<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Information Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5(d)(2))
[X] Definitive Information Statement
</TABLE>
Enterprise Group of Funds, Inc.
- --------------------------------------------------------------------------------
(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:
<PAGE> 2
(ENTERPRISE LETTERHEAD)
- --------------------------------------------------------------------------------
December 3, 1999
Dear Fellow Shareholder:
We are pleased to enclose an Information Statement relating to changes in
the Fund Managers for The Enterprise Group of Funds, Inc. Enterprise Equity Fund
(the "Equity Fund"), Enterprise Capital Appreciation Fund (the "Capital
Appreciation Fund") and Enterprise Managed Fund (the "Managed Fund").
THE NEW FUND MANAGERS
TCW Funds Management, Inc. ("TCW") was named Fund Manager of the Equity
Fund effective November 1, 1999, by the Board of Directors of The Enterprise
Group of Funds, Inc. TCW had assets under management in excess of $55 billion as
of September 30, 1999.
Marsico Capital Management, LLC ("Marsico Capital") was named Fund Manager
of the Capital Appreciation Fund effective November 1, 1999, by the Board of
Directors of The Enterprise Group of Funds, Inc. Marsico Capital had assets
under management in excess of $9 billion as of September 30, 1999.
Sanford C. Bernstein & Co., Inc. ("Bernstein") was named Co-Fund Manager of
the Managed Fund effective November 1, 1999, by the Board of Directors of The
Enterprise Group of Funds, Inc. Bernstein had assets under management in excess
of $85 billion as of September 30, 1999. The current Fund Manager, OpCap
Advisors ("OpCap"), will continue to manage as Co-Fund Manager.
TCW, Marsico Capital and Bernstein bring their investment management
expertise to the Equity, Capital Appreciation and Managed Funds of the
Enterprise family of 17 Funds. In selecting TCW, Marsico Capital and Bernstein
as Fund Managers, consideration was given to, among other factors, the firms'
investment management acumen and style in conjunction with the investment
objectives of the Equity, Capital Appreciation and Managed Funds. There will be
no change in the Equity, Capital Appreciation and Managed Funds' investment
objectives. However, TCW's, Marsico Capital's and Bernstein's investment styles
are distinct and will result in a modification of investment strategies for
their respective Funds.
EQUITY FUND
Using a bottom-up investment approach, TCW invests in large- and
medium-capitalization companies that have a long record of successful operations
in their core business. Looking for companies with a dominant position in a
niche business (e.g., technology, production or distribution), TCW also takes
the financial quality of the company into consideration. Prime candidates have
sound financial fundamentals and management that is committed to shareholder
interests.
The management fee paid by the Equity Fund to Enterprise Capital
Management, Inc. ("Enterprise Capital") will remain unchanged at 0.75% of its
average daily net assets; and fees paid by Enterprise Capital to TCW will be
according to the following schedule: 0.40 of 1% per year for the first
$100,000,000 (one hundred million dollars) of assets under management and 0.30%
per year for assets under management in excess of $100,000,000 (one hundred
million dollars).
CAPITAL APPRECIATION FUND
Marsico Capital's investment strategy blends top-down economic/industry
analysis with bottom-up stock selection and emphasizes large capitalization
growth companies. Marsico Capital specifically looks for those companies
exhibiting market expertise/dominance, above average unit growth or potential to
undergo positive change, a sustainable acceleration of revenues and earnings,
attractive valuation and excellent management.
The management fee paid by the Capital Appreciation Fund to Enterprise
Capital will remain unchanged at 0.75% of its average daily net assets; and fees
paid by Enterprise Capital to Marsico Capital will be according to the following
schedule: 0.45 of 1% per year for assets under management.
<PAGE> 3
MANAGED FUND
Using a bottom-up investment approach, Bernstein invests in large
capitalization companies that have a long record of successful operations in
their core business. In selecting stocks, Bernstein analyzes long-term expected
return and near-term stock performance in order to make adjustments to the
fund's mix as needed. In reviewing a company, analysts meet with management and,
if applicable, suppliers, clients, competitors and consultants. All this is done
to gain a deep understanding of their companies' future earnings and cash flow
prospects.
