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<TABLE>
<S> <C>
[X] Preliminary Information Statement [ ] Confidential, for Use of the Commission
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</TABLE>
Enterprise Accumulation Trust
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(ENTERPRISE ACCUMULATION TRUST LOGO)
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November 27, 2000
Dear Contractholder:
We are pleased to enclose an information statement about two changes
relating to the Managed Portfolio of Enterprise Accumulation Trust. The first
concerns a change in ownership of Sanford C. Bernstein & Co., Inc. ("Bernstein
Inc."), a co-Portfolio Manager of the Managed Portfolio. The second change
concerns a new co-Portfolio Manager of the Managed Portfolio: Wellington
Management Company, LLP ("Wellington Management").
On October 2, 2000, Bernstein Inc. was acquired by Alliance Capital
Management L.P. ("Alliance Capital"). Alliance Capital is a limited partnership
that is indirectly controlled by AXA Financial, Inc., a leading financial
services organization. As a result of this change in ownership, the Portfolio
Manager agreement among the Managed Portfolio, Bernstein Inc. 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 Securities and
Exchange Commission, approved a new Portfolio Manager agreement with Sanford C.
Bernstein & Co., LLC ("Bernstein LLC"), an indirect wholly-owned subsidiary of
Alliance Capital, which became effective October 2, 2000.
Effective January 1, 2001, the Board of Trustees of Enterprise Accumulation
Trust has named Wellington Management a co-Portfolio Manager of the Managed
Portfolio. As of September 30, 2000, Wellington Management had over $250 billion
in assets under management. Wellington Management joins Bernstein LLC as a co-
Portfolio Manager of the Managed Portfolio.
In selecting Wellington Management as co-Portfolio Manager, consideration
was given to, among other factors, Wellington Management's investment management
acumen and style in conjunction with the investment objectives of the Managed
Portfolio. There will be no change in the Managed Portfolio's investment
objective. However, Wellington Management's investment style is distinct and
will result in modification of investment strategies. Investment decisions at
Wellington Management are generally made on a bottom-up basis, with managers
relying heavily on proprietary fundamental research provided by a team of global
industry analysts, as well as a number of other analytical inputs. The
Wellington Management research process focuses on the early recognition of
change, the identification of successful companies and the disciplines required
for making valuation judgments.
The management fees paid by the Managed Portfolio to Enterprise Capital
Management, Inc. ("Enterprise Capital"), the investment advisor to the Managed
Portfolio, will not change in any way as a result of the new Portfolio Manager
agreements. The terms of the new Portfolio Manager agreement with Bernstein LLC
are substantially identical to the terms of the prior agreements. The management
fees paid to and the services provided by Bernstein LLC will not change. Under
the new
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Portfolio Manager agreement with Wellington Management, the services provided by
Wellington Management will be the same as under the agreement with the prior co-
Portfolio Manager of the Managed Portfolio, OpCap Advisors; however, the
management fees paid by Enterprise Capital to Wellington Management could be
higher than the management fees paid to OpCap.
We encourage you to read the attached information statement, which more
fully describes the acquisition of Bernstein, the naming of Wellington
Management as co-Portfolio Manager and the Board of Trustees' approval of the
new Portfolio Manager agreements. Enterprise Accumulation Trust looks forward to
working with Bernstein LLC and Wellington Management to assist you in working
toward your investment goals. Thank you for your continued support.
Sincerely,
/s/ VICTOR UGOLYN
Victor Ugolyn
Chairman, President, and Chief Executive Officer
<PAGE> 4
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO
ATLANTA FINANCIAL CENTER
3343 PEACHTREE ROAD, N.E., SUITE 450
ATLANTA, GA 30326-1022
---------------------
PRELIMINARY
INFORMATION STATEMENT
---------------------
We are providing this information statement to the contractholders of
Enterprise Accumulation Trust Managed Portfolio (the "Managed Portfolio") in
lieu of a proxy statement, pursuant to the terms of an exemptive order that
Enterprise Accumulation Trust ("EAT") has received from the Securities and
Exchange Commission (the "SEC"). The order permits EAT's investment adviser,
Enterprise Capital Management, Inc. ("Enterprise Capital"), to appoint new
Portfolio Managers (defined below) and to make changes to existing Portfolio
Manager agreements with the approval of EAT'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.
