBIT F
CERTIFICATION TO FUND BOARDS
BISYS Fund Services ("BISYS") requires that all directors, officers and
associates of BISYS ("Covered Persons") certify that they have read and
thoroughly understand and agree to abide by the conditions set forth in the
BISYS Code of Ethics (the "Code"). If such Covered Persons are deemed to be
Access Persons under the Code, they are required to submit Initial and Annual
Holdings Reports, as well as Transaction/New Account Reports, to the Code
Compliance Officer, listing all personal securities transactions in Covered
Securities for all such accounts in which the Access Person has any direct or
indirect beneficial interest within ten (10) days of entering into any such
transactions. Access Persons must direct their broker, dealer or bank(s) to send
duplicate trade confirmations and statements of all such personal securities
transactions directly to the Code Compliance Officer who compares them to the
required Transaction/New Account Reports. Additionally, the Code Compliance
Officer undertakes a quarterly review of all Access Person's personal securities
transactions against the Fund's Investment Adviser for all such Funds that BISYS
serves as principal underwriter.
The undersigned hereby certifies that BISYS has adopted Procedures designed to
be reasonably necessary to prevent Access Persons from violating BISYS' Code and
the required provisions of Rule 17j-1 under the Investment Company Act of 1940,
as amended.
- -------------------------------- ------------------
Kathleen McGinnis Date
Code Compliance Officer
BISYS Fund Services
F-1
FAAM POLICY & PROCEDURE MANUAL - CODE OF ETHICS, PERSONAL
SECURITIES TRADING
- --------------------------------------------------------------------------------
Procedure Name: FAAM Code of Ethics
- --------------------------------------------------------------------------------
Process Ref. #: FAAM 101
Contact Name: Chris Griffin
Author: Chris Griffin
Approval Date: 3/29/99
Related Policy: USBC 101, 102, FAAM 301
- --------------------------------------------------------------------------------
PURPOSE
- --------------------------------------------------------------------------------
While affirming its confidence in the integrity and good faith of all its
employees, officers and directors, First American Asset Management ("FAAM"), a
division of U.S. Bank National Association, recognizes that the knowledge of
present or future portfolio transactions and, in certain instances, the power to
influence portfolio transactions made by or for the First American Funds, Inc.
and the First American Investment Funds, Inc. (collectively, the "Funds") may
place such individuals, if they engage in Personal Securities Transactions in
securities which are eligible for investment by the Funds, in a position where
their personal interest may conflict with that of the Funds.
In view of the above and of the provisions of Rule 17j-1(b)(1) under the
Investment Company Act of 1940 (the "1940 Act") and other regulations and legal
considerations, FAAM has determined to adopt this Code of Ethics to specify and
prohibit certain types of transactions which would create conflicts of interest
(or at least the potential for the appearance of conflicts of interest), and to
establish reporting requirements and enforcement procedures. This Code
supplements but does not supersede or contradict the U.S. Bancorp ("USBC") Code
of Ethics and applicable USBC Trust policies and procedures.
- --------------------------------------------------------------------------------
SCOPE
- --------------------------------------------------------------------------------
The attached Code of Ethics, (Appendix A), applies to all individuals defined as
general access personnel or restricted access personnel by section II of the
code. This includes all FAAM employees engaged in making investment decisions or
supporting the investment process regarding marketable securities and other
employees of U.S. Bancorp, (permanent, temporary and contractors), as defined in
the code.
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PROCEDURE
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Task/Action Responsibility
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For Newly Hired and Transferring Access Personnel
. Provide the Code of Ethics to new or transferred
access personnel coincident with their hire or
transfer date. FAAM Compliance Officer
. Conduct training/orientation regarding the Code FAAM Compliance Officer
of Ethics and related procedures in groups or in
one-on-one meetings, as Officer appropriate.
This must be done within 10 business days of
their hire or transfer.
. Review the Code of Ethics and complete the Access Personnel
attached signoff form within 10 business
days of receipt. Return the signoff forms
to FAAM Compliance Officer.