The management fee paid by the Managed Fund to Enterprise Capital
Management, Inc. ("Enterprise Capital") will remain unchanged at 0.75% of its
average daily net assets; however, fees paid by Enterprise Capital to Bernstein
will be revised to the following schedule: 0.40 of 1% per year for the first
$10,000,000 of assets under management; 0.30 of 1% per year for the next
$40,000,000 of assets under management; 0.20 of 1% per year for the next
$50,000,000 of assets under management; and 0.10% per year for assets in excess
of $100,000,000; and the fees paid by Enterprise Capital to OpCap will be
according to the following schedule: 0.40 of 1% per year for the first
$1,000,000,000 (one billion dollars) of assets under management; 0.30 of 1% per
year for the next $1,000,000,000 (one billion dollars) of assets under
management up to $2,000,000,000 (two billion dollars); and 0.25% of 1% per year
for assets in excess of $2,000,000,000 (two billion dollars).
We encourage you to read the attached Information Statement, which more
fully describes TCW, Marsico Capital and Bernstein, and the Board of Directors'
approval of the new subadvisory agreements. The other material terms of the
subadvisory agreement are identical to the previous arrangements. The Enterprise
Group of Funds, Inc. looks forward to working with TCW, Marsico Capital and
Bernstein 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
<PAGE> 4
THE ENTERPRISE GROUP OF FUNDS, INC.
EQUITY, CAPITAL APPRECIATION AND
MANAGED FUNDS
ATLANTA FINANCIAL CENTER
3343 PEACHTREE ROAD, N.E.
SUITE 450
ATLANTA, GA 30326-1022
---------------------
INFORMATION STATEMENT
---------------------
We are providing this Information Statement to the shareholders of The
Enterprise Group of Funds, Inc. Enterprise Equity Fund (the "Equity Fund"),
Enterprise Capital Appreciation Fund (the "Capital Appreciation Fund") and
Enterprise Managed Fund (the "Managed 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 Fund Managers and to make changes to
existing Fund 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.
SHARE OWNERSHIP
The Equity, Capital Appreciation and Managed Funds are a separate series of
shares of beneficial interest of the Fund. As of November 1, 1999, there were
2,903,140 shares outstanding as to the Equity Fund, there were 4,068,686 shares
outstanding as to the Capital Appreciation Fund, and there were 41,326,953
shares outstanding as to the Managed Fund. The cost of this Information
Statement will be paid by the Fund.
To the knowledge of the Fund, as of November 1, 1999, no single person or
"group" (as such term is used in Section 13(d) of the Securities Exchange Act of
1934), had the power to direct the vote of more than 5% of the Equity, Capital
Appreciation or Managed Fund's outstanding shares. This Information Statement
will be mailed on or about December 3, 1999.
THE FUND
The Equity, Capital Appreciation, and Managed Funds are investment funds of
the Fund, a Maryland corporation. The Fund has entered into an investment
advisory agreement with Enterprise Capital dated July 1, 1999 (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 fund 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 fund
of the Fund, from which Enterprise Capital renders all fees payable to the Fund
Managers. The investment funds of the Fund, therefore, pay no fees directly to
the Fund Managers.
Enterprise Capital recommends Fund Managers for the investment 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 investment 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.
3
<PAGE> 5
The Fund Managers do not provide any services to the investment funds
except Fund investment management and related record-keeping services. However,
in accordance with the procedures adopted by the Board, the Fund Managers, or
their affiliated broker-dealers, may execute transactions for the Equity,
Capital Appreciation and Managed Funds 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.
