<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>
[X] Preliminary Information Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5(d)(2))
[ ] Definitive Information Statement
</TABLE>
The 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 Group of Funds LOGO]
--------------------------------------------------------------------------------
November 27, 2000
Dear Fellow Shareholder:
We are pleased to enclose an information statement about changes to two
funds of The Enterprise Group of Funds, Inc.: the Global Financial Services Fund
and the Managed Fund (the "Funds"). The first concerns a change in ownership of
Sanford C. Bernstein & Co., Inc. ("Bernstein Inc."), a Fund Manager for the
Funds. The second change concerns a new co-Fund Manager for the Managed Fund:
Wellington Management Company, LLP ("Wellington Management").
On October 2, 2000, Bernstein Inc. was acquired by Alliance Capital
Management L.P. ("Alliance Capital"). Alliance Capital is a limited partnership
that is indirectly controlled by AXA Financial, Inc., a leading financial
services organization. As a result of this change in ownership, the Fund Manager
agreements among the Funds, Bernstein Inc. 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 Securities and Exchange
Commission, approved new Fund Manager agreements with Sanford C. Bernstein &
Co., LLC ("Bernstein LLC"), an indirect wholly-owned subsidiary of Alliance
Capital, which were effective as of October 2, 2000.
Effective January 1, 2001, the Board of Directors of The Enterprise Group
of Funds, Inc. has named Wellington Management co-Fund Manager of the Managed
Fund. As of September 30, 2000, Wellington Management had over $250 billion in
assets under management. Wellington Management joins Bernstein LLC as a co-Fund
Manager of the Managed Fund.
In selecting Wellington Management as co-Fund Manager, consideration was
given to, among other factors, Wellington Management's investment management
acumen and style in conjunction with the investment objectives of the Managed
Fund. There will be no change in the Managed Fund's investment objective.
However, Wellington Management's investment style is distinct and will result in
modification of investment strategies. Investment decisions at Wellington
Management are generally made on a bottom-up basis, with managers relying
heavily on proprietary fundamental research provided by a team of global
industry analysts, as well as a number of other analytical inputs. The
Wellington Management research process focuses on the early recognition of
change, the identification of successful companies and the disciplines required
for making valuation judgments.
The management fees paid by the Funds to Enterprise Capital Management,
Inc. ("Enterprise Capital"), the investment advisor to the Funds, will not
change as a result of the new Fund Manager agreements. The terms of the new Fund
Manager agreement with Bernstein LLC are substantially identical to the terms of
the prior agreements. The management fees paid to and the services provided by
Bernstein LLC will not change. Under the new Fund Manager agreement with
Wellington Management, the
<PAGE> 3
services provided by Wellington Management will be the same as under the
agreement with the prior co-Fund Manager of the Managed Fund, OpCap Advisors;
however, the management fees paid by Enterprise Capital to Wellington Management
will likely be less than the management fees paid to OpCap.
We encourage you to read the attached information statement, which more
fully describes the acquisition of Bernstein and the Board of Directors'
approval of the new Fund Manager agreements. The Enterprise Group of Funds, Inc.
looks forward to working with Bernstein LLC and Wellington Management 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.
GLOBAL FINANCIAL SERVICES FUND
MANAGED FUND
ATLANTA FINANCIAL CENTER
3343 PEACHTREE ROAD, N.E., SUITE 450
ATLANTA, GA 30326-1022
---------------------
PRELIMINARY
INFORMATION STATEMENT
---------------------
We are providing this information statement to the shareholders of The
Enterprise Group of Funds, Inc. Global Financial Services Fund and Managed Fund
(collectively, the "Funds") in lieu of a proxy statement, pursuant to the terms
of an exemptive order that The Enterprise Group of Funds, Inc. ("EGF") has
received from the Securities and Exchange Commission (the "SEC"). The order
permits EGF's investment adviser, Enterprise Capital Management, Inc.
("Enterprise Capital"), to appoint new Fund Managers (defined below) and to make
changes to existing Fund Manager contracts with the approval of EGF'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 November 27, 2000. As
of , 2000, there were shares outstanding of the Global
Financial Services Fund, and there were shares outstanding of the
Managed Fund. The cost of this information statement will be paid by Sanford C.
Bernstein & Co., LLC.
