Exhibit d(1)(a)
THE MAINSTAY FUNDS
AMENDED AND RESTATED MANAGEMENT AGREEMENT
Amended and Restated Management Agreement, made as of the 1st day of
August, 2002 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, the Trust entered into (1) a Management Agreement on October
21, 1997 by and between the Trust and MainStay Management Inc. ("MMI") whereby
MMI agreed to provide advisory and related administrative services to certain of
the Funds; and (2) a Management Agreement on January 2, 2001 by and between the
Trust and New York Life Investment Management LLC ("NYLIM") whereby NYLIM agreed
to provide advisory and related administrative services to the Mid Cap Growth
and Select 20 Equity Funds (collectively, the "Current Management Agreements");
and
WHEREAS, the Management Agreement dated October 21, 1997 was amended
effective October 1, 1999 to reflect the conversion of MMI from a corporation to
a limited liability company under Delaware law and to replace MMI with MainStay
Management LLC ("MM LLC"); and
WHEREAS, pursuant to a Substitution Agreement dated January 2, 2001 by
and between MM LLC and NYLIM, NYLIM assumed all the interests, rights and
responsibilities of MM LLC under the Management Agreement dated October 21,
1997, as further amended effective October 1, 1999, and agreed to perform all of
MM LLC's duties and responsibilities under such Agreement; and
WHEREAS, on March 10, 2002, the Board approved certain contractual
management fee breakpoints; 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, this Agreement amends and restates, in its entirety, the
Current Management Agreements in order to combine the Current Management
Agreements into
a single Amended and Restated Management Agreement to reflect the current
parties of the Current Management Agreements, to reflect the contractual
management fee breakpoints and to make certain other ministerial changes
designed to facilitate the administration of this 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,
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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.
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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").
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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;
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(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
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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
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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: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chairman and Chief Executive Officer
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SCHEDULE A
(as amended and restated on August 1, 2002)
FUNDS ANNUAL RATE(1)
Blue Chip Growth Fund 1.00%
Capital Appreciation Fund 0.72%(2)
Convertible Fund 0.72%(3)
Equity Income Fund 0.70%
Equity Index Fund 0.50%
Global High Yield Fund 0.70%
Government Fund 0.60%(4)
Growth Opportunities Fund 0.70%
High Yield Corporate Bond Fund 0.60%(5)
International Bond Fund 0.70%
International Equity Fund 1.00%
MAP Fund 0.75%
Mid Cap Growth Fund 0.75%
Money Market Fund 0.50%(6)
Research Value Fund 0.85%
Select 20 Equity Fund 0.70%
Small Cap Growth Fund 1.00%
Small Cap Value Fund 1.00%
Strategic Income Fund 0.60%
Strategic Value Fund 0.75%
Tax Free Bond Fund 0.60%
Total Return Fund 0.64%(7)
Value Fund 0.72%(8)
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(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 to $500 million; and 0.50% on assets in
excess of $500 million.
(3) contractual fee breakpoints as follows: 0.72% on assets up to $500 million,
0.67% on assets from $500 million to $1.0 billion and 0.62% on assets in
excess of $1.0 billion
(4) contractual fee breakpoints as follows: 0.60% on assets up to $1 billion;
and 0.55% on assets in excess of $1 billion.
(5) contractual fee breakpoints as follows: 0.60% on assets up to $500 million;
and 0.55% on assets in excess of $500 million.
(6) contractual fee breakpoints as follows: 0.50% on assets up to $300 million;
0.45% on assets from $300 million to $700 million; 0.40% on assets from
$700 million to $1 billion; and 0.35% on assets over $1 billion.
(7) contractual fee breakpoints as follows: 0.64% on assets up to $500 million;
and 0.60% on assets in excess of $500 million.
(8) contractual fee breakpoints as follows: 0.72% on assets up to $200 million;
0.65% on assets from $200 million to $500 million; and 0.50% on assets over
$500 million.
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