EXHIBIT D(2)(A)
AMENDED AND RESTATED SUB-ADVISORY AGREEMENT
Amended and Restated Sub-Advisory Agreement made as of August 1, 2007 (the
"Agreement") between New York Life Investment Management LLC, a Delaware limited
liability company (the "Manager"), on behalf of The MainStay Funds (the "Trust")
and its series as set forth in Schedule A, as amended from time to time (each, a
"Fund," and collectively, the "Funds"), and MacKay Xxxxxxx LLC, a Delaware
limited liability company (the "Subadviser").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Manager has entered into an Amended and Restated Management
Agreement, dated August 1, 2007, with the Trust, on behalf of the Funds, which
amends and restates in its entirety the Management Agreement, dated August 1,
2002, in order to reflect a reduction in fees to certain funds; and
WHEREAS, under the Management Agreement, the Manager has agreed to provide
certain investment advisory and related administrative services to each Fund;
and
WHEREAS, the Management Agreement permits the Manager to delegate certain
of its investment advisory duties under the Management Agreement to a
sub-adviser; and
WHEREAS, the Manager desires to retain the Subadviser to furnish certain
investment advisory services with respect to each Fund and the Subadviser is
willing to furnish such services.
NOW, THEREFORE, the parties hereto agree as follows:
1. Appointment. The Manager hereby appoints the Subadviser as an investment
sub-adviser with respect to each Fund for the period and on the terms set forth
in this Agreement. The Subadviser accepts that appointment and agrees to render
the services herein set forth, for the compensation herein provided.
2. Duties as Subadviser. Subject to the supervision of the Board of
Trustees of the Trust and the Manager, the Subadviser shall manage the
investment operations of each Fund and the composition of the portfolio of each
Fund, including the purchase, retention and disposition of securities therein,
in accordance with the investment objectives, policies and restrictions of each
Fund, as specified in the currently effective Prospectus (as hereinafter
defined) and subject to the following understandings:
(a) The Subadviser shall provide supervision of each Fund's
investments and determine from time to time what investments or securities will
be purchased, retained, sold or lent by each Fund, and what portion of each
Fund's assets will be invested or held uninvested as cash.
(b) The Subadviser shall use its best judgment in the performance of
its duties under this Agreement.
(c) The Subadviser, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Declaration of Trust,
By-Laws and Prospectus (each as hereinafter defined) of the Trust and with the
instructions and directions of the Board of Trustees and the Manager and will
conform to and comply with the requirements of the 1940 Act and all other
applicable federal and state laws and regulations.
(d) The Subadviser shall determine the securities to be purchased or
sold by each Fund and will place orders pursuant to its determination with or
through such persons, brokers or dealers (including NYLIFE Securities Inc.) in
conformity with the policy with respect to brokerage as set forth in the Trust's
Registration Statement and Prospectus (each as hereinafter defined) or as the
Board of Trustees may direct from time to time. It is recognized that, in
providing a Fund with investment supervision or the placing of orders for
portfolio transactions, the Subadviser will give primary consideration to
securing the most favorable price and efficient execution. Consistent with this
policy, the Subadviser may consider the financial responsibility, research and
investment information and other services provided by brokers or dealers who may
effect or be a party to any such transaction or other transactions to which
other clients of the Subadviser may be a party. It is understood that none of
the Funds, the Trust, the Manager nor the Subadviser has adopted a formula for
allocation of a Fund's investment transaction business. It is also understood
that it is desirable for each Fund that the Subadviser have access to
supplemental investment and market research and security and economic analyses
provided by certain brokers who may execute brokerage transactions at a higher
cost to a Fund than may result when allocating brokerage to other brokers on the
basis of seeking the most favorable price and efficient execution. Therefore,
the Subadviser is authorized to place orders for the purchase and sale of
securities for each Fund with such certain brokers, subject to review by the
Trust's Board of Trustees from time to time with respect to the extent and
continuation of this practice. It is understood that the services provided by
such brokers may be useful to the Subadviser in connection with its services to
other clients.
