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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>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
ENTERPRISE GROUP OF FUNDS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ENTERPRISE GROUP OF FUNDS, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $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:
/X/ 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 LETTERHEAD]
THE ENTERPRISE GROUP OF FUNDS, INC.
ATLANTA FINANCIAL CENTER
3343 PEACHTREE ROAD, NE, SUITE 450
ATLANTA, GEORGIA 30326
Dear Small Company Portfolio Shareholders:
Enclosed is a notice of Special Meeting of Shareholders of the Small
Company 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 June 28, 1996, at 10:00 am (the "Meeting"). At the Meeting, shareholders of
the Small Company Portfolio will be asked to approve a new sub-advisory
agreement with GAMCO Investors, Inc. ("GAMCO"), a proposed new Portfolio Manager
for the Small Company Portfolio.
The Meeting has accordingly been called for the specific purpose of
approving the new sub-advisory agreement. No change in the investment objectives
of the Small Company Portfolio will occur by reason of the change of
sub-adviser. The new agreement embodies the same terms as the agreement with the
current Portfolio Manager with the exception of a revision to the fee schedule
paid to the Portfolio Manager. There will be no impact to the overall advisory
fee paid by the shareholders.
The Fund's Board of Directors has approved the New Agreement and recommends
that the shareholders of the Small Company Portfolio approve 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,
President and Chief Executive Officer
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 JUNE 28, 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 June
28, 1996 at 10:00 am, 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 GAMCO Investors, Inc.
for the Small Company 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 May 15, 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
May 30, 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.
<PAGE> 4
THE SMALL COMPANY PORTFOLIO
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
ATLANTA FINANCIAL CENTER
3343 PEACHTREE ROAD, NE, SUITE 450
ATLANTA, GEORGIA 30326
---------------------
PROXY STATEMENT
---------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 28, 1996
---------------------
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 the Small Company Portfolio of the Fund and any adjournment
or adjournments thereof, to be held at 3343 Peachtree Road, NE, Suite 450,
Atlanta, Georgia on June 28, 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 May 30, 1996.
The Board of Directors of the Fund has named Victor Ugolyn, Chairman,
President, and Chief Executive Officer; 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 them 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 GAMCO Investors, Inc. ("GAMCO").
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 the Portfolio. 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 Small
Company Portfolio (the "Shares") at the close of business on May 15, 1996 will
be entitled to vote at the Meeting. On such date, there were 3,302,722.707
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,
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.
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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 Small Company 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 GAMCO
requires a vote of a majority of the outstanding voting securities of the Small
Company Portfolio, which is defined as the vote of the lesser of (i) 67% or more
of the Outstanding Shares of the Small Company Portfolio present in person or by
proxy at such meeting, if the holders of more than 50% of the outstanding Shares
of the Small Company Portfolio are present or represented by proxy, or (ii) more
than 50% of the outstanding Shares of the Small Company 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.
The Portfolio Manager's Agreement with the previous manager of the
Portfolio, Fisher Investments, Inc., will terminate on or about July 1, 1996 by
vote of the Board of Directors. Such action was taken primarily because of
investment philosophies and the performance of the previous manager.
The aggregate amount of the Portfolio Manager's fee paid to Fisher
Investments, Inc. by Enterprise Capital for the Small Company Portfolio in
fiscal year 1995 was $53,967.
PROPOSAL NO. 1
APPROVAL OR DISAPPROVAL OF NEW PORTFOLIO MANAGER'S AGREEMENT
BETWEEN THE ADVISER AND GAMCO INVESTORS, INC.