BOARD OF DIRECTORS' DECISION
At a meeting held on October 26, 1999, the Board, including a majority of
the non-interested Directors, approved Enterprise Capital's recommendation to
replace OpCap Advisors ("OpCap") with a new Fund Manager for the Equity Fund and
to replace Provident Investment Counsel, Inc. ("Provident") with a new Fund
Manager for the Capital Appreciation Fund. The Board, including a majority of
the non-interested Directors, also approved Enterprise Capital's recommendation
to add Sanford C. Bernstein & Co., Inc. ("Bernstein") as a Co-Fund Manager of
the Managed Fund along with OpCap. Accordingly, the Board approved new Fund
Manager Agreements (the "New Agreements") with TCW Funds Management, Inc.
("TCW") for the Equity Fund, Marsico Capital Management, LLC ("Marsico Capital")
for the Capital Appreciation Fund, and Bernstein along with OpCap for the
Managed Fund. The Board's decisions to replace OpCap and Provident on the Equity
and Capital Appreciation Funds, respectively, and to add Bernstein as a
Co-Manager on the Managed Fund along with OpCap were based on performance and
divergent investment strategies. In approving the New Agreements, the Board
considered a number of factors, including, but not limited to: (i) the
performance of the Equity, Capital Appreciation and Managed Funds since they
commenced operations; (ii) the nature and quality of the services expected to be
rendered to the Equity, Capital Appreciation and Managed Funds by the Fund
Managers, (iii) that the material terms of the Fund Manager Agreements will be
unchanged under the New Agreements; (iv) the history, reputation, qualification
and background of the Fund Managers, as well as the qualifications of their
personnel. The Board considered these factors to be of equal weight and
importance.
Enterprise Capital made the recommendations to hire TCW, Marsico Capital
and Bernstein in the ordinary course of its ongoing evaluation of Fund Manager
performance and investment strategy. Enterprise Capital conducted extensive
research of numerous candidate firms and qualitative and quantitative analysis
of each candidate's organizational structure, investment process and style, and
long-term performance record. Enterprise Capital believes that TCW's management
style is appropriately suited to the Equity Fund, that Marsico Capital's
management style is appropriately suited to the Capital Appreciation Fund and
that Bernstein's management style is appropriately suited to serving as the
Co-Manager of the Managed Fund.
THE FUND MANAGER AGREEMENTS
The Equity Fund
OpCap served as Fund Manager of the Equity Fund, pursuant to a Fund Manager
Agreement dated November 5, 1997 (the "Previous Agreement for the Equity Fund").
Under the Adviser's Agreement, the Equity Fund paid to Enterprise Capital a
management fee at the rate of 0.75% of the average of the daily closing net
asset values of the Fund per year. From this amount, under the Previous
Agreement for the Equity Fund, Enterprise Capital paid to OpCap fees equal to
0.40 of 1% of the Equity Fund's daily net assets up to $100,000,000 (one hundred
million dollars) and 0.30 of 1% thereafter on the Equity Funds average daily net
assets. These fees will remain the same under the New Agreement for the Equity
Fund.
For the fiscal year ended December 31, 1998, the Equity Fund paid to
Enterprise Capital management fees in the amount of $77,640, of which Enterprise
Capital paid $33,324 to OpCap. If the New Agreement for the Equity Fund had been
in effect for 1998, the fee paid by Enterprise Capital to the Fund Manager would
have been the same.
4
<PAGE> 6
The Capital Appreciation Fund
Provident served as Fund Manager of the Capital Appreciation Fund, pursuant
to a Fund Manager Agreement dated May 15, 1995 (the "Previous Agreement for the
Capital Appreciation Fund"). Under the Adviser's Agreement, the Capital
Appreciation Fund paid to Enterprise Capital a management fee equal to 0.75% of
its average daily net assets. From this amount, under the Previous Agreement for
the Capital Appreciation Fund, Enterprise Capital paid to Provident fees equal
to 0.50 of 1% of the Capital Appreciation Fund's daily net assets up to
$100,000,000; 0.45% of 1% on the next $100,000,000; 0.35 of 1% on the next
$100,000,000; and 0.30 of 1% thereafter on the Capital Appreciation Funds'
average daily net assets. The Fund Manager fees will change under the New
Agreement for the Capital Appreciation Fund with Marsico Capital to 0.45 of 1%
per year of the average of the daily closing net asset value of assets under
management.
