THE ENTERPRISE GROUP OF FUNDS II, INC.
INVESTMENT ADVISER'S AGREEMENT
THIS AGREEMENT, made this 28th day of December 2004, is by and between The
Enterprise Group of Funds II, Inc., a Maryland corporation (hereinafter referred
to as "Enterprise"), and Enterprise Capital Management, Inc., a Georgia
corporation (hereinafter referred to as the "Adviser").
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, Enterprise and the
Adviser agree as follows:
(1) Enterprise hereby employs the Adviser to act as the Investment
Adviser of Enterprise, and in addition to render certain other services to
Enterprise, all as set forth herein. The Adviser hereby accepts such
employment and agrees to perform such services on the terms set forth, and
for the compensation herein provided.
(2) The Adviser will furnish each series ("Fund") of Enterprise advice
with respect to the investment and reinvestment of the assets of each Fund
of Enterprise in accordance with the investment objectives of each such
Fund as set forth in any currently effective registration statement with
the Securities and Exchange Commission (the "SEC") with respect to
securities of Enterprise.
(3) In carrying out its duties hereunder, it is contemplated that the
Adviser will select and employ subinvestment adviser Fund Managers for the
respective Funds of Enterprise, with the exception of the Money Market
Fund, subject to compliance with the provisions of Section 15 of the
Investment Company Act of 1940, as amended. It is contemplated that the
Adviser will act as Fund Manager of the Money Market Fund, subject to
compliance with the provisions of Section 15 of the Investment Company Act
of 1940, as amended.
(4) The Adviser will provide oversight and management services to the
Fund which will include, but not be limited to, (i) supervising the
sub-adviser's compliance with federal and state regulations, including the
Investment Company Act, (ii) evaluating sub-adviser's performance, (iii)
analyzing the composition of the investment portfolios of each Fund of the
Fund and preparing reports thereon for the Board or any committee of the
Board, (iv) evaluating each Fund's performance in comparison to similar
mutual funds and other market information, (v) conducting searches, upon
request of the Board, for a replacement for any sub-adviser then serving
the Fund, and (vi) preparing presentations to shareholders which analyze
the Fund's overall investment program and performance.
(5) The Adviser will for all purposes herein be deemed to be an
independent contractor. The Adviser has no authority to act for or
represent Enterprise in any way and is not an agent of Enterprise.
(6) The Adviser will, at its own expense, furnish to Enterprise
directly or through any of the Adviser's subsidiaries, office facilities,
including space, furniture and equipment, and, to the extent that such
services are not being provided by others under contract with Enterprise,
personnel for the managing of the affairs of, servicing the investment of,
and keeping the books and records of Enterprise, including clerical,
research, statistical and investment work, but not including duties or
services which are customarily performed for an open-end management
investment company by its Board of Directors, custodian, transfer agent,
registrar, dividend disbursing agent, auditors and legal counsel.
Personnel provided shall be persons satisfactory to the Board of
Directors of Enterprise to serve as officers of Enterprise, including a
President, one or more Vice Presidents, a Secretary, a Treasurer and such
additional officers and employees as may reasonably be necessary for the
execution of its duties under this Agreement.
The personnel and facilities furnished as aforesaid shall be subject
to the control and direction of the Board of Directors of Enterprise. Such
personnel shall be employees of Enterprise notwithstanding that some or all
of their compensation and expenses of their employment may be paid by the
Adviser.
(7) It is understood that the Adviser does not, by this Agreement,
undertake to assume or pay any costs or expenses of Enterprise except those
specifically stated herein to be payable by the Adviser. In connection
therewith, the Adviser understands that Enterprise pays and shall continue
to pay the following expenses (which shall not be a limiting statement of
such expenses):
(a) The fees, compensation and traveling expenses of the
Directors of Enterprise,
(b) Telephone, telegraphic and postage expenses related to
communications between Directors and officers of Enterprise, other
than those provided by the Adviser,
(c) The fees of any custodian, transfer agent, registrar of
dividend disbursing agent of Enterprise,
(d) Compensation of Enterprise's auditors and counsel, including
compensation and costs relating to litigation,
(e) Franchise, income and original issue taxes relating to
Enterprise and its securities,
(f) Fees and legal expenses incurred in qualifying the shares of
Enterprise for sale with any state regulatory agency in the several
states, and the fees and expenses of maintaining, renewing, increasing
or amending such qualification,
(g) Insurance premiums or interest on indebtedness,
(h) Association dues,
(i) Fees and expenses involved in registering and maintaining
registrations of Enterprise and of its shares with the SEC, including
the preparation and printing of prospectuses,
(j) Costs of printing and mailing reports to shareholders, proxy
statements, dividends notices and other communications to
shareholders, as well as all expenses of shareholders and Directors
meetings,
(k) Cost of printing of stock certificates,
(l) Broker's commissions and issue and transfer taxes chargeable
to Enterprise in connection with securities transactions to which
Enterprise is a party, and
(m) Business licenses, intangible and franchise taxes.
Costs relating to Enterprise's dividends and capital gains
reinvestment program and other shareholder plans will not be borne by
Enterprise except to the extent of the normal cost to Enterprise of
issuing shares. All other costs relating to such programs and plans
will be borne by the Adviser.
(8) Enterprise agrees to pay the Adviser for its services and
facilities to be furnished under this Agreement, within 15 days after the
close of each calendar month after the effective date of this Agreement,
the amounts equal to the percentages of the average of the daily closing
net asset values of the respective Funds of Enterprise that are set forth
in Schedule A hereto. Subject to the requirements of Section 15 of the
Investment Company Act of 1940, Schedule A may be amended from time to time
by
2
agreement between the Enterprise and the Adviser with respect to existing
Funds of Enterprise or as new Funds are added to Enterprise.