THE FUNDS
The Funds are investment portfolios of EGF, a Maryland corporation. EGF
entered into an investment advisory agreement with Enterprise Capital, dated
July 1, 1999 (the "Adviser's Agreement"). Under the Adviser's Agreement,
Enterprise Capital is responsible 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 EGF. 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 EGF,
except those operations contracted to EGF's custodian and transfer agent. As
compensation for these services, Enterprise Capital receives a fee from each
investment portfolio of EGF, from which Enterprise Capital pays all fees due to
the Fund Managers. The investment portfolios of EGF, therefore, pay no fees
directly to the Fund Managers.
Enterprise Capital recommends Fund Managers for the investment portfolios
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 portfolio. 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 investment portfolios
other than investment management and related record-keeping services. However,
in accordance with the procedures adopted by the
1
<PAGE> 5
Board, the Fund Manager, or its affiliated broker-dealer, may execute
transactions for the 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.
CHANGE IN OWNERSHIP OF SANFORD C. BERNSTEIN & CO., INC.
THE FUND MANAGER'S AGREEMENTS
Sanford C. Bernstein & Co., Inc. ("Bernstein Inc.") has served as Fund
Manager to the Global Financial Services Fund since October 1, 1998, pursuant to
a Fund Manager's Agreement (the "Previous Global Financial Services Fund
Agreement"). Since November 1, 1999, Bernstein Inc. has also served as one of
two Fund Managers for the Managed Fund pursuant to a Fund Manager's Agreement
(the "Previous Managed Fund Agreement"). Bernstein Inc. was wholly-owned by
Sanford C. Bernstein, Inc. ("Sanford C. Bernstein").
Under the 1940 Act, 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. On October 2, 2000, Alliance
Capital Management L.P. ("Alliance Capital") acquired all assets and liabilities
of the operating subsidiaries of Sanford C. Bernstein, the parent of Bernstein
Inc. This acquisition effectively terminated the Previous Global Financial
Services Agreement and the Previous Managed Fund Agreement. The Board of
Directors of EGF approved new Fund Manager's Agreements with Sanford C.
Bernstein & Co. LLC ("Bernstein LLC"), on September 12, 2000 (the "New
Agreements").
GLOBAL FINANCIAL SERVICES FUND
Under the Adviser's Agreement, the Global Financial Services Fund pays per
year to Enterprise Capital a management fee equal to 0.85% of its average daily
net assets. From this amount, under the Previous Global Financial Services Fund
Agreement, Enterprise Capital paid to Bernstein Inc. fees per year equal to
0.50% of the first $100,000,000 of assets under management; 0.40% for assets
under management from $100,000,000 to $300,000,000; and 0.30% for assets under
management over $300,000,000. For the fiscal year ended December 31, 1999, the
Global Financial Services Fund paid to Enterprise Capital management fees in the
amount of $110,325 of which Enterprise Capital paid $64,897 to Bernstein Inc.
MANAGED FUND
Also under the Adviser's Agreement, the Managed Fund pays to Enterprise
Capital a management fee equal to 0.75% of its average daily net assets. From
this amount, under the Previous Agreement, Enterprise Capital paid per year to
Bernstein Inc. fees equal to 0.40% of assets under management up to $10,000,000;
0.30 % for the next $40,000,000 of assets under management; 0.20% per year for
the next $50,000,000 of assets under management; and 0.10% per year for assets
under management in excess of $100,000,000. For the fiscal year ended December
31, 1999, the Managed Fund paid to Enterprise Capital management fees in the
amount of $3,122,484 of which Enterprise Capital paid $33,441 to Bernstein Inc.
2
<PAGE> 6
THE NEW AGREEMENTS
The fees will not change under the New Agreements, which are identical in
all material respects to the Previous Global Financial Services Fund Agreement
and the Previous Managed Fund Agreement. The forms of the New Agreements are
attached to this Information Statement as Exhibit A.
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: (i) that the terms and
conditions of the New Agreements are identical in all material respects to those
of the Previous Global Financial Service Fund Agreement and the Managed Fund
Agreement, (ii) the change in control of Bernstein Inc. does not affect its
personnel or operations, (iii) the performance of the Funds since Bernstein Inc.
became Fund Manager for the Funds, (iv) the nature and quality of services
rendered by Bernstein Inc., and (v) the New Agreements 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 Agreements and
relevant information, the Board concluded that the New Agreements were fair,
reasonable and in the best interests of the shareholders of the 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 EGF. Enterprise Capital is a second-tier subsidiary
of The MONY Group Inc. Enterprise Fund Distributors, Inc. is EGF'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 ("EAT"). The Managed Portfolio of EAT
has an identical investment objective to the Managed Fund. EAT does not have a
portfolio with an identical investment objective to the Global Financial
Services Fund.
