MAINSTAY INSTITUTIONAL FUNDS INC.
CORE BOND PLUS FUND
MID CAP CORE FUND
TAX FREE BOND FUND
FORM OF MANAGEMENT AGREEMENT
Agreement, made as of the 5th day of December, 2000 between Mainstay
Institutional Funds Inc., a Maryland corporation (the "Company"), on behalf of
the Core Bond Plus Fund, Mid Cap Core Fund and Tax Free Bond Fund (each a "Fund"
and collectively, the "Funds"), each a separate series of the Company, and New
York Life Investment Management LLC, a Delaware limited liability company
("NYLIM" or the "Manager").
W I T N E S S E T H:
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the shares of common stock of the Company (the "Shares") are
divided into separate series, each of which is established by resolution of the
Board of Directors of the Company and the Directors may from time to time
terminate such series or establish and terminate additional series; and
WHEREAS, each Fund desires to retain the Manager to render investment
advisory and related administrative services to the Fund, and the Manager is
willing to render such services on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, the parties agree as follows:
1. Appointment. Each Fund hereby appoints NYLIM to act as manager to
the Fund for the period and on the terms set forth in this Agreement. NYLIM
accepts such appointment and agrees to render the services herein described,
for the compensation herein provided.
2. Duties as Manager. Subject to the supervision of the Directors of the
Company, the Manager shall administer each Fund's business affairs and manage
the investment operations of each Fund and the composition of the portfolio of
each Fund, including the purchase, retention and disposition thereof, in
accordance with the investment objectives, policies and restrictions of each
Fund, as stated in the currently effective Prospectus (as hereinafter defined)
and subject to the following understandings:
(a) The Manager shall (i) furnish each Fund with office facilities;
(ii) be responsible for the financial and accounting records required to be
maintained by each Fund (excluding those being maintained by the Fund's
Custodian and Transfer Agent except as to which the Manager has supervisory
functions) and other than those being maintained by the Fund's subadviser, if
any; and (iii) furnish each Fund with ordinary clerical, bookkeeping and
recordkeeping services at such office facilities.
(b) The Manager shall provide supervision of each Fund's investments
and determine from time to time what investments or securities will be
purchased, retained, sold or lent by each Fund, and what portion of each Fund's
assets will be invested or held uninvested as cash.
(c) The Manager shall use its best judgment in the performance of
its duties under this Agreement.
(d) The Manager, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Articles of
Incorporation, By-Laws and Prospectus (each as hereinafter defined) of the
Company and with the instructions and directions of the Directors of the Company
and. will conform to and comply with the requirements of the 1940 Act and all
other applicable federal and state laws and regulations.
(e) The Manager, and any sub-adviser to whom such authority has been
delegated, shall determine the securities to be purchased or sold by each Fund
and will place orders pursuant to its determination with or through such
persons, brokers or dealers (including NYLIFE Securities Inc.) in conformity
with the policy with respect to brokerage as set forth in the Company's
Registration Statement and Prospectus (each as hereinafter defined) or as the
Directors may direct from time to time. It is recognized that, in providing a
Fund with investment supervision or the placing of orders for portfolio
transactions, the Manager or any sub-adviser will give primary consideration to
securing the most favorable price and efficient execution. Consistent with this
policy, the Manager or any sub-adviser may consider the financial
responsibility, research and investment information and other services provided
by brokers or dealers who may effect or be a party to any such transaction or
other transactions to which other clients of the Manager or any sub-adviser may
be a party. It is understood that none of the Funds, the Company nor the Manager
or sub-adviser has adopted a formula for allocation of a Fund's investment
transaction business. It is also understood that it is desirable for each Fund
that the Manager or any sub-adviser have access to supplemental investment and
market research and security and economic analyses provided by certain brokers
who may execute brokerage transactions at a higher cost to a Fund than may
result when allocating brokerage to other brokers on the basis of seeking the
most favorable price and efficient execution. Therefore, the Manager or any
sub-adviser is authorized to place orders for the purchase and sale of
securities for a Fund with such certain brokers, subject to review by the
Company's Directors from time to time with respect to the extent and
continuation of this practice. It is understood that the services provided by
such brokers may be useful to the Manager or any sub-adviser in connection with
its services to other clients.
