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SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
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[ ] Preliminary Information Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5(d)(2))
[X] Definitive Information Statement
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The Enterprise Group of Funds, Inc.
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(Name of Registrant As Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) 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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ENTERPRISE LETTERHEAD
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January 11, 1999
Dear Fellow Shareholder:
We are pleased to enclose an information statement relating to a change in
ownership involving Caywood-Scholl Capital Management, the Fund Manager for the
Enterprise Group of Funds, Inc. High-Yield Bond Fund (the "High-Yield Bond
Fund").
On November 11, 1998, Caywood-Scholl Capital Management ("Caywood-Scholl")
was acquired by Dresdner RCM Global Investor LLC, an affiliate of Dresdner Bank
AG. As a result of this change in ownership, the subadvisory agreement between
the High-Yield Bond Fund, Caywood-Scholl and Enterprise Capital Management, Inc.
terminated automatically as a matter of law. The Board of Directors, acting
pursuant to an exemptive order granted by the SEC, approved a new subadvisory
agreement on November 11, 1998.
The terms of the new subadvisory agreement are substantially identical to
the terms of the prior agreement. The management fee paid by the High-Yield Bond
Fund and the services provided by Caywood-Scholl will not change.
We encourage you to read the attached information statement which more
fully describes the acquisition of Caywood-Scholl and the Board of Directors'
approval of the new subadvisory agreement. The Enterprise Group of Funds, Inc.
looks forward to working with Caywood-Scholl to assist you in working toward
your investment goals. Thank you for your continued support.
Sincerely,
/s/ VICTOR UGOLYN
Victor Ugolyn
Chairman, President, and Chief Executive Officer
Atlanta Financial Center - 3343 Peachtree Road, NE, Suite 450 - Atlanta, Georgia
30326-1022
404-261-1116 - 1-800-432-4320 - 404-261-1118 (fax)
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THE ENTERPRISE GROUP OF FUNDS, INC.
HIGH-YIELD BOND FUND
ATLANTA FINANCIAL CENTER
3343 PEACHTREE ROAD, N.E., SUITE 450
ATLANTA, GA 30326-1022
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INFORMATION STATEMENT
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We are providing this information statement to the shareholders of The
Enterprise Group of Funds, Inc. High-Yield Bond Fund (the "High-Yield Bond
Fund") in lieu of a proxy statement, pursuant to the terms of an exemptive order
that The Enterprise Group of Funds, Inc. (the "Fund") has received from the
Securities and Exchange Commission. The order permits the Fund's investment
adviser, Enterprise Capital Management, Inc. ("Enterprise Capital"), to hire new
portfolio managers and to make changes to existing portfolio manager contracts
with the approval of the Fund's Board of Directors, but without obtaining
shareholder approval. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
This information statement will be mailed on or about January 11, 1999. As
of November 10, 1998, there were 9,583,193 shares outstanding as to the
High-Yield Bond Fund. The cost of this information statement will be paid by
Caywood-Scholl Capital Management.
THE FUND
The High-Yield Bond Fund is an investment portfolio of the Fund, a Maryland
corporation. The Fund has entered into an investment advisory agreement with
Enterprise Capital dated May 1, 1995 (the "Adviser's Agreement"). Under the
Adviser's Agreement, it is Enterprise Capital's responsibility to select,
subject to the review and approval by the Board of Directors, one or more
subadvisers (the "Fund Managers") to manage each investment portfolio of the
Fund. The Adviser's Agreement also gives Enterprise Capital the responsibility
to review and monitor the performance of the Fund Managers on an ongoing basis,
and to recommend to the Board of Directors changes to the roster of Fund
Managers as appropriate. Enterprise Capital also is responsible for conducting
all business operations of the Fund, except those operations contracted to the
Fund's custodian or transfer agent. As compensation for these services,
Enterprise Capital receives a fee from each investment portfolio of the Fund,
out of which Enterprise Capital renders all fees payable to the Fund Managers.
The investment portfolios of the Fund, therefore, pay no fees directly to the
Fund Managers.
