<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
THE GATEWAY TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
_____________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________
5) Total fee paid:
_____________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_____________________________________________________________
2) Form, Schedule or Registration Statement No.:
_____________________________________________________________
3) Filing Party:
_____________________________________________________________
4) Date Filed:
_____________________________________________________________
<PAGE> 2
THE GATEWAY TRUST
400 TECHNECENTER DRIVE, SUITE 220
MILFORD, OHIO 45150
October 24, 1998
Dear Shareholder:
Enclosed you will find a notice, proxy statement, and proxy card regarding a
Special Meeting of Shareholders of The Gateway Trust to be held on December 10,
1998.
This meeting has been called to address some important issues now facing the
Trust. Shareholders of all three funds will consider the following proposals:
- - Election of the Board of Trustees: I am pleased to say that all seven of
the current Trustees have agreed to continue to serve and will stand for
re-election. Two additional Trustees, portfolio manager J. Patrick Rogers,
and James E. Schwab, CEO of a Cincinnati area manufacturer, are also
nominated.
- - Ratification of Independent Accountants: The Board of Trustees requests
that you ratify their selection of Arthur Andersen LLP as independent
accountants to the Trust. Arthur Andersen has served the Trust in this
capacity since 1990.
- - Amendment to the Declaration of Trust: The Board of Trustees recommends
that the Declaration of Trust be changed to give the Board greater
flexibility with respect to future amendments.
ONLY SHAREHOLDERS OF THE GATEWAY FUND will consider approval of a Distribution
Plan and a new Management Agreement with the Fund's current investment adviser,
Gateway Investment Advisers, L.P. The Board of Trustees believes that the Fund's
interests will be best served by continued asset growth, and that the most
effective way to pursue these goals is expanded third-party distribution, which
is the objective of these proposals. The Board therefore recommends approval of
these proposals. We urge you to read the enclosed proxy statement carefully
where these issues are addressed at length. SHAREHOLDERS SHOULD BE AWARE THAT
THE FUND'S EXPENSE RATIO COMPARES VERY FAVORABLY TO ITS PEERS UNDER PRESENT
CIRCUMSTANCES, AND THAT THESE PROPOSALS WILL NOT RAISE EXPENSES.
Please review this proxy statement carefully. Then, at your earliest
convenience, mark and return the proxy card in the addressed, postage-paid
envelope provided. We urge you to exercise your voting rights by marking and
returning the proxy card. EVERY VOTE IS IMPORTANT.
Sincerely,
Walter G. Sall
Chairman
<PAGE> 3
THE GATEWAY TRUST
400 TechneCenter Drive / Suite 220 / Milford, Ohio 45150
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 10, 1998
To The Shareholders:
A special meeting of shareholders of The Gateway Trust (the "Trust"),
consisting of the Gateway Fund, the Gateway Small Cap Index Fund and the
Cincinnati Fund, will be held on December 10, 1998 at 9:00 a.m., Eastern Time,
at 400 TechneCenter Drive, Suite 220, Milford, Ohio 45150, for the purpose of
considering the following proposals, all as described in the accompanying proxy
statement:
1. To elect members of the Board of Trustees;
2. To ratify the selection of Arthur Andersen LLP as the
independent accountants for the Trust for each Fund's fiscal
year ending December 31, 1998;
3. To approve amendments to the Trust's Declaration of Trust;
To transact such other business as may properly come before the meeting
or any adjournment thereof; and
THE FOLLOWING PROPOSAL APPLIES TO THE GATEWAY FUND SHAREHOLDERS ONLY
(This proposal does not apply to the Cincinnati Fund or the Gateway
Small Cap Index Fund)
4. To approve new distribution and investment advisory
arrangements, which include:
a. Approval of a Distribution Plan pursuant to Rule
12b-1 of the Investment Company Act of 1940, as
amended; and
b. Approval of a new Management Agreement with Gateway
Investment Advisers, L.P., the Gateway Fund's current
investment adviser.
You are entitled to vote at the meeting and any adjournment thereof if
you owned shares of a Fund at the close of business on October 12, 1998. Whether
or not you plan to attend the meeting in person, you may vote by marking,
signing, dating, and returning the enclosed proxy card in the enclosed
postage-paid envelope, or over the Internet by connecting to www.proxyvote.com,
entering the 12 digit Control Number found on your proxy card, and following the
instructions.
By Order of the Board of Trustees
--------------------------
____________, 1998 Donna M. Squeri, Secretary
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. Please indicate your
voting instructions on the enclosed proxy card, date and sign the card, and
return it by fax or in the envelope provided. IF YOU SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE VOTED
"FOR" THE PROPOSALS LISTED ABOVE. In order to avoid the additional expense of
further solicitation, we ask your cooperation in mailing your proxy card
promptly. Unless proxy cards submitted by corporations and participants are
signed by the appropriate persons as indicated in the voting instructions on the
proxy card, they will not be voted.
<PAGE> 4
THE GATEWAY TRUST
400 TechneCenter Drive / Suite 220 / Milford, Ohio 45150
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 10, 1998
This proxy statement is being furnished to the shareholders of The
Gateway Trust (the "Trust"), consisting of the Gateway Fund, the Gateway Small
Cap Index Fund (the "Small Cap Fund") and the Cincinnati Fund (each, a "Fund"
and collectively, the "Funds"), in connection with a solicitation of proxies by
and on behalf of the Trust's Board of Trustees for use at a special meeting of
the shareholders of the Trust, to be held on December 10, 1998 at 9:00 a.m.,
Eastern Time, at 400 TechneCenter Drive, Suite 220, Milford, Ohio 45150, or any
adjournment or adjournments thereof (collectively, the "Meeting").
The persons named as proxies in the enclosed form of proxy will vote in
accordance with your direction when the form of proxy is returned properly
executed. If you sign, date, and return the form of proxy but give no voting
instructions, your shares will be voted:
1. FOR ALL FUNDS: For the election of members of the Board of
Trustees;
2. FOR ALL FUNDS: For the ratification of the selection of Arthur
Andersen LLP as the independent accountants for the Trust for
each Fund's fiscal year ending December 31, 1998;
3. FOR ALL FUNDS: For the approval of amendments to the Trust's
Declaration of Trust;
For all Funds, at the discretion of the holders of the proxy, on any
other business as may properly come before the meeting or any
adjournment thereof; and
4. FOR THE GATEWAY FUND SHAREHOLDERS ONLY: For the approval of
new distribution and investment advisory arrangements, which
include:
a. Approval of a Distribution Plan pursuant to Rule
12b-1 of the Investment Company Act of 1940, as
amended; and
b. Approval of a new Management Agreement with Gateway
Investment Advisers, L.P., the Gateway Fund's current
investment adviser (the "Adviser").
You may revoke your form of proxy by giving another proxy or by letter
directed to the Trust showing your name and account number. To be effective,
such revocation must be received prior to the Meeting. If you wish, you may
cancel any proxy previously given by attending the Meeting and voting by ballot
at the Meeting. The proxy statement, along with the Notice of Meeting and proxy
card(s) will first be mailed to shareholders on or about October 23, 1998.
As of the record date, October 12, 1998, the Trust had ____________
shares of beneficial interest outstanding, consisting of ________ shares of the
Gateway Fund, ________ shares of the Small Cap Fund, and _______ shares of the
Cincinnati Fund. [FirstCinco common trust fund, Cincinnati, Ohio, owned _____%,
and Up East, Inc., Chadds Ford, Pennsylvania owned ____% of the Cincinnati
Fund's outstanding shares as of the record date.] Management does not know of
any other person who owned beneficially 5% or more of a Fund's outstanding
shares on the record date. The solicitation of proxies will occur primarily by
mail but also may include telephone or oral communications by regular employees
of Gateway Investment Advisers, L.P. Shareholders of record on the record date
are entitled to one vote for each share held and fractional votes for fractional
shares held.
