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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
ENTERPRISE GROUP OF FUNDS, INC
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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THE ENTERPRISE GROUP OF FUNDS, INC.
Atlanta Financial Center
3343 Peachtree Road, NE, Suite 450, Atlanta, Georgia 30326
Dear Managed Portfolio Shareholders:
Enclosed is a notice of Special Meeting of Shareholders of the Managed
Portfolio of The Enterprise Group of Funds, Inc. (the "Fund") to be held at
the offices of the Fund, 3343 Peachtree Road, NE, Suite 450, Atlanta Georgia on
March 29, 1996, at 2:00 pm (the "Meeting"). At the Meeting, shareholders of
the Managed Portfolio will be asked to approve a new sub-advisory agreement
with OpCap Advisors ("OpCap"). formerly known as Quest For Value Advisors,
Portfolio Manager of the Managed Portfolio.
The Meeting has accordingly been called for the specific purpose of
approving the new sub-advisory agreement. The new agreement embodies exactly
the same terms with a fee reduction to the Portfolio Manager on assets under
management in excess of $100,000,000. There will be no impact to the overall
fee advisory fee paid by the shareholders.
The Fund's Board of Directors has approved the New Agreement and
recommends that the shareholders of the Managed Portfolio approved the New
Agreement.
You are cordially invited to attend the Meeting. Since it is
important that your vote be represented whether or not you are able to attend,
you are urged to complete, date, sign and return the enclosed proxy card in the
accompanying return envelope at your earliest convenience. Of course, we hope
that you will be able to attend the Meeting, and if you wish, you may vote your
shares in person, even though you may have already returned a proxy. Please
respond promptly in order to save additional costs of proxy solicitation in
order to make sure you are represented.
Sincerely,
VICTOR UGOLYN
Chairman of the Board,
Chief Executive Officer and President
The Enterprise Group of Funds, Inc.
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ENTERPRISE GROUP OF FUNDS, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 29, 1996
TO THE SHAREHOLDERS:
Notice is hereby given that a special meeting of shareholders (the
"Meeting") of ENTERPRISE GROUP OF FUNDS, INC., (the "Fund"), will be held at
the offices of the Fund, 3343 Peachtree Road, NE, Atlanta, Georgia 30326, on
March 29, 1996 at 2:00 p.m., Eastern Standard Time, for the following purposes:
1. To approve or disapprove a new Portfolio Manager's
Agreement among the Fund; Enterprise Capital Management, Inc., and
OpCap Advisors (formerly known as Quest for Value Advisors) for the
Managed Portfolio.
2. To act upon such other matters as properly may come before
the Meeting or any adjournment or adjournments thereof.
The close of business of January 23, 1996 has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the Meeting and any adjournments thereof. Your attention is called to the
accompanying Proxy Statement. Regardless of whether you plan to attend the
Meeting. PLEASE COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD.
If you are present at the Meeting, you may change your vote, if desired, at
that time.
CATHERINE R. MC CLELLAN
Secretary
Atlanta, Georgia
February 19, 1996
Please fill in, date, sign and return the enclosed proxy/proxies in
the enclosed postage prepaid envelope so that you may be sure that your shares
will be represented at the meeting.
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THE MANAGED PORTFOLIO
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
Atlanta Financial Center
3343 Peachtree Road, NE, Suite 450, Atlanta, Georgia 30326
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 29, 1996
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of The Enterprise Group of Funds, Inc.
(hereinafter called the "Fund"), to be used at a special meeting of
shareholders (the "Meeting") of they Managed Portfolio of the Fund and any
adjournment or adjournments thereof, to be held at 3343 Peachtree Road, NE,
Suite 450, Atlanta, Georgia on March 29, 1996 at 10:00 a.m., Eastern Time, for
the purposes set forth in the accompanying Notice of Special Meeting of
Shareholders. This proxy statement was first mailed to shareholders on or
about February 19, 1996.
