1
EXHIBIT (D)(V)
RIDER TO GROWTH AND INCOME PORTFOLIO
OF THE ENTERPRISE GROUP OF FUNDS, INC.
PORTFOLIO MANAGER'S AGREEMENT
DATED FEBRUARY 28, 1992
THIS RIDER, made the first day of May 1997, is among The Enterprise
Group of Funds, Inc. (the "Fund"), Enterprise Capital Management, Inc., and 1740
Advisers, Inc.
The Agreement is hereby modified by deleting all references to the
Growth and Income Portfolio and replacing all references with the Equity Income
Portfolio.
Whenever there is any conflict between this Rider and the printed part
of the Agreement, the provisions of the Agreement are paramount and the
Agreement shall be construed accordingly.
IN WITNESS WHEREOF, the parties hereof have caused this Rider to be
signed by their duly authorized officers and their corporate seals hereunto
affixed and attested as of the date first above written.
THE ENTERPRISE GROUP OF FUNDS, INC.
By: /s/ XXXXXXXXX X. XXXXXXXXX
--------------------------------
ENTERPRISE CAPITAL MANAGEMENT, INC.
By: /s/ XXXXXXXXX X. XXXXXXXXX
--------------------------------
1740 ADVISERS, INC.
By: /s/ XXXX X. ROCK
--------------------------------
2
GROWTH AND INCOME PORTFOLIO
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made this 28th day of February, 1992, is by and between
Enterprise Capital Management, Inc., a Georgia corporation (hereinafter referred
to as the "Adviser"), and MONY 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 Enterprise Group of Funds, Inc., a Maryland
corporation (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 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 therefor. 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 "Portfolio") securities investment advisory services for that Portfolio.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Adviser
and the Portfolio Manager agree as follows:
(1) The Adviser hereby employs the Portfolio Manager to render
certain investment advisory services to the Portfolio, as set forth
herein. The Portfolio Manager xxxxxx 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 Exhibit B attached hereto and made a part hereof.
(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.
3
(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 .025 of 1% of the average of the daily closing net asset values of the
Portfolio managed by the Portfolio Manager during such month (that is,
.30 of 1% per year) for the first ONE HUNDRED MILLION DOLLARS
($100,000,000.00) under management and a sum equal to .0208 of 1% of the
average of the daily closing net asset values for the next ONE HUNDRED
MILLION DOLLARS ($100,000,000.00) to TWO HUNDRED MILLION DOLLARS
($200,000,000.00) (that is, .25 of 1% per year) and a sum equal to .0167
of 1% of the average of daily closing net asset values for assets in
excess of TWO HUNDRED MILLION DOLLARS ($200,000,000.00) managed by the
Portfolio Manager during such month (that is .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 5, 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;
except that the Portfolio Manager shall be held liable for any losses
resulting from its negligent management which result in transactional
errors or omissions including, but not limited to, incorrect, delayed or
omitted trade advices arising from the Portfolio Manager's negligence
which result in mispricing the Portfolio; and the Portfolio Manager shall
be obligated to make the Portfolio whole and absorb related transfer
agent costs which result from the transaction.
(9) The Portfolio Manager will not take, and it will take
necessary steps to prevent its officers and directors from taking, at any
time, a short position in any shares of any Portfolio of the Fund. The
Portfolio Manager also will cooperate with the Fund in adopting a written
policy prohibiting xxxxxxx xxxxxxx with respect to Fund Portfolio
transactions insofar as such transactions may relate to the Portfolio
Manager.
4
(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 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
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 provisions 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 1,
1993 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 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.
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/ XXXXXX XXXXXX
------------------------
Xxxxxx Xxxxxx, President
ATTEST: /s/ XXXXXXXXX X. XXXXXXXXX
--------------------------
Secretary or
Assistant Secretary
MONY ADVISERS, INC.
(SEAL) By: /s/ XXXX X. XXXX, PRES.
