Exhibit (d)(2)(e)
SUBADVISORY AGREEMENT
THE MAINSTAY FUNDS
SUBADVISORY AGREEMENT, made as of the 5th day of October, 2006 (the
"Agreement"), between New York Life Investment Management LLC, a Delaware
limited liability company (the "Manager"), on behalf of The MainStay Funds (the
"Trust"), and Institutional Capital LLC (the "Subadvisor").
WHEREAS, the Trust is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end, management investment company; and
WHEREAS, the Trust is authorized to issue separate series, each of which may
offer a separate class of shares of beneficial interest, each series having its
own investment objective or objectives, policies, and limitations; and
WHEREAS, the Trust currently offers shares in multiple series, may offer shares
of additional series in the future, and intends to offer shares of additional
series in the future; and
WHEREAS, the Manager entered into an Amended and Restated Management Agreement,
dated as of August 1, 2002, with the Trust, on behalf of its series, (the
"Management Agreement"); and
WHEREAS, under the Management Agreement, the Manager has agreed to provide
certain investment advisory and related administrative services to the Trust;
and
WHEREAS, the Management Agreement permits the Manager to delegate certain of its
investment advisory duties under the Management Agreement to one or more
subadvisors; and
WHEREAS, the Manager wishes to retain the Subadvisor to furnish certain
investment advisory services to one or more of the series of the Trust, and
manage such portion of the Trust as the Manager shall from time to time direct,
and the Subadvisor is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between the Trust, the Manager, and the
Subadvisor as follows:
1. Appointment. The Manager hereby appoints Institutional Capital LLC to
act as subadivsor to the series designated on Schedule A of this Agreement (the
"Series") with respect to that portion of the assets of the Series designated by
the Manager as allocated to the Subadvisor ("Allocated Assets") subject to such
written instructions, including any redesignation of Allocated Assets, and
supervision as the Manager may from time to time furnish for the periods and on
the terms set forth in this Agreement. The Subadvisor accepts such appointment
and agrees to furnish the services herein set forth for the compensation herein
provided.
In the event the Trust designates one or more series other than the
Series with respect to which the Trust and the Manager wish to retain the
Subadvisor to render investment advisory services hereunder, they shall notify
the Subadvisor in writing. If the Subadvisor is willing to render such services,
it shall notify the Trust and Manager in writing, whereupon such series shall
become a Series hereunder, and be subject to this Agreement.
2. Portfolio Management Duties. Subject to the supervision of the Trust's
Board of Trustees and the Manager, the Subadvisor will provide a continuous
investment program for the Series' Allocated Assets and determine the
composition of the assets of the Series' Allocated Assets, including
determination of the purchase, retention, or sale of the securities, cash, and
other investments contained in the portfolio with respect to its Allocated
Assets. The Subadvisor will provide investment research and conduct a continuous
program of evaluation, investment, sales, and reinvestment of the Series'
Allocated Assets by determining the securities and other investments that shall
be purchased, entered into, sold, closed, or exchanged for the Series, when
these transactions should be executed, and what portion of the Allocated Assets
of the Series should be held in the various securities and other investments in
which it may invest, and the Subadvisor is hereby authorized to execute and
perform such services on behalf of the Series. The Subadvisor will provide the
services under this Agreement in accordance with the Series' investment
objective or objectives, policies, and restrictions as stated in the Trust's
Registration Statement filed with the Securities and Exchange Commission (the
"Commission"), as amended, copies of which shall be sent to the Subadvisor by
the Manager. The Subadvisor further agrees as follows:
(a) The Subadvisor will take all reasonable steps necessary to manage the
Allocated Assets so that the Series will qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code.
(b) The Subadvisor will conform with the 1940 Act and all rules and
regulations thereunder, all other applicable federal and state laws and
regulations, any applicable procedures adopted by the Trust's Board of Trustees
of which the Subadvisor has been sent a copy, and the provisions of the
Registration Statement of the Trust under the Securities Act of 1933, as amended
(the "1933 Act"), and the 1940 Act, as supplemented or amended, of which the
Subadvisor has received a copy.
