GATEWAY FUND
MANAGEMENT AGREEMENT
THIS AGREEMENT made as of the 1st day of January, 2006, 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 9, 1998; and
WHEREAS, the current investment advisory contract will automatically
terminate upon the exercise of an option to purchase certain shares of the
general partner of the Adviser; and
WHEREAS, the Trust and the Adviser desire to enter into a new investment
advisory contract to permit the Adviser to continue to serve the Fund as
investment adviser.
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
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.
(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 Funds' 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
1.5% 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, 2006.
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 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 theaction 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.
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
Xxxxxxxx Xxxxx, Xxxxx 000, 0000 Xxxxxxx Xxxx, Xxxxxxxxxx XX, 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
/s/Xxxxxx X. Xxxx
By
Xxxxxx X. Xxxx
Chairman
ATTEST:
/s/Xxxxx X. Xxxxxx By
Xxxxx X. Xxxxxx
Secretary
GATEWAY INVESTMENT ADVISERS, L.P.
BY GATEWAY INVESTMENT ADVISERS, INC.,
GENERAL PARTNER
/s/ J. Xxxxxxx Xxxxxx
By
J. Xxxxxxx Xxxxxx
President
ATTEST:
/s/Xxxxx X. Xxxxxx
By
Xxxxx X. Xxxxxx
Secretary
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