1
SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
Enterprise Accumulation Trust
-------------------------------------------------------------------------------
(Name of Registrant As Specified In Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number,
2
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
3
-Enterprise Group of Funds LOGO-
--------------------------------------------------------------------------------
September 20, 2001
Dear Contractholder:
We are pleased to enclose an information statement about a matter affecting
one of the portfolios of Enterprise Accumulation Trust ("EAT"): the High-Yield
Bond Portfolio (the "Portfolio"). The matter concerns a change in ownership of
Caywood-Scholl Capital Management, the investment subadviser (the "Portfolio
Manager") to the Portfolio.
On July 23, 2001, Allianz AG acquired substantially all of the outstanding
shares of capital stock of Dresder Bank AG, the ultimate parent of the Portfolio
Manager (the "Transaction"). The Transaction closed on July 23, 2001 and
resulted in a change in control of the Portfolio Manager.
As a result of the change in ownership, the Portfolio Manager's Agreement
with respect to the High-Yield Bond Portfolio terminated automatically as a
matter of law. The Board of Trustees of EAT, acting pursuant to an exemptive
order granted by the Securities and Exchange Commission, approved a new
Portfolio Manager's Agreement with the Portfolio Manager, effective as of July
23, 2001.
The management fees paid by the Portfolio to the Portfolio Manager will not
change as a result of the new Portfolio Manager's Agreement. The terms of the
new Portfolio Manager's Agreement with the Portfolio Manager are substantially
the same as the terms of the prior agreement in all material respects. The
management fees paid to and the services provided by the Portfolio Manager will
not change.
These materials are provided to you for your information. YOU ARE NOT BEING
ASKED TO VOTE OR OTHERWISE RESPOND TO THIS MAILING.
We encourage you to read the attached information statement, which more
fully describes the Transaction and the Board of Trustees' approval of the new
Portfolio Manager's Agreement. We look forward to working with Caywood-Scholl
Capital Management to assist you in working toward your investment goals. Thank
you for your continued support.
Sincerely,
/s/ VICTOR UGOLYN
Victor Ugolyn
Chairman, President, and Chief Executive Officer
4
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO
ATLANTA FINANCIAL CENTER
3343 PEACHTREE ROAD, N.E., SUITE 450
ATLANTA, GA 30326-1022
---------------------
INFORMATION STATEMENT
---------------------
SEPTEMBER 20, 2001
This information statement is being provided to the contractholders of the
High-Yield Bond Portfolio (the "Portfolio") of Enterprise Accumulation Trust
("EAT") to inform contractholders of the Portfolio about the implementation of a
new subadvisory agreement with their existing subadviser, Caywood-Scholl Capital
Management ("Caywood-Scholl"). This information statement is provided in lieu of
a proxy statement, pursuant to the terms of an exemptive order that EAT and its
investment adviser, Enterprise Capital Management, Inc. ("Enterprise Capital"),
received from the Securities and Exchange Commission (the "SEC"). The order
permits Enterprise Capital to appoint new subadvisers (each a "Portfolio
Manager") and to make changes to existing subadvisory agreements with the
approval of EAT's Board of Trustees (the "Board" or the "Trustees"), but without
obtaining contractholder approval. WE ARE NOT ASKING YOU FOR A PROXY, AND YOU
ARE REQUESTED NOT TO SEND US A PROXY.
This information statement will be mailed on or about September 20, 2001.
The cost of this information statement will be paid by Caywood-Scholl or its
affiliates.
Shares of beneficial interest ("Shares") of EAT are presently sold to MONY
Life Insurance Company ("MONY") and its affiliate, MONY Life Insurance Company
of America ("MONY America") for allocation to variable accounts established by
MONY and MONY America (collectively, the "Variable Accounts") to provide
benefits to contractholders ("Contractholders") of variable annuity and variable
life insurance contracts ("Contracts") issued by those companies.