For Annual Review or Code of Ethics Revisions
. Distribute the Code of Ethics and the annual FAAM Compliance Officer
signoff form to all access personnel according
to the annual schedule as Officer defined by
FAAM compliance officer. Complete special
distributions of the Code of Ethics and signoff
forms to all access personnel when changes in the
Code of Ethics occur.
. Review the Code of Ethics, or revisions to the Access Personnel
Code, then complete the signoff form and return
it to FAAM Compliance Officer within 10 business
days of receipt.
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FAAM CODE OF ETHICS
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Appendix A
I. Statement of General Principles
(1) The interests of the Funds are paramount, and all of FAAM's
employees must conduct themselves and their operations to give
maximum effect to this principle by constantly placing the interests
of the Funds before their own.
(2) All Personal Securities Transactions by FAAM's employees must be
accomplished so as to avoid even the appearance of a conflict of
interest on the part of such personnel with the interests of the
Funds.
(3) All of FAAM's employees must avoid actions or activities that allow
(or appear to allow) a person to profit or benefit from his or her
position with respect to the Funds, or that otherwise bring into
question the person's independence or judgment.
(4) A General Access or Restricted Access Person shall act on his or her
best judgment in effecting or recommending, or deciding not to
effect or recommend, any transaction on behalf of or to a Fund or
trust client. A General Access or Restricted Access Person shall not
take into consideration his or her personal financial situation in
connection with decisions regarding portfolio transactions by or on
behalf of a Fund or trust client.
(3) No General Access or Restricted Access Person shall divulge to any
person contemplated or completed securities transactions of any
Fund, except in the performance of his or her duties, unless such
information previously has become a matter of public knowledge.
II. Definitions
(1) "General Access Person" shall be each employee of FAAM who, in
connection with his or her regular functions or duties obtains
information regarding the purchase or sale of securities by the
Funds, or who obtains any information concerning which securities
are being recommended prior to the effective dissemination of such
recommendations, and any other USBC employee, (permanent, temporary
or contracted) who obtains information concerning recommendations
made by FAAM with respect to the purchase or sale of a security by
the Funds.
(2) "Restricted Access Person" shall be each employee of FAAM who, in
connection with his or her regular functions or duties, makes or
participates in the making of any recommendations regarding the
purchase or sale of securities by the Funds. Restricted access
persons includes proprietary fund managers, research analysts,
securities lending staff, traders, and administrative staff that
support these functions.
<PAGE>
(3) "Personal Securities Transaction" means a transaction in a Security
in which an individual has or thereby acquired Beneficial Ownership.
A person shall be considered to be "engaging in" or "effecting" a
Personal Securities Transaction if such a Security is involved,
regardless of whether the transaction is effected by that person or
by some other person (such as an immediate family member).
(4) "Beneficial Ownership" of a security is to be determined in the same
manner as it is for purposes of Section 16a-1(a)(2) of the
Securities Exchange Act of 1934 ("1934 Act"). This means that a
person should generally consider themselves the beneficial owner of
any securities in which they have a direct or indirect financial
interest. In addition, persons should consider themselves the
beneficial owner of securities held by their spouse, minor children,
relatives who share their home, or other persons by reason of any
contract, arrangement, understanding or relationship that provides
them with sole or shared voting or investment power.
Although the following list is not exhaustive, under the 1934 Act
and this Code a person generally would be regarded to be the
beneficial owner of the following securities:
(A) securities held in the person's own name;
(B)securities held with another in joint tenancy, community
property or other joint ownership;
(C)securities held by a bank or broker as nominee or custodian on
such person's behalf or pledged as collateral for a loan;
(D)securities held by members of the person's immediate family
sharing the same household ("immediate family" means any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse,
sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law, including
adoptive relationships);
(E)securities held by a relative not residing in the person's home
if the person is a custodian, guardian or otherwise has or shares
control over the purchase, sale or voting of such securities;
(F)securities held by a trust in which the person is a beneficiary
and has or shares the power to make purchase or sale decisions;
(G)securities held by a trust for which the person serves as a
trustee and in which the person has a pecuniary interest
(including pecuniary interests by virtue of performance fees and
by virtue of holdings by the person's immediate family);
(H)securities held by a general partnership or limited partnership
in which the person is a general partner;
(I)securities owned by a corporation in which the person has a
control position or in which the person has or shares investment
control over the portfolio securities (other than a registered
investment company);
(J)securities in a portfolio giving the person certain
performance-related fees;
(K)securities held by another person or entity pursuant to any
agreement, understanding, relationship or other arrangement
giving the person any direct or indirect pecuniary interest.
