SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _________)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2)).
[ ] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material under Rule 14a-12.
The Coventry Group
(Name of Registrant as Specified in Its Charter)
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(Names of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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WILLAMETTE ASSET MANAGERS, INC.
220 N.W. 2ND AVENUE, SUITE 940
PORTLAND, OREGON 97209
February 6, 2001
Dear Shareholder:
I am writing to inform you of the upcoming special meeting of the
shareholders of Willamette Value Fund, Willamette Small Cap Growth Fund,
Willamette Global Health Sciences Fund and Willamette Technology Fund
(collectively, the "Funds," and each individually, a "Fund").
The meeting is scheduled to be held at 10 a.m. Eastern Standard Time on
March 16, 2001, at the office of the Funds, 3435 Stelzer Road, Columbus, Ohio
43219. Please take the time to read the proxy and cast your vote.
The purpose of the meeting is to seek your approval on the following two
proposals:
o to approve a proposed reorganization of the Funds. The Funds are
currently each a series of The Coventry Group, an investment company organized
as a Massachusetts business trust. After the completion of the proposed tax-free
reorganization, the Funds would each be a series of The Willamette Funds, a new
Delaware business trust ("New Trust").
o to approve a proposal that would permit Willamette Asset Managers,
Inc., and each Fund to enter into or materially change agreements with sub-
advisers on behalf of the Fund without obtaining shareholder approval
We think that each of these proposals offers the opportunity for operational
efficiencies that will benefit all shareholders and your Board of Trustees has
unanimously recommended that shareholders of each Fund vote "FOR" each proposal.
Should you have any questions, please feel free to call us at 1(877) 945-3863.
We will be happy to answer any questions you may have.
PLEASE TAKE A FEW MINUTES TO REVIEW THIS PROXY STATEMENT AND SIGN AND
RETURN THE PROXY CARD TODAY.
Sincerely,
Timothy C. Phillips
President
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WILLAMETTE VALUE FUND
WILLAMETTE SMALL CAP GROWTH FUND
WILLAMETTE GLOBAL HEALTH SCIENCES FUND
WILLAMETTE TECHNOLOGY FUND
EACH A SERIES OF
THE COVENTRY GROUP
3435 STELZER ROAD
COLUMBUS, OHIO 43219
1(877) 945-3863
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 16, 2001
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To the Shareholders:
The Coventry Group, a Massachusetts business trust (the "Trust"), will
hold a special meeting of the shareholders of Willamette Value Fund, Willamette
Small Cap Growth Fund, Willamette Global Health Sciences Fund and Willamette
Technology Fund (collectively, the "Funds", and each individually, a "Fund") at
the offices of the Trust, 3435 Stelzer Road, Columbus, Ohio 43219 on March 16,
2001 at 10:00 a.m., Eastern Time, for the following purposes:
(1) To approve a proposed Agreement and Plan of Reorganization, in the
form set forth in Exhibit A to the attached Proxy Statement, pursuant to which
the Funds would be reorganized as separate series of The Willamette Funds, a new
Delaware Business Trust ("New Trust").
(2) To approve a proposal that would permit Willamette Asset Managers,
Inc. and each Fund to enter into or materially change agreements with
sub-advisers on behalf of the Fund without obtaining shareholder approval.
(3) To consider and act upon any other business as may properly come
before the meeting and any adjournments thereof.
You are entitled to vote at the meeting and any adjournment(s) if you
owned shares of any of the Funds at the close of business on January 24, 2001.
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Whether or not you plan to attend the meeting in person, please vote your
shares. As a convenience to our shareholders, you may now vote in any one of the
following ways:
o By telephone, with a toll-free call to the number listed on the
enclosed proxy card and following recorded instructions;
o By mail, with the enclosed proxy card and postage-paid envelope;
or
o In person at the meeting.
We encourage you to vote by telephone, using the control number that
appears on your enclosed proxy card. Use of telephone voting will reduce the
time and costs associated with this proxy solicitation. Whichever method you
choose, please read the enclosed proxy statement carefully before you vote.
PLEASE RESPOND - WE ASK THAT YOU VOTE PROMPTLY IN ORDER TO
AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION.
YOUR VOTE IS IMPORTANT.
By Order of the Board of Trustees
of The Coventry Group,
George A. Stevens
Secretary
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WILLAMETTE VALUE FUND
WILLAMETTE SMALL CAP GROWTH FUND
WILLAMETTE GLOBAL HEALTH SCIENCES FUND
WILLAMETTE TECHNOLOGY FUND
EACH A SERIES OF
THE COVENTRY GROUP
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PROXY STATEMENT
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MEETING OF SHAREHOLDERS
This proxy statement is being furnished in connection with the
solicitation by the Board of Trustees of The Coventry Group (the "Trust") of
proxies to be used at a meeting of the shareholders of Willamette Value Fund,
Willamette Small Cap Growth Fund, Willamette Global Health Sciences Fund and
Willamette Technology Fund (collectively, the "Funds," and each individually, a
"Fund") to be held at 10 a.m. Eastern Standard Time on March 16, 2001 at the
offices of the Funds, located at 3435 Stelzer Road, Columbus, OH 43219, and at
any adjournment of the meeting, for the purposes set forth in the accompanying
Notice of Special Meeting of Shareholders (Notice). The primary purpose of the
meeting is for shareholders of the Funds, as set forth in the attached Notice,
to consider and approve the following proposals:
(1) To approve a proposed Agreement and Plan of Reorganization, in the
form set forth in Exhibit A to the Proxy Statement, pursuant to which the Funds
would be reorganized as separate series of The Willamette Funds, a new Delaware
business trust ("New Trust").
(2) To approve a proposal that would permit Willamette Asset Managers,
Inc., and each Fund to enter into or materially change agreements with
sub-advisers on behalf of the Fund without obtaining shareholder approval.
(3) To consider and act upon any other business as may properly come
before the meeting and any adjournments thereof.
The date of the first mailing of this Proxy Statement will be on or about
February 6, 2001.
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SUMMARY OF PROPOSALS
While you should read the full text of the Proxy Statement, here's a brief
summary of each of the proposals and how they will affect each Fund.
Proposal 1:
Under this proposal, you are asked to consider a proposed Agreement and
Plan of Reorganization, which includes: (a) the transfer of all assets of each
Fund to a corresponding series of the same name (the "New Funds") of The
Willamette Funds, a newly formed Delaware business trust (the "New Trust"), in
exchange for shares of the corresponding New Fund, and the assumption by each
New Fund of liabilities of its respective Fund, and (b) the distribution to
shareholders of each Fund of a corresponding New Fund's shares. A form of the
Agreement and Plan of Reorganization is attached as Exhibit A (the
"Reorganization Plan").
The reorganization will not change the name, investment objective or
principal investment strategy, investment adviser, investment sub-advisers,
portfolio managers, independent accountants, or fiscal year of any of the Funds.
Each shareholder will own the same number of shares of the New Fund immediately
after the reorganization as the number of Fund shares owned by the shareholder
on the closing of the reorganization. Each New Fund will offer the same
shareholder services as its corresponding Fund.
We think this effort offers the opportunity for operational efficiencies
that will benefit all shareholders.
Proposal 2:
Under this proposal, you are asked to approve a proposal that would allow
each Fund and Willamette Asset Managers, Inc., ("Willamette Asset Managers") to
hire sub-adviser(s) for such Fund without shareholder approval of the action.
This proposal would also allow Willamette Asset Managers and each Fund to change
the contracts with the applicable sub-adviser, including changes to the fees
that are paid by Willamette Asset Managers, without obtaining shareholder
approval. This will save each Fund the delay and the expense of a shareholder
vote.
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VOTING INFORMATION
Shareholders of record of the Funds at the close of business on January
24, 2001 will be entitled to vote at the meeting or at any adjournments thereof.
As of the record date, there were issued and outstanding the following number of
shares for each Fund:
- Willamette Value Fund
- Willamette Small Cap Growth Fund
- Willamette Global Health Sciences Fund
- Willamette Technology Fund
Shareholders are entitled to one vote for each share held and a
proportionate vote for each fractional share held. Shareholders of each Fund
will vote separately on each proposal. The holders of a majority of the
outstanding shares of each Fund entitled to vote shall constitute a quorum for
the meeting for that Fund. A quorum being present, the Trust will adopt the
proposal if a majority of the shares of each Fund vote to approve the proposal.
For purposes of each proposal, majority means the lesser of: (a) 67% or more of
the voting securities of that Fund present at the meeting, if 50% or more of the
outstanding voting securities of such Fund are represented in person or by
proxy; or (b) 50% or more of the outstanding voting securities of such Fund. The
Board of Trustees unanimously recommends that the shareholders vote FOR each
proposal set forth above.
For purposes of determining the presence of a quorum for transacting
business at the meeting and for determining whether sufficient votes have been
received for approval of the proposal to be acted upon at the meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
be treated as shares that are present at the meeting, but which have not been
voted. For this reason, abstentions and broker non-votes will assist the Fund in
obtaining a quorum, but both have the practical effect of a "no" vote for
purposes of obtaining the requisite vote for approval of the proposal.
If either (a) a quorum is not present at the meeting or (b) a quorum is
present but sufficient votes in favor of the proposal have not been obtained,
then the persons named as proxies may propose one or more adjournments of the
meeting without further notice to shareholders to permit further solicitation of
proxies provided such persons determine, after consideration of all relevant
factors, including the nature of the proposal, the percentage of votes then
cast, the percentage of negative votes then cast, the nature of the proposed
solicitation activities and the nature of the reasons for such further
solicitation, that an adjournment and additional solicitation is reasonable and
in the interests of shareholders. The persons named as proxies will vote those
proxies that such persons are required to vote FOR the reorganization proposal
in favor of such an adjournment and
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will vote those proxies required to be voted AGAINST the reorganization proposal
against such adjournment.