As of September 20, 2001, MONY and MONY America owned all of the
outstanding Shares of EAT. Although shares held in the Variable Accounts
generally will be voted in accordance with instructions received from
Contractholders, if voting were required, EAT might nevertheless be deemed to be
controlled by MONY and MONY America by virtue of the definition of "control"
contained in the Investment Company Act of 1940, as amended ("1940 Act"). MONY
and MONY America disclaim such control.
As of September 1, 2001, there were 7,603,591 shares outstanding of the
Portfolio.
EAT REPORTS
Contractholders can find out more about the Portfolio in EAT's most recent
annual and semi-annual reports, which have been furnished to contractholders.
Contractholders may request another copy of these reports without charge by
writing to The MONY Group Inc., 1740 Broadway, New York, New York 10019, or by
calling 800-432-4320.
1
5
INTRODUCTION
The Portfolio is an investment portfolio of EAT, a Massachusetts business
trust. Enterprise Capital, located at Atlanta Financial Center, 3343 Peachtree
Road, N.E., Suite 450, Atlanta, Georgia 30326-1022, serves as investment adviser
to the Fund. EGF is a party to an investment advisory agreement with Enterprise
Capital, dated July 1, 1999 (the "Advisory Agreement") The Advisory Agreement
was last submitted to a shareholder vote on November 18, 1994. Enterprise
Capital is a wholly-owned subsidiary of MONY Life Insurance Company, which in
turn is wholly-owned by The MONY Group Inc. Enterprise Fund Distributors, Inc.
is EGF's principal underwriter, and its address is 3343 Peachtree Road N.E.,
Suite 450, Atlanta, Georgia 30326-1022. Enterprise Capital also provides
investment advisory services to the Enterprise Group of Funds, Inc. ("EGF"). The
High-Yield Bond Fund of EGF has an identical investment objective to the
High-Yield Bond Portfolio of EAT.
Caywood-Scholl, located at 4350 Executive Drive, Suite 125, San Diego, CA
92121, has served as Portfolio Manager to the Portfolio since November 18, 1994,
pursuant to an investment subadvisory agreement with the Portfolio (the
"Portfolio Manager's Agreement"). Caywood-Scholl is a wholly-owned subsidiary of
Dresdner RCM Global Investors US Holdings LLC, Four Embarcadero Center, San
Francisco, CA 94111 ("US Holdings"). US Holdings in turn is wholly-owned by
Dresdner Bank AG, 60301 Frankfurt/Main, Germany ("Dresdner Bank").
Caywood-Scholl is not affiliated with Enterprise Capital or EAT other than by
reason of serving as a Portfolio Manager to the Portfolio.
Caywood-Scholl recently underwent a "change of control" as a result of the
consummation of the transaction described below (the "Transaction"), resulting
in the assignment (as that term is defined in the 1940 Act) and, therefore,
automatic termination of the Portfolio Manager's Agreements. In light of this,
the Board, at the request of Enterprise Capital, considered and approved new
investment subadvisory agreements on June 22, 2001, among Enterprise Capital,
Caywood-Scholl and EAT with terms that are substantially identical to the
Portfolio Manager's Agreement (the "New Portfolio Manager's Agreement"). The New
Portfolio Manager's Agreement took effect on July 23, 2001.
As a matter of regulatory compliance, we need to send you this information
statement, which describes the recent transaction and the terms of the New
Portfolio Manager's Agreement that EAT's Directors have approved.
INFORMATION ABOUT THE TRANSACTION
All information in this information statement about the Transaction has
been provided to EAT by Caywood-Scholl.
DESCRIPTION OF THE TRANSACTION
On July 23, 2001, Allianz AG ("Allianz") acquired substantially all of the
outstanding shares of capital stock of Dresdner Bank, the ultimate parent of
Caywood-Scholl. As a result of the transaction, Allianz AG now has more than $1
trillion in assets under management.
