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EXHIBIT (D)(XI)
GOVERNMENT SECURITIES PORTFOLIO
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
PORTFOLIO MANAGER'S AGREEMENT
THIS AGREEMENT, made this 14th day of March 1992, is by and between
Enterprise Capital Management, Inc., a Georgia corporation (hereinafter referred
to as the "Adviser"), and TCW Funds Management, Inc., a California corporation
(hereinafter referred to as the "Portfolio Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of September 14, 1987 with The Enterprise Group of Funds, Inc., a
Maryland corporation (the "Fund"), a copy of which agreement is attached hereto
as Exhibit A (the "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 therefor. 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 of the Fund.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the Government Securities Portfolio of the
Fund (the "Portfolio") securities investment advisory services for that
Portfolio.
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Adviser
and the Portfolio Manager agree as follows:
(1) The Adviser hereby employs the Portfolio Manager to render
certain investment advisory services to the 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 Portfolio advice
with respect to the investment and reinvestment of the assets of the
Portfolio, or such portion of the assets of the Portfolio as the
Adviser shall specify from time to time, in accordance with the
investment objectives, restrictions and limitations of the Portfolio as
set forth in Exhibit B attached hereto and made a part hereof.
(3) The Portfolio Manager shall perform a monthly
reconciliation of the Portfolio to the holdings report provided by the
Fund's custodian and bring any material or significant variances
regarding holding or valuation 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
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or the Portfolio in any way except to direct securities transactions
pursuant to its investment advice hereunder. The Portfolio Manager is
not an agent of the Fund or the Portfolio.
(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 (20th) day after the close of each calendar month, a sum
equal to .0250 of 1% of the average of the daily closing net asset
values of the Portfolio managed by the Portfolio Manager during such
month (that is, .30 of 1% per year) for the first FIFTY-MILLION DOLLARS
($50,000,000.00) under management, and a sum equal to .0208 of 1% of
the average of the daily closing net asset values of the Portfolio
thereafter in excess of FIFTY-MILLION DOLLARS ($50,000,000.00), managed
by the Portfolio Manager during such month (that is, .25 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 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; except that the Portfolio Manager shall be
held liable for any losses directly resulting from its negligent
management which directly result in incorrect, delayed or omitted trade
advices arising from the Portfolio Manager's negligence which directly
result in mispricing the Portfolio; and the Portfolio Manager shall be
obligated to make the Portfolio whole and absorb related transfer agent
costs which result from the transaction.
(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 Portfolio from taking, at any
time, a short position in any shares of any Portfolio of the Fund. The
Portfolio Manager also will cooperate with the Fund in adopting a
written policy prohibiting
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xxxxxxx xxxxxxx with respect to Fund 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 Portfolio, the Portfolio Manager is
authorized to select the brokers or dealers that will execute 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 Portfolio
and its shareholders, the Portfolio 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 Portfolio, the
Adviser or the Portfolio Manager and, subject to the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., to
select brokers and dealers who sell shares of Portfolios of the Fund.
(11) The Fund may terminate this Agreement by sixty 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
Directors, or by vote of a majority of its outstanding voting
securities. The Adviser may terminate this Agreement by sixty days
written notice to the Portfolio Manager and the Portfolio Manager may
terminate this Agreement by sixty 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 provisions 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 May
1, 1993 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 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.
(SIGNATURES ON FOLLOWING PAGE)
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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.
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
By:/s/ XXXXXX XXXXXX
---------------------------------
Xxxxxx Xxxxxx, President
ATTEST: /s/ XXXXXXXXX X. XXXXXXXXX
-----------------------------
Secretary or
Assistant Secretary
TCW FUNDS MANAGEMENT, INC.
(SEAL)
By: /s/ XXXXXXX XXXXXX
---------------------------------
(name, title)
By: /s/ XXXXX X. XXXXXX
---------------------------------
(name, title)
ATTEST: /s/ XXXXX X. XXXXXX
----------------------------
Secretary or
Assistant Secretary
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EXHIBIT A
THE ENTERPRISE GROUP OF FUNDS, INC.