The presence in person or by proxy at the Meeting of the owners of
one-third of the shares entitled to vote is required for a quorum. If a quorum
is not present at the Meeting, or if a quorum is present at the Meeting but
sufficient votes to approve any of the proposals are not received, the persons
named as proxies may propose one or more adjournments of the Meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named
-1-
<PAGE> 5
as proxies will vote those proxies that they are entitled to vote FOR any such
proposal in favor of such adjournment, and will vote those proxies required to
be voted AGAINST any such proposal against such adjournment. A shareholder vote
may be taken on one or more of the proposals in this proxy statement prior to
any such adjournment if sufficient votes have been received and it is otherwise
appropriate.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote, and the broker does not have discretionary
voting authority. Abstentions and broker non-votes will be counted as shares
present for purposes of determining whether a quorum is present but will not be
voted for or against any adjournment or proposal. Accordingly, abstentions and
broker non-votes effectively will be a vote against adjournment and against any
proposal, because the required vote is a percentage of the shares present or
outstanding.
A COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER
31, 1997 AND SEMI-ANNUAL REPORT FOR THE PERIOD ENDED JUNE 30, 1998, CONTAINING
FINANCIAL AND OTHER INFORMATION, WILL BE FURNISHED WITHOUT CHARGE, TO ANY
SHAREHOLDER UPON REQUEST, BY THE GATEWAY TRUST, 400 TECHNECENTER DRIVE, SUITE
220, MILFORD, OHIO 45150, TELEPHONE NUMBER (800) 354-6339.
A shareholder receiving this proxy statement may hold shares in one or
more of the Funds. A separate proxy card with respect to each Fund of which a
shareholder owns shares accompanies this proxy statement. A shareholder may
execute proxies or vote at the Meeting with respect to all shares owned in each
of the Funds.
PROPOSAL 1 [X] FOR ALL FUNDS: ELECTION OF TRUSTEES
The Board of Trustees has decided to expand the size of the Board from
seven to nine and, accordingly, has nominated the nine individuals identified
below for election to the Board. The nine Trustees elected will constitute the
entire Board of Trustees. Each trustee will hold office until his or her
successor is selected and qualified, or until he or she sooner reaches the age
of 75, dies, resigns, or is removed. Unless you give contrary instructions in
the form of proxy, your proxy will be voted for the election of all nine
nominees. Each of the nominees has indicated a willingness to serve if elected.
If any of the nominees should withdraw or otherwise become unavailable for
election due to events not now known or anticipated, unless the Board reduces
the number of trusteeships, or you have withheld authority as to the election
of the Trustees, your proxies will be voted for such other nominee or nominees
as the Board may recommend.
Seven of the nominees are currently Trustees of the Trust; J. Patrick
Rogers and James E. Schwab are not. Mr. Rogers is currently the President of the
Trust and of the Adviser. Mr. Schwab is not affiliated with the Trust or the
Adviser. The nominees for election, their ages, a description of their positions
with the Trust and its predecessor, Gateway Option Income Fund, Inc. (the
"Company") and their principal occupations are listed in the table below.
<TABLE>
<CAPTION>
========================================== =================================================================================
NOMINEE BUSINESS EXPERIENCE; OTHER DIRECTORSHIPS
========================================== =================================================================================
<S> <C>
Walter G. Sall* Chairman and Trustee of the Trust; Chairman of the Adviser; various senior
Age: 53 management positions and offices held with the Trust, the Company, and the
Adviser since 1977.
========================================== =================================================================================
J. Patrick Rogers* President of the Trust since 1997; President of the Adviser since 1995;
Age: 34 portfolio manager of the Funds since 1997; co-portfolio manager of the Funds
from 1995 to 1997; various senior management positions and offices held
with the Trust and the Adviser since 1989.
========================================== =================================================================================
James M. Anderson Trustee of the Trust since April 1997; Children's Hospital Medical Center,
Age: 56 President and Chief Executive Officer since November 1996, Chairman of the
Board of Trustees from 1992 through 1996, and Trustee since 1979; Taft
Stettinius & Hollister (law firm), Partner from 1992 to November 1996; Access
Corporation,(______) Secretary from 1985 to 1996, Consultant from 1996 to 1997,
and Director 1997 to 1998; Cincinnati Stock Exchange, Trustee since 1978;
</TABLE>
-2-
<PAGE> 6
<TABLE>
<S> <C>
River City Insurance Limited, Director since 1991.
========================================== =================================================================================
Stefen F. Brueckner Trustee of the Trust since October 1992; Director, President, and Chief
Age: 49 Executive Officer, Anthem Companies, Inc. (health insurer) since 1995; Director
and President of Community Mutual Insurance Company (health insurer) since
1991, and various management positions since 1986 (Director of Anthem Health
and Life Insurance Company, Anthem Life Insurance Company, and various
other affiliates and subsidiaries).
========================================== =================================================================================
Kenneth A. Drucker Director of the Company from January 1984 to May 1986; Trustee of the Trust
Age: 53 since April 1986; Vice President and Treasurer, Sequa Corporation (gas turbine
and industrial equipment) since November 1987.
========================================== =================================================================================
Beverly J. Fertig Trustee of the Trust since September 1988; arbitrator, National Association of
Age: 68 Securities Dealers, Inc., since January 1992; Vice President, Marketing and
Communications, Coffee, Sugar and Cocoa Exchange from January 1989 to December 1991;
Executive Director, National Institutional Options and Futures Society, March 1988 to
December 1988; prior thereto, Vice President, Institutional Marketing, Chicago
Board Options Exchange.
========================================== =================================================================================
R.S. (Dick) Harrison Director of the Company from 1977 to 1982; Trustee of the Trust since April
Age: 66 1996; Director/Chairman of the Board, Baldwin Piano & Organ Company from 1994
to 1997; Chairman of the Board/CEO, Baldwin Piano & Organ Company from 1983 to
1994. Prior thereto, various management positions with Baldwin Piano & Organ
Company. Director of Sencorp and Anderson Bank of Cincinnati, OH and Trustee
of Kenyon College.
========================================== =================================================================================
William H. Schneebeck Director of the Company from September 1977 to May 1986; Trustee of the Trust
Age: 69 since April 1986; retired, formerly Chairman of Midwestern Fidelity Corporation
(a financial holding company).
========================================== =================================================================================
James E. Schwab President of XTEK, Inc. (a manufacturing company), from November 1995 to
Age: 55 present, Vice President of XTEK, Inc. from October 1994 to November 1995;
various executive positions with American Financial Corporation and its
affiliates from 1985 to 1994, including Senior Vice President of General Cable
Corporation from 1992 to 1994 and Senior Vice President of American Premier
Underwriters, Inc. from 1985 to 1988.
========================================== =================================================================================
<FN>
*MESSRS. SALL AND ROGERS ARE DEEMED TO BE "INTERESTED PERSONS" OF THE TRUST AS
THOSE TERMS ARE DEFINED IN THE 1940 ACT BECAUSE OF THEIR RESPECTIVE ASSOCIATIONS
WITH THE TRUST AND THE ADVISER.
</TABLE>
The shares of each Fund beneficially owned by each nominee, as of
October 12, 1998, is shown in the following table. For this purpose, "beneficial
ownership" is defined in the regulations under section 13(d) of the Securities
Exchange Act of 1934. The information is based on statements furnished to the
Trust by the nominees. Unless otherwise indicated, no trustee or officer
beneficially owned more than 1% of the shares outstanding of any Fund. As of
October 12, 1998, the officers and Trustees as a group beneficially owned __% of
the shares of the Gateway Fund, __% of the shares of the Gateway Small Cap Index
Fund, and __% of the shares of the Cincinnati Fund.
