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Exhibit (d)(xvi)
BALANCED FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 30th day of June, 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 Montag & Xxxxxxxx, Inc., a Georgia corporation, (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 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 fund managers to the Portfolios.
(B) The parties hereto wish to enter into an agreement whereby the Fund
Manager will provide to the Balanced Fund of the Fund (the "Balanced Fund")
securities investment advisory services for the Balanced 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 Balanced 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 Balanced Fund advice
with respect to the investment and reinvestment of the assets of the Balanced
Fund, or such portion of the assets of the Balanced Fund as the Adviser shall
specify from time to time, in accordance with the investment objectives,
restrictions and limitations applicable to the Balanced Fund which are set forth
in the Fund's most recent Registration Statement.
(3) The Fund Manager shall perform a monthly reconciliation of
the Balanced 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 Portfolios 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 Portfolios.
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(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
Portfolios.
(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 0.025 of 1% of the
average of the daily closing net asset value of the Balanced Fund managed by the
Fund Manager during such month (that is, 0.30 of 1% per year) for the first
$100,000,000 of assets under management; and a sum equal to 0.0208 of 1% of the
average of the daily closing net asset value of the Balanced Fund during such
month (that is, 0.25 of 1% per year) for the next $100,000,000 of assets under
management (up to $200,000,000); and a sum equal to .0167 of 1% of the average
of the daily closing net asset value of the Balanced Fund during such month
(that is .2 of 1% per year) for assets under management over $200,000,000.
(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
Balanced 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 Balanced Fund or the Adviser or to any shareholder or shareholders
of the Fund, the Balanced 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 Balanced Fund from taking, at any time, a short position in any
shares of any holdings of the Balanced 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 Balanced 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 Balanced Fund, the Fund Manager is authorized
to select the brokers or dealers that will execute purchase and sale
transactions for the Balanced 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
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portfolio securities for the Balanced Fund. Subject to this primary requirement,
and maintaining as its first consideration the benefits for the Balanced 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 Balanced 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 Portfolios.
(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.
(12) Subject to prior termination as provided above, this
Agreement shall continue in force from the date of execution until December 31,
1999 and from year to year thereafter if its continuance after said date: (1) is
specifically approved on or before said date and at least annually thereafter by
vote of the Board of 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
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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: Montag & Xxxxxxxx, Inc.
1100 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, XX 00000
by the Adviser: Enterprise Capital Management, Inc.
0000 Xxxxxxxxx Xxxx, X.X., Xxxxx 000
Xxxxxxx, XX 00000-0000
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 Balanced Fund.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized officers and their corporate seals hereunder duly
affixed and attested, as of the date first above written.
THE ENTERPRISE GROUP OF FUNDS, INC.
(SEAL)
ATTEST: /s/ XXXXXXXXX X. XxXXXXXXX By: /s/ XXXXXX XXXXXX
---------------------------- -------------------------------------
Secretary Xxxxxx Xxxxxx, Chairman, President
and Chief Executive Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
ATTEST: /s/ XXXXXXXXX X. XxXXXXXXX By: /s/ XXXXXX XXXXXX
---------------------------- -------------------------------------
Secretary Xxxxxx Xxxxxx, Chairman, President
and Chief Executive Officer
MONTAG & XXXXXXXX, INC.
(SEAL)
ATTEST: /s/ XXXXXXXXX XXXXXXX By: XXXXXX X. XXXXXXXXX
---------------------------- -------------------------------------
Secretary
Name:
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Title:
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