On occasions when the Manager or any sub-adviser deems the
purchase or sale of a security to be in the best interest of a Fund as well as
other clients, the Manager or any 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 Manager or any sub-adviser in
the manner it considers to be the most equitable and consistent with its
fiduciary obligations to that Fund and to such other clients.
-2-
(f) The Manager shall maintain all books and records with respect to
each Fund's securities transactions required by sub-paragraphs (b)(5), (6), (9)
and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act and any other books
and records required to be maintained by it under the 1940 Act and the Rules
thereunder and shall render to the Company's Directors such periodic and special
reports as the Directors may reasonably request.
(g) The Manager shall provide the Company's Custodian on each
business day with information relating to the execution of all portfolio
transactions pursuant to standing instructions.
(h) With respect to any or all series of the Company, including the
Funds, the Manager may enter into one or more contracts ("Sub-Advisory or
Sub-Administration Contract") with a sub-adviser or sub-administrator in which
the Manager delegates to such sub-adviser or sub-administrator any or all its
duties specified in this Agreement, provided that each Sub-Advisory or
Sub-Administration Contract meets all requirements of the 1940 Act and rules
thereunder.
3. Manager Personnel. The Manager shall authorize and permit any of its
directors, officers and employees who may be elected or appointed as Directors
or officers of the Company to serve in the capacities in which they are elected
or appointed. Services to be furnished by the Manager under this Agreement may
be furnished through the medium of any of such directors, officers or employees.
4. Books and Records. The Manager shall keep each Fund's books and records
required to be maintained by it, pursuant to paragraph 2 hereof. The Manager
agrees that all records which it maintains for a Fund are the property of that
Fund, and it will surrender promptly to that Fund any of such records upon the
Fund's request. The Manager further agrees to preserve for the periods
prescribed by Rule 31a-2 as promulgated by the Securities and Exchange
Commission (the "Commission") under the 1940 Act any such records as are
required to be maintained by the Manager pursuant to paragraph 2 hereof.
5. Services Not Exclusive. The services furnished by the Manager
hereunder are not to be deemed exclusive and the Manager shall be free to
furnish similar services to others so long as its services under this
Agreement are not impaired thereby.
6. Documents. The Company has delivered to the Manager copies of each
of the following documents and will deliver to it all future amendments and
supplements, if any:
(a) Articles of Incorporation of the Company, filed with the
Maryland Department of Assessments and Taxation (such Articles of Incorporation,
as in effect on the date hereof and as amended from time to time, are herein
called the "Articles of Incorporation");
(b) By-Laws of the Company (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 Directors of the Company
authorizing the appointment of the Manager and approving the form of this
Agreement;
-3-
(d) Registration Statement under the 1940 Act and the Securities Act
of 1933, as amended, on Form N-lA (the "Registration Statement"), as filed with
the Commission, relating to each Fund and each Fund's 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) Each form of Prospectus and Statement of Additional Information
of the Company (such Prospectuses and Statement of Additional Information, as
currently in effect and as amended or supplemented from time to time, being
herein called collectively the "Prospectus").