------------------------
(name, title)
ATTEST: /s/ XXXXX X. XXXXX
--------------------------
Secretary or
Assistant Secretary
6
EXHIBIT A
THE ENTERPRISE GROUP OF FUNDS, INC.
INVESTMENT ADVISER'S AGREEMENT
THIS AGREEMENT, made this 14th day of September, 1987, is by and
between The Enterprise Group of Funds, Inc., a Maryland corporation (hereinafter
referred to as the "Fund"), and Enterprise Capital Management Inc., a Georgia
corporation (hereinafter referred to as the "Adviser").
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund and
the Adviser agree as follows:
(1) The Fund hereby employs the Adviser to act as the Investment
Adviser of the Fund, and in addition, to render certain other services to the
Fund, 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 will1 furnish each Portfolio of the Fund advice with
respect to the investment and reinvestment of the assets of each Portfolio of
the Fund 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 the Fund.
(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 the Fund, subject to compliance with the provisions of
Section 15 of the Investment Company Act of 1940, as amended.
(4) The Adviser will for all purposes herein be deemed to be an
independent contractor. The Adviser has no authority to act for or represent the
Fund in any way and is not an agent of the Fund.
(5) The Adviser will, at its own expense, furnish to the Fund 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 the Fund, personnel for the
managing of the affairs of, service of, the investment of, and keeping the books
and records of the Fund, 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
Directors, custodian, transfer agent, registrar, dividend disbursing agent,
auditors and legal counsel.
Personnel provided shall be persons satisfactory to the Board
of Directors of the Fund to serve as officers of the Fund, 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 Directors of the Fund. Such
personnel shall be employees of the Fund,
1
7
notwithstanding that some or all of their compensation and expenses of their
employment may be paid by the Adviser.
(6) It is understood that the Adviser does not, by this Agreement,
undertake to assume or pay any costs or expenses of the Fund except those
specifically stated herein to be payable by the Adviser. In connection
therewith, the Adviser understands that the Fund 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
Directors of the Fund,
(b) Telephone, telegraphic and postage expenses related to
communications between Directors and officers of the Fund, other than
those provided by the Adviser,
(c) The fees of any custodian, transfer agent, registrar or
dividend disbursing agent of the Fund.
(d) Compensation of the Fund's auditors and counsel, including
compensation and costs relating to litigation.
(e) Franchise, income and original issue taxes relating to the
Fund and its securities,
(f) Fees and legal expenses incurred in qualifying the shares
of the Fund for sale with any state regulatory agency in the several
states, and the fees and expenses of maintaining, renewing, increasing
or amending such qualifications,
(g) Insurance premiums or interest on indebtedness,
(h) Association dues,
(i) Fees and expenses involved in registering and maintaining
registrations of the Fund 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 Directors
meetings,
(k) Cost of printing of stock certificates,
(l) Xxxxxx's commissions and issue and transfer taxes
chargeable to the Fund in connection with securities transactions to
which the Fund is a party, and
(m) Business licenses, intangible and franchise taxes.
Costs relating to the Fund's dividends and capital gains
reinvestment program and other shareholder plans will not be borne by the Fund
except to the extent of the normal cost to the Fund of issuing shares. All other
costs relating to such programs and plans will be borne by the Adviser.
(7) The Fund 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
2
8
Agreement, the amounts equal to the percentages of the average of the daily
closing net asset values of the respective Portfolios of the Fund 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 time to time
by agreement between the fund and the Adviser with respect to existing
Portfolios of the Fund or as new Portfolios are added to the Fund.
(8) 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.
(9) 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 the
Fund or to any shareholder or shareholders of the Fund for any mistake of
judgment, act or omission in the course of, or connected with, the services to
be rendered by the Adviser hereunder.