The meeting may be adjourned from time to time by the vote of a majority
of the shares represented at the meeting, whether or not a quorum is present. If
the meeting is adjourned to another time or place, notice need not be given of
the adjourned meeting at which the adjournment is taken, unless a new record
date of the adjourned meeting is fixed. At any adjourned meeting, the Trust may
transact any business which might have been transacted at the original meeting.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with the shareholder's direction, as indicated thereon, if the proxy
card is received and is properly executed. If the shareholder properly executes
a proxy and gives no voting instructions with respect to the reorganization
proposal, the shares will be voted in favor of the reorganization proposal. The
proxies, in their discretion, may vote upon such other matters as may properly
come before the meeting. The Board of Trustees of the Trust is not aware of any
other matters to come before the meeting.
REVOCATION OF PROXIES
If you return a properly executed proxy card, but later wish to revoke it,
you may do so at any time before it is voted by doing any of the following:
o delivering written notice of the proxy's revocation to the
Secretary of the Trust at the above address prior to the meeting;
o submitting a properly-executed proxy bearing a later date, but
prior to the meeting;
o submitting a subsequent telephone vote; or
o attending and voting in person at the meeting and giving oral
notice of revocation to the Chairman of the meeting.
SOLICITATION OF PROXIES
We are soliciting these proxies by U.S. mail, and may also solicit them in
person, by telephone, by facsimile, or by any other electronic means. Willamette
Asset Managers, the investment adviser for the Funds and proposed investment
adviser for the New Funds, is paying for the costs of this proposed
reorganization, and is paying for the expense of the preparation, printing, and
mailing of the enclosed proxy card, this proxy statement, and other expenses
relating to the shareholder meeting. Willamette Asset Managers has engaged
Shareholder Communications Corporation to assist in proxy solicitation at a cost
to Willamette Asset Managers of approximately $15,000. Employees of Willamette
Asset Managers, Willamette Securities, Phillips & Company Securities, Inc. or
BISYS Fund Services Ohio, Inc. ("BISYS"), the transfer agent for the Funds, may
make additional
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solicitations to obtain the necessary representation at the meeting, but will
receive no additional compensation for doing so. We may count proxies authorized
by telephone or electronically-transmitted instruments if we follow procedures
designed to verify that you have authorized us to accept your proxy in that
manner.
If a shareholder wishes to participate in the meeting, but does not wish
to authorize the execution of a proxy by telephone, the shareholder may still
submit the proxy form included with this Proxy Statement or attend the meeting
in person.
The most recent annual report of the Funds, including financial
statements, for the year ended March 31, 2000, and the most recent semi-annual
report for the semi-annual period ended September 30, 2000, have been mailed
previously to shareholders. If you have not received these reports or would like
to receive additional copies free of charge, please contact the Funds at the
address set forth on the first page of this proxy statement or by calling 1(877)
945-3863 and they will be sent within three business days by first class mail.
PROPOSAL 1
APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION
At a meeting of the Trustees of the Trust held on November 16, 2000, the
Trustees approved the Reorganization Plan substantially in the formed attached
to this Proxy Statement as Exhibit A. Willamette Asset Managers requested that
the Reorganization Plan be submitted to shareholders of the Funds. For the
reasons set forth below under "Reasons for the Reorganization," the Trustees of
the Trust, including the Trustees who are not "interested persons" as that term
is defined in the federal securities laws ("Independent Trustees"), have
unanimously determined that the reorganization is in the best interests of the
shareholders of each of the Funds and that the interests of those shareholders
will not be diluted as a result of the reorganization.
We now submit to shareholders of each Fund a proposal to approve the
Reorganization Plan. If shareholders approve the proposal, the Trustees and
officers of The Coventry Group will execute and implement the Reorganization
Plan. If approved, we expect the reorganization to take effect on or about April
1, 2001, although that date may be adjusted in accordance with the
Reorganization Plan.
SUMMARY OF THE REORGANIZATION PLAN AND AGREEMENT
We summarize below the important terms of the Reorganization Plan. This
summary is qualified in its entirety by reference to the Reorganization Plan
itself, which is set forth in Exhibit A to this Proxy Statement. All information
regarding the New Trust, its operations and the various agreements between the
New Trust and its several service providers have been supplied by Willamette
Asset Managers, and neither the current Trust nor any of its Trustees or
officers has independently verified the accuracy of such information.
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GENERAL PLAN OF REORGANIZATION. The Reorganization Plan consists of
several steps that will occur on the Closing Date following shareholder
approval. First, each Fund of the Trust will transfer all of its assets to a
corresponding New Fund of the New Trust in exchange solely for all of the shares
of the corresponding New Fund. The Funds, as sole shareholders of the New Funds,
will make elections, approvals and ratifications as set forth below. Each New
Fund will also assume all of the liabilities of the corresponding Fund.
Immediately thereafter, each Fund will liquidate and distribute shares of the
corresponding New Fund to its shareholders in exchange for their shares of that
Fund. This will be accomplished by opening an account on the books of the
corresponding New Fund in the name of each shareholder of record of the Fund and
by crediting to each account the shares due in the reorganization. Every
shareholder will own the same number of shares of the corresponding New Fund as
the number of Fund shares held by the shareholder in each Fund immediately
before the reorganization. For example, if you held 100 shares of the Willamette
Value Fund immediately prior to the close of the New York Stock Exchange on the
Closing Date, those shares would be canceled and you would receive 100 shares of
the corresponding New Fund of the same name. All of these transactions would
occur as of the Closing Date. The value of your investment immediately after the
reorganization will be the same as it was immediately prior to the
reorganization.
ELECTIONS, APPROVALS AND RATIFICATIONS. The Investment Company Act of
1940, as amended ("1940 Act") generally requires that shareholders of a mutual
fund elect the fund's trustees, approve the fund's investment advisory
agreements, approve the distribution plan administered pursuant to Rule 12b-1
under the 1940 Act and ratify the Trustee's selection of the independent
accountant for the fund. Those requirements apply to new mutual funds, including
the New Funds. If shareholders approve the proposed reorganization, they will
also be:
o authorizing election of Trustees of the New Trust;
o authorizing the approval of an Investment Advisory Agreement(s)
with Willamette Asset Managers;
o with respect to the Willamette Value Fund and Willamette Small Cap
Growth Fund, authorizing the approval of a Sub-Investment Advisory
Agreement with the Bank of New York;
o with respect to the Willamette Global Health Sciences Fund,
authorizing the approval of a Sub-Investment Advisory Agreement with
Credit Suisse Asset Management LLC;
o with respect to the Willamette Technology Fund, authorizing the
approval of the Sub-Investment Advisory Agreement with U.S. Bank National
Association (through its First American Asset Management Division);
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o approving the distribution plan administered pursuant to Rule
12b-1 under the 1940 Act; and
o ratifying the selection of Ernst & Young, LLP as the independent
accountants for the New Funds.
Technically, these elections, approvals and ratifications will be
accomplished by a vote of the Funds, as sole shareholders of the New Funds prior
to the effective date of the reorganization. In general, there will be no
substantive changes in those areas noted above from the Funds to the New Funds
except that the Trustees will not be the same for the New Funds. The slate of
new Trustees is listed below.
CLOSING DATE. Willamette Asset Managers currently anticipates that the
closing will occur on or about April 1, 2001.
OTHER PROVISIONS. The reorganization is subject to a number of conditions
set forth in the Reorganization Plan. Certain of these conditions may be waived
by the Board of Trustees. The significant conditions which may not be waived
include: (a) the receipt by the Trust and the New Trust of opinions of counsel
as to certain federal income tax aspects of the reorganization and (b) the
approval of the Reorganization Plan by the shareholders of all of the Funds of
the Trust. The Reorganization Plan may be terminated and the reorganization
abandoned at any time, before or after approval by the shareholders of the Funds
prior to the Closing Date, by the Board of Trustees. In addition, the
Reorganization Plan may be amended by the Board of Trustees. However, the
reorganization agreement may not be amended subsequent to the shareholders
meeting in a manner that would change the method for determining the number of
shares to be issued to shareholders of the existing Funds without shareholder
approval.
REASONS FOR THE PROPOSED REORGANIZATION
The Board of Trustees of the Trust, including the Independent Trustees,
unanimously approved the Reorganization Plan at a meeting held on November 16,
2000. In approving the reorganization, the Trustees of the Trust determined that
the proposed reorganization would be in the best interests of each Fund, and
that the interests of each Fund's shareholders would not be diluted as a result
of effecting the reorganization. We summarize below the key factors considered
by the Trustees:
- The Trustees considered that the investment objective, policies and
restrictions of each Fund are identical to those of the corresponding New Fund,
the Fund would be managed by the same personnel and in accordance with the same
investment strategies and techniques utilized in the management of each Fund
immediately prior to the reorganization.
- Willamette Asset Managers informed the Trustees that it believes that in the
long run, the New Funds will have greater opportunity for asset growth then if
the Funds remain part of the Trust. A larger pool of assets should result in
operational economies of scale
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and investment management efficiencies, which can help to minimize expenses. A
fund with a larger pool of assets is also more attractive to institutional
investors such as plan sponsors, which often view asset size as one of the
criteria when selecting investment options.
- In recent years, many mutual funds have reorganized as Delaware business
trusts. Willamette Asset Managers has informed the Trustees that it believes
that the proposed Delaware business trust form provides the most flexible and
cost efficient method of providing different investment vehicles to present and
prospective shareholders. Delaware law offers a mutual fund certain advantages
compared with Massachusetts law. Delaware law provides that the shareholders and
trustees of a Delaware business trust are not liable for obligations of the
trust. Under Massachusetts law, shareholders and trustees are potentially liable
for trust obligations. Although the risk of this liability is remote, Delaware
law should afford greater protection against potential shareholder and trustee
liability. Similarly, Delaware law provides that no series of a Delaware
business trust is liable for the debts of another series. This is another
potential, although remote, risk in the case of a Massachusetts business trust.
- It is anticipated that under the Delaware trust instrument, the New Trust will
be required to have fewer shareholder meetings, potentially further reducing
costs. Delaware law affords to the Trustees the ability to adapt the New Trust
to future contingencies; for example, the Trustees have the power to amend the
Delaware Trust instrument, merge or consolidate the New Funds with another
entity and to change the New Trust's domicile, in each case without a
shareholder vote. Any exercise of this authority by the Trustees will be subject
to applicable federal law. This flexibility should help to assure that the New
Trust always operates under the most advanced form of organization, and is
intended to reduce the expense and frequency of future shareholder meetings for
non-investment-related operational issues. For a more detailed comparison of the
Trust's current Massachusetts trust instrument and the proposed Delaware Trust
instrument, see "Certain Comparative Information about the Trust and the New
Trust."
