ICAP FUNDS, INC. SUBADVISORY AGREEMENT
ICAP
FUNDS, INC.
SUBADVISORY
AGREEMENT, made as of the 31st
day of
August, 2006 (the “Agreement”), between New York Life Investment Management LLC,
a Delaware limited liability company (the “Manager”), on behalf of ICAP Funds,
Inc. (the “Company”), and Institutional Capital LLC (the
“Subadvisor”).
WHEREAS,
the Company is registered under the Investment Company Act of 1940, as amended
(the “1940 Act”), as an open-end, management investment company; and
WHEREAS,
the 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 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 a Management Agreement, dated August 31, 2006, with
the
Company, on behalf of its series (the “Management Agreement”); and
WHEREAS,
under the Management Agreement, the Manager has agreed to provide certain
investment advisory and related administrative services to the 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 Company, and manage
such
portion of the 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 Company, the Manager,
and
the Subadvisor as follows:
1.
Appointment. The Manager hereby appoints Institutional Capital LLC to act
as
Subadvisor to the series designated on Schedule A of this Agreement (the
“Series”) for the periods and on the terms set forth in this Agreement. The
Subadvisor accepts such appointment and agrees to furnish the services herein
set forth for the compensation herein provided.
In
the
event the Company designates one or more series other than the Series with
respect to which the Company and the Manager wish to retain the Subadvisor
to
render investment advisory services hereunder, they shall notify the Subadvisor
in writing. If the Subadvisor is willing to render such services, it shall
notify the Company and Manager in writing, whereupon such series shall become
a
Series hereunder, and be subject to this Agreement.
2.
Portfolio Management Duties. Subject to the supervision of the Company’s Board
of Directors and the Manager, the Subadvisor will provide a continuous
investment program for the Series’ portfolio and determine the composition of
the assets of the Series’ portfolio, including determination of the purchase,
retention, or sale of the securities, cash, and other investments contained
in
the portfolio. The Subadvisor will provide investment research and conduct
a
continuous program of evaluation, investment, sales, and reinvestment of
the
Series’ 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 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 Company’s Registration
Statement filed with the Securities and Exchange Commission (the “Commission”),
as amended, copies of which shall be sent to the Subadvisor by the Manager.
The
Subadvisor further agrees as follows:
(a)
The
Subadvisor will take all steps necessary to manage the Series so that it
will
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code.
(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 Company’s Board of Directors of which the
Subadvisor has been sent a copy, and the provisions of the Registration
Statement of the Company under the Securities Act of 1933, as amended (the
“1933
Act”), and the 1940 Act, as supplemented or amended, of which the Subadvisor
has
received a copy.
(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 is fair and equitable in the judgment
of
the Subadvisor in the exercise of its fiduciary obligations to the Company
and
to such other clients, subject to review by the Manager and the Board of
Directors.
(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 Company and Clearing
Corporation, the Subadvisor will arrange for the automatic transmission of
the
confirmation of such trades to the Company’s custodian and
portfolio
accounting
agent.
(e)
The
Subadvisor will monitor on a daily basis the determination by the portfolio
accounting agent for the Company of the valuation of portfolio securities
and
other investments of the Series. The Subadvisor will assist the custodian
and
portfolio accounting agent for the Company in determining or confirming,
consistent with the procedures and policies stated in the Registration Statement
for the Company, the value of any portfolio securities or other 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 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 Company) as are necessary
to
assist the 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 Company are being conducted in a manner consistent with
applicable laws and regulations.
(g)
The
Subadvisor will provide reports to the Company’s Board of Directors, for
consideration at meetings of the Board, on the investment program for the
Series
and the issuers and securities represented in the Series’ portfolio, and will
furnish the Company’s Board of Directors with respect to the Series such
periodic and special reports as the Directors and the Manager may reasonably
request.
(h)
In
rendering the services required under this Agreement, the Subadvisor may,
from
time to time, employ or associate with itself such 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 Company’s Board of Directors and by a majority of 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 Company, the Manager,
or 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 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 Company
assets:
(i)
been
convicted, in 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
Xxxxx 00, Xxxxxx Xxxxxx 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.
3.