Shares of beneficial interest ("Shares") of EAT are presently sold to MONY
Life Insurance Company ("MONY") and its affiliate, MONY Life Insurance Company
of America ("MONY America") for allocation to variable accounts established by
MONY and MONY America (collectively the "Variable Accounts") to provide benefits
to contractholders ("Contractholders") of variable annuity and variable life
insurance contracts ("Contracts") issued by those companies.
SHARE OWNERSHIP
The Managed Portfolio is a separate series of shares of beneficial interest
of EAT. As of October 2, 2000, there were 64,656,925 shares outstanding of the
Managed Portfolio. As of October 2, 2000, MONY and MONY America owned all of the
outstanding shares of EAT. Although shares held by the Variable Accounts
generally will be voted in accordance with instructions received from
Contractholders, if voting were required, EAT might nevertheless be deemed to be
controlled by MONY and MONY America by virtue of the definition of "control"
contained in the Investment Company Act of 1940, as amended (the "1940 Act").
MONY and MONY America disclaim such control.
To the knowledge of EAT, as of October 2, 2000, no single person or "group"
(as such term is used in Section 13(d) of the Securities Exchange Act of 1934),
had the power to direct the vote of more than 5% of the Managed Portfolio's
outstanding shares. As of October 2, 2000, Trustees and officers of the EAT as a
group beneficially owned none of the EAT's outstanding shares. This information
statement will be mailed on or about November 27, 2000. The cost of this
information statement will be paid by Sanford C. Bernstein & Co., LLC.
THE TRUST
The Managed Portfolio is an investment portfolio of EAT, a Massachusetts
business trust. EAT entered into an investment advisory agreement with
Enterprise Capital, dated July 1, 1999 (the "Adviser's Agreement"). Under the
Adviser's Agreement, Enterprise Capital is responsible to select, subject to the
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review and approval by the Board of Trustees, one or more subadvisers (the
"Portfolio Managers") to manage each investment portfolio of EAT. 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 EAT, except those operations contracted to EAT's custodian and
transfer agent. As compensation for these services, Enterprise Capital receives
a fee from each investment portfolio of EAT, from which Enterprise Capital pays
all fees due to the Portfolio Managers. The investment portfolios of EAT,
therefore, pay no fees directly to the Portfolio Managers.
Enterprise Capital recommends Portfolio Managers for the investment
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 investment portfolio. 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 investment
portfolios other than 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
Portfolios and receive brokerage commissions in connection therewith as
permitted by Section 17(e) of the Investment Company Act of 1940, as amended
(the "1940 Act") and the rules thereunder.
CHANGE IN OWNERSHIP OF SANFORD C. BERNSTEIN & CO., INC.
THE PORTFOLIO MANAGER'S AGREEMENT
Sanford C. Bernstein & Co., Inc. ("Bernstein Inc.") has served as a
co-Portfolio Manager to the Managed Portfolio since November 1, 1999, pursuant
to a Portfolio Manager's Agreement (the "Previous Agreement"). Bernstein Inc.
was wholly-owned by Sanford C. Bernstein, Inc. ("Sanford C. Bernstein").
Under the 1940 Act, a change in ownership of an investment company's
adviser or subadviser is deemed to be an assignment of the advisory contract,
which automatically terminates the contract. On October 2, 2000, Alliance
Capital Management L.P. ("Alliance Capital") acquired all assets and liabilities
of the operating subsidiaries of Sanford C. Bernstein, the parent of Bernstein
Inc. This acquisition effectively terminated the Previous Agreement. The Board
of Trustees of EAT approved a new Portfolio Manager's Agreement with the
successor to Bernstein Inc., Sanford C. Bernstein & Co. LLC ("Bernstein LLC"),
on September 12, 2000 (the "New Agreement").