(c) On occasions when the Subadvisor deems the purchase or sale of a
security to be in the best interest of the Series as well as of other investment
advisory clients of the Subadvisor or any of its affiliates, the Subadvisor may,
to the extent permitted by applicable laws and regulations, but shall not be
obligated to, aggregate the securities to be so sold or purchased for the Series
with those of its other clients where such aggregation is not inconsistent with
the policies set forth in the Registration Statement. In such event, allocation
of the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Subadvisor in a manner that is fair and
equitable in the judgment of the Subadvisor in the exercise of its fiduciary
obligations to the Trust and to such other clients, subject to review by the
Manager and the Board of Trustees.
2
(d) In connection with the purchase and sale of securities for the Series,
the Subadvisor will arrange for the transmission to the custodian and portfolio
accounting agent for the Series, on a daily basis, such confirmation, trade
tickets, and other documents and information, including, but not limited to,
CUSIP, Sedol, or other numbers that identify securities to be purchased or sold
on behalf of the Series, as may be reasonably necessary to enable the custodian
and portfolio accounting agent to perform their administrative and recordkeeping
responsibilities with respect to the Series. With respect to portfolio
securities to be purchased or sold through the Depository Trust and Clearing
Corporation, the Subadvisor will arrange for the automatic transmission of the
confirmation of such trades to the Trust's custodian and portfolio accounting
agent.
(e) The Subadvisor will monitor on a daily basis the determination by the
portfolio accounting agent for the Trust of the valuation of portfolio
securities and other investments of the Allocated Assets of the Series. The
Subadvisor will assist the custodian and portfolio accounting agent for the
Trust in determining or confirming, consistent with the procedures and policies
stated in the Registration Statement for the Trust, the value of any portfolio
securities or other Allocated Assets of the Series for which the custodian and
portfolio accounting agent seek assistance from, or which they identify for
review by, the Subadvisor.
(f) The Subadvisor will make available to the Trust and the Manager,
promptly upon request, all of the Series' investment records and ledgers
maintained by the Subadvisor (which shall not include the records and ledgers
maintained by the custodian or portfolio accounting agent for the Trust) as are
necessary to assist the Trust and the Manager to comply with requirements of the
1940 Act and the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), as well as other applicable laws. The Subadvisor will furnish to
regulatory agencies having the requisite authority any information or reports in
connection with such services that may be requested in order to ascertain
whether the operations of the Trust are being conducted in a manner consistent
with applicable laws and regulations.
(g) The Subadvisor will provide reports to the Trust's Board of Trustees,
for consideration at meetings of the Board, on the investment program for the
Series and the issuers and securities represented in the Series' Allocated
Assets, and will furnish the Trust's Board of Trustees with respect to the
Series such periodic and special reports as the Trustees and the Manager may
reasonably request.
(h) In rendering the services required under this Agreement, the Subadvisor
may, from time to time, employ or associate with itself such person or persons
as it believes necessary to assist it in carrying out its obligations under this
Agreement. The Subadvisor may not, however, retain as subadvisor any company
that would be an "investment adviser," as that term is defined in the 1940 Act,
to the Series unless the contract with such company is approved by a majority of
the Trust's Board of Trustees and by a majority of Trustees who are not parties
to any agreement or contract with such company and who are not "interested
persons," as defined in the 1940 Act, of the Trust, the Manager, or the
Subadvisor, or any such company that is retained as subadvisor, and also is
approved by the vote of a majority of the outstanding voting securities of the
applicable Series of the Trust to the extent required by the 1940 Act. The
Subadvisor shall be responsible for making reasonable inquiries and for
reasonably ensuring that any employee of
3
the Subadvisor, any subadvisor that the Subadvisor has employed or with which it
has associated with respect to the Series, or any employee thereof has not, to
the best of the Subadvisor's knowledge, in any material connection with the
handling of Trust assets:
(i) been convicted, in the last ten (10) years, of any felony or
misdemeanor arising out of conduct involving embezzlement, fraudulent
conversion, or misappropriation of funds or securities, involving violations of
Sections 1341, 1342, or 1343 of Xxxxx 00, Xxxxxx Xxxxxx Code, or involving the
purchase or sale of any security; or
(ii) been found by any state regulatory authority, within the last ten
(10) years, to have violated or to have acknowledged violation of any provision
of any state insurance law involving fraud, deceit, or knowing
misrepresentation; or
(iii) been found by any federal or state regulatory authorities,
within the last ten (10) years, to have violated or to have acknowledged
violation of any provision of federal or state securities laws involving fraud,
deceit, or knowing misrepresentation.
3. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Manager shall pay the Subadvisor as full
compensation therefore, a fee equal to the percentage of the portion of the
Allocated Assets of the respective Series' average daily net assets managed by
the Subadvisor as described in the attached Schedule A. Liability for payment of
compensation by the Manager to the Subadvisor under this Agreement is contingent
upon the Manager's receipt of payment from the Trust for management services
described under the Management Agreement between the Trust and the Manager.
Expense caps or fee waivers for the Series that may be agreed to by the Manager,
but not agreed to by the Subadvisor, shall not cause a reduction in the amount
of the payment to the Subadvisor by the Manager.
4. Broker-Dealer Selection. The Subadvisor is responsible for decisions to
buy and sell securities and other investments for the Series' Allocated Assets,
for broker-dealer selection, and for negotiation of brokerage commission rates.
The Subadvisor's primary consideration in effecting a security transaction will
be to obtain the best execution for the Series, taking into account the factors
specified in the Prospectus and/or Statement of Additional Information for the
Trust, which include the following: price (including the applicable brokerage
commission or dollar spread); the size of the order; the nature of the market
for the security; the timing of the transaction; the reputation, experience and
financial stability of the broker-dealer involved; the quality of the service;
the difficulty of execution, and the execution capabilities and operational
facilities of the firm involved; and the firm's risk in positioning a block of
securities. Accordingly, the price to the Series in any transaction may be less
favorable than that available from another broker-dealer if the difference is
reasonably justified, in the judgment of the Subadvisor in the exercise of its
fiduciary obligations to the Trust, by other aspects of the portfolio execution
services offered. Subject to such policies as the Board of Trustees may
determine, and consistent with Section 28(e) of the Securities Exchange Act of
1934, as amended, the Subadvisor 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 caused the Series to pay a broker-dealer for effecting a
portfolio investment transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, if the
4
Subadvisor or its affiliate determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker-dealer, viewed in terms of either that
particular transaction or the Subadvisor's or its affiliate's overall
responsibilities with respect to the Series and to their other clients as to
which they exercise investment discretion. To the extent consistent with these
standards and with the Trust's Procedures for Securities Transactions with
Affiliated Brokers pursuant to Rule 17e-1, the Subadvisor is further authorized
to allocate the orders placed by it on behalf of the Series to the Subadvisor if
it is registered as a broker-dealer with the Commission, to its affiliated
broker-dealer, or to such brokers and dealers who also provide research or
statistical material, or other services, to the Series, the Subadvisor, or an
affiliate of the Subadvisor. Such allocation shall be in such amounts and
proportions as the Subadvisor shall determine consistent with the above
standards, and the Subadvisor will report on said allocation regularly to the
Board of Trustees of the Trust, indicating the broker-dealers to which such
allocations have been made and the basis therefor.
5. Disclosure about Subadvisor. The Subadvisor has reviewed and will review
as appropriate, the post-effective amendment to the Registration Statement for
the Trust filed with the Commission and any supplements thereto that contain
disclosure about the Subadvisor, which materials have been or will be provided
to Subadvisor by the Manager. Subadvisor represents and warrants that, with
respect to the disclosure about the Subadvisor or information relating, directly
or indirectly, to the Subadvisor, such materials contain, as of the date hereof,
no untrue statement of any material fact and do not omit any statement of a
material fact which was required to be stated therein or necessary to make the
statements contained therein not misleading. The Subadvisor represents and
warrants that it shall notify the Trust on an ongoing basis of any information
necessary for the Trust to know in order to arrange for the disclosure relating
to the Subadvisor to be amended or supplemented such that the materials relating
to the Subadvisor at no time contain any untrue statement of any material fact
and do not omit any statement of a material fact that would be required to be
stated therein or necessary to make the statements contained therein not
misleading. The Subadvisor further represents and warrants that it is a duly
registered investment adviser under the Advisers Act and a duly registered
investment adviser in all states in which the Subadvisor is required to be
registered.
