FORM N-SAR Exhibits 77Q1(e) THE MAINSTAY FUNDS For Period Ended 4/30/09 MAINSTAY FUNDS INTERIM SUBADVISORY AGREEMENT
FORM
N-SAR
Exhibits
77Q1(e)
THE
MAINSTAY FUNDS
811-04550
For
Period Ended 4/30/09
This
Interim Subadvisory Agreement, is made as of the 15th
day of
April, 2009 (the “Agreement”), between New York Life Investment Management LLC
(, a Delaware limited liability company (the “Manager”) and MacKay ▇▇▇▇▇▇▇ LLC,
a Delaware limited liability company (the “Subadvisor”).
WHEREAS,
The MainStay Funds (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
August 1, 2008 with the Trust, on behalf of its series, as amended (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 Board of Trustees of the Trust, at a meeting held on April 8, 2009, approved
the termination of the Subadvisory Agreement dated August 1, 2008, by and
between the Manager and McMorgan and Company LLC.
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; and
WHEREAS,
Rule 15a-4 under the 1940 Act provides for a temporary exemption from the
shareholder approval requirement of Section 15(a) of the 1940 Act upon board
approval of an interim contract containing specified conditions; and
WHEREAS,
the Board of Trustees of the Trust, including a majority of the Trustees who
are
not “interested persons,” as defined in the 1940 Act, of the Trust, voted at a
meeting held on April 8, 2009, to approve this Interim Sub-Advisory Agreement
(“Interim Agreement”) so that the Subadvisor may provide investment advisory
services to the Series as of the date first stated above for a period of no
more
than 150 days from such date or, if earlier, until a new Subadvisory Agreement
with the Subadvisor is approved by the vote of a “majority of the Series’
outstanding voting securities” (as defined in the 1940 Act);
NOW,
THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between the Manager and the Subadvisor
as follows:
1.
Appointment. The Manager hereby appoints MacKay ▇▇▇▇▇▇▇ LLC to act as Subadvisor
to the series designated on Schedule A of this Agreement (the “Series”) with
respect to all or a 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 Manager wishes
to
retain the Subadvisor to render investment advisory services hereunder, it
shall
notify the Subadvisor in writing. If the Subadvisor is willing to
render such services, it shall notify the Manager in writing, whereupon such
series shall become a Series hereunder, and be subject to this Agreement, and
Schedule A shall be revised accordingly.
2.
Portfolio Management Duties. Subject to the supervision of the Trust’s Board of
Trustees (“Board”) 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. The Subadvisor will
conduct 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
“SEC”), as amended, copies of which shall be delivered to the Subadvisor by the
Manager. The Subadvisor further agrees as follows:
(a)
The Subadvisor understands that the Allocated Assets of the Series need to
be
managed so as to permit the Series to qualify or continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code,
and will coordinate efforts with the Manager with that objective.
(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 which a copy has been
delivered to the Subadvisor, 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, copies of which shall be delivered to
the
Subadvisor by the Manager.
(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 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, over time, 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.
The Manager recognizes that in some cases this procedure may adversely affect
the results obtained for the Series or Trust.
(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 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, 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 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 entity, entities, 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 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, 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 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, within 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 ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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.
(i)
The Subadvisor is authorized to retain legal counsel and financial advisors
and
to negotiate and execute documentation relating to investments in the Allocated
Assets or Series, at the expense of the Allocated Assets or Series. Such
documentation may relate to investments to be made or sold, currently held
or
previously held. The authority shall include, without limitation:
(i) documentation relating to private placements and bank debt;
(ii) waivers, consents, amendments or other modifications relating to
investments; and (iii) purchase agreements, sales agreements, commitment
letters, pricing letters, registration rights agreements, indemnities and
contributions, escrow agreements and other investment related
agreements. Manager represents that the Allocated Assets or Series
can settle such private placements.
3.
Compensation. For the services provided and the expenses assumed pursuant to
this Agreement, the Manager shall pay the Subadvisor as full compensation
therefor, a fee equal to the percentage of the Allocated Assets constituting
the
respective Series’ average daily net assets 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
in writing by the Subadvisor, shall not cause a reduction in the amount of
the
payment to the Subadvisor.
