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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 3, 1999
SECURITIES ACT FILE NO. 33-21534
INVESTMENT COMPANY ACT FILE NO. 811-05543
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 17 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 18
(Check appropriate box or boxes)
ENTERPRISE ACCUMULATION TRUST
(Exact Name of Registrant as Specified in Charter)
ATLANTA FINANCIAL CENTER
3343 PEACHTREE ROAD
SUITE 450
ATLANTA, GA 30326
(Address of Principal Executive Office)(Zip Code)
(800) 432-4320
Registrant's telephone number, including area code
CATHERINE R. MCCLELLAN
ATLANTA FINANCIAL CENTER
3343 PEACHTREE ROAD
SUITE 450
ATLANTA, GA 30326
(Name and Address for Agent for Service)
COPY TO:
MARGERY K. NEALE, ESQ
SWIDLER BERLIN SHEREFF FRIEDMAN, LLP
919 THIRD AVENUE
NEW YORK, NY 10022
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on May 3, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on May 3, 1999 pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
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ENTERPRISE ACCUMULATION TRUST
PROSPECTUS
DATED MAY 3, 1999
EQUITY PORTFOLIOS
Growth Portfolio
Growth and Income Portfolio
Equity Portfolio
Equity Income Portfolio
Capital Appreciation Portfolio
Small Company Growth Portfolio
Small Company Value Portfolio
International Growth Portfolio
Global Financial Services Portfolio
INCOME PORTFOLIO
High-Yield Bond Portfolio
FLEXIBLE PORTFOLIO
Managed Portfolio
This prospectus contains information you should know before investing,
including information about risks. Please read it before you invest and keep it
for future reference. As with all mutual funds, the Securities and Exchange
Commission does not guarantee that the information in this prospectus is
accurate or complete, nor has it approved or disapproved these securities. It is
a criminal offense to state otherwise.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
Introduction................................................ 1
Growth Portfolio............................................ 2
Growth and Income Portfolio................................. 3
Equity Portfolio............................................ 4
Equity Income Portfolio..................................... 6
Capital Appreciation Portfolio.............................. 7
Small Company Growth Portfolio.............................. 8
Small Company Value Portfolio............................... 9
International Growth Portfolio.............................. 11
Global Financial Services Portfolio......................... 13
High-Yield Bond Portfolio................................... 14
Managed Portfolio........................................... 16
Additional Information about the Portfolios' Investments and
Risks..................................................... 18
Year 2000................................................. 19
Euro Conversion........................................... 19
Higher Risk Securities and Investment Practices............. 20
Risk Terminology.......................................... 22
Account Information......................................... 23
Transaction and Account Policies............................ 24
Valuation of Shares....................................... 24
Dividends, Distributions and Taxes........................ 24
Portfolio Management........................................ 25
The Investment Advisor.................................... 25
The Portfolio Managers.................................... 26
Financial Highlights........................................ 29
</TABLE>
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INTRODUCTION
Enterprise Accumulation Trust offers separate investment Portfolios that
serve as the underlying funding vehicles for variable annuity contracts and
variable life insurance policies. The Portfolios have individual objectives and
strategies to offer investors a broad range of investment alternatives. Shares
of the Portfolios are sold only to the insurance companies that write the
variable annuity and variable life policies. The contractholders do not become
shareholders of the Portfolios.
Enterprise Capital Management, Inc. (the "Advisor") is the investment
advisor to each Portfolio. The Advisor selects a Portfolio Manager for each
Portfolio on the basis of a number of criteria, including the Portfolio
Manager's reputation, resources and performance results.
Before investing in the Portfolios, you should consider the general risks
involved. The value of your investment in a Portfolio is based on the market
prices of the securities the Portfolio holds. These prices change due to
economic and other events that affect securities markets generally, as well as
those that affect particular companies, industry sectors or countries. These
price movements, sometimes called volatility, will vary depending on the types
of securities a Portfolio owns and the markets in which these securities trade.
In addition, the investments made by a Fund may underperform the market
generally or other mutual funds with a similar investment objective of that
Fund. As with other investments, you could lose money on your investment in a
Portfolio. Your investment in a Portfolio is not a bank deposit. It is not
insured or guaranteed by the FDIC or any government agency. A Portfolio may not
achieve its objective. A Portfolio's objective may not be changed without
shareholder approval.
1
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(PICTURE)
Columns of various heights: located to the left of the section titled: "Growth
Portfolio Profile."
GROWTH PORTFOLIO
PORTFOLIO PROFILE
Investment Objective Capital appreciation
Principal Investments U.S. common stocks of large
capitalization companies
Portfolio Manager Montag & Caldwell, Inc.
Investor Profile Investors who want the value of their
investment to grow but do not need to receive income on
their investment.
Investment Strategies The Growth Portfolio invests
primarily in U.S. common stocks. The "Growth at a
Reasonable Price" strategy employed by the Portfolio
combines growth and value style investing. This means that
the Portfolio invests in the stocks of companies with
long-term earnings potential but which are currently
selling at a discount to their estimated long term value.
The Portfolio's equity selection process is generally lower
risk than a typical growth stock approach. Valuation is the
key selection criterion which makes the investment style
risk adverse. Also emphasized are growth characteristics to
identify companies whose shares are attractively priced and
may experience strong earnings growth relative to other companies.
Principal Risks As a result of investing primarily in U.S. common stocks, the
Portfolio is subject to the risk that stock prices will fall over short or
extended periods of time. Stock markets tend to move in cycles, with periods of
rising prices and periods of falling prices. This price volatility is the
principal risk of investing in the Portfolio.
PERFORMANCE INFORMATION
Information about Portfolio performance is not provided due to the fact that the
Portfolio does not have returns for a full calendar year.
2
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(PICTURE)
Columns of various heights: located to the left of the section titled: "Growth
and Income Portfolio Profile."
GROWTH AND INCOME PORTFOLIO
PORTFOLIO PROFILE
Investment Objective Total return through capital
appreciation with income as a secondary consideration
Principal Investments Broadly diversified group of U.S.
common stocks of large capitalization companies
Portfolio Manager Retirement System Investors Inc.
Investor Profile Investors who want the value of their
investment to grow, with the potential of receiving
dividend income.
Investment Strategies The Growth and Income Portfolio
invests primarily in U.S. common stocks of large
capitalization companies. The Portfolio principally selects
stocks that will appreciate in value, seeking to take
advantage of temporary stock price inefficiencies, which
may be caused by market participants focusing heavily on
short-term developments. In selecting stocks for the Portfolio, the Portfolio
Manager employs a "value-oriented" strategy. This means that the Portfolio
Manager attempts to identify stocks of companies that have greater value than is
recognized by the market generally. The Portfolio Manager considers a number of
factors, such as sales, growth and profitability prospects for the economic
sector and markets in which the company operates and sells its products and
services, the company's stock market price, earnings level and projected
earnings growth rate. The Portfolio Manager also considers current and projected
dividend yields. The Portfolio Manager compares this information to that of
other companies in determining relative value.
Principal Risks The Portfolio invests primarily in U.S. common stocks. As a
result, the Portfolio is subject to the risk that stock prices will fall over
short or extended periods of time. Stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices. This price volatility is
the principal risk of investing in the Portfolio.
PERFORMANCE INFORMATION
Information about Portfolio performance is not provided due to the fact that the
Portfolio does not have returns for a full calendar year.
3
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(PICTURE)
Columns of various heights: located to the left of the section titled: "Equity
Portfolio Profile."
EQUITY PORTFOLIO
PORTFOLIO PROFILE
Investment Objective Long-term capital appreciation
Principal Investments U.S. equity securities
Portfolio Manager OpCap Advisors
Investor Profile Investors who want the value of their
investment to grow but do not need to receive income on
their investment.
Investment Strategies The Equity Portfolio invests
primarily in U.S. common stock of companies that meet the
Portfolio Manager's criteria of high return on investment
capital, strong positions within their industries, sound
financial fundamentals and management committed to
shareholder interests. To that end, Portfolio Manager
selects companies with one or more of the following
characteristics: substantial and growing discretionary cash flow, strong
shareholder value-oriented management, valuable consumer or commercial
franchises, high return on capital, favorable price to intrinsic value, and
undervalued assets. The Portfolio Manager also imposes a strict sell discipline
to sell the stock once it rises close to the target price established by the
Portfolio Manager.
Principal Risks The Portfolio invests primarily in U.S. common stocks. As a
result, the Portfolio is subject to the risk that stock prices will fall over
short or extended periods of time. Stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices. This price volatility is
the principal risk of investing in the Portfolio.
PERFORMANCE INFORMATION
The bar chart below and the performance table on the next page illustrate the
volatility of an investment in the Portfolio and give some indication of the
risk. Of course, the Portfolio's past performance does not necessarily indicate
how the Portfolio will perform in the future.
This bar chart shows changes in the performance of the Portfolio's shares from
year to year. It does not reflect separate account charges imposed by the
insurance companies that write the variable annuity contracts and variable life
policies; if these charges were included they would have reduced the
performance.
(BAR CHART)
Illustrates volatility of an investment and shows changes in shares performance
from 1989-1998
<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
14.17% -13.44%
(MARCH 31, 1991) (SEPTEMBER 30, 1998)
</TABLE>
4
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<TABLE>
<CAPTION>
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AVERAGE ANNUAL TOTAL RETURNS
(AS OF THE CALENDAR YEAR ENDED PAST ONE PAST FIVE PAST TEN
DECEMBER 31, 1998) YEAR YEARS YEARS
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<S> <C> <C> <C>
Enterprise Equity Portfolio(1).............................. 9.90% 20.00% 17.42%
S&P 500(2).................................................. 28.57% 24.06% 19.21%
</TABLE>
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(1) Inception date is August 1, 1988.
(2) This unmanaged broad-based index includes 500 companies which tend to be
leaders in important industries within the U.S. economy. It includes
reinvested dividends. An index does not have an investment advisor and does
not pay commissions or expenses. If an index had expenses, its performance
would be lower. One cannot invest directly in an index.
5
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(PICTURE)
Columns of various heights: located to the left of the section titled: "Equity
Income Portfolio Profile."
EQUITY INCOME PORTFOLIO
PORTFOLIO PROFILE
Investment Objective A combination of growth and income to
achieve an above-average and consistent total return
Principal Investments Dividend-paying U.S. common stocks
Portfolio Manager 1740 Advisers, Inc.
Investor Profile Investors who want the value of their
investment to grow, with the potential of receiving
dividend income.
Investment Strategies The Equity Income Portfolio invests
primarily in dividend-paying U.S. common stocks. The goal
is capital appreciation combined with a high level of
current income. Dividend yield relative to the S&P 500
average is used as a discipline and measure of value in
selecting stocks for the Fund. To qualify for a purchase, a
stock's yield must be greater than the S&P 500's average
dividend yield. The stock must be sold within two quarters
after its dividend yield falls below that of the S&P
average. The effect of this discipline is that a stock will
be sold if increases in its annual dividends do not keep
pace with increases in its market price.
Principal Risks The Portfolio invests primarily in U.S. common stocks. As a
result, the Portfolio is subject to the risk that stock prices will fall over
short or extended periods of time. Stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices. This price volatility is
the principal risk of investing in the Portfolio.
PERFORMANCE INFORMATION
Information about Portfolio performance is not provided due to the fact that the
Portfolio does not have returns for a full calendar year.
6
<PAGE> 10
(PICTURE)
Ticker: Old fashioned ticker tape: located to the left of the section titled:
"Capital Appreciation Portfolio Profile."
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO PROFILE
Investment Objective Maximum capital appreciation
Principal Investments U.S. common stocks of companies that
demonstrate accelerating earnings momentum and consistently
strong financial characteristics
Portfolio Manager Provident Investment Counsel, Inc.
Investor Profile Investors who want the value of their
investment to grow but do not need to receive income on
their investment and are willing to accept the increased
risk associated with more aggressive investment strategies.
Investment Strategies The Capital Appreciation Portfolio
invests in U.S. common stocks of companies that demonstrate
accelerating earnings momentum and consistently strong
financial characteristics. The Portfolio Manager's criteria
for stock selection include: (a) steadily increasing
earnings; and (b) a three-year performance record of sales,
earnings, dividend growth, pretax margins, return on equity
and reinvestment rate which, in the aggregate, average 1.5 times the average
performance of the S&P 500 for the same period. The Portfolio Manager selects
stocks of small, medium and large capitalization companies in an attempt to
achieve an average capitalization of portfolio companies that is less than the
average capitalization of the S&P 500. The potential for maximum capital
appreciation is the basis for investment decisions; any income is incidental.
Principal Risks The Portfolio invests in common stocks. As a result, the
Portfolio is subject to the risk that stock prices will fall over short or
extended periods of time. Stock markets tend to move in cycles, with periods of
rising prices and periods of falling prices. This price volatility is the
principal risk of investing in the Portfolio. In addition, the Portfolio invests
to a large extent in small- to mid-sized companies which may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these companies may have somewhat limited product lines, markets
and financial resources, and may depend upon a relatively small- to medium-sized
management group.
PERFORMANCE INFORMATION
Information about Portfolio performance is not provided due to the fact that the
Portfolio does not have returns for a full calendar year.
7
<PAGE> 11
(PICTURE)
Ticker: Old fashioned ticker tape: located to the left of the section titled:
"Small Company Growth Portfolio Profile."
SMALL COMPANY GROWTH PORTFOLIO
PORTFOLIO PROFILE
Investment Objective Capital appreciation
Principal Investments U.S. common stocks of small
capitalization companies
Portfolio Manager William D. Witter, Inc.
Investor Profile Investors who want an increase in the
value of their investment without regard to income; are
willing to accept the increased risk of investing in small
company stocks for the possibility of higher returns; and
want to diversify their portfolio to include small company
stocks.
Investment Strategies The Small Company Growth Portfolio
invests primarily in common stocks of small capitalization
companies with above-average growth characteristics that
are reasonably valued. The Portfolio Manager uses a
disciplined approach in evaluating growth companies. It
relates the expected growth rate in earnings to the
price-earnings ratio of the stock. Generally, the Portfolio
Manager will not buy a stock if its price-earnings ratio
exceeds its growth rate. By using this valuation parameter,
the Portfolio Manager believes it moderates some of the inherent volatility in
the small capitalization sector of the market. Securities will be sold when the
Portfolio Manager believes the stock price exceeds the valuation criteria, or
when the stock appreciates to a point where it is substantially overweighted in
the portfolio, or when the company no longer meets the Portfolio Manager's
expectations. The Portfolio Manager's goal is to hold a stock for a minimum of
one year but this may not always be feasible and there may be times when
short-term gains or losses will be realized.
Principal Risks The Portfolio invests primarily in common stocks. As a result,
the Portfolio is subject to the risk that stock prices will fall over short or
extended periods of time. Stock markets tend to move in cycles, with periods of
rising prices and periods of falling prices. This price volatility is the
principal risk of investing in the Portfolio. In addition, the Fund invests
primarily in small sized companies which may be more vulnerable to adverse
business or economic events than larger, more established companies. In
particular, small-sized companies may have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
PERFORMANCE INFORMATION
Information about Portfolio performance is not provided due to the fact that the
Portfolio does not have returns for a full calendar year.
8
<PAGE> 12
(PICTURE)
Ticker: Old fashioned ticker tape: located to the left of the section titled:
"Small Company Value Portfolio Profile."
SMALL COMPANY VALUE PORTFOLIO
PORTFOLIO PROFILE
Investment Objective Maximum capital appreciation
Principal Investments U.S. common stocks of small
capitalization companies
Portfolio Manager Gabelli Asset Management Company ("GAMCO
Investors, Inc.")
Investor Profile Investors who want an increase in the
value of their investment without regard to income; are
willing to accept the increased risk of investing in small
company stocks for the possibility of higher returns; and
want to diversify their portfolio to include small company
stocks.
Investment Strategies The Small Company Value Portfolio
invests primarily in common stocks of small capitalization
companies that the Portfolio Manager believes are
undervalued -- that is, the stock's market price does not
fully reflect the company's value. The Portfolio Manager
uses a proprietary research technique to determine which
stocks have a market price that is less than the "private market value," or what
an investor would pay for the company. The Portfolio Manager then determines
whether there is an emerging valuation catalyst that will focus investor
attention on the underlying assets of the company and increase the market price.
Smaller companies may be subject to a valuation catalyst such as increased
investor attention, takeover efforts or a change in management.
Principal Risks The Portfolio invests primarily in common stocks. As a result,
the Portfolio is subject to the risk that stock prices will fall over short or
extended periods of time. Stock markets tend to move in cycles, with periods of
rising prices and periods of falling prices. This price volatility is the
principal risk of investing in the Portfolio. In addition, the Fund invests
primarily in small-sized companies which may be more vulnerable to adverse
business or economic events than larger, more established companies. In
particular, small-sized companies may have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
PERFORMANCE INFORMATION
The bar chart and the performance table on the next page illustrate the
volatility of an investment in the Portfolio and give some indication of the
risk. Of course, the Portfolio's past performance does not necessarily indicate
how the Portfolio will perform in the future.
9
<PAGE> 13
This bar chart shows changes in the performance of the Portfolio's shares from
year to year. It does not include separate account charges imposed by the
insurance companies that write the annuity contracts and variable life policies;
if these charges were included they would have reduced performance.
(BAR CHART)
Illustrates volatility of an investment and shows changes in shares performance
from 1989-1998
<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
19.20% -17.80%
(MARCH 31, 1991) (SEPTEMBER 30, 1998)
</TABLE>
<TABLE>
<CAPTION>
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AVERAGE ANNUAL TOTAL RETURNS
(AS OF THE CALENDAR YEAR ENDED PAST ONE PAST FIVE PAST TEN
DECEMBER 31, 1998) YEAR YEARS YEARS
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<S> <C> <C> <C> <C>
Enterprise Small Company Value Portfolio(1).......................... 9.61% 14.59% 16.33%
Russell 2000(2)...................................................... -2.56% 11.86% 12.92%
</TABLE>
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(1) Inception date is August 1, 1988.
(2) This unmanaged broad-based index measures the performance of 2,000 small
capitalization companies. As of the latest reconstitution, the average
market capitalization was approximately $592.0 million and the largest
company in the index had an approximate market capitalization of $1,402.7
million. An index does not have an investment advisor, indicates reinvested
dividends and does not pay commissions or expenses. If an index had
expenses, its performance would be lower. One cannot invest directly in an
index.
10
<PAGE> 14
(PICTURE)
Columns of various heights: located to the left of the section titled:
"International Growth Portfolio Profile."
INTERNATIONAL GROWTH PORTFOLIO
PORTFOLIO PROFILE
Investment Objective Capital appreciation
Principal Investments Non-U.S. equity securities
Portfolio Manager Vontobel USA Inc.
Investor Profile Investors who want an increase in the
value of their investment without regard to income and are
willing to accept the increased risk of international
investing for the possibility of higher returns.
Investment Strategies The International Growth Portfolio
invests primarily in non-U.S. equity securities that the
Portfolio Manager believes are undervalued. The Portfolio
Manager uses an approach that involves bottom-up stock
selection. The Portfolio Manager looks for companies that
are good predictable businesses selling at attractive
prices relative to an estimate of intrinsic value. The
Portfolio Manager diversifies investments among European,
Australian and Far East ("EAFE") markets.
Principal Risks The Portfolio invests primarily in common stocks of foreign
companies. As a result, the Portfolio is subject to the risk that stock prices
will fall over short or extended periods of time. Stock markets tend to move in
cycles, with periods of rising prices and periods of falling prices. This price
volatility is the principal risk of investing in the Portfolio. In addition,
investments in foreign markets may be more volatile than investments in U.S.
markets. Diplomatic, political or economic developments may cause foreign
investments to lose money. The value of the U.S. dollar may rise, causing
reduced returns for U.S. persons investing abroad. A foreign country may not
have the same accounting and financial reporting standards as the U.S. Foreign
stock markets, brokers and companies are generally subject to less supervision
and regulation than their U.S. counterparts. Emerging market securities may be
even more susceptible to these risks.
PERFORMANCE INFORMATION
The bar chart below and the performance table on the next page illustrate the
volatility of an investment in the Portfolio and give some indication of the
risk. Of course, the Portfolio's past performance does not necessarily indicate
how the Portfolio will perform in the future.
This bar chart shows changes in the performance of the Portfolio's shares from
year to year. It does not include separate account charges imposed by the
insurance companies that write the annuity contracts and variable life policies;
if these charges were included they would have reduced performance.
(BAR CHART)
Illustrates volatility of an investment and shows changes in shares performance
from 1995-1998
<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
17.29% -13.69%
(DECEMBER 31, 1998) (SEPTEMBER 30, 1998)
</TABLE>
11
<PAGE> 15
<TABLE>
<CAPTION>
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AVERAGE ANNUAL TOTAL RETURNS
(AS OF THE CALENDAR YEAR ENDED PAST ONE RETURN SINCE
DECEMBER 31, 1998) YEAR INCEPTION(1)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Enterprise International Growth Portfolio................... 14.83% 11.62%
MSCI EAFE Index(2).......................................... 20.00% 9.51%
</TABLE>
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(1) Inception date is November 18, 1994. Performance reflects annualized return
from November 30, 1994 to December 31, 1998.
(2) The Morgan Stanley Capital International Europe, Australia, and the Far East
(MSCI EAFE) Index is a market capitalization weighted, equity index
comprised of 1,032 companies that are representative of the market structure
of 20 countries, excluding the United States, Canada and other regions such
as Latin America. Constituent stocks are selected on the basis of industry
representation, liquidity, and sufficient float. Includes invested dividends
and excludes any transaction or holding charges. One cannot invest directly
in any index.
12
<PAGE> 16
(PICTURE)
Ticker: Old fashioned ticker tape: located to the left of the section titled:
"Global Financial Services Portfolio Profile."
GLOBAL FINANCIAL SERVICES PORTFOLIO
PORTFOLIO PROFILE
Investment Objective Capital appreciation
Principal Investments Common stocks of domestic and
foreign financial services companies
Portfolio Manager Sanford C. Bernstein & Co., Inc.
Investor Profile Investors who want an increase in the
value of their investment without regard to income, want
investment in the global financial services sector, and are
willing to accept the increased risk of international
investing for the possibility of higher returns.
Investment Strategies The Global Financial Services
Portfolio invests primarily in the domestic and foreign
financial services industry by normally investing in
companies domiciled in the U.S. and in at least three other
countries. The Portfolio considers a financial services
company to be a firm that in its most recent fiscal year
either (i) derived at least 50% of its revenues or earnings
from financial services activities, or (ii) devoted at
least 50% of its assets to such activities. Financial services companies provide
financial services to consumers and businesses and include the following types
of U.S. and foreign firms: commercial banks, thrift institutions and their
holding companies; consumer and industrial finance companies; diversified
financial services companies; investment banks; securities brokerage and
investment advisory firms; financial technology companies; real estate-related
firms; leasing firms; credit card companies; government sponsored financial
enterprises; investment companies; insurance brokerages; and various firms in
all segments of the insurance industry such as multi-line property and casualty,
life insurance companies and insurance holding companies. The Portfolio Manager
selects securities by combining fundamental and quantitative research to
identify securities of financial services companies that are attractively priced
relative to their expected returns. Its research analysts employ a long-term
approach to forecasting the earnings and growth potential of companies and
attempt to construct global portfolios that produce maximum returns at a given
risk level.
Principal Risks The Portfolio invests in common stocks of foreign companies. As
a result, the Portfolio is subject to the risk that stock prices will fall over
short or extended periods of time. Stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices. This price volatility is
a principal risk of investing in the Portfolio. In addition, investments in
foreign markets may be more volatile than investments in U.S. markets.
Diplomatic, political or economic developments may cause foreign investments to
lose money. The value of the U.S. dollar may rise, causing reduced returns for
U.S. persons investing abroad. A foreign country may not have the same
accounting and financial reporting standards as the U.S. Foreign stock markets,
brokers and companies are generally subject to less supervision and regulation
than their U.S. counterparts. Emerging markets securities may be even more
susceptible to these risks. Because the Portfolio concentrates in a single
industry sector, its performance is largely dependent on the sector's
performance, which may differ from that of the overall stock market. Generally,
the financial services industry is extremely sensitive to fluctuations in
interest rates. Moreover, while rising interest rates will cause a decline in
the value of any debt securities the Portfolio holds, falling interest rates or
deteriorating economic conditions can adversely affect the performance of
financial services companies' stock. Both foreign and domestic financial
services companies are affected by government regulation or market intervention,
which may limit their activities and affect their profitability. Some financial
services companies, e.g., insurance companies, are subject to severe market
share and price competition.
PERFORMANCE INFORMATION
Information about Portfolio performance is not provided due to the fact that the
Portfolio does not have returns for a full year.
13
<PAGE> 17
(PICTURE)
Piggy bank: Antiqued piggy bank with various coins lying beside: located to the
left of the section titled: "High-Yield Bond Portfolio Profile."
HIGH-YIELD BOND PORTFOLIO
PORTFOLIO PROFILE
Investment Objective Maximum current income
Principal Investments Debt securities rated below
investment grade, which are commonly known as "junk bonds"
Portfolio Manager Caywood-Scholl Capital Management
Investor Profile Income-oriented investors who are willing
to accept increased risk for the possibility of greater
returns through high-yield bond investing.
Investment Strategies The High-Yield Bond Portfolio
invests primarily in high-yield, income-producing U.S.
corporate bonds rated B3 or better by Moody's Investors
Service, Inc. ("Moody's") or B- or better by Standard &
Poor's Corporation ("S&P"), which are commonly known as
"junk bonds." The Portfolio's investments are selected by
the Portfolio Manager after examination of the economic
outlook to determine those industries that appear favorable
for investment. Industries going through a perceived
decline generally are not candidates for selection. After the industries are
selected, the Portfolio Manager identifies bonds of issuers within those
industries based on their creditworthiness, their yields in relation to their
credit and the relative strength of their common stock prices. Companies near or
in bankruptcy are not considered for investment. The Portfolio does not purchase
bonds which are rated Ca or lower by Moody's or CC or lower by S&P or which, if
unrated, in the judgment of the Portfolio Manager have characteristics of such
lower-grade bonds. Should an investment be subsequently downgraded to Ca or
lower or CC or lower, the Portfolio Manager has discretion to hold or liquidate
the security. Subject to the restrictions described above, under normal
circumstances, up to 20% of the Portfolio's assets may include: (1) bonds rated
Caa by Moody's or CCC by S&P; (2) unrated debt securities which, in the judgment
of the Portfolio Manager, have characteristics similar to those described above;
(3) convertible debt securities; (4) puts, calls and futures as hedging devices;
(5) foreign issuer debt securities; and (6) short-term money market instruments,
including certificates of deposit, commercial paper, U.S. Government securities
and other income-producing cash equivalents.
Principal Risks The Portfolio invests primarily in below investment-grade debt
securities. As a result, the Portfolio is subject to the risk that the prices of
the debt securities will decline due to rising interest rates. This risk is
greater for long-term debt securities than for short-term debt securities. A
junk bond's market price may fluctuate more than higher-quality securities and
may decline significantly. High-yield bonds also carry a substantial risk of
default or changes in the issuer's creditworthiness. In addition, it may be more
difficult for the Portfolio to dispose of junk bonds or to determine their
value. Junk bonds may contain redemption or call provisions that, if exercised
during a period of declining interest rates, may force the Portfolio to replace
the security with a lower yielding security. If this occurs, it will result in a
decreased return for shareholders.
PERFORMANCE INFORMATION
The bar chart and the performance table on the next page illustrate the
volatility of an investment in the Portfolio and give some indication of the
risk. Of course, the Portfolio's past performance does not necessarily indicate
how the Portfolio will perform in the future.
14
<PAGE> 18
This bar chart shows changes in the performance of the Portfolio's shares from
year to year. It does not include separate account charges imposed by the
insurance companies that write the variable annuity contracts and variable life
insurance policies, if these charges were included they which would have reduced
performance.
(BAR CHART)
Illustrates volatility of an investment and shows changes in shares performance
from 1995-1998
<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
5.47% -5.13%
(SEPTEMBER 30, 1997) (SEPTEMBER 30, 1998)
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(AS OF THE CALENDAR YEAR ENDED PAST ONE RETURN SINCE
DECEMBER 31, 1998) YEAR INCEPTION(1)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Enterprise High-Yield Bond Portfolio........................ 3.60% 11.56%
Lehman Brothers High Yield Bond Index(2).................... 5.13% 11.91%
</TABLE>
- ---------------
(1) Inception date is November 18, 1994. Performance reflects annualized return
from November 30, 1994 to December 31, 1998.
(2) This is an unmanaged index that includes fixed rate, public nonconvertible
issues that are rated Bal or lower by Moody's Investor Service. If a Moody's
rating is not available, the bonds must be rated BB+ or lower by S&P, or by
Fitch if an S&P rating is not available. The index does not have an
investment advisor. It includes reinvested interest and does not pay
commissions or expenses. If an index had expenses, its performance would be
lower. One cannot invest directly in an index.
15
<PAGE> 19
(PICTURE)
Stones: "precious stones" lying in dishes of varying sizes and shapes: located
to the left of the section titled: "Managed Portfolio Profile."
MANAGED PORTFOLIO
PORTFOLIO PROFILE
Investment Objective Growth of capital over time
Principal Investments Common stocks, bonds and cash
equivalents, the percentages of which will vary based on
the Portfolio Manager's assessment of relative investment
values
Portfolio Manager OpCap Advisors
Investor Profile Investors who want the value of their
investment to grow but do not need to receive income on
their investment.
Investment Strategies The Managed Portfolio invests in a
diversified portfolio of common stocks, bonds and cash
equivalents. The allocation of the Portfolio's assets among
the different types of permitted investments will vary from
time to time based upon the Portfolio Manager's evaluation
of economic and market trends and its perception of the
relative values available from such types of securities at any given time. There
is neither a minimum nor a maximum percentage of the Portfolio's assets that
may, at any time, be invested in any specific types of investments. However, the
Portfolio invests primarily in equity securities at times when the Portfolio
Manager believes that the best investment values are available in the equity
markets. The Portfolio may invest almost all of its assets in high-quality
short-term money market and cash equivalent securities when the Portfolio
Manager deems it advisable to preserve capital. Consequently, while the
Portfolio will earn income to the extent it is invested in bonds or cash
equivalents, the Portfolio does not have any specific income objective. The
bonds in which the Portfolio may invest will normally be investment grade
intermediate to long-term U.S. government and corporate debt.
Principal Risks The Portfolio invests in both common stocks and debt
securities. As a result, the Portfolio is subject to the risk that stock prices
will fall over short or extended periods of time. Stock markets tend to move in
cycles, with periods of rising prices and periods of falling prices. This price
volatility is a principal risk of investing in the Portfolio. In addition, the
Portfolio is subject to the risk that the prices of debt securities will decline
due to rising interest rates. The risk is greater for long-term debt securities
than for short-term debt securities. Debt securities may decline in credit
quality due to factors affecting the issuer, or general economic or political
events. In addition, an issuer may be unable to make timely payments of
principal or interest to the Portfolio. Some investment grade bonds may have
speculative characteristics.
PERFORMANCE INFORMATION
The bar chart and the performance table on the next page illustrate the
volatility of an investment in the Portfolio and give some indication of the
risk. Of course, the Portfolio's past performance does not necessarily indicate
how the Portfolio will perform in the future.
This bar chart shows changes in the performance of the Portfolio's shares from
year to year. It does not include separate account charges imposed by the
insurance companies that write the variable annuity contracts and variable life
insurance policies; if these charges were included they would have reduced
performance.
16
<PAGE> 20
(BAR CHART)
Illustrates volatility of an investment and shows changes in shares performance
from 1989-1998
<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
20.79% -14.24%
(MARCH 31, 1991) (SEPTEMBER 30, 1998)
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(AS OF THE CALENDAR YEAR ENDED PAST ONE PAST FIVE PAST TEN
DECEMBER 31, 1998) YEAR YEARS YEARS
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Enterprise Managed Portfolio(1)............................. 7.95% 20.11% 19.83%
S&P 500(2).................................................. 28.57% 24.06% 19.21%
</TABLE>
- ---------------
(1) Inception date is August 1, 1988.
(2) This unmanaged broad-based index includes 500 companies which tend to be
leaders in important industries within the U.S. economy. It includes
reinvested dividends. An index does not have an investment advisor and does
not pay commissions or expenses. If an index had expenses, its performance
would be lower. One cannot invest directly in an index.
17
<PAGE> 21
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS'
INVESTMENTS AND RISKS
EQUITY, INCOME AND FLEXIBLE PORTFOLIOS' INVESTMENTS
The table below shows the Equity, Income and Flexible Portfolios' principal
investments. In other words, the table describes the type or types of
investments that we believe will most likely help each Portfolio achieve its
investment goal.
<TABLE>
<CAPTION>
EQUITY PORTFOLIOS
SMALL SMALL GLOBAL
GROWTH & EQUITY CAPITAL COMPANY COMPANY INTERNATIONAL FINANCIAL
GROWTH INCOME EQUITY INCOME APPRECIATION GROWTH VALUE GROWTH SERVICES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Stocks(1) o o o o o o o o
Foreign Stocks o o
Bonds(2)
<CAPTION>
INCOME FLEXIBLE
PORTFOLIO PORTFOLIO
HIGH-YIELD
BOND MANAGED
<S> <C> <C>
U.S. Stocks(1) o
Foreign Stocks
Bonds(2) o o
</TABLE>
(1) Each Portfolio that invests in U.S. stocks may invest in large
capitalization companies, medium capitalization companies and small
capitalization companies. Large capitalization companies generally have
market capitalizations of over $5 billion. Medium-sized capitalization
companies generally have market capitalizations ranging from $1 billion to
$5 billion. Small capitalization companies generally have market
capitalizations of $1 billion or less. However, there may be some overlap
among capitalization categories. The Growth, Growth & Income, Equity and
Equity Income Portfolios intend to invest primarily in stocks of large
capitalization companies. The Small Company Growth Portfolio and the Small
Company Value Portfolio intend to invest primarily in the stocks of small
capitalization issuers.
(2) The High-Yield Bond Portfolio invests primarily in junk bonds, which are
high-yielding, income producing corporate bonds, and investment grade
corporate debt. To the extent that the Managed Portfolio invests in bonds,
it will normally invest in investment grade intermediate to long-term U.S.
government and corporate debt. An investment grade debt security is rated in
one of the top four ratings categories by a debt rating agency (or is
considered of comparable quality by the Portfolio Manager). The two best
known debt rating agencies are Standard & Poor's Rating Services, a Division
of The McGraw-Hill Companies, Inc. and Moody's Investors Service, Inc.
"Investment grade" refers to any security rated "BBB" or above by Standard &
Poor's or "Baa" or above by Moody's.
Each Portfolio also may invest in other securities, use other strategies
and engage in other investment practices, which are described in detail in our
Statement of Additional Information. Of course, we cannot guarantee that any
Portfolio will achieve its investment goal.
The investments listed above and the investments and strategies described
throughout this prospectus are those that a Portfolio may use under normal
conditions. During unusual economic or market conditions or for temporary
defensive or liquidity purposes, each Portfolio may invest up to 100% of its
assets in cash, money market instruments, repurchase agreements and short-term
obligations. When a Portfolio is investing for temporary defensive purposes, it
is not pursuing its investment goal. In addition, active and frequent trading
may have an effect on performance due to additional expenses.
18
<PAGE> 22
YEAR 2000
Many computer and computer-based systems cannot distinguish the year 2000
from the year 1900 because of the way they encode and calculate dates (commonly
known as the "Year 2000 Issue"). The Year 2000 Issue could potentially have an
adverse impact on the handling of security trades, the payment of interest and
dividends, pricing and account services. As part of its operational
responsibilities, the Advisor has reviewed each of its internal systems and has
obtained assessments from each service provider, including Portfolio Managers,
of Year 2000 issues which could potentially impact services to the Portfolios.
The Advisor is unaware of any Year 2000 issues which remain unresolved or have
been identified as unresolvable. In addition, the Advisor has established a
timetable to periodically re-evaluate systems to ensure that new issues or those
which may not previously have been identified are addressed and resolved in an
expeditious manner. The Advisor does not anticipate any material expenditures
for monitoring Year 2000 issues. If the problem has not been fully addressed,
however, the Portfolios could be negatively affected. The Year 2000 Issue could
also have a negative impact on the companies or governmental agencies in which
the Portfolios invest, which could hurt the Portfolios' investment returns, but
at this time, the Advisor cannot predict the degree of impact on the Portfolios.
EURO CONVERSION
Effective January 1, 1999, several European countries irrevocably fixed
their existing national currencies to a new single European currency unit, the
"euro." Certain European investments may be subject to additional risks as a
result of this conversion. These risks include adverse tax and accounting
consequences, as well as difficulty in processing transactions. The Advisor is
aware of such potential problems and is coordinating efforts to prevent or
alleviate their adverse impact on the Funds. There can be no assurance that the
Funds will not suffer any adverse consequences as a result of the euro
conversion.
19
<PAGE> 23
HIGHER RISK SECURITIES AND INVESTMENT PRACTICES
<TABLE>
<CAPTION>
This table shows each Portfolio's investment limitations as a percentage of
portfolio assets. In each case the principal types of risk are described in the
following chart. Numbers in this table show allowable usage only; for actual
usage, consult the Portfolio's annual/semiannual reports.
5 Percent of total assets (italic type)
5 Percent of net assets (roman type)
-- No policy limitation on usage; fund may be using currently
o Permitted, but not typically used. GROWTH & EQUITY
-- Not permitted GROWTH INCOME EQUITY Income
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONVENTIONAL SECURITIES
NON-INVESTMENT-GRADE SECURITIES. Securities rated below Baa/BBB are considered
junk bonds. Credit, market, interest rate, liquidity, valuation, information
risks. o o o o
FOREIGN EQUITIES
- Stocks issued by foreign companies. Market, currency, information, natural
event, political risks. 5 5 5 5
- American or European depository receipts, which are dollar-denominated
securities typically issued by American or European banks and are based on
ownership of securities issued by foreign companies. Market, currency,
information, natural event, political risks. 20 20 20 20
RESTRICTED AND ILLIQUID SECURITIES. Securities not traded on the open market
May include illiquid Rule 144A securities. Liquidity, valuation, market risks. 10 10 10 10
---------------------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICES
REPURCHASE AGREEMENTS. The purchase of a security that must later be sold back
to the seller at the same price plus interest. Credit risk. 5 5 5 5
SECURITIES LENDING. The lending of securities to financial institutions, which
provide cash or government securities as collateral. Credit risk. -- -- -- --
HEDGING. Means of offsetting or neutralizing the price movement of an
investment by making another investment the price of which should tend to move
in the opposite direction from the original investment. o o o o
SHORT SALES. The selling of securities which have been borrowed on the
expectation that the market price will drop. Hedged leverage, market,
correlation, liquidity, opportunity risks. -- -- -- --
SHORT-TERM TRADING. Selling a security soon after purchase. A Portfolio
engaging in short-term trading will have higher turnover, brokerage commissions
and transaction expenses. Short-term trading may also have tax consequences,
involving a possible increase the short-term capital gains or losses. Market
risk. o o o o
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS. The purchase or sale of
securities for delivery at a future date; market value may change before
delivery. Market, opportunity, leverage risks. 5 5 5 5
---------------------------------------------------------------------------------------------------------------------------
DERIVATIVE SECURITIES. The Portfolios will not invest in derivatives for
speculative purposes, but only as a hedge against changes in the values of the
Portfolios' securities resulting from market conditions.