For the fiscal year ended December 31, 1998, the Capital Appreciation Fund
paid to Enterprise Capital management fees in the amount of $944,606, of which
Enterprise Capital paid $616,764 to Provident. If the New Agreement for the
Capital Appreciation Fund had been in effect for 1998, the fee paid by
Enterprise Capital to the Fund Manager would have been $567,111.
The Managed Fund
Under the New Agreements with Bernstein and OpCap, Bernstein and OpCap are
obligated to provide the same services to the Managed Fund as OpCap alone
provided under the Previous Agreement for the Managed Fund. In addition, the New
Agreements do not change the management fee paid by the Managed Fund. Assets
held in the Managed Fund as of November 1, 1999 were divided equally for
management between OpCap and Bernstein. Net cash flows into the Managed
Fund/redemptions out of the Managed Fund will be allocated on a 50/50 basis for
management purposes going forward.
OpCap served as Fund Manager of the Managed Fund, pursuant to a Fund
Manager Agreement dated November 5, 1997 (the "Previous Agreement for the
Managed Fund"). Under the Adviser's Agreement, the Managed Fund paid to
Enterprise Capital a management fee at the rate of 0.75% of the average of the
daily closing net asset values of the Fund per year paid monthly.
From this amount, under the Previous Agreement for the Managed Fund
Enterprise Capital paid to OpCap fees equal to 0.40 of 1% of the Managed Fund's
daily net assets up to $100,000,000 (one hundred million dollars) and 0.30 of 1%
on the Managed Fund's average daily net assets in excess of $100,000,000 (one
hundred million dollars). These fees will change under the New Agreement on the
fifty-percent (50%) of the Managed Fund that Bernstein manages to: 0.40 of 1%
per year for the first $10,000,000 of assets under management; 0.30 of 1% per
year for the next $40,000,000 of assets under management (up to $50,000,000);
0.20 of 1% per year for the next $50,000,000 of assets under management (up to
$100,000,000); and 0.10% per year for assets under management in excess of
$100,000,000; and the fees paid by Enterprise Capital to OpCap on the
fifty-percent (50%) of the Managed Fund that it manages will stay the same as
under the previous schedule: 0.40 of 1% per year for the first $100,000,000 (one
hundred million dollars) of assets under management and 0.30 of 1% on the
Managed Fund's average daily net assets in excess of $100,000,000 (one hundred
million dollars).
For the fiscal year ended December 31, 1998, the Managed Fund paid to
Enterprise Capital Management fees in the amount of $3,103,061, of which
Enterprise Capital paid $1,341,224 to OpCap. If the New Agreements for the
Managed Fund with Bernstein and OpCap had been in effect for 1998, the fee paid
by Enterprise Capital to Bernstein would have been $366,855, and the fee paid by
Enterprise Capital to OpCap would have been $720,566, for a total sub-advisory
fee of $1,087,421.
The New Agreements with TCW, Marsico Capital, Bernstein and OpCap are
identical in form in all material respects to the Previous Agreements with the
exception of the revised Fund Manager fee schedules for Marsico Capital and
Bernstein. The form of the New Agreements with TCW, Marsico, Bernstein and OpCap
are attached to this Information Statement as Exhibits A, B, C and D,
respectively.
5
<PAGE> 7
THE BOARD OF DIRECTORS' DECISION
In approving the New Agreements, the Board of Directors considered a number
of material factors, including, but not limited to: that the terms and
conditions of the New Agreements are substantially identical to those of the
previous agreements for the Equity, Capital Appreciation and Managed Funds, the
performance of the Equity, Capital Appreciation and Managed Funds, the quality
of the services rendered by TCW, Marsico Capital and Bernstein, and that the New
Agreements will 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 Agreements and relevant information, the Board concluded that the New
Agreements are fair, reasonable and in the best interests of the Shareholders of
the Equity, Capital Appreciation and Managed Funds. Accordingly, the Board of
Directors, including the non-interested Directors, unanimously approved the New
Agreements.