INFORMATION ABOUT BERNSTEIN LLC
The following is a description of Bernstein LLC, which is based on
information provided by Bernstein LLC. Bernstein LLC is not affiliated with
Enterprise Capital or EGF other than by reason of serving as Fund Manager to one
or more investment portfolios of EGF.
Bernstein LLC, an indirect wholly-owned subsidiary of Alliance Capital, is
located at 767 Fifth Avenue, New York, New York, 10153 and serves as the Fund
Manager of the Global Financial Services Fund, as well as the Managed Fund's
Co-Fund Manager. With the investment management assistance of the new Bernstein
Investment Research and Management Unit (the "Bernstein Unit") of Alliance
Capital, Bernstein LLC now provides investment advisory services to the Funds.
The Bernstein Unit continues the investment research and management business of
Bernstein Inc., and the investment professionals of Bernstein Inc. who managed
the Funds prior to October 2, 2000 continue to manage the Funds through the
Bernstein Unit. Bernstein Inc. has provided investment counseling services since
1967. As of June 30, 2000, Bernstein Inc.'s total assets under management were
approximately $82.7 billion.
Andrew S. Adelson chairs the Bernstein Unit's International Value Equity
Policy Group, which conducts the day-to-day management of the Global Financial
Services Fund. Mr. Adelson is the Chief Investment Officer of International
Value Equities -- Bernstein Unit and an Executive Vice President at Alliance
Capital
3
<PAGE> 7
since October 2000 and prior to that was the Chief Investment Officer of
International Investment Management Services at Bernstein Inc. since 1990.
Steven Pisarkiewicz chairs the Bernstein Unit's Structured Equities
Investment Policy Group, which conducts day-to-day co-management of the Managed
Fund together with OpCap Advisors. He has 15 years of experience in the
investment industry and joined Bernstein Inc. in 1989. Mr. Pisarkiewicz also has
served as the Chief Investment Officer of the Bernstein Unit's Structured Equity
Services since October 2, 2000 and prior to that at Bernstein Inc. since 1998.
He previously served as Managing Director of Institutional Services from 1991-97
and as Senior Portfolio Manager for Bernstein Inc.'s US Equity investment group
from 1997-98.
Bernstein LLC also serves as investment adviser to other investment
companies having similar objectives to the Managed Fund as indicated in Exhibit
B.
INFORMATION ABOUT ALLIANCE CAPITAL
The following is a description of Alliance Capital, which is based on
information provided by Alliance Capital. Alliance Capital is not affiliated
with Enterprise Capital or the Funds other than by reason of Bernstein LLC
serving as a Fund Manager.
Alliance Capital is a leading global investment management firm best known
for its growth style of equity investing. Assets under management of Alliance
Capital as of June 30, 2000 totaled $388 billion. Alliance Capital manages
retirement assets for many of the largest public and private employee benefit
plans (including 28 of the U.S. Fortune 100 companies), for public employee
retirement funds in 31 out of 50 states, and the foundations, endowments, banks
and insurance companies worldwide. Alliance Capital is also one of America's
largest mutual fund sponsors.
At October 2, 2000, Alliance Capital Management Holding L.P., ("Alliance
Holding") owned approximately 30% of the units of limited partnership interests
in Alliance Capital. AXA Financial Inc. owns approximately 2% of the outstanding
Alliance Holding limited partnership units and approximately 52% of the
outstanding Alliance Capital units, amounting to an approximate 53% economic
interest in Alliance Capital. AXA, which has operations in approximately 60
countries, holds a 60% interest in AXA Financial, Inc.
Alliance Capital Management Corporation ("ACMC") is the general partner of
Alliance Capital and Alliance Holding and makes all decisions relating to the
management of Alliance Capital and Alliance Holding. ACMC has agreed that it
will conduct no business other than managing Alliance Capital and Alliance
Holding, although it may make certain investments for its own account.