FINANCIAL FUTURES AND OPTIONS; SECURITIES AND INDEX OPTIONS. Contracts
involving the right or obligation to deliver or receive assets or money
depending on the performance of one or more assets or an economic index.
- Futures and related options. Interest rate, currency, market, hedged or
speculative leverage, correlation, liquidity, opportunity risks. o o o o
- Puts and calls on securities and indices. Interest rate, currency, market,
leverage, correlation, liquidity, credit, opportunity risks. 5 5 5 5
CURRENCY CONTRACTS. Contracts involving the right or obligation to buy or sell
a given amount of foreign currency at a specified price and future date.
- HEDGED/SPECULATIVE. Currency, hedged leverage, correlation, liquidity,
opportunity risks. o o o o
OTHER DERIVATIVES, INCLUDING PUTS, CALLS AND INTEREST RATE SWAPS. Interest
rate, currency, market, leverage, correlation, liquidity, credit, opportunity
risk. o o o o
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE> 24
<TABLE>
<CAPTION>
SMALL SMALL GLOBAL
CAPITAL COMPANY COMPANY INTERNATIONAL FINANCIAL HIGH-YIELD
APPRECIATION GROWTH VALUE GROWTH SERVICES MANAGED Bond
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
o o o o o -o --
o o o -- -- o o
20 20 20 -- -- 20 --
10 10 10 10 10 10 10
-----------------------------------------------------------------------------
5 5 5 5 5 5 5
-- -- -- -- -- -- --
o o o o o o o
-- -- -- -- -- -- --
o o o o o o o
5 5 5 20 20 5 5
-----------------------------------------------------------------------------
o o o -- -- o o
5 5 5 20 5 5 20
o o o -- -- o o
o o o o o o 10
-----------------------------------------------------------------------------
</TABLE>
21
<PAGE> 25
RISK TERMINOLOGY
CORRELATION RISK: the risk that changes in the value of a hedging
instrument will not match that of the asset being hedged (hedging is the use of
one investment to offset the effects of another investment). Incomplete
correlation can result in unanticipated risks.
CREDIT RISK: the risk that the issuer of a security, or the counter party
to a contract, will default or otherwise become unable to honor a financial
obligation.
CURRENCY RISK: the risk that fluctuations in the exchange rates between
the U.S. dollar and foreign currencies may negatively affect an investment.
Adverse changes in exchange rates may erode or reverse any gains produced by
foreign currency denominated investments and may increase any losses.
INFORMATION RISK: the risk that key information about a security or market
is inaccurate or unavailable.
INTEREST RATE RISK: the risk of market losses attributable to changes in
interest rates. With fixed-rate securities, a rise in interest rates typically
cause a fall in values, while a fall in rates typically causes a rise in values.
LEVERAGE RISK: the risk associated with securities or practices (such as
borrowing) that multiply small index or market movements into large changes in
value.
Hedged. When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that a
Portfolio also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa.
While hedging can reduce or eliminate losses, it can also reduce or
eliminate gains.
Speculative. To the extent that a derivative is not used as a hedge,
a Portfolio is directly exposed to the risks of that derivative. Gains or
losses from speculative positions in a derivative may be substantially
greater than the derivative's original cost.
LIQUIDITY RISK: the risk that certain securities may be difficult or
impossible to sell at the time and the price that the seller would like. The
seller may have to lower the price, sell other securities instead or forego an
investment opportunity, any of which could have a negative effect on a
Portfolio's management or performance.
MARKET RISK: the risk that the market value of a security may move up or
down, sometimes rapidly and unpredictably. These fluctuations may cause a
security to be worth less than the price originally paid for it, or less than it
was worth at an earlier time. Market risk may affect a single issuer, industry,
sector of the economy or the market as a whole. Common to all stocks and bonds
and the mutual funds that invest in them.
NATURAL EVENT RISK: the risk of losses attributable to natural disasters,
crop failures and similar events.
OPPORTUNITY RISK: the risk of missing out on an investment opportunity
because the assets necessary to take advantage of it are tied up in less
advantageous investments.
POLITICAL RISK: the risk of losses attributable to government or political
actions. Political risks range from changes in tax or trade statutes to
governmental collapse and war.
VALUATION RISK: the risk that a Portfolio has valued certain of its
securities at a higher price than it can sell them for.
22
<PAGE> 26
ACCOUNT INFORMATION
Shares of each Portfolio are not offered directly to the public. Instead,
shares are currently issued and redeemed only in connection with investments in
and payments under variable annuity contracts and variable life insurance
policies (the "Contracts") of MONY Life Insurance Company ("MONY") and its
affiliates. All shares of the Portfolios are currently owned by "Separate
Accounts" of MONY and its affiliates. The Separate Accounts invest in shares of
the Portfolios in accordance with the allocation instructions received from
holders of the Contracts. You should be aware that the Contracts involve fees
and expenses that are not described in this Prospectus, and that the Contracts
also may involve certain restrictions and limitations. Certain Portfolios may
not be available in connection with a particular Contract. MONY is under common
control with, and therefore affiliated with Enterprise Capital Management, Inc.,
the investment advisor of the Portfolios. In the future, shares of the
Portfolios may be sold to Separate Accounts and other eligible investors that
are not affiliated entities of MONY. It is possible, although not presently
anticipated, that a material conflict could arise between and among the various
investors in the Portfolios. If such a conflict were to occur, one or more
investors might withdraw their investments in the Portfolios. This might force
one or more of the Portfolios to sell portfolio securities at disadvantageous
prices. You will find information about purchasing a Contract in the Prospectus
that offers such Contracts, which accompanies this Prospectus.
23
<PAGE> 27
TRANSACTION AND ACCOUNT POLICIES
VALUATION OF SHARES
The purchase or redemption price of a Portfolio share is its next
determined net asset value per share. The net asset value per share is
calculated separately for each Portfolio. Each Portfolio calculates a share's
net asset value by dividing net assets of the Portfolio by the total number of
outstanding shares of such Portfolio.
The Portfolios calculate net asset value at the close of regular trading on
each day the New York Stock Exchange is open. Investment securities, other than
debt securities, listed on either a national or foreign securities exchange or
traded in the over-the-counter National Market System are valued each business
day at the last reported sale price on the exchange on which the security is
primarily traded. If there are no current day sales, the securities are valued
at their last quoted bid price.
Investments for which market quotations are readily available are valued at
market. All other securities and assets are valued at fair value following
procedures approved by the Trustees. The Portfolios may invest in securities
that are primarily listed on foreign exchanges that trade on weekends or other
days when the Portfolios do not price their shares. As a result, the value of
the Portfolios' shares may change on days when you will not be able to purchase
or redeem your shares.
Other securities traded over-the-counter and not part of the National
Market System are valued at the last quoted bid price. Debt securities (other
than certain short-term obligations) are valued each business day by an
independent pricing service approved by the Board of Directors. Short-term debt
securities having a remaining maturity of sixty days or less are valued at
amortized cost, which approximates market value. Any securities for which market
quotations are not readily available are valued at their fair value as
determined in good faith by the Board of Trustees.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Portfolio will distribute substantially all of its net investment
income and realized net capital gains, if any.
Each Portfolio declares and pays distributions of capital gains, if any, at
least once per calendar year. Each Portfolio declares and pays dividends of
investment income according to the following schedule:
<TABLE>
<CAPTION>
DECLARED AND PAID AT LEAST ANNUALLY DECLARED AND PAID SEMI-ANNUALLY DECLARED DAILY AND PAID MONTHLY
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Portfolio Equity Income Portfolio High-Yield Bond Portfolio
Growth and Income Portfolio
Equity Portfolio
Capital Appreciation Portfolio
Small Company Growth
Small Company Value Portfolio
International Growth Portfolio
Global Financial Services
Portfolio
Managed Portfolio
</TABLE>
Your dividends and capital gains distributions, if any, will be
automatically reinvested in shares of the same Portfolio on which they were paid
at net asset value. Such reinvestments automatically occur on the payment date
of such dividends and capital gains distributions.
Each Portfolio intends to continue to qualify as a regulated investment
company under the Internal Revenue Code of 1986, as amended. As long as each
Portfolio is qualified as a regulated investment company, it will not be subject
to federal income tax on the earnings that it distributes. For information
concerning the federal income tax consequences to holders of the Contract, see
the accompanying Prospectus for the Contracts.
24
<PAGE> 28
PORTFOLIO MANAGEMENT
THE INVESTMENT ADVISOR
Enterprise Capital Management, Inc. serves as the investment advisor to
each of the Portfolios. The Advisor selects Portfolio Managers for the
Portfolios, subject to the approval of the Board of Trustees of the Portfolios,
and reviews each Portfolio Manager's continued performance. Evaluation
Associates, Inc., which has had 26 years of experience in evaluating investment
advisors for individuals and institutional investors, assists the Advisor in
selecting Portfolio Managers. The Advisor also provides various administrative
services.
The Securities and Exchange Commission has issued an exemptive order that
permits the Advisor to enter into or amend Agreements with Portfolio Managers
without obtaining shareholder approval each time. The exemptive order permits
the Advisor, with Board approval, to employ new Portfolio Managers for the
Portfolios, change the terms of the Agreements with Portfolio Managers or enter
into a new Agreement with a Portfolio Manager. Shareholders of a Portfolio have
the right to terminate an Agreement with a Portfolio Manager at any time by a
vote of the majority of the outstanding voting securities of such Portfolio. The
Portfolio will notify shareholders of any Portfolio Manager changes or other
material amendments to the Agreements with Portfolio Managers that occur under
these arrangements.
The Advisor, which was incorporated in 1986, also serves as investment
advisor to The Enterprise Group of Funds, Inc. which had assets of $3.34 billion
as of March 31, 1999. Performance of the funds of The Enterprise Group of Funds,
Inc. that are similar to the Portfolios may differ from those of the Portfolios
due to a number of factors including the size of such Portfolios, investment
cash flows and redemptions. The Advisor's address is Atlanta Financial Center,
3343 Peachtree Road, N.E., Suite 450, Atlanta, Georgia 30326.
The following table sets forth the fee paid to the Advisor for the fiscal
year ended December 31, 1998 by each Portfolio. The Advisor in turn compensated
each Portfolio Manager at no additional cost to the Portfolio.
<TABLE>
<CAPTION>
FEE (AS A PERCENTAGE OF
AVERAGE DAILY NET
NAME OF PORTFOLIO ASSETS)
- -------------------------------------------------------------------------------------
<S> <C>
Growth Portfolio............................................ 0.75%
Growth and Income Portfolio................................. 0.75%
Equity Portfolio............................................ 0.78%
Equity Income Portfolio..................................... 0.75%
Capital Appreciation Portfolio.............................. 0.75%
Small Company Growth Portfolio.............................. 1.00%
Small Company Value Portfolio............................... 0.80%
International Growth Portfolio.............................. 0.85%
Global Financial Services Portfolio......................... 0.85%
High-Yield Bond Portfolio................................... 0.60%
Managed Portfolio........................................... 0.72%
</TABLE>
25
<PAGE> 29
THE PORTFOLIO MANAGERS
The following chart sets forth certain information about each of the
Portfolio Managers. The Portfolio Managers are responsible for the day-to-day
management of the Portfolios. The Portfolio Managers typically manage assets for
institutional investors and high net worth individuals. Collectively, the
Portfolio Managers manage assets in excess of $250 billion for all clients,
including Enterprise Accumulation Trust.
<TABLE>
<CAPTION>
NAME OF PORTFOLIO AND NAME THE PORTFOLIO MANAGER'S
AND ADDRESS OF PORTFOLIO MANAGER EXPERIENCE PORTFOLIO MANAGERS
<S> <C> <C>
Growth Portfolio Montag & Caldwell and its Ronald E. Canakaris, President
predecessors have been engaged and Chief Investment Officer of
Montag & Caldwell, Inc. in the business of providing Montag & Caldwell, is
("Montag & Caldwell") investment counseling to responsible for the day-to-day
1100 Atlanta Financial Center individuals and institutions investment management of the
3343 Peachtree Road, N.E. since 1945. Total assets under Growth Portfolio and has more
Atlanta, Georgia 30326 management for all clients than 30 years' experience in
approximated $30.2 billion as the investment industry. He has
of March 31, 1999. Usual been President of Montag &
investment minimum is $40 Caldwell for more than 15
million. years.
Growth and Income Portfolio RSI has been providing James P. Coughlin, President
investment advisory services and Chief Investment Officer of
Retirement System Investors Inc. since 1989. Total assets under RSI, is responsible for the
("RSI") management for RSI were $648 day-to-day management of the
317 Madison Avenue million as of March 31, 1999. Portfolio and has more than 30
New York, New York 10017 years' experience in the
investment industry. He has
served as President and Chief
Investment Officer of RSI since
1989.
Equity Portfolio OpCap has provided investment Eileen Rominger, Managing
advisory services since 1984. Director of Oppenheimer
OpCap Advisors ("OpCap") OpCap had approximately $60 Capital, is responsible for the
One World Financial Center billion under management as of day-to-day management of the
New York, New York 10281 March 31, 1999. Usual Fund. Ms. Rominger has more
investment minimum is $20 than 20 years' experience in
million. the investment industry and has
been Managing Director of
Oppenheimer Capital since 1994.
She previously served as Senior
Vice President from 1986 to
1994.
Equity Income Portfolio 1740 Advisers has provided John V. Rock, President and
investment advisory services Director of 1740 Advisers, is
1740 Advisers, Inc. since 1971. 1740 Advisers is an responsible for the day-to-day
("1740 Advisers") affiliate of the Advisor. Total investment management of the
1740 Broadway assets under management for Portfolio and has more than 35
New York, New York 10019 1740 Advisers as of March 31, years' experience in the
1999, were approximately $1.9 investment industry. He has
billion. Usual investment served as President of 1740
minimum is $20 million. Advisers since 1974.
Capital Appreciation Portfolio PIC traces its origins to an Jeffrey J. Miller, Managing
investment partnership formed Director of PIC, and is
Provident Investment Counsel, in 1951. As of March 31, 1999, responsible for the day-to-day
Inc. ("PIC") total assets under management management of the Portfolio. He
300 North Lake Avenue for all clients were $17.6 has more than 25 years'
Pasadena, California 91101 billion. Usual investment experience in the investment
minimum: $5 million. industry. He has been Managing
Director of PIC since 1972.
</TABLE>
26
<PAGE> 30
<TABLE>
<CAPTION>
NAME OF PORTFOLIO AND NAME THE PORTFOLIO MANAGER'S
AND ADDRESS OF PORTFOLIO MANAGER EXPERIENCE PORTFOLIO MANAGERS
<S> <C> <C>
Small Company Growth Portfolio Witter has provided investment William D. Witter, President of
advisory services since 1977. Witter, and Paul B. Phillips,
William D. Witter, Inc. As of March 31, 1999 total Managing Director of Witter,
("Witter") assets under management for all are responsible for the
One Citicorp Center clients were $975 million. day-to-day management of the
153 East 53rd Street Usual investment minimum is $1 Portfolio. They have more than
New York, New York 10022 million. 80 years' combined experience
in the investment industry. Mr.
Witter and Mr. Phillips have
been employed in their present
positions by Witter since 1977
and 1996, respectively. Mr.
Phillips previously served as
Senior Portfolio Manager at
Bankers Trust Company from 1986
to 1995.
Small Company Value Portfolio Gabelli's predecessor, Gabelli Mario J. Gabelli has served as
& Company, Inc., was founded in chief investment officer of
GAMCO Investors, Inc. 1977. As of March 31, 1999 Gabelli since its inception in
("Gabelli") total assets under management 1977 and is responsible for the
One Corporate Center for all clients were $7.57 day-to-day management of the
Rye, New York 10580 billion. Usual investment Portfolio. He has more than 28
minimum is $500,000. years' experience in the
investment industry.
International Growth Portfolio Vontobel has provided Fabrizio Pierallini, Senior
investment counseling since Vice President and Managing
Vontobel USA Inc. ("Vontobel") 1984. Vontobel's assets under Director of Vontobel
450 Park Avenue management for all clients were International Investments is
New York, New York 10022 $1.86 billion as of March 31, responsible for the day-to-day
1999. Usual investment minimum management of the Portfolio.
is $10 million. Mr. Pierallini has been
employed by Vontobel since
1994. He previously served as
assistant director/portfolio
manager for the Swiss Bank.
Global Financial Services Sanford Bernstein was The day-to-day management of
Portfolio established in 1967 and as of this Portfolio is performed by
March 31, 1999 had $77.1 Sanford Bernstein's
Sanford C. Bernstein & Co., Inc. billion in assets under International Policy Group,
("Sanford Bernstein") management. Usual investment which is chaired by Andrew S.
767 Fifth Avenue minimum is $5 million. Adelson, who has more than 20
New York, New York 10153-0185 years' experience in the
investment industry. He joined
Sanford Bernstein in 1980 and
has served as Chief Investment
Officer of International
Investment Services since 1990.
High-Yield Bond Portfolio Caywood-Scholl has provided James Caywood, Managing
investment advice with respect Director and Chief Investment
Caywood-Scholl Capital to high-yield, low grade fixed Officer of Caywood-Scholl, is
Management ("Caywood-Scholl") income instruments since 1986. responsible for the day-to-day
4350 Executive Drive, Suite 125 As of March 31, 1999 assets management of the Portfolio. He
San Diego, California 92121 under management for all has more than 30 years'
clients approximated $1.01 investment industry experience.
billion. Usual investment He joined Caywood-Scholl in
minimum is $1 million. 1986 as Managing Director and
Chief Investment Officer and
has held those positions since
1986.
</TABLE>
27
<PAGE> 31
<TABLE>
<CAPTION>
NAME OF PORTFOLIO AND NAME THE PORTFOLIO MANAGER'S
AND ADDRESS OF PORTFOLIO MANAGER EXPERIENCE PORTFOLIO MANAGERS
<S> <C> <C>
Managed Portfolio OpCap Advisors has been Richard J. Glasebrook II,
providing investment advisory Managing Director of
OpCap Advisors services since 1987. As of Oppenheimer Capital is
One World Financial Center March 31, 1999, Oppenheimer responsible for the day-to-day
New York, New York 10281 Capital and its affiliates have management of the Portfolio. He
over $60 billion under has more than 25 years'
management. Its usual investment industry experience.
investment minimum is $20 Mr. Glasebrook has served as
million. Managing Director of
Oppenheimer Capital since 1994
and prior to that served as
Senior Vice President.
</TABLE>
28
<PAGE> 32
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED)
The Financial Highlights tables for each Portfolio is intended to help you
understand the Portfolio's financial performance for the past 5 years, or, if
shorter, the period of the Portfolio's operations. Certain information reflects
financial results for a single Portfolio share. The total returns in each table
represent the rate that an investor would have earned (or lost) on an investment
in a Portfolio (assuming reinvestment of all dividends and distributions).
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
ENTERPRISE ACCUMULATION ---------------------------------------------------------
TRUST EQUITY PORTFOLIO 1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..... $ 35.09 $ 28.86 $ 23.35 $ 18.14 $ 17.95
---------------------------------------------------------
Net Investment Income (Loss)............. 0.46 0.30 0.37 0.33 0.28
Net Realized and Unrealized Gain (Loss)
on Investments.......................... 3.00 7.13 5.52 6.38 0.41
---------------------------------------------------------
Total from Investment Operations......... 3.46 7.43 5.89 6.71 0.69
---------------------------------------------------------
Dividends from Net Investment Income..... (0.37) (0.32) (0.09) (0.49) (0.18)
Distributions from Net Capital Gains..... (1.36) (0.88) (0.29) (1.01) (0.32)
---------------------------------------------------------
Total Distributions...................... (1.73) (1.20) (0.38) (1.50) (0.50)
---------------------------------------------------------
Net Asset Value, End of Period........... $ 36.82 $ 35.09 $ 28.86 $ 23.35 $ 18.14
---------------------------------------------------------
Total Return............................. 9.90% 25.76% 25.22% 38.44% 3.87%
Net Assets End of Period (In
Thousands).............................. $621,338 $517,803 $314,907 $167,963 $88,583
Ratio of Expenses to Average Net
Assets.................................. 0.83% 0.84% 0.81% 0.69% 0.67%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)..................... .83% 0.84% 0.81% 0.72% 0.69%
Ratio of Net Investment Income (Loss) to
Average Net Assets...................... 1.42% 1.42% 1.94% 1.94% 1.81%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding
Waivers)................................ 1.42% 1.42% 1.94% 1.91% 1.79%
Portfolio Turnover....................... 30% 17% 30% 29% 38%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
ENTERPRISE ACCUMULATION TRUST --------------------------------------------------------
SMALL COMPANY VALUE PORTFOLIO 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period... $ 26.70 $ 20.22 $ 18.48 $ 17.56 $ 18.62
--------------------------------------------------------
Net Investment Income (Loss)........... 0.16 0.05 0.25 0.32 0.19
Net Realized and Unrealized Gain (Loss)
on Investments........................ 2.33 8.91 1.82 1.75 (0.16)
--------------------------------------------------------
Total from Investment Operations....... 2.49 8.96 2.07 2.07 0.03
--------------------------------------------------------
Dividends from Net Investment Income... (0.08) (0.15) (0.12) (0.40) (0.10)
Distributions from Net Capital Gains... (1.75) (2.33) (0.21) (0.75) (0.99)
--------------------------------------------------------
Total Distributions.................... (1.83) (2.48) (0.33) (1.15) (1.09)
--------------------------------------------------------
Net Asset Value, End of Period......... $ 27.36 $ 26.70 $ 20.22 $ 18.48 $ 17.56
--------------------------------------------------------
Total Return........................... 9.61% 44.32% 11.21% 12.28% 0.02%
Net Assets End of Period (in
Thousands)............................ $406,801 $365,266 $192,704 $166,061 $144,880
Ratio of Expenses to Average Net
Assets................................ 0.85% 0.86% 0.84% 0.69% 0.66%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)................... 0.85% 0.86% 0.84% 0.72% 0.67%
Ratio of Net Investment Income (Loss)
to Average Net Assets................. 0.56% 0.21% 1.35% 1.86% 1.30%
Ratio of Net Investment Income (Loss)
to Average Net Assets (Excluding
Waivers).............................. 0.56% 0.21% 1.35% 1.83% 1.29%
Portfolio Turnover..................... 37% 58% 137% 70% 58%
</TABLE>
A Annualized
B Not annualized
29
<PAGE> 33
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
ENTERPRISE ACCUMULATION ----------------------------------------------------------------
TRUST MANAGED PORTFOLIO 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period.......................... $ 40.78 $ 34.31 $ 28.06 $ 20.82 $ 21.35
----------------------------------------------------------------
Net Investment Income (Loss)..... 0.71 0.35 0.59 0.40 0.40
Net Realized and Unrealized Gain
(Loss) on Investments........... 2.53 8.06 5.99 8.97 0.15
----------------------------------------------------------------
Total from Investment
Operations...................... 3.24 8.41 6.58 9.37 0.55
----------------------------------------------------------------
Dividends from Net Investment
Income.......................... (0.43) (0.55) (0.06) (0.75) (0.46)
Distributions from Net Capital
Gain............................ (3.03) (1.39) (0.27) (1.38) (0.62)
----------------------------------------------------------------
Total Distributions.............. (3.46) (1.94) (0.33) (2.13) (1.08)
----------------------------------------------------------------
Net Asset Value, End of Period... $ 40.56 $ 40.78 $ 34.31 $ 28.06 $ 20.82
----------------------------------------------------------------
Total Return..................... 7.95% 24.50% 23.47% 46.89% 2.56%
Net Assets End of Period (in
Thousands)...................... $2,739,305 $2,672,932 $1,935,343 $1,264,718 $689,252
Ratio of Expenses to Average Net
Assets.......................... 0.76% 0.76% 0.74% 0.67% 0.64%
Ratio of Expenses to Average Net
Assets (Excluding Waivers)...... 0.76% 0.76% 0.74% 0.67% 0.64%
Ratio of Net Investment Income
(Loss) to Average Net Assets.... 1.66% 1.14% 2.16% 1.80% 2.23%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers)............. 1.66% 1.14% 2.16% 1.80% 2.23%
Portfolio Turnover............... 46% 32% 29% 31% 33%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, PERIOD OF
ENTERPRISE ACCUMULATION TRUST ------------------------------------- NOVEMBER 18, 1994 -
INTERNATIONAL GROWTH PORTFOLIO 1998 1997 1996 1995 DECEMBER 31, 1994
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 6.18 $ 6.05 $ 5.39 $ 4.96 $ 5.00
-----------------------------------------------------------
Net Investment Income (Loss)................................ 0.06 0.06 0.05 0.04 --
Net Realized and Unrealized Gain (Loss) on Investments...... 0.84 0.26 0.63 0.67 (0.04)
-----------------------------------------------------------
Total from Investment Operations............................ 0.90 0.32 0.68 0.71 (0.04)
-----------------------------------------------------------
Dividends from Net Investment Income........................ (0.07) (0.04) -- (0.04) --
Distributions from Net Capital Gains........................ (0.27) (0.15) (0.02) (0.24) --
-----------------------------------------------------------
Total Distributions......................................... (0.34) (0.19) (0.02) (0.28) --
-----------------------------------------------------------
Net Asset Value, End of Period.............................. $ 6.74 $ 6.18 $ 6.05 $ 5.39 $ 4.96
-----------------------------------------------------------
Total Return................................................ 14.83% 5.26% 12.65% 14.64% (0.80)%(B)
Net Assets End of Period (in Thousands)..................... $91,794 $78,148 $52,768 $18,598 $3,247
Ratio of Expenses to Average Net Assets..................... 1.22% 1.19% 1.38% 1.55% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 1.22% 1.19% 1.38% 2.21% 8.85%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... 1.04% 1.34% 1.32% 1.17% 0.80%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ 1.04% 1.34% 1.32% 0.51% (6.34)%(A)
Portfolio Turnover.......................................... 55% 28% 21% 27% 0%
</TABLE>
A Annualized
B Not annualized
30
<PAGE> 34
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, PERIOD OF
ENTERPRISE ACCUMULATION TRUST HIGH-YIELD BOND -------------------------------------- NOVEMBER 18, 1994 -
PORTFOLIO 1998 1997 1996 1995 DECEMBER 31, 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 5.71 $ 5.51 $ 5.31 $ 4.98 $ 5.00
------------------------------------------------------------
Net Investment Income (Loss)........................... 0.46 0.51 0.45 0.45 0.04
Net Realized and Unrealized Gain (Loss) on
Investments........................................... (0.26) 0.20 0.21 0.35 (0.01)
------------------------------------------------------------
Total from Investment Operations....................... 0.20 0.71 0.66 0.80 0.03
------------------------------------------------------------
Dividends from Net Investment Income................... (0.46) (0.51) (0.45) (0.45) (0.05)
Distributions from Net Capital Gains................... (0.08) -- (0.01) (0.02) --
------------------------------------------------------------
Total Distributions.................................... (0.54) (0.51) (0.46) (0.47) (0.05)
------------------------------------------------------------
Net Asset Value, End of Period......................... $ 5.37 $ 5.71 $ 5.51 $ 5.31 $ 4.98
------------------------------------------------------------
Total Return........................................... 3.60% 13.38% 12.95% 16.59% 0.50%(B)
Net Assets End of Period (In Thousands)................ $101,865 $68,364 $34,411 $15,223 $ 1,421
Ratio of Expenses to Average Net Assets................ 0.72% 0.77% 0.85% 0.85% 0.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers).............................................. 0.72% 0.77% 0.94% 1.59% 7.80%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets................................................ 8.19% 8.47% 8.57% 8.51% 7.84%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................ 8.19% 8.47% 8.48% 7.77% 0.80%(A)
Portfolio Turnover..................................... 109% 175% 175% 115% 0%
</TABLE>
<TABLE>
<CAPTION>
PERIOD OF
DECEMBER 1, 1998 -
ENTERPRISE ACCUMULATION TRUST GROWTH PORTFOLIO DECEMBER 31, 1998
- ---------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Year.......................... $ 5.00
Income from Investment Operations:
Net Investment Income (Loss)................................ --
Net Realized and Unrealized Gain (Loss) on Investments...... 0.27
-------
Total from Investment Operations............................ 0.27
-------
Less Dividends and Distributions:
Dividends from Net Investment Income........................ --
Distributions to Shareholders from Net Capital Gains........ --
-------
Total Dividends and Distributions........................... --
-------
Net Asset Value, End of Year................................ $ 5.27
-------
Total Return................................................ 5.40%(B)
Net Assets End of Year (000)................................ $ 1,943
Ratio of Net Operating Expenses to Average Net Assets....... 1.15%(A)
Ratio of Net Operating Expenses to Average Net Assets
(Excluding Waivers)........................................ 25.33%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (0.25)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (24.43)%(A)
Portfolio Turnover.......................................... 1%
</TABLE>
<TABLE>
<CAPTION>
PERIOD OF
DECEMBER 1, 1998 -
ENTERPRISE ACCUMULATION TRUST GROWTH AND INCOME PORTFOLIO DECEMBER 31, 1998
- ---------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Year.......................... $ 5.00
Income from Investment Operations:
Net Investment Income (Loss)................................ --
Net Realized and Unrealized Gain (Loss) on Investments...... 0.11
-------
Total from Investment Operations............................ 0.11
-------
Less Dividends and Distributions:
Dividends from Net Investment Income........................ --
Distributions to Shareholders from Net Capital Gains........ --
-------
Total Dividends and Distributions........................... --
-------
Net Asset Value, End of Year................................ $ 5.11
-------
Total Return................................................ 2.20%(B)
Net Assets End of Year (000)................................ $ 537
Ratio of Net Operating Expenses to Average Net Assets....... 1.05%(A)
Ratio of Net Operating Expenses to Average Net Assets
(Excluding Waivers)........................................ 60.68%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (0.45)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (60.08)%(A)
Portfolio Turnover.......................................... 9%
</TABLE>
A Annualized
B Not annualized
31
<PAGE> 35
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
PERIOD OF
DECEMBER 1, 1998-
ENTERPRISE ACCUMULATION TRUST EQUITY INCOME PORTFOLIO DECEMBER 31, 1998
- ------------------------------------------------------- -----------------------
<S> <C>
Net Asset Value, Beginning of Year..................... $ 5.00
Income from Investment Operations:
Net Investment Income (Loss)........................... --
Net Realized and Unrealized Gain (Loss) on
Investments........................................... 0.09
-------
Total From Investment Operations....................... 0.09
-------
Less Dividends and Distributions:
Dividends from Net Investment Income................... --
Distributions to Shareholders from Net Capital Gains... --
-------
Total Dividends and Distributions...................... --
-------
Net Asset Value, End of Year........................... $ 5.09
-------
Total Return........................................... 1.80%(B)
Net Assets End of Year (000)........................... $ 465
Ratio of Net Operating Expenses to Average Net
Assets................................................ 1.05%(A)
Ratio of Net Operating Expenses to Average Net Assets
(Excluding Waivers)................................... 66.67%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets................................................ 0.54%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................ (65.07)%(A)
Portfolio Turnover..................................... 0%
</TABLE>
<TABLE>
<CAPTION>
PERIOD OF
ENTERPRISE ACCUMULATION TRUST CAPITAL APPRECIATION DECEMBER 1, 1998-
PORTFOLIO DECEMBER 31, 1998
- ------------------------------------------------------- -----------------------
<S> <C>
Net Asset Value, Beginning of Year..................... $ 5.00
Income from Investment Operations:
Net Investment Income (Loss)........................... --
Net Realized and Unrealized Gain (Loss) on
Investments........................................... 0.57
-------
Total from Investment Operations....................... 0.57
-------
Less Dividends and Distributions:
Dividends from Net Investment Income................... --
Distributions to Shareholders from Net Capital Gains... --
-------
Total Dividends and Distributions...................... --
-------
Net Asset Value, End of Year........................... $ 5.57
-------
Total Return........................................... 11.40%(B)
Net Assets End of Year (000)........................... $ 511
Ratio of Net Operating Expenses to Average Net
Assets................................................ 1.30%(A)
Ratio of Net Operating Expenses to Average Net Assets
(Excluding Waivers)................................... 63.71%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets................................................ (0.95)%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................ (63.36)%(A)
Portfolio Turnover..................................... 1%
</TABLE>
<TABLE>
<CAPTION>
PERIOD OF
ENTERPRISE ACCUMULATION TRUST SMALL COMPANY GROWTH DECEMBER 1, 1998-
PORTFOLIO DECEMBER 31, 1998
- ------------------------------------------------------- -----------------------
<S> <C>
Net Asset Value, Beginning of Year..................... $ 5.00
Income from Investment Operations:
Net Investment Income (Loss)........................... --
Net Realized and Unrealized Gain (Loss) on
Investments........................................... 0.46
-------
Total from Investment Operations....................... 0.46
-------
Less Dividends and Distributions:
Dividends from Net Investment Income................... --
Distributions to Shareholders From Net Capital Gains... --
-------
Total Dividends and Distributions...................... --
-------
Net Asset Value, End of Year........................... $ 5.46
-------
Total Return........................................... 9.20%(B)
Net Assets End of Year (000)........................... $ 469
Ratio of Net Operating Expenses to Average Net
Assets................................................ 1.40%(A)
Ratio of Net Operating Expenses to Average Net Assets
(Excluding Waivers)................................... 60.67%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets................................................ (1.26)%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................ (60.54)%(A)
Portfolio Turnover..................................... 4%
</TABLE>
A Annualized
B Not annualized
32
<PAGE> 36
FOR MORE INFORMATION
The following documents contain more information about the Portfolios and
are available free of charge upon request:
Annual/Semi-annual Reports. Contain financial statements, performance
data and information on portfolio holdings. The annual report also contains
a written analysis of market conditions and investment strategies that
significantly affected a Portfolio's performance during the last fiscal
year.
Statement of Additional Information (SAI). Contains additional
information about the Portfolios' policies, investment restrictions and
business structure. This prospectus incorporates the SAI by reference.
You may obtain copies of these documents or ask questions about the
Portfolios by contacting:
MONY Life Insurance Company of New York
Mail Drop 9-34
1740 Broadway
New York, New York 10019
1-800-487-6669
Inquiries concerning management and investment policies of the Portfolios
should be directed to:
Enterprise Capital Management, Inc.
Atlanta Financial Center
3343 Peachtree Road, Suite 450
Atlanta, GA 30326
1-800-432-4320
Information about the Portfolios (including the SAI) can be reviewed and
copied at the Public Reference Room of the Securities and Exchange Commission,
Washington, D.C. Call (800) SEC-0330 for information on the operation of the
Public Reference Room. Information about the Portfolios is also available on the
Securities and Exchange Commission's web-site at http://www.sec.gov and copies
may be obtained upon payment of a duplicating fee by writing the Public
Reference Section of the Securities and Exchange Commission, Washington, D.C.
20549-6009.
You should rely only on the information contained in this prospectus. No
one is authorized to provide you with any different information.
INVESTMENT COMPANY ACT
File No. 811-05543
33
<PAGE> 37
ENTERPRISE ACCUMULATION TRUST
Atlanta Financial Center
3343 Peachtree Road, Suite 450
Atlanta, Georgia 30326-1022
1-800-432-4320
STATEMENT OF ADDITIONAL INFORMATION
EQUITY PORTFOLIOS:
Growth Portfolio
Growth and Income Portfolio
Equity Portfolio
Equity Income Portfolio
Capital Appreciation Portfolio
Small Company Growth Portfolio
Small Company Value Portfolio
International Growth Portfolio
Global Financial Services Portfolio
INCOME PORTFOLIO:
High-Yield Bond Portfolio
FLEXIBLE PORTFOLIO:
Managed Portfolio
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Prospectus of Enterprise Accumulation Trust (the
"Trust") dated May 3, 1999, which has been filed with the Securities and
Exchange Commission. The Trust sells shares to variable accounts and MONY Life
Insurance Company of America ("MONY America") ("Variable Accounts") that were
established to fund certain Flexible Payment Variable Annuity and Life Insurance
contracts (the "Contracts). Holders of the Contracts ("Contractholders") can
obtain copies of the Trust's Prospectus by writing to MONY, Mail Drop 9-34, 1740
Broadway, New York, NY 10019 or by calling MONY at 1-800-487-6669.
The Prospectus is incorporated by reference into this Statement of
Additional Information, and this Statement of Additional Information is
incorporated by reference into the Prospectus.
The date of this Statement of Additional Information is May 3, 1999.
<PAGE> 38
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
General Information and History................................................................1
Investment Objectives and Policies.............................................................1
Equity Portfolios.....................................................................1
Income Portfolio......................................................................7
Flexible Portfolio....................................................................8
Certain Investment Securities, Techniques and Associated Risks.................................8
Short Term Investments................................................................9
Obligations Issued or Guaranteed by U.S. Government Agencies or Instrumentalities.....9
Information on Time Deposits and Variable Rate Notes..................................9
Insured Bank Obligations.............................................................10
High-Yield Securities................................................................10
REITs ............................................................................12
Hedging Transactions.................................................................12
Certain Securities...................................................................12
Foreign Currency Values and Transactions.............................................15
Certain Other Securities.............................................................16
Forward Commitments..................................................................18
Temporary Defensive Tactics..........................................................18
Investment Restrictions.......................................................................18
Portfolio Turnover............................................................................21
Management of the Trust.......................................................................21
Investment Advisory and Other Services........................................................25
Investment Advisory Agreement........................................................25
Fund Manager Arrangements............................................................27
Purchase, Redemption and Pricing of Securities Being Offered..................................30
Purchase of Shares...................................................................30
Redemption of Shares.................................................................30
Determination of Net Asset Value.....................................................32
Portfolio Transactions and Brokerage..........................................................32
Performance Comparisons.......................................................................35
Dividends, Distributions and Taxes............................................................38
</TABLE>
B-2
<PAGE> 39
<TABLE>
<S> <C>
Additional Information........................................................................39
Custodian, Transfer and Dividend Disbursing Agent.............................................41
Independent Accountants.......................................................................41
Financial Statements..........................................................................41
Appendix A....................................................................................42
Appendix B....................................................................................44
</TABLE>
ii
<PAGE> 40
GENERAL INFORMATION AND HISTORY
The Trust was organized as a Massachusetts business trust under the
name Quest for Value Accumulation Trust on March 2, 1988, and is registered with
the Securities and Exchange Commission (the "SEC") as an open-end diversified
management investment company. On September 16, 1994, it changed its name to
Enterprise Accumulation Trust. The Trust's common stock is divided into eleven
classes, each of which representing shares of a separate portfolio (each a
"Portfolio," and collectively, the Portfolios).