DESCRIPTION OF ALLIANZ AG AND ITS AFFILIATES
The following is a description of Allianz, which is not affiliated with
Enterprise Capital or EAT other than by reason of Caywood-Scholl serving as
Portfolio Manager of the Portfolio.
2
6
Allianz owns substantially all of the outstanding shares of capital stock
of Dresdner Bank, which wholly owns US Holdings. US Holdings, a registered
investment adviser, in turn wholly owns Caywood-Scholl.
Allianz's principal executive offices are located at Koeniginstrasse 28,
D-80802, Munich, Germany. Allianz acts as a reinsurance company and a holding
company for the Allianz Group, which is one of the world's leading financial
service providers, offering insurance and asset management products and services
through property-casualty insurance, life and health insurance, and financial
services business segments. Allianz engages in financial services operations
through over 850 subsidiaries with approximately 120,000 employees in more than
70 countries around the world. Allianz had total assets at December 31, 2000 of
$371.9 billion (440.0 billion Euros), net income for the year ended December 31,
2000 of $2.9 billion (3.5 billion Euros) and total income for the year ended
December 31, 2000 of $65.0 billion (76.9 billion Euros).
DESCRIPTION OF CAYWOOD-SCHOLL
Caywood-Scholl is registered as an investment adviser with the SEC and is
wholly owned by US Holdings. Caywood-Scholl, which together with its
predecessors has been in operation since 1986, is actively engaged in providing
investment management and investment advisory services to institutions,
collective investment vehicles (including mutual funds), and individual clients.
The elements of such services may include one or more of the following: 1)
Assisting the client in the development and subsequent modification of
appropriate investment objectives, guidelines, and restrictions; 2) Determining
an appropriate investment strategy, consistent with the investment objectives,
guidelines, and restrictions established by the client, and reviewing and
modifying such strategy through meetings and consultations with the client or
its agents from time to time; 3) Implementing the investment strategy through
purchase and sale of securities and/or other financial instruments, the exercise
of options, warrants, and subscription rights, and the investment and re-
investment of cash balances for the client's account; 4) Providing information
and instructions to the custodian (or trustee) of the client's account so that
transactions for the account are settled in an accurate and timely manner, and
reconciling its records with those of the custodian (or trustee) on a periodic
basis; 5) Monitoring the individual instruments held in the account so that the
individual instruments and the overall portfolio remain consistent with the
investment strategy for the account as well as the client's investment
objectives, guidelines, and restrictions; 6) Valuing securities and other
financial instruments held in the portfolio; 7) Evaluating proxy statements and
proposed corporate actions, providing advice related to proxy voting and voting
proxies; and 8) Furnishing reports to the client on a periodic basis concerning
account activity and performance. As of December 31, 2000, Caywood-Scholl had
assets under management of approximately $1.5 billion.
3
7
EAT pays Enterprise Capital an investment advisory fee at an annual rate of
0.60% of the average daily net assets of the Portfolio. For fiscal year 2000,
EAT paid Enterprise Capital $573,162 for its investment advisor services
regarding the Portfolio. As compensation for the services it renders,
Caywood-Scholl receives a monthly fee from Enterprise Capital, at no additional
cost to EAT, computed at the annual rate based on average of the daily closing
net asset value of the Portfolio advised by Caywood-Scholl during such month, as
set forth in the table below. The table also sets forth the aggregate
subadvisory fees paid to Caywood-Scholl during the Portfolio's fiscal year ended
December 31, 2000.
<Table>
<Caption>
FUNDS FEE RATE AGGREGATE SUBADVISORY FEES
High-Yield Bond Fund Annual rate of 0.30% of the $285,952
average daily net assets of
the Fund advised by Caywood-
Scholl for the first
$100,000,000; annual rate of
0.25% of the average daily
net assets of the Fund
advised by Caywood-Scholl
for over $100,000,000
</Table>
Information about the directors and principal executive officer of
Caywood-Scholl is set forth below. Unless otherwise stated, the principal
occupation of each person listed below is his or her position with
Caywood-Scholl. Unless otherwise indicated, the address of each person listed
below is the principal office of Caywood-Scholl set forth above.
