EXHIBIT (d)(iii)
GROWTH AND INCOME FUND
OF
THE ENTERPRISE GROUP OF FUNDS, INC.
FUND MANAGER'S AGREEMENT
THIS AGREEMENT, made the 1st day of May 2003, 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 UBS Global Asset Management (Americas) Inc., a Delaware
corporation, (hereinafter referred to as the "Fund Manager").
BACKGROUND INFORMATION
(A) The Adviser has entered into an Investment Adviser's Agreement
dated as of May 1, 1993 with the Fund (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 Fund 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 Growth and Income Portfolio of the Fund (the
"Growth and Income 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 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 Growth and Income Fund
advice with respect to the investment and reinvestment of the assets of the
Growth and Income Fund, or such portion of the assets of the Growth and Income
Fund as the Adviser shall specify from time to time, in accordance with the
investment objectives, restrictions and limitations of the Fund as set forth in
the Fund's most recent Registration Statement.
(3) The Fund Manager shall maintain all books and records with
respect to the Growth and Income Fund's portfolio transactions required by
subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule
31a-1 under the Investment Company Act of 1940 ("▇▇▇ ▇▇▇▇ ▇▇▇") 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 Growth and Income Fund required by Rule 31a-1 under the
1940 Act. The Fund Manager agrees that all records that it maintains on behalf
of the Growth and Income Fund are property of the Growth and Income Fund and the
Fund Manager will surrender promptly to the Growth and Income Fund any of such
records upon the Growth and Income 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 Growth and Income
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 perform a monthly reconciliation of the
Fund 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.
(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 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 funds.
(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
funds, as set forth in the Fund's prospectus.
(7) (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 Growth and Income 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; a sum equal to 0.0208 of 1%
of the average of the daily closing net asset value of the Fund during such
month (that is, 0.25% per year) for the next $100,000,000; and a sum equal to
0.0167 of 1% of the average of the daily closing net asset value of the Growth
and Income Fund during such month (that is, 0.20 of 1% per year) for assets in
excess of $200,000,000.
(7) (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.
(7) (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 Growth and
Income Fund's shares.
(8) 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 Fund Manager purchases or sells securities of
the same issuer
2
on behalf of two or more advisory clients the available securities will be
allocated in a manner believed by the Fund Manager to be equitable to each
client.
(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 Fund Manager shall not be liable to
the Fund, the Fund or the Adviser or to any shareholder or shareholders of the
Fund, the 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.
(10) The Fund Manager represents that it has, in accordance with
Rule 17j-1 under the Investment Company Act of 1940 ("Investment Company Act"),
adopted a Code of Ethics that includes procedures designed to prevent investment
professionals, including those who are responsible for managing the portfolio of
the Growth and Income Fund, from engaging in any personal investing activity
that may operate to defraud Fund Managers' mutual fund clients.
(11) In connection with the management of the investment and
reinvestment of the assets of the Growth and Income Fund, the Fund Manager is
authorized to select the brokers or dealers that will execute purchase and sale
transactions for the Growth and Income 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 Fund securities for the Growth and Income
Fund. Subject to this primary requirement, and maintaining as its first
consideration the benefits for the Growth and Income Fund and its shareholders,
the Fund Manager shall have the right, subject to the oversight of the Board of
Directors of the Fund and of the Adviser, to follow a policy of selecting
brokers and dealers who furnish research and other services to the Growth and
Income 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.
(12) 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.
(13) Subject to prior termination as provided above, this Agreement
shall continue in force from the date of execution until May 1, 2004, 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.
(14) 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
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
3
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, 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 this
section.
(15) The Adviser agrees that no marketing materials that include a
reference to the Fund Manager will be used by the Adviser with respect to the
Fund unless first provided to the Adviser by the Fund Manager or unless the
Adviser has obtained the Fund Manager's prior written approval.
(16) Except as otherwise provided in paragraph 14 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.
(17) In the event of a change in control that results in an
assignment as defined by the Investment Company Act of 1940, the Fund Manager
agrees to notify the parties within a reasonable period of time.
(18) 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.
(19) 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:
UBS Global Asset Management (Americas) Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ Doberman,
Managing Director and General Counsel
by the Adviser: Enterprise Capital Management, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
by the Fund: The Enterprise Group of Funds, Inc. c/o Enterprise
Capital Management, Inc.
4
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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.
(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 Growth and Income Fund.
5
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized officers and attested, as of the date first above
written.
THE ENTERPRISE GROUP OF FUNDS, INC.
ATTEST: /s/ ▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------- --------------------------------------
Secretary ▇▇▇▇▇▇ ▇▇▇▇▇▇
Chairman, President & Chief Executive
Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
ATTEST: /s/ ▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------- --------------------------------------
Secretary ▇▇▇▇▇▇ ▇▇▇▇▇▇
Chairman, President & Chief Executive
Officer
UBS GLOBAL ASSET MANAGEMENT
(AMERICAS) INC.
ATTEST: /s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇ R DOBERMAN
------------------------- --------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇ ▇. Doberman
Title: Managing Director and General
Counsel
UBS GLOBAL ASSET MANAGEMENT
(AMERICAS) INC.
ATTEST: /s/ ▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ ▇▇
------------------------- --------------------------------------
Name: ▇▇▇▇ ▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇.
Title: Chief Financial Officer
6