INVESTMENT OBJECTIVES AND POLICIES
The following information is provided for those investors wishing to
have more comprehensive information than that contained in the Prospectus. The
investment objectives of each Portfolio are fundamental and may not be changed
without the approval of a majority of the outstanding voting securities of that
Portfolio. The investment policies of the Trust are not fundamental and may be
changed without contractholder approval.
EQUITY PORTFOLIOS
Under normal market conditions, at least 65% of the total assets of the
nine Equity Portfolios will be invested in common equity securities. The
remainder of the Equity Portfolios' assets may be invested in repurchase
agreements, bankers acceptances, bank certificates of deposit, commercial paper
and similar money market instruments, convertible bonds, convertible preferred
stock, preferred stock, corporate bonds, U.S. Treasury, notes and bonds,
American Depository Receipts ("ADRs"), European Depository Receipts ("EDRs"),
rights and warrants.
The Growth, Growth and Income, Equity, Equity Income, Capital
Appreciation, Global Financial Services, Small Company Growth and Small Company
Value Portfolios invest in securities that are traded on national securities
exchanges and in the over-the-counter market. Each of these Portfolios, except
the Global Financial Services Portfolio, may invest up to 20% of its total
assets in foreign securities provided they are listed on a domestic or foreign
securities exchange or are represented by ADRs or EDRs. The Global Financial
Services Portfolio may invest over 50% of its total assets in foreign
securities. No Portfolio may invest more than 10% of its total assets in
illiquid, including restricted, securities. As noted below, the International
Growth Portfolio invests principally in the securities of foreign issuers listed
on recognized foreign exchanges, but may also invest in securities traded on the
over-the-counter market.
GROWTH PORTFOLIO. The objective of the Growth Portfolio is appreciation
of capital primarily through investments in common stocks. The Portfolio's
common stock selection emphasizes those companies having growth characteristics,
but the Portfolio's investment policy recognizes that securities of other
companies may be attractive for capital appreciation purposes by virtue of
special developments or depression in price believed to be temporary. The
potential for appreciation of capital is the basis for investment decisions; any
income is incidental.
<PAGE> 41
Growth and Income Portfolio. The objective of the Growth and Income
Portfolio is total return through capital appreciation with income as a
secondary consideration. The Portfolio will invest in securities of companies
which the Portfolio Manager believes to be financially sound and will consider
such factors as the sales, growth and profitability prospects for the economic
sector and markets in which the company operates and for the services or
products it provides; the financial condition of the company; its ability to
meet its liabilities and to provide income in the form of dividends; the
prevailing price of the security; how that price compares to historical price
levels of the security to current price levels in the general market, and to
the prices of competing companies; projected earnings estimates and earnings
growth rate of the company, and the relation of those figures to the current
price. The securities held in the Growth and Income Portfolio will generally
reflect the price volatility of the broad equity market (i.e., the S&P 500
Composite Stock Price Index).
Equity Portfolio. The investment objective of the Equity Portfolio is
long-term capital appreciation through investment in securities (primarily
equity securities) of companies that are believed by the Portfolio Manager to be
undervalued in the marketplace in relation to factors such as the companies'
assets or earnings. It is the Portfolio Manager's intention to invest in
securities of companies which in the Portfolio Manager's opinion possess one or
more of the following characteristics: undervalued assets, valuable consumer or
commercial franchises, securities valuation below peer companies, substantial
and growing cash flow and/or a favorable price to book value relationship.
Investment policies aimed at achieving the Portfolio's objective are set in a
flexible framework of securities selection which primarily includes equity
securities, such as common stocks, preferred stocks, convertible securities,
rights and warrants in proportions which vary from time to time. Under normal
circumstances at least 65% of the Portfolio's total assets will be invested in
equity securities. The Portfolio will invest primarily in stocks listed on the
New York Stock Exchange ("NYSE"). In addition, it may also purchase securities
listed on other domestic securities exchanges, securities traded in the domestic
over-the-counter market and foreign securities provided that they are listed on
a domestic or foreign securities exchange or represented by ADRs or EDRs listed
on a domestic securities exchange or traded in the United States
over-the-counter market.
Equity Income Portfolio. The objective of the Equity Income Portfolio
is a combination of growth and income to achieve an above-average and consistent
total return, primarily from investments in dividend-paying common stocks. Under
normal circumstances, at least 65% of the Portfolio's total assets will be
invested in income producing equity securities.
The Portfolio's principal criterion in stock selection is above-average
yield, and it uses this criterion to enhance stability and reduce market risk.
Subject to this primary criterion, the Portfolio invests in stocks that have
relatively low price to earnings ratios or relatively low price to book value
ratios.
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<PAGE> 42
Capital Appreciation Portfolio. The objective of the Capital
Appreciation Portfolio is maximum capital appreciation, primarily through
investments in common stocks of companies that demonstrate accelerating earnings
momentum and consistently strong financial characteristics.
The Portfolio invests primarily in common stocks of companies which
meet the Portfolio Manager's criteria of: (a) steadily increasing earnings; and
(b) a three-year average performance record of sales, earnings, dividend growth,
pretax margins, return on equity and reinvestment rate at an aggregate average
of 1.5 times the average performance of the S&P 500 for the same period. The
Portfolio attempts to invest in a range of small, medium and large companies
designed to achieve an average capitalization of the companies in which it
invests that is less than the average capitalization of the S&P 500. The
potential for maximum capital appreciation is the basis for investment
decisions; any income is incidental.
Small Company Growth Portfolio. The Small Company Growth Portfolio
seeks to achieve its objective of capital appreciation by investing primarily in
common stocks of small companies with strong earnings growth and potential for
significant capital appreciation. Under normal market conditions, the Portfolio
will have at least 65% of its total assets in small capitalization stocks
(market capitalization of up to $1 billion) and generally that percentage will
be considerably higher. The Portfolio reserves the right to have some of its
assets in the equities of companies with over $1 billion in market
capitalization. These holdings may be equities that have appreciated since
original purchase or equities of companies with a market capitalization in
excess of $1 billion at the time of purchase. The Portfolio will normally be as
fully invested as practicable in common stocks, but also may invest up to 5% of
its total assets in warrants and rights to purchase common stocks.
In pursuing its objective, the Portfolio Manager will seek out the
stocks of small companies that are expected to have above average growth in
earnings and are reasonably valued. The Portfolio Manager uses a disciplined
approach in evaluating growth companies. It relates the expected growth rate in
earnings to the price-earnings ratio of the stock. Generally, the Portfolio
Manager will not buy a stock if the price-earnings ratio exceeds the growth
rate. By using this valuation parameter, the Portfolio Manager believes it
moderates some of the inherent volatility in the small-capitalization sector of
the market. Securities will be sold when the Portfolio Manager believes the
stock price exceeds the valuation criteria, or when the stock appreciates to a
point where it is substantially overweighted in the portfolio, or when the
company no longer meets expectations. The Portfolio Manager's goal is to hold a
stock for a minimum of one year but this may not always be feasible and there
may be times when short-term gains or losses will be realized.
Small Company Value Portfolio. The investment objective of the Small
Company Value Portfolio is maximum capital appreciation, primarily through
investment of at least 65% of its total assets in common equity securities of
companies (based on the total outstanding common shares at the time of
investment) which have market capitalizations of up to $1 billion.
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<PAGE> 43
The Portfolio intends to invest the remaining 35% of its total assets
in the same manner but reserves the right to use some or all of the 35% to
invest in equity securities of companies (based on the total outstanding common
shares at the time of investment) which have a market capitalization of more
than $1 billion.
In pursuing its objective, the Portfolio's strategy will be to invest
in stocks of companies with value that may not be fully reflected by the current
stock price. Since small companies tend to be less actively followed by stock
analysts, the market may overlook favorable trends and then adjust its valuation
more quickly once investor interest has surfaced. The Portfolio Manager uses a
number of proprietary research techniques in various sectors to seek out
companies in the public market that are selling at a discount to what the
Portfolio Manager terms the private market value (PMV) of the companies. The
Portfolio Manager then determines whether there is an emerging catalyst that
will focus investor attention on the underlying assets of the company. Smaller
companies may be subject to a valuation catalyst such as increased investor
attention, takeover efforts or a change in management.
International Growth Portfolio. The objective of the International
Growth portfolio is capital appreciation, primarily through a diversified
portfolio of non-U.S. equity securities.
It is an operating policy of the Portfolio that it will invest at
least 80% of its total assets (except when maintaining a temporary defensive
position) in equity securities of companies domiciled outside the United States.
That portion of the Portfolio not invested in equity securities is, in normal
circumstances, invested in U.S. and foreign government securities, high-grade
commercial paper, certificates of deposit, foreign currency, bankers
acceptances, cash and cash equivalents, time deposits, repurchase agreements and
similar money market instruments, both foreign and domestic. The Portfolio may
invest in convertible debt securities of foreign issuers which are convertible
into equity securities at such time as a market for equity securities is
established in the country involved.
The International Growth Portfolio will invest primarily in equity
securities, which may achieve capital appreciation by selecting companies with
superior potential based on a series of macro and micro analyses. The
International Growth Portfolio may select its investments from companies which
are listed on a securities exchange or from companies whose securities have an
established over-the-counter market, and may make limited investments in "thinly
traded" securities.
The International Growth Portfolio will have at least 65% of its total
assets invested in European and Pacific Basin equity securities. The
International Growth Portfolio intends to broadly diversify investments among
countries and normally to have represented in the portfolio business activities
of not less than three different countries. The selection of the securities in
which the International Growth Portfolio will invest not be limited to companies
of any particular size.
Using a bottom-up investment approach, Vontobel USA invests in
large- and medium-capitalization companies that have a long record of successful
operations in their core business. Typically such companies occupy a leading
position in their industry, have consistently generated free cash flow, and have
achieved earnings growth through increasing market share and unit sales volumes.
Vonotobel USA's goal is to construct a portfolio of the best companies in the
developed markets of Europe and the Pacific Basin without making any country
bets. With approximately 80-100 names, the International Growth Fund also seeks
to be well diversified in terms of industry exposure. Vontobel USA analyzes
approximately 35 international equity markets, including those comprised in
Morgan Stanley Capital International's EAFE (Europe, Australia and Far East).
The Adviser also gives consideration to such factors as market liquidity,
accessibility to foreign investors, regulatory protection of shareholders,
accounting and disclosure standards, transferability of funds and foreign
exchange controls, if any.
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<PAGE> 44
Global Financial Services Portfolio. The investment objective of the
Global Financial Services Portfolio is capital appreciation by investing
primarily in common stocks of domestic and foreign financial services companies.
The Portfolio will concentrate (invest 25% or more of its total assets) its
investments in the financial services industry. The Portfolio seeks to achieve
its objective through investment in the common stocks of domestic and foreign
financial services
5
<PAGE> 45
companies. Under normal circumstances, at least 65% of the Portfolio's total
assets will be invested in financial services companies that are domiciled in at
least four countries, including the U.S.
For Portfolio purposes, a financial services company is a firm that in
its most recent fiscal year either (i) derived at least 50% of its revenues or
earnings from financial services activities, or (ii) devoted at least 50% of its
assets to such activities. Financial services companies provide financial
services to consumers and businesses and include the following types of U.S. and
foreign firms: commercial banks, thrift institutions and their holding
companies; consumer and industrial finance companies; diversified financial
services companies; investment banks; securities brokerage and investment
advisory firms; financial technology companies; real estate-related firms;
leasing firms; credit card companies; government sponsored financial
enterprises; investment companies; insurance brokerages; and various firms in
all segments of the insurance industry such as multi-line property and casualty,
and life insurance companies and insurance holding companies.
The Portfolio Manager systematically applies a combination of
fundamental and quantitative research to identify securities that are
attractively priced relative to their expected returns and to develop a
portfolio that trades off risk and reward over full market cycles.
The Global Financial Services Portfolio employs a research-driven,
value-based investment philosophy that the Fund Manager utilized for more than
two decades. The Portfolio Manager's approach rests on the premise that the
capital markets all have some degree of inefficiency; value distortions are
common in all markets, with their dimensions ranging from minor to extreme.
In addition to targeting high return potential, process is also geared
to control volatility. To evaluate the potential risk/reward tradeoff, the
Portfolio Manager incorporates the use of a number of proprietary models
including an optimization model, a multi-factor risk model, a country valuation
model, a currency valuation model, an earnings revision model, and a relative
return trends model. The actual construction of the portfolio considers not
only this fundamental risk/reward profile of stocks, but also the appropriate
timing for the transactions.
The Global Financial Services Portfolio invests almost exclusively in
financial services stocks with average holdings of between 55 and 75 stocks. At
least 65% of total assets of the Fund will be invested in financial services
stocks. In addition, the Portfolio primarily invests in U.S. financial services
companies. Other countries eligible for inclusion into this service will be
limited to the developed market as represented by the MSCI EAFE Index with
Canada. The Portfolio Manager will not make investments in emerging markets. The
Portfolio is broadly diversified geographically, typically with holdings in ten
or more foreign countries. The vast majority of the investments are made in
common and preferred stocks with a fully invested posture being the norm.
Individual security positions are controlled so that no single holding will
dominate the portfolio.
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<PAGE> 46
The Portfolio Manager employs a centralized investment approach in all
portfolios. The Global Investment Policy Group uses its many years of experience
and market memory to review analysts' latest research findings and forecasts.
The group integrates the work of analysts, economists and the quantitative
group, systematically applying valuation and portfolio construction processes to
select securities. The portfolio managers then apply the Investment Policy
Group's decisions, deviating only to conform to Portfolio objectives.
The Portfolio Manager employs 129 analysts who take an intensive,
long-term approach to forecasting earnings power and growth. Organized in global
industry teams so that they can discern companies' strategies, cost pressures
and competition in a global context, the Portfolio Manager's analysts are
centrally located so that the senior professionals can control the quality of
their findings.
Income Portfolio
Investors should refer to Appendix A to this Statement of Additional
Information for a description of the Moody's Investors Service, Inc. (Moody's)
and Standard & Poor's (S&P) ratings mentioned below.
High-Yield Bond Portfolio. The objective of the High-Yield Bond
Portfolio is maximum current income, primarily from debt securities that are
rated Ba or lower by Moody's or BB or lower by S&P.
It is a fundamental policy of the Portfolio that under normal
circumstances it will invest at least 80% of the value of its total net assets
(at least 65% of total assets) in high-yielding, income-producing corporate
bonds that are rated below investment grade and rated B3 or better by Moody's or
B- or better by S&P. The corporate bonds in which the Portfolio invests are
high-yielding but normally carry a greater credit risk than bonds with higher
ratings. In addition, such bonds, commonly referred to as "junk bonds," may
involve greater volatility of price than higher-rated bonds. For a discussion of
high-yield securities and related risks, see "Certain Investment Techniques and
Associated Risks" in this Statement of Additional Information.
The Portfolio's investments are selected by the Portfolio Manager
after careful examination of the economic outlook to determine those industries
that appear favorable for investments. Industries going through a perceived
decline generally are not candidates for selection. After the industries are
selected, bonds of issuers within those industries are selected based on their
creditworthiness, their yields in relation to their credit and the relative
strength of their common stock prices. Companies near or in bankruptcy are not
considered for investment. The Portfolio does not purchase bonds which are
rated Ca or lower by Moody's or CC or lower by S&P or which, if unrated, in the
judgment of the Portfolio Manager, have characteristics of such lower-grade
bonds. Should an investment purchased with the above-described credit quality
requisites be downgraded to Ca or lower or CC or lower, the Portfolio Manager
shall have discretion to hold or liquidate the security.
7
<PAGE> 47
Subject to the restrictions described above, under normal
circumstances, up to 20% of the Portfolio's total assets may include: (1) bonds
rated Caa by Moody's or CCC by S&P; (2) unrated debt securities which, in the
judgment of the Portfolio Manager have characteristics similar to those
described above; (3) convertible debt securities; (4) puts, calls and futures
as hedging devices; (5) foreign issuer debt securities; and (6) short-term
money market instruments, including certificates of deposit, commercial paper,
U.S. Government Securities and other income-producing cash equivalents. For a
discussion of put, calls, and futures and their related risks, see "Certain
Investment Techniques and Associated Risks."
Flexible Portfolio
Managed Portfolio. The objective of the Managed Portfolio is growth of
capital over time through investment in a portfolio consisting of common
stocks, bonds and cash equivalents, the percentages of which will vary based on
the Portfolio Manager's assessments of the relative outlook for such
investments. In seeking to achieve its investment objective, the types of
equity securities in which the Portfolio may invest will be the same as those
in which the Equity Portfolios invest. Debt securities are expected to be
predominantly investment grade intermediate to long-term U.S. Government and
corporate debt, although the Portfolio will also invest in high quality
short-term money market and cash equivalent securities and may invest almost
all of its assets in such securities when the Portfolio Manager deems it
advisable in order to preserve capital. In addition, the Portfolio may also
invest up to 20% of its total assets in foreign securities provided that they
are listed on a domestic or foreign securities exchange or are represented by
ADRs or EDRs listed on a domestic securities exchange or traded in the United
States over-the-counter market.
The allocation of the Portfolio's assets among the different types of
permitted investments will vary from time to time based upon the Portfolio
Manager's evaluation of economic and market trends and its perception of the
relative values available from such types of securities at any given time.
There is neither a minimum nor a maximum percentage of the Portfolio's assets
that may, at any given time, be invested in any of the types of investments
identified above. Consequently, while the Portfolio will earn income to the
extent it is invested in bonds or cash equivalents, the Portfolio does not have
any specific income objective. However, it is a policy of the Portfolio that it
will not invest more than 5% of the value of its total assets in high-yield
securities.
CERTAIN INVESTMENT SECURITIES, TECHNIQUES
AND ASSOCIATED RISKS
Following is a description of certain investment techniques employed by
the Portfolios, and certain types of securities invested in by the Portfolios
and associated risks. Unless otherwise indicated, all of the Portfolios may use
the indicated techniques and invest in the indicated securities.
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<PAGE> 48
Short Term Investments
Each Portfolio typically invests a part of its assets in various types
of U.S. Government Securities and high-quality short-term debt securities with
remaining maturities of one year or less ("money market investments"). This type
of short-term investment is made to provide liquidity for the purchase of new
investments and to effect redemptions of shares. The money market instruments in
which each portfolio may invest include government obligations, certificates of
deposit, bankers' acceptances, commercial paper, short-term corporate securities
and repurchase agreements. The International Growth Portfolio and Global
Financial Services Portfolio may invest in all of the above, both foreign and
domestic, including foreign currency, foreign time deposits and foreign bank
acceptances.
Obligations Issued or Guaranteed by U.S. Government Agencies or
Instrumentalities
Some obligations issued or guaranteed by U.S. government agencies or
instrumentalities, such as securities issued by the Federal Home Loan Bank, are
backed by the right of the agency or instrumentality to borrow from the
Treasury. Others, such as securities issued by the Federal National Mortgage
Association ("Fannie Mae"), are supported only by the credit of the
instrumentality and not by the Treasury. If the securities are not backed by the
full faith and credit of the United States, the owner of the securities must
look principally to the agency issuing the obligation for repayment and may not
be able to assert a claim against the United States in the event that the agency
or instrumentality does not meet its commitment.
Information on Time Deposits and Variable Rate Notes
The Portfolios may invest in fixed time deposits, whether or not
subject to withdrawal penalties; however, investment in such deposits which are
subject to withdrawal penalties, other than overnight deposits, are subject to
10% limit on illiquid investments set forth below.
The commercial paper obligations which the Portfolios may buy are
unsecured and may include variable rate notes. The nature and terms of a
variable rate note (i.e., the "Master Note") permit a Portfolio to invest
fluctuating amounts at varying rates of interest pursuant to a direct
arrangement between a Portfolio as lender and the issuer as borrower. It permits
daily changes in the amounts borrowed. The Portfolios have the right at any time
to increase, up to the full amount stated in the note agreement, or to decrease
the amount outstanding under the note. The issuer may prepay at any time and
without penalty any part of or the full amount of the note. The note may or may
not be backed by one or more bank letters of credit. Because these notes are
direct lending arrangements between the Portfolios and the issuer, it is not
generally contemplated that they will be traded; moreover, there is currently no
secondary market for them. The Portfolios have no limitations on the type of
issuer from whom these notes will be purchased; however, in connection with such
purchase and on an ongoing basis, the Fund
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<PAGE> 49
Managers will consider the earning power, cash flow and other liquidity ratios
of the issuer, and its ability to pay principal and interest on demand,
including a situation in which all holders of such notes made demand
simultaneously. The Portfolios will not invest more than 5% of their total
assets in variable rate notes.
Insured Bank Obligations
The Federal Deposit Insurance Corporation ("FDIC") insures the deposits
of federally insured banks and savings and loan associations (collectively
referred to as "banks") up to $100,000. The Portfolios may, within the limits
set forth in this Statement of Additional Information, purchase bank obligations
which are fully insured as to principal by the FDIC. Currently, to remain fully
insured as to principal, these investments must be limited to $100,000 per bank;
if the principal amount and accrued interest together exceed $100,000, the
excess accrued interest will not be insured. Insured bank obligations may have
limited marketability. Unless the Board of Trustees determined that a readily
available market exists for such obligations, a Portfolio will treat such
obligations as subject to the 10% limit for illiquid investments for each
Portfolio unless such obligations are payable at principal amount plus accrued
interest on demand or within seven days after demand.
High-Yield Securities
Notwithstanding the investment policies and restrictions applicable to
the High-Yield Bond and Managed Portfolios which were designed to reduce risks
associated with such investments, high-yield securities may carry higher levels
of risk than many other types of income producing securities. These risks are of
three basic types: the risk that the issuer of the high-yield bond will default
in the payment of principal and interest; the risk that the value of the bond
will decline due to rising interest rates, economic conditions, or public
perception; and the risk that the investor in such bonds may not be able to
readily sell such bonds. Each of the major categories of risk are affected by
various factors, as discussed below:
High-Yield Bond Market. The high-yield bond market is relatively new
and has grown in the context of a long economic expansion. Any downturn in the
economy may have a negative impact on the perceived ability of the issuer to
make principal and interest payments which may adversely affect the value of
outstanding high-yield securities and reduce market liquidity.
Sensitivity to Interest Rate and Economic Changes. In general, the
market prices of bonds bear an inverse relationship to interest rates; as
interest rates increase, the prices of bonds decrease. The same relationship may
hold for high-yield bonds, but in the past high-yield bonds have been somewhat
less sensitive to interest rate changes than treasury and investment grade
bonds. While the price of high-yield bonds may not decline as much, relatively,
as the prices of treasury or investment grade bonds decline in an environment of
rising interest rates, the market price, or value, of a high-yield bond will be
expected to decrease in periods of increasing interest
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<PAGE> 50
rates, negatively affecting the net asset value of the High-Yield Bond
Portfolio. High-yield bond prices may not increase as much, relatively, as the
prices of treasury or investment grade bonds in periods of decreasing interest
rates. Payments of principal and interest on bonds are dependent upon the
issuer's ability to pay. Because of the generally lower creditworthiness of
issuers of high-yield bonds, changes in the economic environment generally, or
in an issuer's particular industry or business, may severely impair the ability
of the issuer to make principal and interest payments and may depress the price
of high-yield securities more significantly than such changes would affect
higher-rated, investment-grade securities.
Payment Expectations. Many high-yield bonds contain redemption or call
provisions which might be expected to be exercised in periods of decreasing
interest rates. Should bonds in which the High-Yield Bond Portfolio has invested
be redeemed or called during such an interest rate environment, the Portfolio
would have to sell such securities without reference to their investment merit
and reinvest the proceeds received in lower yielding securities, resulting in a
decreased return for investors in the High-Yield Bond Portfolio. In addition,
such redemptions or calls may reduce the High-Yield Bond Portfolio's asset base
over which the Portfolio's investment expenses may be spread.
Liquidity and Valuation. Because of periods of relative illiquidity,
many high-yield bonds may be thinly traded. As a result, the ability to
accurately value high-yield bonds and determine the net asset value of the
High-Yield Bond Portfolio, as well as the Portfolio's ability to sell such
securities, may be limited. Public perception of and adverse publicity
concerning high-yield securities may have a significant negative impact on the
value and liquidity of high-yield securities, even though not based on
fundamental investment analysis.
Tax Considerations. To the extent that a Portfolio invests in
securities structured as zero coupon bonds, the Portfolio will be required to
report interest income even though no cash interest payment is received. Because
such income is not represented by cash, the Portfolio may be required to sell
other securities in order to satisfy the distribution requirements applicable to
regulated investment companies under the Internal Revenue Code of 1986, as
amended ("IRC").
Portfolio Composition. As of March 31, 1999, the High-Yield Bond
Portfolio consisted of securities classified as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
TOTAL
RATINGS INVESTMENTS
------- -------------
<S> <C>
AAA......................................................... 3%
BBB......................................................... 4%
BB.......................................................... 31%
B........................................................... 59%
CCC......................................................... 1%
</TABLE>
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<TABLE>
<S> <C>
Non-rated*.................................................. 2%
</TABLE>
- ----------------
* Equivalent ratings for these securities would have been B.
REITS
Each Portfolio may invest up to 10% of its total assets in the
securities of real estate investment trusts ("REITs"). REITs are pooled
investment vehicles which invest in real estate and real estate-related loans.
The value of a REIT's shares generally is affected by changes in the value of
the underlying investments of the trust.
HEDGING TRANSACTIONS
Except as otherwise indicated, the Portfolio Managers may invest in
derivatives, which are discussed in detail below, to seek to hedge all or a
portion of a Portfolio's assets against market value changes resulting from
changes in equity values, interest rates and currency fluctuations. Hedging is a
means of offsetting, or neutralizing, the price movement of an investment by
making another investment, the price of which should tend to move in the
opposite direction from the original investment.
The Portfolios will not engage in hedging transactions for speculative
purposes but only as a hedge against changes resulting from market conditions in
the values of securities owned or expected to be owned by the Portfolios. Unless
otherwise indicated, a Portfolio will not enter into a hedging transaction
(except for closing transactions) if, immediately thereafter, the sum of the
amount of the initial deposits and premiums on open contracts and options would
exceed 5% of the Portfolio's total assets taken at current value.
CERTAIN SECURITIES
CALL OPTIONS. The Portfolios may write (sell) call options ("calls")
that are listed on national securities exchanges or are available in the
over-the-counter market through primary broker-dealers. Call options are
short-term contracts with a duration of nine months or less. Such Portfolios may
only write call options which are "covered," meaning that the Portfolio either
owns the underlying security or has an absolute and immediate right to acquire
that security, without additional cash consideration, upon conversion or
exchange of other securities currently held in the Portfolio. In addition, no
Portfolio will, prior to the expiration of a call option, permit the call to
become uncovered. If a Portfolio writes a call option, the purchaser of the
option has the right to buy (and the Portfolio has the option to sell) the
underlying security against payment of the exercise price throughout the term of
the option. The amount paid to the Portfolio by the purchaser of the option is
the "premium." The Portfolio's obligation to deliver the underlying security
against payment of the exercise price would terminate either upon expiration of
the option or earlier if the Portfolio were to effect a "closing purchase
transaction" through the
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<PAGE> 52
purchase of an equivalent option on an exchange. The Portfolio would not be able
to effect a closing purchase transaction after it had received notice of
exercise. The International Growth Portfolio and Global Financial Serives
Fundmay purchase and write covered call options on foreign and U.S. securities
and indices and enter into related closing transactions.
Generally, a Portfolio intends to write listed covered calls when it
anticipates that the rate of return from so doing is attractive, taking into
consideration the premium income to be received, the risks of a decline in
securities prices during the term of the option, the probability that closing
purchase transactions will be available if a sale of the securities is desired
prior to the exercise, expiration of the options, and the cost of entering
into such transactions. A principal reason for writing calls on a securities
portfolio is to attempt to realize, through the receipt of premium income, a
greater return than would be earned on the securities alone. A covered call
writer such as a Portfolio, which owns the underlying security, has, in return
for the premium, given up the opportunity for profit from a price increase in
the underlying security above the exercise price, but it has retained the risk
of loss should the price of the security decline.
The writing of covered call options involves certain risks. A principal
risk arises because exchange and over-the-counter markets for options may be
limited; it is impossible to predict the amount of trading interest which may
exist in such options, and there can be no assurance that viable exchange and
over-the-counter markets will develop or continue. The Portfolios will write
covered call options only if there appears to be a liquid secondary market for
such options. If, however, an option is written and a liquid secondary market
does not exist, it may be impossible to effect a closing purchase transaction in
the option. In that event, the Portfolio may not be able to sell the underlying
security until the option expires or the option is exercised, even though it may
be advantageous to the Portfolio to sell the underlying security before that
time.
Puts. The Portfolios may purchase put options ("Puts") which relate to
(i) securities (whether or not they hold such securities); (ii) Index Options
(described below whether or not they hold such Options); or (iii) broadly-based
stock indices. The Portfolios may write covered Puts. The Portfolios will
receive premium income from writing covered Puts, although it may be required,
when the put is exercised, to purchase securities at higher prices than the
current market price. The High-Yield Bond Portfolio may invest up to 10% of its
total assets.
Futures Contracts. To the extent permitted by Arizona and New York law,
all Portfolios may enter into contracts for the future acquisition or delivery
of securities ("Futures Contracts") including index contracts and foreign
currencies, and may also purchase and sell call options on Futures Contracts.
These Portfolios may use this investment technique to hedge against anticipated
future adverse price changes which otherwise might either adversely affect the
value of the securities or currencies held in the Portfolio, or to
hedge anticipated future price changes which adversely affect the prices of
stocks, long-term bonds or currencies which the Portfolio intends to purchase at
a later date. Alternatively, the Portfolios may enter into Futures Contracts in
order to hedge against a change in interest rates which will result in the
premature call at par value of certain securities which the Portfolio has
purchased at a premium.
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<PAGE> 53
If stock, bond or currency prices or interest rates move in an unexpected
manner, the Portfolio would not achieve the anticipated benefits of Futures
Contracts.
The use of Futures Contracts involves special considerations or risks
not associated with the primary activities engaged in by any Portfolios. Risks
of entering into Futures Contracts include: (1) the risk that the price of the
Futures Contracts may not move in the same direction as the price of the
securities in the various markets; (2) the risk that there will be no liquid
secondary market if the Portfolio attempts to enter into a closing position;
(3) the risk that the Portfolio will lose an amount in excess of the initial
margin deposit; and (4) the risk that the Fund Manager may be incorrect in its
prediction of movements in stock, bond, currency prices and interest rates.
Index Options. All of the Equity Portfolios may invest in options on
stock indices. These options are based on indices of stock prices that change in
value according to the market value of the stocks they include. Some stock index
options are based on a broad market index, such as the New York Stock Exchange
Composite Index or the S&P 500. Other index options are based on a market
segment or on stocks in a single industry. Stock index options are traded
primarily on securities exchanges.
Because the value of an index option depends primarily on movements in
the value of the index rather than in the price of a single security, whether a
Portfolio will realize a gain or loss from purchasing or writing an option on a
stock index depends on movements in the level of stock prices in the stock
market generally or, in the case of certain indexes, in an industry or market
segment rather than changes in the price of a particular security. Consequently,
successful use of stock index options by a Portfolio will depend on that Fund
Manager's ability to predict movements in the direction of the stock market
generally or in a particular industry. This requires different skills and
techniques than predicting changes in the value of individual securities.
Interest Rate Swaps. In order to attempt to protect a Portfolio's
investments from interest rate fluctuations, the Portfolio may engage in
interest rate swaps. Generally, the Portfolios use interest rate swaps as a
hedge and not as a speculative investment. Interest rate swaps involve the
exchange between a Portfolio and another party of their respective rights to
receive interest (e.g., an exchange of fixed rate payments for floating rate
payments). For example, if a Portfolio holds an interest-paying security whose
interest rate is reset once a year, it may swap the right to receive interest at
a rate that is reset daily. Such a swap position would offset changes in the
value of the underlying security because of subsequent changes in interest
rates. This would protect the Portfolio from a decline in the value of the
underlying security due to rising rates, but would also limit its ability to
benefit from falling interest rates.
The Portfolio will enter into interest rate swaps only on a net basis
(i.e., the two payments streams will be netted out, with the Portfolio receiving
or paying as the case may be, only the net amount of the two payments). The net
amount of the excess, if any, of the Portfolio's obligations
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<PAGE> 54
over its entitlements with respect to each interest rate swap will be accrued on
a daily basis, and an amount of cash or liquid high grade debt securities having
an aggregate net asset value at least equal to the accrued excess, will be
maintained in a segregated account by the Portfolio's custodian bank.
The use of interest rate swaps involves investment techniques and risks
different from those associated with ordinary portfolio security transactions.
If a Portfolio Manager is incorrect in its forecasts of market values, interest
rates and other applicable factors, the investment performance of the Portfolio
will be less favorable than it would have been if this investment technique were
never used. Interest rate swaps do not involve the delivery of securities or
other underlying assets or principal. Thus, if the other party to an interest
rate swap defaults, the Portfolio's risk of loss consists of the net amount of
interest payments that the Portfolio is contractually entitled to receive.
Foreign Currency Values and Transactions
Investments in foreign securities will usually involve currencies of
foreign countries, and the value of the assets of the International Growth
Portfolio and the Global Financial Services Portfolio (and of the other
Portfolios that may invest in foreign securities to a much lesser extent) as
measured in United States dollars may be affected favorably or unfavorably by
changes in foreign currency exchange rates and exchange control regulations, and
the International Growth Portfolio and the Global Financial Portfolio may incur
costs in connection with conversions between various currencies.
The normal currency allocation of the International Growth Portfolio is
identical to the currency mix of the Benchmark, the MSCI EAFE Index. The
Portfolio expects to maintain this normal currency exposure when global currency
markets are fairly priced relative to each other and relative to associated
risks. The Portfolio may actively deviate from such normal currency allocations
to take advantage of or to protect the Portfolio from risk and return
characteristics of the currencies and short-term interest rates when those
prices deviate significantly from fundamental value. Deviations from the
Benchmark are determined by the Portfolio Manager based upon its research.
To manage exposure to currency fluctuations, a Portfolio may alter
equity or money market exposures (in its normal asset allocation mix as
previously identified), enter into forward currency exchange contracts, buy or
sell options, futures or options on futures relating to foreign currencies and
may purchase securities indexed to currency baskets. The Portfolio will also use
these currency exchange techniques in the normal course of business to hedge
against adverse changes in exchange rates in connection with purchases and sales
of securities. Some of these strategies may require the Portfolio to set aside
liquid assets in a segregated custodial account to cover its obligations. These
techniques are further described below.
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<PAGE> 55
The Portfolios may conduct their foreign currency exchange transactions
on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency
exchange market or through entering into contracts to purchase or sell foreign
currencies at a future date (i.e., "forward foreign currency" contract or
"forward" contract). A forward contract involves an obligation to purchase or
sell a specific currency amount at a future date, which may be any fixed number
of days from the date of the contract, agreed upon by the parties, at a price
set at the time of the contract. Portfolios will convert currency on a spot
basis from time to time and investors should be aware of the potential costs of
currency conversion.
When a Portfolio Manager believes that the currency of a particular
country may suffer a significant decline against the U.S. dollar or against
another currency, the Portfolio may enter into a currency contract to sell, for
a fixed amount of U.S. dollars or other appropriate currency, the amount of
foreign currency approximating the value of some or all of the Portfolio's
securities denominated in such foreign currency.
At the maturity of a forward contract, the Portfolio may either sell a
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by repurchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Portfolio may realize a gain or loss from currency
transactions.
The Portfolio also may purchase and write put and call options on
foreign currencies (traded on U.S. and foreign exchanges or over-the-counter
markets) to manage the Portfolio's exposure to changes in currency exchange
rates. Call options on foreign currency written by the Portfolio will be
"covered", which means that the Portfolio will own an equal amount of the
underlying foreign currency. With respect to put options on foreign currency
written by the Portfolio, the Portfolio will establish a segregated account with
its custodian bank consisting of cash, U.S. government securities or other
high-grade liquid debt securities in an amount equal to the amount the Portfolio
would be required to pay upon exercise of the put.
Certain Other Securities
Except as otherwise indicated, the Portfolios may purchase the
following securities, the purchase of which involves certain risks described
below. Unless otherwise indicated, a Portfolio will not purchase a category of
such securities if the value of such category, taken at current value, would
exceed 5% of the Portfolio's total assets.
Master Demand Notes. All Portfolios may purchase variable amount master
demand notes. Variable amount master demand notes are demand obligations that
permit the investment of fluctuating amounts at varying market rates of interest
pursuant to arrangements between the issuer and a commercial bank acting as
agent for the payees of such notes whereby both parties have the right to vary
the amount of the outstanding indebtedness on the notes. Since there is no
secondary market for these notes, the appropriate Portfolio Managers, subject to
the overall review
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<PAGE> 56
of the Trust's Trustees and the Advisor, monitor the financial condition of the
issuers to evaluate their ability to repay the notes.
Repurchase Agreements. All Portfolios may enter into repurchase
agreements usually having maturities of one business day and not more than one
week. When a Portfolio acquires securities from a bank or broker-dealer, it may
simultaneously enter into a repurchase agreement with the same seller pursuant
to which the seller agrees at the time of sale to repurchase the security at a
mutually agreed upon time and price. In such instances, the Custodian has
possession of the security or collateral for the seller's obligation. If the
seller should default on its obligation to repurchase the securities, the
Portfolio may experience delays, difficulties or other costs when selling the
securities held as collateral and may incur a loss if the value of the
collateral declines. The appropriate Portfolio Managers, subject to the overall
review by the Trust's Trustees and the Advisor, monitor the value of the
collateral as to repurchase agreements, and they monitor the creditworthiness of
the seller and mist find it satisfactory before engaging in repurchase
agreements. The Portfolios will enter into repurchase agreements only with
Federal Reserve member banks that have net worth of at least $100,000,000 and
outstanding commercial paper of the two highest rating categories assigned by
Moody's or S&P or with broker-dealers that are registered with the Securities
and Exchange Commission, are members of the National Association of Securities
Dealers, Inc. ("NASD") and have similarly rated commercial paper outstanding.