INFORMATION ABOUT BROKERAGE TRANSACTIONS
Bernstein LLC is a registered broker-dealer and is affiliated with one or
more registered broker-dealers. From time to time, a portion of the brokerage
transactions of the Global Financial Services Fund and the Managed Fund may be
conducted with such broker-dealers, subject to policies established by EGF's
Board to ensure that all brokerage commissions paid to such broker-dealers by
the Global Financial Services Fund and the Managed Fund are fair and reasonable.
For the fiscal year ended December 31, 1999, EGF paid $2,928 in brokerage
commissions with respect to the Global Financial Services Fund to affiliated
broker-dealers of Bernstein Inc., and paid $152,448 in brokerage commissions
with respect to the Managed Fund to affiliated broker-dealers of Bernstein Inc.
4
<PAGE> 8
WELLINGTON MANAGEMENT COMPANY, LLP TO CO-MANAGE THE MANAGED FUND
DECISION OF THE BOARD OF DIRECTORS
At a meeting held on November 16, 2000, the Board of Directors of EGF,
including a majority of the non-interested directors, approved Enterprise
Capital's recommendation to replace OpCap Advisors ("OpCap") with a new co-Fund
Manager of the Managed Fund. Accordingly, the Board approved a Fund Manager
Agreement with Wellington Management (the "Wellington Management Agreement").
The Board's decision to replace OpCap was based on performance and divergent
investment strategies. In approving the Wellington Management Agreement, the
Board considered a number of factors, including , but not limited to: (i) the
performance of the Managed Fund since it commenced operations; (ii) the nature
and quality of the services expected to be rendered to the Managed Fund by the
co-Fund Managers; (iii) that the material terms of the Fund Manager Agreement
will be unchanged under the Wellington Management Agreement; (iv) the history,
reputation, qualification and background of Wellington Management, as well as
the qualifications of its personnel. The Board considered these factors to be of
equal weight and importance.
Enterprise Capital made the recommendation to engage Wellington Management
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 Wellington Management's management
style is appropriately suited to the Managed Fund.
THE FUND MANAGER AGREEMENT
OpCap served as co-Fund Manager of the Managed Fund, pursuant to a Fund
Manager Agreement dated May 5, 2000 (the "OpCap Agreement"). Under the OpCap
Agreement, the Managed Fund paid to Enterprise Capital a management fee equal to
0.75% of its average daily net assets. From this amount, under the OpCap
Agreement, Enterprise Capital paid to OpCap fees equal to 0.40% of average daily
net assets up to $100,000,000 and 0.30% for assets in excess of $100,000,000.
Under the Wellington Management Agreement, Enterprise Capital will pay to
Wellington Management fees equal to 0.35% for assets under management up to
$100,000,000 and 0.30% for assets in excess of $100,000,000.
For the fiscal year ended December 31, 1999, the Managed Fund paid to
Enterprise Capital management fees in the amount of $3,122,484, of which
Enterprise Capital paid $1,247,563 to OpCap. If the Wellington Management
Agreement had been in effect for 1999, the fee paid by Enterprise Capital to
Wellington Management would have been lower.
The other material terms of the Wellington Management Agreement are
identical in form to the OpCap Agreement. The form of the Wellington Management
Agreement is attached to this Information Statement as Exhibit C.
INFORMATION ABOUT ENTERPRISE CAPITAL
Information about Enterprise Capital can be found on page 3 of this
Information Statement.
5
<PAGE> 9
INFORMATION ABOUT WELLINGTON MANAGEMENT
The following is a description of Wellington Management, which is based on
information provided by Wellington Management. Wellington Management is not
affiliated with Enterprise Capital or The Enterprise Group of Funds, Inc. other
than by reason of serving as co-Fund Manager of the Managed Fund.
Wellington Management's principal offices are located at 75 State Street,
Boston, Massachusetts 02109. Wellington Management is a Massachusetts limited
liability partnership owned entirely by 62 general partners, all of whom are
full-time professional members of the firm. It has provided investment
counseling since 1928. Wellington Management had assets under management for all
clients as of September 30, 2000 of over $250 billion. The usual minimum for
separate account investment is generally $10 to 50 million. James Rullo, a
partner of Wellington Management, is responsible for day-to-day management of
the Fund. Investment decisions at Wellington Management are generally made on a
bottom-up basis, with managers relying heavily on proprietary fundamental
research provided by a team of global industry analysts, as well as a number of
other analytical inputs. The Wellington Management research process focuses on
the early recognition of change, the identification of successful companies and
the disciplines required for making valuation judgments.