INFORMATION ABOUT ENTERPRISE CAPITAL
Enterprise Capital, located at the 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 Inc. and had more than $8 billion under management
as of October 31, 1999. Enterprise Fund Distributors, Inc. is the Fund's
principal underwriter, and its address is 3343 Peachtree Road N.E., Suite 450,
Atlanta Georgia 30326-1022. Enterprise Capital also provides investment advisory
services to Enterprise Accumulation Trust. The Equity Portfolio has an identical
investment objective to the Equity Fund, the Capital Appreciation Portfolio has
an identical investment objective to the Capital Appreciation Fund and the
Managed Portfolio has an identical investment objective to the Managed Fund.
INFORMATION ON TCW, MARSICO CAPITAL AND BERNSTEIN
The following are descriptions of TCW, Marsico Capital and Bernstein, which
are based on information provided by TCW, Marsico Capital and Bernstein. TCW,
Marsico Capital and Bernstein are not affiliated with Enterprise Capital or The
Enterprise Group Of Funds, Inc. other than by reason of serving as Fund Managers
to one or more Funds.
TCW
TCW's offices are located at 865 South Figueroa, Suite 1800, Los Angeles,
CA 90017. TCW has provided investment counseling since 1971. TCW's assets under
management for all clients were $55 billion as of September 30, 1999. Usual
separate account investment minimum is $50 million. Glen E. Bickerstaff is
responsible for the day-to-day management of the Equity Fund and is a Managing
Director of TCW, which he joined in 1998. He has 19 years of investment industry
experience, and he previously served as Senior Fund Manager and Vice President
for Transamerica Investment Services.
Marsico Capital
Marsico Capital's offices are located at 1200 17th Street, Suite 1300,
Denver, CO 80202. Marsico Capital has provided investment counseling since 1997.
Marsico Capital's assets under management for all clients were $9 billion as of
September 30, 1999. Usual separate account investment minimum is $100 million.
Thomas F. Marsico, Chairman and Chief Executive Officer, is responsible for the
day-to-day management of the Capital Appreciation Fund. Mr. Marsico founded
Marsico Capital in 1997. He previously served as Fund Manager for Janus Capital
Corp. from 1986-1997.
Bernstein
Bernstein's offices are located at 767 Fifth Avenue, New York, New York
10153-0185. Bernstein has provided investment counseling since 1967. Bernstein's
assets under management for all clients were $85 billion as of September 30,
1999. Usual separate account investment minimum is $5 million. A team led by
6
<PAGE> 8
Steven Pisarkiewicz, Chief Investment Officer of Structured Equity Services is
responsible for the day-to-day management of Bernstein's portion of the Managed
Fund.
ADDITIONAL INFORMATION
To the knowledge of the Fund, as of November 1, 1999, no person
beneficially owned more than 5% of the outstanding shares of any of the Equity,
Capital Appreciation or Managed Funds. 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
1-800-432-4320, or writing to Enterprise Capital at the above address.
By Order of the Board of Directors,
Catherine R. McClellan
Secretary
7
<PAGE> 9
EXHIBIT A
EQUITY FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 26th day of October, 1999, 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 TCW Funds Management, Inc., a California corporation,
(hereinafter referred to as the "Fund Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement 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 funds 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 funds.
(B) The parties hereto wish to enter into an agreement whereby the Fund
Manager will provide to the Equity Fund of the Fund (the "Equity Fund")
securities investment advisory services for the Equity 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 Equity 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 Equity Fund advice with respect
to the investment and reinvestment of the assets of the Equity Fund, or
such portion of the assets of the Equity Fund as the Adviser shall specify
from time to time, in accordance with the investment objectives,
restrictions and limitations applicable to the Equity Fund which are set
forth in the Fund's most recent Registration Statement.
(3) The Fund Manager shall perform a monthly reconciliation of the
Equity 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 funds 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 funds.
(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 funds.
