THE MAINSTAY FUNDS AND MAINSTAY VP SERIES FUND, INC. SUBADVISORY AGREEMENT
Exhibit d.2.
THE
MAINSTAY FUNDS AND MAINSTAY VP SERIES FUND, INC.
This
Subadvisory Agreement, made as of the 29th day of
June, 2009 (the “Agreement”), between New York Life Investment Management LLC, a
Delaware limited liability company (the “Manager”) and Epoch Investment Partners
Inc., a Delaware corporation (the “Subadvisor”).
WHEREAS,
MainStay Funds (the “Trust”) and MainStay VP Series Fund, Inc. (the “Company”)
each are registered under the Investment Company Act of 1940, as amended (the
“1940 Act”), as an open-end, management investment company; and
WHEREAS,
the Trust/Company 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/Company 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 Amended and Restated Management Agreements dated August
1, 2008 with the Trust/Company, on behalf of its series, as amended
(collectively the “Management Agreement”); and
WHEREAS,
under the Management Agreement, the Manager has agreed to provide certain
investment advisory and related administrative services to the Trust/Company;
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/Company and manage
such portion of the Trust/Company 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 Epoch Investment Partners Inc. to act as Subadvisor to
each series of the Trust/Company designated on Schedule A of this Agreement
(each a “Series”) with respect to (i) all of the assets of
such Series, in the case of each Series other than the MainStay Total Return
Fund and MainStay VP Total Return Portfolio, and (ii) those assets of such
Series specified on Schedule A as allocated to the Subadvisor, in the
case of the MainStay Total Return Fund and MainStay VP Total Return Portfolio
(in the case of either clause (i) or clause (ii) with respect to a Series (as
applicable), the “Allocated Assets” of such Series),subject to such written
instructions to the Subadvisor and supervision as the Manager may from time to
time furnish for the periods and on the terms set forth in this Agreement, and
subject in the case of the MainStay Total Return Fund and MainStay VP Total
Return Portfolio to such written redesignation of Allocated Assets as the
Manager may from time to time furnish to the Subadvisor. The
Subadvisor accepts such appointment and agrees to furnish the services herein
set forth for the compensation herein provided.
In the event the Trust/Company
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/Company’s
Board of Trustees/Directors (“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/Company’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/Company’s Board of which a copy has
been delivered to the Subadvisor, and the provisions of the Registration
Statement of the Trust/Company 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/Company 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/Company.
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(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/Company and Clearing Corporation, the Subadvisor will arrange for the
automatic transmission of the confirmation of such trades to the Trust/Company’s
custodian and portfolio accounting agent.
(e) The
Subadvisor will assist the custodian and portfolio accounting agent for the
Trust/Company in determining or confirming, consistent with the procedures and
policies stated in the Registration Statement for the Trust/Company, 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/Company 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/Company) as are
necessary to assist the Trust/Company 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/Company are
being conducted in a manner consistent with applicable laws and
regulations.
(g) The
Subadvisor will provide reports to the Trust/Company’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/Company’s Board with respect to the Series such periodic and
special reports as the Trustees/Directors and the Manager may reasonably
request.
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(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/Company’s Board and by a majority of
Trustees/Directors 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/Company, 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/Company 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/Company 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 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/Company for management services described under the Management Agreement
between the Trust/Company 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.
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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/Company, 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/Company, 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/Company’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/Company filed with the SEC
that contains disclosure about the Subadvisor and represents and warrants that,
with respect to the disclosure about 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.
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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/Company shall be responsible for all the expenses of the Trust/Company’s
operations, including, but not limited to:
(a) the
fees and expenses of Trustees/Directors who are not interested persons of the
Manager or of the Trust/Company;
(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/Directors of the Trust/Company;
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/Company’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/Company;
(e) brokers’
commissions and any issue or transfer taxes chargeable to the Trust/Company in
connection with its securities transactions on behalf of the
Series;
(f) all
taxes and business fees payable by the Trust/Company or the Series to federal,
state or other governmental agencies;
(g) the
fees of any trade association of which the Trust/Company 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/Company and of its Series with the SEC, registering the Trust/Company as a
broker or dealer and qualifying its shares under state securities laws,
including the preparation and printing of the Trust/Company’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/Directors’ meetings and of preparing, printing and
mailing reports to shareholders in the amount necessary for distribution to the
shareholders;
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(k) litigation
and indemnification expenses and other extraordinary expenses not incurred in
the ordinary course of the Trust/Company’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/Company in complying with
the Trust/Company’s obligations under Rule 38a-1 under the 1940 Act, including
but not limited to: (i) periodically providing the
Trust/Company’s Chief Compliance Officer with requested 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/Company’s Chief Compliance Officer within a reasonable time following the
Subadvisor becoming aware of such deficiency; and (iii) reporting any
material changes to the Subadvisor’s Compliance Program to the Trust/Company’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/Company’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 about the Subadvisor that is not contained in the
Registration Statement or prospectus for the Trust/Company, or any amendment or
supplement thereto, or upon the Subadvisor becoming aware of any statement
contained therein about the Subadvisor 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/Company, 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.