Enterprise Capital recommends Fund Managers for the Funds to the Board, on
the basis of its continuing quantitative and qualitative evaluation of the Fund
Manager's skills in managing assets pursuant to specific investment styles and
strategies in accordance with the objectives of each Fund. Short-term investment
performance, by itself, is not a significant factor in selecting or terminating
a Fund Manager, and Enterprise Capital does not expect to recommend frequent
changes of Fund Managers.
The Fund Managers do not provide any services to the Funds except portfolio
investment management and related record-keeping services. However, in
accordance with the procedures adopted by the Board, the Fund Manager, or its
affiliated broker-dealer, may execute transactions for the High-Yield Bond Fund
and receive brokerage commissions in connection therewith as permitted by
Section 17(e) of the Investment Company Act of 1940, as amended (the "1940 Act")
and the rules thereunder.
THE FUND MANAGER'S AGREEMENT
Caywood-Scholl is the Fund Manager for the High-Yield Bond Fund. Since
1987, Caywood-Scholl has served as Fund Manager to the High-Yield Bond Fund
pursuant to a Fund Manager's Agreement dated November 5, 1987 (the "Previous
Agreement"). On November 11, 1998, Caywood-Scholl was acquired by Dresdner RCM
Global Investors LLC, an affiliate of Dresdner Bank AG. Dresdner Bank AG is an
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international banking organization which is headquartered in Germany. The
address of Dresdner Bank AG is Juergen-Ponto-Platz 1, 60301 Frankfurt, Germany.
Under the federal securities laws, a change in ownership of an investment
company's adviser or subadviser is deemed to be an assignment of the advisory
contract, which automatically terminates the contract. The acquisition of
Caywood-Scholl by Dresdner RCM Global Investors LLC operated to terminate the
Previous Agreement; therefore, the Board of Directors approved a new Fund
Manager's Agreement with Caywood-Scholl on September 4, 1998 (the "New
Agreement"). The New Agreement became effective on November 11, 1998.
THE BOARD OF DIRECTORS' DECISION
In approving the New Agreement, the Board of Directors considered a number
of material factors, including, but not limited to: that the terms and
conditions of the New Agreement are substantially identical to those of the
Previous Agreement, the performance of the High-Yield Bond Fund, the quality of
the services rendered by Caywood-Scholl, and that the New Agreement would secure
the continuity of such services. The Board considered these factors to be of
equal weight and importance. On the basis of their review of the New Agreement
and relevant information, the Board concluded that the New Agreement was fair,
reasonable and in the best interests of the shareholders of the High-Yield Bond
Fund. Accordingly, the Board of Directors, including the non-interested
Directors, unanimously approved the New Agreement.
Under the New Agreement, Caywood-Scholl is obligated to provide the same
services to the High-Yield Bond Fund as under the Previous Agreement. In
addition, the New Agreement does not change the management fee paid by the
High-Yield Bond Fund. The form of the New Agreement is attached to this
information statement as Exhibit A. Under the Previous Agreement, the High-Yield
Bond Fund paid to Enterprise Capital a fee equal to .60% of its average daily
net assets. From that amount, Enterprise Capital paid Caywood-Scholl a fee of
.30% on the first $100 million and 0.25% thereafter of the High-Yield Bond
Fund's average daily net assets. During the Fund's last fiscal year, the
High-Yield Bond Fund paid to Enterprise Capital an aggregate amount of $436,989
in management fees.
The New Agreement is identical in form to the Previous Agreement. The form
of the New Agreement is attached to this Information Statement as Exhibit A.
INFORMATION ABOUT ENTERPRISE CAPITAL
Enterprise Capital, located at Atlanta Financial Center, 3343 Peachtree
Road, N.E., Suite 450, Atlanta, Georgia 30326-1022, serves as the Investment
Adviser and Administrator of the Fund. Enterprise Capital is a second-tier
subsidiary of The MONY Group. Enterprise Fund Distributors, Inc. is the Fund's
principal underwriter, and its address is 3343 Peachtree Road NE, Suite 450,
Atlanta, Georgia 30326-1022. Enterprise Capital also provides investment
advisory services to Enterprise Accumulation Trust High-Yield Bond Portfolio
that has an identical investment objective to the High-Yield Bond Fund.