6. Expenses. During the term of this Agreement, the Subadvisor will pay all
expenses incurred by it and its staff and for their activities in connection
with its portfolio management duties under this Agreement. The Manager or the
Trust shall be responsible for all the expenses of the Trust's operations,
including, but not limited to:
(a) the fees and expenses of Trustees who are not interested persons of the
Manager or of the Trust;
(b) the fees and expenses of the Series which relate to (A) the custodial
function and the recordkeeping connected therewith, (B) the maintenance of the
required accounting records of the Series not being maintained by the Manager,
(C) the pricing of the Series' Shares, including the cost of any pricing service
or services that may be retained pursuant to the authorization of the Trustees
of the Trust, and (D) for both mail and wire orders, the cashiering function in
connection with the issuance and redemption of the Series' Shares;
5
(c) the fees and expenses of the Trust's transfer and dividend disbursing
agent, that may be the custodian, and which relate to the maintenance of each
shareholder account;
(d) the charges and expenses of legal counsel (including an allocable
portion of the cost of maintaining internal legal and compliance departments)
and independent accountants for the Trust;
(e) brokers' commissions and any issue or transfer taxes chargeable to the
Trust in connection with its securities transactions on behalf of the Series;
(f) all taxes and business fees payable by the Trust or the Series to
federal, state or other governmental agencies;
(g) the fees of any trade association of which the Trust may be a member;
(h) the cost of share certificates representing the Series' Shares;
(i) the fees and expenses involved in registering and maintaining
registrations of the Trust and of its Shares with the Commission, registering
the Trust as a broker or dealer, and qualifying its Shares under state
securities laws, including the preparation and printing of the Trust's
registration statements and prospectuses for filing under federal and state
securities laws for such purposes;
(j) allocable communications expenses with respect to investor services and
all expenses of shareholders' and Trustees' meetings and of preparing, printing
and mailing reports to shareholders in the amount necessary for distribution to
the shareholders;
(k) litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Trust's business; and
(l) any expenses assumed by the Series pursuant to a Plan of Distribution
adopted in conformity with Rule 12b-1 under the 1940 Act.
7. Compliance.
(a) The Subadvisor agrees to assist the Manager and the Trust in complying
with the Trust's obligations under Rule 38a-1 under the 1940 Act, including but
not limited to: (a) periodically providing the Trust with information about, and
independent third-party reports on, the Subadvisor's compliance program adopted
pursuant to Rule 206(4)-7 under the Advisers Act ("Subadvisor's Compliance
Program"); (b) reporting any material deficiencies in the Subadvisor's
Compliance Program to the Trust within a reasonable time; and (c) reporting any
material changes to the Subadvisor's Compliance Program to the Trust within a
reasonable time. The Subadvisor understands that the Board of Trustees of the
Trust is required to approve the Subadvisor's Compliance Program on at least an
annual basis, and acknowledges that this Agreement is conditioned upon the Board
of Trustees approval of the Subadvisor's Compliance Program.
6
(b) The Subadvisor agrees that it shall immediately notify the Manager and
the Trust: (1) in the event that the Commission has censured the Subadvisor;
placed limitations upon its activities, functions or operations; suspended or
revoked its registration as an investment adviser; or commenced proceedings or
an investigation that may result in any of these actions; or (2) upon having a
reasonable basis for believing that the Series has ceased to qualify or might
not qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code. The Subadvisor further agrees to notify the Manager and the Trust
immediately of any material fact known to the Subadvisor respecting or relating
to the Subadvisor that is not contained in the Registration Statement or
prospectus for the Trust, or any amendment or supplement thereto, or of any
statement contained therein that becomes untrue in any material respect.
(c) The Manager agrees that it shall immediately notify the Subadvisor: (1)
in the event that the Commission has censured the Manager or the Trust; placed
limitations upon either of their activities, functions, or operations; suspended
or revoked the Manager's registration as an investment adviser; or commenced
proceedings or an investigation that may result in any of these actions; or (2)
upon having a reasonable basis for believing that the Series has ceased to
qualify or might not qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code.