Wellington Management currently does not serve as investment adviser to
other investment companies having similar objectives to the Managed Fund.
ADDITIONAL INFORMATION
To the knowledge of EGF, as of November 27, 2000, no person beneficially
owned more than 5% of the outstanding shares of the Global Financial Services
Fund or the Managed Fund. EGF 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 EGF 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 EGF'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,
/s/ CATHERINE R. MCCLELLAN
Catherine R. McClellan
Secretary
6
<PAGE> 10
EXHIBIT A
GLOBAL FINANCIAL SERVICES FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 2nd day of October, 2000, 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., LLC, a Delaware limited liability
company (hereinafter referred to as the "Fund Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement dated as
of July 1, 1999 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 (the "Portfolios"), 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 Global Financial Services Portfolio of the Fund (the
"Global Fund") securities investment advisory services for the Global 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 Global 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 Global Fund advice with respect
to the investment and reinvestment of the assets of the Global Fund, or
such portion of the assets of the Global Fund as the Adviser shall specify
from time to time, in accordance with the investment objectives,
restrictions and limitations applicable to the Global Fund which are set
forth in the Fund's most recent Registration Statement. The Fund Manager
may delegate its investment advisory and other responsibilities and duties
hereunder to an affiliated person of the Fund Manager, subject to the Fund
Manager retaining overall responsibility for such powers and functions and
any and all obligations and liabilities in connection therewith.
(3) The Fund Manager shall perform a monthly reconciliation of the
Global 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
A-1
<PAGE> 11
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 0.042 of 1% of the
average of the daily closing net asset value of the Global Fund managed by
the Fund Manager during such month (that is, 0.50 of 1% per year) for the
first $100,000,000 of assets under management; a sum equal to 0.033 of 1%
of the average of the daily closing net asset value of the Global Fund
during such month (that is, 0.40% per year) for assets from $100,000,000 to
$300,000,000; and a sum equal to 0.025 of 1% of the average of the daily
closing net asset value of the Global Fund during such month (that is, 0.30
of 1% per year) for assets over $300,000,000.
(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
Global 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 Global Fund or the Adviser or to any
shareholder or shareholders of the Fund, the Global 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 and affiliated persons of the
Fund Manager who are responsible for investing assets of the Global Fund
from taking, at any time, a short position in any shares of any holdings of
the Global 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 Global 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 Global Fund, the Fund Manager is
authorized to select the brokers or dealers that will execute purchase and
sale transactions for the Global 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
Global Fund. Subject to this primary requirement, and maintaining as its
first consideration the benefits
A-2
<PAGE> 12
for the Global 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 Global 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.
In lieu of selecting broker-dealers to execute transactions in
domestic equities for the Global Fund, the Fund Manager may execute such
transactions for the Global 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 Global Fund with the benefit
of the Fund Manager's execution capabilities at no additional charge and
then transfer or "step-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 Global 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 Global Fund, the Fund Manager may, subject to obtaining best
execution, also act as a broker for the Global 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 Global Fund, which
consent is hereby granted. The Fund Manager represents, warrants and
covenants that all agency cross transactions for the Global 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 not effect agency cross transactions
between two managed accounts, that is, the Fund Manager will only effect an
agency cross transaction for the Global 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 Global Fund. In an agency cross
transaction where the Fund Manager acts as broker for Global 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 Oct. 2, 2002 and
from year to year thereafter if its continuance after said date:
A-3
<PAGE> 13
(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.
A-4
<PAGE> 14
(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., LLC
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 Global 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) SANFORD C. BERNSTEIN & CO., LLC
ATTEST: By: /s/ JEAN MARGO REID
------------------------------------------------ --------------------------------------------------
Secretary
</TABLE>
A-5
<PAGE> 15
MANAGED FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 2nd day of October, 2000, 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., LLC, a Delaware limited liability
company (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. The
Fund Manager may delegate its investment advisory and other
responsibilities and duties hereunder to an affiliated person of the Fund
Manager, subject to the Fund Manager retaining overall responsibility for
such powers and functions and any and all obligations and liabilities in
connection therewith.