MANAGEMENT AND OTHER SERVICE PROVIDERS
Adviser and Subadvisers
The Reorganization Plan authorizes each Fund, while it is the sole
shareholder of the corresponding New Fund, to approve new Advisory Agreements
with Willamette Asset Managers ("Adviser"), and new Sub-Investment Advisory
Agreements with The Bank of New York, U.S. Bank National Association (through
its First American Asset Management Division) and Credit Suisse Asset
Management, LLC (each a "Sub-Adviser" and collectively the "Sub-Advisers"), that
are substantially identical to the current agreements detailed below, as
proposed to be modified as discussed in Proposal 2. The rate of advisory fees
payable to the Adviser and Sub-Investment Advisers under the new Advisory and
Sub-Investment Advisory Agreements with respect to each New Fund will be the
same as under the current agreements. Each Agreement will continue in effect,
unless sooner terminated, for two years from its effective date, and each
Agreement shall continue for additional one (1) year periods if such continuance
is approved at least annually by the New Trust's Board
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of Trustees, including a majority of the Independent Trustees, by votes cast in
person at a meeting called for such purpose, or by vote of a majority of the
outstanding shares of the applicable New Fund.
Willamette Asset Managers, 220 NW 2nd Avenue, Suite 950, Portland, Oregon
97209, acts as investment adviser to the Funds pursuant to Investment Advisory
Agreements dated June 5, 2000 for Willamette Value Fund (Value Fund), April 1,
1999 for Willamette Small Cap Growth Fund (Growth Fund), June 12, 2000 for
Willamette Global Health Sciences Fund (Health Sciences 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%; Health Sciences 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, as detailed
below, to provide portfolio management services. The Adviser pays the fees of
each Sub-Adviser, at no additional cost to a Fund.
The Bank of New York (BONY), One 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 June 5, 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
$50,000,000 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 period of Value Fund's portfolio. BONY
commenced its services as Sub-Adviser as of June 5, 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 $106,339 for its
services to Growth Fund.
U.S. Bank National Association, through its First American Asset
Management Division (U.S. Bank), 601 Second Avenue South, Minneapolis, Minnesota
55480, serves as Sub-Adviser to Technology Fund pursuant to a Sub-Investment
Advisory Agreement dated as of February 17, 2000. For its services to
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Technology Fund, the Adviser pays U.S. Bank a fee computed daily and paid
monthly at an annual rate of 0.50% calculated as a percentage of the Fund's
average daily net assets. For its services to Technology Fund, which commenced
operations on March 1, 2000, U.S. Bank received fees totaling $11,736 for the
fiscal year ended March 31, 2000.
Credit Suisse Asset Management, LLC (Credit Suisse), One Citicorp Center,
153 East 53rd Street, New York, NY 10022, acts as Sub-Adviser to Health Sciences
Fund pursuant to a Sub-Investment Advisory Agreement dated June 12, 2000. Credit
Suisse also acts as investment adviser to the Warburg Pincus Family of Funds.
Credit Suisse is a member company of Credit Suisse Asset Management (CSAM), the
institutional asset management and mutual fund arm of Credit Suisse Group, one
of the world's leading banks. The CSAM companies manage more than $58 billion in
the U.S. and $186 billion globally. They have offices in 14 countries, including
SEC-registered offices in New York and London. CSAM's other offices, including
those in Budapest, Frankfurt, Milan, Moscow, Paris, Prague, Sydney, Tokyo,
Warsaw and Zurich, are not SEC-registered. For its services to Health Sciences
Fund, the adviser pays Credit Suisse a fee at an assessed rate, calculated as a
percentage of Health Sciences Fund's average daily net assets, of 0.55%
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 Agreement and
Sub-Investment Advisory Agreement for Technology Fund were so approved at a
meeting held February 17, 2000. The Advisory Agreement for Health Sciences Fund
was so approved at a meeting held February 17, 2000 the and Sub-Investment
Advisory Agreement for Health Sciences Fund was so approved at a meeting held
May 18, 2000
Each Agreement provides that the Adviser (or Sub-Adviser, as the case may
be) 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
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 (or
Sub-Adviser, as the case may be) in the performance of its duties, or from
reckless disregard by the Adviser (or Sub-Adviser, as the case may be) of its
duties and obligations thereunder.
10
<PAGE>
Independent Accountants
Ernst & Young LLP, 10 West Broad Street, Suite 2300, Columbus, Ohio 43215,
currently serves as each Fund's independent accountant and will also serve as
independent accountants for the New Funds. Ernst & Young LLP will perform an
annual audit of each New Fund's financial statements and provide other services
related to filings with respect to securities regulations.
Distributor, Administrator, Transfer Agency and Fund Accounting Services
BISYS Fund Services Limited Partnership will continue to serve as the New
the Funds' Distributor, BISYS Fund Services Ohio, Inc. will continue to serve as
the New Funds' Administrator and BISYS Fund Services, Inc. will continue to
serve as the new Funds' Transfer Agent and Dividend Disbursing Agent following
the reorganization. The address of each entity is 3435 Stelzer Road, Columbus,
Ohio 43219.
Custodian
Union Bank of California, 475 Sansome Street, San Francisco, California
94111, will continue to serve as the New Funds' custodian.
FISCAL YEAR
Each of the Funds currently operates on a fiscal year ending March 31.
Following the reorganization, the New Funds will also operate on a fiscal year
ending March 31.
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGY
The investment objectives and principal investment strategy of each of the
New Funds will be identical to the investment objectives and principal
investment strategy of the corresponding Fund.
CERTAIN INFORMATION REGARDING THE TRUSTEES
In relation to the reorganization, Willamette Asset Managers has proposed
new Trustees to oversee the operations of the New Trust. Federal securities laws
require that at least one-half of the Trustees of the Trust and, following the
reorganization, the New Trust, be elected by shareholders. Rather than call
another shareholder meeting to vote on Trustees after the reorganization, the
Reorganization Plan authorizes each Fund, while it is the sole shareholder of
the corresponding New Fund, to elect the Trustees of the New Trust.
Information on the proposed individuals that will serve as the Trustees
and officers of the New Trust, to the extent determined to date, and their
business affiliations for the past five years is set forth below.
11
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE PROPOSED TITLE DURING THE PAST 5 YEARS
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Timothy C. Phillips* Trustee and President CEO of Phillips and Co.
220 NW 2nd, Suite 950 Securities, Inc. (02/92 to Present), CEO of
Portland, OR 97209 Willamette Securities, Inc. (01/99 to
Present)
CEO of Willamette Asset Managers, Inc.
(04/98 to Present)
S. Christopher Clark* Trustee President/Managing Director of Phillips and
220 NW 2nd, Suite 950 Co. Securities, Inc. (08/93 to Present)
Portland, OR 97209 Managing Director of Willamette Securities,
Inc. (01/99 to Present)
Managing Director of Willamette Asset
Managers, Inc. (04/98 to Present)
James T. Smith* Trustee and Treasurer CFO of Phillips and Co.
220 NW 2nd, Suite 950 Securities, Inc. (09/94 to Present), CFO of
Portland, OR 97209 Willamette Securities, Inc. (01/99 to
Present)
CFO of Willamette Asset Managers, Inc.
(04/98 to Present)
Charles J. Mohr Trustee Group President of Outsourcing for BISYS
396A Sound Beach Ave Fund Services (07/98 to 09/00)
Old Greenwich, CT 06870 President/CEO of Systematic Financial
Management (01/96 to 07/98)
Andy Gerlicher Trustee Attorney for Schwabe Williamson & Wyatt
600 SW Columbia, Suite 3210 (06/00 to Present)
Bend, OR 97702 Banker for Key Bank, N.A. (05/99 to 05/00)
Trust Co. President for West Coast Trust
Co. (04/96 to 04/99)
S.V.P./General Counsel for First Interstate
Bank (09/85 to 03/96)
</TABLE>
* Messrs. Phillips, Clark and Smith are each considered to be an "interested
person" of the Trust as defined in the 1940 Act.
12
<PAGE>
The foregoing individuals proposed to serve as Trustees of the New Trust
are subject to change. However, in accordance with conditions to the Order in
Proposal 2, at all times a majority of the Board of Trustees will be Independent
Trustees, and the nomination of new or additional Independent Trustees will be
placed within the discretion of the then existing Independent Trustees. Such
board composition will also satisfy recent amendments, requiring compliance by
July 1, 2002, adopted by the Securities Exchange Commission ("SEC") in order for
the New Trust to rely on certain exemptive rules under the 1940 Act.
Trustees of the Trust not affiliated with BISYS Fund Services currently
receive from the Trust an annual fee of $1,000, plus $2,250 for each regular
meeting of the Board of Trustees attended and $1,000 for each special meeting of
the Board attended in person and $500 for other special meetings of the Board
attended by telephone, and are reimbursed for all out-of-pocket expenses
relating to attendance at such meetings. Trustees who are affiliated with BISYS
Fund Services do not receive compensation from the Trust. The foregoing fees do
not include the reimbursement of expenses incurred in connection with meeting
attendance. Officers and employees of BISYS Fund Services of Ohio who are
interested persons will be compensated by such entity and will receive no
compensation from the Trust.
After the reorganization, the Trustees for the New Trust will be
compensated as follows: for services on the Boards of Trustees of the New Funds,
each Trustee who is not a full-time employee of Willamette Asset Managers or any
of its affiliates will receive a fee of $2,500 per joint meeting of the Boards
attended in person and $1,000 for each meeting of the Board attended by
telephone. Each Trustee who serves on the Audit Committee will receive a fee of
$________ per joint Audit Committee meeting attended. Costs will be allocated
equally to each of the New Funds within the fund complex. The foregoing fees do
not include the reimbursement of expenses incurred in connection with meeting
attendance. Officers and employees of Willamette Asset Managers who are
interested persons will be compensated by such entity and will receive no
compensation from the Trust.
