EXHIBIT 5(a)
FORM OF
C O M P O S I T E
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MAINSTAY INSTITUTIONAL FUNDS INC.
[BOND FUND]
[EAFE INDEX FUND]
[GROWTH EQUITY FUND]
[INDEXED BOND FUND]
[INDEXED EQUITY FUND]
[INTERNATIONAL BOND FUND]
[INTERNATIONAL EQUITY FUND]
[MONEY MARKET FUND]
[MULTI-ASSET FUND]
[SHORT-TERM BOND FUND]
[VALUE EQUITY FUND]
MANAGEMENT AGREEMENT
Agreement, made as of the 21st day of November 1997 between MAINSTAY
INSTITUTIONAL FUNDS INC., a Maryland corporation (the "Company"), on behalf of
the [Bond Fund, EAFE Index Fund, Growth Equity Fund, Indexed Bond Fund, Indexed
Equity Fund, International Bond Fund, International Equity Fund, Money Market
Fund, Multi-Asset Fund, Short-Term Bond Fund, and Value Equity Fund](the
"Fund"), a separate series of the Company, and MainStay Management, Inc., a
Delaware corporation (the "Manager").
W I T N E S S E T H :
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WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the shares of beneficial interest of the Company (the "Shares")
are divided into separate series, each of which is established pursuant to a
written instrument executed by the Board of Directors of the Company and the
Directors may from time to time terminate such series or establish and terminate
additional series; and
WHEREAS, the Fund desires to retain the Manager to render investment
advisory and related administrative services to the Fund, and the Manager is
willing to render such services on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, the parties agree as follows:
1. Appointment. The Fund hereby appoints MainStay Management, Inc. to
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act as manager to the Fund for the period and on the terms set forth in this
Agreement. The Manager accepts such appointment and agrees to render the
services herein described, for the compensation herein provided.
2. Duties as Manager. Subject to the supervision of the Directors of the
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Company, the Manager shall administer the Fund's business affairs and manage the
investment operations of the Fund and the composition of the portfolio of the
Fund, including the purchase, retention and disposition thereof, in accordance
with the investment objectives, policies and restrictions of the Fund, as stated
in the Prospectus (as hereinafter defined) and subject to the following
understandings:
(a) The Manager shall (i) furnish the Fund with office facilities;
(ii) be responsible for the financial and accounting records required to be
maintained by the Fund (excluding those being maintained by the Fund's Custodian
and Transfer Agent except as to which the Manager has supervisory functions) and
other than those being maintained by the Fund's sub-adviser, if any; and (iii)
furnish the Fund with ordinary clerical, bookkeeping and recordkeeping services
at such office facilities.
(b) The Manager shall provide supervision of the Fund's investments
and determine from time to time what investments or securities will be
purchased, retained, sold or lent by the Fund, and what portion of the Fund's
assets will be invested or held uninvested as cash.
(c) The Manager shall use its best judgment in the performance of its
duties under this Agreement.
(d) The Manager, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Articles of
Incorporation, By-Laws and Prospectus (each as hereinafter defined) of the
Company and with the instructions and directions of the Directors of the Company
and will conform to and comply with the requirements of the 1940 Act and all
other applicable federal and state laws and regulations.
(e) The Manager, and any sub-adviser to whom such authority has been
delegated, shall determine the securities to be purchased or sold by the Fund
and will place orders pursuant to its determination with or through such
persons, brokers or dealers (including NYLIFE Securities Inc.) in conformity
with the policy with respect to brokerage as set forth in the Company's
Registration Statement and Prospectus (each as hereinafter defined) or as the
Directors may direct from time to time. It is recognized that, in providing the
Fund with investment supervision or the placing of orders for portfolio
transactions, the Manager or any sub-adviser will give primary consideration to
securing the most favorable price and efficient execution. Consistent with this
policy, the Manager or any sub-adviser may consider the financial
responsibility, research and investment information and other services provided
by brokers or dealers who may effect or be a party to any such transaction or
other transactions to which other clients of the Manager or any sub-adviser may
be a party. It is understood that neither the Fund, the Company nor the
Manager or sub-adviser has adopted a formula for allocation of the Fund's
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investment transaction business. It is also understood that it is desirable for
the Fund that the Manager or any sub-adviser have access to supplemental
investment and market research and security and economic analyses provided by
certain brokers who may execute brokerage transactions at a higher cost to the
Fund than may result when allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution. Therefore, the Manager
or any sub-adviser is authorized to place orders for the purchase and sale of
securities for the Fund with such certain brokers, subject to review by the
Company's Directors from time to time with respect to the extent and
continuation of this practice. It is understood that the services provided by
such brokers may be useful to the Manager or any sub-adviser in connection with
its services to other clients.
On occasions when the Manager or any sub-adviser deems the purchase or sale
of a security to be in the best interest of the Fund as well as other clients,
the Manager or any sub-adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be so sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as expenses incurred in the
transaction, will be made by the Manager or any sub-adviser in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Fund and to such other clients.