Compensation. For the services provided and the expenses assumed pursuant
to
this Agreement, the Manager shall pay the Subadvisor as full compensation
therefore, a fee equal to the percentage of the respective Fund’s average daily
net assets of the portion of the respective Fund managed by the Subadvisor
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 Fund for management services described
under the Management Agreement between the Fund and the Manager. Expense
caps or
fee waivers for the Fund that may be agreed to by the Manager, but not agreed
to
by the Subadvisor, shall not cause a reduction in the amount of the payment
to
the Subadvisor by the Manager.
4.
Broker-Dealer Selection. The Subadvisor is responsible for decisions to buy
and
sell securities and other investments for the Series’ portfolio, 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
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 Company, by other aspects of the portfolio
execution services offered. Subject to such policies as the Board of Directors
may determine, and consistent with Section 28(e) of the Securities Exchange
Act
of 1934, as amended, 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 with the 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 Commission, to its affiliated
broker-dealer, or to such brokers and dealers who also provide research or
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 of Directors of the Company, 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 Company filed with the
Commission that contains disclosure about the Subadvisor, and represents
and
warrants that, with respect to the disclosure about the Subadvisor or
information relating, directly or indirectly, to 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.
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
Company shall be responsible for all the expenses of the Company’s operations,
including, but not limited to:
(a)
the
fees and expenses of Directors who are not interested persons of the Manager
or
of the Company;
(b)
the
fees and expenses of each Series which relate to (A) the custodial function
and
the recordkeeping connected therewith, (B) the maintenance of the required
accounting records of the Series not being maintained by the Manager, (C)
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 Directors
of
the Company, and (D) 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 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 (including an allocable portion of
the
cost of maintaining internal legal and compliance departments) and independent
accountants for the Company;
(e)
brokers’ commissions and any issue or transfer taxes chargeable to the Company
in connection with its securities transactions on behalf of the
Series;
(f)
all
taxes and business fees payable by the Company or the Series to federal,
state
or other governmental agencies;
(g)
the
fees of any trade association of which the Company may be a member;
(h)
the
cost of share certificates representing Series Shares;
(i)
the
fees and expenses involved in registering and maintaining registrations of
the
Company and of its Shares with the Commission, registering the Company as
a
broker or dealer, and qualifying its Shares under state securities laws,
including the preparation and printing of the 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 Directors’ meetings and of preparing, printing and
mailing reports to shareholders in the amount necessary for distribution
to the
shareholders;
(k)
litigation and indemnification expenses and other extraordinary expenses
not
incurred in the ordinary course of the 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 Company in complying with
the
Company’s obligations under Rule 38a-1 under the 1940 Act, including but not
limited to: (a) periodically providing the Company with information about,
and
independent third-party reports (if available) on, the Subadvisor’s compliance
program adopted pursuant to Rule 206(4)-7 under the Advisers Act (“Subadvisor’s
Compliance Program”); (b) reporting any material deficiencies in the
Subadvisor’s Compliance Program to the Company within a reasonable time; and (c)
reporting any material changes to the Subadvisor’s Compliance Program to the
Company within a reasonable time. The Subadvisor understands that the Board
of
Directors of the Company 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 of Directors approval of the Subadvisor’s Compliance
Program.
(b)
The
Subadvisor agrees that it shall immediately notify the Manager and the Company:
(1) in the event that the Commission 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 (2) 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 and the
Company immediately of any material fact known to the Subadvisor respecting
or
relating to the Subadvisor that is not contained in the Registration Statement
or prospectus for the Company, or any amendment or supplement thereto, or
of any
statement contained therein that becomes untrue in any material
respect.
(c)
The
Manager agrees that it shall immediately notify the Subadvisor: (1) in the
event
that the Commission has censured the Manager or the 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 (2) 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.
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)
Articles of Incorporation of the Company of the Company, filed with the
Department of Assessment and Taxation of the State of Maryland (such Articles
of
Incorporation of Company, as in effect on the date hereof and as amended
from
time to time, is herein called the “Amended and Restated Articles of
Incorporation of the Company”);
(b)
By-Laws of the Company;
(c)
Certified Resolutions of the Directors of the 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 Commission relating to the Series
and
the Series’ Shares, and all amendments thereto;
(e)
Notification of Registration of the Company under the 1940 Act on Form N-8A,
as
filed with the Commission, 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 Company, and further agrees to surrender promptly
to the Company any of such records upon the 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 Commission) in connection
with
any investigation or inquiry relating to this Agreement or the
Company.
11.