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 may determine, and consistent with Section 28(e) of the Securities
Exchange Act of 1934, as amended, and the rules and interpretations of the
SEC
thereunder, 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
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 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 SEC, to its affiliated
broker-dealer, or to such brokers and dealers who also provide research,
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, indicating the broker-dealers to which such allocations have been made
and the basis therefor.
5.
Disclosure about Subadvisor. The Subadvisor has reviewed the post-effective
amendment to the Registration Statement for the Trust filed with the SEC that
contains disclosure about the Subadvisor and represents and warrants that,
with
respect to the disclosure about the Subadvisor or information relating directly
or indirectly to the Subadvisor, such Registration Statement contains, as of
the
date hereof, no untrue statement of any material fact and does 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 further represents and warrants that it is a duly registered
investment adviser under the Advisers Act and has notice filed in all states
in
which the Subadvisor is required to make such filings.
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 each Series which relate to: (i) the custodial
function and recordkeeping connected therewith; (ii) the maintenance of the
required accounting records of the Series not being maintained by the Manager;
(iii) 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 (iv) for both mail and wire orders, the
cashiering function in connection with the issuance and redemption of the
Series’ shares;
(c)
the fees and expenses of the Trust’s transfer and dividend disbursing agent,
that may be the custodian, which relate to the maintenance of each shareholder
account;
(d)
the charges and expenses of legal counsel 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 Series with the SEC, 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: (i) periodically providing the Trust’s Chief
Compliance Officer with information about and independent third-party reports
(if available) in connection with the Subadvisor’s compliance program adopted
pursuant to Rule 206(4)-7 under the Advisers Act (“Subadvisor’s Compliance
Program”); (ii) reporting any material deficiencies in the Subadvisor’s
Compliance Program to the Trust’s Chief Compliance Officer within a reasonable
time; and (iii) reporting any material changes to the Subadvisor’s
Compliance Program to the Trust’s Chief Compliance Officer within a reasonable
time. The Subadvisor understands that the Board 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’ approval of the
Subadvisor’s Compliance Program.
(b)
The Subadvisor agrees that it shall immediately notify the Manager and the
Trust’s Chief Compliance Officer: (i) in the event that the SEC
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 (ii) 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 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: (i) in
the event that the SEC 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 (ii) 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, as amended from time to time, as filed with
the Secretary of the Commonwealth of the Commonwealth of Massachusetts (such
Declaration of Trust, as in effect on the date hereof and as amended from time
to time, are herein called the “Declaration of Trust”);
(b)
By-Laws of the Trust, as amended from time to time (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 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 SEC 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-8A,
as
filed with the SEC, 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 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 SEC) 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) business 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 Series 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 Manager 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.
Nothing
in this section shall be deemed a limitation or waiver of any obligation or
duty
that may not by law be limited or waived.
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 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: (i) may be based
upon any willful misfeasance, bad faith or gross negligence in the performance
of the Manager’s duties or reckless disregard of the Manager’s obligations and
duties under this Agreement, or by any of its employees or representatives
or
any affiliate of or any person acting on behalf of the Manager, or (ii) 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, 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 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: (i) may be based upon any 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, or by any of its employees or
representatives, or any affiliate of or any person acting on behalf of the
Subadvisor; (ii) may be based upon a failure to comply with Section 2,
Paragraph (a) of this Agreement; or (iii) 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 a
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 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 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 interest 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 interest and, therefore, would not, 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.
Services Not Exclusive. The services furnished by the Subadvisor hereunder
are
not to be deemed exclusive, and except as the Subadvisor may otherwise agree
in
writing, the Subadvisor shall be free to furnish similar services to others
so
long as its services under this Agreement are not impaired thereby. Nothing
in
this Agreement shall limit or restrict the right of any director, officer or
employee of the Subadvisor, 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 other business,
whether of a similar nature or a dissimilar nature.
17.