Under the Adviser's Agreement, the Managed Portfolio pays to Enterprise
Capital a management fee equal to 0.75% of its average daily net assets. From
this amount, under the Previous Agreement, Enterprise Capital paid to Bernstein
Inc. fees per year equal to 0.40% of average daily net assets up to $10,000,000;
0.30% for the next $40,000,000 of assets under management; 0.20% for the next
$50,000,000 of assets under management; and 0.10% for assets under management in
excess of $100,000,000. For the fiscal year ended December 31, 1999, the Managed
Portfolio paid to Enterprise Capital management fees in the amount of
$18,815,456 of which Enterprise Capital paid $212,165 to Bernstein Inc.
The fees will not change under the New Agreement, which is identical in all
material respects to the Previous Managed Portfolio Agreement. The form of the
New Agreement is attached to this Information Statement as Exhibit A.
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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: (i) the terms and conditions
of the New Agreements, which are identical in all material respects to those of
the Previous Agreement, (ii) the change in control of Bernstein Inc. does not
affect its personnel or operations, (iii) the performance of the Managed
Portfolio since Bernstein Inc. became Portfolio Manager for the Portfolio, (iv)
the nature and quality of services rendered by Bernstein Inc., and (v) 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 Managed Portfolio. Accordingly, the Board of Trustees including the
non-interested Trustees, unanimously approved the New Agreement.
INFORMATION ABOUT ENTERPRISE CAPITAL
Enterprise Capital, located at the Atlanta Financial Center, 3343 Peachtree
Road, N.E., Suite 450, Atlanta, Georgia 30326-1022, serves as the Investment
Adviser and Administrator of EAT. Enterprise Capital is a second-tier subsidiary
of The MONY Group Inc. Enterprise Fund Distributors, Inc. is EAT's principal
underwriter, and its address is 3343 Peachtree Road N.E., Suite 450, Atlanta
Georgia 30326-1022. Enterprise Capital also provides investment advisory
services to The Enterprise Group of Funds, Inc. ("EGF"). The Managed Portfolio
of EAT has an identical investment objective to the Managed Fund of EGF.
INFORMATION ABOUT BERNSTEIN LLC
The following is a description of Bernstein LLC, which is based on
information provided by Bernstein LLC. Bernstein LLC is not affiliated with
Enterprise Capital or EAT other than by reason of serving as Portfolio Manager
to one or more series of EAT.
Bernstein LLC, an indirect wholly-owned subsidiary of Alliance Capital, is
located at 767 Fifth Avenue, New York, New York, 10153 and serves as the Managed
Portfolio's Co-Portfolio Manager. With the investment management assistance of
the new Bernstein Investment Research and Management Unit (the "Bernstein Unit")
of Alliance Capital, Bernstein LLC now provides investment advisory services to
the Portfolios. The Bernstein Unit continues the investment research and
management business of Bernstein Inc., and the investment professionals of
Bernstein Inc. who managed the Portfolios prior to October 2, 2000 continue to
manage the Portfolios through the Bernstein Unit. Bernstein Inc. has provided
investment counseling services since 1967. As of June 30, 2000, Bernstein Inc.'s
total assets under management were approximately $82.7 billion.
Andrew S. Adelson chairs the Bernstein Unit's International Value Equity
Policy Group, which conducts the day-to-day management of the Global Financial
Services Portfolio. Mr. Adelson is the Chief Investment Officer of International
Value Equities -- Bernstein Unit and an Executive Vice President at Alliance
Capital since October 2000 and prior to that was the Chief Investment Officer of
International Investment Management Services at Bernstein Inc. since 1990.