The Board of Directors of the Fund has named Victor Ugolyn, Chairman
and President, Catherine R. McClellan, Secretary, and Herbert M. Williamson,
Treasurer, and each of them with power of substitution as attorneys and
proxies. Shareholders who execute proxies retain the right to revoke them at
any time before they are voted. Shareholders who execute proxies retain the
right to revoke then before they are voted. Shareholders may revoke proxies by
attendance at the Meeting and voting in person, by submission of a subsequent
proxy, or by giving written notice prior to the Meeting to the Fund at the
address shown above. Unless revoked, proxies will be voted, and will be voted
according to the specifications thereon. Unless otherwise specifically
instructed in the proxies, it is the intention of the persons named in the
proxy to vote all proxies received by them FOR the approval of the new
sub-advisory agreement with OpCap Advisors ("OpCap"), formerly Quest For Value
Advisors.
The cost of this proxy solicitation, which will be principally by mail
but also may be by telephone or personal interview conducted by regular
employees of the Fund or Enterprise Capital Management, Inc. ("Enterprise
Capital"), will be paid by Enterprise Capital. Banks, brokers and other
custodians will be requested to forward proxy soliciting material to their
customers where appropriate, and Enterprise Capital will reimburse such banks,
brokers and custodians for their reasonable out-of-pocket expenses in sending
the proxy materials to beneficial owners of the shares.
Only shareholders of record holding shares of Common Stock of the Managed
Portfolio (the "Shares") at the close of business on January 23, 1996 will be
entitled to vote at the Meeting. On such date, there were 14,875,892 shares
outstanding. Each shareholder is entitled to one vote for each full Share
held, and a proportionate vote for each fractional Share. Under Maryland law,
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shares owned by two or more persons (whether as joint tenants, co-fiduciaries
or otherwise) will be voted as follows (unless a court order providing to the
contrary has been filed with the Fund): (i) if only one votes, that vote will
bind all; (ii) if more than one votes, the vote of the majority will bind all;
and (iii) if more than one votes and the vote is evenly divided, the vote will
be cast proportionately.
A quorum for the transaction of business at the Meeting is constituted
by the presence in person or by proxy of holders of the majority of the
outstanding Shares of the Managed Portfolio entitled to vote at the Meeting.
If a proxy is properly executed and returned accompanied by instructions to
withhold authority ("non-vote") or is marked with an abstention, the Shares
represented thereby will be considered to be present at the meeting for
determining the existence of a quorum. Approval of the new sub-advisory
agreement with OpCap requires a vote of a majority of the outstanding voting
securities of the Managed Portfolio, which is defined as the vote of the lesser
of (i) 67% or more of the Outstanding Shares of the Managed Portfolio present
in person or by proxy at such meeting, if the holders of more than 50% of the
outstanding Shares of the Managed Portfolio are present or represented by
proxy, or (ii) more than 50% of the outstanding Shares of the Managed
Portfolio. Any Shares represented by a proxy that constitutes a non-vote or
abstention will have the same effect as a vote cast against the proposal.
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PROPOSAL NO. 1
APPROVAL OR DISAPPROVAL OF NEW PORTFOLIO MANAGER'S AGREEMENT
BETWEEN THE ADVISER AND THE OPCAP ADVISORS
BACKGROUND
GENERAL. The Meeting has been called for the purpose of considering a
new Portfolio Manager's Agreement for the Portfolio as a result of a proposed
reduction in the Portfolio Manager fee paid by Enterprise Capital to OpCap
Advisors, formerly Quest for Value Advisors, for services rendered to the
Managed Portfolio. Accordingly, shareholders are being asked to approve a
"new" Portfolio Manager's Agreement (the "New Portfolio Manager's Agreement")
embodying exactly the same terms with the reduced fees with the Portfolio
Manager. The Fund's Board of Directors has approved the New Portfolio
Manager's Agreement, subject to approval by the shareholders of the Portfolio.
The net effect of the fee reduction will not impact the overall fee charged to
shareholders of the Portfolio, and all services to the Portfolio by the
Portfolio Manager will remain the same.