Duration and Termination. This Agreement shall become effective on the date
first indicated above. This Agreement will continue in effect, unless sooner
terminated as provided herein, for a period of no more than 150 days from such
date or, if earlier, until a new Sub-Advisory Agreement with the Subadvisor
is
approved by the vote of a “majority of the Series’ outstanding voting
securities” (as defined in the 1940 Act). This Agreement is
terminable, without payment of any penalty, by vote of the Board of Trustees
of
the Trust or a by vote of a majority of Series’ outstanding voting securities on
ten (10) calendar days’ written notice to the Subadvisor. This
Agreement will automatically terminate, without the payment of any penalty,
in
the event of its assignment (as defined in the ▇▇▇▇ ▇▇▇) or in the event the
Management Agreement between the Manager and the Trust is assigned or terminates
for any other reason. This Agreement will also terminate upon written
notice to the other party that the other party is in material breach of this
Agreement, unless the other party in material breach of this Agreement cures
such breach to the reasonable satisfaction of the party alleging the breach
within ten (10) days after written notice. In the event of
termination for any reason, all records of the Series 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. In the event this Agreement
is
terminated or is not approved in the manner described above, the Sections
numbered 2(f), 8, 9, 10, 12, 14, 15 and 19 of this Agreement shall remain in
effect, as well as any applicable provision of this Section 17.
18.
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.
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 name MacKay ▇▇▇▇▇▇▇ LLC or any derivative thereof
or
logo associated with that name is the valuable property of the Subadvisor and
its affiliates and that the Trust and/or the Series have the right to use such
name (or derivative or logo) in offering materials of the Trust or sales
materials with respect to 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
name
(or derivative or logo).
20.
Proxies; Class Actions.
(a)
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.
(b)
Manager acknowledges and agrees that the Subadvisor shall not be responsible
for
taking any action or rendering advice with respect to any class action claim
relating to any assets held in the Allocated Assets or Series. Manager will
instruct the applicable service providers not to forward to the Subadvisor
any
information concerning such actions. The Subadvisor will, however, forward
to
Manager any information it receives regarding any legal matters involving any
asset held in the Allocated Assets or Series.
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, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President; or (2) to the Subadvisor
at
MacKay ▇▇▇▇▇▇▇ LLC, ▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Chairman.
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 SEC 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 1940 Act;
(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 Section 16 of 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
by their officers designated below as of the 15th day of April,
2009. This Agreement may be signed in counterparts.
NEW
YORK
LIFE INVESTMENT MANAGEMENT LLC
Attest:
/s/ ▇▇▇▇▇▇
▇▇▇▇▇
By: /s/ ▇▇▇▇▇
▇. ▇▇▇▇▇
Name:
▇▇▇▇▇▇
▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Vice President
and
Title:
Executive Vice President
Assistant
General Counsel
MACKAY
▇▇▇▇▇▇▇ LLC
Attest:
/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇
By: /s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name:
▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Senior Managing
Director
Title:
Chief Operating Officer
and
General Counsel
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 equal to the following:
|
FUND
|
ANNUAL
RATE
|
|
Institutional
Bond Fund
|
0.175%
|
The
portion of the fee based upon the average daily net assets of the respective
Fund shall be accrued daily at the rate of 1/(number of days in calendar year)
of the annual rate applied to the daily net assets of the Fund.
|
|
Payment
will be made to the Subadvisor on a monthly basis.
|
::ODMA\PCDOCS\OGCDOCS\226081\2
THE
MAINSTAY FUNDS
SUBADVISORY
AGREEMENT
This
Subadvisory Agreement, made as of the 1st
day of
January, 2009 (the “Agreement”), between New York Life Investment Management
LLC, a Delaware limited liability company (the “Manager”) and Madison Square
Investors LLC, a Delaware limited liability company (the “Subadvisor”).
WHEREAS,
The MainStay Funds (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 the Amended and Restated Management Agreement with
the
Trust, on behalf of its series, as amended (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 Manager and the Subadvisor
as follows:
1.
Appointment. The Manager hereby appoints Madison Square Investors LLC to act
as
Subadvisor to the series designated on Schedule A of this Agreement (the
“Series”) with respect to all or a 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 Manager wishes
to
retain the Subadvisor to render investment advisory services hereunder, it
shall
notify the Subadvisor in writing. If the Subadvisor is willing to
render such services, it shall notify the Manager in writing, whereupon such
series shall become a Series hereunder, and be subject to this Agreement, and
Schedule A shall be revised accordingly.
2.