(5) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the 1940 Act. Section 2(a)(9) provides that "control"
means the power to exercise a controlling influence over the
management or policies of a company, unless such power is solely the
result of an official position with such company. Ownership of 25%
or more of a company's outstanding voting security is presumed to
the holder thereof control over the company. Such presumption may be
countered by the facts and circumstances of a given situation.
(6) "Fund Manager" means any FAAM employee entrusted with the direct
responsibility and authority to make investment recommendations to
any Fund or investment decisions with respect to a Fund.
(7) "Purchase or sale of a security" includes, among other things, the
writing of an option to purchase or sell a security.
(8) "Research Analyst" means any FAAM employee with the responsibility
to make investment recommendations to any Fund Manager.
(9) A Security is "being purchased or sold" by the Funds from the time
when a purchase or sale program has been communicated to the trader
until the time when such program has been fully completed or
terminated.
(10) "Security" shall have the same meaning as that set forth in Section
2(a)(36) of the 1940 Act ("i.e., any note, stock, treasury stock,
bond, debenture, evidence of indebtedness, certificate of interest
or participation in any profit-sharing agreement, collateral-trust
certificate, reorganization certificate or subscription,
transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest
in oil, gas, or other mineral rights, any put, call, straddle,
option, or privilege on any security (including a certificate of
deposit) or on any group or index of securities (including any
interest therein or based on the value thereof), or any put, call,
straddle, option, or privilege entered into on a national securities
exchange relating to foreign currency, or, in general, any interest
or instrument commonly known as a `security', or any certificate of
interest or participation in, temporary or interim certificate for,
receipt for, guarantee of, or warrant or right to subscribe to or
purchase, any of the foregoing"), except that it shall not include
securities issued by the Government of the United States or an
agency thereof, bankers' acceptances, bank certificates of deposit,
commercial paper, shares of registered open-end investment companies
and shares of bank common and collective funds.
(11) "Watchlist" shall be the daily list of Securities being recommended
and intended for recommendation for trading by the Funds.
III Prohibited Purchases and Sales of Securities
(1) No General Access Person or Restricted Access Person shall, in
connection with the purchase or sale, directly or indirectly of a
Security held or to be acquired by the Funds:
(A) employ any device or scheme to defraud any such Funds;
(B) make to such Funds any untrue statement of a material fact or
omit to state to such Funds a material fact necessary in order
to make the statements made, in light of the circumstances
under which they are made, not misleading;
(C) engage in any act, practice or course of business which would
operate as a fraud or deceit upon such Funds; or
(D) engage in any manipulative practice with respect to any of the
Funds.
(2) No Restricted Access Person shall purchase or sell, directly or
indirectly, any Security in which they have any Beneficial Ownership
on a day during which any Fund has a pending "buy" or "sell" order
for the same Security until that order is executed or withdrawn, or
if that Security is under active consideration by a Fund Manager as
indicated on the daily "Watchlist," except for those items in III
(4) (A) - (G) below.
(3) No General Access Person shall purchase or sell, directly or
indirectly, any Security in which they have any Beneficial Ownership
on a day during which any Fund has a pending "buy" or "sell" order
for the same Security until that order is executed or withdrawn
except for those items in III (4) (A) - (G) below.
(4) No Restricted Access Person shall purchase or sell, directly or
indirectly, any Security in which they have any Beneficial
Ownership, within 7 calendar days before or after the time that the
same (or a related) Security is being purchased or sold by any Funds
that he or she manages, or within 7 calendar days before or after
they recommend a Security transaction except for:
(A) Purchases or sales over which the person has no direct or
indirect influence or control.
(B) Purchases or sales which are non-volitional on the part of the
person, including purchases or sales upon exercise of puts or
calls written by the person and sales from a margin account
pursuant to a bona fide margin call.
(C) Purchases which are part of an automatic dividend reinvestment
plan.
