FORM OF
SUB-ADVISORY AGREEMENT
MAINSTAY LARGE CAP GROWTH FUND
SUB-ADVISORY AGREEMENT, made as of the ___th day of January, 2005 (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 Xxxxxxx Capital Management, Inc. (the "Subadviser").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end, management investment company; and
WHEREAS, the Trust 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 Trust 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 an Amended and Restated Management
Agreement, dated August 1, 2004, with the Trust, on behalf of its series, which
amends and restates in its entirety the Management Agreement, dated October 21,
1997, as further amended on December 10, 2005 to include the Fund (collectively
the "Management Agreement"); and
WHEREAS, under the Management Agreement, the Manager has agreed to provide
certain investment advisory and related administrative services to the Fund; and
WHEREAS, the Management Agreement permits the Manager to delegate certain
of its investment advisory duties under the Management Agreement to one or more
sub-advisers; and
WHEREAS, the Manager wishes to retain the Subadviser to furnish
certain investment advisory services to one or more of the series of the Trust,
and the Subadviser 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 Trust, the Manager,
and the Subadviser as follows:
1. Appointment. The Manager hereby appoints Xxxxxxx Capital Management,
Inc. to act as sub-adviser 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 Subadviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
In the event the Trust designates one or more series other than the Series
with respect to which the Trust and the Manager wish to retain the Subadviser to
render investment advisory services
hereunder, they shall notify the Subadviser in writing. If the Subadviser is
willing to render such services, it shall notify the Trust 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 Trust's
Board of Trustees and the Manager, the Subadviser 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 Subadviser 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 Subadviser is hereby authorized to execute and perform such
services on behalf of the Series. The Subadviser will provide the services under
this Agreement in accordance with the Series' investment objective or
objectives, policies, and restrictions as stated in the Trust's Registration
Statement filed with the Securities and Exchange Commission (the "Commission"),
as amended, copies of which shall be sent to the Subadviser by the Manager. The
Subadviser further agrees as follows:
(a) The Subadviser 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 Subadviser 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 Trust's Board of Trustees
of which the Subadviser has been sent a copy, and the provisions of the
Registration Statement of the Trust under the Securities Act of 1933, as amended
(the "1933 Act"), and the 1940 Act, as supplemented or amended, of which the
Subadviser has received a copy.
(c) On occasions when the Subadviser 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 Subadviser or any of its affiliates, the Subadviser 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 Subadviser in a manner that is fair and
equitable in the judgment of the Subadviser in the exercise of its fiduciary
obligations to the Trust and to such other clients, subject to review by the
Manager and the Board of Trustees.
(d) In connection with the purchase and sale of securities for the
Series, the Subadviser 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 Trust
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and Clearing Corporation, the Subadviser will arrange for the automatic
transmission of the confirmation of such trades to the Trust's custodian and
portfolio accounting agent.
(e) The Subadviser will monitor on a daily basis the determination
by the portfolio accounting agent for the Trust of the valuation of portfolio
securities and other investments of the Series. The Subadviser will assist the
custodian and portfolio accounting agent for the Trust in determining or
confirming, consistent with the procedures and policies stated in the
Registration Statement for the Trust, 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
Subadviser.
(f) The Subadviser will make available to the Trust and the Manager,
promptly upon request, all of the Series' investment records and ledgers
maintained by the Subadviser (which shall not include the records and ledgers
maintained by the custodian or portfolio accounting agent for the Trust) as are
necessary to assist the Trust 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 Subadviser 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 Trust are being conducted in a manner consistent
with applicable laws and regulations.
(g) The Subadviser will provide reports to the Trust's Board of
Trustees, 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 Trust's Board of Trustees with respect to the
Series such periodic and special reports as the Trustees and the Manager may
reasonably request.