-3-
<PAGE> 7
<TABLE>
<CAPTION>
===========================================================================================================
GATEWAY FUND GATEWAY SMALL CAP CINCINNATI FUND
INDEX FUND
------------------------------------------------------------------------
NOMINEE SHARES PCT. OF FUND SHARES PCT. OF SHARES PCT. OF
FUND FUND
==========================================================================================================
<S> <C> <C> <C> <C>
Walter Gene Sall __% __% __%
- -----------------------------------------------------------------------------------------------------------
J. Patrick Rogers __% __% __%
- -----------------------------------------------------------------------------------------------------------
James M. Anderson __% __% __%
- -----------------------------------------------------------------------------------------------------------
Stefen F. Brueckner __% __% __%
- -----------------------------------------------------------------------------------------------------------
Kenneth A. Drucker __% __% __%
- -----------------------------------------------------------------------------------------------------------
Beverly J. Fertig __% __% __%
- -----------------------------------------------------------------------------------------------------------
R.S. (Dick) Harrison __% __% __%
- -----------------------------------------------------------------------------------------------------------
William Harding Schneebeck __% __% __%
- -----------------------------------------------------------------------------------------------------------
James E. Schwab __% __% __%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
COMMITTEES
The Board of Trustees has established three standing committees: an
Audit Committee, a Nominating Committee, and a Dividend Declaration Committee.
Messrs. Drucker (Chairman), Harrison and Schneebeck serve on the Audit
Committee. The functions of the Audit Committee include: reviewing the annual
financial statements of the Funds; recommending the engagement of the Funds'
independent accountants; reviewing the arrangements for and scope of the annual
audit; reviewing comments made by the independent accountants with respect to
internal controls and the considerations given or the corrective action taken by
management; and reviewing non-audit services provided by the independent
accountants.
Messrs. Drucker and Schneebeck serve on the Nominating Committee. The
Nominating Committee has, as its principal role, the consideration and
recommendation of individuals for nomination as Trustees.
The Dividend Declaration Committee is comprised of the Trust's
Chairman, and one member of the Trust's Audit Committee and one additional
member of the Board of Trustees, selected for each meeting by the Chairman. The
Committee has as its principal role the review, approval and authorization of
dividend payments.
For the fiscal year ended December 31, 1997, the Board of Trustees met
four times. During the same period, the Audit Committee met twice, the
Nominating Committee met once, and the Dividend Declaration Committee met four
times. No trustee attended fewer than 75% of the total number of Board meetings
or meetings of committees on which such trustee served.
Those Trustees who are not affiliated with the Adviser are paid (a) an
annual fee of $3,000; (b) a $500 base fee plus $100 per fund for each regular or
special meeting of the Board attended; (c) $200 per fund ($1,000 per fund for
the Chairman) for each Audit Committee meeting attended; and (d) $100 per fund
for each Nominating Committee meeting attended. Trustees are not compensated for
attending Dividend Declaration Committee meetings. The Trust also reimburses
each Trustee for any reasonable and necessary travel expenses incurred in
connection with attendance at such meetings.
COMPENSATION TABLE
-4-
<PAGE> 8
The following table provides certain information relating to the
compensation for each of the Trustees of the Trust for the fiscal year ended
December 31, 1997.
<TABLE>
<CAPTION>
============================ ===========================
NAME TOTAL COMPENSATION FROM
TRUST
============================ ===========================
<S> <C>
James M. Anderson $3,300
---------------------------- ---------------------------
Stefen F. Brueckner 6,600
---------------------------- ---------------------------
Kenneth A. Drucker 12,200
---------------------------- ---------------------------
Beverly J. Fertig 6,600
---------------------------- ---------------------------
R.S. Harrison 7,400
---------------------------- ---------------------------
Walter G. Sall 0
---------------------------- ---------------------------
William H. Schneebeck 8,100
---------------------------- ---------------------------
</TABLE>
OFFICERS
The principal occupations of the executive officers of the Trust who
are not Trustee nominees are as follows:
<TABLE>
<CAPTION>
============================ ===============================================================================================
EXECUTIVE OFFICERS BUSINESS EXPERIENCE; OTHER DIRECTORSHIPS
============================ ===============================================================================================
<S> <C>
Geoffrey Keenan Vice President of the Trust since April 1996; Chief Operating Officer, Gateway Investment
Age: 40 Advisers, L.P. since December 1995; Executive Vice President and Chief Operating Officer,
Gateway Investment Advisers, Inc. since 1995; Vice President, Gateway Investment Advisers,
Inc. from 1991 to 1995.
============================ ===============================================================================================
Paul R. Stewart Treasurer of the Trust since October 1995; Chief Financial Officer of the Adviser since 1996,
Age: 33 Controller of the Adviser from October 1995 to December 1996; Audit Manager and Senior, Price
Waterhouse LLP from September 1992 to 1995 and from
August 1988 to August 1991.
============================ ===============================================================================================
Donna M. Squeri Secretary of the Trust since October 1995; Secretary and General Counsel of the Adviser since
Age: 39 September 1995; in-house counsel of Bartlett & Co., a registered investment adviser, from
October 1984 to September 1993.
============================ ===============================================================================================
</TABLE>
The address of each of the above-listed persons is 400 TechneCenter
Dr., Suite 220, Milford, OH 45150. No executive officer of the Trust received
compensation from the Trust for his or her service as officer.
Trustees may be elected by a vote of the holders of a plurality of the
shares present, by person or by proxy, at the Meeting. Shares of each Fund shall
be voted as a single class for purposes of Proposal 1.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 1.
PROPOSAL 2 [X] FOR ALL FUNDS: RATIFICATION OF SELECTION OF INDEPENDENT
ACCOUNTANTS
Under this proposal, shareholders of the Trust are asked to ratify the
Board's selection of Arthur Andersen LLP as the Trust's independent accountants
("Auditors") for the fiscal year ending December 31, 1998. The Trust's Auditors
audit each Fund's financial statements for each year and review its federal and
state annual income tax returns. Arthur Andersen LLP has served as the Trust's
Auditors since 1990. The Board of Trustees unanimously selected Arthur Andersen
LLP based upon its industry experience, depth of expertise, and fees charged.
Representatives of Arthur Andersen LLP are not expected to be present
at the Meeting. If the selection is not ratified by the shareholders, the Board
will take such action as is necessary or appropriate in the best interests of
the Trust's shareholders subject to legal requirements.
-5-
<PAGE> 9
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 2.
PROPOSAL 3 [X] FOR ALL FUNDS: APPROVAL OF AMENDMENTS TO THE DECLARATION OF TRUST
The Declaration of Trust is the document that governs the operations of
the Trust. The Board of Trustees has proposed that the Declaration of Trust be
amended to revise certain requirements related to shareholder voting. The
proposed text of the Amendment to the Declaration of Trust is attached hereto as
Exhibit A.
The Declaration of Trust currently requires that, in most cases,
shareholders of each Fund vote separately on matters submitted for their
approval. The Funds vote in the aggregate only if the Investment Company Act of
1940 requires that all shareholders of the Trust vote in the aggregate. If the
Trustees determine that a matter does not affect all the Funds, only the Funds
affected vote. In most cases, this means that a majority of each Fund must
approve each matter separately in order to approve it for the Trust as a whole.
As a result, the shareholders of one Fund could defeat a proposal for the entire
Trust, even though the shareholders of that Fund represent only a small fraction
of all shareholders.
The Trustees have determined that the voting requirements of the Trust
would be more equitable if the decisions affecting the Trust as a whole were
decided by the shareholders as a whole. The proposed amendment would require
that, in most cases, shareholders of the Trust vote in the aggregate on matters
submitted for their approval. Funds would only vote separately if required by
the 1940 Act or if the Trustees determine that the matter does not affect all of
the Funds.
