EXHIBIT (d)(1)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of July, 2002, between The Coventry Group
(the "Trust"), a Massachusetts business trust having its principal place of
business in Columbus, Ohio, and Signal Capital Management, Inc. (the "Investment
Adviser"), an investment adviser having its principal place of business in
Evansville, Indiana.
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Investment Adviser to furnish
investment advisory and administrative services to certain investment portfolios
of the Trust and may retain the Investment Adviser to serve in such capacity
with respect to certain additional investment portfolios of the Trust, all as
now or hereafter may be identified in Schedule A hereto as such Schedule may be
amended from time to time (individually referred to herein as a "Fund" and
collectively referred to herein as the "Funds") and the Investment Adviser
represents that it is willing and possesses legal authority to so furnish such
services without violation of applicable laws and regulations;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Investment Adviser to act as
investment adviser to the Funds for the period and on the terms set
forth in this Agreement. The Investment Adviser accepts such appointment
and agrees to furnish the services herein set forth for the compensation
herein provided. Additional investment portfolios may from time to time
be added to those covered by this Agreement by the parties executing a
new Schedule A which shall become effective upon its execution and shall
supersede any Schedule A having an earlier date.
2. Delivery of Documents. The Trust has furnished the Investment Adviser
with copies properly certified or authenticated of each of the
following:
(a) the Trust's Declaration of Trust, dated January 8, 1992, and
filed with the Secretary of State of Massachusetts on January 8,
1992, and any and all amendments thereto or restatements thereof
(such Declaration, as presently in effect and as it shall from
time to time be amended or restated, is herein called the
"Declaration of Trust");
(b) the Trust's By-Laws and any amendments thereto;
(c) resolutions of the Trust's Board of Trustees authorizing the
appointment of the Investment Adviser and approving this
Agreement;
(d) the Trust's Notification of Registration on Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission
(the "Commission") on January 8, 1992, and all amendments
thereto;
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(e) the Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act"), and under
the 1940 Act as filed with the Commission and all amendments
thereto; and
(f) the most recent Prospectus and Statement of Additional
Information of each of the Funds (such Prospectus and Statement
of Additional Information, as presently in effect, and all
amendments and supplements thereto, are herein collectively
called the "Prospectus").
The Trust will furnish the Investment Adviser from time to time with copies of
all amendments of or supplements to the foregoing.
3. Management. Subject to the supervision of the Trust's Board of Trustees,
the Investment Adviser will provide a continuous investment program for
the Funds, including investment research and management with respect to
all securities and investments and cash equivalents in the Funds. The
Investment Adviser will determine from time to time what securities and
other investments will be purchased, retained or sold by the Trust with
respect to the Funds. The Investment Adviser will provide the services
under this Agreement in accordance with each of the Fund's investment
objectives, policies, and restrictions as stated in the Prospectus and
resolutions of the Trust's Board of Trustees. The Investment Adviser
further agrees that it:
(a) will use the same skill and care in providing such services as
it uses in providing services to its other accounts for which it
has investment responsibilities;
(b) will conform with all applicable Rules and Regulations of the
Commission under the 1940 Act and in addition will conduct its
activities under this Agreement in accordance with any
applicable regulations of any governmental authority pertaining
to the investment advisory activities of the Investment Adviser;
(c) will place or cause to be placed orders for the Funds either
directly with the issuer or with any broker or dealer. In
placing orders with brokers and dealers, the Investment Adviser
will attempt to obtain prompt execution of orders in an
effective manner at the most favorable price. Consistent with
this obligation and to the extent permitted by the 1940 Act,
when the execution and price offered by two or more brokers or
dealers are comparable, the Investment Adviser may, in its
discretion, purchase and sell portfolio securities to and from
brokers and dealers who provide the Investment Adviser with
research advice and other services. In no instance will
portfolio securities be purchased from or sold to BISYS, Inc.,
the Investment Adviser, or any affiliated person of the Trust,
BISYS Inc. or the Investment Adviser, except to the extent
permitted by the 1940 Act and the Commission;
(d) will maintain all books and records with respect to the
securities transactions of the Funds and will furnish the
Trust's Board of Trustees with such periodic and special reports
as the Board may request; and
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(e) will treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust
and the Funds and prior, present, or potential shareholders, and
will not use such records and information for any purpose other
than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by
the Trust, which approval shall not be unreasonably withheld and
may not be withheld where the Investment Adviser may be exposed
to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted
authorities, or when so requested by the Trust.
The Investment Adviser may, subject to the approval of the Trust's Board
of Trustees, appoint a sub-adviser to provide the services contemplated
hereunder, provided, however, that the Investment Adviser shall not be
relieved of any of its obligations under this Agreement by the
appointment of such sub-adviser and provided further, that the
Investment Adviser shall be responsible, to the extent provided in
Section 8 hereof for all acts of such sub-adviser as if such acts were
its own.