(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.
A-6
<PAGE> 16
(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 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 and affiliated persons 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
A-7
<PAGE> 17
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-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 Oct 2, 2002 and
from year to year thereafter if its continuance after said date:
A-8
<PAGE> 18
(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.
A-9
<PAGE> 19
(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., LLC
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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their duly authorized officers and their corporate seals
hereunder duly affixed and attested, as of the date first above written.
<TABLE>
<S> <C>
(SEAL) ENTERPRISE 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., LLC
ATTEST: By: /s/ JEAN MARGO REID
---------------------------------------------- --------------------------------------------------
Name: Jean Margo Reid
-----------------------------------------------------
Title: Title: Senior Vice President
---------------------------------------- -----------------------------------------------------
</TABLE>
A-10
<PAGE> 20
MANAGED FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the day of , 2000, 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 Wellington Management Company, LLP, a Massachusetts
limited liability 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.
A-11
<PAGE> 21
(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 0.029166 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, 0.35 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.
A-12
<PAGE> 22
(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, 2002
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.
A-13
<PAGE> 23
(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: Wellington Management Company, LLP
75 State Street
Boston, MA 02109-1807
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.
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: By:
-------------------------------------------- ------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) ENTERPRISE CAPITAL
MANAGEMENT, INC.
ATTEST: By:
-------------------------------------------- ------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
</TABLE>
A-14
<PAGE> 24
<TABLE>
<S> <C>
(SEAL) WELLINGTON MANAGEMENT COMPANY, LLP
ATTEST: By:
--------------------------------------------- ------------------------------------------------
Title: Name:
--------------------------------------- ----------------------------------------------
Title:
---------------------------------------------
</TABLE>
A-15
<PAGE> 25
EXHIBIT B
Bernstein LLC manages assets for the following funds or portfolios of
series funds with similar investment objectives to the Managed Fund:
Managed Portfolio of Enterprise Accumulation Trust
Bernstein LLC is one of two sub-advisers for the Managed Portfolio, a
portfolio of the Enterprise Accumulation Trust. Shares of the Managed Portfolio
are sold only as the underlying investment for variable annuity contracts issued
by MONY Life Insurance Company of America. The approximate value of the
portfolio managed by Bernstein LLC for this fund was $777,054,686.80 at October
31, 2000. For services provided to this fund, the fund's manager, Enterprise
Capital, pays to Bernstein LLC a sub-advisory fee equal to: 0.40 of 1% per year
for assets under management up to $10,000,000; 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 of 1% per year for assets under
management in excess of $100,000,000. Bernstein LLC has not agreed to waive or
reduce its fees.
ASAF Sanford Bernstein Managed Index 500 Fund and AST Sanford Bernstein Managed
Index 500 Fund
Bernstein LLC is the sole sub-adviser for each of the ASAF Sanford
Bernstein Managed Index 500 Fund of American Skandia Advisor Funds, Inc. and the
AST Sanford Bernstein Managed Index 500 Portfolio of American Skandia Trust.
Shares of the AST Sanford Bernstein Managed Index 500 Portfolio may be purchased
only by separate accounts of certain participating insurance companies or by
qualified plans. The approximate value of the portfolio managed by Bernstein LLC
for each of the ASAF Sanford Bernstein Managed Index 500 Fund and the AST
Sanford Bernstein Managed Index 500 Portfolio was $83,151,349.47 and
$739,497,802.89, respectively, at October 31, 2000. For services provided to
these funds, Bernstein LLC is paid a sub-advisory fee at an annual rate equal to
the following percentages of the combined average daily net assets of the ASAF
Sanford Bernstein Managed Index 500 Fund and the AST Sanford Bernstein Managed
Index 500 Portfolio: 0.1533% of the portion of the combined average daily net
assets not in excess of $300 million; plus 0.10% of the portion of the combined
average daily net assets in excess of $300 million. Notwithstanding the
foregoing, the following annual rate applies for each day that the combined
average daily net assets are not in excess of $300 million: 0.40% of the first
$10 million of combined average daily net assets; plus 0.30% on the next $40
million of combined average daily net assets; plus 0.20% on the next $50 million
of combined average daily net assets; plus 0.10% on the next $200 million of
combined average daily net assets. Bernstein LLC has not agreed to waive or
reduce its fees.
B-1