In addition, the Amendment to the Declaration of Trust would permit the
Trustees to further amend the Declaration of Trust without shareholder approval
if the amendment does not adversely affect the rights of any shareholder. There
are situations where changes in the mutual fund industry, the operations of the
Trust, the laws and regulations governing the Trust, or other changes in
circumstances make it necessary or desirable to amend the Declaration of Trust.
Allowing the Trustees to amend the Declaration of Trust would give the officers
and Trustees the ability to respond more effectively to such situations, without
burdening the shareholders with the substantial costs of a special shareholder
meeting.
Approval of Proposal 3 requires the affirmative vote of the holders of
a majority of the shares of each Fund entitled to vote at the Meeting. Shares of
each Fund shall be voted as a separate class for purposes of Proposal 3. The
Amendment to the Declaration of Trust would become effective upon adoption by
the shareholders. If it is not approved by the Trust's shareholders, the
Trustees will take such action as they deem necessary or appropriate in the best
interests of the Trust's shareholders subject to legal requirements.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 3.
PROPOSAL 4 [X} FOR THE GATEWAY FUND SHAREHOLDERS ONLY:
APPROVAL OF DISTRIBUTION PLAN AND NEW INVESTMENT ADVISORY CONTRACT
FOR THE GATEWAY FUND
Over the last three years, a substantial majority of the new
shareholders of the Gateway Fund have purchased the Fund through broker-dealers
and other third-party distribution channels. The Fund has been sold most
successfully through financial intermediaries who have been attracted to the
Fund's unique investment strategy, and who have been able to explain the
strategy and its benefits to their customers. As a result of the Fund's growth,
existing shareholders have benefited from a declining expense ratio. The Board
of Trustees believes that the Fund's interests will be served best by continued
asset growth, and that the most promising source of that growth is expanded
third-party distribution.
Under existing arrangements, third-parties have been compensated for
their sales efforts by the Adviser and not by the Fund. When such payments are
made by the Adviser to third-parties who actively solicit investments in the
Fund, the payments fall under provisions of the Investment Advisers Act of 1940
which impose paperwork and
-6-
<PAGE> 10
disclosure requirements in excess of common mutual fund industry sales
practices. These legal requirements have been a significant obstacle to the
establishment of additional distribution relationships for the Fund.
A mutual fund can pay its own distribution expenses under a
distribution plan which conforms to Rule 12b-1 of the Investment Company Act of
1940 (the "Distribution Plan"). Such plans have become common among mutual
funds. Distribution expenses paid under such plans do not require the additional
paperwork and disclosures to which Fund sales are subject under present
circumstances. The Trustees believe that a Distribution Plan would significantly
enhance the Fund's ability to expand distribution. Therefore, the Trustees are
recommending that the Gateway Fund adopt the proposed Distribution Plan.
In conjunction with the proposed Distribution Plan, the Trustees and
the Adviser have proposed that the Trust enter into a new investment advisory
contract with the Adviser (the "New Contract") for the Gateway Fund whereby the
Adviser will no longer pay the Fund's distribution expenses. However, the
Adviser's fee will be reduced by the amount of the Fund's distribution expenses
under the proposed Distribution Plan.
THIS REDUCTION OF THE PROPOSED MANAGEMENT FEE WILL OFFSET THE IMPACT
OF THE DISTRIBUTION PLAN ON THE FUND'S TOTAL EXPENSE RATIO. THE FUND'S
EXPENSE RATIO WILL NOT INCREASE AS A RESULT OF THE PLAN.
If the New Contract and Distribution Plan are approved, and current
asset levels are maintained, it is anticipated that current Gateway Fund
shareholders will be subject to total operating expenses, as a percentage of net
assets, substantially identical to those currently paid. The following table
compares the actual fees and expenses that the Gateway Fund incurred under the
Current Contract for the fiscal year ended December 31, 1997, to the fees and
estimated expenses under the New Contract had it been in effect during 1997. The
table also compares the Fund's projected fees and expenses under the Current
Contract with estimated fees and expenses under the New Contract for the year
ending December 31, 1998. All fees and expenses are expressed as a percentage of
average net assets.
<TABLE>
<CAPTION>
1997 1998
THE GATEWAY FUND Current Contract New Contract Current Contract New Contract
- --------------------------------- --------------------- -------------------- --------------------- --------------------
Management Fee 0.69% 0.74% 0.67% 0.68%
Distribution Expenses N/A 0.19% N/A 0.25%
Other Expenses 0.38% 0.11% 0.35% 0.09%
- --------------------------------- --------------------- -------------------- --------------------- --------------------
<S> <C> <C> <C> <C>
TOTAL OPERATING EXPENSES 1.07% 1.04% 1.02% 1.02%
</TABLE>
* Management fee under New Contract is calculated as 0.925% less Distribution
Expenses.
PROPOSAL 4a [X] APPROVAL OF DISTRIBUTION PLAN
On September 24, 1998, the Board of Trustees, by unanimous vote of both
the full Board and those Trustees who have no financial interest in the
Distribution Plan or any agreement related thereto (the "Qualified Trustees"),
approved the Distribution Plan. The following is a summary of the significant
provisions of the Distribution Plan, however this summary is qualified in its
entirety by reference to the Distribution Plan, which is attached hereto as
Exhibit B.
Under the Distribution Plan, the Trust may, directly or indirectly,
engage in any activities related to the distribution of shares of the Fund,
which activities may include, but are not limited to, the following: (a)
payments to securities dealers and others that are engaged in the sale of
shares, that may be advising shareholders of the Fund regarding the Fund, that
hold shares for shareholders in omnibus accounts or as shareholders of record,
or provide shareholder support or administrative services to the Fund and its
shareholders; (b) expenses of maintaining personnel who engage in or support
distribution; (c) costs of preparing, printing and distributing prospectuses and
statements of additional information and reports of the Fund for recipients
other than existing shareholders of the Fund; (d) costs of formulating and
implementing marketing and promotional activities; and (e) costs of preparing,
printing and distributing sales literature. The expenditures to be made by the
Trust pursuant to the Plan and the basis upon which payment of such expenditures
will be made is determined by the Trustees, but in no event may such
expenditures exceed in any fiscal year an amount calculated at the rate of 0.50%
of the average daily net asset value of the Fund.
-7-
<PAGE> 11
FACTORS CONSIDERED BY THE BOARD OF TRUSTEES.
Prior to approving the Distribution Plan, the Board of Trustees was
provided with detailed information relating thereto. Among other things, the
Trustees considered information relating to the merits of certain possible
alternatives to the Distribution Plan, the potential costs and benefits of the
Distribution Plan to shareholders, and the likelihood that the Distribution Plan
would succeed in producing its intended results.
In approving the Distribution Plan, the Trustees considered
management's analysis of the Fund's distribution system and discussed the
likelihood of retaining assets without a Distribution Plan, as well as the
likelihood of growth of the Fund without a Distribution Plan. The Trustees
discussed at length all the features of the distribution system of the Trust,
including (1) the current distribution expenses paid by the Adviser, (2)
management's belief that the Distribution Plan expenditures would be attractive
to the broker-dealers selling the Fund, resulting in greater growth of the Fund
than might otherwise be the case, (3) the advantages to the shareholders of
economies of scale resulting from growth in the Fund's assets and potential
continued growth, and (4) the Fund's estimated expenses and costs under the
Plan.
Following their consideration, the Trustees, including the Qualified
Trustees, concluded that the fees payable by the Fund under the Distribution
Plan were reasonable in view of the anticipated benefits of the Distribution
Plan. The Trustees, including a majority of the qualified Trustees, determined
that approval of the Distribution Plan would be in the best interests of the
Gateway Fund and would have a reasonable likelihood of benefiting the Fund and
its shareholders, once established. Accordingly, the Board of Trustees approved
the Distribution Plan.
ADDITIONAL INFORMATION REGARDING THE DISTRIBUTION PLAN.