EXPENSES OF THE REORGANIZATION
Willamette Asset Managers will bear all expenses associated with the
transactions contemplated by the Reorganization Plan, including expenses
associated with the solicitation of proxies.
FEDERAL INCOME TAX CONSEQUENCES
As a condition to the Fund's obligation to consummate the reorganization,
the Trust and New Trust will receive an opinion from counsel, Dechert, to the
effect that, on the basis of the existing provisions of the Internal Revenue
Code of 1986, as amended, (the "Code"), current administrative rules and court
decisions, the transactions
13
<PAGE>
contemplated by the Reorganization Plan constitute a tax-free reorganization for
federal income tax purposes.
SHARES OWNED BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of January 24, 2001 with
respect to each person who owns of record or is known by the Trust to own of
record or beneficially own 5% or more of any shares of the Funds:
--------------------------------------------------------------------------------
NAME OF SHAREHOLDER FUND PERCENTAGE OF THE FUND NUMBER OF SHARES
--------------------------------------------------------------------------------
On January 24, 2001, the Trustees and officers as a group owned
beneficially less than one percent of the Trust's outstanding shares.
CONTINUATION OF SHAREHOLDER ACCOUNTS AND PLANS
BISYS, as the Trust's and New Trust's transfer agent, will establish
accounts for all current Fund shareholders containing the appropriate number of
New Fund shares to be received by that shareholder in accordance with the terms
and provisions of the Reorganization Plan. These accounts will be identical in
all material respects to the accounts currently maintained by the Fund on behalf
of its shareholders.
COMPARATIVE INFORMATION ON SHAREHOLDER SERVICES
The New Funds will offer the same shareholder services as the Funds,
including the Automatic Withdrawal Program, Automatic Investment Plan, telephone
exchanges, and telephone redemptions.
Shareholders may exchange shares for another Willamette Fund. As with the
Funds, exchange privileges may not be available for all New Funds and may
continue to be limited to 4 exchanges within a calendar year or may be changed
or eliminated.
Shares of the New Funds may be redeemed at a redemption price equal to the
net asset value of the shares as next determined following the receipt of a
redemption order and any other required documentation in proper form, less any
applicable redemption fee. Payment of redemption proceeds for redeemed New Fund
shares will generally be made within seven days after receipt of a redemption
request in proper form and documentation.
DIVIDENDS AND DISTRIBUTIONS
Each New Fund will have the same dividend and distribution policy as the
corresponding Fund. After the closing of the reorganization, Fund shareholders
who
14
<PAGE>
currently have dividends reinvested will continue to have dividends reinvested
in the New Fund. Shareholders who currently have capital gains reinvested will
continue to have capital gains reinvested in the New Fund.
CERTAIN COMPARATIVE INFORMATION ABOUT THE TRUST AND THE NEW TRUST
The following is a summary of certain differences between and among the
Declaration of Trust and By-laws of the Trust and the Declaration of Trust and
By-laws of the New Trust. It is not a complete list of the differences.
Shareholders should refer to the provisions of these documents and state law
directly for a more thorough comparison. Copies of the Declaration of Trust and
By-laws of the Trust and of the Declaration of Trust and By-laws of the New
Trust are available to shareholders without charge upon written request.
General. The Trust was organized as a Massachusetts business trust on
January 8, 1992. As a Massachusetts business trust, the Trust's operations are
currently governed by its Agreement and Declaration of Trust ("Massachusetts
Trust Instrument") and applicable Federal and Massachusetts law. The New Trust
was organized as a Delaware business trust in November 2000. As a Delaware
business trust, the New Trust's operations will be governed by an Agreement and
Declaration of Trust (the "Delaware Trust Instrument") and applicable Federal
and Delaware law.
Under the Delaware Trust Instrument, the Trustees of the New Trust will
have more flexibility than they currently have as Trustees of the Trust and,
subject to applicable requirements of the 1940 Act and Delaware law, broader
authority to act. The increased flexibility may allow the Trustees to react more
quickly to changes in competitive and regulatory conditions and, as a
consequence, may allow the Trust to operate in a more efficient and economical
manner. The Trustees' existing fiduciary obligations to act with due care and in
the interest of shareholders will not be affected by the reorganization.
Term of Trustees. The term of office of a Trustee of both the Trust and
the New Trust is unlimited in duration unless the Trustees themselves adopt a
limited term. A person serving as Trustee will continue as Trustee until the
person resigns, dies or is removed from office. Under the Delaware Trust
Instrument, a Trustee may be removed with or without cause at any meeting of
shareholders by a vote of at least two-thirds of the outstanding shares of the
Trust or by a vote of two-thirds of the number of Trustees prior to such
removal. The Massachusetts Trust Instrument also provides that any Trustee may
be removed by the affirmative vote of the holders of two-thirds of the
outstanding shares. However, a Trustee may be removed by two-thirds of the
remaining Trustees only for cause.
Liability of Trustees and Officers. A Trustee of both the Trust and the
New Trust will be personally liable only for his or her own willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of
15
<PAGE>
Trustee. Under the Massachusetts Trust Instrument and the by-laws of the New
Trust, Trustees, officers and employees will be indemnified by the respective
trust for the expenses of litigation against them unless it is determined that
his or her conduct constitutes willful misfeasance, bad faith, gross negligence
or reckless disregard of his or her duties.
Shareholder Liability. Delaware law provides that shareholders are not
liable for the obligations of a Delaware business trust. Under Massachusetts
law, there is no equivalent statutory limitation of shareholder liability.
However, the Delaware Trust Instrument and the Massachusetts Trust Instrument
contain disclaimers of shareholder liability for acts or obligations of the
respective trust, and provide for indemnification for any shareholder who is
exposed to liability by reason of a claim or demand relating to such person
being a shareholder. The Delaware Trust Instrument expands the shareholder
indemnification provision to include former shareholders.
Shareholder Voting. The voting rights of shareholders of the Trust are
based on the number of shares the shareholder owns. Each holder of a share of a
Fund is entitled to one vote for each whole share and a proportionate fractional
vote for each fractional share. When a registered investment company has
multiple series, as does the Trust, the share price of each series will likely
differ. As a result, holders of lower-priced shares of a series of the Trust
have a greater amount of influence on matters submitted to a shareholder vote
than shareholders holding an equivalent dollar amount of higher priced shares of
the Trust. As a shareholder of the New Trust, voting rights will be
dollar-based. Each shareholder will have one vote for each dollar of net asset
value held by the shareholder regardless of the number of shares held. Under
dollar-based voting rights, a shareholder's voting power will be in direct
proportion to the shareholder's investment in the New Trust.
Shareholder Meetings. The New Trust and the Trust are not required to hold
annual shareholder meetings. Under the Massachusetts Trust Instrument,
shareholders owning at least 10% of the outstanding shares of a Fund may call a
special meeting for any purpose. The Delaware Trust Instrument does not
specifically authorize shareholders to call a special meeting. However, under
the 1940 Act, shareholders owning at least 10% of the outstanding shares of the
New Trust may by written request call a special meeting of shareholders of the
New Trust for the purpose of removing a Trustee.
Reorganization/Combination Transactions. Under the Delaware Trust
Instrument, the Trustees may generally authorize mergers, consolidations, share
exchanges and reorganizations of a New Fund or the New Trust with another trust,
series or other business organization without shareholder approval. Under the
Massachusetts Trust Instrument, a majority of the outstanding shares of a Fund
must approve a merger of the Fund with another business organization, or the
sale or exchange of all or substantially all of the property of the Fund.
Termination of the Trust or a Fund. Under the Delaware Trust Instrument,
the New Trust may be terminated at any time by the Trustees alone, upon written
notice to
16
<PAGE>
the shareholders, or by vote of a majority of the shares of the New Trust. A New
Fund or a class thereof may be terminated at any time by a vote of a majority of
the shares of the New Fund or class or by the Trustees by written notice to the
shareholders of the New Fund or class. Under the Massachusetts Trust Instrument,
the holders of at least two-thirds of the shares of each Fund must approve the
termination of the Trust. The termination of a Fund requires an affirmative vote
of the holders of at least two-thirds of the shares of the Fund.
Amendment of Charter Document. Under the Delaware Trust Instrument, the
Trustees may generally restate, amend or otherwise supplement the Delaware Trust
Instrument without the approval of shareholders, subject to limited exceptions
(such as amendments affecting shareholders' liability or indemnity rights). The
Massachusetts Trust Instrument may generally only be amended by the affirmative
vote of the majority of shareholders. The Trustees may amend the Massachusetts
Trust Instrument without shareholder approval to conform the Massachusetts Trust
Instrument to the requirements of applicable federal laws or regulations, or the
requirements of the regulated investment company provisions of the Internal
Revenue Code.
Derivative and Class Actions. Under the Massachusetts Trust Instrument,
shareholders have the power to vote to the same extent as the shareholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a class
action on behalf of the Trust or its shareholders. The Delaware Trust Instrument
does not provide shareholders a similar right.
Shareholder Appraisal Rights. The Massachusetts Trust Instrument provides
shareholders with the right to demand an appraisal of the value of their shares
in a merger, consolidation, sale or exchange of assets to the same extent as a
shareholder of a Massachusetts business corporation. The Delaware Trust
Instrument does not provide for shareholder appraisal rights. Appraisal rights
are highly unusual in the context of open-end investment companies, and it is
the position of the SEC that state appraisal rights given to mutual fund
shareholders would violate the 1940 Act.
THE BOARD OF TRUSTEES, INCLUDING THE INDEPENDENT
TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT THE SHAREHOLDERS APPROVE THE REORGANIZATION PLAN.
17
<PAGE>
PROPOSAL 2
APPROVAL OF A POLICY TO PERMIT EACH FUND AND WILLAMETTE ASSET MANAGERS TO ENTER
INTO, OR MATERIALLY AMEND, SUB-ADVISORY AGREEMENTS WITHOUT OBTAINING SHAREHOLDER
APPROVAL
At a meeting of the Trustees of the Trust held on January 19, 2001, the
Trustees approved the submission for shareholder consideration of a proposal to
permit the New Trust and Willamette Asset Managers, in its capacity as each
Fund's adviser, to enter into, and materially amend, sub-investment advisory
agreements with each of the sub-advisers as retained by Willamette Asset
Managers and the New Trust to manage the Funds without obtaining shareholder
approval. Submission of this proposal is required under the terms of an order
(the "Order") that the New Trust expects to receive from the SEC in the near
future. The Order would grant exemptive relief from the provisions of the 1940
Act and its rules, as discussed below.