(9) The services of the Adviser hereunder are not to be deemed to be
exclusive, and the Adviser is free to render services to others and to
engage in other activities so long as its services hereunder are not
impaired thereby. Without in any way relieving the Adviser of its
responsibilities hereunder, it is agreed that the Adviser may employ others
to furnish factual information, economic advice and/or research, and
investment recommendations, upon which its investment advice and service is
furnished hereunder.
(10) In the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or reckless
disregard of its obligations and duties hereunder, the Adviser shall not be
liable to Enterprise or to any shareholder or shareholders of Enterprise
for any mistake of judgement, act or omission in the course of, or
connected with, the services to be rendered by the Adviser hereunder.
(11) Subject to and in accordance with the articles of incorporation
and by-laws of Enterprise and of the Adviser, it is agreed that the
Directors, officers, employees and shareholders of Enterprise 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 become similarly interested in
Enterprise and that the Adviser may be or become interested in Enterprise
as a shareholder, or otherwise.
(12) The Adviser will not take, and it will take necessary steps to
prevent its officers and directors from taking, at any time, a short
position in any shares of Enterprise. The Adviser also will cooperate with
Enterprise in adopting a written policy prohibiting xxxxxxx xxxxxxx with
respect to Enterprise Fund transactions.
(13) In connection with the management of the investment and
reinvestment of the assets of Enterprise and subject to review by
Enterprise's Board of Directors, the Adviser is authorized to select the
brokers or dealers that will execute purchase and sale transactions for
each Fund of Enterprise and, at its option, at all times or from time to
time to permit the respective Fund 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 Fund securities for Enterprise. Subject to this primary
requirement, and maintaining as its first consideration the benefits for
Enterprise, its Funds and its shareholders, the Adviser shall have the
right, subject to the control of the Board of Directors of Enterprise, to
follow a policy of selecting brokers and dealers who furnish statistical
research and other services to Enterprise, the Adviser or any Fund Manager
and, subject to the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., to consider sales of shares of the Funds as a
factor in the selection of brokers and dealers.
With respect to Section 17(e) of the Investment Company Act of 1940
and Section 11(a) of the Securities Exchange Act of 1934, Enterprise hereby
expressly consents and agrees that any associated person of the Adviser,
including, without limitation, MONY Securities Corp., may effect securities
transactions on any exchange of which such associated person is a member,
and that the Adviser and such associated person may receive or retain
compensation in connection therewith.
On occasions when the Adviser deems the purchase or sale of a security
or other investment to be in the best interest of any Fund of Enterprise as
well as other Funds of Enterprise, the Adviser may, to the extent permitted
by applicable law and regulations, but shall not be obligated to, aggregate
the securities to be so sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Adviser in the manner that
it considers to be the most equitable and consistent with its fiduciary
obligations to Enterprise and each of its Funds.
(14) Enterprise may terminate this Agreement by sixty days written
notice to the Adviser at any time, without the payment of any penalty, by
vote of Enterprise's Board of 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 Enterprise, without the payment of any
penalty. This Agreement shall immediately
3
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.
(15) Subject to prior termination as provided above, this Agreement
shall continue in force from the date of execution, 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 Enterprise, including a majority of those
directors who are not parties to this Agreement or interested persons of
any such party, or by vote of a majority of the outstanding voting
securities of Enterprise; and (2) is specifically approved at least
annually by the vote of a majority of directors of Enterprise who are not
parties to this Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on such approval.
(16) This Agreement may be amended at any time by mutual consent of
the parties; provided, that such consent on the part of Enterprise shall
have been approved by a vote of the majority of the outstanding voting
securities of Enterprise; but further provided, that this limitation shall
not prevent any minor amendments to the Agreement which may be required by
federal or state regulatory bodies, which amendments may be made without
shareholder approval.
(17) The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall
have the respective meanings specified in the Investment Company Act of
1940 as now in effect or as hereafter amended.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the date first above written.
ATTEST: THE ENTERPRISE GROUP OF FUNDS II, INC.
By: /s/ Xxxxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxx
---------------------------------- -----------------------------------
Xxxxxx X. Xxxxx
President and Chief Executive
Officer
ATTEST: ENTERPRISE CAPITAL MANAGEMENT, INC.
By: /s/ Xxxxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------- -----------------------------------
Xxxxxxx X. Xxxxxxxxx
Treasurer
4
SCHEDULE A TO
THE ENTERPRISE GROUP OF FUNDS II, INC.
INVESTMENT ADVISER'S AGREEMENT
--------------------------------------------------------------------------------
Name of Fund Percentage of Average Daily Closing Net Asset
Values of Fund to be Paid
--------------------------------------------------------------------------------
Growth At the rate of 0.75% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Growth and Income At the rate of 0.75% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Equity At the rate of 0.75% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Equity Income Fund At the rate of 0.75% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Capital Appreciation At the rate of 0.75% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Multi-Cap Growth At the rate of 1.00% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Small Company Growth At the rate of 1.00% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Small Company Value At the rate of 0.75% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
International Growth At the rate of 0.85% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Global Financial Services At the rate of 0.85% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Technology At the rate of 1.00% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Government Securities At the rate of 0.60% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
High-Yield Bond At the rate of 0.50% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Tax-Exempt Income At the rate of 0.50% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Managed At the rate of 0.75% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Money Market At the rate of 0.35% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Global Socially Responsive At the rate of 0.90% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Mergers and Acquisitions At the rate of 0.90% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
Deep Value Fund At a rate of 0.75% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Strategic Allocation At a rate of 0.75% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Total Return At the rate of 0.65% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
Short Duration Bond At the rate of 0.45% of the average of the daily
closing net asset values of the Fund per year, paid
monthly.
--------------------------------------------------------------------------------
6