Any repurchase agreements entered into by the Portfolios will be fully
collateralized and marked to market daily.
Restricted or Illiquid Securities. Each Portfolio may invest up to 10%
of its total assets in restricted securities (privately placed equity or debt
securities) or other securities which are not readily marketable.
Foreign Securities. As noted above, the International Growth Portfolio
will invest primarily in foreign securities and the Global Financial Services
Portfolio may invest 50% or more of its total assets in such securities. All
other Portfolios may, subject to the 20% limitation, invest in foreign
securities as well as both sponsored and unsponsored ADRs, and EDRs which are
securities of U.S. issuers backed by securities of foreign issuers. There may be
less information available about unsponsored ADRs and EDRs, and therefore, they
may carry higher credit risks. The Portfolios may also invest in securities of
foreign branches of domestic banks and domestic branches of foreign banks.
Investments in foreign equity and debt securities involve risks
different from those encountered when investing in securities of domestic
issuers. The appropriate Portfolio Managers and the Advisor, subject to the
overall review of the Portfolio's Trustees, evaluate the risks and opportunities
when investing in foreign securities. Such risks include trade balances and
imbalances and related economic policies; currency exchange rate fluctuations;
foreign exchange control policies; expropriation or confiscatory taxation;
limitations on the removal of funds or other assets; political or social
instability; the diverse structure and liquidity of securities markets
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<PAGE> 57
in various countries and regions; policies of governments with respect to
possible nationalization of their own industries; and other specific local,
political and economic considerations.
Forward Commitments
Securities may be purchased on a "when issued" or on a "forward
delivery" basis, which means it may take as long as 120 days before such
obligations are delivered to a Portfolio. The purpose of such investments is to
attempt to obtain higher rates of return or lower purchase costs than would be
available for securities purchased for immediate delivery. Securities purchased
on a when issued or forward delivery basis involve a risk that the value of the
security to be purchased may decline prior to the settlement date. In addition,
if the dealer through which the trade is made fails to consummate the
transaction, the Portfolio may lose an advantageous yield or price. The
Portfolio does not accrue income prior to delivery of the securities in the
case of forward commitment purchases. The 5% limitation does not apply to the
International Growth Portfolio and Global Financial Services Portfolio, which
has a 20% limitation.
Temporary Defensive Tactics
Any or all of the Portfolios may at times for defensive purposes, at
the determination of the Portfolio Manager, temporarily place all or a portion
of their assets in cash, short-term commercial paper (i.e., short-term
unsecured promissory notes issued by corporations to finance short-term credit
needs), United States Government securities, high-quality debt securities
(including "Eurodollar" and "Yankee Dollar" obligations, i.e., U.S. issuer
borrowings payable overseas in U.S. funds and obligations of foreign issuers
payable in U.S. funds), and obligations of banks when in the judgment of the
Portfolio Manager such investments are appropriate in light of economic or
market conditions. For temporary defensive purposes, the International Growth
Portfolio and the Global Financial Services Portfolio may invest in all of the
above, both foreign and domestic, including foreign currency, foreign time
deposits, and foreign bank acceptances. When a Portfolio takes a defensive
position, it may not be following the fundamental investment policy of the
Portfolio.
INVESTMENT RESTRICTIONS
The following are fundamental policies and, together with the
restrictions and other fundamental policies described above cannot be changed
without the vote of a majority of the outstanding voting securities of that
Portfolio. Such a majority is defined as the lesser of (a) 67% or more of the
shares of the Portfolio present at the meeting of shareholders of the Trust, if
the holders of more than 50% of the outstanding shares of the Portfolio are
present or represented by proxy or (b) more than 50% of the outstanding shares
of the Portfolio. Except as otherwise set forth, no Portfolio may:
1. As to 75% of the total assets of any Portfolio, invest more than 5%
of the value of its total assets in the securities of any one issuer, or
purchase more than 10% of the voting securities, or more than 10% of any class
of security, of any issuer (for this purpose all
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<PAGE> 58
outstanding debt securities of an issuer are considered as one class and all
preferred stock of an issuer are considered as one class).
2. Except for the Global Financial Services Portfolio, concentrate its
investments in any particular industry, but if deemed appropriate for attaining
its investment objective, a Portfolio may invest up to 25% of its total assets
(valued at the time of investment) in any one industry classification used by
that Portfolio for investment purposes.
3. Invest more than 5% of the value of its total assets in securities
of issuers having a record, together with predecessors, of less than three years
of continuous operation.
4. Make loans of money or securities, except (a) by the purchase of
debt obligations in which the Portfolio may invest consistent with its
investment objectives and policies; (b) by investing in repurchase agreements;
or (c) by lending its portfolio securities, not in excess of 10% of the value of
a Portfolio's total assets, made in accordance with guidelines adopted by the
Trust's Board of Trustees, including maintaining collateral from the borrower
equal at all times to the current market value of the securities loaned.
5. Borrow money in excess of 10% of the value of its total assets. It
may borrow only as a temporary measure for extraordinary or emergency purposes
and will make no additional investments while such borrowings exceed 5% of the
total assets. Such prohibition against borrowing does not prohibit escrow or
other collateral or margin arrangements in connection with the hedging
instruments which a Portfolio is permitted to use by any of its other
fundamental policies.
6. Invest more than 10% of its total assets in illiquid securities
(securities for which market quotations are not readily available) and
repurchase agreements which have a maturity of longer than seven days.
7. Invest in securities of any issuer if, to the knowledge of the
Trust, any officer or trustee of the Trust or any officer or director of the
Investment Advisor or the Portfolio Manager owns more than 1/2 of 1% of the
outstanding securities of such issuer, and such officers, trustees and directors
who own more than 1/2 of 1% own in the aggregate more than 5% of the outstanding
voting securities of such issuer.
8. Purchase or sell real estate; however, the Portfolios may purchase
marketable securities of issuers which engage in real estate operations or which
invest in real estate or interests therein, and securities which are secured by
real estate or interests therein.
9. Purchase securities on margin (except for such short-term loans as
are necessary for the clearance of purchases of portfolio securities) or sell
securities short except "against the box." (Collateral arrangements in
connection with transactions in options and futures are not deemed to be margin
transactions.)
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10. Purchase or sell physical commodities or physical commodity futures
contracts, or oil, gas or mineral exploration or developmental programs, except
that a Portfolio may invest in the securities of companies which operate, invest
in, or sponsor such programs.
11. Engage in the underwriting of securities except insofar as the
Trust may be deemed an underwriter under the Securities Act of 1933 in disposing
of a Trust security.
12. Invest for the purposes of exercising control or management of
another company.
13. Issue senior securities as defined in the Investment Company Act of
1940, as amended (the "1940 Act") except insofar as the Trust may be deemed to
have issued a senior security by reason of: (a) entering into any repurchase
agreement; (b) borrowing money in accordance with restrictions described above;
or (c) lending Trust securities.
14. Purchase securities of other investment companies, except in
connection with a merger, consolidation, reorganization or acquisition of
assets.
15. Invest more than 5% of the value of its total assets in warrants
not listed on either the New York or American Stock Exchange. However, the
acquisition of warrants attached to other securities is not subject to this
restriction.
16. Invest more than 10% of its net assets in securities which are
restricted as to disposition under the federal securities laws or otherwise.
This restriction shall not apply to securities received as a result of a
corporate reorganization or similar transaction affecting readily marketable
securities already held by the respective Portfolios; however, each Portfolio
will attempt to dispose in an orderly fashion of any securities received under
these circumstances to the extent that such securities, together with other
unmarketable securities, exceed 10% of that Portfolio's net assets.
If a percentage restriction is adhered to at the time of an investment,
a later increase or decrease in the investment's percentage of the value of a
Portfolio's total assets resulting from a change in portfolio value or assets
will not constitute a violation of the percentage restrictions.
PORTFOLIO TURNOVER
A portfolio turnover rate is, in summary, the percentage computed by
dividing the lesser of a Portfolio's purchases or sales of securities
(excluding short-term securities) by the average market value of investments of
that Portfolio. The Portfolio Managers intend to manage each Portfolio's assets
by buying and selling securities to help attain its investment objective. This
may result in increases or decreases in a Portfolio's current income available
for distribution to its shareholders. While none of the Portfolios is managed
with the intent of generating short-term capital gains, each of the Portfolios
may dispose of investments (including money market instruments) regardless of
the holding period if, in the opinion of the Portfolio Manager, an issuer's
creditworthiness or perceived changes in a company's
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growth prospects or asset value make selling them advisable. Such an investment
decision may result in capital gains or losses and could result in a high
portfolio turnover rate during a given period, resulting in increased
transaction costs related to equity securities. Disposing of debt securities in
these circumstances should not increase direct transaction costs since debt
securities are normally traded on a principal basis without brokerage
commissions. However, such transactions do involve a mark-up or mark-down of the
price.
The portfolio turnover rates of the Portfolios cannot be accurately
predicted. Nevertheless, the portfolio turnover rates for the Growth, Equity
Income, Global Financial Services, Capital Appreciation, Small Company Growth,
and Growth and Income Portfolios are not expected to exceed 100%. A 100% annual
turnover rate would occur, for example, if all the securities in a Portfolio's
investment portfolio were replaced once in a period of one year.
The portfolio turnover rate of the Small Company Value Portfolio in
1996, which was 137%, exceeded 100% principally due to the appointment of a new
Fund Manager and a resulting change in management style. In 1997, the portfolio
turnover rate of the Portfolio was 58%.
The portfolio turnover rate of the High-Yield Bond Portfolio in 1998,
which was 108%, exceeded 100% principally due to the investment strategy
utilized by the Portfolio Manager to potentially enhance performance by
replacing portfolio holdings with better revenue-producing issues.
MANAGEMENT OF THE TRUST
The Trust's Board of Trustees has overall responsibility for the
management of the Trust under the laws of Massachusetts governing the
responsibilities of trustees of a Massachusetts business trust. In general, such
responsibilities are comparable to those of directors of a Massachusetts
business corporation. The Board of Trustees of the Trust has undertaken to
monitor the Trust for the existence of any material irreconcilable conflict
between the interests of variable annuity Contractholders and variable life
insurance Contractholders and shall report any such conflict to the boards of
MONY and MONY America. The Board of Directors of those companies have agreed to
be responsible for reporting any potential or existing conflicts to Trustees of
the Trust and, at their own cost, to remedy such conflict up to and including
establishing a new registered management investment company and segregating the
assets underlying the variable annuity contracts and the variable life insurance
contracts.
The Trustees and officers of the Trust, and their principal occupations
during the past five years, are set forth below. Trustees who are "interested
persons", as defined in the 1940 Act, are denoted by an asterisk. As to their
duties relative to the Trust, the address of each is Atlanta Financial Center,
3343 Peachtree Road, N.E., Suite 450, Atlanta, GA 30326-1022.
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<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH PRINCIPAL OCCUPATION
THE TRUST PAST FIVE YEARS
- --------------------------- --------------------
<S> <C>
Arthur T. Dietz (75) President, ATD Advisory Corp. since 1996; President and
Trustee Chief Executive Officer, Strategic Fund Management, Inc.,
[Member of the Audit Committee] 1987-1995; Mills B. Lane Professor of Finance and Banking,
Emory University, 1954-1988; Chairman, First Atlanta Investments,
1998-present; Director, The Enterprise Group
of Funds, Inc.
*Samuel J. Foti (47) President and Chief Operating Officer, MONY since 1994;
Trustee Executive Vice President, MONY (1991-1994); Trustee,
MONY since 1993; Senior Vice President, MONY (1989 -
1991); Director, MONY Life Insurance Co. of America since
1989; Director, MONY Brokerage, Inc. since 1990; Director,
MONY International Holdings, Inc. since 1994; Director,
MONY Life Insurance Company of the Americas, Ltd. since
1994, MONY Bank & Trust Co. of the Americas, Ltd. since
1994; Director, Life Insurance Marketing and Research
Associates; Chairman, Life Insurance Marketing and Research
Associates 1996 - 1997; Director, The Enterprise Group of
Funds, Inc.
Arthur Howell (80) Of Counsel, law firm of Alston & Bird, Atlanta, Georgia since
Trustee 1987; President, Summit Industries, Inc.(manufacturer)
[Chairman of Audit Committee] since 1954; Chairman, Crescent Banking Co., Inc. since 1985;
President, Jonesheirs, Inc. (licensing entity) since 1975;
Director, The Enterprise Group of Funds, Inc.
William A. Mitchell, Jr.(59) President/CEO, Carter & Associates (real estate
Trustee development), Atlanta, Georgia since 1994; Director, John
Wieland Homes (commercial residential builder) since 1992;
Director, The Enterprise Group of Funds, Inc.
Lonnie H. Pope (65) Chief Executive Officer, Longleaf Industries, Inc.,
Trustee (chemical manufacturing) (1996-present); formerly President
[Member of the Audit Committee] and Chief Executive Officer of AFF, Inc. (aromatics manufacturing)
from 1987 to 1998;] Director, The Enterprise Group of Funds, Inc.
</TABLE>
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<PAGE> 62
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH PRINCIPAL OCCUPATION
THE TRUST PAST FIVE YEARS
- --------------------------- --------------------
<S> <C>
*Michael I. Roth (53) Chairman and Chief Executive Officer, MONY since 1993;
Trustee President and Chief Executive Officer, MONY (1991-1993);
Director, MONY Life Insurance Company of
America since 1991; Director, ARES Holdings Inc. since
1995; 1740 Advisers, Inc. since 1992; MONY CS, Inc. since
1989; Executive Vice President and Chief Financial
Officer, MONY (1989-1991); Executive Vice President and
Chief Financial Officer, Primerica Trust (1987); Executive Vice
President, Primerica Trust (1982-1987);
Director, The Enterprise Group of Funds, Inc.; Director,
American Council of Life Insurance (ACLI); Director, the Life
Insurance Counsel of New York; Director, Pitney Bowes, Inc.;
Director, Promus Hotel Trust.
*Victor Ugolyn (51) Chairman, President and Chief Executive Officer, The
Trustee Enterprise Group of Funds, Inc. since 1991; Chairman,
President and Chief Executive Officer, Enterprise Capital
Management, Inc. and Enterprise Fund Distributors, Inc. since
1991; Chairman, President and Chief Executive Officer;
Enterprise Accumulation Trust; Vice Chairman and Chief
Marketing Officer, Value Line Securities, Inc. (1986-1991).
Catherine R. McClellan (43) Secretary, The Enterprise Group of Funds, Inc. since
Secretary 1991; Senior Vice President, Secretary and Chief
Counsel, Enterprise Capital Management, Inc. since
1991; Senior Vice President, Secretary and Chief
Counsel, Enterprise Fund Distributors, Inc. since
1991.
Herbert M. Williamson (48) Assistant Secretary and Treasurer, The Enterprise Group of
Assistant Secretary, Treasurer Funds, Inc., Enterprise Capital Management, Inc. and
Enterprise Fund Distributors, Inc. since 1989.
Phillip G. Goff (35) Vice President and Chief Financial Officer, The Enterprise
Vice President Group of Funds, Inc., Enterprise Capital Management, Inc. and
Enterprise Fund Distributors, Inc. 1995 - present; Audit
Manager, Coopers & Lybrand LLP, 1991 - 1995.
</TABLE>
* Messrs. Foti, Roth and Ugolyn are "interested persons" of the Trust, of the
Advisor, and of the Distributor, as that term is defined in the Investment
Act of 1940.
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Arthur T. Dietz, Arthur Howell and Lonnie H. Pope (the "non-interested
Trustees") also serve on the Audit Committee of the Board of Trustees. The Audit
Committee is charged with recommending to the full Board the engagement or
discharge of the Trust's independent accountants; directing investigations into
matters within the scope of the independent accountants' duties; reviewing with
the independent accountants the audit plan and results of the audit; approving
professional services provided by the independent accountants and other
accounting firms prior to the performance of such services; reviewing the
independence of the independent accountants; considering the range of audit and
non-audit fees; and preparing and submitting Committee minutes to the full
Board. Arthur T. Dietz and Victor Ugolyn also serve on the Valuation Committee
of the Board of Trustees.
All officers of the Trust are officers of Enterprise Capital
Management, Inc. and receive no salary or fee from the Trust. The Trustees,
other than Messrs. Foti, Roth and Ugolyn will be paid an annual fee of $12,500
plus $625 for each Trustee's meeting attended and $625 for each committee
meeting attended.
The following sets forth compensation paid to each of the Trustees
during 1998:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Pension or Total
Retirement Compensation
Benefits from the Trust
Aggregate Accrued as Part Estimated and Portfolio
Compensation of Portfolio Annual Benefits Complex Paid to
Name From the Trust Expenses Upon Retirement Trustees*
<S> <C> <C> <C> <C>
Arthur T. Dietz $11,100 None None $25,875
Arthur Howell $12,100 None None $26,875
William A.
Mitchell, Jr. $11,275 None None $24,625
Lonnie H. Pope $12,100 None None $26,875
</TABLE>
* Each Trustee received fees for services as a Director of The Enterprise Group
of Funds, Inc.
At April 3, 1999, the officers and Trustees of the Trust as a group
owned none of the Portfolios' outstanding shares.
As of the date of this Statement of Additional Information, MONY and
MONY America, its wholly-owned subsidiary, through their respective Variable
Accounts, own all of the Trust's outstanding shares. The shares held by the
Variable Accounts generally will be voted in accordance with instructions of
Contractholders. Under certain circumstances, however, MONY and MONY America may
vote independently of voting instructions received from
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<PAGE> 64
Contractholders. The Trust might nonetheless be deemed to be controlled by MONY
and MONY America by virtue of the definitions contained in the 1940 Act although
the Trust disclaims such control.
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Advisory Agreement
The Trust, on behalf of each Portfolio, has entered into an Investment
Advisory Agreement (the "Advisor's Agreement") with the Advisor which, in turn,
has entered into Portfolio Manager's Agreements with each of the Portfolio
Managers. The Advisor is a subsidiary of MONY Life Insurance Company ("MONY"),
one of the nation's largest insurance companies and a subsidiary of The MONY
Group Inc. The Advisor was incorporated in 1986. The Advisor's address is 3343
Peachtree Road, Suite 450, Atlanta, Georgia 30326. Victor Ugolyn, who is
President of the Trust, is also Chairman of the Board and President of the
Advisor.
The Advisor's Agreement obligates the Advisor to provide investment
advisory services to the Portfolios, to furnish the Trust with certain
administrative, clerical, bookkeeping and statistical services, office space and
facilities, and to pay the compensation of the officers of the Trust. Each
Portfolio pays all other expenses incurred in its operation, including
redemption expenses, expenses of portfolio transactions, shareholder servicing
costs, mailing costs, expenses of registering the shares under federal and state
securities laws, accounting and pricing costs (including the daily calculation
of net asset value and daily dividends), interest, certain taxes, legal
services, auditing services, charges of the custodian and transfer agent, and
other expenses attributable to an individual account. Each Portfolio also pays a
portion of the Trust's general administrative expenses. These expenses are
allocated to the Portfolios either on the basis of their asset size, on the
basis of special needs of any Portfolio, or equally as is deemed appropriate.
These expenses include expenses such as: director fees; state franchise taxes;
custodial, transfer agent, brokerage, auditing and legal services; the printing
of prospectuses, proxies, registration statements and shareholder reports sent
to existing shareholders; expenses relating to bookkeeping, recording and
determining the net asset value of shares; the expenses of qualification of a
Portfolio's shares under the federal and state securities laws; and any other
expenses properly payable by the Trust that are allocable to the respective
Portfolios. Litigation costs, if any, may be directly allocable to the
Portfolios or allocated on the basis of the size of the respective Portfolios.
The Board of Trustees annually reviews allocation of expenses among the
Portfolios and has been determined that this is an appropriate method of
allocation of expenses.
The total expenses of each Portfolio for the most recent fiscal year,
expressed as a percentage of average total net assets were as follows:
25
<PAGE> 65
<TABLE>
<CAPTION>
PORTFOLIO TOTAL EXPENSES
--------- --------------
<S> <C>
Growth 1.15%
Growth and Income 1.05%
Equity 0.83%
Equity Income 1.05%
Capital Appreciation 1.30%
Small Company Growth 1.40%
Small Company Value 0.85%
Global Financial Services N/A
International Growth 1.22%
High-Yield Bond 0.72%
Managed 0.76%
</TABLE>
The Advisor has advised the Trust that it will reimburse such portion
of the fees due to it under the Advisor's Agreement as is necessary to assure,
for the period commencing January 1, 1999, and ending no earlier than December
31, 1999, that expenses incurred by the Portfolios will not exceed the following
percentages of average daily net assets: Growth 1.15%; Growth and Income 1.05%;
Equity 1.15%; Equity Income 1.05%; Capital Appreciation 1.30%; Small Company
Growth 1.40%; Small Company Value 1.30%; International Growth 1.55%; Global
Financial Services 1.55%; High-Yield Bond 0.85%; and Managed 1.30%. The
Portfolio Managers have advised the Trust that they may assist in a portion of
the above-referenced reimbursement from time to time.
The Advisory Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard for its
obligations thereunder, the Advisor or the Portfolio Manager, as the case may
be, is not liable for any act or omission in the course of, or in connection
with, the rendition of services thereunder. The Agreement permits the Advisor to
act as investment advisor for any other person or firm.
The Advisor and the Trust have received an exemptive order from the
Securities and Exchange Commission which permits the Trust to enter into or
amend Portfolio Manager Agreements without obtaining Contractholder approval
each time. On April 28, 1997,
26
<PAGE> 66
Contractholders voted affirmatively to give the Trust this ongoing
authority. With Board approval, the Advisor is permitted to employ new Portfolio
Managers for the Portfolios, change the terms of the Portfolio Manager
Agreements or enter into a new Agreement with that Portfolio Manager.
Contractholders of a Portfolio continue to have the right to terminate the
Portfolio Manager's Agreement for a Portfolio at any time by a vote of the
majority of the outstanding voting securities of the Portfolio. Contractholders
will be notified of any Portfolio Manager changes or other material amendments
to Portfolio Manager Agreements that occur under these arrangements.
PORTFOLIO MANAGER ARRANGEMENTS
Under the Portfolio Manager Agreements, the Portfolio Managers, subject
to the oversight of the Advisor, are required to: (i) regularly provide
investment advice and recommendations to the respective Portfolios of the Trust
with respect to their investments, investment policies and the purchase and sale
of securities; (ii) supervise continuously and determine the securities to be
purchased or sold by the respective Portfolios of the Trust and the portion, if
any, of the assets of these Portfolios of the Trust to be held uninvested; and
(iii) arrange for the purchase of securities and other investments by the
respective Portfolios of the Trust and the sale of securities and other
investments held by each of these Portfolios of the Trust. The following table
sets forth certain information about the Portfolio Managers for each Portfolio.
<TABLE>
<CAPTION>
PORTFOLIO NAME AND CONTROL FEE PAID BY THE ADVISOR TO THE
PERSONS OF THE PORTFOLIO PORTFOLIO MANAGER AS A PERCENTAGE OF
MANAGER AVERAGE DAILY NET ASSETS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Portfolio Montag & Caldwell, Inc. 0.30% for assets under management
("Montag & Caldwell"). up to $1 billion; 0.20% thereafter.
Montag & Caldwell is
controlled by Alleghany
Trust.
Growth and Income Portfolio Retirement System 0.30% for assets under management
Investors Inc. ("RSI") which up to $100 million; 0.25% on the next
is a subsidiary of Retirement $100 million; and 0.20% for assets
System Group Inc. greater than $200 million.
Equity Portfolio OpCap Advisors, which is a 0.40% for assets under management
subsidiary of Oppenheimer up to $1 billion and 0.30% thereafter.
Capital, a general
partnership.
</TABLE>
27
<PAGE> 67
<TABLE>
<CAPTION>
PORTFOLIO NAME AND CONTROL FEE PAID BY THE ADVISOR TO THE
PERSONS OF THE FUND FUND MANAGER AS A PERCENTAGE OF
MANAGER AVERAGE DAILY NET ASSETS
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Income Portfolio 1740 Advisers, Inc. ("1740 0.30% for assets under management
Advisers"). It is a subsidiary up to $100 million; 0.25% on the next
of MONY. $100 million; and 0.20% thereafter.
Capital Appreciation Portfolio Provident Investment 0.50% for assets under management
Counsel, Inc. ("PIC"). PIC up to $100 million; 0.45% for assets
is a wholly owned under management for the next $100
subsidiary of United Asset million; 0.35% for assets greater than
Management, Inc. $200 million up to $300 million and
0.30% thereafter.
Small Company Growth William D. Witter, Inc. 0.65% for assets under management
Portfolio ("Witter"). Witter is owned up to $50 million; 0.55% for assets
by its employees. under management for the next $50
million; and 0.45% for assets
thereafter.
Small Company Value Portfolio GAMCO Investors, Inc. is a 0.40% for assets under management
wholly owned subsidiary of up to $1 billion and 0.30% thereafter.
Gabelli Asset Management Inc.
International Growth Portfolio Vontobel USA Inc. 0.40% for assets under management
("Vontobel"). Vontobel up to $100 million; 0.35% for assets
is a wholly-owned under management from $100 million
subsidiary of Bank J. to $200 million; 0.30% for assets
Vontobel of Zurich, from $200 million to $500
Switzerland. million and 0.25% for assets greater
than $500 million.
Global Financial Services Sanford C. Bernstein & 0.50% for assets up to $100 million;
Portfolio Co., Inc. ("Sanford 0.40% for assets from $100 million to
Bernstein") is owned by $300 million; 0.30% for assets over
its employees. $300 million.
</TABLE>
28
<PAGE> 68
<TABLE>
<CAPTION>
PORTFOLIO NAME AND CONTROL FEE PAID BY THE ADVISOR TO THE
PERSONS OF THE FUND FUND MANAGER AS A PERCENTAGE OF
MANAGER AVERAGE DAILY NET ASSETS
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
High-Yield Bond Portfolio Caywood-Scholl Capital 0.30% for assets under management
Management ("Caywood- up to $100 million and 0.25%
Scholl"). Caywood-Scholl is thereafter.
owned by Dresdner RCM
Global Investors LLC, an
affiliate of Dresdner Bank
AG.
Managed Portfolio OpCap Advisors, a 0.40% for assets under management
majority-owned subsidiary up to $1 billion and 0.30% for assets
of Oppenheimer Capital, a from $1 billion to $2 billion and 0.25%
general partnership. thereafter.
</TABLE>
The tables below sets forth the 1998, 1997 and 1996 breakdown by
Portfolio of (1) the investment advisory fee paid to the Advisor, (2) the
percentage of the Management Fee to be paid by the Advisor to the Portfolio
Manager, (3) the fund management fee paid by the Advisor to the Portfolio
Manager, (4) the net advisory fee left to the Advisor after payment of the fund
management fee, and (5) the amount of the expense reimbursement paid by the
Advisor to the Portfolio.
<TABLE>
<CAPTION>
1998
Portfolio (1) (2) (3) (4) (5)
- --------- --- --- --- --- ---
<S> <C> <C> <C> <C> <C>
Growth $ 471 40% $ 188 $ 283 $15,176
Equity 4,523,391 51% 2,305,888 2,217,503 0
Growth and Income 193 40% 77 116 15,350
Equity Income 176 40% 70 105 15,357
Capital Appreciation 184 67% 122 61 15,292
Small Company Growth 259 65% 168 90 15,324
Small Company Value 3,204,761 50% 1,607,480 1,597,281 0
International Growth 730,659 53% 386,819 343,839 0
High-Yield Bond 520,951 50% 260,455 260,496 0
Managed 20,174,424 45% 8,990,865 11,183,559 0
</TABLE>
29
<PAGE> 69
<TABLE>
<CAPTION>
1997
Portfolio (1) (2) (3) (4) (5)
- --------- --- --- --- --- ---
<S> <C> <C> <C> <C> <C>
Equity $ 3,319,628 51% $1,664,835 $1,654,793 0
Small Company Value 2,119,841 50% 1,060,105 1,059,736 0
International Growth 604,348 53% 319,949 284,399 0
High-Yield Bond 299,011 50% 149,505 149,506 0
Managed 16,976,135 45% 7,855,235 9,120,900 0
<CAPTION>
1996
Portfolio (1) (2) (3) (4) (5)
- --------- --- --- --- --- ---
<S> <C> <C> <C> <C> <C>
Equity $ 1,743,990 51% $ 935,253 $ 808,737 0
Small Company Value 1,316,050 50% 714,051 601,999 0
International Growth 303,177 53% 160,663 142,514 0
High-Yield Bond 143,878 50% 71,939 71,939 $21,526
Managed 11,086,850 45% 5,910,578 5,176,272 0
</TABLE>
PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
PURCHASE OF SHARES
Investments in the Portfolio may be made by the Variable Accounts.
Persons desiring to purchase Contracts funded by any Portfolio or Portfolios of
the Trust should also read the prospectus of the Contract(s).
Shares of each Portfolio of the Trust are offered to the Variable
Accounts without sales charge at the respective net asset values of the
Portfolios next determined after receipt by the Trust of the purchase payment in
the manner set forth below under "Determination of Net Asset Value."
Certificates representing shares of the Trust or any of its Portfolios will not
be physically issued. Enterprise Fund Distributors, Inc. (the "Distributor")
acts without remuneration from the Trust as the exclusive distributor of the
Trust's shares. The principal executive office of the Distributor is located at
Atlanta Financial Center, 3343 Peachtree Road, N.E., Suite 450, Atlanta, Georgia
30326-1022.
REDEMPTION OF SHARES
Shares of any Portfolio of the Trust can be redeemed by the Variable
Accounts at any time for cash, at the net asset value next determined after
receipt of the redemption request in proper form. The market value of the
securities in each of the Portfolios is subject to daily fluctuation and the net
asset value of each Portfolio's shares will fluctuate accordingly. The
redemption value of the Portfolio's shares may be either more or less than the
original cost to the Variable Account. Payment for redeemed shares is ordinarily
made within seven days after receipt by the Trust's transfer agent of redemption
instructions in proper form. The redemption privilege may be suspended or
payment may be postponed for more than seven days during any
30
<PAGE> 70
period when: (1) the NYSE is closed other than for customary weekend or holiday
closings or trading thereon is restricted as determined by the Securities and
Exchange Commission; (2) an emergency, as defined by the Securities and Exchange
Commission, exists making trading of Portfolio securities or valuation of net
assets not reasonably practicable; (3) the Securities and Exchange Commission
has by order permitted such suspension or delay.
31
<PAGE> 71
Determination of Net Asset Value
The Portfolios calculate a share's net asset value by dividing the net
assets of the Portfolio by the number of shares then outstanding of such
Portfolio. The net asset value of each Portfolio's shares is determined once
daily as of the close of the NYSE on each day on which the NYSE is open for
trading. Investment securities, other than debt securities, listed on either a
national or foreign securities exchange or traded in the over-the-counter
National Market System are valued each business day at the last reported sale
price on the exchange on which the security is primarily traded. If there are no
current day sales, the securities are valued at their last quoted bid price.
Other securities traded over-the-counter and not part of the National Market
System are valued at the last quoted bid price. Debt securities (other than
certain short-term obligations) are valued each business day by an independent
pricing service approved by the Board of Trustees. Short-term debt securities
having a remaining maturity of 60 days or less are valued at amortized cost,
which approximates market value. Any securities for which market quotations are
not readily available are valued at their fair value as determined in good faith
by, or under the supervision of, the Board of Trustees. The Portfolios may own
securities that are primarily listed on foreign exchanges which trade on
Saturday or other customary United States national business holidays. If the
Portfolios do not price their securities on these days, their net asset values
may be significantly affected on days when investors have no access to the
Portfolios. The net asset value per share is effective as of the time of
computation.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Each Portfolio Manager selects the brokerage firms which complete
portfolio transactions for that Portfolio, subject to the overall direction and
review of the Advisor and the Board of Trustees of the Trust. Prices of
portfolio securities purchased from underwriters of new issues include a
commission or concession paid by the issuer to the underwriter, and prices of
securities purchased from dealers include a spread between the bid and asked
prices. The Trust seeks to obtain prompt execution of orders at the most
favorable net price.
The initial criterion which must be met by any Portfolio Manager in
selecting brokers and dealers to effect securities transactions for a Portfolio
is whether such brokers and dealers can obtain the most favorable combination of
price and execution for the transaction. This does not mean that the execution
decision must be based solely on whether the lowest possible
32
<PAGE> 72
commission costs may be obtained. In seeking to achieve the best combination of
price and execution, the Portfolio Managers evaluate the overall quality and
reliability of broker-dealers and the service they provide, including their
general execution capability, reliability and integrity, willingness to take
positions in securities, general operational capabilities and financial
condition.
Transactions may be directed to brokers or dealers in return for their
brokerage and research services, which are intangible and on which no dollar
value can be placed, furnished to the Trust, the Advisor, and the respective
Portfolio Managers, or those firms who agree to pay certain of the Trust's
expenses, including certain custodial and transfer agent services, and,
consistent with the National Association of Securities Dealers, Inc. Conduct
Rules, those firms which have been active in selling shares of the Trust. There
is no formula for such allocation. The research information may or may not be
useful to the Trust and/or other accounts of the Portfolio Managers; information
received in connection with directed orders of other accounts managed by the
Portfolio Managers or its affiliates may or may not be useful to the Trust. Such
information may be in written or oral form and includes information on
particular companies and industries as well as market, economic or institutional
activity areas. It serves to broaden the scope and supplement the research
activities of the Portfolio Managers, to make available additional views for
consideration and comparison, and to enable the Portfolio Managers to obtain
market information for the valuation of securities held by the Trust. Portfolio
Managers may execute brokerage transactions through affiliated broker/dealers,
subject to compliance with applicable requirements of the federal securities
laws.
Sales of shares of the Trust, subject to applicable rules covering the
Distributor's activities in this area, will also be considered as a factor in
the direction of the Trust transactions to brokers and dealers, but only in
conformity with the price, execution, and other considerations and practices
discussed above.
It is the practice of the Portfolio Managers to cause purchase or sale
transactions to be allocated among the Portfolios and others whose assets it
manages in such manner as it deems equitable. In making such allocations among
the Trust and other client accounts, the main factors considered are the
respective investment objectives, the relative size of portfolio holdings of the
same or comparable securities, the availability of cash for investment, the size
of investment commitments generally held, and the opinions of the persons
responsible for managing each Portfolio and other client accounts. When
possible, concurrent orders to purchase or sell the same security by more than
one of the accounts managed by the Portfolio Managers or an affiliate are
combined, which in some cases could have a detrimental effect on the price or
volume of the security in a particular transaction as far as a Portfolio is
concerned. Transactions effected pursuant to such combined orders are averaged
as to price and allocated in accordance with the purchase or sale orders
actually placed for such account.
33
<PAGE> 73
The following table sets forth the amounts of the brokerage commissions
paid to broker-dealers by each Portfolio for the fiscal year ended December 31,
1998.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Brokerage Brokerage Commissions
Aggregate Commissions Paid to Paid to Affiliated Broker-
Brokerage Affiliated Broker- Dealers as a Percentage of
Commission Paid Brokerage Dealers as a Percentage the Portfolio's Aggregate
on Transactions Commissions Paid of the Portfolio's Dollar Amount of
in the Portfolio's To Affiliated Aggregate Transactions Involving
Portfolio Securities Broker-Dealers Commissions Paid Brokerage Commissions
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth 1,132.50 0.00 0% 0%
- --------------------------------------------------------------------------------------------------------------------
Growth and Income 387.00 0.00 0% 0%
- --------------------------------------------------------------------------------------------------------------------
Equity 416,690.08 13,080.00 0% 0%
- --------------------------------------------------------------------------------------------------------------------
Equity Income 378.00 0.00 3.1390% .0037%
- --------------------------------------------------------------------------------------------------------------------
Capital Appreciation 128.00 0.00 0% 0%
- --------------------------------------------------------------------------------------------------------------------
Small Company
Growth 346.50 0.00 0% 0%
- --------------------------------------------------------------------------------------------------------------------
Small Company
Value 470,441.76 0.00 0% 0%
- --------------------------------------------------------------------------------------------------------------------
International Growth 254,852.10 0.00 0% 0%
- --------------------------------------------------------------------------------------------------------------------
Global Financial
Services 0 0 0% 0%
- --------------------------------------------------------------------------------------------------------------------
High-Yield Bond 18.60 0.00 0% 0%
- --------------------------------------------------------------------------------------------------------------------
Managed 2,419,896.50 47,474,00 1.962% 0.002%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The following tables set forth the aggregate brokerage commissions paid
by each Portfolio on transactions in that Portfolio's securities for the fiscal
year ended December 31, 1997 and December 31, 1996.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
1997
- -------------------------------------------------------------------------------
Aggregate Brokerage Commissions Paid on
Portfolio Transactions in the Portfolio's Securities
- -------------------------------------------------------------------------------
<S> <C>
Equity $ 164,149
- -------------------------------------------------------------------------------
Small Company Value $ 534,558
- -------------------------------------------------------------------------------
International Growth $ 181,826
- -------------------------------------------------------------------------------
High-Yield Bond $ 562
- -------------------------------------------------------------------------------
Managed $1,382,062
- -------------------------------------------------------------------------------
</TABLE>
34
<PAGE> 74
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
1996
- -------------------------------------------------------------------------------
Aggregate Brokerage Commissions Paid on
Portfolio Transactions in the Portfolio's Securities
- -------------------------------------------------------------------------------
<S> <C>
Equity $ 204,255
- -------------------------------------------------------------------------------
Small Company Value $ 784,580
- -------------------------------------------------------------------------------
International Growth $ 102,770
- -------------------------------------------------------------------------------
High-Yield Bond $ 516
- -------------------------------------------------------------------------------
Managed $ 22,241
- -------------------------------------------------------------------------------
</TABLE>
PERFORMANCE COMPARISONS
The average annual total return for the year ended December 31, 1998,
for the five-year period ended December 31, 1998, and the period from inception
through December 31, 1998, is shown in the following table:
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
FOR THE YEAR FOR THE FIVE
ENDED YEARS ENDED FOR THE PERIOD
DECEMBER 31, DECEMBER 31, FROM INCEPTION
1998 1998 TO DECEMBER 31,
PORTFOLIO (ONE YEAR) (FIVE YEARS) 1998(1)(2)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity 23.14% 21.30% 18.02%
Small Company Value 34.19% 17.42% 17.21%
</TABLE>
35
<PAGE> 75
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
International Growth 5.76% -- 12.41%
High-Yield Bond 12.38% -- 13.33%
Managed 22.45% 21.85% 20.98%
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) Reflects waiver of advisory fees and assumption of other expenses by
the Portfolio Manager in its previous role as Investment Advisor.