EXISTING PORTFOLIO MANAGER'S AGREEMENT
OpCap Advisors currently serves as Portfolio Manager for the Portfolio
under an investment advisory agreement (the "Existing Portfolio Manager's
Agreement") dated September 26, 1994. The Board of Directors, including a
majority of the Directors who are not "interested persons" of the Fund or any
party to the Agreement, most recently approved continuation of the Existing
Portfolio Manager's Agreement on February 23, 1995. Under the Existing
Portfolio Manager's Agreement OpCap Advisors is entitled to receive adviser
fees at the annual rate of .40% of the average of the daily closing net asset
values of the Portfolio per year, paid monthly.
NEW PORTFOLIO MANAGER'S AGREEMENT
Except for a different fee schedule, the terms of the New Portfolio
Manager's Agreement are identical in all respects to the terms of the Existing
Portfolio Manager's Agreement. A form of the New Portfolio Manager's Agreement
is attached to this Proxy Statement as Exhibit A, and the description set forth
in this Proxy Statement of the New Portfolio Manager's Agreement is qualified
in its entirety by reference to Exhibit A.
Under the New Portfolio Manager's Agreement, the Portfolio Manager
will provide certain investment advisory services to the Portfolio, including
deciding what securities will be purchased and sold by the Portfolio, when such
purchases and sales are to be made, and arranging for such purchases and sales,
all in accordance with the provisions of the Investment Company Act of 1940, as
amended (the "Investment Company Act") and any rules thereunder, the governing
documents of the Fund, the fundamental policies of the Fund and Portfolio, as
reflected in its registration statement, and any policies and determinations of
the Board of Directors of the Fund.
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As compensation for its services to each of the Portfolio under the
New Portfolio Manager's Agreement, the Portfolio Manager will be entitled to
receive from Enterprise Capital fees calculated at the following rates based
upon average daily net assets: .40% for the first $100 million under
management per Portfolio and .30% thereafter. The New Portfolio Manager's
Agreement will continue in effect for two years from its effective date, and
will continue in effect thereafter for successive annual periods, provided its
continuance is specifically approved at least annually by (1) a majority vote,
cast in person at a meeting called for that purpose, of the Fund's Board of
Directors or (2) a vote of the holders of a majority (as defined in the
Investment Company Act and the rules thereunder) of the outstanding voting
securities of the Portfolio, and (3) in either event by a majority of the
Directors who are not parties to the New Portfolio Manager's Agreement or
interested persons of the Fund or of any such party. The New Portfolio
Manager's Agreement provides that it may be terminated at any time, without
penalty, by either party or by the Fund upon 60 days written notice, provided
that such termination by the Portfolio shall be directed or approved by a vote
of the Directors of the Fund, or by a vote of holders of a majority of the
shares of the Portfolio.
DIRECTORS' CONSIDERATION
The Board of Directors believes that the terms of the New Portfolio
Manager's Agreement are fair to, and in the best interests of, the Fund, the
Portfolio, and their shareholders. The Board of Directors, including all of
the non- interested Directors, recommends approval by the shareholders of the
New Agreement among OpCap Advisors, Enterprise Capital and the Portfolio. In
making this recommendation, the Directors carefully evaluated the experience of
the Portfolio Manager's key personnel in institutional investing, the quality
of services the Portfolio Manager is expected to provide to the Portfolio, and
the compensation proposed to be paid to the Portfolio Manager, and have given
careful consideration to all factors deemed to be relevant to the Portfolio,
including, but not limited to: (1) the fee and expense ratios of comparable
mutual funds; (2) the performance of the Portfolio since commencement of
operations; (3) the nature and quality of the services expected to be rendered
to the Portfolio by the Portfolio Manager; (4) that the terms of the Existing
Portfolio Manager's Agreement will be unchanged under the New Portfolio
Manager's Agreement except for the different fee; (5) the history, reputation,
qualification and background of the Portfolio Manager, as well as the
qualifications of its personnel and their respective financial conditions; and
(6) other factors deemed relevant.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE NEW PORTFOLIO MANAGER'S
AGREEMENT WITH OPCAP ADVISORS
INFORMATION ABOUT OPCAP ADVISORS
OpCap Advisors, formerly Quest For Value Advisors, is a general
partnership of which Oppenheimer Capital, an investment management firm, holds
a 99% interest and Oppenheimer Financial Corp. holds a 1% interest.
