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Exhibit 5(d)
GATEWAY FUND
MANAGEMENT AGREEMENT
THIS AGREEMENT made as of the ____ day of ____________, 1998, by and
between THE GATEWAY TRUST, an Ohio business trust (the "Trust"), and GATEWAY
INVESTMENT ADVISERS, L.P., a Delaware limited partnership (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"Act"), the shares of beneficial interest (the "Shares") of which are registered
under the Securities Act of 1933; and
WHEREAS, the Trust is authorized to issue Shares in separate series
with each such series representing the interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust offers Shares in a series known as the Gateway Fund
(the "Fund"); and
WHEREAS, the Adviser is currently providing investment advisory and
management services to the Fund pursuant to an investment advisory contract
dated December 15, 1995; and
WHEREAS, the Trust and the Adviser desire to revise the compensation
and allocation of expenses with respect to the Adviser's provision of investment
advisory and management services to the Fund.
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. The Adviser shall act as investment manager for the Fund and
shall, in such capacity, supervise the investment and
reinvestment of the cash, securities, or other properties
comprising the assets of the Fund, subject at all times to the
policies applicable to the Fund and to the control of the Board
of Trustees of the Trust. The Adviser shall give the Trust the
benefit of its best judgment, efforts, and facilities in
rendering its services as investment manager.
2. In carrying out its obligations under paragraph 1 hereof, the
Adviser shall:
(a) obtain and evaluate pertinent information about significant
developments and economic, statistical, and financial data,
domestic, foreign, or otherwise, whether affecting the Fund
or the economy generally, and whether concerning the
individual companies whose securities or options therefore
are included in the Fund or the industries in which they
engage, or with respect to other securities or options
therefore which the Adviser considers desirable for
inclusion in the Fund;
(b) determine what industries and companies shall be represented
in the Fund and regularly report them to the Board of
Trustees of the Trust;
(c) formulate and implement programs for the purchases and sales
of any securities or options and regularly report thereon to
the Board of Trustees of the Trust;
(d) place all orders for the purchase and sale of investments
for the Fund, including the purchase and/or sale of options
and the effecting of closing purchase transactions, for the
Fund's account
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with brokers or dealers selected by the Adviser. In the
selection of such brokers or dealers and the placing of such
orders, the Adviser shall always seek best execution, which
is to execute the Fund's transactions where the most
favorable combination of price and execution services in
particular transactions can be obtained or provided on a
continuing basis or with respect to individual transactions
by a broker or dealer, and to deal directly with a principal
market maker in connection with over-the-counter
transactions, except when it is believed that best execution
is obtainable elsewhere. Subject to such policies as the
Board of Trustees may determine, the Adviser shall not be
deemed to have acted unlawfully or to have breached any duty
created by this Agreement, or otherwise, solely by reason of
its having either (i) dealt with an affiliate of the
Adviser, or (ii) caused the Fund to pay a broker or dealer
that provides brokerage, research, and statistical services
to the Adviser an amount of commission for effecting a
portfolio investment transaction, including the sale of an
option or a closing purchase transaction, in excess of the
amount of commission another broker or dealer would have
charged for effecting that transaction, if the Adviser
determines in good faith and in the best interest of the
Fund that (x) the commission and other expenses of any such
affiliate are comparable to the commission and other
expenses charged by unaffiliated brokers and dealers, and
(y) such amount of commission was reasonable in relation to
the value of the brokerage and research services provided by
such broker or dealer, viewed in terms of either that
particular transaction or its overall responsibilities with
respect to the Fund and to any other of its clients as to
which it exercises investment discretion;
(e) present a written report to the Board of Trustees of the
Trust at least quarterly indicating total brokerage
expenses, actual or imputed, as well as the services
obtained in consideration for such expenses; and
(f) take, on behalf of the Fund, all actions which appear to the
Adviser necessary to carry into effect such purchase and
sale programs and supervisory functions as aforesaid.
3. Any investment program undertaken by the Adviser pursuant to this
Agreement, as well as any other activities undertaken by the
Adviser on behalf of the Fund pursuant thereto, shall at all
times be subject to any directives of the Board of Trustees of
the Trust.
4. In carrying out its obligations under this Agreement, the Adviser
shall at all times conform to:
(a) all applicable provisions of the Act and any rules and
regulations adopted thereunder;
(b) the provisions of the Agreement and Declaration of Trust of
the Trust, as amended from time to time;
(c) the provisions of the By-Laws of the Trust, as amended from
time to time;
(d) the provisions of the Registration Statements of the Trust
under the Securities Act of 1933 and the Act, as amended
from time to time; and
(e) any other applicable provision of state or federal law.
5. (a) The Adviser, at its sole expense, shall provide the Trust
with (i) investment recommendations regarding the Fund's
investments; (ii) office space, secretarial, clerical, and
other office help, telephones, securities valuations, and
other office equipment; and (iii) the services of all
officers of the Trust.