Without such waivers and assumptions, the average annual total return
during the period would have been lower.
(2) The date of inception of the Equity, Small Company Value and Managed
Portfolios is August 1, 1988. The date of inception of the High-Yield
Bond and International Growth Portfolios is November 18, 1994.
Average annual total return is calculated by finding the average annual
compounded rates of return over the one, five and since inception periods that
would equate the initial amount invested to the ending redemption value
according to the following formula:
P(1+T)(n) = ERV
Where: P = a hypothetical initial payment of $10,000
T = average annual total return
N = number of years
ERA = ending redeemable value of hypothetical $10,000
payment made at the beginning of the one, five and
since inception periods at the end of the one, five
and since inception periods.
For the Equity, Small Company Value, Growth, Growth and Income, Small
Company Growth, Capital Appreciation, Equity Income, and International Growth
Portfolios and for the equity securities of the Managed Portfolio, net
investment income is the net of the dividends accrued (1/360 of the stated
dividend rate multiplied by the number of days the particular security is in the
Portfolio) on all equity securities during the 30-day period and expenses
accrued for the period. It does not reflect capital gains or losses. Net
investment income is the net of accrued interest earned on debt obligations held
by each Portfolio and expenses accrued for the period. Accrued interest is
determined by (i) computing the yield to maturity based on the market value of
each obligation held in the corresponding Portfolio and on the day before the
beginning of the period with respect to debt obligations held by the Equity,
Managed, International Growth, Growth, Growth and Income, Small Company Growth,
Capital Appreciation, Equity Income, and Small Company Value Portfolios (or as
to obligations purchased during that 30-day period, based on the purchase price
plus accrued interest); (ii)
36
<PAGE> 76
dividing the yield to maturity for each obligation by 360; (iii) multiplying
that quotient by the market value of each obligation (including actual accrued
interest) for each day of the subsequent 30-day month that the obligation is in
the Portfolio; and (iv) totaling the interest on each obligation. Discount or
premium amortization is recomputed at the beginning of each 30-day period and
with respect to discount and premium on mortgage or other receivables-backed
obligations subject to monthly payment of principal and interest; discount and
premium is not amortized on the remaining security. Gain or loss attributable to
actual monthly paydowns is reflected as an increase or decrease in interest
income during that period.
The yield shown reflects deductions for all charges, expenses and fees
of the Trust. The table does not reflect charges and deductions which are, or
may be, imposed under the Contracts. Yield is calculated by dividing net
investment income of a Portfolio per share earned during a 30 day period by the
maximum offering price per share on the last day of the period, according to the
following formula:
Yield = 2[(a-b/cd+1)(6)-1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = the maximum offer price per share on the last day of
the period.
From time to time, the performance of one or more of the Portfolios may
be advertised. The performance data contained in these advertisements is based
upon historical earnings and is not indicative of future performance. The data
for each Portfolio reflects the results of that Portfolio of the Trust and
recurring charges and deductions borne by or imposed on the Portfolio. As the
performance for any Portfolio does not include charges and deductions under the
Contracts, comparisons with other Portfolios used in connection with different
variable accounts may not be useful. Set forth below for each Portfolio is the
manner in which the data contained in such advertisements will be calculated.
The performance data for these Portfolios will reflect the "yield" and
"total return". The "yield" of each of these Portfolios refers to the income
generated by an investment in that Portfolio over the 30 day period stated in
the advertisement and is the result of dividing that income by the value of the
Portfolio. The value of each Portfolio is the average daily number of shares
outstanding multiplied by the net asset value per share on the last day of the
period. "Total Return" for each of these Portfolios refers to the value a
Shareholder would receive on the date indicated if a $10,000 investment had been
made the indicated number of years ago. It reflects historical investment
results less charges and deductions of the Portfolio.
In addition, reference in advertisements may be made to various
indices, including, without limitation, the S&P 500 Composite Stock Price Index,
the Russell 2000 and the Lehman
37
<PAGE> 77
Brothers Corporate/Government Index, and various rankings by independent
evaluators such as Morningstar and Lipper Analytical Services, Inc. in order to
provide the reader a basis for comparison.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The dividend policies of the Portfolios are discussed in the
Prospectus. In computing interest income, the Portfolios will amortize any
discount or premium resulting from the purchase of debt securities except for
mortgage- or other receivables-backed obligations subject to monthly payment of
principal and interest.
Each Portfolio is qualified and intends to remain qualified and elect
to be treated as a regulated investment company under Subchapter M of the IRC.
To remain qualified as a regulated investment company, a Portfolio must, among
other things, (a) derive at least 90% of its gross income from the sales or
other disposition of securities, dividends, interest, proceeds from loans of
stocks or securities and certain other related income; and (b) diversify its
holdings so that, at the end of each fiscal quarter, (i) 50% of the Portfolio's
total assets is represented by cash, government securities and other securities
limited in respect of any one issuer to 5% of the Portfolio's total assets and
to not more than 10% of the voting securities of any one issuer (other than
government securities) and (ii) not more than 25% of the Portfolio's total
assets is invested in the securities (other than government securities or the
securities of other regulated investment companies) of any one issuer.
Each Portfolio will comply with asset diversification regulations
prescribed by the U.S. Treasury Department under the IRC. In general, these
regulations effectively provide that, as of the end of each calendar quarter or
within 30 days thereafter, no more that 55% of the total assets of the Portfolio
may be represented by any one investment, no more than 70% by any two
investments, no more than 80% by any three investments, and no more than 90% by
any four investments. For this purpose, all securities of the same issuer are
considered a single investment, but each U.S. agency or instrumentality is
treated as a separate issuer. There are also alternative diversification tests
that may be satisfied by the Portfolio under the regulation. Each Portfolio
intends to comply with the diversification regulations. If a Portfolio fails to
comply with these regulations, the contracts invested in that Portfolio will not
be treated as annuity, endowment or life insurance contracts under the IRC.
Income received by a Portfolio from sources within foreign countries
may be subject to withholding and other taxes imposed by such countries. Income
tax treaties between certain countries and the United States may reduce or
eliminate such taxes. It is impossible to determine in advance the effective
rate of foreign tax to which a Portfolio will be subject, since the amount of
that Portfolio's assets to be invested in various countries is not known. A
Portfolio's returns will be reduced by the amount of any such foreign taxes.
Contractholders are urged to consult their tax advisors regarding specific
questions as to Federal, state and local taxes.
ADDITIONAL INFORMATION
Description of the Trust. The Trust is organized as a Massachusetts
business trust. Under Massachusetts law shareholders could, in certain
circumstances, be held personally liable as partners for Trust obligations. The
Trust's Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Trust and requires that notice of such
disclaimer be given in each instrument entered into or executed by the Trust.
The Declaration of Trust also provides for indemnification out of the Trust's
property for any shareholder held
38
<PAGE> 78
personally liable for any Trust obligation. Thus, the risk of loss to a
shareholder from being held personally liable for obligations of the Trust is
limited to the unlikely circumstance in which the Portfolio itself would be
unable to meet its obligations.
It is not contemplated that regular annual meetings of shareholders
will be held. Shareholders have the right, upon the declaration in writing or
vote of a majority of the outstanding shares of the Trust, to remove a Trustee.
The Trustees will call a meeting of the shareholders to vote on the removal of a
Trustee upon written request of the record holders (for at least six months) of
10% of its outstanding shares. In addition, 10 shareholders holding the lesser
of $25,000 or 1% of the Trust's outstanding shares may advise the Trustees in
writing that they wish to communicate with other shareholders for the purpose of
requesting a meeting to remove a Trustee. The Trustees will then either give the
applicants access to the Trust's shareholder list or mail the applicants'
communication to all other shareholders at the applicants' expense.
Possible Additional Trust Series. If additional Portfolios are created
by the Board of Trustees, shareholders of each such Portfolio will be entitled
to vote as a class only to the extent permitted by the Act (see below) or as
permitted by the Board of Trustees. Income and operating expenses would be
allocated fairly among two or more Portfolios by the Board of Trustees.
Under Rule 18f-2 under the 1940 Act, any matter required to be
submitted to a vote of shareholders of any investment company which has two or
more series outstanding is not deemed to have been effectively acted upon unless
approved by the holders of a "majority" (as defined in that Rule) of the voting
securities of each series affected by the matter. Such separate voting
requirements do not apply to the election of trustees or the ratification of the
selection of independent accountants. The Rule contains special provisions for
cases in which an advisory agreement is approved by one or more, but not all,
series. A change in investment policy may go into effect as to one or more
series whose holders so approve the change even though the required vote is not
obtained as to the holders of other affected series.
Organization of the Trust. When issued, shares are fully paid and have
no preemptive, conversion or other subscription rights. The shares of beneficial
interest of the Trust, $0.01 par value, are divided into eleven separate series.
The shares of each series are freely-transferrable and equal as to earnings,
assets and voting privileges with all other shares of that series. Upon
liquidation of the Trust or any Portfolio, shareholders of a Portfolio are
entitled to share pro rata in the net assets of that Portfolio available for
distribution to shareholders after all debt and expenses have been paid. The
shares do not have cumulative voting rights.
The Trust's Board of Trustees, whose responsibilities are comparable to
those of directors of a Massachusetts corporation, is empowered to issue
additional classes of shares, which classes may either be identical except as to
dividends or may have separate assets and liabilities; classes having separate
assets and liabilities are referred to as "series." The creation of additional
series and offering of their shares (the proceeds of which would be invested in
separate, independently
39
<PAGE> 79
managed Portfolios with distinct investment objectives, policies and
restrictions) would not affect the interests of the current shareholders in the
existing Portfolios.
The assets received by the Trust on the sale of shares of each
Portfolio and all income, earnings, profits and proceeds thereof, subject only
to the rights of creditors, are allocated to each Portfolio, and constitute the
assets of such Portfolio. The assets of each Portfolio are required to be
segregated on the Trust's books of account. The Trust's Board of Trustees has
agreed to monitor the Trust transactions and management of each of the
Portfolio's books of account and to consider and resolve any conflict that may
arise. Direct expenses will be allocated to each Portfolio and general expenses
of the Portfolio will be prorated by total net assets.
Voting. For matters affecting only one Portfolio, only the
shareholders of that Portfolio are entitled to vote. For matters relating to
all the Portfolios but affecting the Portfolios differently, separate votes by
Portfolio are required. Approval of the Investment Advisor Agreement or a
Portfolio Manager Agreement, or a change in a fundamental policy are matters
which require separate voting by each Portfolio. To the extent required by law,
the Variable Accounts, which are the shareholders of the Portfolio, will vote
the shares of the Trust, or any Portfolio of the Trust, held in the Variable
Accounts in accordance with instructions from Contractholders, [as described
under the caption "Voting Rights" in the accompanying Prospectus for the
Contracts.] Shares for which no instructions are received from Contractholders,
as well as shares which the Advisor or its parent, MONY, may own, will be voted
in the same proportion as shares for which instructions are received. The Trust
does not intend to hold annual meetings of shareholders. However, the Board of
Trustees will call special meetings of shareholders for action by shareholder
vote as may be requested in writing by holders of 10% or more of the
outstanding shares of a Portfolio or as may be required by applicable laws or
the Declaration of Trust pursuant to which the Trust has been organized.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company ("State Street") whose address is
P.O. Box 8505, Boston, Massachusetts, 02266-8505, has been retained to act as
custodian of the assets of the Trust. The custodian is responsible for
safeguarding and controlling the cash and securities of the Portfolios, handling
the receipt and delivery of securities and collecting interest and dividends on
the Portfolios' investments. State Street also acts as transfer agent and
Shareholder Servicing Agent for the Trust.
40
<PAGE> 80
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, whose address is 2400 Eleven Penn Center,
Philadelphia PA 19103, has been retained to serve as the Trust's independent
accountants. The independent accountants are responsible for auditing the annual
financial statements of each Portfolio as well as other related services.
PricewaterhouseCoopers LLP also serves as independent accountants for the
Advisor and its affiliates.
FINANCIAL STATEMENTS
The Fund's Semi-Annual Report dated June 30, 1998, which was filed with
the Securities & Exchange Commission on August 27, 1998 (accession number
0000950123-98-007870, and the Fund's Annual Report dated December 31, 1998,
which was filed with the Securities & Exchange Commission on March 2, 1999
(accession number 0000950123-99-001510), are hereby incorporated by reference
into this Statement of Additional Information.
41
<PAGE> 81
APPENDIX A
RATINGS OF CORPORATE DEBT SECURITIES
MOODY'S INVESTORS SERVICE, INC. (1)
Aaa Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to
as "gilt edge."
Aa Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high grade bonds.
A Bonds rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations.
Baa Bonds rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.
Ba Bonds rated Ba are judged to have speculative elements: their future
cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty
of position characterize bonds in this case.
B Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments of or
maintenance of other terms of the contract over any long period of time
may be small.
Caa Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or
interest.
Ca Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked
short-comings.
- ---------------------
(1) Moody's applies numerical modifiers, 1, 2 and 3 in generic rating
classification from Aa through B in its corporate bond rating system.
The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks in the
lower end of its generic rating category.
42
<PAGE> 82
STANDARD & POOR'S CORPORATION (2)
AAA Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest-rated issues only in a small
degree.
A Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions
than bonds in higher-rated categories.
BBB Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for bonds
in higher-rated categories.
BB, Bonds rated BB, B, CCC, and CC are regarded, on balance, as
predominately speculative with respect to the issuer's capacity to pay
B, interest and repay principal in accordance with the terms of the
obligation. BB indicates the lowest degree of speculation and CC the
CCC, highest speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective
CC characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.
- ----------------------
(2) Plus (+) or Minus (-): The ratings from AA to BB may be modified by the
addition of a plus or minus sign to show relative standing within the
major rating categories.
43
<PAGE> 83
the Municipal Securities market, and the maturity, rating and size of individual
offerings. Changes in market values of Municipal Securities may vary inversely
in relation to changes in interest rates. The magnitude of changes in market
values in response to changes in market rates of interest typically varies in
proportion to the quality and maturity of obligations. In general, among
Municipal Securities of comparable quality, the longer the maturity, the higher
the yield, and the greater potential for price fluctuations.
FLOATING RATE AND VARIABLE RATE SECURITIES
The Tax-Exempt Income Portfolio may invest in floating rate and variable rate
tax-exempt securities. These securities are normally IDBs or revenue bonds that
provide that the rate of interest is set as a specific percentage of a
designated base rate, such as rates of treasury bills or bonds or the prime rate
at a major commercial bank and provide that the holders of the securities can
demand payment of the obligation on short notice at par plus accrued interest,
which amount may be more or less than the amount initially paid for the bonds.
Floating rate securities have an interest rate which changes whenever there is a
change in the designated base interest rate, while variable rate securities
provide for a specific periodic adjustment in the interest rate. Frequently such
securities are secured by letters of credit or other credit support arrangements
provided by banks. The quality of the underlying credit or of the bank, as the
case may be, must be equivalent to the long-term bond or commercial paper rating
stated above.
45
<PAGE> 84
PART C
OTHER INFORMATION
Item 23. Exhibits.
(a) (i) Registrant's Charter [Declaration of Trust]: Incorporated
herein by reference to Registrant's Registration Statement on
Form N-1A (File No. 33-21534) filed on April 28, 1988.
(ii) Amendment to Charter [Declaration of Trust] dated
April 26, 1995: Incorporated herein by reference to Post-
Effective Amendment No. 13 to Registrant's Registration
Statement on Form N-1A (File No. 33-21534) filed on April 26,
1995.
(b) (i) By-Laws: Incorporated herein by reference to Post-
Effective Amendment No. 11 to Registrant's Registration
Statement on Form N-1A (File No. 33-21534) filed on April 28,
1994.
(ii) Amendment to By-Laws, dated November 17, 1994:
Incorporated herein by reference to Post-Effective Amendment
No. 12 to Registrant's Registration Statement on Form N-1A
(File No. 2-28097) filed on April 26, 1995.
(c) Not applicable.
(d) (i) Investment Adviser's Agreement between Registrant and
Enterprise Capital Management, Inc. ("Enterprise
Capital"), filed as Exhibit (d)(i) to Post Effective
Amendment No. 17, dated April 30, 1999, to
Registration Statement on Form N-1A (Reg. no.
33-21534), is incorporated.
(ii) Portfolio Manager's Agreement between Enterprise
Accumulation Trust, Enterprise Capital and Montag &
Caldwell, Inc., as sub-adviser, filed as Exhibit
(d)(ii) to Post-Effective Amendment No. 17, dated
April 30, 1999, to Registration Statement on Form
N-1A (Reg. no. 33-21534), is incorporated.
(iii) Portfolio Manager's Agreement Between Enterprise
Accumulation Trust, Enterprise Capital and Retirement
Systems Investors Inc., as sub-adviser, filed as
Exhibit (d)(iii) to Post-Effective Amendment No. 17,
dated April 30, 1999, to Registration Statement on
Form N-1A (Reg. no. 33-21534), is incorporated.
(iv) Portfolio Manager's Agreement between Enterprise
Accumulation Trust, Enterprise Capital and OpCap
Advisors, as sub-adviser, filed as Exhibit (d)(iv) to
Post-Effective Amendment No. 17, dated April 30,
1999, to Registration Statement on Form N-1A (Reg.
no. 33-21534), is incorporated.
(v) Portfolio Manager's Agreement between Enterprise
Capital and 1740 Advisers, Inc., as sub-adviser,
filed as Exhibit (d)(v) to Post-Effective Amendment
No. 17, dated April 30, 1999, to Registration
Statement on Form N-1A (Reg. no. 33-21534), is
incorporated.
(vi) Portfolio Manager's Agreement between Enterprise
Capital and Provident Investment Counsel, Inc. as
sub-adviser, filed as Exhibit (d)(vi) to
Post-Effective Amendment No. 17, dated April 30,
1999, to Registration Statement on Form N-1A (Reg.
no. 33-21534), is incorporated.
(vii) Portfolio Manager's Agreement between Enterprise
Capital and William D. Witter, Inc. as sub-adviser,
filed as Exhibit (d)(vii) to Post-Effective Amendment
No. 17, dated April 30, 1999, to Registration
Statement on Form N-1A (Reg. no. 33-21534), is
incorporated.
(viii) Portfolio Manager's Agreement between Enterprise
Capital and GAMCO Investors, Inc. as sub-adviser,
filed as Exhibit (d)(viii) to Post-Effective
Amendment No. 17, dated April 30, 1999, to
Registration Statement on Form N-1A (Reg. no.
33-21534), is incorporated.
(ix) Portfolio Manager's Agreement between Enterprise
Capital and Vontobel USA Inc. as sub-adviser, filed
as Exhibit (d)(ix) to Post-Effective Amendment No.
17, dated April 30, 1999, to Registration Statement
on Form N-1A (Reg. no. 33-21534), is incorporated.
<PAGE> 85
(x) Portfolio Manager's Agreement between Enterprise
Capital and Sanford C. Bernstein & Co., Inc. as
sub-adviser, filed as Exhibit (d)(x) to
Post-Effective Amendment No. 17, dated April 30,
1999, to Registration Statement on Form N-1A (Reg.
no. 33-21534), is incorporated.
(xi) Portfolio Manager's Agreement between Enterprise
Capital and Caywood-Scholl Capital Management as
sub-adviser, filed as Exhibit (d)(xi) to
Post-Effective Amendment No. 17, dated April 30,
1999, to Registration Statement on Form N-1A (Reg.
no. 33-21534), is incorporated.
(e) Distribution Agreement. Incorporated herein by reference
to Pre-Effective Amendment No. 1 to Registrant's Registration
Statement on Form N-1A (File no. 33-21534) filed on July 13,
1988.
(f) Not applicable.
(g) Custody Agreement. Incorporated herein by reference to
Post-Effective Amendment No. 2 to Registrant's Registration
Statement on Form N-1A (File no. 33-21534) filed on May 1,
1990.
(h) Inapplicable.
(i) Opinion of Counsel, filed as Exhibit (i) to Post-Effective
Amendment No. 17, dated April 30, 1999, to Registration
Statement on Form N-1A (Reg. no. 33-21534), is incorporated.
(j) Consent of Independent Accountants, filed as Exhibit (j) to
Post-Effective Amendment No. 17, dated April 30, 1999, to
Registration Statement on Form N-1A (Reg. no. 33-21534), is
incorporated.
(k) Inapplicable.
(l) Agreement Related to Initial Capital. Incorporated herein by
reference to Pre-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A (File no. 33-21534) filed
on July 13, 1988.
(m) Inapplicable.
(n) Financial Data Schedules, filed as Exhibit (n) to
Post-Effective Amendment No. 17, dated April 30, 1999, to
Registration Statement on Form N-1A (Reg. no. 33-21534), is
incorporated.
(o) (i) Inapplicable.
(ii) Powers of Attorney, filed as Exhibit (o)(ii) to
Post-Effective Amendment No. 17, dated April 30, 1999,
to Registration Statement on Form N-1A (Reg. no.
33-21534), is incorporated.
Item 24. Persons Controlled By or Under Common Control with Registrant.
As of the date of this Post-Effective Amendment variable
accounts of life insurance company affiliates of MONY Life Insurance
Company ("MONY") owns all the outstanding shares of the registrant as
described in the Registrant's Statement of Additional Information.
Shares of the Registrant will be voted as directed by persons having
interests in the respective Variable Accounts. Registrant might be
deemed to be controlled by such insurance company affiliates of MONY
although Registrant declaims such control.
The Subsidiaries of MONY are as follows: MONY Realty Partners, Inc.,
MONY Funding, Inc., MONY CS, Inc., MONY Brokerage, Inc., MONY Credit
Corporation, 1740 Advisers, Inc., MONY Securities Corporation, MONY
Life Insurance Company of America, Enterprise Capital Management, Inc.,
1740 Ventures, Inc., MONY International Holdings, Inc. Each subsidiary
is wholly-owned.
Item 25. Indemnification.
Reference is made to the provisions of Article Six of Registrant's
Articles of Incorporation which is incorporated herein by reference to
Post-Effective Amendment No. 39 to the Registration Statement on Form
N-1A (File No. 2-28097) filed on April 26, 1995.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of Registrant pursuant to the foregoing provision or otherwise,
Registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment of Registrant of expenses
incurred or paid by a director, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person, Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such
<PAGE> 86
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication
of such issue.
Item 26. Business and Other Connections of the Investment Adviser.
See "Management of The Fund" in the Prospectus and "Investment Advisory
and Other Services" in the Statement of Additional Information for
information regarding the business and other connections of the
Investment Adviser
For information as to the business, profession, vocation or employment
of a substantial nature of each of the officers and directors of
Enterprise Capital Management, Inc. reference is made to Part B of
Post-Effective Amendment to the Registrant's Registration Statement and
to the registration of Form ADV (File No. 801-27181) of Enterprise
Capital Management, Inc. filed under the Investment Adviser Act of
1940, which is incorporated herein by reference.
Montag & Caldwell, Inc., Retirement System Investors Inc., OpCap
Advisors, 1740 Advisers, Inc., Provident Investment Counsel, Inc.,
William D. Witter, Inc., GAMCO Investors, Inc., Vontobel USA Inc.,
Sanford C. Bernstein & Co., Inc., TCW Funds Management, Inc.,
Caywood-Scholl Capital Management, and MBIA Capital Management Corp.;
the Fund Managers of certain of the Funds of the Registrant, are
primarily engaged in the business of rendering investment advisory
services. Reference is made to the recent Form ADV and schedules
thereto on file with the Commission for a description of the names and
employment of the directors and officers of the following Fund
Managers, and other required information:
<TABLE>
<CAPTION>
File No.
--------
<S> <C>
Montag & Caldwell, Inc. 801-15398
Retirement System Investors Inc. 801-36893
OpCap Advisors 801-27180
1740 Advisers, Inc. 801-8176
Provident Investment Counsel, Inc. 801-30020
William D. Witter, Inc. 801-12695
GAMCO Investors, Inc. 801-14132
Vontobel USA Inc. 801-34910
Sanford C. Bernstein & Co., Inc. 801-10488
TCW Funds Management, Inc. 801-29075
Caywood-Scholl Capital Management 801-26996
MBIA Capital Management Corp. 801-46649
</TABLE>
Item 27. Principal Underwriters.
(a) Enterprise Fund Distributors, Inc. is the principal
underwriter of the Funds' shares.
(b) The information contained in the registration on Form BD of
Enterprise Fund
<PAGE> 87
Distributor's Inc. (File No. 8-8-815577), filed under the
Securities Exchange Act of 1934, is incorporated herein by
reference.
(c) Inapplicable.
Item 28. Location and Accounts and Records.
<TABLE>
<CAPTION>
Entity Function Address
- ------ -------- -------
<S> <C> <C>
The Enterprise Group of Registrant Atlanta Financial Center
Funds, Inc. 3343 Peachtree Road, N.E.
Suite 450
Atlanta, GA 30326
Enterprise Capital Investment Adviser
Management, Inc. Same as above.
Enterprise Fund Distributors, Distributor Same as above.
Inc.
State Street Bank and Trust Custodian One Heritage Drive
Company The Joseph Palmer
Building
North Quincy, MA 02171
</TABLE>
The records of the Fund Managers are kept at the following locations:
<TABLE>
<S> <C>
Growth Fund Montag & Caldwell, Inc.
1100 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, GA 30326
Growth & Income Fund Retirement Systems Investors Inc.
317 Madison Avenue
New York, NY 10017
Equity Fund OpCap Advisors
One World Financial Center
New York, NY 10281
Equity Income Fund 1740 Advisers, Inc.
1740 Broadway
New York, NY 10019
Capital Appreciation Fund Provident Investment Counsel, Inc.
300 North Lake Avenue
Pasadena, CA 91101
</TABLE>
<PAGE> 88
<TABLE>
<S> <C>
Small Company Growth Fund William D. Witter, Inc.
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Small Company Value Fund GAMCO Investors, Inc.
One Corporate Center
Rye, NY 10580
International Growth Fund Vontobel USA Inc.
450 Park Avenue
New York, New York 10022
Global Financial Services Fund Sanford C. Bernstein & Co., Inc.
767 Fifth Avenue
New York, NY 10153-0185
Government Securities Fund TCW Funds Management, Inc.
865 South Figueroa Street, Suite 1800
Los Angeles, CA 90017
High-Yield Bond Fund Caywood-Scholl Capital Management
4350 Executive Drive, Suite 125
San Diego, CA 92121
Tax-Exempt Income Fund MBIA Capital Management Corp.
113 King Street
Armonk, NY 10504
Managed Fund OpCap Advisors
One World Financial Center
New York, NY 10281
Money Market Fund Enterprise Capital Management, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E.,
Suite 450
Atlanta, GA 30326
</TABLE>
Item 29. Management Services.
Inapplicable.
Item 30. Undertakings.
Inapplicable.
<PAGE> 89
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Atlanta,
State of Georgia, on the 30th day of April 1999.
THE ENTERPRISE GROUP OF FUNDS,
INC.
By: /s/ Victor Ugolyn
----------------------------
Victor Ugolyn
Chairman, President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement of the Registrant has
been signed below by the following persons in the capacities and on the date
indicated:
<TABLE>
<S> <C> <C>
/s/ Victor Ugolyn
- --------------------------------- Chairman, President and Chief April 30, 1999
Victor Ugolyn Executive Officer
/s/ Phillip G. Goff
- --------------------------------- Principal Financial and Accounting April 30, 1999
Phillip G. Goff Officer
*
- ---------------------------------
Arthur T. Dietz Director April 30, 1999
*
- ---------------------------------
Samuel J. Foti Director April 30, 1999
*
- ---------------------------------
Arthur Howell Director April 30, 1999
*
- ---------------------------------
Lonnie Hope Director April 30, 1999
*
- ---------------------------------
William A. Mitchell, Jr. Director April 30, 1999
*
- ---------------------------------
Michael I. Roth Director April 30, 1999
By: /s/ Catherine R. McClellan
------------------------------
(Attorney-in-Fact)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ENTERPRISE ACCUMULATION TRUST FOR THE YEAR ENDED
DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832359
<NAME> ENTERPRISE ACCUMULATION TRUST
<SERIES>
<NUMBER> 001
<NAME> EQUITY
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 488,060,907
<INVESTMENTS-AT-VALUE> 621,435,949
<RECEIVABLES> 4,516,586
<ASSETS-OTHER> 10,646
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 625,963,181
<PAYABLE-FOR-SECURITIES> 4,091,534
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 533,991
<TOTAL-LIABILITIES> 4,625,525
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 436,161,098
<SHARES-COMMON-STOCK> 16,876,144
<SHARES-COMMON-PRIOR> 14,758,299
<ACCUMULATED-NII-CURRENT> 8,195,597
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 43,605,919
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 133,375,042
<NET-ASSETS> 621,337,656
<DIVIDEND-INCOME> 8,187,846
<INTEREST-INCOME> 4,771,109
<OTHER-INCOME> 21,467
<EXPENSES-NET> 4,784,728
<NET-INVESTMENT-INCOME> 8,195,694
<REALIZED-GAINS-CURRENT> 43,607,008
<APPREC-INCREASE-CURRENT> (4,143,581)
<NET-CHANGE-FROM-OPS> 47,659,121
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,906,264)
<DISTRIBUTIONS-OF-GAINS> (21,596,997)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 259,368,662
<NUMBER-OF-SHARES-REDEEMED> (203,493,446)
<SHARES-REINVESTED> 27,503,261
<NET-CHANGE-IN-ASSETS> 103,534,337
<ACCUMULATED-NII-PRIOR> 5,906,243
<ACCUMULATED-GAINS-PRIOR> 21,595,989
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,523,391
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,784,728
<AVERAGE-NET-ASSETS> 576,452,110
<PER-SHARE-NAV-BEGIN> 35.09
<PER-SHARE-NII> 0.46
<PER-SHARE-GAIN-APPREC> 3.00
<PER-SHARE-DIVIDEND> (3.07)
<PER-SHARE-DISTRIBUTIONS> (1.36)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 36.82
<EXPENSE-RATIO> 0.83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ENTERPRISE ACCUMULATION TRUST FOR THE YEAR ENDED
DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832359
<NAME> ENTERPRISE ACCUMULATION TRUST
<SERIES>
<NUMBER> 002
<NAME> SMALL COMPANY VALUE PORTFOLIO
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 338,913,665
<INVESTMENTS-AT-VALUE> 407,328,459
<RECEIVABLES> 829,072
<ASSETS-OTHER> 6,527
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 408,164,058
<PAYABLE-FOR-SECURITIES> 973,762
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 389,177
<TOTAL-LIABILITIES> 1,362,939
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 309,669,798
<SHARES-COMMON-STOCK> 14,868,174
<SHARES-COMMON-PRIOR> 13,679,941
<ACCUMULATED-NII-CURRENT> 2,269,065
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 26,447,462
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 68,414,794
<NET-ASSETS> 406,801,119
<DIVIDEND-INCOME> 4,494,858
<INTEREST-INCOME> 1,176,643
<OTHER-INCOME> 22,547
<EXPENSES-NET> 3,424,922
<NET-INVESTMENT-INCOME> 2,269,126
<REALIZED-GAINS-CURRENT> 25,594,861
<APPREC-INCREASE-CURRENT> 1,607,587
<NET-CHANGE-FROM-OPS> 29,471,574
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,050,835)
<DISTRIBUTIONS-OF-GAINS> (24,299,778)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 176,919,909
<NUMBER-OF-SHARES-REDEEMED> (164,856,185)
<SHARES-REINVESTED> 25,350,613
<NET-CHANGE-IN-ASSETS> 41,535,298
<ACCUMULATED-NII-PRIOR> 1,050,774
<ACCUMULATED-GAINS-PRIOR> 25,152,378
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,204,761
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,424,922
<AVERAGE-NET-ASSETS> 401,843,549
<PER-SHARE-NAV-BEGIN> 26.70
<PER-SHARE-NII> 0.16
<PER-SHARE-GAIN-APPREC> 2.33
<PER-SHARE-DIVIDEND> (0.08)
<PER-SHARE-DISTRIBUTIONS> (1.75)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 27.36
<EXPENSE-RATIO> 0.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ENTERPRISE ACCUMULATION TRUST FOR THE YEAR ENDED
DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832359
<NAME> ENTERPRISE ACCUMULATION TRUST
<SERIES>
<NUMBER> 003
<NAME> MANAGED PORTFOLIO
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 2,183,420,531
<INVESTMENTS-AT-VALUE> 2,738,687,306
<RECEIVABLES> 7,960,111
<ASSETS-OTHER> 38,989
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,746,686,406
<PAYABLE-FOR-SECURITIES> 5,151,530
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,229,968
<TOTAL-LIABILITIES> 7,381,498
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,750,711,005
<SHARES-COMMON-STOCK> 67,529,015
<SHARES-COMMON-PRIOR> 65,542,653
<ACCUMULATED-NII-CURRENT> 46,304,556
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 387,022,572
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 555,266,775
<NET-ASSETS> 2,739,304,908
<DIVIDEND-INCOME> 46,489,051
<INTEREST-INCOME> 21,036,122
<OTHER-INCOME> 0
<EXPENSES-NET> 21,220,586
<NET-INVESTMENT-INCOME> 46,304,587
<REALIZED-GAINS-CURRENT> 393,346,265
<APPREC-INCREASE-CURRENT> (253,453,784)
<NET-CHANGE-FROM-OPS> 186,197,068
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (26,677,507)
<DISTRIBUTIONS-OF-GAINS> (189,572,424)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 828,656,136
<NUMBER-OF-SHARES-REDEEMED> (948,480,342)
<SHARES-REINVESTED> 216,249,931
<NET-CHANGE-IN-ASSETS> 66,372,862
<ACCUMULATED-NII-PRIOR> 26,677,477
<ACCUMULATED-GAINS-PRIOR> 183,248,731
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 20,174,424
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 21,220,586
<AVERAGE-NET-ASSETS> 2,796,346,384
<PER-SHARE-NAV-BEGIN> 40.78
<PER-SHARE-NII> 0.71
<PER-SHARE-GAIN-APPREC> 2.53
<PER-SHARE-DIVIDEND> (0.43)
<PER-SHARE-DISTRIBUTIONS> (3.03)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 40.56
<EXPENSE-RATIO> 0.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ENTERPRISE ACCUMULATION TRUST FOR THE YEAR ENDED
DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832359
<NAME> ENTERPRISE ACCUMULATION TRUST
<SERIES>
<NUMBER> 004
<NAME> INTERNATIONAL GROWTH
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 80,246,533
<INVESTMENTS-AT-VALUE> 90,811,808
<RECEIVABLES> 271,106
<ASSETS-OTHER> 7,638
<OTHER-ITEMS-ASSETS> 1,097,752
<TOTAL-ASSETS> 92,188,304
<PAYABLE-FOR-SECURITIES> 234,667
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 159,421
<TOTAL-LIABILITIES> 394,088
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 79,987,662
<SHARES-COMMON-STOCK> 13,620,192
<SHARES-COMMON-PRIOR> 12,646,714
<ACCUMULATED-NII-CURRENT> 895,838
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 308,698
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,602,018
<NET-ASSETS> 91,794,216
<DIVIDEND-INCOME> 1,757,194
<INTEREST-INCOME> 184,133
<OTHER-INCOME> 0
<EXPENSES-NET> 1,045,421
<NET-INVESTMENT-INCOME> 895,906
<REALIZED-GAINS-CURRENT> 862,244
<APPREC-INCREASE-CURRENT> 8,976,597
<NET-CHANGE-FROM-OPS> 10,734,747
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (956,997)
<DISTRIBUTIONS-OF-GAINS> (3,458,658)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 33,682,098
<NUMBER-OF-SHARES-REDEEMED> (30,770,132)
<SHARES-REINVESTED> 4,415,655
<NET-CHANGE-IN-ASSETS> 13,464,713
<ACCUMULATED-NII-PRIOR> 956,929
<ACCUMULATED-GAINS-PRIOR> 2,905,112
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 730,659
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,045,421
<AVERAGE-NET-ASSETS> 85,959,830
<PER-SHARE-NAV-BEGIN> 6.18
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> .84
<PER-SHARE-DIVIDEND> (0.07)
<PER-SHARE-DISTRIBUTIONS> (0.27)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.74
<EXPENSE-RATIO> 1.22
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ENTERPRISE ACCUMULATION TRUST FOR THE YEAR ENDED
DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832359
<NAME> ENTERPRISE ACCUMULATION TRUST
<SERIES>
<NUMBER> 005
<NAME> HIGH-YIELD BOND PORTFOLIO
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 103,599,260
<INVESTMENTS-AT-VALUE> 100,019,120
<RECEIVABLES> 2,058,113
<ASSETS-OTHER> 5,483
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 102,082,716
<PAYABLE-FOR-SECURITIES> 129,076
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 88,686
<TOTAL-LIABILITIES> 217,762
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 104,373,784
<SHARES-COMMON-STOCK> 18,966,191
<SHARES-COMMON-PRIOR> 11,966,911
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,071,310
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,580,140)
<NET-ASSETS> 101,864,954
<DIVIDEND-INCOME> 22,500
<INTEREST-INCOME> 7,650,948
<OTHER-INCOME> 64,542
<EXPENSES-NET> 624,130
<NET-INVESTMENT-INCOME> 7,113,860
<REALIZED-GAINS-CURRENT> 1,083,292
<APPREC-INCREASE-CURRENT> (5,550,240)
<NET-CHANGE-FROM-OPS> 2,646,912
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7,113,860)
<DISTRIBUTIONS-OF-GAINS> (1,380,937)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 53,781,245
<NUMBER-OF-SHARES-REDEEMED> (22,927,376)
<SHARES-REINVESTED> 8,494,797
<NET-CHANGE-IN-ASSETS> 33,500,781
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1,368,953
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 520,951
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 624,130
<AVERAGE-NET-ASSETS> 86,825,107
<PER-SHARE-NAV-BEGIN> 5.71
<PER-SHARE-NII> 0.46
<PER-SHARE-GAIN-APPREC> (0.26)
<PER-SHARE-DIVIDEND> (0.46)
<PER-SHARE-DISTRIBUTIONS> (0.08)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.37
<EXPENSE-RATIO> 0.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ENTERPRISE ACCUMULATION TRUST FOR THE ONE MONTH ENDED
DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832359
<NAME> ENTERPRISE ACCUMULATION TRUST
<SERIES>
<NUMBER> 006
<NAME> GROWTH AND INCOME PORTFOLIO
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 339,173
<INVESTMENTS-AT-VALUE> 350,543
<RECEIVABLES> 45,731
<ASSETS-OTHER> 196,943
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 593,217
<PAYABLE-FOR-SECURITIES> 44,443
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,286
<TOTAL-LIABILITIES> 55,729
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 525,897
<SHARES-COMMON-STOCK> 105,213
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 222
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,369
<NET-ASSETS> 537,488
<DIVIDEND-INCOME> 154
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 270
<NET-INVESTMENT-INCOME> (116)
<REALIZED-GAINS-CURRENT> 338
<APPREC-INCREASE-CURRENT> 11,369
<NET-CHANGE-FROM-OPS> 11,591
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 525,993
<NUMBER-OF-SHARES-REDEEMED> (96)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 537,488
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 193
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,620
<AVERAGE-NET-ASSETS> 313,204
<PER-SHARE-NAV-BEGIN> 5.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.11
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 5.11
<EXPENSE-RATIO> 1.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ENTERPRISE ACCUMULATION TRUST FOR THE ONE MONTH ENDED
DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832359
<NAME> ENTERPRISE ACCUMULATION TRUST
<SERIES>
<NUMBER> 007
<NAME> SMALL COMPANY GROWTH PORTFOLIO
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 337,932
<INVESTMENTS-AT-VALUE> 371,183
<RECEIVABLES> 44,352
<ASSETS-OTHER> 101,539
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 517,074
<PAYABLE-FOR-SECURITIES> 36,839
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,351
<TOTAL-LIABILITIES> 48,190
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 436,486
<SHARES-COMMON-STOCK> 85,863
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (853)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,251
<NET-ASSETS> 468,884
<DIVIDEND-INCOME> 35
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 362
<NET-INVESTMENT-INCOME> (327)
<REALIZED-GAINS-CURRENT> (853)
<APPREC-INCREASE-CURRENT> 33,251
<NET-CHANGE-FROM-OPS> 32,071
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 436,953
<NUMBER-OF-SHARES-REDEEMED> (140)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 468,884
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 259
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,686
<AVERAGE-NET-ASSETS> 314,547
<PER-SHARE-NAV-BEGIN> 5.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.46
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 5.46
<EXPENSE-RATIO> 1.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ENTERPRISE ACCUMULATION TRUST FOR THE ONE MONTH ENDED
DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832359
<NAME> ENTERPRISE ACCUMULATION TRUST
<SERIES>
<NUMBER> 008
<NAME> CAPITAL APPRECIATION PORTFOLIO
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 271,310
<INVESTMENTS-AT-VALUE> 309,478
<RECEIVABLES> 32,353
<ASSETS-OTHER> 223,161
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 564,992
<PAYABLE-FOR-SECURITIES> 42,459
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,277
<TOTAL-LIABILITIES> 53,736
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 473,316
<SHARES-COMMON-STOCK> 91,747
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (228)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 38,168
<NET-ASSETS> 511,256
<DIVIDEND-INCOME> 85
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 319
<NET-INVESTMENT-INCOME> (234)
<REALIZED-GAINS-CURRENT> (227)
<APPREC-INCREASE-CURRENT> 38,168
<NET-CHANGE-FROM-OPS> 37,707
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 473,649
<NUMBER-OF-SHARES-REDEEMED> (100)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 511,256
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 184
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,611
<AVERAGE-NET-ASSETS> 298,143
<PER-SHARE-NAV-BEGIN> 5.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.57
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 5.57
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ENTERPRISE ACCUMULATION TRUST FOR THE ONE MONTH ENDED
DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832359
<NAME> ENTERPRISE ACCUMULATION TRUST
<SERIES>
<NUMBER> 009
<NAME> EQUITY INCOME PORTFOLIO
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 363,884
<INVESTMENTS-AT-VALUE> 370,256
<RECEIVABLES> 53,951
<ASSETS-OTHER> 192,435
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 616,642
<PAYABLE-FOR-SECURITIES> 140,419
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,269
<TOTAL-LIABILITIES> 151,688
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 458,455
<SHARES-COMMON-STOCK> 91,297
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 127
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,372
<NET-ASSETS> 464,954
<DIVIDEND-INCOME> 373
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 246
<NET-INVESTMENT-INCOME> 127
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 6,372
<NET-CHANGE-FROM-OPS> 6,499
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 458,517
<NUMBER-OF-SHARES-REDEEMED> (62)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 464,954
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 176
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,603
<AVERAGE-NET-ASSETS> 284,756
<PER-SHARE-NAV-BEGIN> 5.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.09
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 5.09
<EXPENSE-RATIO> 1.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ENTERPRISE ACCUMULATION TRUST FOR THE ONE MONTH ENDED
DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000832359
<NAME> ENTERPRISE ACCUMULATION TRUST
<SERIES>
<NUMBER> 010
<NAME> GROWTH PORTFOLIO
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 1,380,534
<INVESTMENTS-AT-VALUE> 1,428,708
<RECEIVABLES> 196,804
<ASSETS-OTHER> 779,759
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,405,271
<PAYABLE-FOR-SECURITIES> 450,252
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,564
<TOTAL-LIABILITIES> 461,816
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,895,379
<SHARES-COMMON-STOCK> 369,068
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (98)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 48,174
<NET-ASSETS> 1,943,455
<DIVIDEND-INCOME> 453
<INTEREST-INCOME> 110
<OTHER-INCOME> 0
<EXPENSES-NET> 722
<NET-INVESTMENT-INCOME> (159)
<REALIZED-GAINS-CURRENT> (98)
<APPREC-INCREASE-CURRENT> 48,174
<NET-CHANGE-FROM-OPS> 47,917
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,906,210
<NUMBER-OF-SHARES-REDEEMED> (10,672)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,943,455
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 471
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,898
<AVERAGE-NET-ASSETS> 763,641
<PER-SHARE-NAV-BEGIN> 5.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.27
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 5.27
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE> 1
EXHIBIT (D)(I)
ENTERPRISE ACCUMULATION TRUST
INVESTMENT ADVISER'S AGREEMENT
THIS AGREEMENT, made this 1st day of November 1998, is by and between
Enterprise Accumulation Trust, a Massachusetts trust (hereinafter referred to as
"Enterprise"), and Enterprise Capital Management, Inc., a Georgia corporation
(hereinafter referred to as the "Adviser").