Portfolio Management Duties. Subject to the supervision of the Trust’s Board of
Trustees (“Board”) 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. The Subadvisor will
conduct 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
“SEC”), as amended, copies of which shall be delivered to the Subadvisor by the
Manager. The Subadvisor further agrees as follows:
(a)
The Subadvisor understands that the Allocated Assets of the Series need to
be
managed so as to permit the Series to qualify or continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code,
and will coordinate efforts with the Manager with that objective.
(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 which a copy has been
delivered to the Subadvisor, 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, copies of which shall be delivered to
the
Subadvisor by the Manager.
(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 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, over time, 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.
The Manager recognizes that in some cases this procedure may adversely affect
the results obtained for the Series or Trust.
(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 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, 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 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 entity, entities, 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 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, 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 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, within 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 ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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
therefor, a fee equal to the percentage of the Allocated Assets constituting
the
respective Series’ average daily net assets 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 limitations or
fee waivers for the Series that may be agreed to by the Manager, but not agreed
to in writing 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 may determine, and consistent with Section 28(e) of the Securities
Exchange Act of 1934, as amended, and the rules and interpretations of the
SEC
thereunder, 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
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 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 SEC, to its affiliated
broker-dealer, or to such brokers and dealers who also provide research,
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, indicating the broker-dealers to which such allocations have been made
and the basis therefor.
5.
Disclosure about Subadvisor. The Subadvisor has reviewed the post-effective
amendment to the Registration Statement for the Trust filed with the SEC that
contains disclosure about the Subadvisor and represents and warrants that,
with
respect to the disclosure about the Subadvisor or information relating directly
or indirectly to the Subadvisor, such Registration Statement contains, as of
the
date hereof, no untrue statement of any material fact and does 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 further represents and warrants that it is a duly registered
investment adviser under the Advisers Act and has notice filed in all states
in
which the Subadvisor is required to make such filings.
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 each Series which relate to: (i) the custodial
function and recordkeeping connected therewith; (ii) the maintenance of the
required accounting records of the Series not being maintained by the Manager;
(iii) 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 (iv) for both mail and wire orders, the
cashiering function in connection with the issuance and redemption of the
Series’ shares;
(c)
the fees and expenses of the Trust’s transfer and dividend disbursing agent,
that may be the custodian, which relate to the maintenance of each shareholder
account;
(d)
the charges and expenses of legal counsel 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 Series with the SEC, 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: (i) periodically providing the Trust’s Chief
Compliance Officer with information about and independent third-party reports
(if available) in connection with the Subadvisor’s compliance program adopted
pursuant to Rule 206(4)-7 under the Advisers Act (“Subadvisor’s Compliance
Program”); (ii) reporting any material deficiencies in the Subadvisor’s
Compliance Program to the Trust’s Chief Compliance Officer within a reasonable
time; and (iii) reporting any material changes to the Subadvisor’s
Compliance Program to the Trust’s Chief Compliance Officer within a reasonable
time. The Subadvisor understands that the Board 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’ approval of the
Subadvisor’s Compliance Program.
(b)
The Subadvisor agrees that it shall immediately notify the Manager and the
Trust’s Chief Compliance Officer: (i) in the event that the SEC
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 (ii) 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 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: (i) in
the event that the SEC 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 (ii) 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, as amended from time to time, as filed with
the Secretary of the Commonwealth of the Commonwealth of Massachusetts (such
Declaration of Trust, as in effect on the date hereof and as amended from time
to time, are herein called the “Declaration of Trust”);
(b)
By-Laws of the Trust, as amended from time to time (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 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 SEC 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-8A,
as
filed with the SEC, 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 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 SEC) 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) business 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 Series 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 Manager 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.
Nothing
in this section shall be deemed a limitation or waiver of any obligation or
duty
that may not by law be limited or waived.
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 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: (i) may be based
upon any willful misfeasance, bad faith or gross negligence in the performance
of the Manager’s duties or reckless disregard of the Manager’s obligations and
duties under this Agreement, or by any of its employees or representatives
or
any affiliate of or any person acting on behalf of the Manager, or (ii) 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, 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 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: (i) may be based upon any 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, or by any of its employees or
representatives, or any affiliate of or any person acting on behalf of the
Subadvisor; (ii) may be based upon a failure to comply with Section 2,
Paragraph (a) of this Agreement; or (iii) 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 a
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 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 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 interest 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 interest and, therefore, would not, 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.