(D) Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of its Securities,
to the extent such rights were acquired from such issuer.
(E) Purchases or sales of U.S. Treasury or agency securities, bank
CD's, bankers' acceptances, commercial paper, shares of
registered open-end investment companies or bank common and
collective funds.
(F) Purchases or sales of S&P 500 securities that are not held by
any Funds other than the First American Investment Funds
Equity Index or Asset Allocation Funds.
(G) Purchases of an employer's stock under employer sponsored
plans (including spouse or partner's employer plans).
(5) No General Access or Restricted Access Person may acquire Securities
as part of an initial public offering by the issuer.
(6) No Restricted Access Person shall purchase and sell or sell and
purchase a Security within 60 calendar days of acquiring Beneficial
Ownership of that Security except for circumstances outlined in III
(4)(B) and III (4)(E) above, however, such prohibition may be waived
by the Review Officer in the event that an Restricted Access Person
presents special circumstances provided that the transaction
presents no reasonable likelihood of harm to the Funds. General
Access Persons are allowed to purchase and sell or sell and purchase
a Security within 60 calendar days of acquiring Beneficial Ownership
of that Security. However, the practice of short-term trading is
discouraged for General Access Persons.
(7) Personal Securities Transactions involving privately placed
Securities shall be limited as follows:
(A) No General Access or Restricted Access Person shall engage in
a Securities transaction that involves a private placement of
Securities without the express prior written approval of the
Review Officer. In reviewing any request for such approval,
the Review Officer shall consider, among other factors,
whether the investment opportunity should be reserved for a
Fund, and whether the opportunity is being offered to the
requesting individual by virtue of his or her position with
FAAM, USBC or USBNA.
(B) General Access and Restricted Access Persons who have a
Beneficial Ownership interest in any Securities obtained
through a private placement shall disclose any such interest
to the Review Officer if and when they become involved in any
subsequent consideration of an investment in the Securities of
the same issuer for any Fund. In such case, the decision to
invest in the Securities of such an issuer on behalf of a Fund
shall be subject to the review and approval of a Fund Manager
appointed by the Review Officer who has no personal interest
in such issuer.
<PAGE>
IV. Pre-Clearance of Transactions
(1) Except as provided below, each General Access and Restricted Access
Person must pre-clear each proposed Personal Securities Transaction
in Securities with FAAM's designated Review Officer or an individual
designated by the Review Officer prior to proceeding with the
transaction. No transaction in Securities may be effected without
the prior written approval of the Review Officer or his or her
designee. Pre-clearance approval is effective only on the day of
approval.
(2) The following transactions will not require pre-clearance:
(A) Purchases or sales over which the person has no direct
influence or control.
(B) Purchases or sales which are non-volitional on the part of the
person, including purchases or sales upon exercise of puts or
calls written by the person and sales from a margin account
pursuant to a bona fide margin call.
(C) Purchases which are part of an automatic dividend reinvestment
plan.
(D) Purchases effected upon the exercise of rights issued by an
issuer pro-rata to all holders of a class of its Securities,
to the extent such rights were acquired from such issuer.
(E) Purchases or sales of U.S. Treasury or agency securities, bank
CD's, bankers' acceptances, commercial paper, shares of
registered open-end investment companies or shares of bank
common and collective funds.
(F) Purchases of an employer's stock under employer sponsored
plans (including spouse or partner's employer plans).
(3) The following transactions shall be entitled to clearance from the
Review Officer or his or her designee.
(A) Transactions which appear upon reasonable inquiry and
investigation to present no reasonable likelihood of harm to
the Funds and which are otherwise in accordance with Rule
17j-1.
(B) Transactions which the officers of FAAM, as a group and after
consideration of all the facts and circumstances, determine to
be in accordance with Section III and to present no reasonable
likelihood of harm to the Funds.
(C) Purchases or sales of S&P 500 securities that are not held by
any Funds other than the First American Investment Funds
Equity Index or Asset Allocation Funds.
<PAGE>
(4) The Review Officer will conduct a review of the previous seven days'
trades in the Funds for all Restricted Access Persons prior to
granting pre-clearance.