(b) The Adviser shall bear all (i) expenses incurred in
connection with association membership dues, except the
annual dues of the Trust for its membership in the
Investment Company Institute, which shall be paid by the
Trust; (ii) expenses of printing and distributing all Fund
registration statements, prospectuses and reports to current
Fund shareholders; (iii) costs of printing and transmitting
reports to governmental agencies; and (iv) printing and
mailing costs.
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(c) Except as set forth above, the Trust has agreed to pay all
its operating expenses, including without limitation the
expenses of continuing the Trust's existence; the expenses
of trustees not employed by the Adviser; expenses incurred
by the Fund pursuant to the Fund's Distribution Plan;
expenses of registering or qualifying the Trust or its
shares under federal and various state laws and maintaining
and updating such registrations and qualifications on a
current basis; interest expenses, taxes, fees, and
commissions of every kind; expenses of issue, including cost
of share certificates; repurchases and redemption of shares;
charges and expenses of custodians, transfer agents, fund
accountants, shareholder servicing agents, dividend
disbursing agents, and registrars; expenses of valuing
shares of each Fund; auditing, accounting, and legal
expenses; expenses of shareholder meetings and proxy
solicitations therefore; insurance expenses; membership fees
of the Investment Company Institute; and all "extraordinary
expenses" as may arise, including all losses and liabilities
in administrating the Trust; expenses incurred in connection
with litigation proceedings and claims and the legal
obligations of the Trust to indemnify its officers,
trustees, and agents with respect thereto. A majority of the
Board of Trustees of the Trust and a majority of the
trustees who are not parties to this agreement (except as a
trustee of the Trust), voting separately, shall determine
which expenses shall be characterized as "extraordinary
expenses." The expenses to be borne by the Trust under this
subparagraph shall be determined by the Board of Trustees of
the Trust.
(d) All ordinary business expenses of the Trust shall be borne
by the Trust unless subparagraph 5(a) or 5(b) hereof
specifically provides otherwise.
6. The Trust will pay the Adviser, as full compensation for services
rendered hereunder, a daily fee computed at (a) the annual rate
of 0.925% of the average value of the daily net assets of the
Fund; minus (b) the amount of the Fund's expenses incurred
pursuant to its Distribution Plan. If the Adviser is providing
transfer agency, fund accounting, and other services pursuant to
the Services Agreement with the Trust dated January 1, 1998, the
Adviser shall receive no compensation for such services during
the term of this Agreement.
7. If, for any fiscal year, the total of all expenses of the Fund
(including compensation paid to the Adviser but excluding taxes,
interest, brokerage commissions, and "extraordinary expenses" as
determined in accordance with subparagraph 5(c) hereof) would
exceed 1.50% of the average daily net asset value of the Fund,
the Adviser will bear any such excess expenses. Every month the
investment advisory fee with respect to the Fund will be
determined and the Fund's expenses projected. If the Fund's
projected expenses are in excess of the expense limitation set
forth above, the investment advisory fee with respect to the Fund
paid to the Adviser will be reduced by the amount of the excess
expenses, subject to an annual adjustment at the end of the
Fund's fiscal year; provided, however, that if such amount of
reduction should exceed such monthly investment advisory fee, the
Adviser will repay to the Fund such portion of its investment
advisory fee previously received with respect to such fiscal year
as may be required to make up the deficiency.
Any reimbursement with respect to the Fund pursuant to the
expense limitations set forth in this paragraph 7 will be limited
on an annual basis to compensation received by the Adviser from
the Fund pursuant to this Agreement.
8. The Trust shall at all times keep the Adviser fully informed with
regard to the securities owned by the Fund, the funds available
or to become available to the Fund for investment, and generally
as to the condition of the Fund's affairs. It shall furnish the
Adviser with a copy of all financial statements certified by its
financial officer, and a signed copy of each financial statement
audited by certified public accountants with respect to it.
9. This contract shall become effective on January 1, 1999. It shall
remain in effect, subject to paragraph 10(a) hereof, for a
period of two years, and thereafter, provided that its
continuance for the
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Fund for each renewal year is specifically approved, in advance,
(i) by the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities (as defined in
Section 2(a)(42) of the Act) of the Fund, and (ii) by vote of a
majority of the trustees who are not parties to this Agreement
or interested persons of a party to this Agreement (other than as
trustees of the Trust), by votes cast in person at a meeting
specifically called for such purpose; provided, however, that if
the continuation of this Agreement is not approved for the Fund,
the Adviser may continue to serve in such capacity for the Fund
in the manner and to the extent permitted by the Act and the
rules and regulations thereunder.
10. (a) This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Board of Trustees of
the Trust or by vote of the holders of a majority of the
outstanding voting securities of the Fund, or by the
Adviser, on sixty days' written notice to the other party.