The Distribution Plan also provides that (a) at least quarterly, the
Treasurer of the Trust will submit to the Board of Trustees, and the Trustees
will review, reports regarding all amounts expended under the Distribution Plan
and the purposes for which such expenditures were made, (b) the Distribution
Plan will continue in effect only so long as it is approved at least annually,
and any material amendment thereto is approved, by the Board of Trustees, as
well as by the Qualified Trustees, acting in person at a meeting called for that
purpose, (c) the maximum amount of expenses payable by the Fund under the
Distribution Plan shall not be increased without the affirmative vote of the
holders of a majority of the Fund's shareholders, and (d) while the Distribution
Plan remains in effect, the selection and nomination of Trustees who are not
"interested persons" of the Trust shall be committed to the discretion of the
Qualified Trustees.
If the proposed Distribution Plan is approved by the Fund's
shareholders, the Distribution Plan will take effect January 1, 1999 and remain
in effect for one year unless terminated prior thereto in accordance with its
terms. Thereafter it will continue in effect from year to year, so long as its
continuance is approved annually by a vote of the Trustees of the Trust,
including a majority of the Qualified Trustees, cast in person at a meeting
called for the purpose of voting on such continuance.
An affirmative vote of the holders of a majority of the outstanding
shares of the Fund is required for the approval of Proposal 4a. As defined in
the 1940 Act, a vote of the holders of a majority of the outstanding shares
means the vote of (i) 67% or more of the voting shares of the Fund present at
the Meeting, if the holders of more than 50% of the outstanding share are
present in person or represented by proxy, or (ii) more than 50% of the
outstanding voting shares, whichever is less. Approval of Proposal 4a is
contingent upon shareholder approval of Proposal 4b. If the proposed
Distribution Plan and Proposal 4b are not approved by the shareholders of the
Gateway Fund, the Board will take such action as is necessary or appropriate in
the best interest of the Fund's shareholders subject to legal requirements.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 4a.
PROPOSAL 4b [X] APPROVAL OF PROPOSED INVESTMENT ADVISORY CONTRACT
-8-
<PAGE> 12
CURRENT INVESTMENT ADVISORY CONTRACT
The current investment advisory contract between the Adviser and the
Trust for the Gateway Fund (the "Current Contract") was approved by shareholders
on December 11, 1995 and has been in effect since December 15, 1995. It was
submitted to shareholders for approval because the previous investment advisory
contract was automatically terminated when the Adviser was reorganized from a
corporation to a limited partnership and, as a result, ownership of the Adviser
changed.
Under the terms of the Current Contract, the Adviser provides
investment advisory and management services to the Gateway Fund. In providing
these services, the Adviser supervises 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. For these services, the Adviser receives a
monthly fee computed at an annual rate of: 0.90% of the first $50 million of the
average daily net asset value of the Fund; 0.70% of the average daily net asset
value of the Fund in excess of $50 million and up to $100 million; and 0.60% of
the average daily net asset value of the Fund in excess of $100 million.
The Adviser, at its sole expense, provides the Fund with (i) investment
recommendations regarding the Fund's investments; (ii) office space, including
secretarial, clerical and other office help, telephones, securities valuations,
and other office equipment; and (iii) the services of all officers of the Trust
(the "Advisory Expenses"). The Adviser also pays all expenses incurred in
connection with i) advertising and other marketing expenses in connection with
the sale of shares of the Gateway Fund and with the expense of printing and
distributing all the Trust's registration statements and related documents
regarding the Gateway Fund to prospective shareholders (the "Distribution
Expenses"); and ii) association membership dues, except the annual dues of the
Trust for its membership in the Investment Company Institute. Except for those
expenses, the Gateway Fund pays all other operating expenses of the Fund. Under
the Current Contract, the Adviser has agreed to reimburse the Trust if the
Gateway Fund's operating expenses (including compensation paid to the Adviser
but excluding taxes, interest, brokerage commissions and "extraordinary
expenses") exceed 1.5% of the average daily net asset value of the Gateway Fund.
Any expense reimbursement with respect to the Gateway Fund pursuant to this
expense limitation is limited on an annual basis to the compensation received by
the Adviser from the Gateway Fund pursuant to the Current Contract.
For the fiscal year ended December 31, 1997, the Adviser received
investment advisory fees of $1,530,637 from the Trust for its advisory services
to the Gateway Fund. In addition, the Adviser received $490,970 for its services
to the Gateway Fund as transfer agent, dividend paying agent, fund accountant
and shareholder services agent under the Services Agreement with the Trust (the
"Services Agreement"). These services will continue to be provided if the New
Contract is approved, but the Adviser will receive no compensation for its
services to the Gateway Fund under the Services Agreement.
NEW INVESTMENT ADVISORY CONTRACT
Under the terms of the New Contract, the Adviser will continue to
provide the same advisory and management services to the Fund. The following is
a summary of the significant differences between the Current Contract and the
New Contract; however this summary is qualified in its entirety by reference to
the New Contract, which is attached hereto as Exhibit C.
With respect to expenses:
- Under the New Contract the Adviser will continue to bear the cost
of all Advisory Expenses, and will continue to pay the
association membership dues currently paid.
- Under the New Contract the Adviser will also pay expenses of
printing and distributing all registration statements,
prospectuses, and reports to current shareholders, cost of
printing and transmitting reports to governmental agencies, and
printing and mailing costs. Under the Current Contract, these
expenses are borne by the Fund.
- Under the New Contract the Adviser will no longer pay the
Distribution Expenses. However, the Adviser's fee will be reduced
by the amount of the Fund's expenses under the Distribution Plan,
as described below.
-9-
<PAGE> 13
THIS REDUCTION OF THE MANAGEMENT FEE WILL OFFSET THE IMPACT OF THE
DISTRIBUTION PLAN ON THE FUND'S TOTAL EXPENSE RATIO. THE FUND'S EXPENSE
RATIO WILL NOT INCREASE AS A RESULT OF THE PLAN.
For its services, the Adviser will receive 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 New Contract and the Distribution Plan had been in
effect for the fiscal year ended December 31, 1997, the Adviser would have
received $1,639,731, or 0.74% of the Fund's average daily net assets, for its
advisory, management, and other services.
If the New Contract is approved by the Fund's shareholders, it will
take effect on January 1, 1999 and remain in effect for a period of two years.
Thereafter, it will continue in effect from year to year, if approved annually
by a vote of the Board and by a vote of the majority of the independent
Trustees.
MANAGEMENT OF THE ADVISER
The Adviser, a Delaware limited partnership, has acted as the
investment adviser for each series of the Trust since December 15, 1995. Gateway
Investment Advisers, Inc. ("GIA") provided investment advisory services to the
Trust from its formation in 1986 until December 15, 1995. The Adviser is the
successor in interest to the assets, business, and personnel of GIA. The Adviser
is a limited partnership in which GIA is the general partner with a 76%
partnership interest. The sole limited partner of the Adviser is Alex. Brown
Investments Incorporated, an affiliate of BT Alex. Brown Incorporated, a
nationally known investment banking firm and registered broker/dealer located in
Baltimore, Maryland. The Fund paid a total of $1,750 of brokerage commissions to
BT Alex. Brown Incorporated for the year ended December 31, 1997, which was
0.30% of the entire amount of commissions paid to all brokers by the Fund. The
principal and controlling shareholders of GIA are Walter G. Sall (Chairman of
the Adviser) and J. Patrick Rogers (President of the Adviser). Geoffrey Keenan
is the Chief Operating Officer, Paul R. Stewart is the Chief Financial Officer
and Donna M. Squeri is Secretary and General Counsel of the Adviser.
FACTORS CONSIDERED BY THE BOARD OF TRUSTEES
At their meeting on September 24, 1998, the Trustees, including all of
the independent Trustees, considered and unanimously approved the New Contract.