On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of one or more of the Funds as well as other
clients, the Subadviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be so sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as expenses incurred in the
transaction, will be made by the Subadviser in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Funds and to
such other clients.
(e) The Subadviser shall maintain all books and records with respect
to the Fund's securities transactions required by sub-paragraphs (b)(5), (6),
(9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act and any other
books and records required to be maintained by it under the 1940 Act and the
rules thereunder and shall render to the Manager and to the Trust's Trustees
such periodic and special reports as the Manager or the Trustees may reasonably
request.
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(f) The Subadviser shall provide each Fund's Custodian on each
business day with information relating to the execution of all portfolio
transactions pursuant to standing instructions.
3. Subadviser Personnel. The Subadviser shall authorize and permit any of
its directors, officers and employees who may be elected or appointed as
Trustees or officers of the Trust to serve in the capacities in which they are
elected or appointed. Services to be furnished by the Subadviser under this
Agreement may be furnished through the medium of any of such directors,
officers, or employees.
4. Books and Records. The Subadviser shall keep the Funds' books and
records required to be maintained by it, pursuant to paragraph 2 hereof. The
Subadviser agrees that all records which it maintains for a Fund are the
property of that Fund, and it will surrender promptly to that Fund any of such
records upon the Fund's request. The Subadviser further agrees to preserve for
the periods prescribed by Rule 31a-2 as promulgated by the Securities and
Exchange Commission (the "Commission") under the 1940 Act any such records as
are required to be maintained by the Subadviser pursuant to paragraph 2 hereof.
5. Services Not Exclusive. The services furnished by the Subadviser
hereunder are not to be deemed exclusive and the Subadviser shall be free to
furnish similar or different services to others so long as its services under
this Agreement are not impaired thereby.
6. Documents. The Manager has delivered to the Subadviser copies of each of
the following documents and will deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust of the Trust, filed with the Secretary of The
Commonwealth of Massachusetts (such Declaration of Trust, as in effect on the
date hereof and as amended from time to time, is herein called the "Declaration
of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date
hereof and as amended from time to time, are herein called the "By-Laws");
(c) Certified Resolutions of the Board of Trustees of the Trust
authorizing the appointment of the Subadviser and approving the form of this
Agreement;
(d) Written Instrument to Establish and Designate Separate Series of
Shares;
(e) Registration Statement under the 1940 Act and the Securities Act
of 1933, as amended, on Form N-lA (the "Registration Statement"), as filed with
the Commission relating to each Fund and each Fund's Shares and all amendments
thereto;
(f) Notification of Registration of the Trust under the 1940 Act on
Form N-8A as filed with the Commission and all amendments thereto; and
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(g) Each Prospectus and Statement of Additional Information of the
Trust (such Prospectus and Statement of Additional Information, as currently in
effect and as amended or supplemented from time to time, being herein called
collectively the "Prospectus").
7. Expenses. During the term of this Agreement, the Subadviser will bear
all expenses incurred by it in connection with its services under this
Agreement. The Subadviser shall not be responsible for any expenses incurred by
the Trust, any Fund or the Manager.
8. Compensation. For the services provided and the expenses assumed by the
Subadviser pursuant to this Agreement, the Manager, not the Trust or any Fund,
will pay to the Subadviser a fee, computed daily and payable monthly, at an
annual rate, as set forth on Schedule A, of the average daily net assets of the
Fund.
9. Standard of Care. Subject to the applicable law, the Subadviser shall
not be liable for any error of judgment or for any loss suffered by a Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
10. Duration and Termination. This Agreement shall continue in effect with
respect to each Fund for a period of one year from the effective date hereof,
except with respect to any series of the Trust added to Schedule A of this
Agreement after August 1, 2002, for an initial period of two years from the date
that such series is added, and thereafter only so long as such continuance is
specifically approved at least annually with respect to that Fund in conformity
with the requirements of the 1940 Act and the Rules thereunder. Notwithstanding
the foregoing, this Agreement may be terminated: (a) with respect to any Fund,
at any time without penalty upon the vote of a majority of the Trust's Trustees
or by vote of the majority of the Fund's outstanding voting securities, upon
sixty (60) days' written notice to the Subadviser, (b) by the Manager at any
time without penalty upon sixty (60) days' written notice to the Subadviser or
immediately upon material breach by the Subadviser or immediately if, in the
reasonable judgment of the Manager, the Subadviser becomes unable to discharge
its duties and obligations under this Agreement, or (c) by the Subadviser at any
time without penalty, upon sixty (60) days' written notice to each applicable
Fund. This Sub-Advisory Agreement will also terminate automatically in the event
of its assignment (as defined in the 0000 Xxx) or the assignment or termination
of the Management Agreement.
