THE MAINSTAY FUNDS AMENDED AND RESTATED MANAGEMENT AGREEMENT
THE
MAINSTAY FUNDS
AMENDED
AND RESTATED MANAGEMENT AGREEMENT
Amended
and Restated Management Agreement, made as of the 1st day of
August
2007, between The MainStay Funds, a Massachusetts business trust (the “Trust”),
on behalf of its series as set forth on Schedule A (each, a “Fund,” and
collectively, the “Funds”), as amended from time to time, and New York Life
Investment Management LLC, a Delaware limited liability company (the
“Manager”).
W
I T N E
S S E T H:
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 shares of beneficial interest of the Trust (the “Shares”) are divided into
separate series, each of which is established pursuant to a written instrument
executed by the Trustees of the Trust and the Trustees may from time to time
terminate such series or establish and terminate additional series;
and
WHEREAS,
each Fund desires to retain the Manager to render investment advisory and
related administrative services to the Fund, and the Manager is willing to
render such services on the terms and conditions hereinafter set forth;
and
WHEREAS,
the Trust entered into an Amended and Restated Management Agreement, dated
as of
August 1, 2002 (the “Prior Agreement”); and
WHEREAS,
this Agreement amends and restates, in its entirety, the Prior
Agreement;
NOW,
THEREFORE, the parties hereto agree as follows:
1. Appointment. Each
Fund
hereby appoints New York Life Investment Management LLC to act as manager to
the
Fund for the period and on the terms set forth in this Agreement. The
Manager accepts such appointment and agrees to render the services herein
described, for the compensation herein provided.
2. Duties
as Manager. Subject
to the supervision of the Trustees of the Trust, the Manager shall administer
each Fund’s business affairs and 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 stated in
the
currently effective Prospectus (as hereinafter defined) and subject to the
following understandings:
(a) The
Manager shall (i) furnish each Fund
with office facilities; (ii) be responsible for the financial and accounting
records required to be maintained by each Fund (excluding those being maintained
by the Fund’s Custodian, Transfer Agent and Accounting Services Agent except as
to which the Manager has supervisory functions) and other than those being
maintained by the Fund’s sub-adviser, if any; and (iii) furnish each Fund with
ordinary clerical, bookkeeping and recordkeeping services at such office
facilities.
(b) The
Manager 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 the Fund, and what
portion of the Fund’s assets will be invested or held uninvested as
cash.
(c) The
Manager shall use its best judgment
in the performance of its duties under this Agreement.
(d) The
Manager, in the performance of its
duties and obligations under this Agreement, shall act in conformity with the
Declaration of Trust, By-Laws and Prospectus (each as hereinafter defined)
of
the Trust and with the instructions and directions of the Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act and all
other applicable federal and state laws and regulations.
(e) The
Manager, and any sub-adviser to
whom such authority has been delegated, shall determine the securities to be
purchased or sold by 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 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 Manager or any sub-adviser will give
primary consideration to securing the most favorable price and efficient
execution. Consistent with this policy, the Manager or any
sub-adviser may consider the financial responsibility, research and investment
information and other services provided by brokers or dealers who may effect
or
be a party to any such transaction or other transactions to which other clients
of the Manager or any sub-adviser may be a party. It is understood
that none of the Funds, the Trust nor the Manager or any sub-adviser 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 Manager or any sub-adviser have access to supplemental investment
and
market research and security and economic analyses provided by certain brokers
who may execute brokerage transactions at a higher cost to 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 Manager or any sub-adviser is
authorized to place orders for the purchase and sale of securities for a Fund
with such certain brokers, subject to review by the Trust’s 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 Manager or any sub-adviser in connection with its services
to other clients.
On
occasions when the Manager or any sub-adviser deems the purchase or sale of
a
security to be in the best interest of a Fund as well as other clients, the
Manager or any sub-adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be so sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as expenses incurred
in the transaction, will be made by the Manager or any sub-adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to that Fund and to such other clients.
(f) The
Manager shall maintain all books
and records with respect to each 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 Trust’s
Trustees such periodic and special reports as the Trustees may reasonably
request.
(g) The
Manager shall provide the Trust’s
Custodian on each business day with information relating to the execution of
all
portfolio transactions pursuant to standing instructions.
(h) With
respect to any or all series of
the Trust, including the Funds, the Manager may enter into one or more contracts
(“Sub-Advisory or Sub-Administration Contract”) with a sub-adviser or
sub-administrator in which the Manager delegates to such sub-adviser or
sub-administrator any or all its duties specified in this Agreement, provided
that each Sub-Advisory or Sub-Administration Contract meets all applicable
requirements of the 1940 Act and the rules thereunder.
