MANAGEMENT CONTRACT
AGREEMENT, made this 26 day of May, 1997 by and between Bridgeway
Fund, Inc., a Maryland corporation (hereinafter called the "Fund"),
and Bridgeway Capital Management, Inc., a Texas corporation
(hereinafter sometimes called the "Adviser").
WITNESSETH:
WHEREAS the Fund and the Adviser wish to enter into an agreement
setting forth the terms on which the Adviser will perform certain
services for the Fund;
NOW THEREFORE, in consideration of the premises and the covenants
contained hereinafter, the Fund and the Adviser agree as follows:
1. The Fund hereby employs the Adviser to manage the investment
and reinvestment of the assets of the Ultra-Small Index Portfolio and
the Ultra-Large 35 Index Portfolio and to administer its affairs,
subject to the supervision of the Board of Directors of the Fund, for
the period and on the terms in this agreement set forth. The Adviser
hereby accepts such employment and agrees during such period, at its
own expense, to render the services and to assume the obligations
herein set forth, for the compensation herein provided. The Adviser
shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any
way or otherwise be deemed as agent of the Fund.
2. The Adviser, at its own expense, shall furnish to the Fund
office space in the offices of the Adviser or in such other place as
may be agreed upon from time to time, and all necessary office
facilities, equipment and personnel (with the exception of
bookkeeping, auditing, state registration, and accounting personnel)
for managing the affairs and investments and keeping the Fund's
records and shall arrange, if desired by the Fund, for members of the
Adviser's organization or its affiliates to serve without salaries
from the Fund as officers or agents of the Fund. The Adviser assumes
and shall pay or reimburse the Fund for: (1) the compensation (if
any) of the directors of the Fund who are interested persons of the
Adviser, and the compensation of the officers of the Fund as such
(with the exception of the Chief Financial Officer, Accounting Officer
or Treasurer), and (2) all expenses incurred by the Adviser or by the
Fund in connection with the management of the investment and
reinvestment of the assets of the Fund and the administration of the
affairs of the Fund, other than those specifically assumed by the Fund
herein.
Except as otherwise expressly provided above, the Fund assumes
and shall pay all expenses of the Fund, including, without limitation:
(1) the charges and expenses of any custodian or depository appointed
by the Fund for the safekeeping of its cash, securities and other
property, (2) the charges and expenses of bookkeeping personnel,
auditors, and accountants, computer services and record keeping, (3)
the charges and expenses of any transfer agents and registrars
appointed by the Fund, (4) brokers' commissions and issue and transfer
taxes chargeable to the Fund in connection with securities
transactions to which the Fund is a party, (5) all taxes and corporate
fees payable by the Fund to federal, state or other government
agencies, (6) the cost of stock certificates (if any) representing
shares of the Fund, (7) fees and expenses involved in registering and
maintaining registrations of the Fund and of its shares with the
Securities and Exchange Commission and qualifying its shares under
state or other securities laws, including the preparation and printing
of prospectuses used for these purposes and for shareholders of the
Fund, (8) all expenses of shareholders' and directors' meetings and of
preparing and printing reports to shareholders, (9) charges and
expenses of legal counsel for the Fund in connection with legal
matters relating to the Fund, including without limitation, legal
services rendered in connection with the Fund's corporate existence,
corporate and financial structure and relations with its shareholders,
registrations and qualifications of securities under federal, state
and other laws, issues of securities and expenses which the Fund has
herein assumed, (10) compensation of directors who are not interested
persons of the Adviser, (11) interest expense, (12) insurance expense,
and (13) association membership dues.
The services of the Adviser to the Fund hereunder are not to be
deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services hereunder be not impaired
thereby.
3. As compensation for its services rendered and the charges and
expenses assumed and to be paid by the Adviser as described above,
pays the Adviser a base fee computed and payable on or promptly after
the last market day of each month at the following annual rate:
.5% of the value of the Ultra-Small Index Portfolio's
average daily net assets and
.08% of the value of the Ultra-Large 35 Index Portfolio.
For purposes of calculating such fee, average daily net assets
shall be computed by adding the total asset values less liabilities of
each Portfolio as computed by the Adviser each day (during the month
and dividing the resulting total by the number of days in the month).
Expenses and fees of each Portfolio, including the advisory fee, will
be accrued daily and taken into account in determining net asset
value. For any period less than a full month during which this
agreement is in effect, the fee shall be prorated according to the
proportion which such period bears to a full month.
4. The Fund shall cause its books and accounts to be audited at
least once each year by a reputable, independent public accountant or
organization of public accountants who shall render a report to the
Fund.
5. Subject to and in accordance with the Articles of
Incorporation of the Fund and of the Certificate of Incorporation of
the Adviser, respectively, it is understood that directors, officers,
agents and stockholders of the Fund are or may be interested in the
Adviser (or any successor thereof) as directors, officers or
stockholders, or otherwise, that directors, officers, agents and
stockholders of the Adviser are or may be interested in the Fund as
directors, officers, stockholders or otherwise, that the Adviser (or
any such successor) is or may be interested in the Fund as stockholder
or otherwise and that the effect of any such adverse interests shall
be governed by said Articles of Incorporation and Certificate of
Incorporation, respectively.
6. This agreement shall continue in effect until June 30, 1997
and thereafter from year to year if its continuance after said date is
specifically approved on or before said date and at least annually
thereafter by vote of a majority of the outstanding voting securities
of the Fund or by the Board or Directors of the Fund, and in addition
thereto by a majority of the Directors of the Fund who are not parties
to the agreement or interested persons of the Adviser or affiliated
with any such party except as directors of the Fund, provided,
however, that: (1) this agreement may at any time be terminated
without the payment of any penalty either by vote of the Board of
Directors of the Fund or by vote of a majority of the outstanding
voting securities of the Fund, on sixty days' written notice to the
Adviser, (2) this agreement shall immediately terminate in the event
of its assignment (within the meaning of the federal Investment
Company Act of 1940), and (3) this agreement may be terminated by the
Adviser on ninety days' written notice to the Fund. Any notice under
this agreement shall be given in writing, addressed and delivered, or
mailed postpaid, to the other party at any office of such party.
7. This agreement may be amended at any time by mutual consent
of the parties, provided that such consent on the part of the Fund
shall have been approved by vote of a majority of the outstanding
voting securities of the Fund.
IN WITNESS WHEREOF the parties have hereto executed this
agreement on the day and year first above written.
BRIDGEWAY FUND, INC.
By: _______________________
President
BRIDGEWAY CAPITAL MANAGEMENT, INC.
By: _______________________
President