(f) The Manager shall maintain all books and records with respect to the
Fund's securities transactions required by sub-paragraphs (b)(5), (6), (9) and
(10) and paragraph (f) of Rule 31a-1 under the 1940 Act and any other books and
records required to be maintained by it under the 1940 Act and the Rules
thereunder and shall render to the Company's Directors such periodic and special
reports as the Directors may reasonably request.
(g) The Manager shall provide the Company's Custodian on each business day
with information relating to the execution of all portfolio transactions
pursuant to standing instructions.
(h) With respect to any or all Series of the Company, including the Fund,
the Manager may enter into one or more contracts ("Sub-Advisory or Sub-
Administration Contract") with a sub-adviser or sub-administrator in which the
Manager delegates to such sub-adviser or sub-administrator any or all its duties
specified in this Agreement, provided that each Sub-Advisory or Sub-
Administration Contract meets all requirements of the 1940 Act and rules
thereunder.
3. Manager Personnel. The Manager shall authorize and permit any of its
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directors, officers and employees who may be elected or appointed as Directors
or officers of the Company to serve in the capacities in which they are elected
or appointed. Services to be furnished by the Manager under this Agreement may
be furnished through the medium of any of such directors, officers, or
employees.
4. Books and Records. The Manager shall keep the Fund's books and
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records required to be maintained by it, pursuant to paragraph 2 hereof. The
Manager agrees that all
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records which it maintains for the Fund are the property of the Fund, and it
will surrender promptly to the Fund any of such records upon the Fund's request.
The Manager further agrees to preserve for the periods prescribed by Rule 31a-2
as promulgated by the Commission under the 1940 Act any such records as are
required to be maintained by the Manager pursuant to paragraph 2 hereof.
5. Services Not Exclusive. The services furnished by the Manager
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hereunder are not to be deemed exclusive and the Manager shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby.
6. Documents. The Company has delivered to the Manager copies of each
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of the following documents and will deliver to it all future amendments and
supplements, if any:
(a) Articles of Incorporation of the Company, filed with the Secretary
of State of Maryland (such Articles of Incorporation, as in effect on the date
hereof and as amended from time to time, are herein called the "Articles of
Incorporation");
(b) By-Laws of the Company (such By-Laws, as in effect on the date
hereof and as amended from time to time, are herein called the "By-Laws");
(c) Certified Resolutions of the Directors of the Company authorizing
the appointment of the Manager 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 (the "Registration Statement"), as filed with
the Securities and Exchange Commission (the "Commission") relating to the Fund
and the Fund's Shares and all amendments thereto;
(e) Notification of Registration of the Company under the 1940 Act on
Form N-8A as filed with the Commission and all amendments thereto; and
(f) Prospectus and Statement of Additional Information of the Fund
(such Prospectus and Statement of Additional Information, as currently in effect
and as amended or supplemented from time to time, being herein called the
"Prospectus").
7. Expenses. (a) In connection with the services rendered by the
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Manager under this Agreement, the Manager will bear all of the following
expenses:
(i) the salaries and expenses of all personnel of the Company
and the Manager, except the fees and expenses of Directors who are not
interested persons of the Manager or of the Company; and
(ii) all expenses incurred by the Manager in connection with
managing the investment operations of the Fund and administering the ordinary
course of the Fund's business, other than those assumed by the Fund herein;
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(b) The Fund assumes and will pay its expenses, including but not
limited to those described below (where any such category applies to more than
one series of the Company, the Fund shall be liable only for its allocable
portion of the expenses):
(i) the fees and expenses of Directors who are not interested
persons of the Manager or of the Company;
(ii) the fees and expenses of the Fund's custodian which relate
to (A) the custodial function and the recordkeeping connected therewith, (B) the
maintenance of the required accounting records of the Fund not being maintained
by the Manager, (C) the pricing of the Fund's Shares, including the cost of any
pricing service or services which may be retained pursuant to the authorization
of the Directors of the Company, and (D) for both mail and wire orders, the
cashiering function in connection with the issuance and redemption of the Fund's
Shares;
(iii) the fees and expenses of the Company's transfer and
dividend disbursing agent, which may be the custodian, which relate to the
maintenance of each shareholder account;
(iv) the charges and expenses of legal counsel and independent
accountants for the Company;
(v) brokers' commissions and any issue or transfer taxes
chargeable to the Company in connection with its securities transactions on
behalf of the Fund;
(vi) all taxes and business fees payable by the Fund to federal,
state or other governmental agencies;
(vii) the fees of any trade association of which the Company may
be a member;
(viii) the cost of share certificates representing the Fund's
Shares;
(ix) the fees and expenses involved in registering and
maintaining registrations of the Company and of its Shares with the Securities
and Exchange Commission, registering the Company as a broker or dealer and
qualifying its Shares under state securities laws, including the preparation and
printing of the Company's registration statements and prospectuses for filing
under federal and state securities laws for such purposes;
(x) allocable communications expenses with respect to investor
services and all expenses of shareholders' and Directors' meetings and of
preparing, printing and mailing reports to shareholders in the amount necessary
for distribution to the shareholders;
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(xi) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business; and
(xii) any expenses assumed by the Fund pursuant to a Plan of
Distribution adopted in conformity with Rule 12b-1 under the 1940 Act.