While it is anticipated that this proposal will be implemented following
completion of the reorganization transactions discussed above in Proposal 1,
Proposal 2 is not contingent on shareholder approval of Proposal 1. Accordingly,
if shareholders of a Fund approve Proposal 1, the reorganization transaction
contemplated in that proposal will occur regardless of the results of
shareholder voting regarding Proposal 2. Similarly, the arrangements discussed
herein under Proposal 2 will be implemented (assuming approval by shareholders)
regardless of shareholder approval of Proposal 1. In the event shareholders of a
Fund approve Proposal 2, but not Proposal 1, it is anticipated that the Trust
would become a party to the application for the Order described above. In the
discussion under Proposal 2, the terms "Board" and "Independent Trustees" have
the same meanings with respect to the Trust and the New Trust, as appropriate.
The Board recommends that shareholders of each applicable Fund approve
this proposal. Approval by the Board, including a majority of the Independent
Trustees, will continue to be required prior to entering into a new
sub-investment advisory agreement with respect to any Fund and amending an
existing sub-investment advisory agreement with respect to any Fund. However, if
shareholders approve this proposal, a shareholder vote will not be required to
approve sub-investment advisory agreements and material changes to them. In
addition, the proposal will only apply to entering into any sub-investment
advisory agreement with a sub-adviser that is not an "affiliated person" (as
defined in Section 2(a)(3) of the 1940 Act) of Willamette Asset Managers or the
applicable Fund, other than by reason of serving as a sub-adviser to such Fund.
REASONS FOR THE PROPOSAL AND TRUSTEES' RECOMMENDATION
The Board believes that it is appropriate and in the best interests of
each Fund's shareholders to provide Willamette Asset Managers and the Board with
maximum flexibility to recommend, supervise and evaluate sub-advisers without
incurring the unnecessary delay or expense of obtaining shareholder approval.
This process will allow
18
<PAGE>
each Fund to operate more efficiently. Currently, to appoint a sub-adviser or to
materially amend a sub-investment advisory agreement, the Trust must call and
hold a shareholder meeting of each affected Fund, create and distribute proxy
materials, and solicit proxy votes from the Fund's shareholders. Further, if a
sub-adviser is acquired, the Trust currently must seek approval of a new
sub-investment advisory agreement from shareholders of the affected Funds, even
where there will be no change in the persons managing a Fund. This process is
time-consuming and costly, and the costs are generally borne entirely by the
respective Fund with a consequent reduction in shareholder investment return.
Without the delay inherent in holding a shareholder meeting, Willamette Asset
Managers and the Board would be able to act more quickly and with less expense,
to appoint a sub-adviser when the Board and Willamette Asset Managers believe
that the appointment would benefit a Fund.
In its capacity as adviser to each Fund, Willamette Asset Managers
currently oversees and monitors the performance of each Fund's sub-advisers.
Willamette Asset Managers is also responsible for determining whether to
recommend to the Board that a particular sub-investment advisory agreement be
entered into or terminated. A determination of whether to recommend the
termination of a sub-investment advisory agreement depends on a number of
factors, including, but not limited to, the sub-adviser's performance record
while managing a Fund.
By investing in a Fund, shareholders, in effect hire Willamette Asset
Managers to manage that Fund's assets directly or to hire an external
sub-adviser under Willamette Asset Managers' supervision. Accordingly, the Board
believes that shareholders expect that Willamette Asset Managers and the Board
take responsibility for overseeing each Fund's sub-advisers and for recommending
their hiring, termination and replacement.
Thus, in light of the contractual arrangements under which Willamette
Asset Managers has been engaged as an adviser and the sub-advisers serve as
sub-advisers, and in light of Willamette Asset Managers' experience in
recommending and monitoring sub-advisers, the Board believes that it is
appropriate to allow the recommendation, supervision and evaluation of
sub-advisers to be conducted by Willamette Asset Managers. The Board also
believes that this approach would be consistent with shareholder's expectations
that Willamette Asset Managers will use its expertise to recommend to the Board
qualified candidates to serve as sub-advisers.
The Board will continue to provide oversight of the sub-investment
advisory selection and engagement process. The Board, including a majority of
the Independent Trustees, will continue to evaluate and consider for approval
all new or amended sub-investment advisory agreements. In addition, under the
1940 Act and the terms of the sub-investment advisory agreements, the Board,
including a majority of the Independent Trustees, are required to annually
review and consider for renewal each of these agreements after the initial term.
Upon entering into, renewing or amending a sub-investment advisory agreement,
Willamette Asset Managers and the sub-adviser have a legal duty to provide to
the Board information on pertinent factors.
19
<PAGE>
SHAREHOLDER APPROVAL OF THIS PROPOSAL WILL NOT RESULT IN AN INCREASE OR
DECREASE IN THE TOTAL AMOUNT OF INVESTMENT ADVISORY FEES PAID BY THE FUNDS TO
WILLAMETTE ASSET MANAGERS. When engaging sub-advisers and entering into and
amending sub-investment advisory agreements, Willamette Asset Managers has
negotiated and will continue to negotiate fees with these sub-advisers. Because
these fees are paid by Willamette Asset Managers, and not directly by each Fund,
any fee reduction negotiated by Willamette Asset Managers may benefit Willamette
Asset Managers, and any increase will be a detriment to Willamette Asset
Managers. The fees paid to Willamette Asset Managers by the Funds and the fees
paid to sub-advisers by Willamette Asset Managers are considered by the Board in
approving and renewing the advisory and sub-investment advisory agreements. Any
increase in fees paid by a Fund to Willamette Asset Managers would continue to
require shareholder approval. In any event, if shareholders approve this
proposal, Willamette Asset Managers, pursuant to each Fund's investment advisory
agreement and other agreements, will continue to provide the same level of
management and administrative services to the Funds as it is currently
providing.
THE ORDER
On January __, 2001, the New Trust and Willamette Asset Managers filed an
application with the SEC requesting an order for relief from the provisions of
Section 15(a) of the 1940 Act and Rule 18f-2 thereunder. These provisions of the
1940 Act require that shareholders approve advisory agreements, including the
sub-investment advisory agreements on behalf of a Fund, and to approve any
material amendment to such an advisory agreement. While there can be no
assurance, the New Trust and Willamette Asset Managers expect that the Order
will be issued by the SEC. If shareholders approve this proposal, Willamette
Asset Managers and the New Trust would be authorized to evaluate, select and
retain new sub-advisers for the Funds, or materially amend an existing
sub-investment advisory agreement, without obtaining further approval of the
affected Fund's shareholders.
Under the terms of the proposed Order, the New Trust and Willamette Asset
Managers will continue to be subject to several conditions imposed by the SEC.
For instance, as requested in this proposal, shareholder approval is required
before Willamette Asset Managers and the New Trust may implement the arrangement
described above permitting them to enter into and materially amend
sub-investment advisory agreements. Furthermore, within 90 days of a change to a
Fund's sub-investment advisory agreement, the New Trust must provide the
affected Fund's shareholders with an information statement that contains
information about the sub-adviser, the sub-investment advisory agreement, and
the sub-investment advisory fee. Another condition will require that a majority
of the Board consist of Independent Trustees and that the nomination of new or
additional Independent Trustees be at the discretion of the then existing
Independent Trustees.
As of the date of the Proxy Statement, Willamette Asset Managers is not
aware of any reason why a Fund's current sub-adviser will not continue to serve
in its capacity under terms substantially identical to the existing
sub-investment advisory agreement.
20
<PAGE>
THE BOARD OF TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
APPROVE THIS PROPOSAL.
OTHER BUSINESS
The Board of Trustees of the Trust knows of no business to be brought
before the meeting other than the matters set forth in this Proxy Statement.
Should any other matter requiring a vote of the shareholders of the Funds arise,
however, the proxies will vote thereon according to their best judgment in the
interests of the Funds and the shareholders of the Funds.
The Trust does not hold annual meetings of shareholders. There will
normally be no meeting of shareholders for the purpose of electing Trustees of
the Trust unless and until such time as less than a majority of the Trustees
holding office have been elected by the shareholders, at which time the Trustees
then in office will call a shareholders' meeting for the election of Trustees.
Shareholders wishing to submit proposals for inclusion in the Proxy Statement
for any subsequent shareholder meeting of their Fund (or the corresponding New
Fund post-reorganization) should send their written submissions to the principal
executive offices of the Fund at 3435 Stelzer Road, Columbus, Ohio 43219.
21
<PAGE>
EXHIBIT A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this __ day of _______, 2001, by and between The Coventry Group, a Massachusetts
business trust (the "Predecessor Trust"), on behalf of the Willamette Value
Fund, Willamette Small Cap Growth Fund, Willamette Global Health Sciences Fund
and Willamette Technology Fund (collectively, the "Predecessor Funds" and each
individually, a "Predecessor Fund"), and The Willamette Funds, a Delaware
business trust (the "Successor Trust" or "Trust"), on behalf of the Willamette
Value Fund, Willamette Small Cap Growth Fund, Willamette Global Health Sciences
Fund and Willamette Technology Fund (collectively, the "Successor Funds" and
each individually, a "Successor Fund").
All references in this Agreement to action taken by the Predecessor Funds
or the Successor Funds shall be deemed to refer to action taken by the
Predecessor Trust or the Successor Trust, respectively, on behalf of the
respective portfolio series.
This Agreement is intended to be and is adopted as plans of reorganization
within the meaning of Section 368(a) of the United States Internal Revenue Code
of 1986, as amended (the "Code"). The reorganization (the "Reorganization") will
consist of the transfer by each Predecessor Fund of all of its assets to the
corresponding Successor Fund, in exchange solely for shares of beneficial
interest in such Successor Fund ("New Shares") having a net asset value equal to
the net asset value of the corresponding Predecessor Fund, the assumption by
each Successor Fund of all the liabilities of the corresponding Predecessor
Fund, and the distribution of the New Shares to the shareholders of each
Predecessor Fund in complete liquidation of such Predecessor Fund as provided
herein, all upon the terms and conditions hereinafter set forth in this
Agreement.
