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Exhibit (d)
GATEWAY FUND
MANAGEMENT AGREEMENT
THIS AGREEMENT made as of the 9th day of December, 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:
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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
trans-action, 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 para-graph 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: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Chairman
ATTEST:
By: /s/ Xxxxx X. Xxxxxx
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Secretary
GATEWAY INVESTMENT ADVISERS, L.P.
BY: GATEWAY INVESTMENT ADVISERS, INC.
By: /s/ J. Xxxxxxx Xxxxxx
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President
ATTEST:
By: /s/ Xxxxx X. Xxxxxx
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Secretary