INFORMATION ON CAYWOOD-SCHOLL CAPITAL MANAGEMENT
The following is a description of Caywood-Scholl, which is based on
information provided by Caywood-Scholl. Caywood-Scholl is not affiliated with
Enterprise Capital or Enterprise Group other than by reason of serving as Fund
Manager to one or more Funds.
The firm was formed in April 1986 and is owned by Dresdner RMC Global
Investors LLC. The address of Caywood-Scholl is 4350 Executive Drive, Suite 125,
San Diego, California 92129. James R. Caywood, Managing Director and Chief
Executive Officer, is responsible for the day-to-day management of the Fund and
has more than 29 years of investment industry experience. He joined
Caywood-Scholl in 1986 as Chief Investment Officer. Caywood-Scholl provides
investment advice with respect to high-yield, low grade fixed income
instruments. As of September 30, 1998, assets under management for all clients
approximated $931 million. Usual investment minimum is $1 million. The Fund's
annual management fee is .60% of average daily net assets; and the Fund Manager
receives .30% for assets up to $100 million and .25% thereafter.
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ADDITIONAL INFORMATION
To the knowledge of the Fund, as of November 10, 1998, no person
beneficially owned more than 5% of the outstanding shares of the High-Yield Bond
Fund. The Fund is not required to hold annual meetings of shareholders;
therefore, it cannot be determined when the next meeting of shareholders will be
held. Shareholder proposals intended to be considered for inclusion in the proxy
statement for the next meeting of shareholders must be received by the Fund a
reasonable time before the proxy statement is mailed. Whether a shareholder
proposal will be included in the proxy statement will be determined in
accordance with the applicable state and federal laws.
Copies of the Fund's most recent annual and semi-annual reports are
available without charge. You may obtain a copy of these reports by calling
800-432-4320, or writing to Enterprise Capital at the above address.
By Order of the Board of Directors,
Catherine R. McClellan
Secretary
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EXHIBIT A
HIGH YIELD BOND FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 11th day of November, 1998, 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 Caywood-Scholl Capital Management, a California corporation,
Dresdner RCM Global Investors LLC Company (hereinafter referred to as the "Fund
Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement dated as
of September 14, 1987, with the Fund ("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 fund managers to the Portfolios.
(B) The parties hereto wish to enter into an agreement whereby the Fund
Manager will provide to the High Yield Bond Fund of the Fund (the "High Yield
Fund") securities investment advisory services for the High Yield Fund.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Fund Manager agree as follows:
(1) The Fund and Adviser hereby employ the Fund Manager to render
certain investment advisory services to the High Yield Fund, as set forth
herein. The Fund 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 Fund Manager shall furnish the High Yield Fund advice with
respect to the investment and reinvestment of the assets of the High Yield
Fund, or such portion of the assets of the High Yield Fund as the Adviser
shall specify from time to time, in accordance with the investment
objectives, restrictions and limitations applicable to the High Yield Fund
which are set forth in the Fund's most recent Registration Statement.
(3) The Fund Manager shall perform a monthly reconciliation of the
High Yield Fund to the holdings report provided by the Fund's custodian and
bring any material or significant variances regarding holdings or
valuations to the attention of the Adviser.
(4) The Fund Manager shall for all purposes herein be deemed to be an
independent contractor. The Fund 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 Fund Manager
is not an agent of the Fund or the Portfolios.
(5) It is understood that the Fund Manager does not, by this
Agreement, undertake to assume or pay any costs or expenses of the Fund or
the Portfolios.
(6) (a) The Adviser agrees to pay the Fund 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 0.025 of 1% of the
average of
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the daily closing net asset value of the High Yield Fund managed by the
Fund Manager during such month (that is, 0.30 of 1% per year) for the first
$100,000,000 of assets under management; and a sum equal to 0.0208 of 1% of
the average of the daily closing net asset value of the High Yield Fund
during such month (that is, 0.25 of 1% per year) for assets over
$100,000,000.
(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
High Yield Fund shares.
(7) The services of the Fund Manager hereunder are not to be deemed to
be exclusive, and the Fund 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 Fund Manager of its
responsibilities hereunder, it is agreed that the Fund 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 Fund Manager shall
not be liable to the Fund, the High Yield Fund or the Adviser or to any
shareholder or shareholders of the Fund, the High Yield Fund 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 Fund Manager hereunder.
