EXHIBIT d(2)(e)
FORM OF SECOND AMENDED AND RESTATED
SUB-ADVISORY AGREEMENT
MAINSTAY MAP FUND
Second Amended and Restated Sub-Advisory Agreement, made as of November
25, 2002 (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 Markston International LLC, a New York limited
liability corporation (the "Subadviser").
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 Subadviser entered into an Amended and Restated
Sub-Advisory Agreement, dated August 1, 2002, with the Manager, which amends and
restates in its entirety the Sub-Advisory Agreement, dated June 1, 1999, as
further amended effective October 1, 1999 (collectively, the "Sub-Advisory
Agreement"); and
WHEREAS, under the Sub-Advisory Agreement, the Subadviser has agreed to
provide certain investment advisory and related administrative services to the
MainStay MAP Fund (the "Fund"), a series of the Trust; and
WHEREAS, the Manager entered into an Amended and Restated Management
Agreement, dated August 1, 2002, with the Trust, on behalf of its series, which
amends and restates in its entirety the Management Agreement, dated October 21,
1997, as further amended on October 1, 1999 (collectively the "Management
Agreement"); and
WHEREAS, under the Management Agreement, the Manager has agreed to
provide certain investment advisory and related administrative services to the
Fund; and
WHEREAS, the Management Agreement permits the Manager to delegate
certain of its investment advisory duties under the Management Agreement to one
or more sub-advisers; and
WHEREAS, the Manager desires to retain the Subadviser to furnish certain
investment advisory services with respect to the Fund and the Subadviser is
willing to furnish such services; and
WHEREAS, the Board of Trustees of the Trust, at a meeting held on
September 9, 2002, and the shareholders of the Fund, at a special meeting duly
called and held on November 22, 2002, have
approved an amendment to this Agreement providing that the Subadviser will
manage a portion of the Fund's assets, as the Manager shall determine from time
to time; and
WHEREAS, this Agreement amends and restates, in its entirety, the First
Amended and Restated Agreement in order to reflect that the Subadviser will
manage such portion of the Fund's assets;
NOW, THEREFORE, the parties hereto agree as follows:
1. Appointment. For the periods and on the terms set forth in this
Agreement, the Manager hereby appoints the Subadviser as an investment
sub-adviser with respect to that portion of the assets of the Fund designated by
the Manager as allocated to the Subadviser ("Allocated Assets"), subject to such
written instructions, including any redesignation of the Allocated Assets, and
supervision as the Manager may from time to time furnish. The Subadviser accepts
that appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Duties as Subadviser. Subject to the supervision of the Board of
Trustees of the Trust and the Manager, the Subadviser shall manage the
investment operations and portfolio composition of the Allocated Assets,
including the purchase, retention and disposition of securities in accordance
with the investment objectives, policies and restrictions of the Fund, as
specified in the currently effective Prospectus (as hereinafter defined) and
subject to the following understandings:
(a) The Subadviser shall provide supervision of the investments
of the Allocated Assets and determine from time to time what investments or
securities will be purchased, retained, sold or lent by or for the Allocated
Assets, and what portion of the Allocated Assets will be invested or held
uninvested as cash.
(b) The Subadviser shall use its best judgment in the
performance of its duties under this Agreement.
(c) The Subadviser, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the Declaration
of Trust, By-Laws and Prospectus (each as hereinafter defined) of the Trust and
with the instructions and directions of the Board of Trustees and the Manager,
and will conform to and comply with the requirements of the 1940 Act and all
other applicable federal and state laws and regulations.
(d) The Subadviser shall determine the securities to be
purchased or sold by the Fund with respect to the Allocated Assets 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 Trust's Registration Statement and
Prospectus (each as hereinafter defined) or as the Board of Trustees 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 Subadviser
will give primary consideration to securing the most favorable price and
efficient execution. Consistent with this policy, the Subadviser 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
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Subadviser may be a party. It is understood that none of the Fund, the Trust,
the Manager nor the Subadviser has adopted a formula for allocation of the
Fund's investment transaction business. It is also understood that it is
desirable for the Fund that the Subadviser 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
Subadviser is authorized to place orders for the purchase and sale of securities
for the Fund with respect to the Allocated Assets with such certain brokers,
subject to review by the Trust's Board of Trustees 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 Subadviser in
connection with its services to other clients.
On occasions when the Subadviser deems the purchase or
sale of a security to be in the best interest of the Fund as well as other
clients, the Subadviser, 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 Subadviser in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Fund and to
such other clients.
(e) The Subadviser shall maintain all books and records with
respect to the Allocated Assets of 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 Manager
and to the Trust's Trustees such periodic and special reports as the Manager or
the Trustees may reasonably request.
(f) The Subadviser shall provide the Fund's Custodian on each
business day with information relating to the execution of all portfolio
transactions for the Allocated Assets pursuant to standing instructions.