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, Enterprise and the
Adviser agree as follows:
(1) Enterprise hereby employs the Adviser to act as the Investment
Adviser of Enterprise, and in addition to render certain other services to
Enterprise, all as set forth herein. The Adviser hereby accepts such employment
and agrees to perform such services on the terms set forth, and for the
compensation herein provided.
(2) The Adviser will furnish each series ("Portfolio") of
Enterprise advice with respect to the investment and reinvestment of the assets
of each Portfolio of Enterprise in accordance with the investment objectives of
each such Portfolio as set forth in any currently effective registration
statement with the Securities and Exchange Commission (the "SEC") with respect
to securities of Enterprise.
(3) In carrying out its duties hereunder, it is contemplated that
the Adviser will select and employ subinvestment adviser Portfolio Managers for
the respective Portfolios of Enterprise, subject to compliance with the
provisions of Section 15 of the Investment Company Act of 1940, as amended.
(4) The Adviser will provide oversight and management services to
the Fund which will include, but not be limited to, (i) supervising the
sub-adviser's compliance with federal and state regulations, including the
Investment Company Act, (ii) evaluating the sub-adviser's performance, (iii)
analyzing the composition of the investment portfolios of each Portfolio of the
Trust and preparing reports thereon for the Board or any committee of the Board,
(iv) evaluating each Portfolio's performance in comparison to similar mutual
funds and other market information, (v) conducting searches, upon request of the
Board, for a replacement for any sub-adviser then serving the Trust, and (vi)
preparing presentations to shareholders which analyze the Trust's overall
investment program and performance.
(5) The Adviser will for all purposes herein be deemed to be an
independent contractor. The Adviser has no authority to act for or represent
Enterprise in any way and is not an agent of the Enterprise.
<PAGE> 2
(6) The Adviser will, at its own expense, furnish to Enterprise
directly or through any of the Adviser's subsidiaries, office facilities,
including space, furniture and equipment, and, to the extent that such services
are not being provided by others under contract with Enterprise, personnel for
the managing of the affairs of, servicing the investment of, and keeping the
books and records of Enterprise, including clerical, research, statistical and
investment work, but not including duties or services which are customarily
performed for an open-end management investment company by its Board of
Trustees, custodian, transfer agent, registrar, dividend disbursing agent,
auditors and legal counsel.
Personnel provided shall be persons satisfactory to the Board of
Trustees of Enterprise to serve as officers of Enterprise, including a
President, one or more Vice Presidents, a Secretary, a Treasurer and such
additional officers and employees as may reasonably be necessary for the
execution of its duties under this Agreement.
The personnel and facilities furnished as aforesaid shall be subject to
the control and direction of the Board of Trustees of Enterprise. Such personnel
shall be employees of Enterprise notwithstanding that some or all of their
compensation and expenses of their employment may be paid by the Adviser.
(7) It is understood that the Adviser does not, by this Agreement,
undertake to assume or pay any costs or expenses of Enterprise except those
specifically stated herein to be payable by the Adviser. In connection
therewith, the Adviser understands that Enterprise pays and shall continue to
pay the following expenses (which shall not be a limiting statement of such
expenses):
(a) The fees, compensation and traveling expenses of the
independent Trustees of Enterprise,
(b) Telephone, telegraphic and postage expenses related to
communications between Trustees and officers of Enterprise, other than those
provided by the Adviser,
(c) The fees of any custodian, transfer agent, registrar of
dividend disbursing agent of Enterprise,
(d) Compensation of Enterprise's auditors and counsel, including
compensation and costs relating to litigation,
(e) Franchise, income and original issue taxes relating to
Enterprise and its securities,
(f) Fees and legal expenses incurred in qualifying the shares of
Enterprise for sale with any state regulatory agency in the several states, and
the fees and expenses of maintaining, renewing, increasing or amending such
qualification,
(g) Insurance premiums or interest on indebtedness,
(h) Association dues,
<PAGE> 3
(i) Fees and expenses involved in registering and maintaining
registrations of Enterprise and of its shares with the SEC, including the
preparation and printing of prospectuses,
(j) Costs of printing and mailing reports to shareholders, proxy
statements, dividends notices and other communications to shareholders, as well
as all expenses of shareholders and Trustees meetings,
(k) Cost of printing of stock certificates,
(l) Broker's commissions and issue and transfer taxes chargeable
to Enterprise in connection with securities transactions to which Enterprise is
a party, and
(m) Business licenses, intangible and franchise taxes.
Costs relating to Enterprise's dividends and capital gains reinvestment
program and other shareholder plans will not be borne by Enterprise except to
the extent of the normal cost to Enterprise of issuing shares. All other costs
relating to such programs and plans will be borne by the Adviser.
(8) Enterprise agrees to pay the Adviser for its services and
facilities to be furnished under this Agreement, within 15 days after the close
of each calendar month after the effective date of this Agreement, the amounts
equal to the percentages of the average of the daily closing net asset values of
the respective Funds of Enterprise that are set forth in Schedule A hereto.
Subject to the requirements of Section 15 of the Investment Company Act of 1940,
such Schedule A may be amended from the Investment Company Act of 1940, such
Schedule A may be amended from time to time by agreement between the Enterprise
and the Adviser with respect to existing Funds of Enterprise or as new
Portfolios are added to Enterprise.
(9) The services of the Adviser hereunder are not to be deemed to
be exclusive, and the Adviser 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 Adviser of its responsibilities hereunder, it
is agreed that the Adviser 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.
(10) 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 Adviser shall not be liable to
Enterprise or to any shareholder or shareholders of Enterprise for any mistake
of judgement, act or omission in the course of, or connected with, the services
to be rendered by the Adviser hereunder.
(11) Subject to and in accordance with the articles of
incorporation and by-laws of Enterprise and of the Adviser, it is agreed that
the Trustees, officers, employees and shareholders of Enterprise are or may
become interested in the Adviser as Trustees, officers, employees, shareholders
or otherwise, and that Trustees, officers, employees and shareholders of the
Adviser
<PAGE> 4
are or may become similarly interested in Enterprise and that the Adviser may be
or become interested in Enterprise as a shareholder, or otherwise.
(12) The Adviser will not take, and it will take necessary steps to
prevent its officers and trustees from taking, at any time, a short position in
any shares of Enterprise. The Adviser also will cooperate with Enterprise in
adopting a written policy prohibiting insider trading with respect to Enterprise
Portfolio transactions.
(13) In connection with the management of the investment and
reinvestment of the assets of Enterprise and subject to review by Enterprise's
Board of Trustees, the Adviser is authorized to select the brokers or dealers
that will execute purchase and sale transactions for each Portfolio of
Enterprise and, at its option, at all times or from time to time to permit the
respective Portfolio Managers to make such selections, subject to the review of
the Adviser. In connection with such activity, the Adviser is directed to use
its best efforts to obtain the best available price and most favorable execution
with respect to all such purchases and sales of Portfolio securities for
Enterprise. Subject to this primary requirement, and maintaining as its first
consideration the benefits for Enterprise, its Portfolios and its shareholders,
the Adviser shall have the right, subject to the control of the Board of
Trustees of Enterprise, to follow a policy of selecting brokers and dealers who
furnish statistical research and other services to Enterprise, the Adviser or
any Portfolio Manager and, subject to the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., to consider sales of shares of the
Portfolios as a factor in the selection of brokers and dealers.
With respect to Section 17(e) of the Investment Company Act of 1940 and
Section 11(a) of the Securities Exchange Act of 1934, Enterprise hereby
expressly consents and agrees that any associated person of the Adviser,
including, without limitation, MONY Securities Corp., may effect securities
transactions on any exchange of which such associated person is a member, and
that the Adviser and such associated person may receive or retain compensation
in connection therewith.
On occasions when the Adviser deems the purchase or sale of a security
or other investment to be in the best interest of any Portfolio of Enterprise as
well as other Portfolios of Enterprise, the Adviser may, to the extent permitted
by applicable law and regulations, but shall not be obligated to, aggregate the
securities to be so sold or purchased in order to obtain the best execution and
lower brokerage commissions, if any. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction, will
be made by the Adviser in the manner that it considers to be the most equitable
and consistent with its fiduciary obligations to Enterprise and each of its
Portfolios.
(14) Enterprise may terminate this Agreement by sixty days written
notice to the Adviser at any time, without the payment of any penalty, by vote
of Enterprise's Board of Trustees, or by vote of a majority of its outstanding
voting securities, and the Adviser may terminate this Agreement by sixty days
written notice to Enterprise, 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
<PAGE> 5
exempting such assignment from the provisions of Section 15(a) of the Investment
Company Act of 1940, in which event this Agreement shall remain in full force
and effect.
(15) Subject to prior termination as provided above, this Agreement
shall continue in force from the date of execution until September 9, 1995, and
from year to year thereafter if its continuance after said date: (1) is
specifically approved on or before said date and at least annually thereafter by
vote of the Board of Trustees of Enterprise, including a majority of those
directors who are not parties to this Agreement or interested persons of any
such party, or by vote of a majority of the outstanding voting securities of
Enterprise; and (2) is specifically approved at least annually by the vote of a
majority of trustees of Enterprise 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.
(16) This Agreement may be amended at any time by mutual consent of
the parties; provided, that such consent on the part of Enterprise shall have
been approved by a vote of the majority of the outstanding voting securities of
Enterprise; but further provided, that this limitation shall not prevent any
minor amendments to the Agreement which may be required by federal or state
regulatory bodies, which amendments may be made without shareholder approval.
(17) 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.
(18) This Agreement is executed by the Trustees of the Fund, not
individually, but rather in their capacity as Trustees under the Declaration of
Trust made March 2, 1988. None of the Shareholders, Trustees, officers,
employees, or agents of the Fund shall be personally bound or liable under this
Agreement, nor shall resort be had to their private property for the
satisfaction of any obligation or claim hereunder but only to the property of
the Fund and if the obligation or claim relates to the property held by the Fund
for the benefit of one or more but fewer than all Portfolios then only to the
property held for the benefit of the affected Portfolio.
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers and their corporate seals hereunto duly
affixed and attested, as of the date first above written.
ENTERPRISE ACCUMULATION TRUST
(Seal)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- --------------------------------
Its: Chairman, President,
and Chief Executive Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
(Seal)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- --------------------------------
Its: Chairman, President,
and Chief Executive Officer
<PAGE> 7
SCHEDULE A TO
ENTERPRISE ACCUMULATION TRUST
INVESTMENT ADVISER'S AGREEMENT
<TABLE>
<CAPTION>
Percentage of Average Daily Closing Net Asset Values
Name of Portfolio of Portfolio to be Paid
- ----------------- ----------------------------------------------------
<S> <C>
Growth At the rate of .75% of the average of the
daily closing net asset values of the
Portfolio per year, paid monthly.
Growth and Income At the rate of .75% of the average of the
daily closing net asset values of the
Portfolio per year, paid monthly.
Equity At the rate of .80% of the average of the
daily closing net asset values of the
Portfolio per year of assets up to
$400,000,000; at the rate of .75% of the
average of the daily closing net asset
values of the Portfolio per year for assets
from $400,000,000 to $800,000,000; and at
the rate of .70% of the average of the daily
closing net asset values of the Portfolio in
excess of $800,000,000 per year, paid
monthly.
Equity Income At the rate of .75% of the average of the
daily closing net asset values of the
Portfolio per year, paid monthly.
Capital Appreciation At the rate of .75% of the average of the
daily closing net asset values of the
Portfolio per year, paid monthly.
Small Company Growth At the rate of 1.00% of the average of the
daily closing net asset values of the
Portfolio per year, paid monthly.
Small Company Value At the rate of .80% of the average of the
daily closing net asset values of the
Portfolio per year of assets up to
$400,000,000; at the rate of .75% of the
average of the daily closing net asset
values of the Portfolio per year for assets
from $400,000,000 to $800,000,000; and at
the rate of .70% of the average of the daily
closing net asset values of the Portfolio in
excess of $800,000,000 per year paid
monthly.
</TABLE>
<PAGE> 8
SCHEDULE A TO
ENTERPRISE ACCUMULATION TRUST
INVESTMENT ADVISER'S AGREEMENT
(continued)
<TABLE>
<CAPTION>
Percentage of Average Daily Closing Net Asset Values
Name of Portfolio of Portfolio to be Paid
- ----------------- ----------------------------------------------------
<S> <C>
International Growth At the rate of .85% of the average of the
daily closing net asset values of the
Portfolio per year, paid monthly.
Global Financial Services At the rate of .85% of the average of the
daily closing net asset values of the
Portfolio per year, paid monthly.
High Yield Bond At the rate of .60% of the average of the
daily closing net asset values of the
Portfolio per year, paid monthly.
Managed At the rate of .80% of the average of the
daily closing net asset values of the
Portfolio per year of assets up to
$400,000,000; at the rate of .75% of the
average of the daily closing net asset
values of the Portfolio per year for assets
from $400,000,000 to $800,000,000; and at
the rate of .70% of the average of the daily
closing net asset values of the Portfolio in
excess of $800,000,000 per year paid
monthly.
</TABLE>
<PAGE> 1
EXHIBIT (D)(II)
GROWTH PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the 1st day of November, 1998, is among Enterprise
Accumulation Trust (the "Fund"), a Massachusetts business trust, Enterprise
Capital Management, Inc., a Georgia corporation (hereinafter referred to as the
"Adviser"), and Montag & Caldwell, Inc., a Georgia corporation (hereinafter
referred to as "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of September 9, 1994 with the Fund, ("Investment Adviser's Agreement").
Pursuant to the Investment Adviser's Agreement, the Adviser has agreed to render
investment advisory and certain other management services to all of the
Portfolios of the Fund, and the Fund has agreed to employ the Adviser to render
such services and to pay to the Adviser certain fees therefore. The Investment
Adviser's Agreement recognizes that the Adviser may enter into agreements with
other investment advisers who will serve as Portfolio Managers to the Portfolios
of the Fund.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Growth Portfolio of the Fund (the "Growth
Portfolio") securities investment advisory services for that Fund.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employ the Portfolio Manager
to render certain investment advisory services to the Fund, as set forth herein.
The Portfolio Manager hereby accepts such employment and agrees to perform such
services on the terms herein set forth, and for the compensation herein
provided.
(2) The Portfolio Manager shall furnish the Growth Portfolio
advice with respect to the investment and reinvestment of the assets of the
Growth Portfolio, or such portion of the assets of the Fund as the Adviser shall
specify from time to time, in accordance with the investment objectives,
restrictions and limitations of the Portfolio as set forth in the Fund's most
recent Registration Statement.
(3) The Portfolio Manager shall perform a monthly
reconciliation of the Portfolio to the holdings report provided by the Fund's
custodian and bring any material or significant variances regarding holdings or
valuations to the attention of the Adviser.
(4) The Portfolio Manager shall for all purposes herein be
deemed to be an independent contractor. The Portfolio Manager has no authority
to act for or represent the Fund or the Portfolios in any way except to direct
securities transactions pursuant to its investment advice hereunder. The
Portfolio Manager is not an agent of the Fund or the Portfolio.
<PAGE> 2
(5) It is understood that the Portfolio Manager does not, by
this Agreement, undertake to assume or pay any costs or expenses of the Fund or
the Portfolio.
(6) (a) The Adviser agrees to pay the Portfolio Manager for
its services to be furnished under this Agreement, with respect to each calendar
month after the effective date of this Agreement, on the twentieth (20th) day
after the close of each calendar month, a sum equal to 0.042 of 1% of the
average of the daily closing net asset value of the Fund managed by the
Portfolio 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 0.33 of 1% of the
average of the daily closing net asset value of the Portfolio during such month
(that is, 0.40% per year) for assets from $100,000,000 to $300,000,000; and a
sum equal to 0.25 of 1% of the average of the daily closing net asset value of
the Portfolio 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
Portfolio's shares.
(7) The services of the Portfolio Manager hereunder are not to
be deemed to be exclusive, and the Portfolio Manager is free to render services
to others and to engage in other activities so long as its services hereunder
are not impaired thereby. Without in any way relieving the Portfolio Manager of
its responsibilities hereunder, it is agreed that the Portfolio Manager may
employ others to furnish factual information, economic advice and/or research,
and investment recommendations, upon which its investment advice and service is
furnished hereunder.
(8) In the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or reckless disregard of
its obligations and duties hereunder, the Portfolio Manager shall not be liable
to the Fund, the Portfolio or the Adviser or to any shareholder or shareholders
of the Fund, the Portfolio or the Adviser for any mistake of judgment, act or
omission in the course of, or connected with, the services to be rendered by the
Portfolio Manager hereunder.
(9) The Portfolio Manager will take necessary steps to prevent
the investment professionals of the Portfolio Manager who are responsible for
investing assets of the Portfolio from taking, at any time, a short position in
any shares of any holdings of any Portfolios of the Fund for any accounts in
which such individuals have a beneficial interest, excluding short positions,
including without limitation, short against-the-box positions, effected for tax
reasons. The Portfolio Manager also will cooperate with the Fund in adopting a
written policy prohibiting insider trading with respect to Fund Portfolio
transactions insofar as such transactions may relate to the Portfolio Manager.
(10) In connection with the management of the investment and
reinvestment of the assets of the Portfolio, the Portfolio Manager is authorized
to select the brokers or dealers that will execute purchase and sale
transactions for the Portfolio, and is directed to use its best efforts to
obtain the best available price and most favorable execution with respect to
such purchases and sales of portfolio securities for the Fund. Subject to this
primary requirement, and maintaining as its first consideration the
<PAGE> 3
benefits for the Portfolios and its shareholders, the Portfolio Manager shall
have the right, subject to the approval of the Board of Directors of the Fund
and of the Adviser, to follow a policy of selecting brokers and dealers who
furnish statistical research and other services to the Portfolio, the Adviser,
or the Portfolio Manager and, subject to the Conduct Rules of the National
Association of Securities Dealers, Inc., to select brokers and dealers who sell
shares of Portfolios of the Fund.
(11) The Fund may terminate this Agreement by thirty (30) days
written notice to the Adviser and the Portfolio Manager at any time, without the
payment of any penalty, by vote of the Fund's Board of Directors, or by vote of
a majority of its outstanding voting securities. The Adviser may terminate this
Agreement by thirty (30) days written notice to the Portfolio Manager and the
Portfolio 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 October 1,
1999 and from year to year thereafter if its continuance after said date: (1) is
specifically approved on or before said date and at least annually thereafter by
vote of the Board of Directors of the Fund, including a majority of those
Directors who are not parties to this Agreement of interested persons of any
such party, or by vote of a majority of the outstanding voting securities of the
Fund, and (2) is specifically approved at least annually by the vote of a
majority of Directors of the Fund who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.
(13) The Adviser shall indemnify and hold harmless the
Portfolio Manager, its officers and directors and each person, if any, who
controls the Portfolio Manager within the meaning of Section 15 of the
Securities Act of 1933 (any and all such persons shall be referred to as
"Indemnified Party"), against any loss, liability, claim, damage or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages or expense and reasonable counsel fees incurred in
connection therewith), arising by reason of any matter to which this Portfolio
Manager's Agreement relates. However, in no case (i) is this indemnity to be
deemed to protect any particular Indemnified Party against any liability to
which such Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties under this
Portfolio Manager's Agreement or (ii) is the Adviser to be liable under this
indemnity with respect to any claim made against any particular Indemnified
Party unless such Indemnified Party shall have notified the Adviser in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Portfolio
Manager or such controlling persons.
The Portfolio Manager shall indemnify and hold harmless the Adviser and
each of its directors and officers and each person if any who controls the
Adviser within the meaning of Section 15 of the Securities Act of 1933, against
any loss, liability, claim, damage or expense described in the foregoing
indemnity, but only with respect to the Portfolio Manager's willful misfeasance,
bad faith or gross negligence in the performance of its duties under this
Portfolio Manager's Agreement. In case any action shall be brought against the
Adviser or any person so indemnified, in respect of which indemnity may be
sought against the Portfolio Manager, the Portfolio Manager shall have the
rights and duties given to the Adviser, and the Adviser and each person so
indemnified shall have the rights and duties given to the Portfolio Manager by
the provisions of subsection (i) and (ii) of this section.
<PAGE> 4
(14) Except as otherwise provided in paragraph 13 hereof and
as may be required under applicable federal law, this Portfolio Manager's
Agreement shall be governed by the laws of the State of Georgia.
(15) The Portfolio Manager agrees to notify the parties within
a reasonable period of time regarding a material change in the membership of the
Portfolio Manager.
(16) The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the Investment Company Act of 1940 as now
in effect or as hereafter amended.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized officers and their corporate seals hereunder duly
affixed and attested, as of the date first above written.
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- ---------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
ENTERPRISE ACCUMULATION TRUST
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- ---------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
MONTAG & CALDWELL, INC.
(SEAL)
ATTEST: /s/ ELIZABETH CHESTER By: /s/ RONALD E. CANAKARIS
--------------------------- ---------------------------------------
Secretary
<PAGE> 1
EXHIBIT (D)(III)
GROWTH AND INCOME PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the 1st day of November 1998, is among Enterprise
Accumulation Trust (the "Fund"), a Massachusetts business trust, Enterprise
Capital Management, Inc., a Georgia corporation (hereinafter referred to as the
"Adviser"), and Retirement System Investors Inc., a Delaware corporation,
(hereinafter referred to as the "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of May 1, 1993 with the Fund ("Investment Adviser's Agreement).
Pursuant to the Investment Adviser's Agreement, the Adviser has agreed to render
investment advisory and certain other management services to all of the
Portfolios of the Fund, and the Fund has agreed to employ the Adviser to render
such services and to pay to the Adviser certain fees therefore. The Investment
Adviser's Agreement recognizes that the Adviser may enter into agreements with
other investment advisers who will serve as Portfolio Managers to the Portfolios
of the Fund.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Growth and Income Portfolio of the Fund
(the "Growth and Income Portfolio") securities investment advisory services for
that Portfolio.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employ the Portfolio Manager
to render certain investment advisory services to the Portfolio, as set
forth herein. The Portfolio Manager hereby accepts such employment and
agrees to perform such services on the terms herein set forth, and for
the compensation herein provided.
(2) The Portfolio Manager shall furnish the Growth and Income
Portfolio advice with respect to the investment and reinvestment of the
assets of the Growth and Income Portfolio, or such portion of the
assets of the Portfolio as the Adviser shall specify from time to time,
in accordance with the investment objectives, restrictions and
limitations of the Portfolio as set forth in the Fund's most recent
Registration Statement.
(3) The Portfolio Manager shall perform a monthly
reconciliation of the Portfolio to the holdings report provided by the
Fund's custodian and bring any material or significant variances
regarding holdings or valuations to the attention of the Adviser.
(4) The Portfolio Manager shall for all purposes herein be
deemed to be an independent contractor. The Portfolio Manager has no
authority to act for or represent the Fund or the
<PAGE> 2
Portfolios in any way except to direct securities transactions pursuant
to its investment advice hereunder. The Portfolio Manager is not an
agent of the Fund or the Portfolio.
(5) It is understood that the Portfolio Manager does not, by
this Agreement, undertake to assume or pay any costs or expenses of the
Fund or the Portfolio.
(6) (a) The Adviser agrees to pay the Portfolio Manager for
its services to be furnished under this Agreement, with respect to each
calendar month after the effective date of this Agreement, on the
twentieth (20th) day after the close of each calendar month, a sum
equal to 0.025 of 1% of the average of the daily closing net asset
value of the Portfolio managed by the Portfolio Manager during such
month (that is, 0.30 of 1% per year) for the first $100,000,000 of
assets under management; a sum equal to 0.0208 of 1% of the average of
the daily closing net asset value of the Portfolio during such month
(that is, 0.25% per year) for the next $100,000,000; and a sum equal to
0.0167 of 1% of the average of the daily closing net asset value of the
Portfolio during such month (that is, 0.20 of 1% per year) for assets
in excess of $200,000,000.
(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 Portfolio's shares.
(7) The services of the Portfolio Manager hereunder are not to
be deemed to be exclusive, and the Portfolio Manager is free to render
services to others and to engage in other activities so long as its
services hereunder are not impaired thereby. Without in any way
relieving the Portfolio Manager of its responsibilities hereunder, it
is agreed that the Portfolio Manager may employ others to furnish
factual information, economic advice and/or research, and investment
recommendations, upon which its investment advice and service is
furnished hereunder.
(8) In the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or reckless
disregard of its obligations and duties hereunder, the Portfolio
Manager shall not be liable to the Fund, the Portfolio or the Adviser
or to any shareholder or shareholders of the Fund, the Portfolio or the
Adviser for any mistake of judgment, act or omission in the course of,
or connected with, the services to be rendered by the Portfolio Manager
hereunder.
(9) The Portfolio Manager will take necessary steps to prevent
the investment professionals of the Portfolio Manager who are
responsible for investing assets of the Portfolio from taking, at any
time, a short position in any shares of any holdings of any Portfolios
of the Fund for any accounts in which such individuals have a
beneficial interest, excluding short positions, including without
limitation, short against-the-box positions, effected for tax reasons.
The Portfolio Manager also will cooperate with the Fund in adopting a
written policy prohibiting insider trading with respect to Fund
Portfolio transactions insofar as such transactions may relate to the
Portfolio Manager.
2
<PAGE> 3
(10) In connection with the management of the investment and
reinvestment of the assets of the Portfolio, the Portfolio Manager is
authorized to select the brokers or dealers that will execute purchase
and sale transactions for the Portfolio, and is directed to use its
best efforts to obtain the best available price and most favorable
execution with respect to such purchases and sales of portfolio
securities for the Fund. Subject to this primary requirement, and
maintaining as its first consideration the benefits for the Portfolio
and its shareholders, the Portfolio Manager shall have the right,
subject to the approval of the Board of Trustees of the Fund and of the
Adviser, to follow a policy of selecting brokers and dealers who
furnish statistical research and other services to the Portfolio, the
Adviser, or the Portfolio Manager and, subject to the Conduct Rules of
the National Association of Securities Dealers, Inc., to select brokers
and dealers who sell shares of Portfolio of the Fund.
(11) The Fund may terminate this Agreement by thirty (30) days
written notice to the Adviser and the Portfolio Manager at any time,
without the payment of any penalty, by vote of the Fund's Board of
Directors, or by vote of a majority of its outstanding voting
securities. The Adviser may terminate this Agreement by thirty (30)
days written notice to the Portfolio Manager and the Portfolio 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
October 1, 1999 and from year to year thereafter if its continuance
after said date: (1) is specifically approved on or before said date
and at least annually thereafter by vote of the Board of Trustees of
the Fund, including a majority of those trustees who are not parties to
this Agreement of interested persons of any such party, or by vote of a
majority of the outstanding voting securities of the Fund, and (2) is
specifically approved at least annually by the vote of a majority of
Trustees of the Fund who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called
for the purpose of voting on such approval.
(13) The Adviser shall indemnify and hold harmless the
Portfolio Manager, its officers and directors and each person, if any,
who controls the Portfolio Manager within the meaning of Section 15 of
the Securities Act of 1933 (any and all such persons shall be referred
to as "Indemnified Party"), against any loss, liability, claim, damage
or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of
any matter to which this Portfolio Manager's Agreement relates.
However, in no case (i) is this indemnity to be deemed to protect any
particular Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties
under this Portfolio Manager's Agreement or (ii) is the Adviser to be
liable under this indemnity with respect to any claim made against any
particular Indemnified Party unless such Indemnified Party shall have
notified the Adviser in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim shall have been served upon the Portfolio Manager or such
controlling persons.
3
<PAGE> 4
The Portfolio Manager shall indemnify and hold harmless the Adviser
and each of its trustees and officers and each person if any who
controls the Adviser within the meaning of Section 15 of the Securities
Act of 1933, against any loss, liability, claim, damage or expense
described in the foregoing indemnity, but only with respect to the
Portfolio Manager's willful misfeasance, bad faith or gross negligence
in the performance of its duties under this Portfolio Manager's
Agreement. In case any action shall be brought against the Adviser or
any person so indemnified, in respect of which indemnity may be sought
against the Portfolio Manager, the Portfolio Manager shall have the
rights and duties given to the Adviser, and the Adviser and each person
so indemnified shall have the rights and duties given to the Portfolio
Manager by the provisions of subsection (i) and (ii) of this section.
(14) Except as otherwise provided in paragraph 13 hereof and
as may be required under applicable federal law, this Portfolio
Manager's Agreement shall be governed by the laws of the State of
Georgia.
(15) The Portfolio Manager agrees to notify the parties within
a reasonable period of time regarding a material change in the
membership of the Portfolio Manager.
(16) The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein,
shall have the respective meanings specified in the Investment Company
Act of 1940 as now in effect or as hereafter amended.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized officers and their corporate seals hereunder duly
affixed and attested, as of the date first above written.
ENTERPRISE ACCUMULATION TRUST
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- ------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- ------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
RETIREMENT SYSTEM INVESTORS INC.
(SEAL)
ATTEST: /s/ STEPHEN P. POLLAK By: /s/ JAMES COUGHLIN
--------------------------- ------------------------------------
Secretary
4
<PAGE> 1
EXHIBIT (D)(IV)
EQUITY AND MANAGED PORTFOLIOS
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the 5th day of November, 1997, is among Enterprise
Accumulation Trust (the "Fund"), a Massachusetts business trust, Enterprise
Capital Management, Inc., a Georgia corporation (hereinafter referred to as the
"Adviser"), and OpCap Advisors, a Delaware general partnership (hereinafter
referred to as the "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of September 9, 1994 with the Fund, ("Investment Adviser's Agreement").
Pursuant to the Investment Adviser's Agreement, the Adviser has agreed to render
investment advisory and certain other management services to all of the
Portfolios of the Fund, and the Fund has agreed to employ the Adviser to render
such services and to pay to the Adviser certain fees therefore. The Investment
Adviser's Agreement recognizes that the Adviser may enter into agreements with
other investment advisers who will serve as Portfolio Managers to the Portfolios
of the Fund.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Equity and Managed Portfolios of the Fund
(the "Portfolios") securities investment advisory services for those Portfolios.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employs the Portfolio Manager to
render certain investment advisory services to the Portfolios, as set
forth herein. The Portfolio Manager hereby accepts such employment and
agrees to perform such services on the terms herein set forth, and for
the compensation herein provided.
(2) The Portfolio Manager shall furnish the Portfolios advice with
respect to the investment and reinvestment of the assets of the
Portfolios, or such portion of the assets of the Portfolios as the
Adviser shall specify from time to time, in accordance with the
investment objectives, restrictions and limitations of the Portfolios
as set forth in the Fund's most recent Registration Statement.
(3) The Portfolio Manager shall perform a monthly reconciliation of
the Portfolios to the holdings report provided by the Fund's custodian
and bring any material or significant variances regarding holding or
valuation to the attention of the Adviser.
(4) The Portfolio Manager shall for all purposes herein be deemed
to be an independent contractor. The Portfolio Manager has no authority
to act for or represent the Fund or the Portfolios in any way except to
direct securities transactions pursuant to its investment advice
hereunder. The Portfolio Manager is not an agent of the Fund or the
Portfolios.
(5) It is understood that the Portfolio Manager does not, by this
Agreement, undertake to assume or pay any costs or expenses of the Fund
or the Portfolios.
<PAGE> 2
(6) (a) The Adviser agrees to pay the Portfolio Manager for its
services to be furnished under this Agreement, with respect to each
calendar month after the effective date of this Agreement, on the
twentieth (20th) day after the close of each calendar month, a sum
equal to 0.03333 of 1% of the average of the daily closing net asset
value of the Portfolios managed by the Portfolio Manager during such
month (that is, .40 of 1% per year) for assets under management up to
$1,000,000,000 (one billion dollars) per Portfolio; a sum equal to
0.025 of 1% of the average of the daily closing net asset values of the
Portfolios during such month (that is, 0.30 of 1% per year) for assets
under management in excess of $1,000,000,000 (one billion dollars) per
Portfolio; and as to the Managed Portfolio, a sum equal to 0.02083% of
the average daily closing net asset value of the Portfolio during such
month (that is 0.25 of 1% per year) for assets under management in
excess of $2,000,000,00 (two billion dollars).
(6) (b) The payment of all fees provided for hereunder shall be
prorated and reduced for sums payable for a period less than a full
month in the event of termination of this Agreement on a day that is
not the end of a calendar month.
(6) (c) For the purposes of this Paragraph 6, the daily closing net
asset values of the Portfolios shall be computed in the manner
specified in the Registration Statement for the computation of the
value of such net assets in connection with the determination of the
net asset value of the Portfolios' shares.