4. Services Not Exclusive. The investment management services furnished by
the Investment Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser shall be free to furnish similar services to others
so long as its services under this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Adviser hereby agrees that all
records which it maintains for the Funds are the property of the Trust
and further agrees to surrender promptly to the Trust any of such
records upon the Trust's request. The Investment Adviser further agrees
to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31 a-1 under the 1940 Act.
6. Expenses. During the term of this Agreement, the Investment Adviser will
pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Funds.
7. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, each of the Funds will pay the Investment
Adviser and the Investment Adviser will accept as full compensation
therefor a fee as set forth on Schedule A hereto. The obligation of each
Fund to pay the above-described fee to the Investment Adviser will begin
as of the date of the initial public sale of shares in such Fund. The
fee attributable to each Fund shall be the obligation of that Fund and
not of any other Fund.
8. Limitation of Liability. The Investment Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the
Funds in connection with the performance of this Agreement, except a
loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Investment
Adviser in the performance of its duties or from reckless disregard by
it of its obligations and duties under this Agreement.
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9. Duration and Termination. This Agreement will become effective with
respect to each Fund listed on Schedule A as of the date first written
above (or, if a particular Fund is not in existence on that date, on the
date a registration statement relating to that Fund becomes effective
with the Commission), provided that it shall have been approved by vote
of a majority of the outstanding voting securities of such Fund, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect until June 30,
2004. Thereafter, if not terminated, this Agreement shall continue in
effect as to a particular Fund for successive one-year terms, provided
that such continuance is specifically approved at least annually (a) by
the vote of a majority of those members of the Trust's Board of Trustees
who are not parties to this Agreement or interested persons of any party
to this Agreement, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the vote of a majority of the
Trust's Board of Trustees or by the vote of a majority of all votes
attributable to the outstanding shares of such Fund. Notwithstanding the
foregoing, this Agreement may be terminated as to a particular Fund at
any time on sixty days' written notice, without the payment of any
penalty, by the Trust (by vote of the Trust's Board of Trustees or by
vote of a majority of the outstanding voting securities of such Fund) or
by the Investment Adviser. This Agreement will immediately terminate in
the event of its assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities", "interested persons"
and "assignment" shall have the same meanings as ascribed to such terms
in the 1940 Act.)
10. Investment Adviser's Representations. The Investment Adviser hereby
represents and warrants that it is willing and possesses all requisite
legal authority to provide the services contemplated by this Agreement
without violation of applicable law and regulations.
11. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought.
12. Governing Law. This Agreement shall be governed by and its provisions
shall be construed in accordance with the laws of the Commonwealth of
Massachusetts.
13. Miscellaneous. The names "The Coventry Group" and "Trustees of The
Coventry Group" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from
time to time under an Agreement and Declaration of Trust dated as of
January 8, 1992 to which reference is hereby made and a copy of which is
on file at the office of the Secretary of State of The Commonwealth of
Massachusetts and elsewhere as required by law, and to any and all
amendments thereto so filed or hereafter filed. The obligations of "The
Coventry Group" entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not individually, but
in such capacities, and are not binding upon any of the Trustees,
shareholders or representatives of the Trust personally, but bind only
the assets of the Trust and all persons dealing with any series of
shares of the Trust must look solely to the
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assets of the Trust belonging to such series for the enforcement of any
claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
THE COVENTRY GROUP
By:
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Name:
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Title:
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SIGNAL CAPITAL MANAGEMENT, INC.
By:
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Name:
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Title:
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Dated: July 1, 2002
Schedule A
to the
Investment Advisory Agreement
between The Coventry Group and
Signal Capital Management, Inc.
Name of Fund Compensation*
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Signal Large Cap Growth Fund Annual rate of seventy five-one
hundredths of one percent (0.75%)
of the average daily net assets of
such Fund.
Signal Tax-Exempt Income Fund Annual rate of fifty-one hundredths
of one percent (0.50%) of the
average daily net assets of such
Fund.
Signal Income Fund Annual rate of fifty-one hundredths
of one percent (0.50%) of the
average daily net assets of such
Fund.
Signal Money Market Fund Annual rate of ten-one hundredths
of one percent (0.10%) of the
average daily net assets of such
Fund.
Signal Tax-Exempt Money Market Fund Annual rate of ten-one hundredths
of one percent (0.10%) of the
average daily net assets of such
Fund.
THE COVENTRY GROUP
By:
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Name:
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Title:
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SIGNAL CAPITAL MANAGEMENT, INC.
By:
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Name:
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Title:
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* All fees are computed daily and paid monthly.
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