FORM OF
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made this day of , 200 , by and between vanteq
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Investment Advisors, Inc. (the "Adviser"), a Delaware corporation, and WORKING
EQUITY FUNDS, a Massachusetts business trust (the "Fund").
W I T N E S S E T H :
WHEREAS, the Fund is a business trust organized under the laws of the
Commonwealth of Massachusetts; and
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as a non-diversified, open-end management
investment company, which currently has one series (the Working Equity S&P 500
Index Fund [the "Existing Portfolio"]) which is currently divided into shares
of a single class (the "Shares"), but which may be divided into additional
series each representing an interest in a separate portfolio of investments and
each of which such series may be divided into one or more classes (each such
series, including the Existing Portfolio, a "Portfolio"), and
WHEREAS, the Fund desires that the Adviser manage its operations and to
provide certain other services, and the Adviser desires to manage said
operations and to provide such other services;
NOW, THEREFORE, in consideration of these premises and of the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. INVESTMENT MANAGEMENT SERVICES. The Adviser hereby agrees to manage
the investment operations of the Fund's Portfolios, subject to the
terms of this Agreement and to the supervision of the Fund's
trustees (the "Trustees"). The Adviser agrees to perform, or arrange
for the performance of, the following specific services for the
Fund:
(a) to manage the investment and reinvestment of all the assets,
now or hereafter acquired, of the Fund's Portfolios, and to
execute all purchases and sales of portfolio securities;
(b) to maintain a continuous investment program for the Fund's
Portfolios, consistent with
(i) the Portfolios' investment policies as set forth
in the Fund's Declaration of Trust, Bylaws, and
Registration Statement, as from time to time
amended, under 1940 Act, and in any prospectuses
and/or statements of additional information of
the Fund, as from
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time to time amended and in use under the
Securities Act of 1933, as amended, and
(ii) the Fund's status as a regulated investment
company under the Internal Revenue Code of 1986,
as amended;
(c) to determine what securities are to be purchased or sold
for the Fund's Portfolios, unless otherwise directed by the
Trustees of the Fund, and to execute transactions
accordingly;
(d) to provide to the Fund's Portfolios the benefit of all of
the investment analyses and research, the reviews of current
economic conditions and of trends, and the consideration of
long-range investment policy now or hereafter generally
available to investment advisory customers of the Adviser;
(e) to determine what portion of the Fund's Portfolios should be
invested in the various types of securities authorized for
purchase by the Fund; and
(f) to make recommendations as to the manner in which voting
rights, rights to consent to Fund action and any other
rights pertaining to the Portfolios' securities shall be
exercised.
With respect to the foregoing services, the Adviser is
authorized, subject to the supervision of the Trustees, to
employ agents, including subadvisers registered as investment
advisers under the Investment Advisers Act of 1940, as amended.
With respect to execution of transactions for the Fund's
Portfolios, the Adviser, or any such subadviser, is authorized
to employ such brokers or dealers as may, in the applicable
adviser's best judgment, implement the policy of the Fund to
obtain prompt and reliable execution at the most favorable price
obtainable. In assigning an execution or negotiating the
commission to be paid therefor, each such adviser is authorized
to consider the full range and quality of a broker's services
which benefit the Fund, including but not limited to research
and analytical capabilities, reliability of performance, and
financial soundness and responsibility. Research services
prepared and furnished by brokers through which any such adviser
effects securities transactions on behalf of the Fund may be
used by the applicable adviser in servicing all of its accounts,
and not all such services may be used by the applicable adviser
in connection with the Fund. In the selection of a broker or
dealer for execution of any negotiated transaction, such adviser
shall have no duty or obligation to seek advance competitive
bidding for the most favorable negotiated commission rate for
such transaction, or to select any broker solely on the basis of
its purported or "posted" commission rate for such transaction,
provided, however, that such adviser shall consider such
"posted" commission rates, if any, together with any other
information available at the time as to the level of commissions
known to be charged on comparable transactions by other
qualified brokerage firms, as well as all other relevant factors
and circumstances, including the size of any contemporaneous
market in such securities, the
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importance to the Fund of speed, efficiency, and confidentiality
of execution, the execution capabilities required by the
circumstances of the particular transactions, and the apparent
knowledge or familiarity with sources from or to whom such
securities may be purchased or sold. Where the commission rate
reflects services, reliability and other relevant factors in
addition to the cost of execution, the Adviser shall have the
burden of demonstrating that such expenditures were bona fide
and for the benefit of the Fund.