(7) The services of the Portfolio Manager hereunder are not to be
deemed to be exclusive, and the Portfolio Manager is free to render
services to others and to engage in other activities so long as its
services hereunder are not impaired thereby. Without in any way
relieving the Portfolio Manager of its responsibilities hereunder, it
is agreed that the Portfolio Manager may employ others to furnish
factual information, economic advice and/or research, and investment
recommendations, upon which its investment advice and service is
furnished hereunder.
(8) In the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or reckless
disregard of its obligations and duties hereunder, the Portfolio
Manager shall not be liable to the Fund, the Portfolios or the Adviser
or to any shareholder or shareholders of the Fund, the Portfolios or
the Adviser for any mistake of judgment, act or omission in the course
of, or connected with, the services to be rendered by the Portfolio
Manager hereunder.
(9) The Portfolio Manager will take necessary steps to prevent the
investment professionals of the Portfolio Manager who are responsible
for investing assets of the Portfolios from taking, at any time, a
short position in any shares of any holdings of any Portfolios of the
Fund for any accounts in which such individuals have a beneficial
interest, excluding short positions, including without limitation,
short against-the-box positions, effected for tax reasons. The
Portfolio Manager also will cooperate with the Fund in adopting a
written policy prohibiting insider trading with respect to Fund
Portfolio transactions insofar as such transactions may relate to the
Portfolio Manager.
(10) In connection with the management of the investment and
reinvestment of the assets of the Portfolio, the Portfolio Manager is
authorized to select the brokers or dealers that will execute purchase
and sale transactions for the Portfolios, and is directed to use its
best efforts to obtain the best available price and most favorable
execution with respect to such purchases and sales of Portfolio
securities for the Fund. Subject to this primary requirement, and
maintaining as its first consideration the benefits for the Portfolios
and its shareholders, the Portfolio Manager shall have the right,
subject to the approval of the Board of Trustees of the Fund and of the
Adviser, to follow a policy of selecting brokers and dealers who
furnish statistical research and other services to the Portfolios, the
Adviser, or the Portfolio Manager and, subject to the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., to
select brokers and dealers who sell shares of Portfolios of the Fund.
(11) The Fund may terminate this Agreement by sixty days written
notice to the Adviser and the Portfolio Manager at any time, without
the payment of any penalty, by vote of the Fund's Board of Trustees, or
by vote of a majority of its outstanding voting securities. The Adviser
may terminate this Agreement by sixty
<PAGE> 3
days written notice to the Portfolio Manager and the Portfolio Manager
may terminate this Agreement by sixty days written notice to the
Adviser, without the payment of any penalty. This Agreement shall
immediately terminate in the event of its assignment, unless an order
is issued by the Securities and Exchange Commission conditionally or
unconditionally exempting such assignment from the provision of Section
15 (a) of the Investment Company Act of 1940, in which event this
Agreement shall remain in full force and effect.
(12) Subject to prior termination as provided above, this Agreement
shall continue in force from the date of execution until November 1,
1999 and from year to year thereafter if its continuance after said
date: (1) is specifically approved on or before said date and at least
annually thereafter by vote of the Board of Trustees of the Fund,
including a majority of those trustees who are not parties to this
Agreement of interested persons of any such party, or by vote of a
majority of the outstanding voting securities of the Fund, and (2) is
specifically approved at least annually by the vote of a majority of
trustees of the Fund who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called
for the purpose of voting on such approval.
(13) The Adviser shall indemnify and hold harmless the Portfolio
Manager, its officers and directors and each person, if any, who
controls the Portfolio Manager within the meaning of Section 15 of the
Securities Act of 1933 (any and all such persons shall be referred to
as "Indemnified Party"), against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of
any matter to which this Portfolio Manager's Agreement relates.
However, in no case (i) is this indemnity to be deemed to protect any
particular Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties
under this Portfolio Manager's Agreement or (ii) is the Adviser to be
liable under this indemnity with respect to any claim made against any
particular Indemnified Party unless such Indemnified Party shall have
notified the Adviser in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim shall have been served upon the Portfolio Manager or such
controlling persons.
The Portfolio Manager shall indemnify and hold harmless the Adviser
and each of its directors and officers and each person if any who
controls the Adviser within the meaning of Section 15 of the Securities
Act of 1933, against any loss, liability, claim, damage or expense
described in the foregoing indemnity, but only with respect to the
Portfolio Manager's willful misfeasance, bad faith or gross negligence
in the performance of its duties under this Portfolio Manager's
Agreement. In case any action shall be brought against the Adviser or
any person so indemnified, in respect of which indemnity may be sought
against the Portfolio Manager, the Portfolio Manager shall have the
rights and duties given to the Adviser, and the Adviser and each person
so indemnified shall have the rights and duties given to the Portfolio
Manager by the provisions of subsection (i) and (ii) of this section.
(14) Except as otherwise provided in paragraph 13 hereof and as may
be required under applicable federal law, this Portfolio Manager's
Agreement shall be governed by the laws of the State of New York.
(15) The Portfolio Manager agrees to notify the parties within a
reasonable period of time regarding a material change in the membership
of the Portfolio Manager.
(16) The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein,
shall have the respective meanings specified in the Investment Company
Act of 1940 as now in effect or as hereafter amended.
(17) This Agreement is executed by the Trustees of the Fund, not
individually, but rather in their capacity as Trustees under the
Declaration of Trust made March 2, 1988. None of the Shareholders,
Trustees, officers, employees, or agents of the Fund shall be
personally bound or liable under this Agreement, nor shall resort be
had to their private property for the satisfaction of any obligation or
claim hereunder but only to the
<PAGE> 4
property of the Fund and, if the obligation or claim relates to the
property held by the Fund for the benefit of one or more but fewer than
all Portfolios, then only to the property held for the benefit of the
affected Portfolio.
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.
ENTERPRISE CAPITAL, MANAGEMENT, INC.
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ PHILLIP G. GOFF
--------------------------- --------------------------------------
Secretary Phillip G. Goff, Vice President
ENTERPRISE ACCUMULATION TRUST
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ PHILLIP G. GOFF
--------------------------- --------------------------------------
Secretary Phillip G. Goff, Vice President
(SEAL) OPCAP ADVISORS
ATTEST: /s/ THOMAS E. DUGGAN By: /s/ BERNARD H. GARIL
--------------------------- --------------------------------------
Secretary
<PAGE> 1
EXHIBIT (D)(V)
EQUITY INCOME PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the 1st day of November, 1998, is among Enterprise
Accumulation Trust (the "Fund"), a Massachusetts business trust, Enterprise
Capital Management, Inc., a Georgia corporation (hereinafter referred to as the
"Adviser"), and 1740 Advisers, Inc., a New York corporation (hereinafter
referred to as the "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of September 14, 1987 with the Fund ("Investment Adviser's Agreement").
Pursuant to the Investment Adviser's Agreement, the Adviser has agreed to render
investment advisory and certain other management services to all of the
Portfolios of the Fund, and the Fund has agreed to employ the Adviser to render
such services and to pay to the Adviser certain fees therefore. The Investment
Adviser's Agreement recognizes that the Adviser may enter into agreements with
other investment advisers who will serve as Portfolio Managers to the Portfolios
of the Fund.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Equity Income Portfolio of the Fund (the
"Equity Income Portfolio") securities investment advisory services for that
Fund.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employ the Portfolio Manager
to render certain investment advisory services to the Fund, as set forth herein.
The Portfolio Manager hereby accepts such employment and agrees to perform such
services on the terms herein set forth, and for the compensation herein
provided.
(2) The Portfolio Manager shall furnish the Equity Income
Portfolio advice with respect to the investment and reinvestment of the assets
of the Equity Income Portfolio, or such portion of the assets of the Fund as the
Adviser shall specify from time to time, in accordance with the investment
objectives, restrictions and limitations of the Portfolio as set forth in the
Fund's most recent Registration Statement.
(3) The Portfolio Manager shall perform a monthly
reconciliation of the Portfolio to the holdings report provided by the Fund's
custodian and bring any material or significant variances regarding holdings or
valuations to the attention of the Adviser.
(4) The Portfolio Manager shall for all purposes herein be
deemed to be an independent contractor. The Portfolio Manager has no authority
to act for or represent the Fund or the Portfolios in
<PAGE> 2
any way except to direct securities transactions pursuant to its investment
advice hereunder. The Portfolio Manager is not an agent of the Fund or the
Portfolio.
(5) It is understood that the Portfolio Manager does not, by
this Agreement, undertake to assume or pay any costs or expenses of the Fund or
the Portfolio.
(6) (a) The Adviser agrees to pay the Portfolio Manager for
its services to be furnished under this Agreement, with respect to each calendar
month after the effective date of this Agreement, on the twentieth (20th) day
after the close of each calendar month, a sum equal to 0.025 of 1% of the
average of the daily closing net asset value of the Portfolio managed by the
Portfolio Manager during such month (that is, 0.30 of 1% per year) for the first
$100,000,000 under management and a sum equal to 0.0208 of 1% of the average of
the daily closing net asset value for the next $100,000,000 to $200,000,000
(that is, 0.25 of 1% per year); and a sum equal to 0.0167 of 1% of the average
of daily closing net asset value for assets in excess of $200,000,000 managed by
the Portfolio Manager during such month (that is, 0.20 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
Portfolio's shares.
(7) The services of the Portfolio Manager hereunder are not to
be deemed to be exclusive, and the Portfolio Manager is free to render services
to others and to engage in other activities so long as its services hereunder
are not impaired thereby. Without in any way relieving the Portfolio Manager of
its responsibilities hereunder, it is agreed that the Portfolio Manager may
employ others to furnish factual information, economic advice and/or research,
and investment recommendations, upon which its investment advice and service is
furnished hereunder.
(8) In the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or reckless disregard of
its obligations and duties hereunder, the Portfolio Manager shall not be liable
to the Fund, the Portfolio or the Adviser or to any shareholder or shareholders
of the Fund, the Portfolio or the Adviser for any mistake of judgment, act or
omission in the course of, or connected with, the services to be rendered by the
Portfolio Manager hereunder.
(9) The Portfolio Manager will take necessary steps to prevent
the investment professionals of the Portfolio Manager who are responsible for
investing assets of the Portfolio from taking, at any time, a short position in
any shares of any holdings of any Portfolios of the Fund for any accounts in
which such individuals have a beneficial interest, excluding short positions,
including without limitation, short against-the-box positions, effected for tax
reasons. The Portfolio Manager also will cooperate with the Fund in adopting a
written policy prohibiting insider trading with respect to Fund Portfolio
transactions insofar as such transactions may relate to the Portfolio Manager.
(10) In connection with the management of the investment and
reinvestment of the assets of the Portfolio, the Portfolio Manager is authorized
to select the brokers or dealers that will execute purchase and sale
transactions for the Portfolio, and is directed to use its best efforts to
obtain the
<PAGE> 3
best available price and most favorable execution with respect to such purchases
and sales of portfolio securities for the Fund. Subject to this primary
requirement, and maintaining as its first consideration the benefits for the
Portfolios and its shareholders, the Portfolio Manager shall have the right,
subject to the approval of the Board of Directors of the Portfolio and of the
Adviser, to follow a policy of selecting brokers and dealers who furnish
statistical research and other services to the Portfolio, the Adviser, or the
Portfolio Manager and, subject to the Conduct Rules of the National Association
of Securities Dealers, Inc., to select brokers and dealers who sell shares of
Portfolios of the Fund.
(11) The Fund may terminate this Agreement by thirty (30) days
written notice to the Adviser and the Portfolio Manager at any time, without the
payment of any penalty, by vote of the Portfolio'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 Portfolio
Manager and the Portfolio 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 October 1,
1999 and from year to year thereafter if its continuance after said date: (1) is
specifically approved on or before said date and at least annually thereafter by
vote of the Board of Directors of the Fund, including a majority of those
Directors who are not parties to this Agreement of interested persons of any
such party, or by vote of a majority of the outstanding voting securities of the
Fund, and (2) is specifically approved at least annually by the vote of a
majority of Directors of the Fund who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.
(13) The Adviser shall indemnify and hold harmless the
Portfolio Manager, its officers and directors and each person, if any, who
controls the Portfolio Manager within the meaning of Section 15 of the
Securities Act of 1933 (any and all such persons shall be referred to as
"Indemnified Party"), against any loss, liability, claim, damage or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages or expense and reasonable counsel fees incurred in
connection therewith), arising by reason of any matter to which this Portfolio
Manager's Agreement relates. However, in no case (i) is this indemnity to be
deemed to protect any particular Indemnified Party against any liability to
which such Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties under this
Portfolio Manager's Agreement or (ii) is the Adviser to be liable under this
indemnity with respect to any claim made against any particular Indemnified
Party unless such Indemnified Party shall have notified the Adviser in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Portfolio
Manager or such controlling persons.
The Portfolio Manager shall indemnify and hold harmless the Adviser and
each of its directors and officers and each person if any who controls the
Adviser within the meaning of Section 15 of the Securities Act of 1933, against
any loss, liability, claim, damage or expense described in the foregoing
indemnity, but only with respect to the Portfolio Manager's willful misfeasance,
bad faith or gross negligence in the performance of its duties under this
Portfolio Manager's Agreement. In case any action shall be brought against the
Adviser or any person so indemnified, in respect of which indemnity may be
sought against the Portfolio Manager, the Portfolio Manager shall have the
rights and duties given to the
<PAGE> 4
Adviser, and the Adviser and each person so indemnified shall have the rights
and duties given to the Portfolio Manager by the provisions of subsection (i)
and (ii) of this section.
(14) Except as otherwise provided in paragraph 13 hereof and
as may be required under applicable federal law, this Portfolio Manager's
Agreement shall be governed by the laws of the State of Georgia.
(15) The Portfolio Manager agrees to notify the parties within
a reasonable period of time regarding a material change in the membership of the
Portfolio Manager.
(16) The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the Investment Company Act of 1940 as now
in effect or as hereafter amended.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized officers and their corporate seals hereunder duly
affixed and attested, as of the date first above written.
ENTERPRISE ACCUMULATION TRUST
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- ------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- ------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
1740 ADVISERS, INC.
(SEAL)
ATTEST: By: /s/ JOHN V. ROCK
--------------------------- ------------------------------------
Secretary
<PAGE> 1
EXHIBIT (D)(VI)
CAPITAL APPRECIATION PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the 1st day of November, 1998, is among Enterprise
Accumulation Trust (the "Fund"), a Massachusetts business trust, Enterprise
Capital Management, Inc., a Georgia corporation (hereinafter referred to as the
"Adviser"), and Provident Investment Counsel, Inc., a Massachusetts corporation
(hereinafter referred to as the "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of September 14, 1987 with the Fund ("Investment Adviser's Agreement").
Pursuant to the Investment Adviser's Agreement, the Adviser has agreed to render
investment advisory and certain other management services to all of the
Portfolios of the Fund, and the Fund has agreed to employ the Adviser to render
such services and to pay to the Adviser certain fees therefore. The Investment
Adviser's Agreement recognizes that the Adviser may enter into agreements with
other investment advisers who will serve as Portfolio Managers to the Portfolios
of the Fund.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Capital Appreciation Portfolio of the Fund
(the "Capital Appreciation Portfolio") securities investment advisory services
for that Fund.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employ the Portfolio Manager
to render certain investment advisory services to the Fund, as set forth herein.
The Portfolio Manager hereby accepts such employment and agrees to perform such
services on the terms herein set forth, and for the compensation herein
provided.
(2) The Portfolio Manager shall furnish the Capital
Appreciation Portfolio advice with respect to the investment and reinvestment of
the assets of the Capital Appreciation Portfolio, or such portion of the assets
of the Fund as the Adviser shall specify from time to time, in accordance with
the investment objectives, restrictions and limitations of the Portfolio as set
forth in the Fund's most recent Registration Statement.
(3) The Portfolio Manager shall perform a monthly
reconciliation of the Portfolio to the holdings report provided by the Fund's
custodian and bring any material or significant variances regarding holdings or
valuations to the attention of the Adviser.
(4) The Portfolio Manager shall for all purposes herein be
deemed to be an independent contractor. The Portfolio Manager has no authority
to act for or represent the Fund or the Portfolios in
<PAGE> 2
any way except to direct securities transactions pursuant to its investment
advice hereunder. The Portfolio Manager is not an agent of the Fund or the
Portfolio.
(5) It is understood that the Portfolio Manager does not, by
this Agreement, undertake to assume or pay any costs or expenses of the Fund or
the Portfolio.
(6) (a) The Adviser agrees to pay the Portfolio Manager for
its services to be furnished under this Agreement, with respect to each calendar
month after the effective date of this Agreement, on the fifteenth (15th) day
after the close of each calendar month, a sum equal to 0.50 of 1% of the average
daily closing net asset value of the Portfolio for assets up to $100,000,000
under management; 0.45% of 1% per year of the average daily net assets for the
next $100,000,000 under management; 0.35 of 1% per year of the average daily net
assets for the next $100,000,000 under management; and 0.30 of 1% of the average
daily net assets for assets under management thereafter.
(6) (b) The payment of all fees provided for hereunder shall
be prorated and reduced for sums payable for a period less than a full month in
the event of termination of this Agreement on a day that is not the end of a
calendar month.
(6) (c) For the purposes of this Paragraph 6, the daily
closing net asset values of the Portfolio shall be computed in the manner
specified in the Registration Statement for the computation of the value of such
net assets in connection with the determination of the net asset value of the
Portfolio's shares.
(7) The services of the Portfolio Manager hereunder are not to
be deemed to be exclusive, and the Portfolio Manager is free to render services
to others and to engage in other activities so long as its services hereunder
are not impaired thereby. Without in any way relieving the Portfolio Manager of
its responsibilities hereunder, it is agreed that the Portfolio Manager may
employ others to furnish factual information, economic advice and/or research,
and investment recommendations, upon which its investment advice and service is
furnished hereunder.
(8) In the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or reckless disregard of
its obligations and duties hereunder, the Portfolio Manager shall not be liable
to the Fund, the Portfolio or the Adviser or to any shareholder or shareholders
of the Fund, the Portfolio or the Adviser for any mistake of judgment, act or
omission in the course of, or connected with, the services to be rendered by the
Portfolio Manager hereunder.
(9) The Portfolio Manager will take necessary steps to prevent
the investment professionals of the Portfolio Manager who are responsible for
investing assets of the Portfolio from taking, at any time, a short position in
any shares of any holdings of any Portfolios of the Fund for any accounts in
which such individuals have a beneficial interest, excluding short positions,
including without limitation, short against-the-box positions, effected for tax
reasons. The Portfolio Manager also will cooperate with the Fund in adopting a
written policy prohibiting insider trading with respect to Fund Portfolio
transactions insofar as such transactions may relate to the Portfolio Manager.
(10) In connection with the management of the investment and
reinvestment of the assets of the Portfolio, the Portfolio Manager is authorized
to select the brokers or dealers that will execute purchase and sale
transactions for the Portfolio, and is directed to use its best efforts to
obtain the best available price and most favorable execution with respect to
such purchases and sales of portfolio securities for the Fund. Subject to this
primary requirement, and maintaining as its first consideration the
<PAGE> 3
benefits for the Portfolios and its shareholders, the Portfolio Manager shall
have the right, subject to the approval of the Board of Directors of the
Portfolio and of the Adviser, to follow a policy of selecting brokers and
dealers who furnish statistical research and other services to the Portfolio,
the Adviser, or the Portfolio Manager and, subject to the Conduct Rules of the
National Association of Securities Dealers, Inc., to select brokers and dealers
who sell shares of Portfolios of the Fund.
(11) The Fund may terminate this Agreement by thirty (30) days
written notice to the Adviser and the Portfolio Manager at any time, without the
payment of any penalty, by vote of the Portfolio'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 Portfolio
Manager and the Portfolio 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 October 1,
1999 and from year to year thereafter if its continuance after said date: (1) is
specifically approved on or before said date and at least annually thereafter by
vote of the Board of Directors of the Fund, including a majority of those
Directors who are not parties to this Agreement of interested persons of any
such party, or by vote of a majority of the outstanding voting securities of the
Fund, and (2) is specifically approved at least annually by the vote of a
majority of Directors of the Fund who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.
(13) The Adviser shall indemnify and hold harmless the
Portfolio Manager, its officers and directors and each person, if any, who
controls the Portfolio Manager within the meaning of Section 15 of the
Securities Act of 1933 (any and all such persons shall be referred to as
"Indemnified Party"), against any loss, liability, claim, damage or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages or expense and reasonable counsel fees incurred in
connection therewith), arising by reason of any matter to which this Portfolio
Manager's Agreement relates. However, in no case (i) is this indemnity to be
deemed to protect any particular Indemnified Party against any liability to
which such Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties under this
Portfolio Manager's Agreement or (ii) is the Adviser to be liable under this
indemnity with respect to any claim made against any particular Indemnified
Party unless such Indemnified Party shall have notified the Adviser in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Portfolio
Manager or such controlling persons.
The Portfolio Manager shall indemnify and hold harmless the Adviser and
each of its directors and officers and each person if any who controls the
Adviser within the meaning of Section 15 of the Securities Act of 1933, against
any loss, liability, claim, damage or expense described in the foregoing
indemnity, but only with respect to the Portfolio Manager's willful misfeasance,
bad faith or gross negligence in the performance of its duties under this
Portfolio Manager's Agreement. In case any action shall be brought against the
Adviser or any person so indemnified, in respect of which indemnity may be
sought against the Portfolio Manager, the Portfolio Manager shall have the
rights and duties given to the Adviser, and the Adviser and each person so
indemnified shall have the rights and duties given to the Portfolio Manager by
the provisions of subsection (i) and (ii) of this section.
<PAGE> 4
(14) Except as otherwise provided in paragraph 13 hereof and
as may be required under applicable federal law, this Portfolio Manager's
Agreement shall be governed by the laws of the State of Georgia.
(15) The Portfolio Manager agrees to notify the parties within
a reasonable period of time regarding a material change in the membership of the
Portfolio Manager.
(16) The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the Investment Company Act of 1940 as now
in effect or as hereafter amended.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized officers and their corporate seals hereunder duly
affixed and attested, as of the date first above written.
ENTERPRISE ACCUMULATION TRUST
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- -----------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- -----------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
PROVIDENT INVESTMENT COUNSEL, INC.
(SEAL)
ATTEST: /s/ JEFFREY J. MILLER By: /s/ THAD M. BROWN
--------------------------- -----------------------------------
Jeffrey J. Miller Thad M. Brown
Managing Director Chief Operating Officer
Senior Vice President
<PAGE> 1
EXHIBIT (D)(VII)
SMALL COMPANY GROWTH PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the 2nd day of November, 1998, is among Enterprise
Accumulation Trust (the "Fund"), a Massachusetts business trust, Enterprise
Capital Management, Inc., a Georgia corporation (hereinafter referred to as the
"Adviser"), and William D. Witter, Inc., a New York corporation (hereinafter
referred to as the "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of May 1, 1993 with the Fund ("Investment Adviser's Agreement").
Pursuant to the Investment Adviser's Agreement, the Adviser has agreed to render
investment advisory and certain other management services to all of the
Portfolios of the Fund, and the Fund has agreed to employ the Adviser to render
such services and to pay to the Adviser certain fees therefore. The Investment
Adviser's Agreement recognizes that the Adviser may enter into agreements with
other investment advisers who will serve as Portfolio Managers to the Portfolios
of the Fund.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Small Company Growth Portfolio of the Fund
(the "Small Company Growth Portfolio") securities investment advisory services
for that Fund.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employ the Portfolio Manager
to render certain investment advisory services to the Fund, as set forth herein.
The Portfolio Manager hereby accepts such employment and agrees to perform such
services on the terms herein set forth, and for the compensation herein
provided.
(2) The Portfolio Manager shall furnish the Small Company
Growth Portfolio advice with respect to the investment and reinvestment of the
assets of the Small Company Growth Portfolio, or such portion of the assets of
the Fund as the Adviser shall specify from time to time, in accordance with the
investment objectives, restrictions and limitations of the Portfolio as set
forth in the Fund's most recent Registration Statement.
(3) The Portfolio Manager shall perform a monthly
reconciliation of the Portfolio to the holdings report provided by the Fund's
custodian and bring any material or significant variances regarding holdings or
valuations to the attention of the Adviser.
(4) The Portfolio Manager shall for all purposes herein be
deemed to be an independent contractor. The Portfolio Manager has no authority
to act for or represent the Fund or the Portfolios in
<PAGE> 2
any way except to direct securities transactions pursuant to its investment
advice hereunder. The Portfolio Manager is not an agent of the Fund or the
Portfolio.
(5) It is understood that the Portfolio Manager does not, by
this Agreement, undertake to assume or pay any costs or expenses of the Fund or
the Portfolio.
(6) (a) The Adviser agrees to pay the Portfolio Manager for
its services to be furnished under this Agreement, with respect to each calendar
month after the effective date of this Agreement, on the twentieth (20th) day
after the close of each calendar month, a sum equal to 0.054 of 1% of the
average of the daily closing net asset value of the Portfolio managed by the
Portfolio Manager during such month (that is, 0.65 of 1% per year) for the first
$50,000,000 of assets under management; a sum equal to 0.046 of 1% of the
average of the daily closing net asset value of the Portfolio during such month
(that is, 0.55 of 1% per year) for assets in excess $50,000,000 to $100,000,000
under management; and a sum equal to 0.0375 of 1% of the average of the daily
closing net asset value of the Portfolio during such month (that is, 0.45 of 1%
per year) for assets in excess of $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
Portfolio's shares.
(7) The services of the Portfolio Manager hereunder are not to
be deemed to be exclusive, and the Portfolio Manager is free to render services
to others and to engage in other activities so long as its services hereunder
are not impaired thereby. Without in any way relieving the Portfolio Manager of
its responsibilities hereunder, it is agreed that the Portfolio Manager may
employ others to furnish factual information, economic advice and/or research,
and investment recommendations, upon which its investment advice and service is
furnished hereunder.
(8) In the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or reckless disregard of
its obligations and duties hereunder, the Portfolio Manager shall not be liable
to the Fund, the Portfolio or the Adviser or to any shareholder or shareholders
of the Fund, the Portfolio or the Adviser for any mistake of judgment, act or
omission in the course of, or connected with, the services to be rendered by the
Portfolio Manager hereunder.
(9) The Portfolio Manager will take necessary steps to prevent
the investment professionals of the Portfolio Manager who are responsible for
investing assets of the Portfolio from taking, at any time, a short position in
any shares of any holdings of any Portfolios of the Fund for any accounts in
which such individuals have a beneficial interest, excluding short positions,
including without limitation, short against-the-box positions, effected for tax
reasons. The Portfolio Manager also will cooperate with the Fund in adopting a
written policy prohibiting insider trading with respect to Fund Portfolio
transactions insofar as such transactions may relate to the Portfolio Manager.
(10) In connection with the management of the investment and
reinvestment of the assets of the Portfolio, the Portfolio Manager is authorized
to select the brokers or dealers that will execute purchase and sale
transactions for the Portfolio, and is directed to use its best efforts to
obtain the
<PAGE> 3
best available price and most favorable execution with respect to such purchases
and sales of portfolio securities for the Fund. Subject to this primary
requirement, and maintaining as its first consideration the benefits for the
Portfolios and its shareholders, the Portfolio Manager shall have the right,
subject to the approval of the Board of Directors of the Portfolio and of the
Adviser, to follow a policy of selecting brokers and dealers who furnish
statistical research and other services to the Portfolio, the Adviser, or the
Portfolio Manager and, subject to the Conduct Rules of the National Association
of Securities Dealers, Inc., to select brokers and dealers who sell shares of
Portfolios of the Fund.
(11) The Fund may terminate this Agreement by thirty (30) days
written notice to the Adviser and the Portfolio Manager at any time, without the
payment of any penalty, by vote of the Portfolio'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 Portfolio
Manager and the Portfolio 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 October 1,
1999 and from year to year thereafter if its continuance after said date: (1) is
specifically approved on or before said date and at least annually thereafter by
vote of the Board of Directors of the Fund, including a majority of those
Directors who are not parties to this Agreement of interested persons of any
such party, or by vote of a majority of the outstanding voting securities of the
Fund, and (2) is specifically approved at least annually by the vote of a
majority of Directors of the Fund who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.
(13) The Adviser shall indemnify and hold harmless the
Portfolio Manager, its officers and directors and each person, if any, who
controls the Portfolio Manager within the meaning of Section 15 of the
Securities Act of 1933 (any and all such persons shall be referred to as
"Indemnified Party"), against any loss, liability, claim, damage or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages or expense and reasonable counsel fees incurred in
connection therewith), arising by reason of any matter to which this Portfolio
Manager's Agreement relates. However, in no case (i) is this indemnity to be
deemed to protect any particular Indemnified Party against any liability to
which such Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties under this
Portfolio Manager's Agreement or (ii) is the Adviser to be liable under this
indemnity with respect to any claim made against any particular Indemnified
Party unless such Indemnified Party shall have notified the Adviser in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Portfolio
Manager or such controlling persons.
The Portfolio Manager shall indemnify and hold harmless the Adviser and
each of its directors and officers and each person if any who controls the
Adviser within the meaning of Section 15 of the Securities Act of 1933, against
any loss, liability, claim, damage or expense described in the foregoing
indemnity, but only with respect to the Portfolio Manager's willful misfeasance,
bad faith or gross negligence in the performance of its duties under this
Portfolio Manager's Agreement. In case any action shall be brought against the
Adviser or any person so indemnified, in respect of which indemnity may be
sought against the Portfolio Manager, the Portfolio Manager shall have the
rights and duties given to the
<PAGE> 4
Adviser, and the Adviser and each person so indemnified shall have the rights
and duties given to the Portfolio Manager by the provisions of subsection (i)
and (ii) of this section.
(14) Except as otherwise provided in paragraph 13 hereof and
as may be required under applicable federal law, this Portfolio Manager's
Agreement shall be governed by the laws of the State of Georgia.
(15) The Portfolio Manager agrees to notify the parties within
a reasonable period of time regarding a material change in the membership of the
Portfolio Manager.
(16) The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the Investment Company Act of 1940 as now
in effect or as hereafter amended.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized officers and their corporate seals hereunder duly
affixed and attested, as of the date first above written.
ENTERPRISE ACCUMULATION TRUST
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- -----------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- -----------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
WILLIAM D. WITTER, INC.
(SEAL)
ATTEST: /s/ MARY R. DONNELLY By: /s/ WILLIAM D. WITTER
--------------------------- -----------------------------------
Secretary
<PAGE> 1
EXHIBIT (D)(VIII)
SMALL CAP PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the first day of June, 1996 is among Enterprise
Accumulation Trust (the "Fund"), a Massachusetts business trust, Enterprise
Capital Management, Inc., a Georgia corporation (hereinafter referred to as the
"Adviser"), and GAMCO Investors, Inc., New York corporation, (hereinafter
referred to as the "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of May 1, 1993 with the Fund, a copy of which agreement is attached
hereto as Exhibit A (the "Investment Adviser's Agreement"). Pursuant to the
Investment Adviser's Agreement, the Adviser has agreed to render investment
advisory and certain other management services to all of the Portfolio of the
Fund, and the Fund has agreed to employ the Adviser to render such services and
to pay to the Adviser certain fees therefore. The Investment Adviser's Agreement
recognizes that the Adviser may enter into agreements with other investment
advisers who will serve as Portfolio Managers to the Portfolio of the Fund.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Small Cap Portfolio of the Fund (the
"Portfolio") securities investment advisory services for that Portfolio.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employs the Portfolio
Manager to render certain investment advisory services to the
Portfolio, as set forth herein. The Portfolio Manager hereby accepts
such employment and agrees to perform such services on the terms herein
set forth, and for the compensation herein provided.
(2) The Portfolio Manager shall furnish the Portfolio
advice with respect to the investment and reinvestment of the assets of
the Portfolio, or such portion of the assets of the Portfolio as the
Adviser shall specify from time to time, in accordance with the
investment objectives, restrictions and limitations of the Portfolio as
set forth in the Fund's most recent Registration Statement.
(3) The Portfolio Manager shall perform a monthly
reconciliation of the Portfolio to the holdings report provided by the
Fund's custodian and bring any material or significant variances
regarding holding or valuation to the attention of the Adviser.
(4) The Portfolio Manager shall for all purposes herein
be deemed to be an independent contractor. The Portfolio Manager has no
authority to act for or represent the Fund or the Portfolio in any way
except to direct securities transactions pursuant to its investment
advice hereunder. The Portfolio Manager is not an agent of the Fund or
the Portfolio.
<PAGE> 2
(5) It is understood that the Portfolio Manager does not,
by this Agreement, undertake to assume or pay any costs or expenses of
the Fund or the Portfolio.
(6) (a) The Adviser agrees to pay the Portfolio Manager for
its services to be furnished under this Agreement, with respect to each
calendar month after the effective date of this Agreement, on the
twentieth (20th) day after the close of each calendar month, a sum
equal to 0.033 of 1% of the average of the daily closing net asset
value of the Portfolio managed by the Portfolio Manager during such
month (that is, .40 of 1% per year) for the first $1,000,000,000 of
assets under management and a sum equal to 0.025 of 1% of the average
of the daily closing net asset value of the Portfolio during such month
(that is, 0.30 of 1% per year) for assets in excess of $1,000,000,000
under management.
(6) (b) The payment of all fees provided for hereunder shall
be prorated and reduced for sums payable for a period less than a full
month in the event of termination of this Agreement on a day that is
not the end of a calendar month.
(6) (c) For the purposes of this Paragraph 6, the daily
closing net asset values of the Portfolio shall be computed in the
manner specified in the Registration Statement for the computation of
the value of such net assets in connection with the determination of
the net asset value of the Portfolio' shares.
(7) The services of the Portfolio Manager hereunder are
not to be deemed to be exclusive, and the Portfolio Manager is free to
render services to others and to engage in other activities so long as
its services hereunder are not impaired thereby. Without in any way
relieving the Portfolio Manager of its responsibilities hereunder, it
is agreed that the Portfolio Manager may employ others to furnish
factual information, economic advice and/or research, and investment
recommendations, upon which its investment advice and service is
furnished hereunder.
(8) In the absence of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or
reckless disregard of its obligations and duties hereunder, the
Portfolio Manager shall not be liable to the Fund, the Portfolio or the
Adviser or to any shareholder or shareholders of the Fund, the
Portfolio or the Adviser for any mistake of judgment, act or omission
in the course of, or connected with, the services to be rendered by the
Portfolio Manager hereunder.
(9) The Portfolio Manager will take necessary steps to
prevent the investment professionals of the Portfolio Manager who are
responsible for investing assets of the Portfolio from taking, at any
time, a short position in any shares of any holdings of any Portfolio
of the Fund for any accounts in which such individuals have a
beneficial interest, excluding short positions, including without
limitation, short against-the-box positions, effected for tax reasons.
The Portfolio Manager also will cooperate with the Fund in adopting a
written policy prohibiting insider trading with respect to Fund
Portfolio transactions insofar as such transactions may relate to the
Portfolio Manager.
(10) In connection with the management of the investment
and reinvestment of the assets of the Portfolio, the Portfolio Manager
is authorized to select the brokers or dealers that will execute
purchase and sale transactions for the Portfolio, and is directed to
use its best efforts to obtain the best available price and most
favorable execution with respect to such purchases and sales of
portfolio securities for the Fund. Subject to this primary requirement,
and maintaining as its first consideration the benefits for the
Portfolio and its shareholders, the Portfolio Manager shall have the
right, subject to the approval of the Board of Directors of the Fund
and of the Adviser, to follow a policy of selecting brokers and dealers
who furnish statistical research and other services to the Portfolio,
the Adviser, or the Portfolio Manager and, subject to the Rules of
2
<PAGE> 3
Fair Practice of the National Association of Securities Dealers, Inc.,
to select brokers and dealers who sell shares of Portfolio of the Fund.
(11) The Fund may terminate this Agreement by sixty days
written notice to the Adviser and the Portfolio Manager at any time,
without the payment of any penalty, by vote of the Fund's Board of
Directors, or by vote of a majority of its outstanding voting
securities. The Adviser may terminate this Agreement by sixty days
written notice to the Portfolio Manager and the Portfolio Manager may
terminate this Agreement by sixty days written notice to the Adviser,
without the payment of any penalty. This Agreement shall immediately
terminate in the event of its assignment, unless an order is issued by
the Securities and Exchange Commission conditionally or unconditionally
exempting such assignment from the provision of Section 15 (a) of the
Investment Company Act of 1940, in which event this Agreement shall
remain in full force and effect.
(12) Subject to prior termination as provided above, this
Agreement shall continue in force from the date of execution until May
31, 1998 and from year to year thereafter if its continuance after said
date: (1) is specifically approved on or before said date and at least
annually thereafter by vote of the Board of Directors of the Fund,
including a majority of those directors who are not parties to this
Agreement of interested persons of any such party, or by vote of a
majority of the outstanding voting securities of the Fund, and (2) is
specifically approved at least annually by the vote of a majority of
directors of the Fund who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called
for the purpose of voting on such approval.
(13) The Adviser shall indemnify and hold harmless the
Portfolio Manager, its officers and directors and each person, if any,
who controls the Portfolio Manager within the meaning of Section 15 of
the Securities Act of 1933 (any and all such persons shall be referred
to as "Indemnified Party"), against any loss, liability, claim, damage
or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of
any matter to which this Portfolio Manager's Agreement relates.
However, in no case (i) is this indemnity to be deemed to protect any
particular Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties
under this Portfolio Manager's Agreement or (ii) is the Adviser to be
liable under this indemnity with respect to any claim made against any
particular Indemnified Party unless such Indemnified Party shall have
notified the Adviser in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim shall have been served upon the Portfolio Manager or such
controlling persons.
The Portfolio Manager shall indemnify and hold harmless the Adviser
and each of its directors and officers and each person if any who
controls the Adviser within the meaning of Section 15 of the Securities
Act of 1933, against any loss, liability, claim, damage or expense
described in the foregoing indemnity, but only with respect to the
Portfolio Manager's willful misfeasance, bad faith or gross negligence
in the performance of its duties under this Portfolio Manager's
Agreement. In case any action shall be brought against the Adviser or
any person so indemnified, in respect of which indemnity may be sought
against the Portfolio Manager, the Portfolio Manager shall have the
rights and duties given to the Adviser, and the Adviser and each person
so indemnified shall have the rights and duties given to the Portfolio
Manager by the provisions of subsection (i) and (ii) of this section.
(14) Except as otherwise provided in paragraph 13 hereof
and as may be required under applicable federal law, this Portfolio
Manager's Agreement shall be governed by the laws of the State of
Georgia.
3
<PAGE> 4
(15) The Portfolio Manager agrees to notify the parties
within a reasonable period of time regarding a material change in the
membership of the Portfolio Manager.