The notice provided for herein may be waived by either
party.
(b) In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not
be subject to liability to the Trust or to any shareholder
of the Fund for any act or omission in the course of, or
connected with, rendering services hereunder or for any
losses that may be sustained in the purchase, holding, or
sale of any security or other investment, except that
nothing under this paragraph shall be deemed to be a waiver
of any rights of the Trust or of any shareholder of the Fund
that may exist under the federal securities laws.
11. It is understood that the Adviser may perform investment advisory
services for various other clients, including investment
companies. The Adviser agrees to report to the Board of Trustees
(at regular quarterly meetings and at such other times as the
Board of Trustees reasonably shall request) (i) the financial
condition and prospects of the Adviser, (ii) the nature and
amount of transactions affecting the Fund that involve the
Adviser and affiliates of the Adviser, (iii) information
regarding any potential conflicts of interest arising by reason
of its continuing provision of advisory services to the Fund and
to its other accounts, and (iv) such other information as the
Board of Trustees shall reasonably request regarding the Fund,
the Fund's performance, the services provided by the Adviser to
the Fund as compared to its other accounts, and the plans and
capability of the Adviser with respect to providing future
services to the Fund and its other accounts. At least annually,
the Adviser shall report to the Trustees the total number and
type of such other accounts and the approximate total asset value
thereof (but not the identities of the beneficial owners of such
accounts). The Trust agrees that the Adviser may give advice and
take action with respect to any of its clients which may differ
from advice given or the timing or nature of the action taken
with respect to the Fund, so long as it is the Adviser's policy,
to the extent practicable, to allocate investment transactions
among the Fund and its other accounts, over a period of time, on
a fair and equitable basis. The Adviser agrees to submit to the
Trust a statement defining its policies with respect to the
allocation of business among the Fund and its other clients.
Broker/dealer affiliates of the Adviser may effect orders on
national securities exchanges for the Fund and may retain
compensation in connection with effecting such transactions, so
long as the Adviser furnishes the Board of Trustees, at least
annually, with a statement setting forth the total amount of all
compensation retained by such broker/dealer affiliates in
connection with effecting such transactions within the preceding
year for the Trust.
12. This Agreement may be amended from time to time by agreement of
the parties hereto provided that such amendment shall be approved
by the vote of a majority of trustees of the Trust, including a
majority of trustees who are not parties to this Agreement or
interested persons of any such party to this Agreement (other
than as trustees of the Trust), cast in person at a meeting
called for that purpose, and (if required under current
interpretations of the Act by the Securities and Exchange
Commission) by vote of the shareholders of the Fund.
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13. This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" for this purpose having the
meaning defined in Section 2(a)(4) of the Act.
14. All parties hereto are expressly put on notice of (i) The Gateway
Trust Agreement and Declaration of Trust, as amended, which is on
file with the Secretary of the State of Ohio, and (ii) the
limitation of shareholder and trustee liability contained therein
and in Chapter 1746 of the Ohio Revised Code. Notice is hereby
given that the obligations of this Agreement are not binding upon
any of the trustees, officers, or shareholders of the Trust
individually but are binding upon only the assets and property of
the Trust. With respect to any claim by the Adviser for recovery
of any portion of the investment management fee (or any other
liability of the Trust arising hereunder), whether in accordance
with the express terms hereof or otherwise, the Adviser shall
have recourse solely against the assets of the Fund to satisfy
such claim and shall have no recourse against the assets of any
other funds of the Trust for such purpose.
15. (a) This contract shall be construed in accordance with and
governed by applicable federal law and the laws of the State
of Ohio.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived
from a term or provision of the Act shall be resolved by
reference to such term or provision of the Act and to
interpretation thereof, if any, by the United States courts
or in the absence of any controlling decision of any such
court, by the Securities and Exchange Commission or its
staff. In addition, where the effect of a requirement of the
Act, reflected in any provision of this Agreement is revised
by rule, regulation, order, or interpretation of the
Securities and Exchange Commission, such provision shall be
deemed to incorporate the effect of such rule, regulation,
order, or interpretation.
16. Any notices under this Agreement shall be in writing addressed
and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such
notice. Until further notice to the other party, it is agreed
that the address of the Trust and that of the Adviser for this
purpose shall be 000 XxxxxxXxxxxx Xxxxx, Xxxxx 000, Xxxxxxx,
Xxxx, 00000.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate as of the day and year first above written.
THE GATEWAY TRUST
By:
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Xxxxxx X. Xxxx
Chairman
ATTEST:
By:
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Secretary
GATEWAY INVESTMENT ADVISERS, L.P.
BY: GATEWAY INVESTMENT ADVISERS, INC.
By:
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President
ATTEST:
By:
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Secretary