The
Trust
and Manager understand and agree that the Manager may manage a Fund in a
“manager-of-managers” style with either a single or multiple subadvisors, which
contemplates that the Manager will, among other things and pursuant to an Order
issued by the Securities and Exchange Commission (SEC): (i) continually evaluate
the performance of each subadvisor to a Fund, if applicable, through
quantitative and qualitative analysis and consultations with such subadvisor;
(ii) periodically make recommendations to the Board as to whether the contract
with one or more subadvisors should be renewed, modified, or terminated; and
(iii) periodically report to the Board regarding the results of its evaluation
and monitoring functions. The Trust recognizes that a subadvisor’s
services may be terminated or modified pursuant to the “manager-of-managers”
process, and that the Manager may appoint a new subadvisor for a subadvisor
that
is so removed.
3. Manager
Personnel. The
Manager 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 Manager under this Agreement may be furnished through the
medium of any of such directors, officers, or employees.
4. Books
and Records. The
Manager shall keep the Funds’ books and records required to be maintained by it,
pursuant to paragraph 2 hereof. The Manager agrees that all records
which it maintains for a Fund are the property of such Fund, and it will
surrender promptly to the Fund any of such records upon the Fund’s
request. The Manager further agrees to preserve for the periods
prescribed by Rule 31a-2 as promulgated by the Securities and Exchange
Commission (the “Commission”) under the 1940 Act any such records as are
required to be maintained by the Manager pursuant to paragraph 2
hereof.
5. Services
Not Exclusive. The
services furnished by the Manager hereunder are not to be deemed exclusive
and
the Manager shall be free to furnish similar services to others so long as
its
services under this Agreement are not impaired thereby.
6. Documents. The
Trust has
delivered to the Manager 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 Trustees
of the Trust authorizing the appointment of the Manager 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-1A (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
(g) Each
form of 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. (a)
In connection
with the services rendered by the Manager under this Agreement, the Manager
will
bear all of the following expenses:
(i) the
salaries and expenses of all
personnel of the Trust and the Manager, except the fees and expenses of Trustees
who are not interested persons of the Manager or of the Trust; and
(ii) all
expenses incurred by the Manager in
connection with managing the investment operations of each Fund and
administering the ordinary course of each Fund’s business, other than those
assumed by the Funds herein;
(b) Each
Fund assumes and will pay its
expenses, including but not limited to those described below (where any such
category applies to more than one series of the Trust, each Fund shall be liable
only for its allocable portion of the expenses):
(i) the
fees and expenses of Trustees who
are not interested persons of the Manager or of the Trust.;
(ii) the
fees and expenses of each Fund’s
custodian which relate to (A) the custodial function and the recordkeeping
connected therewith, (B) the maintenance of the required accounting records
of
the Funds not being maintained by the Manager, (C) the pricing of the Funds’
Shares, including the cost of any pricing service or services which may be
retained pursuant to the authorization of the Trustees of the Trust, and (D)
for
both mail and wire orders, the cashiering function in connection with the
issuance and redemption of the Funds’ Shares;
(iii) the
fees and expenses of the Trust’s
transfer and dividend disbursing agent, which may be the custodian, which relate
to the maintenance of each shareholder account;
(iv) the
charges and expenses of legal
counsel (including an allocable portion of the cost of maintaining an internal
legal and compliance department) and independent accountants for the
Trust;
(v) brokers’
commissions
and any issue or
transfer taxes chargeable to the Trust in connection with its securities
transactions on behalf of the Funds;
(vi) all
taxes and business fees payable by
the Trust or the Funds to federal, state or other governmental
agencies;
(vii) the
fees of any trade association of
which the Trust may be a member;
(viii) the
cost of share certificates
representing Fund Shares;
(ix) the
fees and expenses involved in
registering and maintaining registrations of the Trust and of its Shares with
the Commission, 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;
(x) 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;
(xi) litigation
and indemnification expenses
and other extraordinary expenses not incurred in the ordinary course of the
Trust’s business; and
(xii) any
expenses assumed by the Funds
pursuant to a Plan of Distribution adopted in conformity with Rule 12b-1 under
the 1940 Act
8. Organization
Expenses. Each
Fund hereby agrees to reimburse the Manager for the organization expenses
of, and the expenses
incurred in connection with, the initial offering of Shares of that
Fund.
