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SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
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[X] Preliminary Information Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5(d)(2))
[ ] Definitive Information Statement
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Enterprise Accumulation Trust
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(Name of Registrant As Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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(ENTERPRISE LETTERHEAD)
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January 19, 1999
Dear Contractholder:
We are pleased to enclose an information statement relating to a change in
ownership involving Caywood-Scholl Capital Management, the Portfolio Manager for
Enterprise Accumulation Trust High-Yield Bond Portfolio (the "High-Yield Bond
Portfolio") of the MONYMaster and MONYEquity Master products.
On November 11, 1998, Caywood-Scholl Capital Management ("Caywood-Scholl")
was acquired by Dresdner RCM Global Investor LLC, an affiliate of Dresdner Bank
AG. As a result of this change in ownership, the subadvisory agreement between
the High-Yield Bond Portfolio, Caywood-Scholl and Enterprise Capital Management,
Inc. terminated automatically as a matter of law. The Board of Trustees, acting
pursuant to an exemptive order granted by the SEC, approved a new subadvisory
agreement on November 11, 1998.
The terms of the new subadvisory agreement are substantially identical to
the terms of the prior agreement. The management fee paid by the High-Yield Bond
Portfolio and the services provided by Caywood-Scholl will not change.
We encourage you to read the attached information statement which more
fully describes the acquisition of Caywood-Scholl and the Board of Trustees'
approval of the new subadvisory agreement. Enterprise Accumulation Trust looks
forward to working with Caywood-Scholl to assist you in working toward your
investment goals. Thank you for your continued support.
Sincerely,
/s/ VICTOR UGOLYN
Victor Ugolyn
Chairman, President, and Chief Executive Officer
Atlanta Financial Center - 3343 Peachtree Road, NE, Suite 450 - Atlanta, Georgia
30326-1022
404-261-1116 - 1-800-432-4320 - 404-261-1118 (fax)
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ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO
ATLANTA FINANCIAL CENTER
3343 PEACHTREE ROAD, N.E.
SUITE 450
ATLANTA, GA 30326-1022
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PRELIMINARY
INFORMATION STATEMENT
---------------------
We are providing this information statement to the contractholders of
Enterprise Accumulation Trust High-Yield Bond Portfolio (the "High-Yield Bond
Portfolio") in lieu of a proxy statement, pursuant to the terms of an exemptive
order that Enterprise Accumulation Trust (the "Fund") has received from the
Securities and Exchange Commission. The order permits the Fund's investment
adviser, Enterprise Capital Management, Inc. ("Enterprise Capital"), to hire new
portfolio managers and to make changes to existing portfolio manager contracts
with the approval of the Fund's Board of Trustees, but without obtaining
contractholder approval. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
This information statement will be mailed on or about January 19, 1999. As
of November 10, 1998, there were 17,991,291 shares outstanding as to the
High-Yield Bond Portfolio. The cost of this information statement will be paid
by Caywood-Scholl Capital Management.
THE FUND
The High-Yield Bond Portfolio is an investment portfolio of the Fund, a
Maryland corporation. The Fund has entered into an investment advisory agreement
with Enterprise Capital dated May 1, 1995 (the "Adviser's Agreement"). Under the
Adviser's Agreement, it is Enterprise Capital's responsibility to select,
subject to the review and approval by the Board of Trustees, one or more
subadvisers (the "Portfolio Managers") to manage each investment portfolio of
the Fund. The Adviser's Agreement also gives Enterprise Capital the
responsibility to review and monitor the performance of the Portfolio Managers
on an ongoing basis, and to recommend to the Board of Trustees changes to the
roster of Portfolio Managers as appropriate. Enterprise Capital also is
responsible for conducting all business operations of the Fund, except those
operations contracted to the Fund's custodian or transfer agent. As compensation
for these services, Enterprise Capital receives a fee from each investment
portfolio of the Fund, out of which Enterprise Capital renders all fees payable
to the Portfolio Managers. The investment portfolios of the Fund, therefore, pay
no fees directly to the Portfolio Managers.