WHEREAS, the Predecessor Trust and the Successor Trust are each open-end,
registered investment companies of the management type; and
WHEREAS, the Board of Trustees of the Predecessor Trust and the Board of
Trustees of the Successor Trust have determined that it is in the best interest
of the Predecessor Funds and the Successor Funds, respectively, that the assets
of the Predecessor Funds be acquired by the Successor Funds pursuant to this
Agreement and in accordance with the applicable statutes of the Commonwealth of
Massachusetts and the State of Delaware and that the interests of existing
shareholders will not be diluted as a result of this transaction;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
<PAGE>
1. PLAN OF REORGANIZATION
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Predecessor Trust
agrees to transfer all of the assets of each Predecessor Fund, as set forth in
paragraph 1.2, to the corresponding Successor Fund and the Successor Trust
agrees in exchange therefor: (i) to deliver to the Predecessor Trust a number of
full and fractional New Shares of each Successor Fund equal to the number of
shares of the corresponding Predecessor Fund as of the time and date set forth
in Article 2, and (ii) to assume all the liabilities of each Predecessor Fund,
as set forth in paragraph 1.2. Such transactions shall take place at the closing
provided for in paragraph 2.1 (the "Closing").
1.2 The assets of the Predecessor Funds to be acquired by the
corresponding Successor Funds shall consist of all property, including, without
limitation, all cash, securities, commodities and futures interests, and
dividends or interest receivable which are owned by the Predecessor Funds and
any deferred or prepaid expenses shown as an asset on the books of the
Predecessor Funds on the closing date provided in paragraph 2.1 (the "Closing
Date"). All liabilities, expenses, costs, charges and reserves of the
Predecessor Funds, to the extent that they exist at or after the Closing, shall
after the Closing attach to the corresponding Successor Funds and may be
enforced against the Successor Funds to the same extent as if the same had been
incurred by the Successor Fund.
1.3 Immediately upon delivery to the Predecessor Funds of the New Shares,
the Predecessor Funds, as the then sole shareholders of the Successor Funds,
shall (i) elect trustees of the Trust, (ii) approve an Investment Advisory
Agreement(s) between the Trust, on behalf of the Successor Funds and Willamette
Asset Managers, Inc. (the "Investment Manager"), (iii) in the case of the
Willamette Value Fund and Willamette Small Cap Growth Fund, approve a
Sub-Investment Advisory Agreement by and between the Investment Manager, on
behalf of such funds, and The Bank of New York, (iv) in the case of the
Willamette Technology Fund, approve a Sub-Investment Advisory Agreement by and
between Investment Manager, on behalf of such fund, and U.S. Bank National
Association (v) in the case of the Willamette Global Health Sciences Fund,
approve a Sub-Investment Advisory Agreement by and between the Investment
Manager, on behalf of such fund, and Credit Suisse Asset Management LLC, (vi)
approve the distribution plan(s) administered pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended ("1940 Act") with respect to each
Successor Fund, and (vii) ratify the selection of Ernst & Young LLP as the
independent accountants of the Successor Funds.
1.4 Immediately following the action contemplated by paragraph 1.3, the
Predecessor Funds will distribute pro rata to their respective shareholders of
record, determined as of immediately after the close of business on the Closing
Date (the "Current Shareholders"), the corresponding New Shares received by the
Predecessor Trust pursuant to paragraph 1.1. Such distribution and liquidation
will be accomplished by the transfer of the New Shares then credited to the
accounts of the
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Predecessor Funds on the books of the Successor Funds to open accounts on the
share records of the Successor Funds in the names of the Current Shareholders
and representing the respective pro rata number of the New Shares due such
shareholders. All issued and outstanding shares of the Predecessor Funds will
simultaneously be canceled on the books of the Predecessor Trust, although share
certificates representing interests in the Predecessor Trust will represent a
number of Successor Shares after the Closing Date as determined in accordance
with paragraph 2.2. The Successor Funds shall not issue certificates
representing the New Shares in connection with such exchange. Ownership of New
Shares will be shown on the books of the Successor Trust's transfer agent. As
soon as practicable after the Closing, the Predecessor Trust shall take all
steps necessary to effect a complete liquidation of the Predecessor Funds and
shall file such instruments, if any, as are necessary to effect the dissolution
of the Predecessor Trust and shall take all other steps necessary to effect such
dissolution.
2. CLOSING AND CLOSING DATE
2.1 The Closing Date shall be the next Monday that is a full business day
following satisfaction (or waiver as provided herein) of all of the conditions
set forth in Article 4 of this Agreement (other than those conditions which may
by their terms be satisfied only at the Closing), or such later date as the
parties may agree to in writing. All acts taking place at the Closing shall be
deemed to take place simultaneously as of immediately after the close of
business on the Closing Date unless otherwise agreed to by the parties. The
close of business on the Closing Date shall be as of 4:00 p.m. New York Time.
The Closing shall be held at the offices of the Successor Trust, 3435 Stelzer
Road, Columbus, Ohio 43219, or at such other time and/or place as the parties
may agree.
2.2 The Predecessor Trust shall cause BISYS Fund Services (the "Transfer
Agent"), transfer agent of the Predecessor Funds, to deliver at the Closing a
certificate of an authorized officer stating that its records contain the names
and addresses of the Current Shareholders and the number and percentage
ownership of outstanding shares of the Predecessor Funds owned by each such
shareholder immediately prior to the Closing. The Successor Funds shall issue
and deliver a confirmation evidencing the New Shares to be credited on the
Closing Date to the Secretary of the Predecessor Trust or provide evidence
satisfactory to the Predecessor Trust that such New Shares have been credited to
the accounts of the Predecessor Funds on the books of the Successor Funds. At
the Closing, each party shall deliver to the other such bills of sales, checks,
assignments, share certificates, if any, receipts or other documents as such
other party or its counsel may reasonably request.
3. REPRESENTATIONS AND WARRANTIES
3.1 The Predecessor Trust, on behalf of each Predecessor Fund, hereby
represents and warrants to the Successor Funds as follows:
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(i) the Predecessor Trust is duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts and has
full power and authority to conduct its business as presently conducted;
(ii) the Predecessor Trust has full power and authority to execute,
deliver and carry out the terms of this Agreement on behalf of each
Predecessor Fund;
(iii) the execution and delivery of this Agreement on behalf of each
Predecessor Fund and the consummation of the transactions contemplated
hereby are duly authorized and no other proceedings on the part of the
Predecessor Trust or the shareholders of the Predecessor Fund (other than
as contemplated in paragraph 4.1(vi) are necessary to authorize this
Agreement and the transactions contemplated hereby;
(iv) the Predecessor Trust is registered under the 1940 Act as an
open-end management investment company; such registration has not been
revoked or rescinded and is in full force and effect. The Predecessor
Funds are a separate series of the Predecessor Trust;
(v) there are no material liabilities of the Predecessor Funds
whether or not determined or determinable, other than liabilities
disclosed or provided for in the Funds' Financial Statements and
liabilities incurred in the ordinary course of business after the date of
such Financial Statements;
(vi) there are no claims, actions, suits or proceedings pending or,
to the knowledge of the Predecessor Trust, threatened which would
adversely affect the Predecessor Funds or its assets or business or which
would prevent or hinder consummation of the transactions contemplated
hereby or which upon such consummation would adversely affect the
Successor Fund;
(vii) this Agreement has been duly executed by the Predecessor Trust
on behalf of the Predecessor Funds and constitutes its valid and binding
obligation, enforceable in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium and other
rights affecting creditors' rights generally, and general equitable
principles;
(viii) neither the execution and delivery of this Agreement by the
Predecessor Trust on behalf of the Predecessor Funds, nor the consummation
by the Predecessor Trust on behalf of the Predecessor Funds of the
transactions contemplated hereby will conflict with, result in a breach or
violation of or constitute (or with notice, lapse of time or both) a
breach of or default under, the Declaration of Trust or By-Laws of the
Predecessor Trust, as each may be amended, or any statute, regulation,
order, judgment or decree, or any instrument, contract or other agreement
to which the Predecessor Trust is a party or by which the Predecessor
Trust or any of its assets is subject or bound;
(ix) as of the Effective Time of the Reorganization, all federal and
other tax returns and reports of the Predecessor Funds required by law to
have been filed shall
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have been filed, and all taxes of the Predecessor Funds shall have been
paid so far as due, or provision shall have been made for the payment
thereof, and to the best of the Predecessor Trust's knowledge, no such
return is currently under audit and no assessment has been asserted with
respect to any of such returns. The Funds have qualified and elected, and
continue to qualify, to be treated as regulated investment companies under
the provisions of Subchapter M of the Code; and
(x) no authorization, consent or approval of any governmental or
other public body or authority or any other party is necessary for the
execution and delivery of this Agreement by the Predecessor Trust on
behalf of the Predecessor Funds or the consummation of any transactions
contemplated hereby by the Predecessor Trust, other than as shall be
obtained at or prior to the Closing.
3.2 The Successor Trust, on behalf of each of the Successor Funds, hereby
represents and warrants to the Predecessor Funds as follows:
(i) the Successor Trust is duly organized, validly existing and in
good standing under the laws of the State of Delaware and has full power
and authority to conduct its business as presently conducted;
(ii) the Successor Trust has full power and authority to execute,
deliver and carry out the terms of this Agreement on behalf of the
Successor Funds;
(iii) the execution and delivery of this Agreement on behalf of the
Successor Funds and the consummation of the transactions contemplated
hereby are duly authorized and no other proceedings on the part of the
Successor Trust or the shareholders of the Successor Funds are necessary
to authorize this Agreement and the transactions contemplated hereby;
(iv) the Successor Trust is (or will be before the Effective Time of
the Reorganization) registered under the 1940 Act as an open-end
management investment company; such registration has not been revoked or
rescinded and is in full force and effect;
(v) the Successor Trust's New Shares to be issued in connection with
the Reorganization have been duly authorized and upon consummation of the
Reorganization will be validly issued, fully paid and nonassessable.