Oppenheimer Capital is a general partnership of which Oppenheimer Financial
Corp., a holding company, holds a 33.3% interest and Oppenheimer Capital L.P.,
a limited partnership of which Oppenheimer Financial Corp. is the sole general
partner, holds a 66.7% interest. Oppenheimer Capital L.P. acquired a 32.3%
interest in Oppenheimer Capital on July 9, 1987 for $99,032,000 in connection
with a public offering of units of limited partnership interest in Oppenheimer
Capital, L.P. (See Registration Statement No. 33-14364 and Amendments
thereto). Additional interests were acquired subsequently as a
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result of the issuance of units pursuant to the Restricted Unit and Restricted
Option Plans. An additional interest of 33.6% in Oppenheimer Capital was
acquired by Oppenheimer Capital, L.P. on April 23 and May 1, 1991 in connection
with a public offering of 6.6 million units of limited partnership interest in
Oppenheimer Capital, L.P. (see Registration Statement No. 33-39345 and
Amendments thereto). All such units were sold by Oppenheimer Financial Corp.,
which is owned by Oppenheimer Group, Inc. Oppenheimer & Co., L.P., an
investment limited partnership, owns 100% of the common stock of Oppenheimer
Group, Inc. Oppenheimer Capital and Oppenheimer Financial Corp. are general
partners of OCC Distributors, (formerly Quest for Value Distributors). The
location of all such entities is One World Financial Center, New York, New York
10281 and its executive offices have business addresses at that location.
Mr. Joseph M. La Motta is Chairman of OpCap Advisors and President of
Oppenheimer Capital, Executive Vice President of Oppenheimer & Co., Inc., and
Director and Executive Vice President of Oppenheimer Financial Corp.,
Oppenheimer Group, Inc., and Oppenheimer Holdings, Inc.
Mr. Bernard H. Garil serves as President and Chief Operating Officer
of OpCap Advisors and as Senior Vice President of Oppenheimer Capital.
Exhibit B to this Proxy Statement sets forth a list of the investment
companies for which OpCap Advisors acts as investment adviser, the size of such
investment companies and the compensation OpCap Advisors receives for such
services.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The current Portfolio Manager's Agreement contains provisions relating
to the selection of broker-dealers for the Fund's portfolio transactions. If
the Portfolio Manager's Agreement is approved by shareholders, OpCap Advisors,
pursuant to the Portfolio Manager's Agreement, will be responsible for
selection of broker-dealers and negotiation of commission rates for the Fund,
subject to the supervision of Enterprise Capital and the Board.
Portfolio decisions are based upon recommendations of OpCap Advisors
and the judgment of the Portfolio managers. OpCap Advisors' primary
consideration when executing security transactions with broker-dealers is to
obtain, and maintain the availability of, execution at the most favorable
prices and in the most effective manner possible. OpCap Advisors intends to
select Oppenheimer & Co., Inc. ("Opco"), an affiliate of OpCap Advisors, and
may select MONY Securities, an affiliate of MONY, to execute each Portfolio's
transactions. It is contemplated that Opco will act as the Fund's primary
broker. Sales of shares of the Fund, subject to applicable rules covering the
activities of the Fund's distributor in this area, will also be considered as a
factor in the direction of portfolio transactions to brokers and dealers, but
only in conformity with the price, execution and other considerations and
practices discussed above.
The Fund may execute brokerage transactions through Opco or MONY
Securities Corp. acting as agent in accordance with procedures established by
the Board, but will not purchase any securities from or sell securities to Opco
or MONY Securities acting as principal for its own account. Selection of
broker-dealers to execute Portfolio transactions must be done in a manner
consistent with the foregoing primary consideration, the "Rules of Fair
Practice" of the National Association of Securities Dealers, Inc. and such
other policies as the Board of Directors may determine.