Enterprise Capital recommends Portfolio Managers for the Portfolios to the
Board, on the basis of its continuing quantitative and qualitative evaluation of
the Portfolio Manager's skills in managing assets pursuant to specific
investment styles and strategies in accordance with the objectives of each Fund.
Short-term investment performance, by itself, is not a significant factor in
selecting or terminating a Portfolio Manager, and Enterprise Capital does not
expect to recommend frequent changes of Portfolio Managers.
The Portfolio Managers do not provide any services to the Funds except
portfolio investment management and related record-keeping services. However, in
accordance with the procedures adopted by the Board, the Portfolio Manager, or
its affiliated broker-dealer, may execute transactions for the High-Yield Bond
Portfolio and receive brokerage commissions in connection therewith as permitted
by Section 17(e) of the Investment Company Act of 1940, as amended (the "1940
Act") and the rules thereunder.
THE PORTFOLIO MANAGER'S AGREEMENT
Caywood-Scholl is the Portfolio Manager for the High-Yield Bond Portfolio.
Since 1987, Caywood-Scholl has served as Portfolio Manager to the High-Yield
Bond Portfolio pursuant to a Portfolio Manager's Agreement dated November 5,
1987 (the "Previous Agreement"). On November 11, 1998, Caywood-Scholl was
acquired by Dresdner RCM Global Investors LLC, an affiliate of Dresdner Bank AG.
Dresdner Bank AG
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is an international banking organization which is headquartered in Germany. The
address of Dresdner Bank AG is Juergen-Ponto-Platz 1, 60301 Frankfurt, Germany.
Under the federal securities laws, a change in ownership of an investment
company's adviser or subadviser is deemed to be an assignment of the advisory
contract, which automatically terminates the contract. The acquisition of
Caywood-Scholl by Dresdner RCM Global Investors LLC operated to terminate the
Previous Agreement; therefore, the Board of Trustees approved a new Portfolio
Manager's Agreement with Caywood-Scholl on September 4, 1998 (the "New
Agreement"). The New Agreement became effective on November 11, 1998.
THE BOARD OF TRUSTEES' DECISION
In approving the New Agreement, the Board of Trustees considered a number
of material factors, including, but not limited to: that the terms and
conditions of the New Agreement are substantially identical to those of the
Previous Agreement, the performance of the High-Yield Bond Portfolio, the
quality of the services rendered by Caywood-Scholl, and that the New Agreement
would secure the continuity of such services. The Board considered these factors
to be of equal weight and importance. On the basis of their review of the New
Agreement and relevant information, the Board concluded that the New Agreement
was fair, reasonable and in the best interests of the contractholders of the
High-Yield Bond Portfolio. Accordingly, the Board of Trustees, including the
non-interested Trustees, unanimously approved the New Agreement.
Under the New Agreement, Caywood-Scholl is obligated to provide the same
services to the High-Yield Bond Portfolio as under the Previous Agreement. In
addition, the New Agreement does not change the management fee paid by the
High-Yield Bond Portfolio. The form of the New Agreement is attached to this
information statement as Exhibit A. Under the Previous Agreement, the High-Yield
Bond Portfolio paid to Enterprise Capital a fee equal to .60% of its average
daily net assets. From that amount, Enterprise Capital paid Caywood-Scholl a fee
of .30% on the first $100 million and 0.25% thereafter of the High-Yield Bond
Portfolio's average daily net assets. During the Fund's last fiscal year, the
High-Yield Bond Portfolio paid to Enterprise Capital an aggregate amount of
$436,989 in management fees.
The New Agreement is identical in form to the Previous Agreement. The form
of the New Agreement is attached to this Information Statement as Exhibit A.
INFORMATION ABOUT ENTERPRISE CAPITAL
Enterprise Capital, located at Atlanta Financial Center, 3343 Peachtree
Road, N.E., Suite 450, Atlanta, Georgia 30326-1022, serves as the Investment
Adviser and Administrator of the Fund. Enterprise Capital is a second-tier
subsidiary of The MONY Group. Enterprise Fund Distributors, Inc. is the Fund's
principal underwriter, and its address is 3343 Peachtree Road NE, Suite 450,
Atlanta, Georgia 30326-1022. Enterprise Capital also provides investment
advisory services to the Enterprise Group of Funds, Inc. High-Yield Bond Fund
that has an identical investment objective to the High-Yield Bond Portfolio.