INVESTMENT ADVISER'S AGREEMENT
THIS AGREEMENT, made this 14th day of September, 1987, is by and
between The Enterprise Group of Funds, Inc., a Maryland corporation
(hereinafter referred to as the "Fund"), and Enterprise Capital Management
Inc., a Georgia corporation (hereinafter referred to as the "Adviser").
WITNESSETH THAT:
In consideration of the mutual covenants herein contained, the Fund and
the Adviser agree as follows:
(1) The Fund hereby employs the Adviser to act as the Investment
Adviser of the Fund, and in addition, to render certain other services to the
Fund, 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 Portfolio of the Fund advice with
respect to the investment and reinvestment of the assets of each Portfolio of
the Fund in accordance with the investment objectives of each such Portfolio as
set forth in any currently effective registration statement with the Securities
and Exchange Commission (the "SEC") with respect to securities of the Fund.
(3) In carrying out its duties hereunder, it is contemplated that the
Adviser will select and employ subinvestment adviser Portfolio Managers for the
respective Portfolios of the Fund, subject to compliance with the provisions of
Section 15 of the Investment Company Act of 1940, as amended.
(4) The Adviser will for all purposes herein be deemed to be an
independent contractor. The Adviser has no authority to act for or represent the
Fund in any way and is not an agent of the Fund.
(5) The Adviser will, at its own expense, furnish to the Fund 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 the Fund, personnel for the
managing of the affairs of, service of, the investment of, and keeping the books
and records of the Fund, 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 the Fund to serve as officers of the Fund, 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 the Fund. Such
personnel shall be employees of the Fund,
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notwithstanding that some or all of their compensation and expenses of their
employment may be paid by the Adviser.
(6) It is understood that the Adviser does not, by this Agreement,
undertake to assume or pay any costs or expenses of the Fund except those
specifically stated herein to be payable by the Adviser. In connection
therewith, the Adviser understands that the Fund 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 the Fund,
(b) Telephone, telegraphic and postage expenses related to
communications between Directors and officers of the Fund, other than
those provided by the Adviser,
(c) The fees of any custodian, transfer agent, registrar or
dividend disbursing agent of the Fund.
(d) Compensation of the Fund's auditors and counsel, including
compensation and costs relating to litigation.
(e) Franchise, income and original issue taxes relating to the Fund
and its securities,
(f) Fees and legal expenses incurred in qualifying the shares of the
Fund for sale with any state regulatory agency in the several states,
and the fees and expenses of maintaining, renewing, increasing or
amending such qualifications,
(g) Insurance premiums or interest on indebtedness,
(h) Association dues,
(i) Fees and expenses involved in registering and maintaining
registrations of the Fund 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
the Fund in connection with securities transactions to which the Fund is
a party, and
(m) Business licenses, intangible and franchise taxes.
Costs relating to the Fund's dividends and capital gains
reinvestment program and other shareholder plans will not be borne by the Fund
except to the extent of the normal cost to the Fund of issuing shares. All
other costs relating to such programs and plans will be borne by the Adviser.
(7) The Fund 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
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Agreement, the amounts equal to the percentages of the average of the daily
closing net asset values of the respective Portfolios of the Fund that are set
forth in Schedule A hereto. Subject to the requirements of Section 15 of the
Investment Company Act of 1940, such Schedule A may be amended from time to time
by agreement between the fund and the Adviser with respect to existing
Portfolios of the Fund or as new Portfolios are added to the Fund.
(8) 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.
(9) 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 the Fund or
to any shareholder or shareholders of the Fund for any mistake of judgment, act
or omission in the course of, or connected with, the services to be rendered by
the Adviser hereunder.
(10) Subject to and in accordance with the articles of incorporation and
by-laws of the Fund and of the Adviser, it is agreed that the Directors,
officers, employees and shareholders of the Fund 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
be become similarly interested in the Fund and that the Adviser may be or become
interested in the Fund as a shareholder, or otherwise.
(11) 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 the Fund. The Adviser also will cooperate with the Fund in
adopting a written policy prohibiting xxxxxxx xxxxxxx with respect to Fund
portfolio transactions.