Representations Respecting Subadvisor. The Manager and the Company agree
that
neither the Company, the Manager, nor affiliated persons of the 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 Company shares,
as
they may be amended or supplemented from time to time, or in reports or proxy
statements for the 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.
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. 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.
13.
Control. Notwithstanding any other provision of the Agreement, it is understood
and agreed that the Company 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 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.
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 Company, which (1) may be based upon any
misfeasance, malfeasance, or nonfeasance by the Manager, any of its employees
or
representatives or any affiliate of or any person acting on behalf of the
Manager, or (2) may be 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 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 or the 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.
(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 (1) may be based upon any misfeasance, malfeasance, or
nonfeasance by the Subadvisor, any of its employees or representatives, or
any
affiliate of or any person acting on behalf of the Subadvisor, (2) may be
based
upon a failure to comply with Section 2, Paragraph(a) of this Agreement,
or (3)
may be 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 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
Company, or any affiliated person of the Manager or 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, gross
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties
under
this Agreement.
(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 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 interests 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 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 interests 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.
16.
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, 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 of Directors
of the
Company, or by the vote of a majority of the outstanding voting securities
(as
defined in the 0000 Xxx) of the Series, and (b) the vote of a majority of
those
Directors who are not parties to this Agreement or interested persons (as
such
term is defined in the 0000 Xxx) 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 0000 Xxx) 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 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 Company; (b) at any time
without payment of any penalty by the Company, upon the vote of a majority
of
the Company’s Board of Directors 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 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 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 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), 8,
9,
10, 12, 15, and 18 of this Agreement shall remain in effect, as well as any
applicable provision of this Section 16.
17.
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 Directors of the
Company, including a majority of the Directors of the 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.
18.
Use
of Name.
(a)
It is
understood that the name MainStay 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 Company and/or the Series. Upon termination of the Management Agreement
between the Company and the Manager, the Subadvisor shall forthwith cease
to use
such name (or derivative or logo).
(b)
It is
understood that the names ICAP or Institutional Capital LLC or any derivative
thereof or logo associated with those names, are the valuable property of
the
Subadvisor and its affiliates and that the Company and/or the Series have
the
right to use such names (or derivative or logo) in offering materials of
the
Company with the approval of the Subadvisor and for so long as the Subadvisor
is
a Subadvisor to the Company and/or the Series. Upon termination of this
Agreement, the Company shall forthwith cease to use such names (or derivative
or
logo).
19.
Proxies. 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 Company. Absent contrary instructions
received in writing from the 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 Company, and
these
records shall be available to the Company upon request.
20.
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, Attention: President; or (2) to the Subadvisor
at
Institutional Capital LLC, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX
00000.
21.
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
Commission 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 0000 Xxx. (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
16 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.
IN
WITNESS WHEREOF, the parties hereto have caused this instrument to be executed
as of the day and year first above written.
NEW
YORK
LIFE INVESTMENT MANAGEMENT LLC
Attest: /s/
Xxxxxxxxxx X. X. Xxxxxxxx By:/s/
Xxxxx X. Xxxxxxx
Name:
Xxxxxxxxxx X.X. Xxxxxxxx Name:
Xxxxx X. Xxxxxxx
Title:
Managing Director Title:
President and Chief Executive Officer
INSTITUTIONAL
CAPITAL LLC
Attest:
/s/
Xxxxxx X. Xxxxxx By: /s/
Xxxxxx Xxxx
Name:
Xxxxxx X. Xxxxxx Name:
Xxxxxx Xxxx
Title:
Executive Vice President Title:
President and Chief Investment Officer
Schedule
A
As
Compensation for services provided by Subadvisor the Manager will pay the
Subadvisor and Subadvisor agrees to accept as full compensation for all services
rendered hereunder, at an annual subadvisory fee equal to the
following:
Fund Annual
Rate
MainStay
ICAP Equity Fund .40%
of
the average daily net assets of the Fund
MainStay
ICAP Select Equity Fund .40%
of
the average daily net assets of the Fund
MainStay
ICAP International Equity Fund .40%
of
the average daily net assets of the Fund
The
portion of the fee based upon the average daily net assets of the respective
Fund shall be accrued daily at the rate of 1/365th
of the
annual rate applied to the daily net assets of the Fund.
The
subadvisory fee so accrued shall be paid monthly to the
Subadvisor.