8. Documents. The Manager has delivered to the Subadvisor copies of each of
the following documents and will deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust of the Trust, filed with the Secretary of the
Commonwealth of Massachusetts (such Declaration of Trust, as in effect on the
date hereof and as amended from time to time, is herein called the "Amended and
Restated Declaration of Trust");
(b) By-Laws of the Trust;
(c) Certified Resolutions of the Trustees of the Trust authorizing the
appointment of the Subadvisor and approving the form of this Agreement;
(d) Registration Statement under the 1940 Act and the Securities Act of
1933, as amended, on Form N-lA, as filed with the Commission relating to the
Series and the Series' Shares, and all amendments thereto;
(e) Notification of Registration of the Trust under the 1940 Act on Form
N-1A, as filed with the Commission, and all amendments thereto; and
(f) Prospectus and Statement of Additional Information of the Series.
9. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Subadvisor hereby agrees that all records that it
maintains for the Series are the property of the Trust, and further agrees to
surrender promptly to the Trust any of such records upon the Trust's or the
Manager's request; provided, however, that the Subadvisor may, at its own
7
expense, make and retain a copy of such records. The Subadvisor further agrees
to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records required to be maintained by Rule 31a-l under the 1940 Act and to
preserve the records required by Rule 204-2 under the Advisers Act for the
period specified in the Rule.
10. Cooperation. Each party to this Agreement agrees to cooperate with each
other party and with all appropriate governmental authorities having the
requisite jurisdiction (including, but not limited to, the Commission) in
connection with any investigation or inquiry relating to this Agreement or the
Trust.
11. Representations Respecting Subadvisor. The Manager and the Trust agree
that neither the Trust, the Manager, nor affiliated persons of the Trust or the
Manager shall, except with the prior permission of the Subadvisor, give any
information or make any representations or statements in connection with the
sale of shares of the Series concerning the Subadvisor or the Series other than
the information or representations contained in the Registration Statement,
Prospectus, or Statement of Additional Information for the Trust shares, as they
may be amended or supplemented from time to time, or in reports or proxy
statements for the Trust, or in sales literature or other promotional material
approved in advance by the Subadvisor. The parties agree that, in the event that
the Manager or an affiliated person of the Manager sends sales literature or
other promotional material to the Subadvisor for its approval and the Subadvisor
has not commented within five (5) days, the Manager and its affiliated persons
may use and distribute such sales literature or other promotional material,
although, in such event, the Subadvisor shall not be deemed to have approved of
the contents of such sales literature or other promotional material.
12. Confidentiality. The Subadvisor will treat as proprietary and
confidential any information obtained in connection with its duties hereunder,
including all records and information pertaining to the Series and its prior,
present or potential shareholders. The Subadvisor will not use such information
for any purpose other than the performance of its responsibilities and duties
hereunder. Such information may not be disclosed except after prior notification
to and approval in writing by the Trust or if such disclosure is expressly
required or requested by applicable federal or state regulatory authorities.
13. Control. Notwithstanding any other provision of the Agreement, it is
understood and agreed that the Trust shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement, and reserves the right to direct, approve, or disapprove any action
hereunder taken on its behalf by the Subadvisor.
14. Liability. Except as may otherwise be required by the 1940 Act or the
rules thereunder or other applicable law, the Trust and the Manager agree that
the Subadvisor, any affiliated person of the Subadvisor, and each person, if
any, who, within the meaning of Section 15 of the 1933 Act controls the
Subadvisor, shall not be liable for, or subject to any damages, expenses, or
losses in connection with, any act or omission connected with or arising out of
any services rendered under this Agreement, except by reason of willful
misfeasance, bad faith, or gross negligence in the performance of the
Subadvisor's duties, or by reason of reckless disregard of the Subadvisor's
obligations and duties under this Agreement.
8
15. Indemnification.
(a) The Manager agrees to indemnify and hold harmless the Subadvisor, any
affiliated person of the Subadvisor, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act controls ("controlling person") the
Subadvisor (all of such persons being referred to as "Subadvisor Indemnified
Persons") against any and all losses, claims, damages, liabilities, or
litigation (including reasonable legal and other expenses) to which a Subadvisor
Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, the Internal Revenue Code, under any other statute, at common law
or otherwise, arising out of the Manager's responsibilities to the Trust, which
(1) may be based upon any misfeasance, malfeasance, or nonfeasance by the
Manager, any of its employees or representatives or any affiliate of or any
person acting on behalf of the Manager, or (2) may be based upon any untrue
statement or alleged untrue statement of a material fact supplied by, or which
is the responsibility of, the Manager and contained in the Registration
Statement or Prospectus covering shares of the Trust or a Series, or any
amendment thereof or any supplement thereto, or the omission or alleged omission
to state therein a material fact known or which should have been known to the
Manager and was required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon information furnished to the Manager or the Trust or to any
affiliated person of the Manager by a Subadvisor Indemnified Person; provided,
however, that in no case shall the indemnity in favor of the Subadvisor
Indemnified Person be deemed to protect such person against any liability to
which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its duties, or
by reason of its reckless disregard of obligations and duties under this
Agreement.