Senior management of the Adviser presented detailed information regarding the
revised fee structure of the New Contract and its likely impact on shareholders.
In considering the New Contract, the Trustees reviewed the services to be
provided by the Adviser, analyzing factors they deemed relevant, including (i)
the nature, quality, and scope of the services to be provided; (ii) the ability
of the Adviser to provide such services; and (iii) the reasonableness and
fairness of the proposed fees in relation to the services to the Gateway Fund.
The Trustees also reviewed the fees to be paid to the Adviser in light of (i)
the expenses of the Fund that would be paid by the Adviser, (ii) fees paid to
other investment managers by comparable funds, and (iii) fees paid by other
funds of the Trust.
In evaluating the New Contract, there was considerable discussion by
the Trustees about the proposed fee structure. The Trustees placed importance on
the fact that, while the Fund would now be paying Distribution Expenses, the
Adviser had agreed to reduce its fee in an amount equal to those expenses,
thereby ensuring that the adoption of the Distribution Plan would not increase
the Fund's total expense ratio. After consideration of these and other factors,
the Trustees, including a majority of the independent Trustees, approved the New
Contract.
An affirmative vote of the holders of a majority of the outstanding
shares of the Gateway Fund is required for approval of Proposal 4b. As defined
in the 1940 Act , a vote of the holders of a majority of the outstanding shares
means the vote of (i) 67% or more of the voting shares of the Gateway Fund
present at the Meeting, if the holders of more than 50% of the outstanding
shares are present in person or represented by proxy, or (ii) more than 50% of
the outstanding vote shares, whichever is less. Approval of Proposal 4b is
contingent upon shareholder approval of Proposal 4a. If the New Contract and
proposal 4a are not approved by the shareholders of the Gateway Fund, the
Current Contract will remain in place with respect to the Fund and the Board of
Trustees will consider whether other action should be taken.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 4b.
10
<PAGE> 14
SHAREHOLDER PROPOSALS
The Trust has not received any shareholder proposals to be considered
for presentation at the Meeting.
Shareholders should be aware that annual meetings of shareholders of
the Trust are not required as long as there is no particular requirement under
the Investment Company Act which must be met by convening such a shareholder
meeting. If a shareholder meeting is called for any purpose, shareholder
proposals to be presented must be received by the Trust at its principal office
within a reasonable time before the proxy solicitation is made.
COST OF SOLICITATION
The cost of preparing and mailing this Proxy Statement, the
accompanying Notice of Special Meeting and Proxy and any additional material
relating to the meeting and the cost of soliciting proxies will be borne by the
Trust. In addition to solicitation by mail, the Trust will request banks,
brokers and other custodial nominees and fiduciaries to supply proxy material to
the beneficial owners of shares of whom they have knowledge, and will reimburse
them for their expenses in so doing. Certain officers and employees of the Trust
and the Adviser may solicit proxies in person or by telephone, facsimile
transmission or mail, for which they will not receive any special compensation.
OTHER MATTERS
The Trust's Board of Trustees knows of no other matters to be presented
at the meeting other than as set forth above. However, if any other matters
properly come before the meeting, the persons named as proxies will vote the
shares represented by the proxy on such matters in accordance with their
judgment, and discretionary authority to do so is included in the proxy.
BY ORDER OF THE BOARD OF TRUSTEES
Donna M. Squeri
Secretary
Dated _______________, 1998
-11-
<PAGE> 15
EXHIBIT A
AMENDMENT NO. 8
THE GATEWAY TRUST
SECOND AMENDED AGREEMENT AND
DECLARATION OF TRUST
1. Pursuant to Section 9.7 of the Second Amended Agreement and Declaration
of Trust of The Gateway Trust, and effective upon shareholder approval,
the undersigned, being a majority of the Trustees of The Gateway Trust,
hereby replace Section 5.1 in its entirety with the following:
5.1 VOTING POWERS. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in
Section 4.1, (ii) with respect to any Adviser as provided in
Section 4.6, (iii) with respect to any termination of this Trust
or any series to the extent and as provided in Section 9.4, (iv)
with respect to any amendment of this Declaration of Trust to the
extent and as provided in Section 9.7, (v) to the same extent as
the shareholders of an Ohio business corporation as to whether or
not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action of behalf
of the Trust or the Shareholders, and (vi) with respect to the
additional matters relating to the Trust as may be required by
the Trust Act or other law, this Declaration of Trust, the
By-Laws, or any registration of the Trust with the Securities and
Exchange Commission (or any successor agency) or any state, or as
the Trustees may consider necessary or desirable. Each whole
Share shall be entitled to one vote as to any matter on which it
is entitled to vote and each fractional Share shall be entitled
to a proportionate fractional vote. Notwithstanding any other
provision of this Declaration of Trust, on any matter submitted
to a vote of Shareholders, all Shares of the Trust then entitled
to vote shall be voted in the aggregate; except (1) when required
by the 1940 Act, Shares shall be voted by individual series and
not in the aggregate; and (2) when the Trustees have determined
that the matter affects only the interests of one or more series,
then only Shareholders of such series shall be entitled to vote
thereon. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. A proxy with
respect to Shares held in the name of two or more persons shall
be valid if executed by any one of them unless at or prior to
exercise of the proxy the Trust receives a specific written
notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. Until
Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by the Trust Act or
other law, this Declaration of Trust, or the By-Laws to be taken
by Shareholders.
2. Pursuant to Section 9.7 of the Second Amended Agreement and Declaration
of Trust of The Gateway Trust, and effective upon shareholder approval,
the undersigned, being a majority of the Trustees of The Gateway Trust,
hereby replace Section 9.7 in its entirety with the following:
9.7 AMENDMENTS. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation
of the right to amend this Declaration of Trust as herein
provided, except that no amendment shall repeal the limitations
on personal liability of any Shareholder or Trustee or repeal the
prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject
to the foregoing, the provisions of this Declaration of Trust
(whether or not related to the rights of Shareholders) may be
amended at any time so long as such amendment does not adversely
<PAGE> 16
affect the rights of any Shareholder with respect to which
such amendment is or purports to be applicable and so long as
such amendment is not in contravention of applicable law,
including the 1940 Act, by an instrument in writing signed by a
majority of the then Trustees (or by an officer of the Trust
pursuant to the vote of a majority of such Trustees). Any
amendment to this Declaration of Trust that adversely affects the
rights of Shareholders may be adopted at any time by an
instrument in writing signed by a majority of the then Trustees
when authorized to do so by a vote of Shareholders holding a
majority of the Shares of each series entitled to vote, except
that an amendment which shall affect the holders of one or more
series of Shares but not the holders of all outstanding series
shall be authorized by vote of the Shareholders holding a
majority of the Shares entitled to vote of each series affected
and no vote of Shareholders of a series not affected shall be
required.