James R. Caywood CFA -- Vice Chairman, Managing Director, Chief Executive
Officer and Chief Investment Officer (born in 1941).
Eric K. Scholl -- President, Managing Director and Portfolio Manager.
Salim Shah, CFA -- Director and Portfolio Manager.
Thomas W. Saake -- Director and Portfolio Manager.
Luke D. Knecht, CFA -- Chairman. Principal occupation is Head of the Fixed
Income Management Group and Director of Fixed Income Research at Dresdner RCM
Global Investors LLC.
John L. Bernard -- Director. Principal Occupation is Managing Director and
Fixed Income Portfolio Manager at Dresdner RCM Global Investors LLC.
Dora Fong -- Director. Principal Occupation is Director of Finance at
Dresdner RCM Global Investors LLC.
Richard L. Argyle, CFA -- Director and Portfolio Manager.
James A. Magdlen, CFA -- Director and Portfolio Manager.
Thomas W. Saake -- Director and Portfolio Manager.
Caywood-Scholl does not act as an investment adviser with respect to any
other fund having a similar investment objective to the Portfolio.
4
8
Caywood-Scholl is not affiliated with any broker/dealers and therefore no
brokerage commissions have been paid to an affiliated broker/dealer of
Caywood-Scholl.
THE AGREEMENT
THE PORTFOLIO MANAGER'S AGREEMENT
Caywood-Scholl has served as Portfolio Manager of the Portfolio since
inception of the Portfolio on November 18, 1994.
Under the terms of the Portfolio Manager's Agreement, Caywood-Scholl is
responsible for making investment decisions and placing orders for the purchase
and sale of the Fund's investments directly with the issuers or with brokers or
dealers selected by it at its discretion. Caywood-Scholl also furnishes the
Board, which has overall responsibility for the business and affairs of the
Portfolio, periodic reports on the investment performance of the Portfolio.
Caywood-Scholl is obligated to manage the Portfolio in accordance with
applicable laws and regulations. The investment advisory services of
Caywood-Scholl to the Portfolio are not exclusive under the terms of the
Portfolio Manager's Agreement. Caywood-Scholl is free to, and does, render
investment advisory services to others.
Consistent with the requirements of the 1940 Act, the Portfolio Manager's
Agreement provides that Caywood-Scholl generally is not liable to the Portfolio
for any mistake of judgment, act or omission in the course of, or connected
with, the services to be rendered by Caywood-Scholl under the Portfolio
Manager's Agreement, or otherwise, except by reason of willful misfeasance, bad
faith or gross negligence in the performance of Caywood-Scholl's duties or by
reason of its reckless disregard of its obligations and duties under the
Portfolio Manager's Agreement.
The Portfolio Manager's Agreement may be terminated by EAT without penalty
upon 30 days' written notice to Enterprise Capital and Caywood-Scholl at any
time, by vote of the Board or by a vote of the holders of a majority of the
Portfolio's outstanding shares voting as a single class. Enterprise Capital may
terminate the Portfolio Manager's Agreement without penalty by 30 days written
notice to Caywood-Scholl and Caywood-Scholl may terminate the Portfolio
Manager's Agreement without penalty by 30 days written notice to Enterprise
Capital. As noted above, the Portfolio Manager's Agreement terminates
automatically in the event of its "assignment" (as defined in the 1940 Act),
unless an order is issued by the SEC conditionally or unconditionally exempting
such assignment from the provision of Section 15(a) of the 1940 Act, in which
event the Portfolio Manager's Agreement will remain in full force and effect.