(b) Notwithstanding Section 14 of this Agreement, the Subadvisor agrees to
indemnify and hold harmless the Manager, any affiliated person of the Manager,
and each person, if any, who, within the meaning of Section 15 of the 1933 Act,
controls ("controlling person") the Manager (all of such persons being referred
to as "Manager Indemnified Persons") against any and all losses, claims,
damages, liabilities, or litigation (including reasonable legal and other
expenses) to which a Manager Indemnified Person may become subject under the
1933 Act, 1940 Act, the Advisers Act, the Internal Revenue Code, under any other
statute, at common law or otherwise, arising out of the Subadvisor's
responsibilities as Subadvisor of the Series, which (1) may be based upon any
misfeasance, malfeasance, or nonfeasance by the Subadvisor, any of its employees
or representatives, or any affiliate of or any person acting on behalf of the
Subadvisor, (2) may be based upon a failure to comply with Section 2,
Paragraph(a) of this Agreement, or (3) may be based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or Prospectus covering the shares of the Trust or the Series, or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact known or which should have been known to the Subadvisor
and was required to be stated therein or necessary to make the statements
therein not misleading, if such a statement or omission was made in reliance
upon information furnished to the Manager, the Trust, or any affiliated person
of the Manager or Trust by the Subadvisor or any affiliated person of the
Subadvisor; provided, however, that in no case shall the indemnity in favor of a
Manager Indemnified Person be deemed to protect such person against any
liability to
9
which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations and duties
under this Agreement.
(c) The Manager shall not be liable under Paragraph (a) of this Section 15
with respect to any claim made against a Subadvisor Indemnified Person unless
such Subadvisor Indemnified Person shall have notified the Manager in writing
within a reasonable time after the summons, notice, or other first legal process
or notice giving information of the nature of the claim shall have been served
upon such Subadvisor Indemnified Person (or after such Subadvisor Indemnified
Person shall have received notice of such service on any designated agent), but
failure to notify the Manager of any such claim shall not relieve the Manager
from any liability that it may have to the Subadvisor Indemnified Person against
whom such action is brought otherwise than on account of this Section 15. In
case any such action is brought against the Subadvisor Indemnified Person, the
Manager will be entitled to participate, at its own expense, in the defense
thereof or, after notice to the Subadvisor Indemnified Person, to assume the
defense thereof, with counsel satisfactory to the Subadvisor Indemnified Person.
If the Manager assumes the defense of any such action and the selection of
counsel by the Manager to represent both the Manager and the Subadvisor
Indemnified Person would result in a conflict of interests and, therefore, would
not, in the reasonable judgment of the Subadvisor Indemnified Person, adequately
represent the interests of the Subadvisor Indemnified Person, the Manager will,
at its own expense, assume the defense with counsel to the Manager and, also at
its own expense, with separate counsel to the Subadvisor Indemnified Person,
which counsel shall be satisfactory to the Manager and to the Subadvisor
Indemnified Person. The Subadvisor Indemnified Person shall bear the fees and
expenses of any additional counsel retained by it, and the Manager shall not be
liable to the Subadvisor Indemnified Person under this Agreement for any legal
or other expenses subsequently incurred by the Subadvisor Indemnified Person
independently in connection with the defense thereof other than reasonable costs
of investigation. The Manager shall not have the right to compromise on or
settle the litigation without the prior written consent of the Subadvisor
Indemnified Person if the compromise or settlement results, or may result, in a
finding of wrongdoing on the part of the Subadvisor Indemnified Person.
