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EXHIBIT (d)(vi)
CAPITAL APPRECIATION FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 1st day of November, 1999, is among The Enterprise
Group of Funds, Inc. (the "Fund"), a Maryland corporation, Enterprise Capital
Management, Inc., a Georgia corporation (hereinafter referred to as the
"Adviser"), and Xxxxxxx Capital Management, LLC, a Colorado LLC, (hereinafter
referred to as the "Fund Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement with the
Fund ("Investment Adviser's Agreement"). Pursuant to the Investment Adviser's
Agreement, the Adviser has agreed to render investment advisory and certain
other management services to all of the funds of the Fund, and the Fund has
agreed to employ the Adviser to render such services and to pay to the Adviser
certain fees therefore. The Investment Adviser's Agreement recognizes that the
Adviser may enter into agreements with other investment advisers who will serve
as fund managers to the funds.
(B) The parties hereto wish to enter into an agreement whereby the Fund
Manager will provide to the Capital Appreciation Fund of the Fund (the "Capital
Appreciation Fund") securities investment advisory services for the Capital
Appreciation Fund.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Fund Manager agree as follows:
(1) The Fund and Adviser hereby employ the Fund Manager to render
certain investment advisory services to the Capital Appreciation Fund, as
set forth herein. The Fund Manager hereby accepts such employment and
agrees to perform such services on the terms herein set forth, and for the
compensation herein provided.
(2) The Fund Manager shall furnish the Capital Appreciation Fund
advice with respect to the investment and reinvestment of the assets of the
Capital Appreciation Fund, or such portion of the assets of the Capital
Appreciation Fund as the Adviser shall specify from time to time, with full
discretion in accordance with the investment objectives, restrictions and
limitations applicable to the Capital Appreciation Fund which are set forth
in the Fund's most recent Registration Statement.
(3) The Fund Manager shall perform a monthly reconciliation of the
Capital Appreciation Fund to the holdings report provided by the Fund's
custodian and bring any material or significant variances regarding
holdings or valuations to the attention of the Adviser.
(4) The Fund Manager shall for all purposes herein be deemed to be an
independent contractor. The Fund Manager has no authority to act for or
represent the Fund or the funds in any way except to direct securities
transactions pursuant to its investment advice hereunder. The Fund Manager
is not an agent of the Fund or the funds.
(5) It is understood that the Fund Manager does not, by this
Agreement, undertake to assume or pay any costs or expenses of the Fund or
the funds.
(6) (a) The Adviser agrees to pay the Fund Manager for its services to
be furnished under this Agreement, with respect to each calendar month
after the effective date of this Agreement, on the twentieth (20th) day
after the close of each calendar month, a sum equal to 0.0375 of 1% of the
average
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of the daily closing net asset value of the Capital Appreciation Fund
managed by the Fund Manager during such month (that is, 0.45 of 1% per
year).
(6) (b) The payment of all fees provided for hereunder shall be
prorated and reduced for sums payable for a period less than a full month
in the event of termination of this Agreement on a day that is not the end
of a calendar month.
(6) (c) For the purposes of this Paragraph 6, the daily closing net
asset values of the Portfolio shall be computed in the manner specified in
the Registration Statement for the computation of the value of such net
assets in connection with the determination of the net asset value of the
Capital Appreciation Fund shares.
(7) The services of the Fund Manager hereunder are not to be deemed to
be exclusive, and the Fund Manager is free to render services to others and
to engage in other activities so long as its services hereunder are not
impaired thereby. Without in any way relieving the Fund Manager of its
responsibilities hereunder, it is agreed that the Fund Manager may employ
others to furnish factual information, economic advice and/or research, and
investment recommendations, upon which its investment advice and service is
furnished hereunder.
(8) In the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or reckless
disregard of its obligations and duties hereunder, the Fund Manager shall
not be liable to the Fund, the Capital Appreciation Fund or the Adviser or
to any shareholder or shareholders of the Fund, the Capital Appreciation
Fund or the Adviser for any mistake of judgment, act or omission in the
course of, or connected with, the services to be rendered by the Fund
Manager hereunder.
(9) The Fund Manager will take necessary steps to prevent the
investment professionals of the Fund Manager who are responsible for
investing assets of the Capital Appreciation Fund from taking, at any time,
a short position in any shares of any holdings of the Capital Appreciation
Fund for any accounts in which such individuals have a beneficial interest,
excluding short positions, including without limitation, short
against-the-box positions, effected for tax reasons. The Fund Manager also
will cooperate with the Fund in adopting a written policy prohibiting
xxxxxxx xxxxxxx with respect to Capital Appreciation Fund transactions
insofar as such transactions may relate to the Fund Manager.
(10) In connection with the management of the investment and
reinvestment of the assets of the Capital Appreciation Fund, the Fund
Manager is authorized to select the brokers or dealers that will execute
purchase and sale transactions for the Capital Appreciation Fund, and is
directed to use its best efforts to obtain the best available price and
most favorable execution with respect to such purchases and sales of fund
securities for the Capital Appreciation Fund. Subject to this primary
requirement, and maintaining as its first consideration the benefits for
the Capital Appreciation Fund and its shareholders, the Fund Manager shall
have the right, subject to the approval of the Board of Directors of the
Fund and of the Adviser, to follow a policy of selecting brokers and
dealers who furnish statistical research and other services to the Capital
Appreciation Fund, the Adviser, or the Fund Manager and, subject to the
Conduct Rules of the National Association of Securities Dealers, Inc., to
select brokers and dealers who sell shares of the funds.
