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EXHIBIT (D)(XXV)
TOTAL RETURN FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 31st day of August, 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 Pacific Investment Management Company LLC, a Delaware limited
liability (hereinafter referred to as the "Fund Manager").
BACKGROUND INFORMATION
(A) The Fund is registered with the Securities and Exchange
Commission ("SEC") as an open-end, management investment company under the
Investment Company Act of 1940, and the rules and regulations thereunder, as
amended from time to time (the "1940 Act").
(B) 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 of the Fund.
(C) The parties hereto wish to enter into an agreement (the
"Agreement") whereby the Fund Manager will provide to the Total Return Fund of
the Fund (the "Total Return Fund") securities investment advisory services for
that 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 Total Return 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)(a) The Fund Manager shall furnish the Total Return Fund
advice with respect to the investment and reinvestment of the assets of the
Total Return Fund, or such portion of the assets of the Total Return Fund as the
Adviser shall specify from time to time, in accordance with the investment
objectives, restrictions and limitations of the Total Return Fund as set forth
in the Fund's most recent Registration Statement.
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(2)(b) The Fund Manager is authorized on behalf of the Total
Return Fund to enter into agreements and execute any documents required to make
investments pursuant to the Registration Statement, as may be amended from time
to time.
(3) The Fund Manager shall perform a monthly
reconciliation of the Total Return 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.
(3)(a) The Fund Manager's investment authority shall include
the authority to purchase, sell, cover open positions, and generally to deal in
financial futures contracts and options thereon, in accordance with the
Registration Statement.
(3)(b) The Fund Manager will: (i) open and maintain
brokerage accounts for financial futures and options (such accounts hereinafter
referred to as "brokerage accounts") on behalf of and in the name of the Total
Return Fund. The Fund shall execute for and on behalf of the Total Return Fund,
standard customer agreements with a broker or brokers. The Fund Manager may,
using such of the securities and other property in the Total Return Fund as the
Fund Manager deems necessary or desirable, direct the custodian to deposit on
behalf of the Total Return Fund, original and maintenance brokerage deposits and
otherwise direct payments of cash, cash equivalents and securities and other
property into such brokerage accounts and to such brokers as the Fund Manager
deems desirable or appropriate.
(3)(c) The Fund Manager has delivered to the Adviser a copy
of its Disclosure Document, as amended, dated March 15, 2001, on file with the
Commodity Futures Trading Commission. The Adviser hereby acknowledges receipt of
such copy.
(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 Total Return Fund 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 Total Return Fund.
(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 Total Return Fund.
(6)(a) The Adviser agrees to pay as compensation to 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 0.020833 of 1%
of the average of the daily closing net asset value of the Fund managed by the
Fund Manager during such month (that is, 0.25 of 1% per year) for assets under
management.
(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 Fund 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 Fund's
shares.
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(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. The Fund Manager may, from time to time hereafter, act as investment
adviser to one or more other investment companies and fiduciary or other managed
accounts, provided that when the purchase or sale of securities of the same
issuer is suitable for the investment objectives of two or more companies or
accounts managed by the Fund Manager which have available funds for investment,
the available securities will be allocated in a manner believed by the Fund
Manager to be equitable to each company or account over time.
(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 Total Return Fund or the Adviser or to any shareholder
or shareholders of the Fund, the Total Return 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) In connection with the management of the investment
and reinvestment of the assets of the Total Return Fund, the Fund Manager is
authorized to select the brokers or dealers that will execute purchase and sale
transactions for the Total Return Fund, and is directed to use its reasonable
efforts to obtain the best execution with respect to such purchases and sales of
fund securities for the Total Return Fund. Subject to this primary requirement,
and maintaining as its first consideration the benefits for the Funds 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 Total Return 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 funds of the Fund.
(10) Provided the investment objectives of the Total
Return Fund are adhered to, the Adviser agrees that the Fund Manager may
aggregate sales and purchase orders of securities, commodities and other
investments held in the Total Return Fund with similar orders being made
simultaneously for other accounts managed by the Fund Manager or with accounts
of the affiliates of Fund Manager, if in the Fund Manager's reasonable judgment
such aggregation shall result in an overall economic benefit to the Total Return
Fund taking into consideration the advantageous selling or purchase price,
brokerage commission and other expenses. The Adviser acknowledges that the
determination of such economic benefit to the Total Return Fund by the Fund
Manager represents the Fund Manager's evaluation that the Total Return Fund is
benefited by relatively better purchase or sales prices, lower commission
expenses and beneficial timing of transactions or a combination of these and
other factors.
(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
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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 August 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 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.
(13)(a) 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, 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
from the Indemnified Party's performance or non-performance of any duties under
this Agreement. 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 by 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.
(13)(b) 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, claim, 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 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 the paragraph above of this section.
(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.
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(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: Pacific Investment Management Company LLC
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, 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) Concurrently with the execution of this Agreement,
the Fund Manager is delivering to the Adviser a copy of Part II of its Form ADV,
as revised, on file with the Securities and Exchange Commission. The Adviser
acknowledges receipt of such copy.
(19) The Fund Manager is expressly authorized to rely upon
any and all instructions, approvals and notices given on behalf of the Fund by
any one or more of those persons designated as representatives of the Total
Return Fund whose names, titles and specimen signatures appear in Exhibit A
attached hereto. The Adviser may amend such Exhibit A from time to time by
written notice to the Fund Manager. The Fund Manager shall continue to rely upon
these instructions until notified by the Adviser to the contrary.
(20) 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.
(21) This Agreement constitutes the entire agreement
between the Fund Manager, the Adviser and the Fund relating to the Total Return
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.
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
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
ATTEST: /s/ XXXXX X. XXXXXXXXXX By: /s/ XXXXXXX R BENZ
-------------------------- --------------------------------------
Assistant Secretary Xxxxxxx X. Benz, II
Managing Director