2. OTHER SERVICES AND FACILITIES. The Adviser shall, in addition,
supply at its own expense all supervisory and administrative
services and facilities necessary in connection with the day-to-day
operations of the Fund. These services shall include, but not be
limited to: supplying the Fund with officers, clerical staff and
other employees, if any, who are necessary in connection with the
Fund's operations; furnishing office space, facilities, equipment,
and supplies; providing personnel and facilities required to respond
to inquiries related to shareholder accounts; conducting periodic
compliance reviews of the Fund's operations; preparation and review
of required documents, reports and filings, including the
prospectus, statement of additional information, proxy statements,
shareholder reports, tax returns, reports to the SEC, and other
corporate documents of the Fund, supplying basic telephone service
and other utilities; and preparing and maintaining the books and
records required to be prepared and maintained by the Fund pursuant
to Rule 31a-1(b)(4), (5), (9), and (10) under the 1940 Act. With
respect to the foregoing services, the Adviser is authorized,
subject to the supervision of the Trustees, to employ agents,
including Investors Bank & Trust Company, and such attorneys and
accountants as it deems necessary. All books and records prepared
and maintained by the Adviser for the Fund under this Agreement
shall be the property of the Fund and, upon request therefor, the
Adviser shall surrender to the Fund such of the books and records so
requested.
3. PAYMENT OF COSTS AND EXPENSES. The Adviser shall bear the costs and
expenses of all personnel, facilities, equipment and supplies
reasonably necessary to provide the services required to be provided
by the Adviser under this Agreement, [together with the following
expenses:
(a) the fees and expenses involved in maintaining the
registration and qualification of the Fund and of its shares
under laws administered by the Securities and Exchange
Commission or under other applicable regulatory
requirements;
(b) the compensation and expenses of any employees and officers
of the Fund who are not employees of the Adviser or one of
its affiliated companies and compensated as such;
(c) the costs of printing and distributing reports, notices of
shareholders' meetings, proxy statements, dividend notices,
prospectuses, statements of additional information and other
communications to the Fund's shareholders,
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as well as all expenses of shareholders' meetings and
Trustees' meetings, other than the compensation of the
independent Trustees;
(d) all costs, fees or other expenses arising in connection with
the organization and filing of the Fund's Declaration of
Trust, including its initial registration and qualification
under the 1940 Act and under the Securities Act of 1933, as
amended, the initial determination of its tax status and any
rulings obtained for this purpose, the initial registration
and qualification of its securities under the laws of any
state and the approval of the Fund's operations by any other
federal or state authority;
(e) the expenses of repurchasing and redeeming shares of the
Fund's Portfolios;
(f) insurance premiums;
(g) the costs of designing, printing, and issuing certificates
representing shares of beneficial interest of the Fund's
Portfolios;
(h) premiums for the fidelity bond maintained by the Fund
pursuant to Section 17(g) of the 1940 Act and rules
promulgated thereunder (except for such premiums as may be
allocated to third parties, as insured thereunder);
(i) the fees, charges and expenses of any custodian, depository,
dividend disbursing agent, dividend reinvestment agent,
transfer agent, registrar or independent pricing services;
(j) association and institute dues; and
(k) all fees paid by the Fund for administrative, recordkeeping,
and sub-accounting services.]
The Fund shall pay all of the costs and expenses associated with its operations
and activities, except those expressly assumed by the Adviser under this
Agreement, including but not limited to:
(a) all brokers' commissions, issue and transfer taxes, and
other costs chargeable to the Fund in connection with
securities transactions to which the Fund is a party or in
connection with securities owned by the Fund's Portfolios;
(b) the fees, charges and expenses of any independent public
accountants or legal counsel for the Fund;
(c) the interest on indebtedness, if any, incurred by the Fund;
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(d) the taxes, including franchise, income, issue, transfer,
business license, and other corporate fees payable by the
Fund to federal, state, county, city, or other governmental
agents;
(e) the compensation and expenses of its independent Trustees;
(f) extraordinary expenses, including fees and disbursements of
Fund counsel, in connection with litigation by or against
the Fund; and
(g) the expenses of distributing shares of the Fund but only if
and to the extent permissible under a plan of distribution
adopted by the Fund pursuant to Rule 12b-1 of the 1940 Act.
4. USE OF AFFILIATED COMPANIES. In connection with the rendering of the
services required to be provided by the Adviser under this
Agreement, the Adviser may, to the extent it deems appropriate and
subject to compliance with the requirements of applicable laws and
regulations, and upon receipt of written approval of the Fund, make
use of its affiliated companies and their employees; provided that
the Adviser shall supervise and remain fully responsible for all
such services in accordance with and to the extent provided by this
Agreement and that all costs and expenses associated with the
providing of services by any such companies or employees and
required by this Agreement to be borne by the Adviser shall be borne
by the Adviser or its affiliated companies.