(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 0.033 of 1% of the
average of the daily closing net asset value of the Equity Fund managed by
the Fund Manager during such month (that is, 0.40 of 1% per year) for the
first $100,000,000 of assets under management; and a sum equal to
A-1
<PAGE> 10
0.025 of 1% of the average of the daily closing net asset value of the
Equity Fund during such month (that is, 0.30 of 1% per year) for assets
under management 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
Equity 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 Equity Fund or the Adviser or to any
shareholder or shareholders of the Fund, the Equity 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 Equity Fund from taking, at any time, a short
position in any shares of any holdings of the Equity 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 Equity 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 Equity Fund, the Fund Manager is
authorized to select the brokers or dealers that will execute purchase and
sale transactions for the Equity 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 fund securities for the Equity
Fund. Subject to this primary requirement, and maintaining as its first
consideration the benefits for the Equity 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 Equity 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 funds.
(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, 2000
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
A-2
<PAGE> 11
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.
(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:
<TABLE>
<CAPTION>
<S> <C>
by the Fund Manager: TCW Funds Management, Inc.
865 South Figueroa Street
Suite 1800
Los Angeles, California 90017
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
</TABLE>
A-3
<PAGE> 12
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 Equity Fund.
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.
ASSETS: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
---------------------------------------- -------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) ENTERPRISE CAPITAL MANAGEMENT, INC.
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
---------------------------------------- -------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) TCW FUNDS MANAGEMENT, INC.
ATTEST: /s/ MARK GLANCY By: /s/ MICHAEL E. CAHILL
----------------------------------------- -------------------------------------------------
Assistant Vice President Michael E. Cahill, Managing Director
(SEAL)
ATTEST: /s/ MARK GLANCY By: /s/ PATRICIA M. NAVIS
----------------------------------------- -------------------------------------------------
Assistant Vice President Patricia M. Navis, Vice-President
</TABLE>
A-4
<PAGE> 13
EXHIBIT B
CAPITAL APPRECIATION FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 1st day of November, 1999, 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 Marsico Capital Management, LLC, a Colorado LLC, (hereinafter
referred to as the "Fund Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement 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 funds 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 funds.
(B) The parties hereto wish to enter into an agreement whereby the Fund
Manager will provide to the Capital Appreciation Fund of the Fund (the "Capital
Appreciation Fund") securities investment advisory services for the Capital
Appreciation 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 Capital Appreciation 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 Capital Appreciation Fund
advice with respect to the investment and reinvestment of the assets of the
Capital Appreciation Fund, or such portion of the assets of the Capital
Appreciation Fund as the Adviser shall specify from time to time, with full
discretion in accordance with the investment objectives, restrictions and
limitations applicable to the Capital Appreciation Fund which are set forth
in the Fund's most recent Registration Statement.
(3) The Fund Manager shall perform a monthly reconciliation of the
Capital Appreciation 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 funds 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 funds.
(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 funds.
(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 0.0375 of 1% of the
average
B-1
<PAGE> 14
of the daily closing net asset value of the Capital Appreciation Fund
managed by the Fund Manager during such month (that is, 0.45 of 1% per
year).
(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
Capital Appreciation 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 Capital Appreciation Fund or the Adviser or
to any shareholder or shareholders of the Fund, the Capital Appreciation
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 Capital Appreciation Fund from taking, at any time,
a short position in any shares of any holdings of the Capital Appreciation
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 Capital Appreciation 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 Capital Appreciation Fund, the Fund
Manager is authorized to select the brokers or dealers that will execute
purchase and sale transactions for the Capital Appreciation 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 fund
securities for the Capital Appreciation Fund. Subject to this primary
requirement, and maintaining as its first consideration the benefits for
the Capital Appreciation 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 Capital
Appreciation 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 funds.
(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.
B-2
<PAGE> 15
(12) Subject to prior termination as provided above, this Agreement
shall continue in force from the date of execution until December 31, 2000
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 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.
(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:
<TABLE>
<S> <C>
by the Fund Manager: Marsico Capital Management, LLC
1200 17th Street, Suite 1300
Denver, CO 80202
by the Adviser: Enterprise Capital Management, Inc.