(h) In rendering the services required under this Agreement, the
Subadviser 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 Subadviser may not, however, retain as sub-adviser 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 Trust's Board of Trustees and by a majority of Trustees 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 Trust, the Manager, or
the Subadviser, or any such company that is retained as sub-adviser, and also is
approved by the vote of a majority of the outstanding voting securities of the
applicable Series of the Trust to the extent required by the 1940 Act. The
Subadviser shall be responsible for making reasonable inquiries and for
reasonably ensuring that any employee of the Subadviser, any sub-adviser that
the Subadviser has employed or with which it has associated with respect to the
Series, or any employee thereof has not, to the best of the Subadviser's
knowledge, in any material connection with the handling of Trust 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
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(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. Broker-Dealer Selection. The Subadviser 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
Subadviser'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
Trust, 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 Subadviser in the exercise of its
fiduciary obligations to the Trust, by other aspects of the portfolio execution
services offered. Subject to such policies as the Board of Trustees may
determine, and consistent with Section 28(e) of the Securities Exchange Act of
1934, as amended, the Subadviser 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
Subadviser 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 Subadviser'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 Trust's Procedures for Securities Transactions with
Affiliated Brokers pursuant to Rule 17e-1, the Subadviser is further authorized
to allocate the orders placed by it on behalf of the Series to the Subadviser 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 Subadviser, or an
affiliate of the Subadviser. Such allocation shall be in such amounts and
proportions as the Subadviser shall determine consistent with the above
standards, and the Subadviser will report on said allocation regularly to the
Board of Trustees of the Trust, indicating the broker-dealers to which such
allocations have been made and the basis therefor.
4. Disclosure about Subadviser. The Subadviser has reviewed the
post-effective amendment to the Registration Statement for the Trust filed with
the Commission that contains disclosure about the Subadviser, and represents and
warrants that, with respect to the disclosure about the Subadviser or
information relating, directly or indirectly, to the Subadviser, 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 Subadviser further represents and warrants that it
is
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a duly registered investment adviser under the Advisers Act and a duly
registered investment adviser in all states in which the Subadviser is required
to be registered.
5. Expenses. During the term of this Agreement, the Subadviser 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
Trust shall be responsible for all the expenses of the Trust's operations,
including, but not limited to:
(a) the fees and expenses of Trustees who are not interested persons
of the Manager or of the Trust;
(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 Trustees of the Trust, 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 Trust'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 an internal legal and compliance
department) and independent accountants for the Trust;
(e) brokers' commissions and any issue or transfer taxes chargeable
to the Trust in connection with its securities transactions on behalf of the
Series;
(f) all taxes and business fees payable by the Trust or the Series
to federal, state or other governmental agencies;
(g) the fees of any trade association of which the Trust 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 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;
(j) 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;
(k) litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Trust's business; and
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(l) any expenses assumed by the Series pursuant to a Plan of
Distribution adopted in conformity with Rule 12b-1 under the 1940 Act.
6. Compensation. For the services provided, the Manager will pay the
Subadviser a fee, payable monthly, as described on Schedule A.
7. Seed Money. The Manager agrees that the Subadviser shall not be
responsible for providing money for the initial capitalization of the Series.
8. Compliance.
(a) The Subadviser agrees to assist the Manager and the Trust in
complying with the Trust's obligations under Rule 38a-1 under the 1940 Act,
including but not limited to: (a) periodically providing the Trust with
information about, and independent third-party reports on, the Subadviser's
compliance program adopted pursuant to Rule 206(4)-7 under the Advisers Act
("Subadviser's Compliance Program"); (b) reporting any material deficiencies in
the Subadviser's Compliance Program to the Trust within a reasonable time; and
(c) reporting any material changes to the Subadviser's Compliance Program to the
Trust within a reasonable time. The Subadviser understands that the Board of
Trustees of the Trust is required to approve the Subadviser's Compliance Program
on at least an annual basis, and acknowledges that this Agreement is conditioned
upon the Board of Trustees approval of the Subadviser's Compliance Program.
(b) The Subadviser agrees that it shall immediately notify the
Manager and the Trust: (1) in the event that the Commission has censured the
Subadviser; 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 Subadviser further agrees to notify the
Manager and the Trust immediately of any material fact known to the Subadviser
respecting or relating to the Subadviser that is not contained in the
Registration Statement or prospectus for the Trust, 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
Subadviser: (1) in the event that the Commission has censured the Manager or the
Trust; 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.
9. Documents. The Manager has delivered to the Subadviser copies of each
of the following documents and will deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust of the Trust, filed with the Secretary of
the Commonwealth of Massachusetts (such Declaration of Trust, as in effect on
the date hereof and as amended from time to time, is herein called the "Amended
and Restated Declaration of Trust");
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(b) By-Laws of the Trust;
(c) Certified Resolutions of the Trustees of the Trust authorizing
the appointment of the Subadviser and approving the form of this Agreement;
(d) Written Instrument to Establish and Designate Separate Series of
Shares;
(e) Registration Statement under the 1940 Act and the Securities Act
of 1933, as amended, on Form N-lA, as filed with the Commission relating to the
Series and the Series' 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) Prospectus and Statement of Additional Information of the
Series.
10. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Subadviser hereby agrees that all records that it
maintains for the Series are the property of the Trust, and further agrees to
surrender promptly to the Trust any of such records upon the Trust's or the
Manager's request; provided, however, that the Subadviser may, at its own
expense, make and retain a copy of such records. The Subadviser 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.
11. 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
Trust.
12. Representations Respecting Subadviser. The Manager and the Trust agree
that neither the Trust, the Manager, nor affiliated persons of the Trust or the
Manager shall, except with the prior permission of the Subadviser, give any
information or make any representations or statements in connection with the
sale of shares of the Series concerning the Subadviser or the Series other than
the information or representations contained in the Registration Statement,
Prospectus, or Statement of Additional Information for the Trust shares, as they
may be amended or supplemented from time to time, or in reports or proxy
statements for the Trust, or in sales literature or other promotional material
approved in advance by the Subadviser. 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 Subadviser for its approval and the Subadviser
has not commented within five (5) days, the Manager and its affiliated persons
may use and distribute such sales literature or other promotional material,
although, in such event, the Subadviser shall not be deemed to have approved of
the contents of such sales literature or other promotional material.
13. Confidentiality. The Subadviser will treat as proprietary and
confidential any information obtained in connection with its duties hereunder,
including all records and information pertaining to the Fund and its prior,
present or potential shareholders. The Subadviser will not use such information
for any purpose other than the performance of its responsibilities and duties
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hereunder. Such information may not be disclosed except after prior notification
to and approval in writing by the Fund or if such disclosure is expressly
required or requested by applicable federal or state regulatory authorities.
14. Control. Notwithstanding any other provision of the Agreement, it is
understood and agreed that the Trust 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 Subadviser.
15. Liability. Except as may otherwise be required by the 1940 Act or the
rules thereunder or other applicable law, the Trust and the Manager agree that
the Subadviser, any affiliated person of the Subadviser, and each person, if
any, who, within the meaning of Section 15 of the 1933 Act controls the
Subadviser, 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
Subadviser's duties, or by reason of reckless disregard of the Subadviser's
obligations and duties under this Agreement.
16. Indemnification.
(a) The Manager agrees to indemnify and hold harmless the
Subadviser, any affiliated person of the Subadviser, and each person, if any,
who, within the meaning of Section 15 of the 1933 Act controls ("controlling
person") the Subadviser (all of such persons being referred to as "Subadviser
Indemnified Persons") against any and all losses, claims, damages, liabilities,
or litigation (including legal and other expenses) to which a Subadviser
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 Trust, 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 Trust 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 Trust or to any
affiliated person of the Manager by a Subadviser Indemnified Person; provided,
however, that in no case shall the indemnity in favor of the Subadviser
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 Subadviser
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
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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 Subadviser's responsibilities as Subadviser of
the Series, which (1) may be based upon any misfeasance, malfeasance, or
nonfeasance by the Subadviser, any of its employees or representatives, or any
affiliate of or any person acting on behalf of the Subadviser, (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 Trust 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 Subadviser 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
Trust, or any affiliated person of the Manager or Trust by the Subadviser or any
affiliated person of the Subadviser; 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 Subadviser Indemnified
Person unless such Subadviser 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 Subadviser Indemnified Person (or after such Subadviser
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 Subadviser 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 Subadviser
Indemnified Person, the Manager will be entitled to participate, at its own
expense, in the defense thereof or, after notice to the Subadviser Indemnified
Person, to assume the defense thereof, with counsel satisfactory to the
Subadviser 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 Subadviser Indemnified Person would result in a conflict of interests
and, therefore, would not, in the reasonable judgment of the Subadviser
Indemnified Person, adequately represent the interests of the Subadviser
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 Subadviser Indemnified Person, which counsel shall be satisfactory to the
Manager and to the Subadviser Indemnified Person. The Subadviser Indemnified
Person shall bear the fees and expenses of any additional counsel retained by
it, and the Manager shall not be liable to the Subadviser Indemnified Person
under this Agreement for any legal or other expenses subsequently incurred by
the Subadviser 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 Subadviser Indemnified Person if the compromise or settlement
results, or may result, in a finding of wrongdoing on the part of the Subadviser
Indemnified Person.