Steven Pisarkiewicz chairs the Bernstein Unit's Structured Equities
Investment Policy Group, which conducts day-to-day co-management of the Managed
Portfolio together with OpCap Advisors. He has 15 years of experience in the
investment industry and joined Bernstein Inc. in 1989. Mr. Pisarkiewicz also has
served as the Chief Investment Officer of the Bernstein Unit's Structured Equity
Services since October 2, 2000 and prior to that at Bernstein Inc. since 1998.
He previously served as Managing Director of Institutional
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Services from 1991-97 and as Senior Portfolio Manager for Bernstein Inc.'s US
Equity investment group from 1997-98.
Bernstein LLC also serves as investment adviser to other investment
companies having similar objectives to the Managed Portfolio as indicated in
Exhibit B.
INFORMATION ABOUT ALLIANCE CAPITAL
The following is a description of Alliance Capital, which is based on
information provided by Alliance Capital. Alliance Capital is not affiliated
with Enterprise Capital or the Managed Portfolio other than by reason of
Bernstein LLC serving as a Portfolio Manager.
Alliance Capital is a leading global investment management firm best known
for its growth style of equity investing. Assets under management of Alliance
Capital as of June 30, 2000 totaled $388 billion. Alliance Capital manages
retirement assets for many of the largest public and private employee benefit
plans (including 28 of the U.S. Fortune 100 companies), for public employee
retirement Portfolios in 31 out of 50 states, and the foundations, endowments,
banks and insurance companies worldwide. Alliance Capital is also one of
America's largest mutual fund sponsors.
At October 2, 2000, Alliance Capital Management Holding L.P., ("Alliance
Holding") owned approximately 30% of the units of limited partnership interests
in Alliance Capital. AXA Financial Inc. owns approximately 2% of the outstanding
Alliance Holding limited partnership units and approximately 52% of the
outstanding Alliance Capital units, amounting to an approximate 53% economic
interest in Alliance Capital. AXA, which has operations in approximately 60
countries, holds a 60% interest in AXA Financial, Inc.
Alliance Capital Management Corporation ("ACMC") is the general partner of
Alliance Capital and Alliance Holding and makes all decisions relating to the
management of Alliance Capital and Alliance Holding. ACMC has agreed that it
will conduct no business other than managing Alliance Capital and Alliance
Holding, although it may make certain investments for its own account.
INFORMATION ABOUT BROKERAGE TRANSACTIONS
Bernstein LLC is a registered broker-dealer and is affiliated with one or
more registered broker-dealers. From time to time, a portion of the brokerage
transactions of the Managed Portfolio may be conducted with such broker-dealers,
subject to policies established by the EAT's Board to ensure that all brokerage
commissions paid to such broker-dealers by the Managed Portfolio are fair and
reasonable. For the fiscal year ended December 31, 1999, EAT paid
in brokerage commissions with respect to the Managed Portfolio to
affiliated broker-dealers of Bernstein Inc.
WELLINGTON MANAGEMENT MANAGEMENT COMPANY, LLP TO CO-MANAGE THE MANAGED PORTFOLIO
DECISION OF THE BOARD OF TRUSTEES
At a meeting held on November 16, 2000, the Board of Trustees of EAT,
including a majority of the non-interested trustees, approved Enterprise
Capital's recommendation to replace OpCap Advisors ("OpCap") with a new
co-Portfolio Manager of the Managed Portfolio. Accordingly, the Board approved a
Portfolio Manager Agreement with Wellington Management (the "Wellington
Management Agreement"). The Board's decision to replace OpCap was based on
performance and divergent investment strategies. In approving the Wellington
Management Agreement, the Board considered a number of factors, including, but
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not limited to: (i) the performance of the Managed Portfolio since it commenced
operations; (ii) the nature and quality of the services expected to be rendered
to the Managed Portfolio by the co-Portfolio Managers; (iii) the material terms
of the Portfolio Manager Agreement, which will be unchanged under the Wellington
Management Agreement; (iv) the history, reputation, qualification and background
of Wellington Management, as well as the qualifications of its personnel. The
Board considered these factors to be of equal weight and importance.
