EXHIBIT 7
QUANTITATIVE ADVISORS, INC.
---------------------------
MANAGEMENT CONTRACT
-------------------
Management Contract ("Contract") dated as of January 31, 1999, between
QUANTITATIVE GROUP OF FUNDS, a Massachusetts business trust (the "Fund") and
QUANTITATIVE ADVISORS, INC., a Massachusetts corporation (the "Manager").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) Subject always to the control of the trustees (the "Trustees") of the
Fund, the Manager, will, at its expense, manage, supervise and conduct
the affairs and business of the Fund and matters incidental thereto.
In the performance of its duties, the Manager will comply with the
provisions of the Agreement and Declaration of Trust and By-Laws of
the Fund, as amended, and its stated investment objectives, policies
and restrictions as set forth in the then current Prospectus and/or
Statement of Additional Information of the Fund, and will use its best
efforts to safeguard and promote the welfare of the Fund and to comply
with other written policies which the Trustees may from time-to-time
determine and of which the Manager has received notice, and shall
exercise the same care and diligence expected of the Trustees. In its
management, supervision and conduct of the Fund's affairs and
business, the Manager will do all things necessary so that each series
of the Fund (the "Series") may qualify as a "regulated investment
company" within the meaning of the Internal Revenue Code of 1986, as
amended (the "Code"), and the Rules and Regulations thereunder.
(b) Subject to the provisions of the Declaration of Trust and the
Investment Company Act of 1940, as amended, (the "1940 Act"), the
Manager may, at its expense, select and contract with investment
advisers (the "Advisers") for each of the Series and shall supervise
any such Adviser. The Manager will compensate the Advisers for their
services to the Fund from the fee paid to the Manager by the Fund
pursuant to this Management Contract or from other funds available to
the Manager.
(c) The Fund hereby agrees with the Manager and with any Adviser selected
by the Manger as provided in Section 1(b) hereof that any entity or
person associated with the Manager which is a member of a national
securities exchange is authorized to effect any transaction on such
exchange for the account of the Fund and any Series thereof which is
permitted by Section 11(a) of the Securities Exchange Act of 1934 and
Rule 11a2-2(T) thereunder, and the Fund hereby consents to the
retention of compensation for such transactions in accordance with
Rule 11a2-2(T)(2)(iv).
(d) Except to the extent that any such facilities are provided for any
Series by its Adviser, the Manager, at its expense, will furnish (1)
all necessary investment and management facilities, including salaries
of personnel, required for it to execute its duties faithfully, (2)
suitable office space for the Fund; and (3) administrative facilities,
including bookkeeping, clerical personnel and equipment necessary for
the efficient conduct of the affairs of the Fund, but excluding
shareholder accounting services. The Manager will pay the
compensation, if any, of the officers of the Fund.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, partner, director, officer or
employee of, or be otherwise interested in, the Manager, and in any person
controlled by or under common control with the Manager, and that the Manager and
any person controlled by or under common control with the Manager may have an
interest in the Fund. It is also understood that the Manager and persons
controlled by or under common control with the Manager have and may have
advisory, management, service or other contracts with other organizations
(including other investment companies and other managed accounts) and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager, as compensation for the Manager's
services rendered, for the facilities furnished, and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate for each Series set forth in Schedule I. Such fee computed with
respect to the net asset value of each of such Series shall be paid from the
assets of such Series. Such aggregate average daily net asset value of the
Series shall be determined by taking an average of all the determinations of
such net asset value during such month at the close of business on each business
day, and for non-business days, the net asset value determined on the previous
business day, during such month while this Contract is in effect. Such fee shall
be payable for each month within 30 days after the end of each month.
In the event that the expenses of the Quantitative Small Cap Fund,
Quantitative Growth and Income Fund, or Quantitative International Equity Fund
exceed 2% of such Series' average net assets, the compensation due the Manager
with respect to such Series for such year shall be reduced and, if necessary,
the Manager shall assume expenses of the Series, to the extent required to
reduce the Series' expenses to 2% of average net assets. Series expenses subject
to this limitation are exclusive of brokerage, interest, taxes and extraordinary
expenses, if any and shall be calculated before giving effect to any custody
credits.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS TO
THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
as to any Series unless such amendment is approved at a meeting by an
affirmative vote of a majority of the outstanding shares of the Series, and by
the vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Fund who are not interested
persons of the Fund or of the Manager or of the Advisors.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall remain
in full force and effect as to each Series continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this Contract as to any
Series or as to the Fund as a whole by not more than sixty days' nor less than
thirty days' written notice delivered or mailed by registered mail, postage
prepaid, to the other party, or
(b) If (i) the Trustees of the Fund, or the shareholders by the affirmative
vote of a majority of the outstanding shares of any Series, and (ii) a majority
of the Trustees of the Fund who are not interested persons of the Fund or of the
Manager, by vote cast in person at a meeting called for the purpose of voting on
such approval, do not specifically approve at least annually the continuance of
this Contract, then this Contract shall automatically terminate as to such
Series at the close of business on the second anniversary of the effective date
hereof or the expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the continuance of
this Contract is submitted to the shareholders of a Series for their approval
and such shareholders fail to approve such continuance of this Contract as
provided herein, the Manager may continue to serve hereunder in a manner
consistent with the 1940 Act and the Rules and Regulations thereunder.
Action by the Fund under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the one or more Series affected.
Termination of this Contract pursuant to this Section 5 shall be without
the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund or the Series, as the case may be, present (in person or by proxy) and
entitled to vote at such meeting, if the holders of more than 50% of the
outstanding shares of the Fund or the Series, as the case may be, entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund or the Series, as the case
may be, entitled to vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the 1940 Act and the Rules and Regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission ("SEC") under said Act; the term "specifically approve at
least annually" shall be construed in a manner consistent with the 1940 Act and
the Rules and Regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Manager, its partners, officers, directors, employees or agents or
reckless disregard of the Manager's obligations and duties hereunder, neither
the Manager nor its officers, directors, employees or agents shall be subject to
any liability to the Fund, or to any shareholder of the Fund, for any act or
omission in the course of, or connected with, rendering services hereunder,
provided however, that such limitation shall not apply to the extent such
limitation violates Federal securities or other laws.
8. LIMITS OF THE LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Fund is on file
with the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Fund as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund.
IN WITNESS WHEREOF, QUANTITATIVE GROUP OF FUNDS and QUANTITATIVE ADVISORS,
INC. have each caused this instrument to be signed in duplicate in its behalf,
all as of the day and year first above written.
QUANTITATIVE GROUP OF FUNDS
By___________________________
Xxxxxxx X. Xxxxxxx
President
QUANTITATIVE ADVISORS, INC.
By__________________________
Xxxxxxx X. Xxxxxxx
President
Schedule I to
Management Contract dated as of January 31, 1999
between Quantitative Group of Funds and Quantitative Advisors, Inc.
Management Fee (as a
Series Percentage of Net Assets)
------ -------------------------
Quantitative Small Cap Fund 1.00%
Quantitative Mid Cap Fund 0.80%
Quantitative Growth and Income Fund 0.75%
Quantitative International Equity Fund 1.00%
Quantitative Emerging Markets Fund 0.80%
Quantitative Foreign Value Fund 1.00%