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022
</TABLE>
B-3
<PAGE> 16
<TABLE>
<S> <C>
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
</TABLE>
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 Capital Appreciation
Fund.
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.
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
----------------------------------------- -------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) ENTERPRISE CAPITAL MANAGEMENT, INC.
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
---------------------------------------- -------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) MARSICO CAPITAL MANAGEMENT, LLC
ATTEST: /s/ CHRISTOPHER J. MARSICO By: /s/ BARBARA M. JAPHA
---------------------------------------- ------------------------------------------------
Title: COO/Secretary Name: Barbara M. Japha
Title: President
</TABLE>
B-4
<PAGE> 17
EXHIBIT C
MANAGED FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 26th day of October, 1999, 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 Sanford C. Bernstein & Co., Inc., a New York corporation
(hereinafter referred to as the "Fund Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement 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 funds 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 funds.
(B) The parties hereto wish to enter into an agreement whereby the Fund
Manager will provide to the Managed Fund of the Fund (the "Managed Fund")
securities investment advisory services for the Managed 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 Managed 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 Managed Fund advice with
respect to the investment and reinvestment of the assets of the Managed
Fund, or such portion of the assets of the Managed Fund as the Adviser
shall specify from time to time, in accordance with the investment
objectives, restrictions and limitations applicable to the Managed Fund
which are set forth in the Fund's most recent Registration Statement.
(3) The Fund Manager shall perform a monthly reconciliation of the
Managed 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 funds 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 funds.
(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 funds.
(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
C-1
<PAGE> 18
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
Managed Fund managed by the Fund Manager during such month (that is, 0.40
of 1% per year) for the first $10,000,000 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 Managed Fund during such month (that is, 0.30 of 1% per year)
for the next $40,000,000 of assets under management (up to $50,000,000);
and a sum equal to 0.0166667 of 1% of the average of the daily closing net
asset value of the Managed Fund during such month (that is 0.20 of 1% per
year) for the next $50,000,000 of assets under management (up to
$100,000,000); and a sum equal to 0.0083333 of 1% of the average of the
daily closing net asset value of the Managed Fund during such month (that
is 0.10% per year) for assets under management 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
Managed 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 Managed Fund or the Adviser or to any
shareholder or shareholders of the Fund, the Managed 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 Managed Fund from taking, at any time, a short
position in any shares of any holdings of the Managed 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 Managed 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 Managed Fund, the Fund Manager is
authorized to select the brokers or dealers that will execute purchase and
sale transactions for the Managed 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 fund securities for the Managed
Fund. Subject to this primary requirement, and maintaining as its first
consideration the benefits for the Managed 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 Managed 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 funds.
In lieu of selecting broker-dealers to execute transactions for the
Managed Fund, the Fund Manager may execute such transactions for the
Managed Fund provided that it "steps-out" such transactions to the
broker-dealers selected by the Fund Manager. A step-out is a service
provided by the New York Stock Exchange and other markets which allows the
Fund Manager to provide the Managed Fund with the benefit of the Fund
Manager's execution capabilities at no additional charge and then transfer
or step-
C-2
<PAGE> 19
out the confirmation and settlement responsibilities of such transactions
to the broker-dealer(s) selected by the Fund Manager. In connection with a
step-out, transaction charges shall be paid by the Managed Fund to the
broker-dealers selected by the Fund Manager and not to the Fund Manager.