Enterprise Capital made the recommendation to engage Wellington Management
in the ordinary course of its ongoing evaluation of Portfolio Manager
performance and investment strategy. Enterprise Capital conducted extensive
research of numerous candidate firms and qualitative and quantitative analysis
of each candidate's organizational structure, investment process and style and
long-term performance record. Enterprise Capital believes that Wellington
Management's management style is appropriately suited to the Managed Portfolio.
THE PORTFOLIO MANAGER AGREEMENT
OpCap served as co-Portfolio Manager of the Managed Portfolio, pursuant to
a Portfolio Manager Agreement dated May 5, 2000 (the "OpCap Agreement"). Under
the Adviser's Agreement, the Managed Portfolio paid per year to Enterprise
Capital a management fee equal to 0.75% of its average daily net assets. From
this amount, under the OpCap Agreement, Enterprise Capital paid to OpCap fees
equal to 0.40% of average daily net assets up to $1 billion, 0.30% for assets
from $1 billion to $2 billion and 0.25% for assets in excess of $2 billion.
Under the Wellington Management Agreement, Enterprise Capital will pay per year
to Wellington Management fees equal to 0.40% for assets under management up to
$500,000,000, 0.35% for the next $500,000,000 in assets under management, 0.30%
for the next $1,000,000,000 in assets under management and 0.25% for assets in
excess of $2,000,000,000.
For the fiscal year ended December 31, 1999, the Managed Portfolio paid to
Enterprise Capital management fees in the amount of $3,122,484, of which
Enterprise Capital paid $7,888,043 to OpCap. If the Wellington Management
Agreement had been in effect for 1999, the fees paid by Enterprise Capital to
Wellington Management would have been higher.
The other material terms of the Wellington Management Agreement are
identical in form to the OpCap Agreement. The form of the Wellington Management
Agreement is attached to this Information Statement as Exhibit C.
INFORMATION ABOUT ENTERPRISE CAPITAL
Information about Enterprise Capital can be found on page 3 of this
Information Statement.
INFORMATION ABOUT WELLINGTON MANAGEMENT
The following is a description of Wellington Management, which is based on
information provided by Wellington Management. Wellington Management is not
affiliated with Enterprise Capital or EAT other than by reason of serving as
co-Portfolio Manager of the Managed Portfolio.
Wellington Management's principal offices are located at 75 State Street,
Boston, Massachusetts 02109. Wellington Management is a Massachusetts limited
liability partnership owned entirely by 62 general partners, all of whom are
full-time professional members of the firm. It has provided investment
counseling since 1928. Wellington Management had assets under management for all
clients as of September 30, 2000 of
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over $250 billion. The usual minimum for separate account investment is
generally $10 to 50 million. James Rullo, a partner of Wellington Management, is
responsible for day-to-day management of the Portfolio. Investment decisions at
Wellington Management are generally made on a bottom-up basis, with managers
relying heavily on proprietary fundamental research provided by a team of global
industry analysts, as well as a number of other analytical inputs. The
Wellington Management research process focuses on the early recognition of
change, the identification of successful companies and the disciplines required
for making valuation judgments.
Wellington Management currently does not serve as investment adviser to
other investment companies having similar objectives to the Managed Portfolio.
ADDITIONAL INFORMATION
To the knowledge of EAT, as of November 27, 2000, no person beneficially
owned more than 5% of the outstanding shares of the Managed Portfolio. EAT 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 EAT 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 EAT'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 The MONY Group Inc., 1740 Broadway, New York, New York, 10019.
