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EXHIBIT (d)(xxiii)
DEEP VALUE FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 31st day of May, 2001, 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 Wellington Management Company, LLP, a Massachusetts limited
liability partnership, (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 Deep Value Fund, a series of the Fund (the
"Deep Value Fund") securities investment advisory services for the Deep Value
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 Deep Value 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 manage the investments of the
Deep Value Fund and the composition of the Deep Value Fund's portfolio,
including the purchase, retention and disposition thereof, or such portion of
the assets of the Deep Value Fund as the Adviser shall specify from time to
time, in accordance with the investment objectives, restrictions and limitations
applicable to the Deep Value Fund which are set forth in the Fund's most recent
Registration Statement or any supplements thereto.
(3) The Fund Manager shall provide supervision of the
Deep Value Fund's investments and determine from time to time what investments
and securities will be purchased, retained or sold by the Deep Value Fund and
what portion of the assets will be invested or held uninvested in cash, in
accordance with the investment objectives, restrictions and limitations
applicable to the Deep Value Fund which are set forth in the Fund's most recent
Registration Statement or any supplements thereto.
(4) The Fund Manager shall maintain all books and records
with respect to the Deep Value Fund's portfolio transactions required by
subparagraphs (b)(5), (6), (7), (9), (10) and (11) and
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paragraph (f) of Rule 31a-1 under the Investment Company Act of 1940 ("xxx 0000
Xxx") and shall render to the Fund's Board of Directors such periodic and
special reports as the Fund's Board of Directors may reasonably request. The
Fund Manager shall timely furnish to the Adviser all information relating to the
Fund Manager's services under this Agreement needed by the Adviser to keep the
other books and records of the Deep Value Fund required by Rule 31a-1 under the
1940 Act. The Fund Manager agrees that all records that it maintains on behalf
of the Deep Value Fund are property of the Deep Value Fund and the Fund Manager
will surrender promptly to the Deep Value Fund any of such records upon the Deep
Value Fund's request; provided, however, that the Fund Manager may retain a copy
of such records. The Fund Manager further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are required to
be maintained by it pursuant to this Agreement. The Fund Manager shall perform a
monthly reconciliation of the Deep Value 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.
(5) 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 establish brokerage
accounts with one or more brokers, dealers or other financial intermediaries as
the Fund Manager may select and to direct securities transactions pursuant to
its investment advice hereunder. The Fund Manager is not an agent of the Fund or
the Deep Value Fund.
(6) 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 Deep Value Fund.
(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 0.033333 of 1% of the
average of the daily closing net asset value of the Deep Value Fund managed by
the Fund Manager during such month (that is, 0.40 of 1% per year) for the first
$100,000,000 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 Deep Value Fund during such
month (that is, 0.30 of 1% per year) 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
Deep Value 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. Services to be furnished by the Fund Manager under this
agreement may be furnished through the medium at any of the Fund Manager's
partners, officers or employees. However, day-to-day management of the Deep
Value Fund shall be the responsibility of the individual or individuals
specified in the Fund's Registration Statement or any supplements thereto.
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.
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(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 Deep Value Fund or the Adviser or to any shareholder or
shareholders of the Fund, the Deep Value 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 Deep Value Fund from taking, at any time, a short
position in any shares of any holdings of the Deep Value 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 has adopted a written policy prohibiting xxxxxxx
xxxxxxx, a copy of which has been provided to the Adviser.