Services Not Exclusive. The services furnished by the Subadvisor hereunder
are
not to be deemed exclusive, and except as the Subadvisor may otherwise agree
in
writing, the Subadvisor shall be free to furnish similar services to others
so
long as its services under this Agreement are not impaired thereby. Nothing
in
this Agreement shall limit or restrict the right of any director, officer or
employee of the Subadvisor, 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 other business,
whether of a similar nature or a dissimilar nature.
17.
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 when following a shareholder approval, and otherwise
a period of one (1) year, 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 or by the vote
of a majority of the outstanding voting securities (as defined in the ▇▇▇▇
▇▇▇)
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
▇▇▇▇ ▇▇▇) 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 ▇▇▇▇ ▇▇▇) 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 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. 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 Management Agreement between
the
Manager 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, 12, 14,
15
and 19 of this Agreement shall remain in effect, as well as any applicable
provision of this Section 17.
18.
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.
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 name Madison Square Investors LLC or any derivative
thereof or logo associated with that name, is the valuable property of the
Subadvisor and its affiliates and that the Trust and/or the Series have the
right to use such name (or derivative or logo) in offering materials of the
Trust or sales materials with respect to 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 name (or derivative or logo).
20.
Proxies; Class Actions.
(a)
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.
(b)
Manager acknowledges and agrees that the Subadvisor shall not be responsible
for
taking any action or rendering advice with respect to any class action claim
relating to any assets held in the Allocated Assets or Series. Manager will
instruct the applicable service providers not to forward to the Subadvisor
any
information concerning such actions. The Subadvisor will, however, forward
to
Manager any information it receives regarding any legal matters involving any
asset held in the Allocated Assets or Series.
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, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President; or (2) to the Subadvisor
at
Madison Square Investors LLC, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: President.
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 SEC 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 1940 Act;
(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 Section 17 of 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
by their officers designated below as of the 1st
day of
January, 2009. This Agreement may be signed in counterparts.
NEW
YORK
LIFE INVESTMENT MANAGEMENT LLC
Attest:
/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇
▇. ▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Director
Title:
Executive Vice President
MADISON
SQUARE INVESTORS LLC
Attest:
/s/ ▇▇▇▇▇▇
▇▇▇▇
By: /s/ ▇▇▇▇
▇▇▇▇▇▇
Name:
▇▇▇▇▇▇
▇▇▇▇
Name:
▇▇▇▇ ▇▇▇▇▇▇
Title:
2nd
Vice
President
Title:
Chief Executive Officer
SCHEDULE
A
(As
of
January 1, 2009)
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 equal to the following:
|
FUND
|
ANNUAL
RATE
|
|
Common
Stock Fund *
|
0.275%
up to $500 million;
0.2625%
from $500 million to $1 billion; and
0.250%
in excess of $1 billion
|
|
Equity
Index Fund*
|
0.125%
up to $1 billion;
0.1125%
from $1 billion to $3 billion; and
0.100%
in excess of $3 billion
|
The
portion of the fee based upon the average daily net assets of the respective
Fund shall be accrued daily at the rate of 1/(number of days in calendar year)
of the annual rate applied to the daily net assets of the Fund.
|
|
Payment
will be made to the Subadvisor on a monthly basis.
|
*
For
certain Funds listed above, NYLIM has agreed to waive a portion of each Fund’s
management fee or reimburse the expenses of the appropriate class of the Fund
so
that the class’ total ordinary operating expenses do not exceed certain
amounts. These waivers or expense limitations may be changed with
Board approval. To the extent NYLIM has agreed to waive its
management fee or reimburse expenses, Madison Square Investors LLC, as
Subadvisor for these Funds, has voluntarily agreed to waive or reimburse its
fee
proportionately.
THE
MAINSTAY FUNDS
AMENDED
AND RESTATED SUBADVISORY AGREEMENT
This
Amended and Restated Subadvisory Agreement, made as of the ___ day of December,
2008 (the “Agreement”), between New York Life Investment Management LLC, a
Delaware limited liability company (the “Manager”) and ▇▇▇▇▇▇▇ Capital
Management, Inc., a Minnesota corporation (the “Subadvisor”) and subsidiary of
Nuveen Investments, Inc., a Delaware corporation.