By Order of the Board of Trustees,
/s/ CATHERINE R. MCCLELLAN
Catherine R. McClellan
Secretary
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EXHIBIT A
MANAGED PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the 2nd day of October, 2000, 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., LLC, a Delaware limited liability
company, (hereinafter referred to as the "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement with the
Fund ("Investment Adviser's Agreement"). Pursuant to the Investment Adviser's
Agreement, the Adviser has agreed to render investment advisory and certain
other management services to all of the 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.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Managed Portfolio of the Fund (the
"Managed Portfolio") securities investment advisory services for that Managed
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 Managed 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 Managed Portfolio advice
with respect to the investment and reinvestment of the assets of the
Managed Portfolio, or such portion of the assets of the Managed Portfolio
as the Adviser shall specify from time to time, in accordance with the
investment objectives, restrictions and limitations applicable to the
Managed Portfolio which are set forth in the Fund's most recent
Registration Statement. The Portfolio Manager may delegate its investment
advisory and other responsibilities and duties hereunder to an affiliated
person of the Portfolio Manager, subject to the Portfolio Manager retaining
overall responsibility for such powers and functions and any and all
obligations and liabilities in connection therewith.
(3) The Portfolio Manager shall perform a monthly reconciliation of
the Managed 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.
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(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 twentieth
(20) day after the close of each calendar month, a sum equal to 0.03333 of
1% of the average of the daily closing net asset value of the Managed
Portfolio managed by the Portfolio Manager during such month (that is, 0.40
of 1% per year) for the first $10,000,000 of assets under management; and a
sum equal to 0.025 of 1% of the average of the daily closing net asset
value of the Managed Portfolio during such month (that is, 0.30 of 1% per
year) for the next $40,000,000 of assets under management (up to
$50,000,000); and a sum equal to 0.0166667 of 1% of the average of the
daily closing net asset value of the Managed Portfolio during such month
(that is 0.20 of 1% per year) for the next $50,000,000 of assets under
management (up to $100,000,000); and a sum equal to 0.0083333 of 1% of the
average of the daily closing net asset value of the Managed Fund during
such month (that is 0.10% per year) for assets under management over
$100,000,000.
(6) (b) The payment of all fees provided for hereunder shall be
prorated and reduced for sums payable for a period less than a full month
in the event of termination of this Agreement on a day that is not the end
of a calendar month.
(6) (c) For the purposes of this Paragraph 6, the daily closing net
asset values of the Portfolio shall be computed in the manner specified in
the Registration Statement for the computation of the value of such net
assets in connection with the determination of the net asset value of the
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 and affiliated persons of
the Portfolio Manager who are responsible for investing assets of the
Managed Portfolio from taking, at any time, a short position in any shares
of any holdings of the Managed Portfolio or 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
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trading with respect to Managed 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 Managed 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 Managed 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 Managed 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.
In lieu of selecting broker-dealers to execute transactions for the
Managed Portfolio, the Portfolio Manager may execute such transactions for
the Managed 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 Managed 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 Managed 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 Managed Portfolio, the Portfolio Manager may, subject to obtaining
best execution, also act as a broker for the Managed 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 Managed
Portfolio, which consent is hereby granted. The Portfolio Manager
represents, warrants and covenants that all agency cross transactions for
the Managed 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 only effect
an agency cross transaction for the Managed 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 Managed
Portfolio. In an agency cross transaction where the Portfolio Manager acts
as broker for the Managed 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 Fund's Board of Trustees, or by vote
of a majority of its outstanding voting securities. The Adviser may
terminate this
A-3
<PAGE> 13
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 2, 2002
and from year to year thereafter if its continuance after said date: (1) is
specifically approved on or before said date and at least annually
thereafter by vote of the Board of 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 Paragraph 13.
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, 1998. 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.
A-4
<PAGE> 14
(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:
<TABLE>
<S> <C>
by the Portfolio Manager: Sanford C. Bernstein & Co., LLC
767 Fifth Avenue
New York, New York 10153-0185
by the Adviser: Enterprise Capital Management, Inc.
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022
by the Fund: Enterprise Accumulation Trust
c/o Enterprise Capital Management, Inc.