(d) The Subadvisor shall not be liable under Paragraph (b) of this Section
15 with respect to any claim made against a Manager Indemnified Person unless
such Manager Indemnified Person shall have notified the Subadvisor in writing
within a reasonable time after the summons, notice, or other first legal process
or notice giving information of the nature of the claim shall have been served
upon such Manager Indemnified Person (or after such Manager Indemnified Person
shall have received notice of such service on any designated agent), but failure
to notify the Subadvisor of any such claim shall not relieve the Subadvisor from
any liability that it may have to the Manager Indemnified Person against whom
such action is brought otherwise than on account of this Section 15. In case any
such action is brought against the Manager Indemnified Person, the Subadvisor
will be entitled to participate, at its own expense, in the defense thereof or,
after notice to the Manager Indemnified Person, to assume the defense thereof,
with counsel satisfactory to the Manager Indemnified Person. If the Subadvisor
assumes the defense of any such action and the selection of counsel by the
Subadvisor to represent both the Subadvisor and the Manager Indemnified Person
would result in a conflict of interests and, therefore, would not,
10
in the reasonable judgment of the Manager Indemnified Person, adequately
represent the interests of the Manager Indemnified Person, the Subadvisor will,
at its own expense, assume the defense with counsel to the Subadvisor and, also
at its own expense, with separate counsel to the Manager Indemnified Person,
which counsel shall be satisfactory to the Subadvisor and to the Manager
Indemnified Person. The Manager Indemnified Person shall bear the fees and
expenses of any additional counsel retained by it, and the Subadvisor shall not
be liable to the Manager Indemnified Person under this Agreement for any legal
or other expenses subsequently incurred by the Manager Indemnified Person
independently in connection with the defense thereof other than reasonable costs
of investigation. The Subadvisor shall not have the right to compromise on or
settle the litigation without the prior written consent of the Manager
Indemnified Person if the compromise or settlement results, or may result, in a
finding of wrongdoing on the part of the Manager Indemnified Person.
16. Duration and Termination. This Agreement shall become effective on the
date first indicated above. Unless terminated as provided herein, the Agreement
shall remain in full force and effect for an initial period of two (2) years
from the date first indicated above, and continue on an annual basis thereafter
with respect to the Series, provided that such continuance is specifically
approved each year by (a) the vote of a majority of the entire Board of Trustees
of the Trust, or by the vote of a majority of the outstanding voting securities
(as defined in the 0000 Xxx) of the Series, and (b) the vote of a majority of
those Trustees who are not parties to this Agreement or interested persons (as
such term is defined in the 0000 Xxx) of any such party to this Agreement cast
in person at a meeting called for the purpose of voting on such approval. Any
approval of this Agreement by the holders of a majority of the outstanding
shares (as defined in the 0000 Xxx) of a Series shall be effective to continue
this Agreement with respect to the Series notwithstanding (i) that this
Agreement has not been approved by the holders of a majority of the outstanding
shares of any other Series or (ii) that this Agreement has not been approved by
the vote of a majority of the outstanding shares of the Trust, unless such
approval shall be required by any other applicable law or otherwise.
Notwithstanding the foregoing, this Agreement may be terminated for each or any
Series hereunder: (a) by the Manager at any time without penalty, upon sixty
(60) days' written notice to the Subadvisor and the Trust; (b) at any time
without payment of any penalty by the Trust, upon the vote of a majority of the
Trust's Board of Trustees or a majority of the outstanding voting securities of
each Series, upon sixty (60) days' written notice to the Manager and the
Subadvisor; or (c) by the Subadvisor at any time without penalty, upon sixty
(60) days' written notice to the Manager and the Trust. The Subadvisor
recognizes that its services may be terminated or modified pursuant to the
"manager-of-mangers" process. In the event of termination for any reason, all
records of each Series for which the Agreement is terminated shall promptly be
returned to the Manager or the Trust, free from any claim or retention of rights
in such record by the Subadvisor; provided, however, that the Subadvisor may, at
its own expense, make and retain a copy of such records. The Agreement shall
automatically terminate in the event of its assignment (as such term is
described in the 1940 Act) or in the event the Investment Management Agreement
between the Adviser and the Trust is assigned or terminates for any other
reason. In the event this Agreement is terminated or is not approved in the
manner described above, the Sections numbered 2(f), 8, 9, 10, 13, 14, and 17 of
this Agreement shall remain in effect, as well as any applicable provision of
Section 15 or this Section 16.
