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EXHIBIT (d)(xvi)
MANAGED PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made the 26th day of October, 1999, is among Enterprise
Accumulation Trust (the "Fund"), a Massachusetts business trust, Enterprise
Capital Management, Inc., a Georgia corporation (hereinafter referred to as the
"Adviser"), and Xxxxxxx X. Xxxxxxxxx & Co., 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 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 portfolio managers to the portfolios.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Managed Portfolio of the Fund (the
"Managed Portfolio") securities investment advisory services for that Managed
Portfolio.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund,
Adviser and the Portfolio Manager agree as follows:
(1) The Fund and Adviser hereby employ the Portfolio Manager to render
certain investment advisory services to the Managed Portfolio, as set forth
herein. The Portfolio 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 Portfolio Manager shall furnish the Managed Portfolio advice
with respect to the investment and reinvestment of the assets of the
Managed Portfolio, or such portion of the assets of the Managed Portfolio
as the Adviser shall specify from time to time, in accordance with the
investment objectives, restrictions and limitations applicable to the
Managed Portfolio which are set forth in the Fund's most recent
Registration Statement.
(3) The Portfolio Manager shall perform a monthly reconciliation of
the Managed Portfolio 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 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 portfolios in any way
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except to direct securities transactions pursuant to its investment advice
hereunder. The Portfolio Manager is not an agent of the Fund or the
portfolios.
(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
(20) day after the close of each calendar month, a sum equal to 0.03333 of
1% of the average of the daily closing net asset value of the Managed
Portfolio managed by the Portfolio Manager during such month (that is, 0.40
of 1% per year) for the first $10,000,000 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 Managed Portfolio during such month (that is, 0.30 of 1% per
year) for the next $40,000,000 of assets under management (up to
$50,000,000); and a sum equal to 0.0166667 of 1% of the average of the
daily closing net asset value of the Managed Portfolio during such month
(that is 0.20 of 1% per year) for the next $50,000,000 of assets under
management (up to $100,000,000); and a sum equal to 0.0083333 of 1% of the
average of the daily closing net asset value of the Managed Fund during
such month (that is 0.10% per year) for assets under management over
$100,000,000.
(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
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.
(9) The Portfolio Manager will take necessary steps to prevent the
investment professionals of the Portfolio Manager who are responsible for
investing assets of the Managed Portfolio from taking, at any time, a short
position in any shares of any holdings of the Managed Portfolio or 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 Portfolio Manager also will
cooperate with the Fund in adopting a written policy prohibiting xxxxxxx
xxxxxxx with respect to Managed Portfolio transactions insofar as such
transactions may relate to the Portfolio Manager.
(10) In connection with the management of the investment and
reinvestment of the assets of the Managed Portfolio, the Portfolio Manager
is authorized to select the brokers or dealers that will execute
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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 Managed Portfolio and its
shareholders, the Portfolio Manager shall have the right, subject to the
approval of the Board of Trustees 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 Managed Portfolio, the Adviser, or the Portfolio
Manager and, subject to the Conduct Rules of the National Association of
Securities Dealers, Inc., to select brokers and dealers who sell shares of
portfolios.
In lieu of selecting broker-dealers to execute transactions for the
Managed Portfolio, the Portfolio Manager may execute such transactions for
the Managed Portfolio provided that it "steps-out" such transactions to the
broker-dealers selected by the Portfolio Manager. A step-out is a service
provided by the New York Stock Exchange and other markets which allows the
Portfolio Manager to provide the Managed Portfolio with the benefit of the
Portfolio Manager's execution capabilities at no additional charge and then
transfer or step-out the confirmation and settlement responsibilities of
such transactions to the broker-dealer(s) selected by the Portfolio
Manager. In connection with a step-out, transaction charges shall be paid
by the Managed Portfolio to the broker-dealers selected by the Portfolio
Manager and not to the Portfolio Manager.