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022
</TABLE>
or by such other person or persons at such address or addresses as shall be
specified by the applicable party, in each case, in a notice similarly
given. Each party may rely upon any notice or other communication from the
other reasonably believed by it to be genuine.
(18) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original and all of which, when taken
together, shall constitute one and the same agreement.
(19) This Agreement constitutes the entire agreement between the
Portfolio Manager, the Adviser and the Fund relating to the Managed
Portfolio.
A-5
<PAGE> 15
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized officers and their corporate seals hereunder duly affixed
and attested, as of the date first above written.
<TABLE>
<S> <C>
(SEAL) ENTERPRISE ACCUMULATION TRUST
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------------------------- -------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) ENTERPRISE CAPITAL MANAGEMENT, INC.
ATTEST: /s/ CATHERINE R. MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------------------------- -------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) SANFORD C. BERNSTEIN & CO., LLC
ATTEST: --------------------------------------------- By: /s/ JEAN MARGO REID
Title: -------------------------------------------------
----------------------------------------------- Name: Jean Margo Reid
----------------------------------------------
Title: Senior Vice President
-----------------------------------------------
</TABLE>
A-6
<PAGE> 16
MANAGED PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the day of , 2000, 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 Wellington Management Company, LLP, a Massachusetts
limited liability partnership, (hereinafter referred to as the "Portfolio
Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement with the
Fund ("Investment Adviser's Agreement"). Pursuant to the Investment Adviser's
Agreement, the Adviser has agreed to render investment advisory and certain
other management services to all of the 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.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Managed Portfolio of the Fund (the
"Managed Portfolio") securities investment advisory services for that Managed
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 Managed 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 Managed Portfolio advice
with respect to the investment and reinvestment of the assets of the
Managed Portfolio, or such portion of the assets of the Managed Portfolio
as the Adviser shall specify from time to time, in accordance with the
investment objectives, restrictions and limitations applicable to the
Managed Portfolio which are set forth in the Fund's most recent
Registration Statement.
(3) The Portfolio Manager shall perform a monthly reconciliation of
the Managed 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.
A-7
<PAGE> 17
(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
(20) day after the close of each calendar month, a sum equal to 0.03333 of
1% of the average of the daily closing net asset value of the Managed
Portfolio managed by the Portfolio Manager during such month (that is, 0.40
of 1% per year) for the first $500,000,000 (five hundred million dollars)
of assets under management; a sum equal to 0.029166 of 1% of the average
daily closing net asset value of the Managed Portfolio managed by the
Portfolio Manager during such month (that is, 0.35 of 1% per year) for the
next $500,000,000; a sum equal to 0.025 of 1% of the average of the daily
closing net asset value of the Managed Portfolio managed by the Portfolio
Manager during such month (that is, 0.30 of 1% per year) for the next
$1,000,000,000 (one billion dollars) of assets under management up to
$2,000,000,000 (two billion dollars); and a sum equal to 0.02083 of 1% of
the average of the daily closing net asset value of the Managed Portfolio
managed by the Portfolio Manager during such month (that is 0.25 of 1% per
year) 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 Managed Portfolio from taking, at any time, a short
position in any shares of any holdings of the Managed Portfolio or 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 Managed 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 Managed 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 Managed Portfolio and its shareholders,
the Portfolio Manager shall have the right,
A-8
<PAGE> 18
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 Managed Portfolio, the
Adviser, or the Portfolio Manager and, subject to the Conduct Rules of the
National Association of Securities Dealers, Inc.
(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, 2002
and from year to year thereafter if its continuance after said date: (1) is
specifically approved on or before said date and at least annually
thereafter by vote of the Board of 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 Paragraph 13.
A-9
<PAGE> 19
(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.
(18) 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.
(19) 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, 1998. 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.