THE NEW PORTFOLIO MANAGER'S AGREEMENTS
The New Portfolio Manager's Agreement is substantially identical to the
Portfolio Manager's Agreement, and the fees payable to Caywood-Scholl will not
change. A form of the New Portfolio Manager's Agreement is attached to this
information statement as Appendix A. As noted previously, Caywood-Scholl does
not anticipate that the transaction will cause any reduction in the quality or
types of services now provided to the Portfolio or have an adverse effect on
Caywood-Scholl's ability to fulfill its obligations to the Portfolio or EAT.
There has been no change in the investment philosophies and practices followed
by the Fund. There is no change in subadvisory fees for the Portfolio.
Caywood-Scholl has advised the Portfolio and EAT that it currently anticipates
that the same persons responsible for management of the Portfolio under the
5
9
Portfolio Manager's Agreement will continue to be responsible for management of
the Portfolio under the New Portfolio Manager's Agreement.
On June 22, 2001, the New Portfolio Manager's Agreement was approved
unanimously by the Board, including all of the Directors who are not parties to
the New Portfolio Manager's Agreement or "interested persons" (as defined in the
1940 Act) of any such party (other than as Directors of EAT).
The New Portfolio Manager's Agreement will remain in effect for one year
from the date it took effect and, unless earlier terminated, will continue from
year to year with respect to the fund thereafter, provided that such continuance
is approved annually, with respect to the Portfolio (i) by the Board or by the
vote of a majority of the outstanding voting securities of the Portfolio, and,
in either case, (ii) by a majority of the Directors who are not parties to the
New Portfolio Manager's Agreement or "interested persons" (as defined in the
1940 Act) of any such party (other than as Directors of EAT).
EVALUATION BY THE BOARD OF TRUSTEES
The Board has determined that, in approving the New Portfolio Manager's
Agreement on behalf of the Portfolio, the Portfolio can best assure that
services provided to the Portfolio by Caywood-Scholl, its officers and
employees, will continue without interruption after the Transaction. The Board
believed that, like the Portfolio Manager's Agreement, the New Portfolio
Manager's Agreement enables the Portfolio to obtain high quality services at a
cost that is appropriate, reasonable, and in the best interests of the Portfolio
and its Contractholders.
In determining whether it was appropriate to approve the New Portfolio
Manager's Agreement, the Board, including the Trustees who are not parties to
the New Portfolio Manager's Agreement or "interested persons" (as defined in the
1940 Act) of such parties, considered various materials and representations
provided by Caywood-Scholl, including information concerning the continued
employment of senior management and investment professionals by Caywood-Scholl
after the Transaction.
Information considered by the Trustees included, among other things, the
following: (1) Caywood-Scholl's representation that the same persons responsible
for management of the Portfolio currently are expected to continue to manage the
Portfolio under the New Portfolio Manager's Agreement, thus helping to ensure
continuity of management; (2) the compensation to be received by Caywood-Scholl
under the New Portfolio Manager's Agreement is the same as the compensation paid
under the corresponding Portfolio Manager's Agreement, which the Board
previously has determined to be fair and reasonable; (3) the commonality of the
terms and provisions of the New Portfolio Manager's Agreement with the terms of
the corresponding Portfolio Manager's Agreement; (4) the nature and quality of
the services rendered by Caywood-Scholl under the Portfolio Manager's Agreement;
(5) the results achieved by Caywood-Scholl for the Portfolio; and (6) the high
quality of the personnel, operations, financial condition, investment management
capabilities, methodologies, and performance of Caywood-Scholl.
After consideration of the above factors, and such other factors and
information it considered relevant, the Board unanimously approved the New
Portfolio Manager's Agreement.
6
10
SHAREHOLDER INFORMATION
To the knowledge of EAT, as of September 1, 2001, no single person or
"group" (as such term is used in Section 13(d) of the Securities Exchange Act of
1934, as amended), had the power to direct the vote of more than 5% of the
outstanding shares of the Fund. As of the same date, the Trustees and officers
of EGF, individually and as a group, owned beneficially or of record, less than
one percent of the Portfolio's outstanding shares.