3. This document shall have the status of an amendment to said Second
Amended Agreement and Declaration of Trust, and may be executed in one
or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
Date:________________________, 1998 ________________________________
Walter Gene Sall
__________________________________ ________________________________
James M. Anderson Beverly J. Fertig
__________________________________ ________________________________
Stefen F. Brueckner R.S. Harrison
__________________________________ ________________________________
Kenneth A. Drucker William Harding Schneebeck
<PAGE> 17
EXHIBIT B
THE GATEWAY FUND
DISTRIBUTION PLAN
WHEREAS, The Gateway Trust, an Ohio business trust (the "Trust"),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"), which may be divided
into one or more series of Shares ("Series"); and
WHEREAS, the Trust currently offers several Series, one of which is the
Gateway Fund (the "Fund"); and
WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Qualified Trustees"), having determined, in the
exercise of reasonable business judgment and in light of their fiduciary duties
under state law and under Section 36(a) and (b) of the 1940 Act, that there is a
reasonable likelihood that this Plan will benefit the Fund and its shareholders,
have approved this Plan by votes cast in person at a meeting called for the
purpose of voting hereon and on any agreements related hereto;
NOW THEREFORE, the Trust hereby adopts this Plan for the Fund, subject
to shareholder approval, in accordance with Rule 12b-1 under the 1940 Act, on
the following terms and conditions:
1. DISTRIBUTION ACTIVITIES. Subject to the supervision of the
Trustees of the Trust, the Trust may, directly or indirectly,
engage in any activities related to the distribution of Shares
of the Fund, which activities may include, but are not limited
to, the following: (a) payments, including incentive
compensation, to securities dealers or other financial
intermediaries, financial institutions, investment advisors
and others that are engaged in the sale of Shares, or that may
be advising shareholders of the Trust regarding the purchase,
sale or retention of Shares; (b) payments, including incentive
compensation, to securities dealers or other financial
intermediaries, financial institutions, investment advisors
and others that hold Shares for shareholders in omnibus
accounts or as shareholders of record or provide shareholder
support or administrative services to the Fund and its
shareholders; (c) expenses of maintaining personnel (including
personnel of organizations with which the Trust has entered
into agreements related to this Plan) who engage in or support
distribution of Shares or who render shareholder support
services, including, but not limited to, allocated overhead,
office space and equipment, telephone facilities and expenses,
answering routine inquiries regarding the Trust, processing
shareholder transactions, and providing such other shareholder
services as the Trust may reasonably request; (d) costs of
preparing, printing and distributing prospectuses, statements
of additional information, and reports of the Fund for
recipients other
<PAGE> 18
than existing shareholders of the Fund; (e) costs of
formulating and implementing marketing and promotional
activities, including, but not limited to, sales seminars,
direct mail promotions, and television, radio, newspaper,
magazine, and other mass media advertising; (f) costs of
preparing, printing and distributing sales literature; (g)
costs of obtaining such information, analyses, and reports
with respect to marketing and promotional activities as the
Trust may, from time to time, deem advisable; and (h) costs of
implementing and operating this Plan. The Trust is authorized
to engage in the activities listed above, and in any other
activities related to the distribution of Shares, either
directly or through other persons with which the Trust has
entered into agreements related to this Plan.
2. MAXIMUM EXPENDITURES. The expenditures to be made by the Trust
pursuant to this Plan and the basis upon which payment of such
expenditures will be made shall be determined by the Trustees
of the Trust, but in no event may such expenditures exceed in
any fiscal year an amount calculated at the rate of 0.50% of
the average daily net asset value of the Fund. Such payments
for distribution activities may be made directly by the Trust,
or the Trust's investment adviser may pay such expenses and
obtain reimbursement from the Trust.
3. TERM AND TERMINATION.
(a) This Plan shall become effective, subject to approval by a
majority of the outstanding voting securities (as defined in
the 1940 Act) of the Fund, on January 1, 1999.
(b) Unless terminated as herein provided, this Plan shall
continue in effect for one year from the effective date and
shall continue in effect for successive periods of one year
thereafter, but only so long as each such continuance is
specifically approved by votes of a majority of both (i) the
Trustees of the Trust and (ii) the Qualified Trustees, cast in
person at a meeting called for the purpose of voting on such
approval.
(c) This Plan may be terminated at any time by the vote of a
majority of the Qualified Trustees or by vote of a majority of
the outstanding voting securities (as defined in the 1940 Act)
of the Fund. If this Plan is terminated, the Fund will not be
required to make any payments for expenses incurred after the
date of termination.
4. AMENDMENTS. All material amendments to this Plan must be
approved in the manner provided for annual renewal of this
Plan in Section 3(b) hereof. In addition, this Plan may not be
amended to increase the amount of expenditures provided for in
Section 2 hereof unless such amendment is approved by a vote
of the majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act).
5. SELECTION AND NOMINATION OF TRUSTEES. While this Plan is in
effect, the selection and nomination of Trustees who are not
interested persons (as defined in the 1940 Act) of the Trust
shall be committed to the discretion of the Trustees who are
not interested persons of the Trust.
6. QUARTERLY REPORTS. The Treasurer of the Trust shall provide to
the Trustees and the Trustees shall review, at least
quarterly, a written report of the amounts expended pursuant
to this Plan and any related agreement and the purposes for
which such expenditures were made.
7. RECORDKEEPING. The Trust shall preserve copies of this Plan
and any related
<PAGE> 19
agreements and all reports made pursuant to Section 6 hereof,
for a period of not less than six years from the date of this
Plan, the agreements or such reports, as the case may be, the
first two years in an easily accessible place.
8. LIMITATION OF LIABILITY. A copy of the Agreement and
Declaration of Trust of the Trust, as amended, is on file with
the Secretary of the State of Ohio and notice is hereby given
that this Plan is executed on behalf of the Trustees of the
Trust as trustees and not individually and that the
obligations of this instrument are not binding upon the
Trustees, the shareholders of the Trust individually, or the
assets or property of any other series of the Trust, but are
binding only upon the assets and property of the Fund.
<PAGE> 20
EXHIBIT C
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
therefor are included in the Fund or the industries
in which they engage, or with respect to other
securities or options therefor which the Adviser
considers desirable for inclusion in the Fund;
<PAGE> 21
(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, Adviser
shall at all times conform to:
-2-
<PAGE> 22
(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 therefor; 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
-3-
<PAGE> 23
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, 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 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,
-4-
<PAGE> 24
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.
-5-
<PAGE> 25
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 400 TechneCenter Drive, Suite 220,
Milford, Ohio, 45150.
-6-
<PAGE> 26
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_____________________________
Walter G. Sall
Chairman
ATTEST:
By____________________________
Secretary
GATEWAY INVESTMENT ADVISERS, L.P.
BY GATEWAY INVESTMENT ADVISERS, INC.
By_____________________________
President
ATTEST:
By___________________________
Secretary
-7-
<PAGE> 27
PROXY
THE GATEWAY TRUST
GATEWAY SMALL CAP INDEX FUND
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 10, 1998
The undersigned shareholder of the Gateway Small Cap Index Fund (the
"Fund"), a portfolio of The Gateway Trust (the "Trust"), hereby nominates,
constitutes and appoints Geoffrey Keenan and Paul R. Stewart, and each of them,
the attorney, agent and proxy of the undersigned, with full powers of
substitution, to vote all the stock of the Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at 400 TechneCenter Drive, Suite 220, Milford, Ohio 45150 on December 10, 1998
at 9:00 a.m. Eastern Standard Time and at any and all adjournments thereof, as
fully and with the same force and effect as the undersigned might or could do if
personally present as follows:
PROPOSAL 1. ELECTION OF TRUSTEES
To elect the nine persons below to serve as trustees of the
Trust until their successors are elected and have been qualified:
Walter Gene Sall
J. Patrick Rogers
James M. Anderson
Stefen F. Brueckner
Kenneth A. Drucker
Beverly J. Fertig
R.S. (Dick) Harrison
William Harding Schneebeck
James E. Schwab
[_] AUTHORITY GIVEN [_] AUTHORITY WITHHELD
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR SOME BUT NOT ALL
OF THE NOMINEES NAMED ABOVE, YOU SHOULD CHECK THE BOX MARKED "AUTHORITY GIVEN"
AND YOU SHOULD ENTER THE NAME(S) IN THE SPACE PROVIDED BELOW OF THE NOMINEE(S)
WITH RESPECT TO WHOM YOU WISH TO WITHHOLD AUTHORITY TO VOTE:
- -------------------------------------------------------------------------------
PROPOSAL 2. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS.
Ratification of the selection of Arthur Andersen LLP as
independent accountants of the Trust for the fiscal year ending December 31,
1998.
[_] FOR [_] AGAINST [_] ABSTAIN
<PAGE> 28
PROPOSAL 3. APPROVAL OF AMENDMENTS TO THE TRUST'S DECLARATION OF
TRUST.