(5) (A) Absent extraordinary circumstances, no General Access
Person shall be deemed to have violated the Code for effecting
a Personal Securities Transaction in Securities, if such
Access Person has been advised by the Review Officer, or an
individual designated by the Review Officer, that the
transaction would be consistent with this Code.
(B ) A Restricted Access Person shall be deemed to have violated
the Code for effecting a personal transaction within the seven
day period before a trade by a Fund, even though they had
previously been advised by the Review Officer, or an
individual designated by the Review Officer, that the
transaction would be consistent with the Code.
V. Additional Restrictions and Requirements
(1) No General Access or Restricted Access Person shall accept or
receive any gift or other thing of more than de minimus value from
any person or entity that does business with or on behalf of U.S.
Bancorp or the Funds. This policy covers, among other things, gifts,
favors, gratuities and social invitations offered by any broker,
Fund, supplier, or other person or organization with whom U.S.
Bancorp has a business relationship.
(2) No General Access or Restricted Access Person may accept a position
as a director, trustee or general partner of a publicly-traded
company unless such position has been presented to and approved in
writing by FAAM Senior Management and IFS General Counsel or the
FAAM Compliance Director and, if applicable, by the First American
Board of Directors, as consistent with the interests of the Funds
and its shareholders.
(3) Each General Access and Restricted Access Person must direct each
brokerage firm or bank at which such person maintains a Securities
account to promptly send duplicate copies of such person's
confirmations to the Review Officer. The Employee is responsible for
providing trade documentation to the Review Officer in a case where
no automatic trade confirmation is available.
(4) Each General Access and Restricted Access Person shall not divulge
to any person contemplated or completed Securities transactions of
any Fund, except in the performance of his or her duties, unless
such information previously has become a matter of public knowledge.
<PAGE>
(5) No General Access or Restricted Access Person may seek any benefit
for himself or herself, a Fund, or anyone else from material,
non-public information about issuers, whether or not the Securities
of such issuers are held in Fund portfolios or suitable for
inclusion in their portfolios. Any Employee who believes he or she
is in possession of such information should contact the Review
Officer immediately. This prohibition does not preclude an Employee
from contacting officers and employees of issuers or other
investment professionals in seeking information about issuers that
is publicly available. For further guidance in this regard, consult
USBC's policies and procedures concerning the misuse of material
non-public information.
VI. Reporting Obligation
(1) FAAM shall create and thereafter maintain a list of all General
Access and Restricted Access Persons.
(2) Each General Access and Restricted Access Person shall report all
transactions in Securities in which the person has, or by reason of
such transaction acquires, any direct or indirect Beneficial
Ownership.
(3) Each General Access and Restricted Access Person shall annually
certify that they have read and understand this Code of Ethics and
recognize that they are subject thereto, have complied with the
requirements of the Code and have disclosed and reported all
personal Securities transactions required to be disclosed or
reported pursuant to the requirements of the Code.
VII. Reports
(1) Quarterly reports shall be filed by each General Access and
Restricted Access Person with the Review Officer. The Review Officer
shall submit confidential quarterly reports with respect to his or
her own personal securities transactions to an officer designated to
receive his or her reports ("Alternate Review Officer") who shall
act in all respects in the manner prescribed herein for the Review
Officer.
(2) Any such report may contain a statement that the report shall not be
construed as an admission by the person making such report that he
has any direct or indirect beneficial ownership in the security to
which the report relates.
(3) Every General Access and Restricted Access Person shall specially
note and report the name of any publicly-owned company (or any
company anticipating a public offering of its equity securities) and
the total number of its shares beneficially owned by him if such
ownership is more than 1/2 of 1% of the company's outstanding
shares.
(4) Every report shall be made not later than 10 days after the end of
the calendar quarter in which the transaction to which the report
relates was effected, and shall contain the following information:
(A) The date of the transaction, the title and the number of
shares or the principal amount of each security;
(B) The nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(C) The price at which the transaction was effected;
(D) The name of the broker, dealer or bank with or through whom
the transaction was effected; and
(E) A signature and the date the report was signed.
(5) In the event no reportable transactions occurred during the quarter,
the report should be so noted and returned signed and dated.