In addition to selecting brokers or dealers to execute transactions
for the Managed Portfolio, the Portfolio Manager may, subject to obtaining
best execution, also act as a broker for the Managed Portfolio from time to
time at rates not exceeding the usual and customary broker's commission.
Under Federal law, the Portfolio Manager must obtain the Fund's and the
Adviser's consent to effect agency cross transactions for the Managed
Portfolio, which consent is hereby granted. The Portfolio Manager
represents, warrants and covenants that all agency cross transactions for
the Managed Portfolio will be effected by the Portfolio Manager strictly in
accordance with Rule 206(3)-2 under the Investment Advisers Act of 1940. An
agency cross transaction is where the Portfolio Manager purchases or sells
securities from or to a non-managed account on behalf of a client's managed
account. Pursuant to this consent, the Portfolio Manager will only effect
an agency cross transaction for the Managed Portfolio with a non-managed
account. When the Portfolio Manager crosses transactions in connection with
a step-out, the Portfolio Manager will receive a commission from the
transaction only with respect to the non-managed account and will not
receive a commission from the transaction with respect to the Managed
Portfolio. In an agency cross transaction where the Portfolio Manager acts
as broker for the Managed Portfolio, the Portfolio Manager receives
commissions from both sides of the trade and there is a potentially
conflicting division of loyalties and responsibilities. However, as both
sides to the trade want to execute the transaction at the best price
without moving the market price in either direction, the Portfolio Manager
believes that an agency cross transaction will aid both sides to the trade
in obtaining the best price for the trade. THE FUND OR THE ADVISER MAY
REVOKE THIS CONSENT BY WRITTEN NOTICE TO THE PORTFOLIO MANAGER AT ANY TIME.
(11) The Fund may terminate this Agreement by thirty (30) 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 Trustees, 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
Portfolio Manager and the Portfolio 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
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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, 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 Trustees of the Fund, including a
majority of those Trustees 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 Trustees 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 Portfolio
Manager, its officers and directors and each person, if any, who controls
the Portfolio 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, claim, damage or expense (including
the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages or expense and reasonable counsel fees incurred
in connection therewith), arising by reason of any matter to which this
Portfolio 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 Portfolio 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 Portfolio Manager or such
controlling persons. The Portfolio 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, claim, damage or
expense described in the foregoing indemnity, but only with respect to the
Portfolio Manager's willful misfeasance, bad faith or gross negligence in
the performance of its duties under this Portfolio 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
Portfolio Manager, the Portfolio 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 Portfolio Manager by the provisions
of subsection (i) and (ii) of this Paragraph 13.
This Agreement is executed by the Trustees of the Fund, not
individually, but rather in their capacity as Trustees under the
Declaration of Trust made March 2, 1998. None of the Shareholders,
Trustees, officers, employees, or agents of the Fund shall be personally
bound or liable under this Agreement, nor shall resort be had to their
private property for the satisfaction of any obligation or claim hereunder
but only to the property of the Fund and, if the obligation or claim
relates to the property held by the Fund for the benefit of one or more but
fewer than all Portfolios, then only to the property held for the benefit
of the affected Portfolio.
(14) Except as otherwise provided in Paragraph 13 hereof and as may be
required under applicable federal law, this Portfolio Manager's Agreement
shall be governed by the laws of the State of Georgia.
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(15) The Portfolio Manager agrees to notify the parties within a
reasonable period of time regarding a material change in the membership of
the Portfolio 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 X. Xxxxxxxxx & Co., Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 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 Accumulation Trust 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
Portfolio Manager, the Adviser and the Fund relating to the Managed
Portfolio.
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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.
(SEAL) ENTERPRISE ACCUMULATION TRUST
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 X. XXXXXXXXX & CO., INC.
ATTEST: /s/ XXXX XXXXX XXXX By: /s/ XXXXX XXXXXX
---------------------------------------- -------------------------------------------
Title: Senior Vice President & Secretary Name: Xxxxx Xxxxxx
Title: President