(16) The terms "vote of a majority of the outstanding
voting securities," "assignment" and "interested persons," when used
herein, shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended.
4
<PAGE> 5
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.
ENTERPRISE CAPITAL
MANAGEMENT, INC.
(SEAL)
By: /s/ VICTOR UGOLYN
------------------------------
Victor Ugolyn
Chairman, President and CEO
ATTEST: /s/ CATHERINE R. MCCLELLAN
---------------------------
GAMCO INVESTORS, INC.
(SEAL)
By: /s/ DOUGLAS R. JAMIESON
------------------------------
Douglas R. Jamieson
ATTEST: /s/ J.E. MCKEE Executive Vice President and COO
---------------------------
Secretary
ENTERPRISE ACCUMULATION
TRUST
By: /s/ VICTOR UGOLYN
------------------------------
Victor Ugolyn
Chairman, President and CEO
ATTEST: /s/ CATHERINE R. MCCLELLAN
---------------------------
Secretary
5
<PAGE> 1
EXHIBIT (D)(IX)
INTERNATIONAL GROWTH FUND
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the 31st day of March, 1999, is among Enterprise
Accumulation Trust (the "Fund"), a Massachusetts business trust, Enterprise
Capital Management, Inc., a Georgia corporation (hereinafter referred to as the
"Adviser"), and Vontobel USA, Inc., a New York corporation (hereinafter referred
to as the "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of May 1, 1993, with the Fund ("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 Portfolio
Managers to the Portfolios of the Fund.
(B) The parties hereto wish to enter into an agreement (the
"Agreement") whereby the Portfolio Manager will provide to the International
Growth Portfolio of the Fund (the "International Growth Portfolio") securities
investment advisory services for that Fund, subject to requisite approvals under
the Investment Company Act of 1940. The Fund, the Adviser, and the Portfolio
Manager are registered under the 1940 Act.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employ the Portfolio
Manager to render certain investment advisory services to the Fund, as set forth
herein. The Portfolio Manager hereby accepts such employment and agrees to
perform such services on the terms herein set forth, and for the compensation
herein provided.
(2) The Portfolio Manager shall furnish the International
Growth Portfolio advice with respect to the investment and reinvestment of the
assets of the International Growth Portfolio, or such portion of the assets of
the Fund as the Adviser shall specify from time to time, in accordance with the
investment objectives, restrictions and limitations of the series as set forth
in the Fund's most recent Registration Statement and the Fund's governing
documents.
(3) The Portfolio Manager shall perform a monthly
reconciliation of the 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 Portfolio Manager shall for all purposes herein
be deemed to be an independent contractor. The Portfolio Manager has no
authority to act for or represent the Fund or the
<PAGE> 2
series in any way except to direct securities transactions pursuant to its
investment advice hereunder. The Portfolio Manager is not an agent of the Fund
or the series.
(5) It is understood that the Portfolio Manager does not,
by this Agreement, undertake to assume or pay any costs or expenses of the Fund
or the series.
(6) (a) The Adviser agrees to pay as compensation to the
Portfolio Manager for its services to be furnished under this Agreement, with
respect to each calendar month after the effective date of this Agreement, on
the twentieth (20th) day after the close of each calendar month, a sum equal to
0.033 of 1% of the average of the daily closing net asset value of the Fund
managed by the Portfolio Manager during such month (that is, 0.40 of 1% per
year) for the first $100,000,000 of assets under management; a sum equal to
0.029 of 1% of the average of the daily closing net asset value of the Fund
during such month (that is, 0.35 of 1% per year) for assets between $100,000,000
to $200,000,000 under management; and a sum equal to 0.025 of 1% of the average
of the daily closing net asset value of the Fund during such month (that is,
0.30 of 1% per year) for assets between $200,000,000 and $500,000,000; and a sum
equal to 0.0208 of 1% (that is, 0.25% per year) for assets in excess of
$500,000,000.
(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 Fund 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 Fund's
shares.
(7) The services of the Portfolio Manager hereunder are
not to be deemed to be exclusive, and the Portfolio Manager is free to render
services to others and to engage in other activities so long as its services
hereunder are not impaired thereby. Without in any way relieving the Portfolio
Manager of its responsibilities hereunder, it is agreed that the Portfolio
Manager may employ others to furnish factual information, economic advice and/or
research, and investment recommendations, upon which its investment advice and
service is furnished hereunder. The Portfolio Manager may, from time to time
hereafter, act as investment adviser to one or more other investment companies
and fiduciary or other managed accounts, provided that when the purchase or sale
of securities of the same issuer is suitable for the investment objectives of
two or more companies or accounts managed by the Portfolio Manager which have
available funds for investment, the available securities will be allocated in a
manner believed by the Portfolio Manager to be equitable to each company or
account.
(8) In the absence of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or reckless
disregard of its obligations and duties hereunder, the Portfolio Manager shall
not be liable to the Fund, the series or the Adviser or to any shareholder or
shareholders of the Fund, the series or the Adviser for any mistake of judgment,
act or omission in the course of, or connected with, the services to be rendered
by the Portfolio Manager hereunder.
(9) The Portfolio Manager will take necessary steps to
prevent the investment professionals of the Portfolio Manager who are
responsible for investing assets of the Fund from taking, at any time, a short
position in any shares of any holdings of any series of the Fund for any
accounts in which such individuals have a beneficial interest, excluding short
positions, including without limitation,
<PAGE> 3
short against-the-box positions, effected for tax reasons. The Portfolio Manager
also will cooperate with the Fund in adopting a written policy prohibiting
insider trading with respect to Fund series transactions insofar as such
transactions may relate to the Portfolio Manager.
(10) In connection with the management of the investment
and reinvestment of the assets of the Fund, the Portfolio Manager is authorized
to select the brokers or dealers that will execute purchase and sale
transactions for the 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 Fund. Subject to this primary requirement,
and maintaining as its first consideration the benefits for the Funds and its
shareholders, the Portfolio Manager shall have the right, subject to the
approval of the Board of Trustees of the Fund and of the Adviser, to follow a
policy of selecting brokers and dealers who furnish statistical research and
other services to the Fund, the Adviser, or the Portfolio Manager and, subject
to the Conduct Rules of the National Association of Securities Dealers, Inc., to
select brokers and dealers who sell shares of series of the Fund.
(11) The Fund may terminate this Agreement by thirty (30)
days written notice to the Adviser and the Portfolio Manager at any time,
without the payment of any penalty, by vote of the Fund's Board of Directors, or
by vote of a majority of its outstanding voting securities. The Adviser may
terminate this Agreement by thirty (30) days written notice to the Portfolio
Manager and the Portfolio 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 March 1, 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
Portfolio Manager, its officers and directors and each person, if any, who
controls the Portfolio Manager within the meaning of Section 15 of the
Securities Act of 1933 (any and all such persons shall be referred to as
"Indemnified Party"), against any loss, liability, claim, damage or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages or expense and reasonable counsel fees incurred in
connection therewith), arising from the Indemnified Party's performance or
non-performance of any duties under this Agreement. However, in no case (i) is
this indemnity to be deemed to protect any particular Indemnified Party against
any liability to which such Indemnified Party would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of reckless disregard of its obligations and duties
under this Portfolio Manager's Agreement or (ii) is the Adviser to be liable
under this indemnity with respect to any claim made against any particular
Indemnified Party unless such Indemnified Party shall have notified the Adviser
in writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been served
upon the Portfolio Manager or such controlling persons.
<PAGE> 4
The Portfolio Manager shall indemnify and hold
harmless the Adviser and each of its directors and officers and each person if
any who controls the Adviser within the meaning of Section 15 of the Securities
Act of 1933, against any loss, liability, claim, damage or expense described in
the foregoing indemnity, but only with respect to the Portfolio Manager's
willful misfeasance, bad faith or gross negligence in the performance of its
duties under this 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 Portfolio Manager, the Portfolio Manager shall have
the rights and duties given to the Adviser, and the Adviser and each person so
indemnified shall have the rights and duties given to the Portfolio Manager by
the provisions of subsection (i) and (ii) of this section.
(14) Except as otherwise provided in paragraph 13 hereof
and as may be required under applicable federal law, this Portfolio Manager's
Agreement shall be governed by the laws of the State of Georgia.
(15) The Portfolio Manager agrees to notify the parties
within a reasonable period of time regarding a material change in the membership
of the Portfolio Manager.
(16) The terms "vote of a majority of the outstanding
voting securities," "assignment" and "interested persons," when used herein,
shall have the respective meanings specified in the Investment Company Act of
1940 as now in effect or as hereafter amended.
(17) This Agreement shall terminate automatically in the
event of any transfer or assignment thereof, as defined in the 1940 Act.
(18) If any provision of this Agreement shall be held or
made invalid by a count decision, statute or rule, or shall be otherwise
rendered invalid, the remainder of this Agreement shall not be affected thereby.
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.
ENTERPRISE ACCUMULATION TRUST
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- ------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- ------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
VONTOBEL USA, INC.
(SEAL)
ATTEST: /s/ THOMAS WITTWER By: /s/ HEINRICH SCHLEGEL
--------------------------- ------------------------------------
Secretary
<PAGE> 1
EXHIBIT (D)(X)
GLOBAL FINANCIAL SERVICES PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the 23rd day of September, 1998, is among
Enterprise Accumulation Trust, (the "Fund"), a Massachusetts business trust,
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 "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of May 1, 1995 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 Portfolio
managers to the Portfolios.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Global Financial Services Portfolio of the
Fund (the "Global Portfolio") securities investment advisory services for the
Global Portfolio.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employ the Portfolio
Manager to render certain investment advisory services to the Global Portfolio,
as set forth herein. The Portfolio Manager hereby accepts such employment and
agrees to perform such services on the terms herein set forth, and for the
compensation herein provided.
(2) The Portfolio Manager shall furnish the Global
Portfolio advice with respect to the investment and reinvestment of the assets
of the Global Portfolio, or such portion of the assets of the Global Portfolio
as the Adviser shall specify from time to time, in accordance with the
investment objectives, restrictions and limitations applicable to the Global
Portfolio which are set forth in the Fund's most recent Registration Statement.
(3) The Portfolio Manager shall perform a monthly
reconciliation of the Global Portfolio 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 Portfolio Manager shall for all purposes herein
be deemed to be an independent contractor. The Portfolio Manager has no
authority to act for or represent the Fund or the Portfolios in any way except
to direct securities transactions pursuant to its investment advice hereunder.
The Portfolio Manager is not an agent of the Fund or the Portfolios.
<PAGE> 2
(5) It is understood that the Portfolio Manager does not,
by this Agreement, undertake to assume or pay any costs or expenses of the Fund
or the Portfolios.
(6) (a) The Adviser agrees to pay the Portfolio Manager for
its services to be furnished under this Agreement, with respect to each calendar
month after the effective date of this Agreement, on the twentieth (20th) day
after the close of each calendar month, a sum equal to 0.042 of 1% of the
average of the daily closing net asset value of the Global Portfolio managed by
the Portfolio 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 Portfolio 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 Portfolio 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 Portfolio shares.
(7) The services of the Portfolio Manager hereunder are
not to be deemed to be exclusive, and the Portfolio Manager is free to render
services to others and to engage in other activities so long as its services
hereunder are not impaired thereby. Without in any way relieving the Portfolio
Manager of its responsibilities hereunder, it is agreed that the Portfolio
Manager may employ others to furnish factual information, economic advice and/or
research, and investment recommendations, upon which its investment advice and
service is furnished hereunder.
(8) In the absence of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or reckless
disregard of its obligations and duties hereunder, the Portfolio Manager shall
not be liable to the Fund, the Global Portfolio or the Adviser or to any
shareholder or shareholders of the Fund, the Global Portfolio or the Adviser for
any mistake of judgment, act or omission in the course of, or connected with,
the services to be rendered by the Portfolio Manager hereunder.
(9) The Portfolio Manager will take necessary steps to
prevent the investment professionals of the Portfolio Manager who are
responsible for investing assets of the Global Portfolio from taking, at any
time, a short position in any shares of any holdings of the Global Portfolio for
any accounts in which such individuals have a beneficial interest, excluding
short positions, including without limitation, short against-the-box positions,
effected for tax reasons. The Portfolio Manager also will cooperate with the
Fund in adopting a written policy prohibiting insider trading with respect to
Global Portfolio transactions insofar as such transactions may relate to the
Portfolio Manager.
(10) In connection with the management of the investment
and reinvestment of the assets of the Global Portfolio, the Portfolio Manager is
authorized to select the brokers or dealers that will execute purchase and sale
transactions for the Global Portfolio, and is directed to use its best efforts
to obtain the best available price and most favorable execution with respect to
such purchases and sales of portfolio securities for the Global Portfolio.
Subject to this primary requirement, and maintaining as its first consideration
the benefits for the Global Portfolio and its shareholders, the Portfolio
Manager shall have the right, subject to the approval of the Board of Directors
of the Portfolio and of the Adviser,
<PAGE> 3
to follow a policy of selecting brokers and dealers who furnish statistical
research and other services to the Global Portfolio, the Adviser, or the
Portfolio 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 Portfolio, the Portfolio
Manager may execute such transactions for the Global Portfolio provided that it
"steps-out" such transactions to the broker-dealers selected by the Portfolio
Manager. A step-out is a service provided by the New York Stock Exchange and
other markets which allows the Portfolio Manager to provide the Global Portfolio
with the benefit of the Portfolio 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 Portfolio Manager. In connection with a step-out, transaction
charges shall be paid by the Global Portfolio to the broker-dealers selected by
the Portfolio Manager and not to the Portfolio Manager.
In addition to selecting brokers or dealers to
execute transactions for the Global Portfolio, the Portfolio Manager may,
subject to obtaining best execution, also act as a broker for the Global
Portfolio from time to time at rates not exceeding the usual and customary
broker's commission. Under Federal law, the Portfolio Manager must obtain the
Fund's and the Adviser's consent to effect agency cross transactions for the
Global Portfolio, which consent is hereby granted. The Portfolio Manager
represents, warrants and covenants that all agency cross transactions for the
Global Portfolio will be effected by the Portfolio Manager strictly in
accordance with Rule 206(3)-2 under the Investment Advisers Act of 1940. An
agency cross transaction is where the Portfolio 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 Portfolio Manager will not effect agency
cross transactions between two managed accounts, that is, the Portfolio Manager
will only effect an agency cross transaction for the Global Portfolio with a
non-managed account. When the Portfolio Manager crosses transactions in
connection with a step-out, the Portfolio 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 Portfolio.
In an agency cross transaction where the Portfolio Manager acts as broker for
Global Portfolio, the Portfolio 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 Portfolio 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 PORTFOLIO
MANAGER AT ANY TIME.
(11) The Fund may terminate this Agreement by thirty (30)
days written notice to the Adviser and the Portfolio Manager at any time,
without the payment of any penalty, by vote of the Portfolio'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
Portfolio Manager and the Portfolio 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 January 1,
1999 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
<PAGE> 4
Agreement of interested persons of any such party, or by vote of a majority of
the outstanding voting securities of the Fund, and (2) is specifically approved
at least annually by the vote of a majority of Directors of the Fund who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.
(13) The Adviser shall indemnify and hold harmless the
Portfolio Manager, its officers and directors and each person, if any, who
controls the Portfolio Manager within the meaning of Section 15 of the
Securities Act of 1933 (any and all such persons shall be referred to as
"Indemnified Party"), against any loss, liability, 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 Portfolio Manager's
Agreement relates. However, in no case (i) is this indemnity to be deemed to
protect any particular Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Portfolio Manager's
Agreement or (ii) is the Adviser to be liable under this indemnity with respect
to any claim made against any particular Indemnified Party unless such
Indemnified Party shall have notified the Adviser in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Portfolio Manager or such
controlling persons.
The Portfolio Manager shall indemnify and hold
harmless the Adviser and each of its directors and officers and each person if
any who controls the Adviser within the meaning of Section 15 of the Securities
Act of 1933, against any loss, liability, damage or expense described in the
foregoing indemnity, but only with respect to the Portfolio Manager's willful
misfeasance, bad faith or gross negligence in the performance of its duties
under this Portfolio Manager's Agreement. In case any action shall be brought
against the Adviser or any person so indemnified, in respect of which indemnity
may be sought against the Portfolio Manager, the Portfolio Manager shall have
the rights and duties given to the Adviser, and the Adviser and each person so
indemnified shall have the rights and duties given to the Portfolio Manager by
the provisions of subsection (i) and (ii) of this Paragraph 13.
(14) Except as otherwise provided in Paragraph 13 hereof
and as may be required under applicable federal law, this Portfolio Manager's
Agreement shall be governed by the laws of the State of Georgia.
(15) The Portfolio Manager agrees to notify the parties
within a reasonable period of time regarding a material change in the membership
of the Portfolio Manager.
(16) The terms "vote of a majority of the outstanding
voting securities," "assignment" and "interested persons," when used herein,
shall have the respective meanings specified in the Investment Company Act of
1940 as now in effect or as hereafter amended.
(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:
<PAGE> 5
by the Portfolio Manager: Joseph Lawrence
Sanford C. Bernstein & Co., Inc.
Phillips Point - West Tower
777 South Flagler Drive
West Palm Beach, FL 33401-6135
with a copy to: Managing Director - Institutional Asset Advisors
Sanford C. Bernstein & Co., Inc.
767 Fifth Avenue
New York, NY 10153-0185
by the Adviser:
-------------------------------------------------------
by the Fund:
-------------------------------------------------------
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 Portfolio Manager, the Adviser and the Fund relating to the Global
Portfolio.
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.
ENTERPRISE ACCUMULATION TRUST
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- --------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- --------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
SANFORD C. BERNSTEIN & CO., INC.
(SEAL)
ATTEST: /s/ JEAN MARGO REID By: /s/ J. PHILIP CLARK
--------------------------- --------------------------------
Secretary J. Philip Clark, Vice President and
Managing Director
<PAGE> 1
EXHIBIT (D)(XI)
HIGH YIELD BOND PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the 11th day of November, 1998, is among
Enterprise Accumulation Trust (the "Fund"), a Massachusetts business trust,
Enterprise Capital Management, Inc., a Georgia corporation (hereinafter referred
to as the "Adviser"), and Caywood-Scholl Capital Management, a California
corporation, Dresdner RCM Global Investors LLC Company (hereinafter referred to
as the "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of September 14, 1987, with the Fund ("Investment Adviser's
Agreement"). Pursuant to the Investment Adviser's Agreement, the Adviser has
agreed to render investment advisory and certain other management services to
all of the Portfolios of the Fund (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
Portfolio Managers to the Portfolios of the Fund.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the High Yield Bond Portfolio of the Fund (the
"High Yield Portfolio") securities investment advisory services for that Fund.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employ the Portfolio
Manager to render certain investment advisory services to the High Yield
Portfolio, as set forth herein. The Portfolio Manager hereby accepts such
employment and agrees to perform such services on the terms herein set forth,
and for the compensation herein provided.
(2) The Portfolio Manager shall furnish the High Yield
Portfolio advice with respect to the investment and reinvestment of the assets
of the High Yield Portfolio, or such portion of the assets of the High Yield
Portfolio as the Adviser shall specify from time to time, in accordance with the
investment objectives, restrictions and limitations applicable to the High Yield
Portfolio which are set forth in the Fund's most recent Registration Statement.
(3) The Portfolio Manager shall perform a monthly
reconciliation of the High Yield Portfolio 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 Portfolio Manager shall for all purposes herein
be deemed to be an independent contractor. The Portfolio Manager has no
authority to act for or represent the Fund or the
<PAGE> 2
Portfolios in any way except to direct securities transactions pursuant to its
investment advice hereunder. The Portfolio Manager is not an agent of the Fund
or the Portfolios.
(5) It is understood that the Portfolio Manager does not,
by this Agreement, undertake to assume or pay any costs or expenses of the Fund
or the Portfolio.
(6) (a) The Adviser agrees to pay the Portfolio Manager for
its services to be furnished under this Agreement, with respect to each calendar
month after the effective date of this Agreement, on the twentieth (20th) day
after the close of each calendar month, a sum equal to 0.025 of 1% of the
average of the daily closing net asset value of the High Yield Portfolio managed
by the Portfolio Manager during such month (that is, 0.30 of 1% per year) for
the first $100,000,000 of assets under management; and a sum equal to 0.0208 of
1% of the average of the daily closing net asset value of the High Yield
Portfolio during such month (that is, 0.25 of 1% per year) for assets over
$100,000,000.
(6) (b) The payment of all fees provided for hereunder shall
be prorated and reduced for sums payable for a period less than a full month in
the event of termination of this Agreement on a day that is not the end of a
calendar month.
(6) (c) For the purposes of this Paragraph 6, the daily
closing net asset values of the Portfolio shall be computed in the manner
specified in the Registration Statement for the computation of the value of such
net assets in connection with the determination of the net asset value of the
High Yield Portfolio shares.
(7) The services of the Portfolio Manager hereunder are
not to be deemed to be exclusive, and the Portfolio Manager is free to render
services to others and to engage in other activities so long as its services
hereunder are not impaired thereby. Without in any way relieving the Portfolio
Manager of its responsibilities hereunder, it is agreed that the Portfolio
Manager may employ others to furnish factual information, economic advice and/or
research, and investment recommendations, upon which its investment advice and
service is furnished hereunder.
(8) In the absence of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or reckless
disregard of its obligations and duties hereunder, the Portfolio Manager shall
not be liable to the Fund, the High Yield Portfolio or the Adviser or to any
shareholder or shareholders of the Fund, the High Yield Portfolio or the Adviser
for any mistake of judgment, act or omission in the course of, or connected
with, the services to be rendered by the Portfolio Manager hereunder.
(9) The Portfolio Manager will take necessary steps to
prevent the investment professionals of the Portfolio Manager who are
responsible for investing assets of the High Yield Portfolio from taking, at any
time, a short position in any shares of any holdings of the High Yield Portfolio
for any accounts in which such individuals have a beneficial interest, excluding
short positions, including without limitation, short against-the-box positions,
effected for tax reasons. The Portfolio Manager also will cooperate with the
Fund in adopting a written policy prohibiting insider trading with respect to
High Yield Portfolio transactions insofar as such transactions may relate to the
Portfolio Manager.
(10) In connection with the management of the investment
and reinvestment of the assets of the High Yield Portfolio, the Portfolio
Manager is authorized to select the brokers or dealers that will execute
purchase and sale transactions for the High Yield Portfolio, and is directed to
use its
<PAGE> 3
best efforts to obtain the best available price and most favorable execution
with respect to such purchases and sales of portfolio securities for the High
Yield Portfolio. Subject to this primary requirement, and maintaining as its
first consideration the benefits for the High Yield Portfolio and its
shareholders, the Portfolio Manager shall have the right, subject to the
approval of the Board of Trustees of the Portfolio and of the Adviser, to follow
a policy of selecting brokers and dealers who furnish statistical research and
other services to the High Yield Portfolio, the Adviser, or the Portfolio
Manager and, subject to the Conduct Rules of the National Association of
Securities Dealers, Inc., to select brokers and dealers who sell shares of the
Portfolios.
(11) The Fund may terminate this Agreement by thirty (30)
days written notice to the Adviser and the Portfolio Manager at any time,
without the payment of any penalty, by vote of the Fund's Board of Trustees, or
by vote of a majority of its outstanding voting securities. The Adviser may
terminate this Agreement by thirty (30) days written notice to the Portfolio
Manager and the Portfolio Manager may terminate this Agreement by thirty (30)
days written notice to the Adviser, without the payment of any penalty. This
Agreement shall immediately terminate in the event of its assignment, unless an
order is issued by the Securities and Exchange Commission conditionally or
unconditionally exempting such assignment from the provision of Section 15 (a)
of the Investment Company Act of 1940, in which event this Agreement shall
remain in full force and effect.
(12) Subject to prior termination as provided above, this
Agreement shall continue in force from the date of execution until December 31,
1999 and from year to year thereafter if its continuance after said date: (1) is
specifically approved on or before said date and at least annually thereafter by
vote of the Board of Trustees of the Fund, including a majority of those
Trustees who are not parties to this Agreement of interested persons of any such
party, or by vote of a majority of the outstanding voting securities of the
Fund, and (2) is specifically approved at least annually by the vote of a
majority of Trustees of the Fund who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.
(13) The Adviser shall indemnify and hold harmless the
Portfolio Manager, its officers and Trustees and each person, if any, who
controls the Portfolio Manager within the meaning of Section 15 of the
Securities Act of 1933 (any and all such persons shall be referred to as
"Indemnified Party"), against any loss, liability, 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 Portfolio Manager's
Agreement relates. However, in no case (i) is this indemnity to be deemed to
protect any particular Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Portfolio Manager's
Agreement or (ii) is the Adviser to be liable under this indemnity with respect
to any claim made against any particular Indemnified Party unless such
Indemnified Party shall have notified the Adviser in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Portfolio Manager or such
controlling persons.
The Portfolio Manager shall indemnify and hold
harmless the Adviser and each of its Trustees 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 Portfolio Manager's willful
misfeasance, bad faith or gross negligence in the performance of its duties
under this Portfolio Manager's Agreement. In case any action shall be brought
against the Adviser or any person so indemnified, in respect of which indemnity
<PAGE> 4
may be sought against the Portfolio Manager, the Portfolio Manager shall have
the rights and duties given to the Adviser, and the Adviser and each person so
indemnified shall have the rights and duties given to the Portfolio Manager by
the provisions of subsection (i) and (ii) of this Paragraph 13.
(14) Except as otherwise provided in Paragraph 13 hereof
and as may be required under applicable federal law, this Portfolio Manager's
Agreement shall be governed by the laws of the State of Georgia.
(15) The Portfolio Manager agrees to notify the parties
within a reasonable period of time regarding a material change in the membership
of the Portfolio Manager.
(16) The terms "vote of a majority of the outstanding
voting securities," "assignment" and "interested persons," when used herein,
shall have the respective meanings specified in the Investment Company Act of
1940 as now in effect or as hereafter amended.
(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:
by the Portfolio Manager: James R. Caywood
Managing Director and Chief Executive Officer
Caywood-Scholl Capital Management, Dresdner RCM
Global Investors LLC Company
4350 Executive Drive, Suite 125
San Diego, CA 92121
by the Adviser: Enterprise Capital Management, Inc.
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022
by the Portfolio: The Enterprise Group of Funds, Inc. c/o Enterprise
Capital Management, Inc.
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022
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 Portfolio Manager, the Adviser and the Fund relating to the High
Yield Portfolio.
<PAGE> 5
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.
ENTERPRISE ACCUMULATION TRUST
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- -------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------- -------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
CAYWOOD-SCHOLL CAPITAL MANAGEMENT,
DRESDNER RCM GLOBAL INVESTORS LLC
COMPANY
(SEAL)
ATTEST: /s/ ROBERT J. GOLDSTEIN By: /s/ ALLAN C. MARTIN
--------------------------- -------------------------------------
Secretary Allan C. Martin,
Managing Director
<PAGE> 1
EXHIBIT (I)
April 30, 1999
Securities and Exchange Commission
450 Fifth Street
Washington, D.C. 20549
Re: Enterprise Accumulation Trust
Registration Statement No. 33-21534
Dear Sir or Madam:
I am counsel to Enterprise Accumulation Trust (the "Fund"), and in so acting,
have reviewed Post-Effective Amendment No. 17 (the "Post Effective Amendment")
to the Fund's Registration Statement on Form N-1A, Registration File No.
33-21534. Representatives of the Fund have advised that the Fund will file the
Post-Effective Amendment pursuant to paragraph (b) of Rule 485 ("Rule 485")
promulgated under the Securities Act of 1933. In connection therewith, the Fund
has requested that I provide this letter.
In my examination of the Post-Effective Amendment, I have assumed the conformity
to the originals of all documents submitted to me as copies.
Based upon the foregoing, I hereby advise you that:
(1) the Fund is a trust duly incorporated and validly existing in good
standings under the laws of the State of Massachusetts;
(2) the Common Stock to be offered has been duly authorized and, when
sold as contemplated in the Amendments, will be validly issued, fully paid and
nonassessable; and
(3) the prospectus included as part of the Post-Effective Amendment
does not include disclosure which I believe would render it ineligible to become
effective pursuant to Paragraph (b) of Rule 485.
Very truly yours,
Catherine R. McClellan
Senior Vice President and Chief Counsel
lah
<PAGE> 1
EXHIBIT (J)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective Amendment
No. 17 to the Registration Statement of Enterprise Accumulation Trust on Form
N-1A under the Securities Act of 1933 (File Number 33-21534) of our report dated
February 17, 1999 on our audit of the financial statements and financial
highlights of Enterprise Accumulation Trust appearing in the Registrant's 1998
Annual Report which is incorporated by reference in the Post-Effective Amendment
to the Registration Statement. We also consent to the reference of our Firm
under the captions "Financial Highlights" in the Prospectus and "Independent
Accountants" in the Statement of Additional Information.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
April 30, 1999
<PAGE> 1
EXHIBIT (O)(II)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, SAMUEL J. FOTI, Director of The
Enterprise Group of Funds and Trustee of Enterprise Accumulation Trust (the
"Funds") which Funds have:
(i) filed with the Securities and Exchange Commission ("SEC"),
Washington, D.C., under the provisions of the Securities Act
of 1933, as amended, and/or the Investment Company Act of
1940, as amended, Registration Statements on Form N-1A or such
other forms as may be adopted by the SEC, for the registration
under said Act(s) of certain open-end investment company
shares to be issued by said Funds;
(ii) intends to file with the SEC under said Act(s) Registration
Statements, on SEC Form N-1A or such other forms as may be
adopted by the SEC, for the registration of an open-end
investment company; and
(iii) intends to file one or more amendments to one or more of said
Registration Statements;
hereby constitute and appoint VICTOR UGOLYN, Chairman, President and Chief
Executive Officer of said corporation and RICHARD E. MULROY, Senior Vice
President and General Counsel of The Mutual Life Insurance Company of New York;
my true and lawful attorneys-in-fact and agents, either of them to act with full
power without the other, for me and in my name, place and stead, to sign any
such amended and/or additional Registration Statement and amendment with all
exhibits thereto, any and all other information and documents in connections
therewith, with the SEC, hereby granting said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts and
things requisite and necessary to be done as fully as to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 29th day
of August, 1996.
/s/ SAMUEL J. FOTI
--------------------------------------------
(Signature)
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 29 day of August, 1996 before me personally came SAMUEL J. FOTI to me
known to be the person described in and who executed the foregoing instrument,
and acknowledged that he executed same.
/s/ RUTH BURWA
--------------------------------------------
Notary Public
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, MICHAEL I. ROTH, Director of
The Enterprise Group of Funds and Trustee of Enterprise Accumulation Trust (the
"Funds") which Funds have:
(iv) filed with the Securities and Exchange Commission ("SEC"),
Washington, D.C., under the provisions of the Securities Act
of 1933, as amended, and/or the Investment Company Act of
1940, as amended, Registration Statements on Form N-1A or such
other forms as may be adopted by the SEC, for the registration
under said Act(s) of certain open-end investment company
shares to be issued by said Funds;
(v) intends to file with the SEC under said Act(s) Registration
Statements, on SEC Form N-1A or such other forms as may be
adopted by the SEC, for the registration of an open-end
investment company; and
(vi) intends to file one or more amendments to one or more of said
Registration Statements;
hereby constitute and appoint VICTOR UGOLYN, Chairman, President and Chief
Executive Officer of said corporation and RICHARD E. MULROY, Senior Vice
President and General Counsel of The Mutual Life Insurance Company of New York;
my true and lawful attorneys-in-fact and agents, either of them to act with full
power without the other, for me and in my name, place and stead, to sign any
such amended and/or additional Registration Statement and amendment with all
exhibits thereto, any and all other information and documents in connections
therewith, with the SEC, hereby granting said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts and
things requisite and necessary to be done as fully as to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16 day of
August, 1996.
/s/ MICHAEL I. ROTH
--------------------------------------------
(Signature)
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 16 day of August, 1996 before me personally came MICHAEL I. ROTH to me
known to be the person described in and who executed the foregoing instrument,
and acknowledged that he executed same.
/s/ RUTH BURWA
--------------------------------------------
Notary Public
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, ARTHUR T. DIETZ, Director of
The Enterprise Group of Funds and Trustee of Enterprise Accumulation Trust (the
"Funds") which Funds have:
(vii) filed with the Securities and Exchange Commission ("SEC"),
Washington, D.C., under the provisions of the Securities Act
of 1933, as amended, and/or the Investment Company Act of
1940, as amended, Registration Statements on Form N-1A or such
other forms as may be adopted by the SEC, for the registration
under said Act(s) of certain open-end investment company
shares to be issued by said Funds;
(viii) intends to file with the SEC under said Act(s) Registration
Statements, on SEC Form N-1A or such other forms as may be
adopted by the SEC, for the registration of an open-end
investment company; and
(ix) intends to file one or more amendments to one or more of said
Registration Statements;
hereby constitute and appoint VICTOR UGOLYN, Chairman, President and Chief
Executive Officer of said corporation and CATHERINE R. MCCLELLAN, Senior Vice
President and General Counsel of The Mutual Life Insurance Company of New York;
my true and lawful attorneys-in-fact and agents, either of them to act with full
power without the other, for me and in my name, place and stead, to sign any
such amended and/or additional Registration Statement and amendment with all
exhibits thereto, any and all other information and documents in connections
therewith, with the SEC, hereby granting said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts and
things requisite and necessary to be done as fully as to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 21 day of
August, 1996.
/s/ ARTHUR T. DIETZ
--------------------------------------------
(Signature)
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 21st day of August, 1996 before me personally came ARTHUR T. DIETZ to me
known to be the person described in and who executed the foregoing instrument,
and acknowledged that he executed same.
/s/ JILL U. EDMONDSON
--------------------------------------------
Notary Public
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, LONNIE H. POPE, Director of The
Enterprise Group of Funds and Trustee of Enterprise Accumulation Trust (the
"Funds") which Funds have:
(x) filed with the Securities and Exchange Commission ("SEC"),
Washington, D.C., under the provisions of the Securities Act
of 1933, as amended, and/or the Investment Company Act of
1940, as amended, Registration Statements on Form N-1A or such
other forms as may be adopted by the SEC, for the registration
under said Act(s) of certain open-end investment company
shares to be issued by said Funds;
(xi) intends to file with the SEC under said Act(s) Registration
Statements, on SEC Form N-1A or such other forms as may be
adopted by the SEC, for the registration of an open-end
investment company; and
(xii) intends to file one or more amendments to one or more of said
Registration Statements;
hereby constitute and appoint VICTOR UGOLYN, Chairman, President and Chief
Executive Officer of said corporation and CATHERINE R. MCCLELLAN, Senior Vice
President and General Counsel of The Mutual Life Insurance Company of New York;
my true and lawful attorneys-in-fact and agents, either of them to act with full
power without the other, for me and in my name, place and stead, to sign any
such amended and/or additional Registration Statement and amendment with all
exhibits thereto, any and all other information and documents in connections
therewith, with the SEC, hereby granting said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts and
things requisite and necessary to be done as fully as to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
________________ day of August, 1996.
/s/ LONNIE H. POPE
--------------------------------------------
(Signature)
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the ___________ day of August, 1996 before me personally came LONNIE H. POPE
to me known to be the person described in and who executed the foregoing
instrument, and acknowledged that he executed same.
/s/ JILL U. EDMONDSON
--------------------------------------------
Notary Public
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, ARTHUR HOWELL, Director of The
Enterprise Group of Funds and Trustee of Enterprise Accumulation Trust (the
"Funds") which Funds have:
(xiii) filed with the Securities and Exchange Commission ("SEC"),
Washington, D.C., under the provisions of the Securities Act
of 1933, as amended, and/or the Investment Company Act of
1940, as amended, Registration Statements on Form N-1A or such
other forms as may be adopted by the SEC, for the registration
under said Act(s) of certain open-end investment company
shares to be issued by said Funds;
(xiv) intends to file with the SEC under said Act(s) Registration
Statements, on SEC Form N-1A or such other forms as may be
adopted by the SEC, for the registration of an open-end
investment company; and
(xv) intends to file one or more amendments to one or more of said
Registration Statements;
hereby constitute and appoint VICTOR UGOLYN, Chairman, President and Chief
Executive Officer of said corporation and CATHERINE R. MCCLELLAN, Senior Vice
President and General Counsel of The Mutual Life Insurance Company of New York;
my true and lawful attorneys-in-fact and agents, either of them to act with full
power without the other, for me and in my name, place and stead, to sign any
such amended and/or additional Registration Statement and amendment with all
exhibits thereto, any and all other information and documents in connections
therewith, with the SEC, hereby granting said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts and
things requisite and necessary to be done as fully as to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
_____________ day of August, 1996.
/s/ ARTHUR HOWELL
--------------------------------------------
(Signature)
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 21st day of August, 1996 before me personally came ARTHUR HOWELL to me
known to be the person described in and who executed the foregoing instrument,
and acknowledged that he executed same.
/s/ JILL U. EDMONDSON
--------------------------------------------
Notary Public
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, WILLIAM A. MITCHELL, Director
of The Enterprise Group of Funds and Trustee of Enterprise Accumulation Trust
(the "Funds") which Funds have:
(xvi) filed with the Securities and Exchange Commission ("SEC"),
Washington, D.C., under the provisions of the Securities Act
of 1933, as amended, and/or the Investment Company Act of
1940, as amended, Registration Statements on Form N-1A or such
other forms as may be adopted by the SEC, for the registration
under said Act(s) of certain open-end investment company
shares to be issued by said Funds;
(xvii) intends to file with the SEC under said Act(s) Registration
Statements, on SEC Form N-1A or such other forms as may be
adopted by the SEC, for the registration of an open-end
investment company; and
(xviii) intends to file one or more amendments to one or more of said
Registration Statements;
hereby constitute and appoint VICTOR UGOLYN, Chairman, President and Chief
Executive Officer of said corporation and CATHERINE R. MCCLELLAN, Senior Vice
President and General Counsel of The Mutual Life Insurance Company of New York;
my true and lawful attorneys-in-fact and agents, either of them to act with full
power without the other, for me and in my name, place and stead, to sign any
such amended and/or additional Registration Statement and amendment with all
exhibits thereto, any and all other information and documents in connections
therewith, with the SEC, hereby granting said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts and
things requisite and necessary to be done as fully as to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 21st day
of August, 1996.
/s/ WILLIAM A. MITCHELL
--------------------------------------------
(Signature)
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 21st day of August, 1996 before me personally came WILLIAM A. MITCHELL to
me known to be the person described in and who executed the foregoing
instrument, and acknowledged that he executed same.
/s/ JILL U. EDMONDSON
--------------------------------------------
Notary Public