(c) Fees and expenses of legal counsel, registering shares, holding
meetings and communicating with shareholders as described in subparagraph (b)
above include an allocable portion of the cost of maintaining an internal legal
and compliance department.
8. Organization Expenses. The Fund hereby agrees to reimburse the
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Manager for the organization expenses of, and the expenses incurred in
connection with, the initial offering of any Shares of a Fund.
9. Compensation. For the services provided and the facilities furnished
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pursuant to this Agreement, the Company will pay to the Manager as full
compensation therefor a fee at an annual rate of the following percentage of the
average daily net assets of each Fund.
[Bond Fund 0.75%
EAFE Index Fund 0.95%
Growth Equity Fund 0.85%
Indexed Bond Fund 0.50%
Indexed Equity Fund 0.50%
International Equity Fund 0.85%
International Bond Fund 0.80%
Money Market Fund 0.50%
Multi-Asset Fund 0.65%
Short-Term Bond Fund 0.60%
Value Equity Fund 0.85%]
This fee will be computed daily and will be paid to the Manager monthly.
This fee will be chargeable only to the Fund, and no other series of the Company
shall be liable for the fee due and payable hereunder. The Fund shall not be
liable for any expense of any other series of the Company.
10. Standard of Care. The Manager shall not be liable for any error of
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judgment or for any loss suffered by the Fund in connection with the matters to
which this Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
11. Duration and Termination. This Agreement shall continue in effect
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with respect to the Fund for a period of more than two years from the date
hereof only so long as such continuance is specifically approved at least
annually with respect to the Fund in conformity with the requirements of the
1940 Act and the Rules thereunder; provided, however, that this
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Agreement may be terminated with respect to the Fund at any time, without the
payment of any penalty, by the Directors of the Company or by vote of a majority
of the outstanding voting securities (as defined in the 0000 Xxx) of the Fund,
or by the Manager at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the other party. This
Agreement shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).
12. Other Business. Nothing in this Agreement shall limit or restrict
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the right of any of the Manager's directors, officers, or employees who may also
be a Director, officer, or employee of the Company to engage in any other
business or to devote his time and attention in part to the management or other
aspects of any business, whether of a similar or dissimilar nature, nor limit or
restrict the Manager's right to engage in any other business or to render
services of any kind to any other corporation, trust, firm, individual or
association.
13. Independent Contractor. Except as otherwise provided herein or
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authorized by the Directors of the Company from time to time, the Manager shall
for all purposes herein be deemed to be an independent contractor and shall have
no authority to act for or represent the Fund or the Company in any way or
otherwise be deemed an agent of the Fund or the Company.
14. Company Materials. During the term of this Agreement, the Company
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agrees to furnish the Manager at its principal office all Prospectuses, proxy
statements, reports to shareholders, sales literature or other material prepared
for distribution to shareholders of the Fund or to the public, which refer to
the Manager in any way, prior to use thereof and not to use such material if the
Manager reasonably objects in writing within five business days (or such other
time as may be mutually agreed) after receipt thereof. In the event of
termination of this Agreement, the Company will continue to furnish to the
Manager copies of any of the above-mentioned materials which refer in any way to
the Manager. The Company shall furnish or otherwise make available to the
Manager such other information relating to the business affairs of the Fund as
the Manager at any time, or from time to time, reasonably requests in order to
discharge its obligations hereunder.
15. Amendment. This Agreement may be amended in writing by mutual
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consent, but the consent of the Fund, if required, must be obtained in
conformity with the requirements of the 1940 Act and the Rules thereunder.
16. Notice. Any notice or other communication required to be given
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pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Manager at Xxxxxx Corporate Center
I, Building A, 000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000; or (2) to
the Company at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000.
17. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of New York.
18. Use of Name. The Fund may use any name including the word "MainStay"
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only for so long as this Agreement or any other Investment Advisory Agreement
between the Manager
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or any other affiliate of New York Life Insurance Company and the Company or any
extension, renewal or amendment thereof remains in effect, including any similar
agreement with any organization which shall have succeeded to the Manager's
business as investment adviser. At such time as such an agreement shall no
longer be in effect, the Fund will (to the extent that it lawfully can) cease to
use such name or any other name indicating that it is advised by or otherwise
connected with the Manager or any organization which shall have so succeeded to
its business.
19. Miscellaneous. The captions in this Agreement are included for
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convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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. As used in this Agreement, terms shall have the same meaning
as such terms have in the 1940 Act. Where the effect of a requirement of the
federal securities laws reflected in any provision of this Agreement is made
less restrictive by a rule, regulation or order of the Commission, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order. This Agreement may be signed in
counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
MAINSTAY INSTITUTIONAL FUNDS INC., on
behalf of
_________________________ FUND,
a series
By: ________________________________
Name:
Title:
MAINSTAY MANAGEMENT, INC.
By: ________________________________
Name:
Title:
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