5. COMPENSATION OF THE ADVISER. For the services to be rendered and the
charges and expenses to be assumed by the Adviser hereunder, the
Fund shall pay to the Adviser an advisory fee which will be computed
daily and paid as of the last day of each month, using for each
daily calculation the most recently determined net asset value of
each of the Fund's Portfolios, as determined by valuations made in
accordance with the Fund's procedures for calculating its net asset
value as described in the Fund's Prospectus and/or Statement of
Additional Information. The advisory fee to the Adviser shall be
computed at the following annual rate of 0.40% of the Fund's daily
average net assets. During any period when the determination of the
Fund's net asset value is suspended by the Trustees of the Fund, the
net asset value of a share of the Fund as of the last business day
prior to such suspension shall, for the purpose of this Paragraph 5,
be deemed to be the net asset value at the close of each succeeding
business day until it is again determined. The fee provided for
hereunder shall be prorated in any month in which this Agreement is
not in effect for the entire month. Interest, taxes and
extraordinary items such as litigation costs are not deemed expenses
for purposes of this paragraph and shall be borne by that Portfolio
in any event. Expenditures, including costs incurred in connection
with the purchase or sale of portfolio securities, which are
capitalized in accordance with generally accepted accounting
principles applicable to investment companies, are accounted for as
capital items and shall not be deemed to be expenses for purposes of
this paragraph.
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6. AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH LAWS. In
connection with purchases or sales of securities for the investment
portfolio of the Fund's Portfolios, neither the Adviser nor its
officers or employees will act as a principal or agent for any party
other than the Fund's Portfolios or receive any commissions. The
Adviser will comply with all applicable laws in acting hereunder
including, without limitation, the 1940 Act, the Investment Advisers
Act of 1940, as amended; and all rules and regulations duly
promulgated under the foregoing.
7. DURATION AND TERMINATION. This Agreement shall become effective as
of the date it is approved by a majority of the outstanding voting
securities of the Fund's Portfolios, and unless sooner terminated as
hereinafter provided, shall remain in force for an initial term
ending two years from the date of execution, and from year to year
thereafter, but only as long as such continuance is specifically
approved at least annually (i) by a vote of a majority of the
outstanding voting securities of the Fund's Portfolios or by the
Trustees of the Fund, and (ii) by a majority of the Trustees of the
Fund who are not interested persons of the Adviser or the Fund by
votes cast in person at a meeting called for the purpose of voting
on such approval. This Agreement may, on 60 days' prior written
notice, be terminated without the payment of any penalty, by the
Trustees of the Fund, or by the vote of a majority of the
outstanding voting securities of the Fund's Portfolios, as the case
may be, or by the Adviser. 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 1940 Act, in which event this Agreement shall
remain in full force and effect subject to the terms and provisions
of said order. In interpreting the provisions of this paragraph 7,
the definitions contained in Section 2(a) of the 1940 Act and the
applicable rules under the 1940 Act (particularly the definitions of
"interested person", "assignment" and "vote of a majority of the
outstanding voting securities") shall be applied. The Adviser agrees
to furnish to the Trustees of the Fund such information on an annual
basis as may reasonably be necessary to evaluate the terms of this
Agreement. Termination of this Agreement shall not affect the right
of the Adviser to receive payments on any unpaid balance of the
compensation described in paragraph 5 earned prior to such
termination.
8. NON-EXCLUSIVE SERVICES. The Adviser shall, during the term of this
Agreement, be entitled to render investment advisory services to
others, including, without limitation, other investment companies
with similar objectives to those of the Fund's Portfolios. The
Adviser may, when it deems such to be advisable, aggregate orders
for its other customers together with any securities of the same
type to be sold or purchased for the Fund's Portfolios in order to
obtain best execution and lower brokerage commissions. In such
event, the Adviser shall allocate the shares so purchased or sold,
as well as the expenses incurred in the transaction, in the manner
it considers to be most equitable and consistent with its fiduciary
obligations to the Fund's Portfolios and the Adviser's other
customers.
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9. MISCELLANEOUS PROVISIONS.
NOTICE. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
AMENDMENTS HEREOF. No provision of this Agreement may be orally
changed or discharged, but may only be modified by an instrument
in writing signed by the Fund and the Adviser. In addition, no
amendment to this Agreement shall be effective unless approved
by (1) the vote of a majority of the Trustees of the Fund,
including a majority of the Trustees 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 amendment,
and (2) the vote of a majority of the outstanding voting
securities of any of the Fund's Portfolios as to which such
amendment is applicable (other than an amendment which can be
effective without shareholder approval under applicable law).
SEVERABILITY. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held
illegal or made invalid by a court decision, statute, rule or
otherwise, such illegality or invalidity shall not affect the
validity or enforceability of the remainder of this Agreement.
HEADINGS. The headings in this Agreement are inserted for
convenience and identification only and are in no way intended
to describe, interpret, define or limit the size, extent or
intent of this Agreement or any provision hereof.
APPLICABLE LAW. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts. To the
extent that the applicable laws of the Commonwealth of
Massachusetts, or any of the provisions herein, conflict with
applicable provisions of the 1940 Act, the latter shall control.
IN WITNESS WHEREOF, the Adviser and the Fund each has caused this
Agreement to be duly executed on its behalf by an officer thereunto duly
authorized, on the date first above written.
WORKING EQUITY FUNDS.
By:
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Name:
Title: President
Attest:
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Name:
Title: Secretary
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vanteq INVESTMENT MANAGEMENT, INC.
By:
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Name:
Title: President
Attest:
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Name:
Title: Secretary