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Prices of portfolio securities purchased from underwriters of new
issues include a commission or concession paid by the issuer to the
underwriter, and prices of securities purchased from dealers include a spread
between the bid and asked prices. Transactions may be directed to dealers
during the course of an underwriting in return for their brokerage and research
services, which are intangible and on which no dollar value can be placed.
There is no formula for such allocation. The research information may or may
not be useful to the Fund and/or other accounts of OpCap Advisors; information
received in connection with directed orders of other accounts managed by the
OpCap Advisors or its affiliates may or may not be useful to the Fund. Such
information may be in written or oral form and includes information on
particular companies and industries as well as market, economic or
institutional activity areas. It serves to broaden the scope and supplement
the research activities of OpCap Advisors, to make available additional views
for consideration and comparison, and to enable OpCap Advisors to obtain market
information for the valuation of securities held by the Fund. For the year
ended December 31, 1995, the aggregate dollar amount involved in transactions
directed to brokers because of research services provided by them was
$892,446,326 with related commissions of $89,973. Brokerage commissions paid
to OpCap by the Managed Portfolio for the fiscal year ended December 31, 1995
were $52,730 which represented 59% of total brokerage commissions.
OpCap Advisors currently serves as investment adviser to a number of
clients, including other investment companies, and may in the future act as
investment adviser to others. It is a practice of OpCap Advisors to cause
purchase or sale transactions to be allocated among the Fund and others whose
assets it manages in such manner as it deems equitable. In making such
allocations among the Fund and other client accounts, the main factors
considered are the respective investment objectives, the relative size of
portfolio holdings of the same or comparable securities, the availability of
cash for investment, the size of investment commitments generally held, and the
opinions of the person responsible for managing the Portfolio of each Fund and
other clients' accounts. When possible, concurrent orders to purchase or sell
the same security by more than one of the accounts managed by OpCap Advisors or
Oppenheimer Capital are combined, which in some cases could have a detrimental
effect on the price or volume of the security in a particular transaction as
far as an account is concerned. Transactions effected pursuant to such
combined orders are averaged as to price and allocated in accordance with the
purchase or sale orders actually placed for such account.
If Proposal 1 is not approved, the Existing Portfolio Managers
Agreement will remain in effect and the Board will consider alternative
actions.
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EXHIBIT A
MANAGED PORTFOLIO
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the ____ day of _______________, 19____ is among
The Enterprise Group of Funds, Inc. (the "Fund"), a Maryland corporation.
Enterprise Capital Management, Inc., a Georgia corporation (hereinafter
referred to as the "Adviser"), and OpCap Advisors, a Delaware general
partnership (hereinafter referred to as the "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of May 1, 1995 with the Fund, a copy of which agreement is attached
hereto as Exhibit A (the "Investment Adviser's Agreement"). Pursuant to the
Investment Adviser's Agreement, the Adviser has agreed to render investment
advisory and certain other management services to all of the Portfolios of the
Fund, and the Fund has agreed to employ the Adviser to render such services and
to pay to the Adviser certain fees therefore. The Investment Adviser's
Agreement recognizes that the Adviser may enter into agreements with other
investment advisers who will serve as Portfolio Managers to the Portfolios of
the Portfolio.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Managed Portfolio of the Fund (the
"Portfolios") securities investment advisory services for that Portfolio.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employs the Portfolio Manager
to render certain investment advisory services to the Portfolio, as set forth
herein. The Portfolio Manager hereby accepts such employment and agrees to
perform such services on the terms herein set forth, and for the compensation
herein provided.
(2) The Portfolio Manager shall furnish the Portfolios advice
with respect to the investment and reinvestment of the assets of the
Portfolios, or such portion of the assets of the Portfolio as the Adviser shall
specify from time to time, in accordance with the investment objectives,
restrictions and limitations of the Portfolio as set forth in the Fund's most
recent Registration Statement.
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(3) The Portfolio Manager shall perform a monthly
reconciliation of the Portfolio to the holdings report provided by the Fund's
custodian and bring any material or significant variances regarding holding or
valuation to the attention of the Adviser.