BACKGROUND
General. The Meeting has been called for the purpose of considering a new
Portfolio Manager's Agreement for the Small Company Portfolio naming GAMCO
Investments, Inc., as Portfolio Manager. 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 a revision to the
fee schedule paid to the Portfolio Manager. There will be no impact to the
overall advisory fee paid by the shareholders. In addition, no change in the
investment objectives of the Small Company Portfolio will occur by reason of the
change of 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 new fee schedule 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
Fisher Investments, Inc. currently serves as Portfolio Manager for the
Portfolio under an investment advisory agreement (the "Existing Portfolio
Manager's Agreement") dated December 20, 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 voted to terminate the Existing Portfolio
Manager's Agreement effective July 1, 1996. Such action was taken primarily due
to investment philosophies and the performance of the Portfolio. Under the
Existing Portfolio Manager's Agreement, Fisher Investments, Inc. is entitled to
receive adviser fees at the annual rate of .30 of 1% of the average of the daily
closing net asset values of the Portfolio for the first
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$20,000,000 under management; a sum equal to .40 of 1% of the average of the
daily closing net asset values of the Portfolio for the next $10,000,000; and a
sum equal to .45 of 1% of the average of the daily closing net asset values of
the Portfolio, thereafter in excess of $30,000,000, managed by the Portfolio
Manager per year, paid monthly.
NEW PORTFOLIO MANAGER'S AGREEMENT
Except for a different fee schedule, the terms of the New Portfolio
Manager's Agreement with GAMCO Investors, Inc. are identical in all respects to
the terms of the Existing Portfolio Manager's Agreement. A form of the New
Portfolio Manager's Agreement marked with revisions 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.
As compensation for its services to 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 of 1% for the first $1 billion under management and .30 of
1% 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 its shareholders. The Board of Directors, including all of the
non-interested Directors, recommends approval by the shareholders of the New
Agreement among GAMCO Investors, Inc., 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. In particular, the
Board based its recommendation on the small company equities investment
expertise of Mr. Mario J. Gabelli, Chief Investment Officer of GAMCO, who will
be responsible for the day-to-day management of the Portfolio. The Directors
have given careful consideration to all factors deemed to be relevant to the
management of the Portfolio, including, but not limited to: (1) the fee and
expense ratios of comparable mutual funds; (2) the performance of the Portfolio
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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 GAMCO INVESTMENTS, INC.
INFORMATION ABOUT GAMCO INVESTMENTS, INC.
GAMCO Investors, Inc., is a New York corporation majority owned by Gabelli
Funds, Inc. The location of both entities is One Corporate Center, Rye, New York
10580 and their executive officers have business addresses at that location.
Mr. Mario J. Gabelli is Chief Investment Officer of GAMCO and Chairman and
Chief Investment Officer of Gabelli Funds, Inc.
Mr. Douglas R. Jamieson serves as Executive Vice President, Chief Operating
Officer and Managing Director; Ms. Regina M. Pitaro, Managing Director; Mr.
Joseph R. Rindler, Jr., Managing Director; Mr. F. William Scholz, II, Managing
Director; and Mr. James E. McKee, General Counsel.
GAMCO does not presently act as investment adviser to any investment
company with a small cap value objective.
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, GAMCO, 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 GAMCO. GAMCO's
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. 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.
GAMCO currently serves as investment adviser to a number of clients and may
in the future act as investment adviser to others. It is a practice of GAMCO 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. Concurrent orders to purchase or sell the same security
by more than one of the accounts Small Company by GAMCO may be combined, which
in some cases could have a detrimental effect on the price or volume of the
security in a
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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.
The aggregate amount of brokerage commissions paid by the Portfolio during
1995 were $38,751.
If Proposal No. 1 is not approved, the Existing Adviser's Agreement will
remain in effect and the Board will consider alternative actions.
RECEIPT OF SHAREHOLDER PROPOSALS
Notwithstanding the approval or disapproval of the proposal described
above, as in the past, the Directors do not intend to hold regular annual
meetings of shareholders of the Fund. If a shareholder wishes to present a
proposal to be included in the proxy statement for the next meeting of
shareholders of a Portfolio, such proposal must be received by the Fund a
reasonable time before the solicitation is to be made. The Directors will call
meetings of shareholders of a Portfolio as may be required under the Investment
Company Act (such as to approve a new investment advisory agreement for a
Portfolio or to remove Directors) or as they may determine in their discretion.
MAILING OF ANNUAL REPORT
The Fund will furnish, without charge, a copy of its Annual Report for the
year ended December 31, 1995, to Shareholders upon request. Such requests should
be made to Catherine R. McClellan, Enterprise Capital, Atlanta Financial Center,
3343 Peachtree Rd., Suite 450, Atlanta, Georgia 30326, or by calling
800-432-4320. The report will be sent by first class mail.