11. Other Business. Nothing in this Agreement shall limit or restrict the
right of any of the Subadviser's directors, officers, or employees who may also
be a Trustee, officer, or employee of the Trust to engage in any other business
or to devote his or her time and attention in part to the management or other
aspects of any business, whether of a similar or dissimilar nature, nor limit or
restrict the Subadviser's right to engage in any other business or to render
services of any kind to any other corporation, trust, firm, individual or
association.
12. Amendment. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought. No material amendment of this Agreement shall be
effective until approved (i) by a vote of a majority of those Trustees of the
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Trust who are not parties to this Agreement or interested persons of any such
party, and (ii) by a vote of a majority of the relevant Fund's outstanding
voting securities (unless in the case of (ii), the Trust receives a Commission
order or no-action letter permitting it to modify the Agreement without such
vote).
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
14. Notice. Any notice or other communication required to be given pursuant
to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Manager at NYLIM Center, 000
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000; or (2) to the Subadviser at 0
Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000.
15. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. As used in this Agreement, the terms "majority of the
outstanding voting securities," "affiliated person," "interested person,"
"assignment," "broker," "investment adviser," "net assets," "sale," "sell" and
"security" shall have the same meaning as such terms have in the 1940 Act. Where
the effect of a requirement of the federal securities laws reflected in any
provision of this Agreement is made less restrictive by a rule, regulation or
order of the Commission, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order. This Agreement may be signed in counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
MACKAY XXXXXXX LLC
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
Title: Chief Executive Officer
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: President and Chief Executive
Officer
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SCHEDULE A
(AMENDED AND RESTATED AS OF AUGUST 1, 2007)
FUND ANNUAL RATE*
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Capital Appreciation Fund 0.360% up to $200 million; 0.325% from $200
million to $500 million; and 0.250% in excess
of $500 million
Convertible Fund** 0.300% up to $500 million; 0.275% from $500
million to $1.0 billion; and 0.250% in excess
of $1.0 billion
Diversified Income Fund** 0.300%
Global High Income Fund** 0.350%
Government Fund** 0.300% up to $1.0 billion; and 0.275% in excess
of $1.0 billion
High Yield Corporate Bond Fund 0.300% up to $500 million, 0.275% $500 million
to $5.0 billion; and 0.2625% in excess of $5.0
billion
International Equity Fund** 0.600%
Mid Cap Growth Fund** 0.375%
Mid Cap Value Fund** 0.350%
Money Market Fund** 0.250% up to $300 million; 0.225% from $300
million to $700 million; 0.200% from $700
million to $1.0 billion; and 0.175% in excess
of $1.0 billion
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Small Cap Growth Fund** 0.500% up to $1.0 billion; and 0.475% in excess
of $1.0 billion
Tax Free Bond Fund** 0.300% up to $1.0 billion; and 0.275 in excess
of $1.0 billion
Total Return Fund** 0.320% up to $500 million; 0.300% in excess of
$500 million
Value Fund** 0.360% up to $200 million; 0.325% from $200
million to $500 million; and 0.250% in excess
of $500 million
* of each Fund's average daily net assets
** 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.
Additionally, for certain funds listed above, NYLIM has agreed to waive a
portion of its management fee. To the extent NYLIM has agreed to waive its
management fee or reimburse expenses, MacKay Xxxxxxx, as Subadvisor for
these Funds, has voluntarily agreed to waive or reimburse its fee
proportionately.
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