(4) The Portfolio Manager shall for all purposes herein be
deemed to be an independent contractor. The Portfolio Manager has no authority
to act for or represent the Fund or the Portfolios in any way except to direct
securities transactions pursuant to its investment advice hereunder. The
Portfolio Manager is not an agent of the Fund or the Portfolio.
(5) It is understood that the Portfolio Manager does not, by
this Agreement, undertake to assume or pay any costs or expenses of the Fund or
the Portfolio.
(6) (a) The Adviser agrees to pay the Portfolio Manager for
its services to be furnished under this Agreement, with respect to each
calendar month after the effective date of this Agreement, on the twentieth
(20th) day after the close of each calendar month, a sum equal to 0.03333 of 1%
of the average of the daily closing net asset value of the Portfolio managed by
the Portfolio Manager during such month (that is, .40 of 1% per year) for
assets up to $100,000,000 (one hundred million dollars); and a sum equal to
0.025 of 1% of the average of the daily closing net asset value of the
Portfolio during such month (that is, .30 of 1% per year) for assets under
management in excess of $100,000,000 (one hundred million dollars).
(6) (b) The payment of all fees provided for hereunder shall
be prorated and reduced for sums payable for a period less than a full month in
the event of termination of this Agreement on a day that is not the end of a
calendar month.
(6) (c) For the purposes of this Paragraph 6, the daily
closing net asset values of the Portfolios shall be computed in the manner
specified in the Registration Statement for the computation of the value of
such net assets in connection with the determination of the net asset value of
the Portfolio's shares.
(7) The services of the Portfolio Manager hereunder are not
to be deemed to be exclusive, and the Portfolio Manager is free to render
services to others and to engage in other activities so long as its services
hereunder are not impaired thereby. Without in any way relieving the Portfolio
Manager of its responsibilities hereunder, it is agreed that the Portfolio
Manager may employ others to furnish factual information, economic advice
and/or research, and investment recommendations, upon which its investment
advice and service is furnished hereunder.
(8) In the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or reckless disregard of
its obligations and duties hereunder, the Portfolio Manager shall not be liable
to the Fund, the Portfolio or the Adviser or to any shareholder or shareholders
of the Fund, the Portfolio or the Adviser for any mistake of judgment, act or
omission in the course of, or connected with, the services to be rendered by
the Portfolio Manager hereunder.
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(9) The Portfolio Manager will take necessary steps to
prevent the investment professionals of the Portfolio Manager who are
responsible for investing assets of the Portfolio from taking, at any time, a
short position in any shares of any holdings of any Portfolios of the Fund for
any accounts in which such individuals have a beneficial interest, excluding
short positions, including without limitation, short against-the-box positions,
effected for tax reasons. The Portfolio Manager also will cooperate with the
Fund in adopting a written policy prohibiting insider trading with respect to
Fund Portfolio transactions insofar as such transactions may relate to the
Portfolio Manager.
(10) In connection with the management of the investment and
reinvestment of the assets of the Portfolio, the Portfolio Manager is
authorized to select the brokers or dealers including Oppenheimer & Co., Inc.,
("Opco") that will execute purchase and sale transactions for the Portfolios,
and is directed to use its best efforts to obtain the best available price and
most favorable execution with respect to such purchases and sales of portfolio
securities for the Fund. Subject to this primary requirement, and maintaining
as its first consideration the benefits for the Portfolios and its
shareholders, the Portfolio Manager shall have the right, subject to the
approval of the Board of Trustees of the Fund and of the Adviser, to follow a
policy of selecting brokers and dealers who furnish statistical research and
other services to the Portfolios, the Adviser, or the Portfolio Manager and,
subject to the Rules of Fair Practice of the National Association of Securities
Dealers, Inc., to select brokers and dealers who sell shares of Portfolios of
the Fund.