Approval of the amendments to the Trust's Declaration
of Trust.
[_] FOR [_] AGAINST [_] ABSTAIN
THE BOARD OF TRUSTEES RECOMMENDS A VOTE OF "AUTHORITY GIVEN" ON
PROPOSAL 1 AND "FOR" ON PROPOSALS 2 AND 3. THE PROXY SHALL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF TRUSTEES UNLESS A CONTRARY
INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN ACCORDANCE
WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF ANY, PRESENTED AT THE MEETING,
THIS PROXY SHALL BE VOTED IN THE DISCRETION OF THE PROXY HOLDERS, IN ACCORDANCE
WITH THE RECOMMENDATIONS OF THE BOARD OF TRUSTEES, IF ANY.
________________ DATED:________________ ___________________________________
(Number of Shares) (Please Print Your Name)
____________________________________
(Signature of Shareholder)
____________________________________
(Please Print Your Name)
____________________________________
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the
label. Executors, administrators,
trustees, etc. should give their
full titles. All joint owners should
sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE PRESIDENT OF THE TRUST AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
<PAGE> 29
PROXY
THE GATEWAY TRUST
CINCINNATI FUND
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 10, 1998
The undersigned shareholder of the Cincinnati Fund (the "Fund"), a
portfolio of The Gateway Trust (the "Trust"), hereby nominates, constitutes and
appoints Geoffrey Keenan and Paul R. Stewart, and each of them, the attorney,
agent and proxy of the undersigned, with full powers of substitution, to vote
all the stock of the Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at 400 TechneCenter
Drive, Suite 220, Milford, Ohio 45150 on December 10, 1998 at 9:00 a.m. Eastern
Standard Time and at any and all adjournments thereof, as fully and with the
same force and effect as the undersigned might or could do if personally present
as follows:
PROPOSAL 1. ELECTION OF TRUSTEES
To elect the nine persons below to serve as trustees of the
Trust until their successors are elected and have been qualified:
Walter Gene Sall
J. Patrick Rogers
James M. Anderson
Stefen F. Brueckner
Kenneth A. Drucker
Beverly J. Fertig
R.S. (Dick) Harrison
William Harding Schneebeck
James E. Schwab
[_] AUTHORITY GIVEN [_] AUTHORITY WITHHELD
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR SOME BUT NOT ALL
OF THE NOMINEES NAMED ABOVE, YOU SHOULD CHECK THE BOX MARKED "AUTHORITY GIVEN"
AND YOU SHOULD ENTER THE NAME(S) IN THE SPACE PROVIDED BELOW OF THE NOMINEE(S)
WITH RESPECT TO WHOM YOU WISH TO WITHHOLD AUTHORITY TO VOTE:
- -------------------------------------------------------------------------------
PROPOSAL 2. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS.
Ratification of the selection of Arthur Andersen LLP as
independent accountants of the Trust for the fiscal year ending December 31,
1998.
[_] FOR [_] AGAINST [_] ABSTAIN
<PAGE> 30
PROPOSAL 3. APPROVAL OF AMENDMENTS TO THE TRUST'S DECLARATION OF
TRUST.
Approval of the amendments to the Trust's Declaration
of Trust.
[_] FOR [_] AGAINST [_] ABSTAIN
THE BOARD OF TRUSTEES RECOMMENDS A VOTE OF "AUTHORITY GIVEN" ON
PROPOSAL 1 AND "FOR" ON PROPOSALS 2 AND 3. THE PROXY SHALL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF TRUSTEES UNLESS A CONTRARY
INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN ACCORDANCE
WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF ANY, PRESENTED AT THE MEETING,
THIS PROXY SHALL BE VOTED IN THE DISCRETION OF THE PROXY HOLDERS, IN ACCORDANCE
WITH THE RECOMMENDATIONS OF THE BOARD OF TRUSTEES, IF ANY.
________________ DATED:______________ ____________________________________
(Number of Shares) (Please Print Your Name)
____________________________________
(Signature of Shareholder)
____________________________________
(Please Print Your Name)
____________________________________
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the
label. Executors, administrators,
trustees, etc. should give their
full titles. All joint owners should
sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE PRESIDENT OF THE TRUST AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
<PAGE> 31
PROXY
THE GATEWAY TRUST
GATEWAY FUND
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 10, 1998
The undersigned shareholder of the Gateway Fund (the "Fund"), a
portfolio of The Gateway Trust (the "Trust"), hereby nominates, constitutes and
appoints Geoffrey Keenan and Paul R. Stewart, and each of them, the attorney,
agent and proxy of the undersigned, with full powers of substitution, to vote
all the stock of the Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at 400 TechneCenter
Drive, Suite 220, Milford, Ohio 45150 on December 10, 1998 at 9:00 a.m. Eastern
Standard Time and at any and all adjournments thereof, as fully and with the
same force and effect as the undersigned might or could do if personally present
as follows:
PROPOSAL 1. ELECTION OF TRUSTEES
To elect the nine persons below to serve as trustees of the
Trust until their successors are elected and have been qualified:
Walter Gene Sall
J. Patrick Rogers
James M. Anderson
Stefen F. Brueckner
Kenneth A. Drucker
Beverly J. Fertig
R.S. (Dick) Harrison
William Harding Schneebeck
James E. Schwab
[ ] AUTHORITY GIVEN [_] AUTHORITY WITHHELD
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR SOME BUT NOT ALL
OF THE NOMINEES NAMED ABOVE, YOU SHOULD CHECK THE BOX MARKED "AUTHORITY GIVEN"
AND YOU SHOULD ENTER THE NAME(S) IN THE SPACE PROVIDED BELOW OF THE NOMINEE(S)
WITH RESPECT TO WHOM YOU WISH TO WITHHOLD AUTHORITY TO VOTE:
- -------------------------------------------------------------------------------
PROPOSAL 2. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS.
Ratification of the selection of Arthur Andersen LLP as
independent accountants of the Trust for the fiscal year ending December 31,
1998.
[_] FOR [_] AGAINST [_] ABSTAIN
<PAGE> 32
PROPOSAL 3. APPROVAL OF AMENDMENTS TO THE TRUST'S DECLARATION OF
TRUST.
Approval of the amendments to the Trust's Declaration
of Trust.
[_] FOR [_] AGAINST [_] ABSTAIN
PROPOSAL 4. APPROVAL OF THE DISTRIBUTION AND INVESTMENT ADVISORY
ARRANGEMENTS.
4a. Approval of a Distribution Plan pursuant to Rule 12b-1 of
the Investment Company Act of 1940, as amended.
[_] FOR [_] AGAINST [_] ABSTAIN
4b. Approval of a new Management Agreement with Gateway
Investment Advisers, L.P., the Gateway Fund's current investment adviser.
[_] FOR [_] AGAINST [_] ABSTAIN
THE BOARD OF TRUSTEES RECOMMENDS A VOTE OF "AUTHORITY GIVEN" ON
PROPOSAL 1 AND "FOR" ON PROPOSALS 2, 3, 4A AND 4B. THE PROXY SHALL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF TRUSTEES UNLESS A CONTRARY
INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN ACCORDANCE
WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF ANY, PRESENTED AT THE MEETING,
THIS PROXY SHALL BE VOTED IN THE DISCRETION OF THE PROXY HOLDERS, IN ACCORDANCE
WITH THE RECOMMENDATIONS OF THE BOARD OF TRUSTEES, IF ANY.
________________ DATED:______________ ____________________________________
(Number of Shares) (Please Print Your Name)
____________________________________
(Signature of Shareholder)
____________________________________
(Please Print Your Name)
____________________________________
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the
label. Executors, administrators,
trustees, etc. should give their
full titles. All joint owners should
sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE PRESIDENT OF THE TRUST AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