(d) The Subadviser 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 Subadviser in
writing within a reasonable time after the summons,
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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 Subadviser of any such claim
shall not relieve the Subadviser 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 Subadviser 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 Subadviser assumes the defense of any
such action and the selection of counsel by the Subadviser to represent both the
Subadviser 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 Subadviser will, at its own expense, assume the defense
with counsel to the Subadviser and, also at its own expense, with separate
counsel to the Manager Indemnified Person, which counsel shall be satisfactory
to the Subadviser 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 Subadviser 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 Subadviser 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.
17. 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 Trustees
of the Trust, 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 Trustees 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. The
Subadviser shall not provide any services for a Series or receive any fees on
account of such Series with respect to which this Agreement is not approved as
described in the preceding sentence. However, 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 Trust, 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 Subadviser and
the Trust; (b) at any time without payment of any penalty by the Trust, upon the
vote of a majority of the Trust's Board of Trustees or a majority of the
outstanding voting securities of each Series, upon sixty (60) days' written
notice to the Manager and the Subadviser; or (c) by the Subadviser at any time
without penalty, upon sixty (60) days' written notice to the Manager and the
Trust. 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 Trust, free from any claim or retention
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of rights in such record by the Subadviser; provided, however, that the
Subadviser 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 Investment Management
Agreement between the Adviser and the Trust 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), 10, 11, 12, 14, 15, and
18 of this Agreement shall remain in effect, as well as any applicable provision
of this Section 16.
18. 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 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 Trustees of the Trust,
including a majority of the Trustees of the Trust 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.
19. 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 Subadviser 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 Trust and/or the Series. Upon termination
of the Management Agreement between the Trust and the Manager, the Subadviser
shall forthwith cease to use such name (or derivative or logo).
(b) It is understood that the names Mercury Advisors, Fund Asset
Management, Xxxxxxx Xxxxx, or any derivative thereof or logo associated with
those names, are the valuable property of the Subadviser and its affiliates and
that the Trust and/or the Series have the right to use such names (or derivative
or logo) in offering materials of the Trust with the approval of the Subadviser
and for so long as the Subadviser is a Subadviser to the Trust and/or the
Series. Upon termination of this Agreement, the Trust shall forthwith cease to
use such names (or derivative or logo).
20. Amended and Restated Declaration of Trust. A copy of the Amended and
Restated Declaration of Trust for the Trust is on file with the Secretary of The
Commonwealth of Massachusetts. The Amended and Restated Declaration of Trust has
been executed on behalf of the Trust by the Trustees of the Trust in their
capacity as Trustees of the Trust and not individually. The obligations of this
Agreement shall be binding upon the assets and property of the Trust and shall
not be binding upon any Trustee, officer, or shareholder of the Trust
individually.
21. Proxies. The Manager has provided the Subadviser 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 Trust. Absent
contrary instructions received in writing from the Trust, the Subadviser 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
Subadviser shall maintain records concerning how it has voted proxies on behalf
of the Trust, and these records shall be available to the Trust upon request.
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22. 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 Subadviser at 4720 IDS Tower, 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000.
23. 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 15 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 Subadviser
as an agent of the Manager, or constituting the Manager as an agent of the
Subadviser.
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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: _________________________ By:___________________________________
Name: Name: Xxxxx Xxxxxxx
Title: Title: President
XXXXXXX CAPITAL MANAGEMENT, INC.
Attest: __________________________ By:___________________________________
Name: Name: Xxxxx Xxxxxxx
Title: Title: Chief Executive Officer
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SCHEDULE A
1. Sub-adviser shall provide services for the following series of the Trust:
- MainStay Large Cap Growth Fund
2. Sub-adviser shall be paid:
0.40% of the average daily net asset value of all Sub-adviser-serviced
assets in all accounts managed by the Manager, including the Trust, up to
$250 million;
0.35% of the average daily net asset value of all Sub-adviser-serviced
assets in all accounts managed by the Manager, including the Trust, from
$250 million to $500 million;
0.30% of the average daily net asset value of all Sub-adviser-serviced
assets in all accounts managed by the Manager, including the Trust, from
$500 million to $750 million;
0.25% of the average daily net asset value of all Sub-adviser-serviced
assets in all accounts managed by the Manager, including the Trust, from
$750 million to $1 billion; and
0.20% of the average daily net asset value of all Sub-adviser-serviced
assets in all accounts managed by the Manager, including the Trust, in
excess of $1 billion.
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