WHEREAS,
The MainStay Funds (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 the Amended and Restated Management Agreement dated
August 1, 2008 with the Trust, on behalf of its series, as amended (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; and
WHEREAS,
this Agreement amends and restates the Subadvisory Agreement between the Manager
and the Subadvisor dated March 27, 2006;
NOW,
THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between the Manager and the Subadvisor
as follows:
1.
Appointment. The Manager hereby appoints ▇▇▇▇▇▇▇ Capital Management, Inc. to
act
as Subadvisor to the series designated on Schedule A of this Agreement (the
“Series”) with respect to all or a 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 Manager wishes
to
retain the Subadvisor to render investment advisory services hereunder, it
shall
notify the Subadvisor in writing. If the Subadvisor is willing to
render such services, it shall notify the Manager in writing, whereupon such
series shall become a Series hereunder, and be subject to this Agreement, and
Schedule A shall be revised accordingly.
2.
Portfolio Management Duties. Subject to the supervision of the Trust’s Board of
Trustees (“Board”) 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. The Subadvisor will
conduct 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
“SEC”), as amended, copies of which shall be delivered to the Subadvisor by the
Manager. The Subadvisor further agrees as follows:
(a)
The Subadvisor understands that the Allocated Assets of the Series need to
be
managed so as to permit the Series to qualify or continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code,
and will coordinate efforts with the Manager with that objective.
(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 which a copy has been
delivered to the Subadvisor, 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, copies of which shall be delivered to
the
Subadvisor by the Manager.
(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 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, over time, 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.
The Manager recognizes that in some cases this procedure may adversely affect
the results obtained for the Series or Trust.
(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 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, 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 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 entity, entities, 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 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, 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 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, within 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 ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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
therefor, a fee equal to the percentage of the Allocated Assets constituting
the
respective Series’ average daily net assets 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 limitations or
fee waivers for the Series that may be agreed to by the Manager, but not agreed
to in writing 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 may determine, and consistent with Section 28(e) of the Securities
Exchange Act of 1934, as amended, and the rules and interpretations of the
SEC
thereunder, 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
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 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 SEC, to its affiliated
broker-dealer, or to such brokers and dealers who also provide research,
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, indicating the broker-dealers to which such allocations have been made
and the basis therefor.
5.
Disclosure about Subadvisor. The Subadvisor has reviewed the post-effective
amendment to the Registration Statement for the Trust filed with the SEC that
contains disclosure about the Subadvisor and represents and warrants that,
with
respect to the disclosure about the Subadvisor or information relating directly
or indirectly to the Subadvisor, such Registration Statement contains, as of
the
date hereof, no untrue statement of any material fact and does 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 further represents and warrants that it is a duly registered
investment adviser under the Advisers Act and has notice filed in all states
in
which the Subadvisor is required to make such filings.
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 each Series which relate to: (i) the custodial
function and recordkeeping connected therewith; (ii) the maintenance of the
required accounting records of the Series not being maintained by the Manager;
(iii) 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 (iv) for both mail and wire orders, the
cashiering function in connection with the issuance and redemption of the
Series’ shares;
(c)
the fees and expenses of the Trust’s transfer and dividend disbursing agent,
that may be the custodian, which relate to the maintenance of each shareholder
account;
(d)
the charges and expenses of legal counsel 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 Series with the SEC, 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: (i) periodically providing the Trust’s Chief
Compliance Officer with information about and independent third-party reports
(if available) in connection with the Subadvisor’s compliance program adopted
pursuant to Rule 206(4)-7 under the Advisers Act (“Subadvisor’s Compliance
Program”); (ii) reporting any material deficiencies in the Subadvisor’s
Compliance Program to the Trust’s Chief Compliance Officer within a reasonable
time; and (iii) reporting any material changes to the Subadvisor’s
Compliance Program to the Trust’s Chief Compliance Officer within a reasonable
time. The Subadvisor understands that the Board 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’ approval of the
Subadvisor’s Compliance Program.
(b)
The Subadvisor agrees that it shall immediately notify the Manager and the
Trust’s Chief Compliance Officer: (i) in the event that the SEC
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 (ii) 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 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: (i) in
the event that the SEC 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 (ii) 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, as amended from time to time, as filed with
the Secretary of the Commonwealth 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, as amended from time to time (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 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 SEC 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-8A,
as
filed with the SEC, 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 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 SEC) 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) business 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 Series 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 Manager 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.