3. Subadviser Personnel. The Subadviser shall authorize and permit any
of its directors, officers and employees who may be elected or appointed as
Trustees or officers of the Trust to serve in the capacities in which they are
elected or appointed. Services to be furnished by the Subadviser under this
Agreement may be furnished through the medium of any of such directors,
officers, or employees.
4. Books and Records. The Subadviser shall keep the books and records
with respect to the Allocated Assets of the Fund as required to be maintained by
it, pursuant to paragraph 2 hereof. The Subadviser agrees that all records that
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 Subadviser
further agrees to preserve for the periods prescribed by the Rules of the
Securities and Exchange Commission (the "Commission") under the 1940 Act any
such records as are required to be maintained by the Subadviser pursuant to
paragraph 2 hereof. The Subadviser may make and retain copies of such records.
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5. Services Not Exclusive. The services furnished by the Subadviser
hereunder are not to be deemed exclusive and the Subadviser shall be free to
furnish similar or different services to others so long as its services under
this Agreement are not impaired thereby.
6. Documents. The Manager has delivered to the Subadviser 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
"Declaration of Trust");
(b) By-Laws of the Trust (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 Board of Trustees of the Trust
authorizing the appointment of the Subadviser and approving the form of this
Agreement;
(d) Written Instrument to Establish and Designate Separate
Series of Shares;
(e) 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 Commission relating to the Fund and the Fund's Shares and all
amendments thereto;
(f) Notification of Registration of the Trust under the 1940 Act
on Form N-8A as filed with the Commission and all amendments thereto; and
(g) Prospectus and Statement of Additional Information of the
Trust (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. During the term of this Agreement, the Subadviser will bear
all expenses incurred by it in connection with its services under this
Agreement. The Subadviser shall not be responsible for any expenses incurred by
the Trust, the Fund or the Manager.
8. Compensation. For the services provided and the expenses assumed by
the Subadviser pursuant to this Agreement, the Manager, not the Trust or the
Fund, will pay to the Subadviser a fee, computed daily and payable monthly, at
an annual rate, as set forth in Schedule A, of the average daily net assets of
the Allocated Assets of the Fund.
9. Standard of Care. Subject to applicable law, the Subadviser shall not
be liable for any error of 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.
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10. 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 two (2) years from the date
first indicated above and shall continue on an annual basis thereafter with
respect to the Fund, provided that such annual 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 Fund, and (b) the vote of a majority of
those Trustees who are not parties to this Agreement or interested persons (as
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. Notwithstanding the
foregoing, this Agreement may be terminated: (a) with respect to the Fund, at
any time without penalty upon the vote of a majority of the Trustees or by vote
of the majority of the Fund's outstanding voting securities, upon sixty (60)
days' written notice to the Subadviser; (b) by the Manager, at any time without
penalty upon sixty (60) days' written notice to the Subadviser or immediately
upon material breach by the Subadviser, after the Subadviser has received notice
and an opportunity to cure such breach, or immediately if, in the reasonable
judgment of the Manager, the Subadviser becomes unable to discharge its duties
and obligations under this Agreement; or (c) by the Subadviser, at any time
without penalty, upon sixty (60) days' written notice to the Fund. This
Subadvisory Agreement also will terminate automatically in the event of its
assignment (as defined in the 0000 Xxx) or the assignment or termination of the
Management Agreement.
11. Other Business. Nothing in this Agreement shall limit or restrict
the right of any of the Subadviser's directors, officers, or employees who may
also be a Trustee, officer, or employee of the Trust to engage in any other
business or to devote his or her 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 Subadviser's right to engage in any other business or to
render services of any kind to any other corporation, trust, firm, individual or
association.
12. Proxies. The Manager has provided the Subadviser 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 Subadviser will
vote all proxies solicited by or with respect to the issuers of securities held
by the Fund, in accordance with applicable fiduciary obligations. The Subadviser
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.
13. Amendment. 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. No material amendment of this Agreement shall be
effective until approved (i) by a vote of a majority of those Trustees of the
Trust who are not parties to this Agreement or interested persons of any such
party, and (ii) by a vote of a majority of the Fund's outstanding voting
securities (unless, in the case of (ii), the Trust receives a Commission order
or no-action letter permitting it to modify the Agreement without such vote).
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
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15. 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; or (2) to
the Subadviser at 00 Xxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx X. Xxxxxxxxx, Managing Member.
16. Miscellaneous. The captions in this Agreement are included for
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, the terms "majority of the
outstanding voting securities," "affiliated person," "interested person,"
"assignment," "broker," "investment adviser," "net assets," "sale," "sell" and
"security" 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.
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
By:
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Name:
Title:
MARKSTON INTERNATIONAL LLC
By:
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Name:
Title:
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SCHEDULE A
FUND ANNUAL RATE(1)
MAP Fund 0.450% up to $250 million;
0.400% from $250 million to $500
million; and
0.350% on assets in excess of $500
million.
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(1) Expressed as a percentage of the average daily net assets of the Allocated
Assets of the Fund.
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