In addition to selecting brokers or dealers to execute transactions
for the Managed Fund, the Fund Manager may, subject to obtaining best
execution, also act as a broker for the Managed Fund from time to time at
rates not exceeding the usual and customary broker's commission. Under
Federal law, the Fund Manager must obtain the Fund's and the Adviser's
consent to effect agency cross transactions for the Managed Fund, which
consent is hereby granted. The Fund Manager represents, warrants and
covenants that all agency cross transactions for the Managed Fund will be
effected by the Fund Manager strictly in accordance with Rule 206(3)-2
under the Investment Advisers Act of 1940. An agency cross transaction is
where the Fund Manager purchases or sells securities from or to a
non-managed account on behalf of a client's managed account. Pursuant to
this consent, the Fund Manager will only effect an agency cross transaction
for the Managed Fund with a non-managed account. When the Fund Manager
crosses transactions in connection with a step-out, the Fund Manager will
receive a commission from the transaction only with respect to the
non-managed account and will not receive a commission from the transaction
with respect to the Managed Fund. In an agency cross transaction where the
Fund Manager acts as broker for the Managed Fund, the Fund Manager receives
commissions from both sides of the trade and there is a potentially
conflicting division of loyalties and responsibilities. However, as both
sides to the trade want to execute the transaction at the best price
without moving the market price in either direction, the Fund Manager
believes that an agency cross transaction will aid both sides to the trade
in obtaining the best price for the trade. The fund or the adviser may
revoke this consent by written notice to the fund manager at any time.
(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, 2000
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 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
C-3
<PAGE> 20
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.
(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:
<TABLE>
<S> <C>
by the Fund Manager: Sanford C. Bernstein & Co., Inc.
767 Fifth Avenue
New York, NY 10153-0185
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
</TABLE>
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 Managed Fund.
C-4
<PAGE> 21
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.
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
----------------------------------------- -------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) ENTERPRISE CAPITAL MANAGEMENT, INC.
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
----------------------------------------- -------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) SANFORD C. BERNSTEIN & CO., INC.
ATTEST: /s/ JEAN MARGO REID By: /s/ ROGER HERTOG
----------------------------------------- -------------------------------------------------
Title: SVP & Secretary Name: Roger Hertog
Title: President
</TABLE>
C-5
<PAGE> 22
EXHIBIT D
MANAGED FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 1st day of November, 1999, 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 "Fund Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement 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 funds 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 funds.
(B) The parties hereto wish to enter into an agreement whereby the Fund
Manager will provide to the Managed Fund of the Fund (the "Managed Fund")
securities investment advisory services for the Managed 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 Managed 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 Managed Fund advice with
respect to the investment and reinvestment of the assets of the Managed
Fund, or such portion of the assets of the Managed Fund as the Adviser
shall specify from time to time, in accordance with the investment
objectives, restrictions and limitations applicable to the Managed Fund
which are set forth in the Fund's most recent Registration Statement.
(3) The Fund Manager shall perform a monthly reconciliation of the
Managed 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 funds 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 funds.
(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 funds.
(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 0.03333 of 1% of the
average
D-1
<PAGE> 23
of the daily closing net asset value of the Managed Fund managed by the
Fund Manager during such month (that is, 0.40 of 1% per year) for the first
$100,000,000 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 Managed Fund during
such month (that is, 0.30 of 1% per year) for assets under management 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
Managed 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 Managed Fund or the Adviser or to any
shareholder or shareholders of the Fund, the Managed 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 Managed Fund from taking, at any time, a short
position in any shares of any holdings of the Managed 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 Managed 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 Managed Fund, the Fund Manager is
authorized to select the brokers or dealers that will execute purchase and
sale transactions for the Managed 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 fund securities for the Managed
Fund. Subject to this primary requirement, and maintaining as its first
consideration the benefits for the Managed 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 Managed 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 funds.
(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, 2000
and from year to year thereafter if its continuance after
D-2
<PAGE> 24
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.
(19) 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.
(20) 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:
<TABLE>
<S> <C>
by the Fund Manager: OpCap Advisors
1345 Avenue of the Americas
47th Floor
New York, New York 10105-4800
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
</TABLE>
D-3
<PAGE> 25
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.
(21) 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.
(22) This Agreement constitutes the entire agreement between the Fund
Manager, the Adviser and the Fund relating to the Managed Fund.
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.
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
---------------------------------------- -------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) ENTERPRISE CAPITAL MANAGEMENT, INC.
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
---------------------------------------- -------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) OPCAP ADVISORS
ATTEST: By:
---------------------------------------- -------------------------------------------------
Name: Name:
Title:
</TABLE>
D-4