The Adviser and the Fund's Portfolios recognize and
intend that subject to the foregoing provisions of this Section, Opco will act
as its regular broker so long as it is lawful for it so to act and that Opco
may be a major recipient of brokerage commissions paid by the Fund's
Portfolios. Opco may effect securities transactions for the Fund's Portfolios
only if (1) the commissions, fees or other remuneration received or to be
received by it are reasonable and fair compared to the commissions, fees or
other remuneration received by other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities exchange during a comparable period of time and (2) the Trustees,
including a majority of those Trustees who are not interested persons, have
adopted procedures pursuant to Rule 17e-1 under the Investment Company Act of
1940 for determining the permissible level of such commissions. The Fund's
Portfolios will not purchase any securities from or sell any securities to Opco
acting as principal for their own account.
(11) The Fund may terminate this Agreement by sixty days
written notice to the Adviser and the Portfolio Manager at any time, without
the payment of any penalty, by vote of the Fund's Board of Trustees, or by vote
of a majority of its outstanding voting securities. The Adviser may terminate
this Agreement by sixty days written notice to the Portfolio Manager and the
Portfolio Manager may terminate this Agreement by sixty days written notice to
the Adviser, without the payment of any penalty. This Agreement shall
immediately terminate in the event of its assignment, unless an order is issued
by the Securities and Exchange Commission conditionally or unconditionally
exempting such assignment from
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the provision of Section 15 (a) of the Investment Company Act of 1940, in which
event this Agreement shall remain in full force and effect.
(12) Subject to prior termination as provided above, this
Agreement shall continue in force from the date of execution until November 1,
1995 and from year to year thereafter if its continuance after said date: (1)
is specifically approved on or before said date and at least annually
thereafter by vote of the Board of Trustees of the Fund, including a majority
of those trustees who are not parties to this Agreement of interested persons
of any such party, or by vote of a majority of the outstanding voting
securities of the Fund, and (2) is specifically approved at least annually by
the vote of a majority of trustees of the Fund who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
(13) The Adviser shall indemnify and hold harmless the
Portfolio Manager, its officers and directors and each person, if any, who
controls the Portfolio Manager within the meaning of Section 15 of the
Securities Act of 1933 (any and all such persons shall be referred to as
"Indemnified Party"), against any loss, liability, claim, damage or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages or expense and reasonable counsel fees incurred in
connection therewith), arising by reason of any matter to which this Portfolio
Manager's Agreement relates. However, in no case (i) is this indemnity to be
deemed to protect any particular Indemnified Party against any liability to
which such Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties under this
Portfolio Manager's Agreement or (ii) is the Adviser to be liable under this
indemnity with respect to any claim made against any particular Indemnified
Party unless such Indemnified Party shall have notified the Adviser in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
Portfolio Manager or such controlling persons.
The Portfolio Manager shall indemnify and hold harmless the Adviser
and each of its directors and officers and each person if any who controls the
Adviser within the meaning of Section 15 of the Securities Act of 1933, against
any loss, liability, claim, damage or expense described in the foregoing
indemnity, but only with respect to the Portfolio Manager's willful
misfeasance, bad faith or gross negligence in the performance of its duties
under this Portfolio Manager's Agreement. In case any action shall be brought
against the Adviser or any person so indemnified, in respect of which indemnity
may be sought against the Portfolio Manager, the Portfolio Manager shall have
the rights and duties given to the Adviser, and the Adviser and each person so
indemnified shall have the rights and duties given to the Portfolio Manager by
the provisions of subsection (i) and (ii) of this section.
(14) Except as otherwise provided in paragraph 13 hereof and
as may be required under applicable federal law, this Portfolio Manager's
Agreement shall be governed by the laws of the State of Georgia.
A-4
<PAGE> 14
(15) The Portfolio Manager agrees to notify the parties
within a reasonable period of time regarding a material change in the
membership of the Portfolio Manager.
(16) The terms "vote of a majority of the outstanding
voting securities," "assignment" and "interested persons," when used herein,
shall have the respective meanings specified in the Investment Company Act of
1940 as now in effect or as hereafter amended.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their duly authorized officers and their corporate seals hereunder
duly affixed and attested, as of the date first above written.