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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) With
respect to the Trust, the 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”), and with respect to the Company, Articles of Incorporation of the
Company, as amended from time to time, as filed with the Department of
Assessments and Taxation of the State of Maryland (such Articles of
Incorporation, as in effect on the date hereof and as amended from time to time,
are herein called the “Articles of Incorporation”);
(b) By-Laws
of the Trust/Company, 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/Directors of the Trust/Company 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/Company 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/Company and further
agrees to surrender promptly to the Trust/Company any of such records upon the
Trust/Company’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/Company.
11. Representations Respecting
Subadvisor. The Manager and the Trust/Company agree that
neither the Trust/Company, the Manager, nor affiliated persons of the
Trust/Company 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/Company shares, as they may be amended or supplemented from time to
time, or in reports or proxy statements for the Trust/Company, 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.
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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,
unless required by law. 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 or otherwise required by law.
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/Company 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/Company,
which: (i) is 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) is 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/Company 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/Company 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.
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(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) is 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) is based upon a
failure by the Subadvisor to comply with Section 2, Paragraph (a) of this
Agreement; or (iii) is 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/Company 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/Company or any affiliated
person of the Manager or Trust/Company 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.
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(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 reasonably 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 reasonably 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.
11
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/Director, officer or employee of the Trust/Company, 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/Directors 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/Company, 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/Company;
(B) at any time without payment of any penalty by the Trust/Company, upon
the vote of a majority of the Trust/Company’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/Company. 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/Company, 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/Company 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), 9, 10, 12, 14, 15 and 19 of this Agreement shall remain in
effect, as well as any applicable provision of this Section 17.
12
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/Directors of the Trust/Company, including a majority of the
Trustees/Directors of the Trust/Company 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, MainStay VP Series Fund, Inc. 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/Company and/or the
Series. Upon termination of the Management Agreement between the
Trust/Company and the Manager, the Subadvisor shall forthwith cease to use such
name (or derivative or logo).
(b) It
is understood that the name Epoch Investment Partners, 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/Company and/or the Series have
the right to use such name (or derivative or logo) in offering materials of the
Trust/Company or sales materials with respect to the Trust/Company with the
approval of the Subadvisor and for so long as the Subadvisor is a Subadvisor to
the Trust/Company and/or the Series. Upon termination of this
Agreement, the Trust/Company shall forthwith cease to use such name (or
derivative or logo).
13
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/Company. Absent contrary instructions
received in writing from the Trust/Company, 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/Company, and these records shall be available to the Trust/Company 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 ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, 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 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.
* * *
14
IN
WITNESS WHEREOF, the parties hereto have caused this instrument to be executed
by their officers designated below as of the 29th day of
June, 2009. This Agreement may be signed in
counterparts.
NEW
YORK LIFE INVESTMENT MANAGEMENT LLC
|
Attest:
/s/ ▇▇▇▇▇▇
▇▇▇▇▇
|
By:
/s/ ▇▇▇▇▇▇▇▇▇▇
▇. ▇.
▇▇▇▇▇▇▇▇
|
|
Name:
▇▇▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇▇
|
|
Title:
Vice President
|
Title:
Managing Director
|
EPOCH
INVESTMENT PARTNERS INC.
|
Attest:
/s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
By:
/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
|
|
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
Title:
Managing Director
|
Title:
President & COO
|
15
SCHEDULE
A
As
compensation for services provided by Subadvisor with respect to each of the
following Series the Manager will pay the Subadvisor and Subadvisor agrees to
accept as full compensation for services rendered hereunder, an annual
subadvisory fee with respect to such Series equal to the following:
|
FUND
|
ANNUAL
RATE
|
|
MainStay
Small Cap Growth Fund*
|
0.425%
on assets up to $1 billion;
0.40%
on assets over $1 billion**
|
|
MainStay
Total Return Fund*
|
50%
of the effective gross management fee***
|
|
MainStay
VP Developing Growth Portfolio*
|
0.400
% on assets up to $200 million;
0.375
% on assets from $200 million to $500 million;
0.3625%
on assets from $500 million to $1 billion;
0.350
% on assets in excess of $1 billion
|
|
MainStay
VP Total Return Portfolio*
|
50%
of the effective gross management fee****
|
The fee
based upon the average daily net assets of the respective Series 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 Series.
Payment
will be made to the Subadvisor on a monthly basis.
|
*
|
Effective
three years after the date of this Agreement, the Subadvisor will equally
share in any modifications to the management fee or management fee
breakpoints for the Series that are implemented subsequent to the date of
this Agreement.
|
|
**
|
With
respect to the MainStay Small Cap Growth Fund, to the extent that the net
management fee ratio for the Fund is less than the subadvisory fee ratio
due to total net expense limitation reimbursements, the Subadvisor has
agreed to receive an amount equal to the net management
fees.
|
|
***
|
For
reference, the management fee schedule for MainStay Total Return Fund is
0.64% on assets up to $500 million; 0.60% on assets between $500 million
and $1 billion; and 0.575% on assets in excess of $1
billion.
|
|
****
|
For
reference, the management fee schedule for MainStay VP Total Return
Portfolio is 0.57% on assets up to $1 billion and 0.55% on assets in
excess of $1 billion.
|
A-1