(10) Subject to and in accordance with the articles of incorporation
and by-laws of the Fund and of the Adviser, it is agreed that the Directors,
officers, employees and shareholders of the Fund are or may become interested in
the Adviser as Directors, officers, employees, shareholders or otherwise, and
that Directors, officers, employees and shareholders of the Adviser are or may
be become similarly interested in the Fund and that the Adviser may be or become
interested in the Fund as a shareholder, or otherwise.
(11) The Adviser will not take, and it will take necessary steps to
prevent its officers and directors from taking, at any time, a short position in
any shares of the Fund. The Adviser also will cooperate with the Fund in
adopting a written policy prohibiting xxxxxxx xxxxxxx with respect to Fund
portfolio transactions.
(12) In connection with the management of the investment and
reinvestment of the assets of the Fund and subject to review by the Fund's Board
of Directors, the Adviser is authorized to select the brokers or dealers that
will execute purchase and sale transactions for each Portfolio of the Fund 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 the
Fund. Subject to this primary requirement, and maintaining as its first
consideration the benefits for the Fund, its Portfolios and its shareholders,
the Adviser shall have the right, subject to the control of the Board of
Directors of the Fund, to follow a policy of selecting brokers and dealers who
furnish statistical research and other services to the Fund, 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 or dealers.
With respect to Section 11(a) of the Securities Exchange Act of 1934
and Rule 11(a)2-2(T) thereunder, the Fund hereby expressly consents and agrees
that any associated person of the Adviser, including without limitation, FSC
Securities Corporation, may effect securities transactions for the account of
any Portfolio of the Fund on any national securities exchange of which such
associated
3
9
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 the Fund as
well as other Portfolios of the Fund, 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 the Fund and each of its
Portfolios.
(13) The Fund may terminate this Agreement by sixty days written notice
to the Adviser at any time, without the payment or any penalty, by vote of the
Fund's Board of Directors, or by vote of a majority of its outstanding voting
securities, and the Adviser may terminate this Agreement by sixty days written
notice to the Fund, 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 provisions of Section 15(a) of the Investment
Company Act of 1940, in which event this Agreement shall remain in full force
and effect.
(14) Subject to prior termination as provided above, this Agreement
shall continue in force from the date of execution until August 31, 1989, 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 or 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.
(15) This Agreement may be amended at any time by mutual consent of the
parties; provided, that such consent on the part of the Fund shall have been
approved by a vote of the majority of the outstanding voting securities of the
Fund; 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.
(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
10
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.
THE ENTERPRISE GROUP OF FUNDS, INC.
(SEAL)
ATTEST: /s/ XXXXXXX X. XXXX By: /s/ X. XXXXX XXXXXX
------------------- -------------------------------
Its: President
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
By: /s/ X. XXXXX XXXXXX
-------------------------------
ATTEST: /s/ XXXXXXX X. XXXX Its: President
-------------------
5
11
THE ENTERPRISE GROUP OF FUNDS, INC.
EXHIBIT B
INVESTMENT OBJECTIVES AND POLICIES
OF THE
GROWTH AND INCOME PORTFOLIO
The following investment objectives of the Growth and Income may not be
changed without approval of a majority of the outstanding voting securities of
that Portfolio:
The objective of the Growth and 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. The Portfolios
principal criterion in stock selection is above average yield, and it uses this
criterion as a discipline 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.
Subject to its investment criteria, the Portfolio invests in convertible
preferred stocks or bonds when, in the judgment of Sub-Adviser, common stocks do
not offer equally attractive investment opportunities.
The Portfolio's stock selection process involves an analysis of the financial
strength of the issuer, including the issuer's ability to pay above average
dividends. In addition, a technicolor supply-demand analysis designed to focus
on changes in the general market attitude towards the stock is completed as well
as a cycle rotation analysis designed to benefit from market and business
cycles. The Portfolio maintains a position by investing in stocks of mature,
well-capitalized companies with high daily trading volumes.
The Portfolio Manager shall be subject to the restrictions and
limitations of investments as described in the Prospectus or any subsequent
Prospectus.