<TABLE>
<S> <C>
(SEAL) THE ENTERPRISE GROUP OF FUNDS, INC.
By: ___________________________
Victor Ugolyn
Chairman, President and
Chief Executive Officer
ATTEST: _____________________
Secretary
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
By: ___________________________
Victor Ugolyn
Chairman, President and
Chief Executive Officer
ATTEST: _____________________
Secretary
OPCAP ADVISORS
(SEAL)
By: ___________________________
ATTEST: _____________________
Secretary
</TABLE>
A-5
<PAGE> 15
EXHIBIT B
INFORMATION ON FUNDS MANAGED BY OPCAP ADVISORS
<TABLE>
<CAPTION>
APPROXIMATE ADVISORY FEE
NET ASSETS AS RATE AS % OF
OF 12/31/95 AVERAGE ANNUAL
NAME OF FUND (IN MILLIONS) NET ASSETS
- - ------------ ------------- ----------------------
<S> <C> <C>
Oppenheimer Quest Value Fund, Inc. . . . . . . . 350 .4 (A)
Oppenheimer Quest for Value Funds
Opportunity Value Fund . . . . . . . . . . 742 .2 (B)
Small Cap Value Fund . . . . . . . . . . . 154 .4 (C)
Growth Income Value Fund . . . . . . . . . 50.1 (D)
Officers Value Fund . . . . . . . . . . . . 4 .4 (C)
Quest for Value GROUP OF FUNDS, INC.
Equity Portfolio . . . . . . . . . . . . . 9 .0 .60
Small Cap Portfolio . . . . . . . . . . . . 16.0 .60
Managed Portfolio . . . . . . . . . . . . . 99.1 .60
Global Equity Portfolio . . . . . . . . . . 2 .8 .75
Bond Portfolio . . . . . . . . . . . . . . 4 .3 .50
Money Market Portfolio . . . . . . . . . . 4 .4 .40
U.S. Government Income Portfolio . . . . . 1 .4 .60
Quest for Value Dual Purpose Fund, Inc. . . . . . 814 .9 .75 (1)
Oppenheimer Quest Global Value Fund, Inc. . . . . 183 .8 (F)
Quest Cash Reserves, Inc.
Primary Portfolio . . . . . . . . . . . . . 1,719 .1 .50 (3)
Government Portfolio . . . . . . . . . . . 117 .0 .50 (3)
General Municipal Portfolio . . . . . . . . 121 .6 .50 (3)
California Municipal Portfolio . . . . . . 75.7 .50 (3)
New York Municipal Portfolio . . . . . . . 53.4 .50 (3)
Penn Series Funds, Inc.
Value Small Cap Fund . . . . . . . . . . . 4 .7 .50
Value Equity Fund . . . . . . . . . . . . . 118 .4 .50 (4)
Endeavor Series Fund
Quest for Value Equity Portfolio . . . . . 68.6 .40 (4)
Quest for Value Small Cap Portfolio . . . . 52.6 .40 (4)
Municipal Advantage Fund Inc. . . . . . . . . . 159 .0 .36
Czech Republic Fund, Inc. . . . . . . . . . . . . 57.5
Enterprise Funds Managed Portfolio . . . . . . . 90.3 .40
The Saratoga Advantage Fund
Municipal Bond Portfolio . . . . . . . . . 2 .3 .20% (5)
Large Capitalization Value Portfolio . . . 17.6 .30% (5)
- - ---------
</TABLE>
(1) This rate is charged on the first $200 million of average
annual net assets; the rate is .50% on assets in excess of $200 million.
The Fund also pays an administrative fee at the annual rate of the
greater of $40,000 or .10% of the Fund's total weekly net assets.
(2) The Fund also pays an administrative fee at the annual rate of .25%
of average daily net assets.
(3) This rate is charged on the first $100 million of average net
assets; the rate is 45% on the next $200 million of average daily
net assets and 40% on average daily net assets in excess of $300
million.
(4) This fee is for investment advisory services only. Management and
administrative services are provided by a third party.
(5) This fee is for investment advisory services only.
B-1