(12) In connection with the management of the investment and
reinvestment of the assets of the Fund and subject to review by the Fund's Board
of Directors, the Adviser is authorized to select the brokers or dealers that
will execute purchase and sale transactions for each Portfolio of the Fund and,
at its option, at all times or from time to time to permit the respective
Portfolio 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 portfolio securities for the
Fund. Subject to this primary requirement, and maintaining as its first
consideration the benefits for the Fund, its Portfolios and its shareholders,
the Adviser shall have the right, subject to the control of the Board of
Directors of the Fund, to follow a policy of selecting brokers and dealers who
furnish statistical research and other services to the Fund, the Adviser or any
Portfolio Manager and, subject to the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., to consider sales of shares of the
Portfolios as a factor in the selection of brokers or dealers.
With respect to Section 11(a) of the Securities Exchange Act of 1934
and Rule 11(a)2-2(T) thereunder, the Fund hereby expressly consents and agrees
that any associated person of the Adviser, including without limitation, FSC
Securities Corporation, may effect securities transactions for the account of
any Portfolio of the Fund on any national securities exchange of which such
associated
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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 Portfolio of the Fund as
well as other Portfolios of the Fund, 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 the Fund and each of its
Portfolios.
(13) The Fund may terminate this Agreement by sixty days written notice
to the Adviser at any time, without the payment or any penalty, by vote of the
Fund'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 the Fund, 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 provisions of Section 15(a) of the Investment
Company Act of 1940, in which event this Agreement shall remain in full force
and effect.
(14) Subject to prior termination as provided above, this Agreement
shall continue in force from the date of execution until August 31, 1989, 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 or 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.
(15) This Agreement may be amended at any time by mutual consent of the
parties; provided, that such consent on the part of the Fund shall have been
approved by a vote of the majority of the outstanding voting securities of the
Fund; 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.
(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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers and their corporate seals hereunto duly
affixed and attested, as of the date first above written.
THE ENTERPRISE GROUP OF FUNDS, INC.
(SEAL)
ATTEST: /s/ XXXXXXX X. XXXX By: /s/ E. XXXXX XXXXXX
------------------------ ---------------------------
Its: President
ENTERPRISE CAPITAL MANAGEMENT, INC.
(SEAL)
By: /s/ E. XXXXX XXXXXX
ATTEST: /s/ XXXXXXX X. XXXX --------------------------
----------------------- Its: President
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THE ENTERPRISE GROUP OF FUNDS, INC.
EXHIBIT B
INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIO
Government Securities Portfolio
The objective of the Government Securities Portfolio is current income and
safety of principal primarily from securities that are obligations of the U.S.
Government, its agencies and instrumentalities ("U.S. Government Securities").
It is a fundamental policy of the Portfolio, which may not be changed
without shareholder approval, that under normal conditions at least 80% of the
value of its net assets will be invested in U.S. Government Securities.
The remainder of the Portfolio's assets may be invested in repurchase
agreements, bankers acceptances, bank certificates of deposit, commercial paper
and similar money market instruments, corporate bonds and other mortgage-related
securities (including collateralized mortgage obligations or "CMOs") at such
times and in such amounts as the Portfolio Manager deems appropriate consistent
with the Portfolio's investment objective. In making such investments, the
Portfolio Manager seeks income but gives careful attention to security of
principal and considers such factors as marketability and diversification.
U.S. Government Securities consist of direct obligations of the U.S.
Treasury (such as treasury bills, treasury notes and treasury bonds) and
securities issued or guaranteed by agencies and instrumentalities of the United
States Government. Those securities issued by agencies or instrumentalities may
or may not be backed by the full faith and credit of the United States. An
example of full faith and credit securities is securities issued by the
Government National Mortgage Association ("GNMA Certificates"). Examples of
agencies or instrumentalities whose securities are not backed by the full faith
and credit of the United States are the Federal Farm Credit System, the Federal
Home Loan Banks, the Tennessee Valley Authority, the United States Postal
Service and the Export-Import Bank.
The Portfolio Manager shall be subject to the restrictions and limitations
of investments as described in the Prospectus or any subsequent Prospectus.
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