(10) In connection with the management of the investment
and reinvestment of the assets of the Deep Value Fund, the Fund Manager is
authorized to select the brokers or dealers that will execute purchase and sale
transactions for the Deep Value Fund, including those which from time to time
may furnish to Fund Manager or its affiliates statistical and investment
research information and other services 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 Deep Value Fund. Subject to
this primary requirement, and maintaining as its first consideration the
benefits for the Deep Value Fund and its shareholders, the Fund Manager shall
have the right, subject to the direction of the Board of Directors of the Fund,
to select certain brokers and dealers who furnish statistical research and other
services to the Deep Value 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 Adviser has delivered to the Fund Manager copies
of each of the following documents and will deliver to it all future amendments
and supplements, if any:
(11)(a) By-Laws of the Fund (such By-Laws, as in effect on
the date of this Agreement and as amended from time to time, are herein
called the "By-Laws")
(11)(b) Certified resolutions of the Fund's Board of
Directors authorizing the appointment of the Adviser and Fund Manager with
respect to the Deep Value Fund, and approving the form of this Agreement;
(11)(c) Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-1A (the "Registration Statement"),
as filed with the Securities and Exchange Commission (the "Commission") relating
to the Fund and shares of the Fund's beneficial shares, and all amendments
thereto;
(11)(d) Prospectus of the Fund.
(12) During the term of this Agreement, the Adviser agrees
to furnish the Fund Manager at its principal office all sales literature
prepared for distribution to stockholders of the Deep Value Fund, the Fund or
the public that refer to the Fund Manager in any way, prior to the use thereof,
and the Adviser shall not use any such materials if the Fund Manager reasonably
objects in writing within five business days (or such other period as may be
mutually agreed) after receipt thereof. The Fund Manager's right to object to
such materials is limited to the portions of such materials that expressly
relate to the Fund Manager, its services and its clients. The Adviser agrees to
use its reasonable best efforts to ensure that materials prepared by its
employees or agents or its affiliates that refer to the Fund Manager or
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its clients in any way are consistent with those materials previously approved
by the Fund Manager as referenced in the first sentence of this paragraph. Sales
literature may be furnished to the Fund Manager by first class or overnight
mail, facsimile transmission equipment or hand delivery.
(13) On occasions when the Fund Manager deems the purchase
or sale of a security to be in the best interest of the Deep Value Fund as well
as other clients of the Fund Manager, it may allocate such transactions in the
manner it considers to be the most equitable and consistent with its fiduciary
obligation to the Deep Value Fund and to such other clients.
(14) 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.
(15) Subject to prior termination as provided above, this
Agreement shall continue in force from the date of execution until May 31, 2003
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.
(16) The Adviser shall indemnify and hold harmless the
Fund Manager, its officers and partners 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
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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 16.
(17) Except as otherwise provided in Paragraph 16 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.
(18) The Fund Manager agrees to notify the parties within
a reasonable period of time regarding a material change in the partnership of
the Fund Manager.
(19) 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.
(20) 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: Wellington Management Company, LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
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.
(21) No provisions of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment of this Agreement shall be effective
until approved by the Board of Directors of the Fund in the manner required by
the 1940 Act.
(22) Should any part of this Agreement be held invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
(23) Where the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is altered by a rule, regulation or
order of the Commission, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order.
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(24) 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.
(25) This Agreement constitutes the entire agreement
between the Fund Manager, the Adviser and the Fund relating to the Deep Value
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, if applicable, as of the date first above written.
THE ENTERPRISE GROUP OF FUNDS, INC.
ATTEST: /s/ XXXXXXXXX X. XXXXXXXXX By: /s/ XXXXXX XXXXXX
--------------------------- ------------------------------------
Secretary Xxxxxx Xxxxxx, Chairman, President
and Chief Executive Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
ATTEST: /s/ XXXXXXXXX X. XXXXXXXXX By: /s/ XXXXXX XXXXXX
--------------------------- ------------------------------------
Secretary Xxxxxx Xxxxxx, Chairman, President
and Chief Executive Officer
WELLINGTON MANAGEMENT COMPANY, LLP
ATTEST: /s/ KATY X. XXXXX By: /s/ XXXXXXXX X. XXXXXX
--------------------------- ------------------------------------
Name: Xxxxxxxx X. Xxxxxx
-----------------------------------
Title: Senior Vice President
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