INFORMATION ON CAYWOOD-SCHOLL CAPITAL MANAGEMENT
The following is a description of Caywood-Scholl, which is based on
information provided by Caywood-Scholl. Caywood-Scholl is not affiliated with
Enterprise Capital or Enterprise Group other than by reason of serving as
Portfolio Manager to one or more Funds.
The firm was formed in April 1986 and is owned by Dresdner RMC Global
Investors LLC. The address of Caywood-Scholl is 4350 Executive Drive, Suite 125,
San Diego, California 92121. James R. Caywood, Managing Director and Chief
Executive Officer, is responsible for the day-to-day management of the Fund and
has more than 29 years of investment industry experience. He joined
Caywood-Scholl in 1986 as Chief Investment Officer. Caywood-Scholl provides
investment advice with respect to high-yield, low grade fixed income
instruments. As of September 30, 1998, assets under management for all clients
approximated $92 million. Usual investment minimum is $1 million. The Fund's
annual management fee is .60% of average daily net assets; and the Portfolio
Manager receives .30% for assets up to $100 million and .25% thereafter.
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ADDITIONAL INFORMATION
To the knowledge of the Fund, as of November 10, 1998, no person
beneficially owned more than 5% of the outstanding shares of the High-Yield Bond
Portfolio. The Fund is not required to hold annual meetings of contractholders;
therefore, it cannot be determined when the next meeting of contractholders will
be held. Contractholder proposals intended to be considered for inclusion in the
proxy statement for the next meeting of contractholders must be received by the
Fund a reasonable time before the proxy statement is mailed. Whether a
contractholder proposal will be included in the proxy statement will be
determined in accordance with the applicable state and federal laws.
Copies of the Fund's most recent annual and semi-annual reports are
available without charge. You may obtain a copy of these reports by calling
800-432-4320, or writing to Enterprise Capital at the above address.
By Order of the Board of Trustees,
Catherine R. McClellan
Secretary
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EXHIBIT A
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 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
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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 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
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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 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.
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(17) Unless otherwise permitted, all notices, instructions and advice
with respect to security transactions or any other matters contemplated by
this Agreement shall be deemed duly given when received in writing:
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by the 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
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or by such other person or persons at such address or addresses as shall
be specified by the applicable party, in each case, in a notice
similarly given. Each party may rely upon any notice or other
communication from the other reasonably believed by it to be genuine.
(18) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original and all of which, when taken
together, shall constitute one and the same agreement.
(19) This Agreement constitutes the entire agreement between the
Portfolio Manager, the Adviser and the Fund relating to the High Yield
Portfolio.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized officers and their corporate seals hereunder duly affixed
and attested, as of the date first above written.
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(SEAL) THE ENTERPRISE GROUP
OF FUNDS, INC.
By: /s/ VICTOR UGOLYN
-------------------------------------------------
Victor Ugolyn, Chairman, President
and Chief Executive Officer
ATTEST: /s/ CATHERINE R. MCCLELLAN
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Secretary
(SEAL) ENTERPRISE CAPITAL
MANAGEMENT, INC.
By: /s/ VICTOR UGOLYN
-------------------------------------------------
Victor Ugolyn, Chairman, President
and Chief Executive Officer
ATTEST:/s/ CATHERINE R. MCCLELLAN
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Secretary
(SEAL) CAYWOOD-SCHOLL CAPITAL
MANAGEMENT, DRESDNER RCM GLOBAL
INVESTORS LLC COMPANY
By: /s/ ALLAN C. MARTIN
------------------------------------------------
Allan C. Martin,
Managing Director
ATTEST:/s/ ROBERT J. GOLDSTEIN
--------------------------------------------
Secretary
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