Exhibit d(2)(a)
AMENDED AND RESTATED SUB-ADVISORY AGREEMENT
Amended and Restated Sub-Advisory Agreement made as of August 1, 2002
(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, XxxXxx-Xxxxxxx Financial Corporation ("MSFC") entered into a
Sub-Advisory Agreement, dated October 27, 1997, by and between MSFC and MainStay
Management Inc. ("MMI") whereby MSFC agreed to provide advisory and related
administrative services to each Fund; and
WHEREAS, the Sub-Advisory Agreement was amended effective October 1,
1999 to reflect the conversion of each of MFSC and MMI from a corporation to a
limited liability company under Delaware law and to replace MFSC with
XxxXxx-Xxxxxxx LLC, and MMI with MainStay Management LLC ("MM LLC"); and
WHEREAS, pursuant to a Substitution Agreement, dated January 2, 2001,
by and between MM LLC and New York Life Investment Management LLC ("NYLIM"),
NYLIM assumed all the interests, rights and responsibilities of MM LLC under the
Sub-Advisory Agreement, dated October 27, 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, the Manager has entered into an Amended and Restated
Management Agreement, dated August 1, 2002, with the Trust, on behalf of the
Funds, which amends and restates in its entirety the Management Agreement, dated
October 21, 1997, as further amended October 1, 1999 (collectively, the
"Management Agreement"), to reflect the current parties of the Management
Agreement, to reflect and certain contractual management fee breakpoints and to
make certain ministerial changes designed to facilitate the administration of
that Agreement; 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; and
WHEREAS, this Agreement amends and restates, in its entirety, the
Sub-Advisory Agreement, dated October 27, 1997, as further amended effective
October 1, 1999, by and between
the Subadviser and MM LLC in order to reflect the current parties of the
Sub-Advisory Agreement 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. 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
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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.
(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:
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(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-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 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
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(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
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/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Chairman and Chief Executive Officer
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Operating Officer
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SCHEDULE A
(AMENDED AND RESTATED AS OF AUGUST 1, 2002)
FUND ANNUAL RATE*
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 0.360% up to $500 million;
0.335% from $500 million to
$1.0 billion; and 0.310% in
excess of $1.0 billion
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%
in excess of $500 million
International Bond Fund 0.450%
International Equity Fund 0.600%
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
Strategic Income Fund 0.300%
Mid Cap Growth Fund 0.375%
Tax Free Bond Fund 0.300%
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
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Small Cap Growth Fund 0.500%
Equity Income Fund 0.350%
Global High Yield Fund 0.350%
Select 20 Equity Fund 0.350%
* of each Fund's average daily net assets
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