11
17. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no material amendment of this Agreement shall be
effective until approved by an affirmative vote of (i) the holders of a majority
of the outstanding voting securities of the Series, and (ii) the Trustees of the
Trust, including a majority of the Trustees of the Trust who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, if such approval is required by
applicable law.
18. Amended and Restated Declaration of Trust. A copy of the Amended and
Restated Declaration of Trust for the Trust is on file with the Secretary of The
Commonwealth of Massachusetts. The Amended and Restated Declaration of Trust has
been executed on behalf of the Trust by the Trustees of the Trust in their
capacity as Trustees of the Company and not individually. The obligations of
this Agreement shall be binding upon the assets and property of the Trust and
shall not be binding upon any Trustee, officer, or shareholder of the Trust
individually.
19. Use of Name.
(a) It is understood that the name MainStay or any derivative thereof or
logo associated with that name is the valuable property of the Manager and/or
its affiliates, and that the Subadvisor has the right to use such name (or
derivative or logo) only with the approval of the Manager and only so long as
the Manager is Manager to the Trust and/or the Series. Upon termination of the
Management Agreement between the Trust and the Manager, the Subadvisor shall
forthwith cease to use such name (or derivative or logo).
(b) It is understood that the names Institutional Capital LLC or ICAP or
any derivative thereof or logo associated with those names, are the valuable
property of the Subadvisor and its affiliates and that the Trust and/or the
Series have the right to use such names (or derivative or logo) in offering
materials of the Trust with the approval of the Subadvisor and for so long as
the Subadvisor is a Subadvisor to the Trust and/or the Series. Upon termination
of this Agreement, the Trust shall forthwith cease to use such names (or
derivative or logo).
20. Proxies. The Manager has provided the Subadvisor a copy of the
Manager's Proxy Voting Policy, setting forth the policy that proxies be voted
for the exclusive benefit, and in the best interests, of the Trust. Absent
contrary instructions received in writing from the Trust, the Subadvisor will
vote all proxies solicited by or with respect to the issuers of securities held
by the Series, in accordance with applicable fiduciary obligations. The
Subadvisor shall maintain records concerning how it has voted proxies on behalf
of the Trust, and these records shall be available to the Trust upon request.
21. Notice. Any notice or other communication required to be given pursuant
to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Manager at NYLIM Center, 000
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: President with a cc:
Attention: Secretary; or (2) to the Subadvisor at Institutional Capital LLC, 000
Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000.
12
22. Miscellaneous. (a) This Agreement shall be governed by the laws of the
State of New York, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or rules or orders of the
Commission thereunder. The term "affiliate" or "affiliated person" as used in
this Agreement shall mean "affiliated person" as defined in Section 2(a)(3) of
the 0000 Xxx. (b) The captions of this Agreement are included for convenience
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect. (c) To the extent permitted under this
Agreement, this Agreement may only be assigned by any party with the prior
written consent of the other parties. (d) If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby, and to this
extent, the provisions of this Agreement shall be deemed to be severable. (e)
Nothing herein shall be construed as constituting the Subadvisor as an agent of
the Manager, or constituting the Manager as an agent of the Subadvisor.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
Attest: /s/ Xxxxxxxxxx X.X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
---------------------------- -----------------------------------
Name: Xxxxxxxxxx X.X. Xxxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Managing Director Title: President and Chief Executive
Officer
INSTITUTIONAL CAPITAL LLC
Attest: /s/ Xxxxxxx Xxxxxx Xxxx By: /s/ Xxxxxx X. Xxxxxx
----------------------------- ------------------------------------
Name: Xxxxxxx Xxxxxx Xxxx Name: Xxxxxx X. Xxxxxx
Title: Executive Secretary Title: Executive Vice President
13
SCHEDULE A
As Compensation for services provided by Subadvisor, the Manager will pay the
Subadvisor and Subadvisor agrees to accept as full compensation for all services
rendered hereunder, at an annual subadvisory fee with respect to the Allocated
Assets equal to the following:
Fund Annual Rate
MainStay MAP Fund .45% on the first $250 million;
.40% on the next $250 million; and
.35% over $500 million
The portion of the fee based upon the average daily net assets of the Allocated
Assets of the above Series shall be accrued daily at the rate of 1/365th of the
annual rate applied to the daily net assets of the Allocated Assets of the
Series.
The subadvisory fee so accrued shall be paid monthly to the Subadvisor.
14