(11) The Fund may terminate this Agreement by thirty (30) days written
notice to the Adviser and the Fund Manager at any time, without the payment
of any penalty, by vote of the Fund's Board of Directors, or by vote of a
majority of its outstanding voting securities. The Adviser may terminate
this Agreement by thirty (30) days written notice to the Fund Manager and
the Fund Manager may terminate this Agreement by thirty (30) days written
notice to the Adviser, without the payment of any penalty. This Agreement
shall immediately terminate in the event of its assignment, unless an order
is issued by the Securities and Exchange Commission conditionally or
unconditionally exempting such assignment from the provision of Section 15
(a) of the Investment Company Act of 1940, in which event this Agreement
shall remain in full force and effect.
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(12) Subject to prior termination as provided above, this Agreement
shall continue in force from the date of execution until December 31, 2000
and from year to year thereafter if its continuance after said date: (1) is
specifically approved on or before said date and at least annually
thereafter by vote of the Board of Directors of the Fund, including a
majority of those Directors who are not parties to this Agreement of
interested persons of any such party, or by vote of a majority of the
outstanding voting securities of the Fund, and (2) is specifically approved
at least annually by the vote of a majority of Directors of the Fund who
are not parties to this Agreement or interested persons of any such party
cast in person at a meeting called for the purpose of voting on such
approval.
(13) The Adviser shall indemnify and hold harmless the Fund Manager,
its officers and directors and each person, if any, who controls the Fund
Manager within the meaning of Section 15 of the Securities Act of 1933 (any
and all such persons shall be referred to as "Indemnified Party"), against
any loss, liability, damage or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, damages or expense
and reasonable counsel fees incurred in connection therewith), arising by
reason of any matter to which this Fund Manager's Agreement relates.
However, in no case (i) is this indemnity to be deemed to protect any
particular Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of reckless disregard of its obligations and duties under this
Fund Manager's Agreement or (ii) is the Adviser to be liable under this
indemnity with respect to any claim made against any particular Indemnified
Party unless such Indemnified Party shall have notified the Adviser in
writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon the Fund Manager or such controlling persons.
The Fund Manager shall indemnify and hold harmless the Adviser and
each of its directors and officers and each person if any who controls the
Adviser within the meaning of Section 15 of the Securities Act of 1933,
against any loss, liability, damage or expense described in the foregoing
indemnity, but only with respect to the Fund Manager's willful misfeasance,
bad faith or gross negligence in the performance of its duties under this
Fund Manager's Agreement. In case any action shall be brought against the
Adviser or any person so indemnified, in respect of which indemnity may be
sought against the Fund Manager, the Fund Manager shall have the rights and
duties given to the Adviser, and the Adviser and each person so indemnified
shall have the rights and duties given to the Fund Manager by the
provisions of subsection (i) and (ii) of this Paragraph 13.
(14) Except as otherwise provided in Paragraph 13 hereof and as may be
required under applicable federal law, this Fund Manager's Agreement shall
be governed by the laws of the State of Georgia.
(15) The Fund Manager agrees to notify the parties within a reasonable
period of time regarding a material change in the membership of the Fund
Manager.
(16) The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall
have the respective meanings specified in the Investment Company Act of
1940 as now in effect or as hereafter amended.
(17) Unless otherwise permitted, all notices, instructions and advice
with respect to security transactions or any other matters contemplated by
this Agreement shall be deemed duly given when received in writing:
by the Fund Manager: Xxxxxxx Capital Management, LLC
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
by the Adviser: Enterprise Capital Management, Inc.
0000 Xxxxxxxxx Xxxx, X.X., Xxxxx 000
Xxxxxxx, XX 00000-0000
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by the Fund: The Enterprise Group of Funds, Inc.
c/o Enterprise Capital Management, Inc.
0000 Xxxxxxxxx Xxxx, X.X., Xxxxx 000
Xxxxxxx, XX 00000-0000
or by such other person or persons at such address or addresses as shall be
specified by the applicable party, in each case, in a notice similarly
given. Each party may rely upon any notice or other communication from the
other reasonably believed by it to be genuine.
(18) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original and all of which, when taken
together, shall constitute one and the same agreement.
(19) This Agreement constitutes the entire agreement between the Fund
Manager, the Adviser and the Fund relating to the Capital Appreciation
Fund.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized officers and their corporate seals hereunder duly affixed
and attested, as of the date first above written.
(SEAL) THE ENTERPRISE GROUP OF FUNDS, INC.
ATTEST: /s/ XXXXXXXXX X. XXXXXXXXX By: /s/ XXXXXX XXXXXX
----------------------------------------- -------------------------------------------------
Secretary Xxxxxx Xxxxxx, Chairman, President
and Chief Executive Officer
(SEAL) ENTERPRISE CAPITAL MANAGEMENT, INC.
ATTEST: /s/ XXXXXXXXX X. XXXXXXXXX By: /s/ XXXXXX XXXXXX
---------------------------------------- -------------------------------------------------
Secretary Xxxxxx Xxxxxx, Chairman, President
and Chief Executive Officer
(SEAL) XXXXXXX CAPITAL MANAGEMENT, LLC
ATTEST: /s/ XXXXXXXXXXX X. XXXXXXX By: /s/ XXXXXXX X. XXXXX
---------------------------------------- ------------------------------------------------
Title: COO/Secretary Name: Xxxxxxx X. Xxxxx
Title: President
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