Except for the share issued pursuant to Article 1 above, there shall be no
issued and outstanding New Shares or any other securities issued by the
Successor Fund before the Effective Time of the Reorganization;
(vi) there are no liabilities of the Successor Trust, whether or not
determined or determinable, other than liabilities incurred in the
ordinary course of business or otherwise previously disclosed to the
Predecessor Funds in writing. There are no liabilities of the Successor
Trust of any kind for which the holders of the Old Shares shall
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<PAGE>
become responsible as the result of this Agreement or the consummation of
the transactions contemplated hereby or otherwise;
(vii) there are no claims, actions, suits or proceedings pending or,
to the knowledge of the Successor Trust, threatened which would adversely
affect the Successor Trust or its assets or business or which would
prevent or hinder consummation of the transactions contemplated hereby or
which upon such consummation would adversely affect the Successor Fund;
(viii) this Agreement has been duly executed by the Successor Trust
on behalf of the Successor Funds and constitutes its valid and binding
obligation, enforceable in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium and other
rights affecting creditors' rights generally, and general equitable
principles;
(ix) neither the execution and delivery of this Agreement by the
Successor Trust on behalf of the Successor Funds, nor the consummation by
the Successor Trust on behalf of the Successor Funds of the transactions
contemplated hereby will conflict with, result in a breach or violation of
or constitute (or with notice, lapse of time or both constitute) a breach
of or default under, the Declaration of Trust or By-Laws of the Successor
Trust, as each may be amended, or any statute, regulation, order, judgment
or decree, or any instrument, contract or other agreement to which the
Successor Trust is a party or by which the Successor Trust or any of its
assets is subject or bound;
(x) as of the Effective Time of the Reorganization, all federal and
other tax returns and reports of the Successor Trust required by law to
have been filed shall have been filed, and all taxes shall have been paid
so far as due, or provision shall have been made for the payment thereof,
and to the best of the Successor Trust's knowledge, no such return is
currently under audit and no assessment has been asserted with respect to
any of such returns;
(xi) no authorization, consent or approval of any governmental or
other public body or authority or any other party is necessary for the
execution and delivery of this Agreement by the Successor Trust on behalf
of the Successor Funds or the consummation of any transactions
contemplated hereby by the Successor Trust, other than as shall be
obtained at or prior to the Closing.
(xii) before the Effective Time of the Reorganization, the Successor
Trust will take all steps necessary to cause the formation of the four (4)
Successor Funds. The Successor Funds will have the same investment
objective and policies, and the same investment adviser as the Predecessor
Funds.
(xiii) All information contained in the proxy statement to be
supplied to shareholders of the Predecessor Funds in connection with the
Reorganization that relates to the Predecessor Trust, the New Funds,
Investment Manager, the agreements between the Investment Manager and
sub-advisers, the agreements between the Successor Trust
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and other service providers, the effects, tax and otherwise, of the
Reorganization on Fund shareholders and other matters known primarily to
Successor Trust or the Investment Manager (i) is true and correct in all
material respects and (ii) does not contain (and will not contain at the
time the proxy statement is mailed to Fund shareholders) any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
4. CONDITIONS PRECEDENT
4.1 The obligations of the Predecessor Trust on behalf of the Predecessor
Funds and the Successor Trust on behalf of the Successor Funds to effectuate the
Reorganization shall be subject to the satisfaction of the following conditions:
(i) Such authority from the Securities and Exchange Commission (the
"SEC") and state securities commissions as may be necessary to permit the
parties to carry out the transactions contemplated by this Agreement shall
have been received.
(ii) The Registration Statement of the Successor Trust with respect
to the Successor Funds shall have been filed with the SEC and shall have
become effective, and no stop-order suspending the effectiveness of the
Registration Statement or amendment thereto shall have been issued, and no
proceeding for that purpose shall have been initiated or threatened by the
SEC (and not withdrawn or terminated).
(iii) The applicable New Shares shall have been duly qualified for
offering to the public in all states in which such qualification is
required for consummation of the transactions contemplated hereunder;
(iv) All representations and warranties of the Predecessor Trust on
behalf of the Predecessor Funds contained in this Agreement shall be true
and correct in all material respects as of the date hereof and as of the
Closing, with the same force and effect as if then made, and the Successor
Trust on behalf of the Successor Funds shall have received a certificate
of an officer of the Predecessor Trust acting on behalf of the Predecessor
Funds to that effect in form and substance reasonably satisfactory to the
Successor Trust on behalf of the Successor Funds;
(v) All representations and warranties of the Successor Trust on
behalf of the Successor Funds contained in this Agreement shall be true
and correct in all material respects as of the date hereof and as of the
Closing, with the same force and effect as if then made, and the
Predecessor Trust on behalf of the Predecessor Funds shall have received a
certificate of an officer of the Successor Trust acting on behalf of the
Successor Funds to that effect in form and substance reasonably
satisfactory to the Predecessor Trust on behalf of the Predecessor Funds;
(vi) The Predecessor Trust on behalf of the Predecessor Funds and
the Successor Trust on behalf of the Successor Funds shall have received
opinions from
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<PAGE>
counsel, Dechert, regarding certain tax matters in connection with the
Reorganization; and
(vii) A vote approving this Agreement shall have been adopted by at
least a majority of the outstanding shares of each Predecessor Fund
entitled to vote at a special meeting of shareholders of each such
Predecessor Fund duly called for such purpose (the "Special Meeting").
5. BROKERAGE FEES AND EXPENSES
5.1 The Successor Trust and the Predecessor Trust each represents and
warrants to the other that there are no brokers or finders entitled to receive
any payments in connection with the transactions provided for herein.
5.2 All of the expenses and costs of the Reorganization and the
transactions contemplated thereby shall be borne by the Investment Manager.
6. ENTIRE AGREEMENT
The Successor Trust and the Predecessor Trust agree that neither party has
made any representation, warranty or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties.
7. TERMINATION
This Agreement and the transactions contemplated hereby may be terminated
and abandoned by either party by resolution of the party's Board of Trustees, at
any time prior to the Closing Date, if circumstances should develop that, in the
opinion of such Board, make proceeding with the Agreement inadvisable. In the
event of any such termination, there shall be no liability for damages on the
part of either the Successor Trust or the Predecessor Trust, or their respective
Trustees or officers, to the other party.
8. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the
Predecessor Trust and the Successor Trust; provided, however, that following the
meeting of the Current Shareholders called by the Predecessor Trust pursuant to
paragraph 4.1(vi) of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of New Shares to be issued to
the Current Shareholders under this Agreement to the detriment of such
shareholders without their further approval.
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<PAGE>
9. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the parties hereto at their
principal place of business.
10. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
10.1 The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.2 This Agreement may be executed in any number of counterparts each of
which shall be deemed an original.
10.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
10.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
10.5 It is expressly agreed that the obligations of the Predecessor Trust
hereunder shall not be binding upon any of the trustees, shareholders, nominees,
officers, agents, or employees of the Predecessor Trust personally, but shall
bind only the trust property of the Predecessor Trust, as provided in the
Declaration of Trust of the Predecessor Trust. The execution and delivery by
such officers of the Predecessor Trust shall not be deemed to have been made by
any of them individually or to impose any liability on any of them personally,
but shall bind only the trust property of the Predecessor Trust as provided in
the Declaration of Trust of the Predecessor Trust. The Predecessor Trust is a
series company with multiple series, Willamette Value Fund, Willamette Small Cap
Growth Fund, Willamette Global Health Sciences Fund and Willamette Technology
Fund and has entered into this Agreement on behalf of the Predecessor Funds.
With respect to any obligation of the Predecessor Trust arising hereunder, the
Successor Trust and the Successor Funds shall look for payment or satisfaction
of such obligations solely to the assets and property of the corresponding
Predecessor Funds.
10.6 It is expressly agreed that the obligations of the Successor Trust
hereunder shall not be binding upon any of the trustees, shareholders, nominees,
officers, agents or employees of the Successor Trust personally, but shall bind
only the trust property of the
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<PAGE>
Successor Trust, as provided in the Declaration of Trust of the Successor Trust.
The execution and delivery by such officers of the Successor Trust shall not be
deemed to have been made by any of them individually or to impose any liability
on any of them personally, but shall bind only the trust property of the
Successor Trust as provided in the Declaration of Trust of the Successor Trust.
The Successor Trust is a series company with multiple series, Willamette Value
Fund, Willamette Small Cap Growth Fund, Willamette Global Health Sciences Fund
and Willamette Technology Fund and has entered into this Agreement on behalf of
the Successor Funds. With respect to any obligation of the Successor Trust
arising hereunder, the Predecessor Funds and the Predecessor Trust shall look
for payment or satisfaction of such obligations solely to the assets and
property of the corresponding Successor Funds.
10.7 The sole remedy of a party hereto for a breach of any
representation or warranty made in this Agreement by the other party shall be an
election by the non-breaching party not to complete the transactions
contemplated herein.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President.
ATTEST THE COVENTRY GROUP,
a Massachusetts business trust
By: _____________________________ By: _______________________________
Name: Name:
Title: Title:
ATTEST THE WILLAMETTE FUNDS,
a Delaware business trust
By: ______________________________ By: _______________________________
Name: Name:
Title: Title:
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<PAGE>
THE COVENTRY GROUP
3435 STELZER ROAD
COLUMBUS, OHIO 43219
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
MARCH 16, 2001
WILLAMETTE VALUE FUND
PROXY
The undersigned shareholder of Willamette Value Fund (the "Fund"), a
series of The Coventry Group (the "Trust"), revoking any and all previous
proxies heretofore given for shares of the Trust held by the undersigned, hereby
constitutes and , and each of them, proxies and attorneys of the undersigned,
with power of substitution to each, for and in the name of the undersigned to
vote and act upon all matters (unless and except as expressly limited below) at
the Special Meeting of Shareholders of the Fund to be held on March 16, 2001 at
the offices of the Trust, 3435 Stelzer Road, Columbus, Ohio, and at any and all
adjournments thereof, with respect to all shares of the Fund for which the
undersigned is entitled to provide instructions or with respect to which the
undersigned would be entitled to provide instructions or act with all the powers
the undersigned would possess if personally present and to vote with respect to
specific matters as set forth below. Any proxies heretofore given by the
undersigned with respect to said meeting are hereby revised.