(9) The Fund Manager will take necessary steps to prevent the
investment professionals of the Fund Manager who are responsible for
investing assets of the High Yield Fund from taking, at any time, a short
position in any shares of any holdings of the High Yield 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 Fund Manager also will cooperate
with the Fund in adopting a written policy prohibiting insider trading with
respect to High Yield Fund transactions insofar as such transactions may
relate to the Fund Manager.
(10) In connection with the management of the investment and
reinvestment of the assets of the High Yield Fund, the Fund Manager is
authorized to select the brokers or dealers that will execute purchase and
sale transactions for the High Yield Fund, 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
High Yield Fund. Subject to this primary requirement, and maintaining as
its first consideration the benefits for the High Yield Fund and its
shareholders, the Fund 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 furnish statistical
research and other services to the High Yield Fund, the Adviser, or the
Fund Manager and, subject to the Conduct Rules of the National Association
of Securities Dealers, Inc., to select brokers and dealers who sell shares
of the Portfolios.
(11) The Fund may terminate this Agreement by thirty (30) days written
notice to the Adviser and the Fund 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 thirty (30) days written notice to the Fund Manager and
the Fund Manager may terminate this Agreement by thirty (30) 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 December 31, 1999
and from year to year thereafter if its continuance after
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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 Fund Manager,
its officers and directors and each person, if any, who controls the Fund
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, damage or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, damages or expense
and reasonable counsel fees incurred in connection therewith), arising by
reason of any matter to which this Fund 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
Fund 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 Fund Manager or such controlling persons.
The Fund 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, damage or expense described in the foregoing
indemnity, but only with respect to the Fund Manager's willful misfeasance,
bad faith or gross negligence in the performance of its duties under this
Fund 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 Fund Manager, the Fund 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 Fund Manager by the
provisions of subsection (i) and (ii) of this Paragraph 13.
(14) Except as otherwise provided in Paragraph 13 hereof and as may be
required under applicable federal law, this Fund Manager's Agreement shall
be governed by the laws of the State of Georgia.
(15) The Fund Manager agrees to notify the parties within a reasonable
period of time regarding a material change in the membership of the Fund
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.
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(17) Unless otherwise permitted, all notices, instructions and advice
with respect to security transactions or any other matters contemplated by
this Agreement shall be deemed duly given when received in writing:
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by the Fund Manager: James R. Caywood
Managing Director and Chief Executive Officer
Caywood-Scholl Capital Management, Dresdner RCM Global
Investors LLC Company
4350 Executive Drive, Suite 125
San Diego, CA 92121
by the Adviser: Enterprise Capital Management, Inc.
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022
by the Fund: The Enterprise Group of Funds, Inc.
c/o Enterprise Capital Management, Inc.
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022
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or by such other person or persons at such address or addresses as shall
be specified by the applicable party, in each case, in a notice
similarly given. Each party may rely upon any notice or other
communication from the other reasonably believed by it to be genuine.
(18) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original and all of which, when taken
together, shall constitute one and the same agreement.
(19) This Agreement constitutes the entire agreement between the Fund
Manager, the Adviser and the Fund relating to the High Yield Fund.
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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.
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(SEAL) THE ENTERPRISE GROUP
OF FUNDS, INC.
By: /s/ VICTOR UGOLYN
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Victor Ugolyn, Chairman, President
and Chief Executive Officer
ATTEST: /s/ CATHERINE R. MCCLELLAN
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Secretary
(SEAL) ENTERPRISE CAPITAL
MANAGEMENT, INC.
By: /s/ VICTOR UGOLYN
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Victor Ugolyn, Chairman, President
and Chief Executive Officer
ATTEST:/s/ CATHERINE R. MCCLELLAN
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Secretary
(SEAL) CAYWOOD-SCHOLL CAPITAL
MANAGEMENT, DRESDNER RCM GLOBAL
INVESTORS LLC COMPANY
By: /s/ JAMES R. CAYWOOD
---------------------------------------------------
James R. Caywood, Managing
Director and Chief Executive Officer
ATTEST:/s/ SALIM SHAH
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Secretary
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