Nothing
in this section shall be deemed a limitation or waiver of any obligation or
duty
that may not by law be limited or waived.
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 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: (i) may be based
upon any willful misfeasance, bad faith or gross negligence in the performance
of the Manager’s duties or reckless disregard of the Manager’s obligations and
duties under this Agreement, or by any of its employees or representatives
or
any affiliate of or any person acting on behalf of the Manager, or (ii) 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, 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 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: (i) may be based upon any 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, or by any of its employees or
representatives, or any affiliate of or any person acting on behalf of the
Subadvisor; (ii) may be based upon a failure to comply with Section 2,
Paragraph (a) of this Agreement; or (iii) 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 a
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 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 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 interest 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 interest and, therefore, would not, 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.
Services Not Exclusive. The services furnished by the Subadvisor hereunder
are
not to be deemed exclusive, and except as the Subadvisor may otherwise agree
in
writing, the Subadvisor shall be free to furnish similar services to others
so
long as its services under this Agreement are not impaired thereby. Nothing
in
this Agreement shall limit or restrict the right of any director, officer or
employee of the Subadvisor, 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 other business,
whether of a similar nature or a dissimilar nature.
17.
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 when following a shareholder approval, and otherwise
a period of one (1) year, 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 or by the vote
of a majority of the outstanding voting securities (as defined in the ▇▇▇▇
▇▇▇)
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
▇▇▇▇ ▇▇▇) 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 ▇▇▇▇ ▇▇▇) 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 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. 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 Management Agreement between
the
Manager 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, 12, 14,
15
and 19 of this Agreement shall remain in effect, as well as any applicable
provision of this Section 17.
18.
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.
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 name ▇▇▇▇▇▇▇ Capital Management, Inc. or any
derivative thereof or logo associated with that name, is the valuable property
of the Subadvisor and its affiliates and that the Trust and/or the Series have
the right to use such name (or derivative or logo) in offering materials of
the
Trust or sales materials with respect to 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 name (or derivative or logo).
20.
Proxies; Class Actions.
(a)
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.
(b)
Manager acknowledges and agrees that the Subadvisor shall not be responsible
for
taking any action or rendering advice with respect to any class action claim
relating to any assets held in the Allocated Assets or Series. Manager will
instruct the applicable service providers not to forward to the Subadvisor
any
information concerning such actions. The Subadvisor will, however, forward
to
Manager any information it receives regarding any legal matters involving any
asset held in the Allocated Assets or Series.
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, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President; or (2) to the Subadvisor
at
▇▇▇▇▇▇▇ Capital Management, Inc., 4720 IDS Tower, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President.
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 SEC 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 1940 Act;
(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 Section 17 of 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
by their officers designated below as of the ___ day of December,
2008. This Agreement may be signed in counterparts.
NEW
YORK
LIFE INVESTMENT MANAGEMENT LLC
Attest:
/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇
▇. ▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Director
Title:
Executive Vice President
▇▇▇▇▇▇▇
CAPITAL MANAGEMENT, INC.
Attest:
/s/ ▇▇▇▇ ▇.
▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Name:
▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Managing
Director
Title:
CEO
SCHEDULE
A
(As
of
December ___, 2008)
1.
Subadvisor shall provide services for the following series of the Trust:
|
·
|
MainStay
Large Cap Growth Fund
|
2.
Subadvisor shall be paid:
0.40%
of
the average daily net asset value of all Subadvisor-serviced investment company
assets managed by the Manager, including series of the Trust, up to $250
million;
0.35%
of
the average daily net asset value of all Subadvisor-serviced investment company
assets managed by the Manager, including series of the Trust, from $250 million
to $500 million;
0.30%
of
the average daily net asset value of all Subadvisor-serviced investment company
assets managed by the Manager, including series of the Trust, from $500 million
to $750 million;
0.25%
of
the average daily net asset value of all Subadvisor-serviced investment company
assets managed by the Manager, including series of the Trust, from $750 million
to $1 billion; and
0.20%
of
the average daily net asset value of all Subadvisor-serviced investment company
assets managed by the Manager, including series of the Trust, in excess of
$1
billion.