To avoid the expense of adjourning the meeting to a subsequent date,
please return this proxy in the enclosed self-addressed, postage-paid envelope.
In the alternative, you may vote by telephone by calling toll-free 1(877)
945-3863 and following the recorded instructions. Prompt voting by shareholders
will avoid the costs associated with further solicitation.
This proxy, if properly executed, will be voted in the manner as directed
herein by the undersigned shareholder. Unless otherwise specified in the squares
provided, the undersigned's vote will be cast "FOR" each Proposal. If no
direction is made for any Proposals, this proxy will be voted "FOR" any and all
such Proposals.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE TRUST WHICH RECOMMENDS A VOTE "FOR" THE PROPOSALS
VOTE ON PROPOSALS BELOW:
<PAGE>
PROPOSAL 1:
1. To approve a proposed Agreement and Plan of Reorganization and the
transactions contemplated thereby, which include: (a) the transfer of
all assets of the Fund to a newly formed series also called Willamette
Technology Fund (the "New Fund") of The Willamette Funds, a Delaware
business trust (the "New Trust"), in exchange for shares of the New
Fund, and the assumption by the New Fund of liabilities of the Fund;
and (b) the distribution to Fund shareholders of such New Fund's
shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL 2:
2. To approve a proposal to permit the New Trust and Willamette Asset
Managers, Inc., to enter into and materially amend Sub-Investment
Advisory Agreements without obtaining the approval of shareholders.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please date and sign exactly as the name or names appear on your shareholder
account statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder must sign.
---------------------------------
Signature
---------------------------------
Title (If applicable)
---------------------------------
Signature (if held jointly)
---------------------------------
Title (if applicable)
<PAGE>
THE COVENTRY GROUP
3435 STELZER ROAD
COLUMBUS, OHIO 43219
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
MARCH 16, 2001
WILLAMETTE SMALL CAP GROWTH FUND
PROXY
The undersigned shareholder of Willamette Small Cap Growth Fund (the
"Fund"), a series of The Coventry Group (the "Trust"), revoking any and all
previous proxies heretofore given for shares of the Trust held by the
undersigned, hereby constitutes and , and each of them, proxies and attorneys of
the undersigned, with power of substitution to each, for and in the name of the
undersigned to vote and act upon all matters (unless and except as expressly
limited below) at the Special Meeting of Shareholders of the Fund to be held on
March 16, 2001 at the offices of the Trust, 3435 Stelzer Road, Columbus, Ohio,
and at any and all adjournments thereof, with respect to all shares of the Fund
for which the undersigned is entitled to provide instructions or with respect to
which the undersigned would be entitled to provide instructions or act with all
the powers the undersigned would possess if personally present and to vote with
respect to specific matters as set forth below. Any proxies heretofore given by
the undersigned with respect to said meeting are hereby revised.
To avoid the expense of adjourning the meeting to a subsequent date,
please return this proxy in the enclosed self-addressed, postage-paid envelope.
In the alternative, you may vote by telephone by calling toll-free 1(877)
945-3863 and following the recorded instructions. Prompt voting by shareholders
will avoid the costs associated with further solicitation.
This proxy, if properly executed, will be voted in the manner as directed
herein by the undersigned shareholder. Unless otherwise specified in the squares
provided, the undersigned's vote will be cast "FOR" each Proposal. If no
direction is made for any Proposals, this proxy will be voted "FOR" any and all
such Proposals.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE TRUST WHICH RECOMMENDS A VOTE "FOR" THE PROPOSALS
VOTE ON PROPOSALS BELOW:
<PAGE>
PROPOSAL 1:
1. To approve a proposed Agreement and Plan of Reorganization and the
transactions contemplated thereby, which include: (a) the transfer of
all assets of the Fund to a newly formed series also called Willamette
Technology Fund (the "New Fund") of The Willamette Funds, a Delaware
business trust (the "New Trust"), in exchange for shares of the New
Fund, and the assumption by the New Fund of liabilities of the Fund;
and (b) the distribution to Fund shareholders of such New Fund's
shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL 2:
2. To approve a proposal to permit the New Trust and Willamette Asset
Managers, Inc., to enter into and materially amend Sub-Investment
Advisory Agreements without obtaining the approval of shareholders.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please date and sign exactly as the name or names appear on your shareholder
account statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder must sign.
---------------------------------
Signature
---------------------------------
Title (If applicable)
---------------------------------
Signature (if held jointly)
---------------------------------
Title (if applicable)
<PAGE>
THE COVENTRY GROUP
3435 STELZER ROAD
COLUMBUS, OHIO 43219
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
MARCH 16, 2001
WILLAMETTE GLOBAL HEALTH SCIENCES FUND
PROXY
The undersigned shareholder of Willamette Global Health Sciences Fund (the
"Fund"), a series of The Coventry Group (the "Trust"), revoking any and all
previous proxies heretofore given for shares of the Trust held by the
undersigned, hereby constitutes and , and each of them, proxies and attorneys of
the undersigned, with power of substitution to each, for and in the name of the
undersigned to vote and act upon all matters (unless and except as expressly
limited below) at the Special Meeting of Shareholders of the Fund to be held on
March 16, 2001 at the offices of the Trust, 3435 Stelzer Road, Columbus, Ohio,
and at any and all adjournments thereof, with respect to all shares of the Fund
for which the undersigned is entitled to provide instructions or with respect to
which the undersigned would be entitled to provide instructions or act with all
the powers the undersigned would possess if personally present and to vote with
respect to specific matters as set forth below. Any proxies heretofore given by
the undersigned with respect to said meeting are hereby revised.
To avoid the expense of adjourning the meeting to a subsequent date,
please return this proxy in the enclosed self-addressed, postage-paid envelope.
In the alternative, you may vote by telephone by calling toll-free 1(877)
945-3863 and following the recorded instructions. Prompt voting by shareholders
will avoid the costs associated with further solicitation.
This proxy, if properly executed, will be voted in the manner as directed
herein by the undersigned shareholder. Unless otherwise specified in the squares
provided, the undersigned's vote will be cast "FOR" each Proposal. If no
direction is made for any Proposals, this proxy will be voted "FOR" any and all
such Proposals.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE TRUST WHICH RECOMMENDS A VOTE "FOR" THE PROPOSALS
VOTE ON PROPOSALS BELOW:
<PAGE>
PROPOSAL 1:
1. To approve a proposed Agreement and Plan of Reorganization and the
transactions contemplated thereby, which include: (a) the transfer of
all assets of the Fund to a newly formed series also called Willamette
Technology Fund (the "New Fund") of The Willamette Funds, a Delaware
business trust (the "New Trust"), in exchange for shares of the New
Fund, and the assumption by the New Fund of liabilities of the Fund;
and (b) the distribution to Fund shareholders of such New Fund's
shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL 2:
2. To approve a proposal to permit the New Trust and Willamette Asset
Managers, Inc., to enter into and materially amend Sub-Investment
Advisory Agreements without obtaining the approval of shareholders.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please date and sign exactly as the name or names appear on your shareholder
account statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder must sign.
---------------------------------
Signature
---------------------------------
Title (If applicable)
---------------------------------
Signature (if held jointly)
---------------------------------
Title (if applicable)
<PAGE>
THE COVENTRY GROUP
3435 STELZER ROAD
COLUMBUS, OHIO 43219
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
MARCH 16, 2001
WILLAMETTE TECHNOLOGY FUND
PROXY
The undersigned shareholder of Willamette Technology Fund (the "Fund"), a
series of The Coventry Group (the "Trust"), revoking any and all previous
proxies heretofore given for shares of the Trust held by the undersigned, hereby
constitutes and , and each of them, proxies and attorneys of the undersigned,
with power of substitution to each, for and in the name of the undersigned to
vote and act upon all matters (unless and except as expressly limited below) at
the Special Meeting of Shareholders of the Fund to be held on March 16, 2001 at
the offices of the Trust, 3435 Stelzer Road, Columbus, Ohio, and at any and all
adjournments thereof, with respect to all shares of the Fund for which the
undersigned is entitled to provide instructions or with respect to which the
undersigned would be entitled to provide instructions or act with all the powers
the undersigned would possess if personally present and to vote with respect to
specific matters as set forth below. Any proxies heretofore given by the
undersigned with respect to said meeting are hereby revised.
To avoid the expense of adjourning the meeting to a subsequent date,
please return this proxy in the enclosed self-addressed, postage-paid envelope.
In the alternative, you may vote by telephone by calling toll-free 1(877)
945-3863 and following the recorded instructions. Prompt voting by shareholders
will avoid the costs associated with further solicitation.
This proxy, if properly executed, will be voted in the manner as directed
herein by the undersigned shareholder. Unless otherwise specified in the squares
provided, the undersigned's vote will be cast "FOR" each Proposal. If no
direction is made for any Proposals, this proxy will be voted "FOR" any and all
such Proposals.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE TRUST WHICH RECOMMENDS A VOTE "FOR" THE PROPOSALS
VOTE ON PROPOSALS BELOW:
<PAGE>
PROPOSAL 1:
1. To approve a proposed Agreement and Plan of Reorganization and the
transactions contemplated thereby, which include: (a) the transfer of
all assets of the Fund to a newly formed series also called Willamette
Technology Fund (the "New Fund") of The Willamette Funds, a Delaware
business trust (the "New Trust"), in exchange for shares of the New
Fund, and the assumption by the New Fund of liabilities of the Fund;
and (b) the distribution to Fund shareholders of such New Fund's
shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL 2:
2. To approve a proposal to permit the New Trust and Willamette Asset
Managers, Inc., to enter into and materially amend Sub-Investment
Advisory Agreements without obtaining the approval of shareholders.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please date and sign exactly as the name or names appear on your shareholder
account statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder must sign.
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Signature
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Title (If applicable)
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Signature (if held jointly)
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Title (if applicable)