VIII. Review and Enforcement
(1) The Review Officer shall compare all reported personal Securities
transactions with completed portfolio transactions of the Funds,
pre-clearance forms and the daily Watchlist to determine whether a
violation of this Code may have occurred. Before making any
determination that a violation has been committed by any person, the
Review Officer shall give such person an opportunity to supply
additional explanatory material.
(2) At least quarterly, the Review Officer, or an individual designated
by the Review Officer, shall review the records of each General
Access and Restricted Access Person's Personal Securities
Transactions for the preceeding time period, to determine whether
such transactions comply with the provisions of the Code.
(3) If the Review Officer determines that a violation of this Code may
have occurred, he or she shall submit his or her written
determination, together with the confidential report and any
additional explanatory material provided by the individual, to the
IFS General Counsel, who shall make an independent determination as
to whether a violation has occurred.
(4) If the IFS General Counsel finds that a violation has occurred, the
IFS General Counsel may, if warranted by the circumstances, impose
upon the individual such sanctions as he or she deems appropriate
and shall report the violation and the sanction imposed to the
Senior Manager of IFS, the Vice Chairman for the IFS Group and the
USBC General Counsel and, if applicable, to the First American Funds
Board of Directors. Such sanctions may include disgorgement of
profits in accordance with VIII (4) hereof, a reduction in salary or
position, suspension without pay, dismissal and/or any other
reasonable or appropriate sanction.
<PAGE>
(5) In addition to any other sanction imposed under Section VIII (4)
hereof, any profits realized on Personal Securities Transactions
effected in violation of Section III hereof must be disgorged and
contributed to the appropriate Fund. Each Personal Securities
Transaction will be considered individually and there will be no
netting of profits and losses incurred in the case of multiple
Personal Securities Transactions effected in violation of the Code.
If a violation involves more than one Fund, profits shall be
allocated among the affected Funds in proportion to the relative
assets of the Funds' portfolios as of the date of the violation.
Should the violation not involve any Fund (for example, in the case
of short-swing profits in violation of Section III (6)), profits
shall be paid to a charitable organization chosen at the discretion
of the IFS Legal Counsel.
(6) No person shall participate in a determination of whether he or she
has committed a violation of the Code or of the imposition of any
sanction against himself or herself. If a Securities transaction of
the IFS Legal Counsel is under consideration, the USBC General
Counsel shall act in all respects in the manner prescribed herein
for the IFS Legal Counsel.
(7) Any General or Restricted Access Person who discovers a violation or
apparent violation of this Code by any other person shall bring the
matter to the attention of the Review Officer.
IX. Records
FAAM shall maintain records in the manner and to the extent set forth
below, which records shall be available for examination by representatives
of the Securities and Exchange Commission.
(1) A copy of this Code and any other code which is, or at any time
within the past five years has been, in effect shall be preserved in
an easily accessible place;
(2) A record of any violation of this Code and any action taken as a
result of such violation shall be preserved in an easily accessible
place for a period of not less than five years following the end of
the fiscal year in which the violation occurs;
(3) A copy of each report made by each General Access and Restricted
Access Person pursuant to this Code shall be preserved for a period
of not less than five years from the end of the fiscal year in which
it is made, the first two years in an easily accessible place; and
(4) A list of all General Access and Restricted Access Persons who are,
or within the past five years have been, required to make reports
pursuant to this Code shall be maintained in an easily accessible
place.
X. Miscellaneous
(1) All reports of securities transactions and any other information
filed pursuant to this Code shall be treated as confidential and
maintained in a secured location.
(2) FAAM may from time to time adopt such interpretations of this Code
as it deems appropriate.
(3) The IFS General Counsel or the FAAM Compliance Director shall report
to the IFS Risk Oversight Committee and the Board(s) of the First
American Funds complexes at least annually as to the operation of
this Code and shall address in any such report the following:
(A) a summary of existing procedures concerning personal investing
and any changes in the procedures made during the past year;
(B) a list of any violations that required significant remedial
action during the past year, including details of such
violations and the action taken; and
(C) any recommended changes in existing restrictions or procedures
based upon experience under the Code, evolving industry
practices or developments in applicable laws or regulation.