(18) Unless otherwise permitted, all notices, instructions and advice
with respect to security transactions or any other matters contemplated by
this Agreement shall be deemed duly given when received in writing:
<TABLE>
<S> <C>
by the Portfolio Manager: Wellington Management Company, LLP
75 State Street
Boston, MA 02109-1807
by the Adviser: Enterprise Capital Management, Inc.
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022
by the Fund: Enterprise Accumulation Trust
c/o Enterprise Capital Management, Inc.
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022
</TABLE>
or by such other person or persons at such address or addresses as shall be
specified by the applicable party, in each case, in a notice similarly
given. Each party may rely upon any notice or other communication from the
other reasonably believed by it to be genuine.
(19) 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.
(20) This Agreement constitutes the entire agreement between the
Portfolio Manager, the Adviser and the Fund relating to the Managed
Portfolio.
A-10
<PAGE> 20
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized officers and their corporate seals hereunder duly affixed
and attested, as of the date first above written.
<TABLE>
<S> <C>
(SEAL) ENTERPRISE ACCUMULATION TRUST
ATTEST: By:
---------------------------------------------
Secretary ----------------------------------------------------
Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) ENTERPRISE CAPITAL
MANAGEMENT, INC.
ATTEST: By:
--------------------------------------------- -------------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
(SEAL) WELLINGTON MANAGEMENT COMPANY, LLP
ATTEST: --------------------------------------------- By:
Title:
-------------------------------------------------------- -----------------------------------------------------
Name:
-----------------------------------------------------
Title:
-----------------------------------------------------
</TABLE>
A-11
<PAGE> 21
EXHIBIT B
Bernstein LLC manages assets for the following funds or portfolios of
series funds with similar investment objectives to the Managed Portfolio:
Managed Fund of The Enterprise Group of Funds
Bernstein LLC is one of two sub-advisers for the Managed Fund, a series of
The Enterprise Group of Funds, Inc. The approximate value of the Fund managed by
Bernstein LLC was $149,698,210 at October 31, 2000. For the services provided by
Bernstein LLC, Enterprise Capital pays per year to Bernstein LLC fees equal to
0.40% of assets under management up to $10,000,000; 0.30% for the next
$40,000,000 of assets under management; 0.20% for the next $50,000,000 of assets
under management; and 0.10$ for assets under management in excess of
$100,000,000. Bernstein LLC has not agreed to waive or reduce its fees.
ASAF Sanford Bernstein Managed Index 500 Fund and AST Sanford Bernstein Managed
Index 500 Fund
Bernstein LLC is the sole sub-adviser for each of the ASAF Sanford
Bernstein Managed Index 500 Fund of American Skandia Advisor Funds, Inc. and the
AST Sanford Bernstein Managed Index 500 Portfolio of American Skandia Trust.
Shares of the AST Sanford Bernstein Managed Index 500 Portfolio may be purchased
only by separate accounts of certain participating insurance companies or by
qualified plans. The approximate value of the portfolio managed by Bernstein LLC
for each of the ASAF Sanford Bernstein Managed Index 500 Fund and the AST
Sanford Bernstein Managed Index 500 Portfolio was $83,151,349.47 and
$739,497,802.89, respectively, at October 31, 2000. For services provided to
these funds, Bernstein LLC is paid a sub-advisory fee at an annual rate equal to
the following percentages of the combined average daily net assets of the ASAF
Sanford Bernstein Managed Index 500 Fund and the AST Sanford Bernstein Managed
Index 500 Portfolio: 0.1533% of the portion of the combined average daily net
assets not in excess of $300 million; plus 0.10% of the portion of the combined
average daily net assets in excess of $300 million. Notwithstanding the
foregoing, the following annual rate applies for each day that the combined
average daily net assets are not in excess of $300 million: 0.40% of the first
$10 million of combined average daily net assets; plus 0.30% on the next $40
million of combined average daily net assets; plus 0.20% on the next $50 million
of combined average daily net assets; plus 0.10% on the next $200 million of
combined average daily net assets. Bernstein LLC has not agreed to waive or
reduce its fees.
B-1