OTHER BUSINESS
The management knows of no business other than the matters specified above
which will be presented at the Meeting. Inasmuch as matters not known at the
time of the solicitation may come before the Meeting, the enclosed voting
instruction form confers discretionary authority with respect to such matters as
may properly come before the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
CATHERINE R. MC CLELLAN
Secretary
Dated: May 30, 1996
5
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EXHIBIT A
SMALL COMPANY PORTFOLIO
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the day of , 1996 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 GAMCO Investors, Inc., a New York corporation,
(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, 1993 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 Portfolio of the Fund.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Small Company Portfolio of the Fund (the
"Portfolio") 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 Portfolio advice with
respect to the investment and reinvestment of the assets of the Portfolio,
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.
(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 Portfolio in any way except
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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 0.033 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 the first $1,000,000,000 of assets under management 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 in
excess of $1,000,000,000 under management.
(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 Portfolio 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' 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.
(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 Portfolio 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 that will execute purchase and
sale transactions for the Portfolio, 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 Portfolio and its shareholders, the
Portfolio Manager shall have the right, subject to the approval of the
Board of Directors of the Fund and of the Adviser, to follow a policy of
selecting brokers and dealers who
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furnish statistical research and other services to the Portfolio, 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 Portfolio of the Fund.
(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 Directors, 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 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 June 30, 1998 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 Directors of the Fund, including a
majority of those directors 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 directors 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.
A-3
<PAGE> 12
(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 New York.
(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.
A-4
<PAGE> 13
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) ENTERPRISE CAPITAL
MANAGEMENT, INC.
By:
---------------------------------------
Victor Ugolyn
Chairman, President and CEO
ATTEST:
----------------------------------
(SEAL) GAMCO INVESTORS, INC.
By:
---------------------------------------
Douglas R. Jamieson
Executive Vice President and COO
ATTEST:
----------------------------------
Secretary
THE ENTERPRISE GROUP OF
FUNDS, INC.
(SEAL) By:
---------------------------------------
Victor Ugolyn
Chairman, President and CEO
ATTEST:
----------------------------------
Secretary
</TABLE>
A-5
<PAGE> 14
APPENDIX A
THE ENTERPRISE GROUP OF FUNDS, INC.
SMALL COMPANY PORTFOLIO
Proxy for Shareholders Meeting June 28, 1996
The undersigned does hereby appoints Victor Ugolyn, Catherine R. McClellan or
Herbert M. Williamson, and each of them as proxies of the undersigned, each
with power to appoint his substitute, for the Special Meeting of Shareholders
of the Small Company Portfolio of The Enterprise Group of Funds, Inc. (the
"Fund") to be held on June 28, 1996, at the offices of Enterprise Capital
Management, Atlanta Financial Center, 3343 Peachtree Road, NE, Suite 450,
Atlanta, GA 30326 at 10:00 a.m., and at any adjournment thereof (the
"Meeting") to vote, as designated below, all shares of the Fund, held by the
undersigned at the close of business on May 15, 1996. Capitalized terms used
without definition have the meanings given to them in the accompanying Proxy
Statement.
MANAGEMENT RECOMMENDS A VOTE FOR ALL OF THE PROPOSALS LISTED BELOW AND ON THE
REVERSE SIDE HEREOF. THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED
OR FOR IF NO CHOICE IS INDICATED. THE PROXY IS SOLICITED ON BEHALF OF
MANAGEMENT.
1. APPROVAL OF PORTFOLIO MANAGER'S AGREEMENT BETWEEN THE FUND AND GAMCO
INVESTMENTS, INC.
FOR AGAINST ABSTAIN
Portfolio ................................ ___ ___ ___
2. TO ACT UPON SUCH OTHER MATTERS AS PROPERLY MAY COME BEFORE THE MEETING
OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.
DATED:________________________ 1996
(Month, Day)
___________________________________
Signature(s)
___________________________________
Signature(s)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When signing as
custodian, attorney, executor, administrator, trustee, guardian, etc., please
give your full title as such. Joint owners should each sign this Voting
Instruction Form.
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