9. Compensation. For
the
services provided and the facilities furnished pursuant to this Agreement,
the
Trust will pay to the Manager as full compensation therefor a fee at an annual
rate, as set forth opposite each Fund’s name on Schedule A, of the average daily
net assets of each Fund.
This
fee
will be computed daily and will be paid to the Manager monthly. This
fee will be chargeable only to the respective Fund, and no other series of
the
Trust shall be liable for the fee due and payable hereunder. No Fund
shall be liable for any expense of any other series of the Trust.
10. Standard
of Care. Subject to
the applicable law, the Manager 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.
11. 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. Provided, however, that
this Agreement may be terminated with respect to a Fund at any time, without
the
payment of any penalty, by the Trustees of the Trust or by vote of a majority
of
the outstanding voting securities (as defined in the 0000 Xxx) of that Fund,
or
by the Manager at any time, without the payment of any penalty, on not more
than
60 days’ nor less than 30 days’ written notice to the other
party. This Agreement shall terminate automatically in the event of
its assignment (as defined in the 1940 Act).
12. Other
Business. Nothing in
this Agreement shall limit or restrict the right of any of the Manager’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 time
and
attention in part to the management or other aspects of any business, whether
of
a similar or dissimilar nature, nor limit or restrict the Manager’s right to
engage in any other business or to render services of any kind to any other
corporation, trust, firm, individual or association.
13. Independent
Contractor. Except as otherwise provided herein or authorized by the
Trustees of the Trust from time to time, the Manager shall for all purposes
herein be deemed to be an independent contractor and shall have no authority
to
act for or represent any Fund or the Trust in any way or otherwise be deemed
an
agent of any Fund or the Trust.
14. Trust
Materials. During the
term of this Agreement, the Trust agrees to furnish the Manager at its principal
office all prospectuses, proxy statements, reports to shareholders, sales
literature or other material prepared for distribution to shareholders of a
Fund
or to the public, which refer to the Manager in any way, prior to use thereof
and not to use such material if the Manager reasonably objects in writing within five
business days (or such other time as may be mutually agreed) after receipt
thereof. In the event of termination of this Agreement, the Trust
will continue to furnish to the Manager copies of any of the above-mentioned
materials which refer in any way to the Manager. The Trust shall
furnish or otherwise make available to the Manager such other information
relating to the business affairs of each Fund as the Manager at any time, or
from time to time, reasonably requests in order to discharge its obligations
hereunder.
15. Amendment. This
Agreement
may be amended in writing by mutual consent, but the consent of each of the
Funds, if required, must be obtained in conformity with the requirements of
the
1940 Act and the rules thereunder.
16. Notice. Any
notice or
other communication required to be given 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 Trust at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, XX
00000.
17. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
18. Limitation
of Liability of the Trust
and the Shareholders. It is understood and expressly stipulated that
none of the Trustees, officers, agents or shareholders of the Trust shall be
personally liable hereunder. The name “The MainStay Funds” is the
designation of the Trust for the time being under the Declaration of Trust
and
all persons dealing with the Trust must look solely to the property of the
Trust
for the enforcement of any claims against the Trust, as neither the Trustees,
officers, agents or shareholders assume any personal liability for obligations
entered into on behalf of the Trust. No series of the Trust shall be
liable for any claims against any other series of the Trust.
19. Use
of Name. Each Fund may
use any name including the word “MainStay” only for so long as this Agreement or
any other agreement between the Manager or any other affiliate of New York
Life
Insurance Company and the Trust or any extension, renewal or amendment thereof
remains in effect, including any similar agreement with any organization which
shall have succeeded to the Manager’s business as investment adviser. At such
time as such an agreement shall no longer be in effect, the respective Fund
will
(to the extent that it lawfully can) cease to use such name or any other name
indicating that it is advised by or otherwise connected with the Manager or
any
organization which shall have so succeeded to its business.
20. 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, terms shall have the same meaning as such terms have in the
1940
Act. Where the effect of a
requirement of the federal securities laws reflected in any provision
of
this Agreement is made less restrictive by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall
be
deemed to incorporate the effect of such rule, regulation or
order. This Agreement may be signed in counterpart.
IN
WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their
officers
designated below as of the day and year first above written.