By Order of the Board of Trustees,
/s/CATHERINE R. MCCLELLAN
Catherine R. McClellan
Secretary
7
11
APPENDIX A
HIGH YIELD BOND PORTFOLIO
OF
ENTERPRISE ACCUMULATION TRUST
---------------------
PORTFOLIO MANAGER'S AGREEMENT
---------------------
THIS AGREEMENT, made the day of , 2001, 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 Caywood-Scholl Capital Management, a Delaware limited
liability, Dresdner RCM Global Investors LLC Company (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 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 (the "Portfolios"), 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 of the Fund.
(B) The parties hereto wish to enter into an agreement whereby the
Portfolio Manager will provide to the High Yield Bond Portfolio of the Fund (the
"High Yield Portfolio") securities investment advisory services for that Fund.
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 High Yield 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 High Yield Portfolio
advice with respect to the investment and reinvestment of the assets of the
High Yield Portfolio, or such portion of the assets of the High Yield
Portfolio as the Adviser shall specify from time to time, in accordance
with the investment objectives, restrictions and limitations applicable to
the High Yield Portfolio which are set forth in the Fund's most recent
Registration Statement.
(3) The Portfolio Manager shall perform a monthly reconciliation of
the High Yield 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.
A-1
12
(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 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
(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 High Yield
Portfolio managed by the Portfolio Manager during such month (that is, 0.30
of 1% per year) for the first $100,000,000 of assets under management; and
a sum equal to 0.0208 of 1% of the average of the daily closing net asset
value of the High Yield Portfolio during such month (that is, 0.25 of 1%
per year) for assets 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
High Yield Portfolio 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 High Yield Portfolio or the Adviser or
to any shareholder or shareholders of the Fund, the High Yield 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 High Yield Portfolio from taking, at any time, a
short position in any shares of any holdings of the High Yield Portfolio
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 Portfolio Manager
also will cooperate with the Fund in adopting a written policy prohibiting
insider trading with respect to High Yield 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 High Yield Portfolio, the Portfolio
Manager is authorized to select the brokers or dealers that will execute
purchase and sale transactions for the High Yield 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
A-2
13
securities for the High Yield Portfolio. Subject to this primary
requirement, and maintaining as its first consideration the benefits for
the High Yield Portfolio and its shareholders, the Portfolio Manager shall
have the right, subject to the approval of the Board of Trustees of the
Portfolio and of the Adviser, to follow a policy of selecting brokers and
dealers who furnish statistical research and other services to the High
Yield 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 the Portfolios.
(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 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 June 22, 2002, 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 Trustees 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, 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 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 Trustees 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 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
A-3
14
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.
(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.
(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 Portfolio Manager:
James R. Caywood
Managing Director and Chief Executive Officer
Caywood-Scholl Capital Management, Dresdner RCM Global Investors LLC
Company
4350 Executive Drive, Suite 125
San Diego, CA 92121
by the Adviser:
Enterprise Capital Management, Inc.
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022
by the Portfolio:
The Enterprise Group of Funds, Inc. c/o Enterprise Capital
Management, Inc.
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022
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 High Yield
Portfolio.
A-4
15
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.
<Table>
ENTERPRISE ACCUMULATION TRUST
ATTEST: /s/ CATHERINE MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------------------- -------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
ENTERPRISE CAPITAL MANAGEMENT, INC.
ATTEST: /s/ CATHERINE MCCLELLAN By: /s/ VICTOR UGOLYN
--------------------------------------- -------------------------------------------
Secretary Victor Ugolyn, Chairman, President
and Chief Executive Officer
CAYWOOD-SCHOLL CAPITAL MANAGEMENT, DRESDNER RCM
GLOBAL INVESTORS LLC COMPANY
ATTEST: /s/ SALIM SHAH By: /s/ JAMES R. CAYWOOD
--------------------------------------- -------------------------------------------
Secretary
</Table>
A-5
16
ENTERPRISE ACCUMULATION TRUST ENVELOPE