THE
MAINSTAY FUNDS, on behalf of each series listed on Schedule A
By:________________________________________
Name: Xxxxxxx
X. Xxxxxx
Title:
President
NEW
YORK
LIFE INVESTMENT MANAGEMENT LLC
By:________________________________________
Name: Xxxxx
X. Xxxxxxx
Title: President
and Chief Executive Officer
::ODMA\PCDOCS\OGCDOCS\218262\2
SCHEDULE
A
(as
amended and restated on August 1, 2007)
|
Funds
|
Annual
Rate1
|
|
Capital
Appreciation Fund
|
0.72%2
|
|
Common
Stock Fund*
|
0.70%3
|
|
Convertible
Fund
|
0.60%4
|
|
Diversified
Income Fund*
|
0.60%3
|
|
Equity
Index Fund
|
0.25%5
|
|
Global
High Income Fund*
|
0.70%3
|
|
Government
Fund
|
0.60%6
|
|
High
Yield Corporate Bond Fund
|
0.60%7
|
|
International
Equity Fund
|
0.90%3,
8
|
|
Large
Cap Growth Fund
|
0.80%9
|
|
MAP
Fund
|
0.75%10
|
|
Mid
Cap Growth Fund
|
0.75%3
|
|
Mid
Cap Value Fund*
|
0.70%3
|
|
Money
Market Fund
|
0.50%11
|
|
Small
Cap Growth Fund
|
1.00%10
|
|
Small
Cap Value Fund
|
0.85%10,
12
|
|
Tax
Free Bond Fund
|
0.60%10
|
|
Total
Return Fund
|
0.64%13
|
|
Value
Fund
|
0.72%14
|
::ODMA\PCDOCS\OGCDOCS\218262\2
|
|
* Name
changes effective January 1, 2004.
|
|
1
|
Of
each Fund’s average daily net
assets.
|
|
2
|
Contractual
fee breakpoints as follows: 0.72% on assets up to $200 million; 0.65%
on
assets from $200 million up to $500 million; and 0.50% on assets
in excess
of $500 million.
|
|
3
|
The
Board of Trustees approved a 0.05% contractual fee reduction on assets
in
excess of $500 million for each of these 6 funds, effective August
1,
2004.
|
|
4
|
Contractual
fee breakpoints as follows: 0.60% on assets up to $500 million, 0.55%
on
assets from $500 million up to $1.0 billion; and 0.50% on assets
in excess
of $1.0 billion.
|
|
5
|
At
a meeting held on June 14, 2005, the Board of Trustees approved
contractual fee breakpoints effective August 1, 2005 as follows:
0.25% on
assets up to $1.0 billion, 0.225% on assets from $1.0 billion up
to $3.0
billion; and 0.20% on assets in excess of $3.0
billion.
|
|
6
|
Contractual
fee breakpoints as follows: 0.60% on assets up to $1 billion; and
0.55% on
assets in excess of $1 billion.
|
|
7
|
Contractual
fee breakpoints as follows: 0.60% on assets up to $500 million, 0.55%
on
assets from $500 million to $5.0 billion; and 0.525% on assets
in excess of $5.0 billion.
|
|
8
|
Effective
January 1, 2004, the management fee payable by the Fund was reduced
to
0.90% of the Fund’s average daily net
assets.
|
|
9
|
Contractual
fee breakpoints as follows: 0.80% on assets up to $250 million; 0.75%
on
assets from $250 million up to $500 million; 0.725% on assets from
$500
million up to $750 million; 0.70% on assets from $750 million up
to $2
billion; 0.65% on assets from $2 billion up to $3 billion; and 0.60%
on
assets in excess of $3 billion.
|
|
10
|
At
a meeting held on June 10, 2003, the Board of Trustees approved a
0.05%
contractual fee reduction on assets in excess of $1.0 billion for
each of
these 4 funds, effective
immediately.
|
|
11
|
Contractual
fee breakpoints as follows: 0.50% on assets up to $300 million; 0.45%
on
assets from $300 million up to $700 million; 0.40% on assets from
$700
million up to $1 billion; and 0.35% on assets in excess of $1
billion.
|
|
12
|
Effective
July 1, 2004, the management fee payable by the Fund was contractually
reduced from 1.00% to 0.85% of the Fund’s average daily net assets (in
connection with the approval of a new sub-advisory agreement with
MacKay
Xxxxxxx LLC).
|
|
13
|
Contractual
fee breakpoints as follows: 0.64% on assets up to $500 million; and
0.60%
on assets in excess of $500
million.
|
|
14
|
Contractual
fee breakpoints as follows: 0.72% on assets up to $200 million; 0.65%
on
assets from $200 million up to $500 million; and 0.50% on assets
in excess
of $500 million.
|
::ODMA\PCDOCS\OGCDOCS\218262\2