7. Expenses.
(a) In connection with the services rendered by the Manager under
this Agreement, the Manager will bear all of the following expenses:
(i) the salaries and expenses of all personnel of the
Company and the Manager, except the fees and expenses of Directors who are
not interested persons of the Manager or of the Company, and
(ii) all expenses incurred by the Manager in connection with
the investment operations of each Fund and administering the ordinary course of
each Fund's business, other than those assumed by that Fund herein;
(b) Each Fund assumes and will pay its expenses, including but not
limited to those described below (where any such category applies to more than
one series of the Company, each Fund shall be liable only for its allocable
portion of the expenses):
(i) the fees and expenses of Directors who are not
interested persons of the Manager or of the Company;
(ii) the fees and expenses of the Fund's custodian which
relate to (A) the custodial function and the recordkeeping connected therewith,
(B) the maintenance of the required accounting records of the Fund not being
maintained by the Manager, (C) the pricing of the Fund's Shares, including the
cost of any pricing service or services which 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 Fund's Shares;
(iii) the fees and expenses of the Company's transfer and
dividend disbursing agent, which may be the custodian, which relate to the
maintenance of each shareholder account,
(iv) the charges and expenses of legal counsel and
independent accountants for the Company;
-4-
(v) brokers' commissions and any issue or transfer taxes
chargeable to the Company in connection with its securities transactions on
behalf of the Funds;
(vi) all taxes and business fees payable by the Company or
the Funds to federal, state or other governmental agencies;
(vii) the fees of any trade association of which the
Company may be a member;
(viii)the cost of share certificates representing Fund Shares;
(ix) the fees and expenses involved in registering and
maintaining registrations of the 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;
(x) 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;
(xi) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Company's
business; and
(xii) any expenses assumed by the Funds pursuant to a Plan of
Distribution adopted in conformity with Rule 12b-1 under the 1940 Act.
(c) Fees and expenses of legal counsel, registering shares, holding
meetings and communicating with shareholders as described in subparagraph (b)
above include an allocable portion of the cost of maintaining an internal legal
and compliance department.
8. Organization Expenses. Each Fund hereby agrees to reimburse the
Manager for the organization expenses of, and the expenses incurred in
connection with, the initial offering of any Shares of that Fund.
9. Compensation. For the services provided and the facilities
furnished pursuant to this Agreement, the Company will pay to the Manager as
full compensation therefor a fee at an annual rate of the following
percentage of the average daily net assets of each Fund.
Core Bond Plus Fund 0.60%
Mid Cap Core Fund 0.85%
Tax Free Bond Fund 0.50%
This fee will be computed daily and will be paid to the Manager
monthly. This fee will be chargeable only to the respective Fund, and no other
series of the Company shall be liable for the fee due and payable hereunder. No
Fund shall not be liable for any expense of any other series of the Company.
-5-
10. Standard of Care. Subject to applicable law, the Manager shall not be
liable for any error of judgment or for any loss suffered by a Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
11. Duration and Termination. This Agreement shall continue in effect with
respect to each Fund for a period of more than two years from the date hereof
only so long as such continuance is specifically approved at least annually with
respect to that Fund in conformity with the requirements of the 1940 Act and the
Rules thereunder, provided, however, that this Agreement may be terminated with
respect to any Fund at any time, without the payment of any penalty, by the
Directors of the Company or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of that Fund, or by the Manager at any
time, without the payment of any penalty, on not more than 60 days' nor less
than 30 days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).
12. Other Business. Nothing in this Agreement shall limit or restrict the
right of any of the Managers directors, officers, or employees who may also be a
Director, officer, or employee of the Company to engage in any other business or
to devote his time and attention in part to the management or other aspects of
any business, whether of a similar or dissimilar nature, nor limit or restrict
the Manager's right to engage in any other business or to render services of any
kind to any other corporation, trust, firm, individual or association.
13. Independent Contractor. Except as otherwise provided herein or
authorized by the Directors of the Company from time to time, the Manager shall
for all purposes herein be deemed to be an independent contractor and shall have
no authority to act for or represent any Fund or the Company in any way or
otherwise be deemed an agent of any Fund or the Company.
14. Company Materials. During the term of this Agreement, the Company
agrees to furnish the Manager at its principal office all Prospectuses, proxy
statements, reports to shareholders, sales literature or other material prepared
for distribution to shareholders of a Fund or to the public, which refer to the
Manager in any way, prior to use thereof and not to use such material if the
Manager reasonably objects in writing within five business days (or such other
time as may be mutually agreed) after receipt thereof. In the event of
termination of this Agreement, the Company will continue to furnish to the
Manager copies of any of the above-mentioned materials which refer in any way to
the Manager. The Company shall furnish or otherwise make available to the
Manager such other information relating to the business affairs of each Fund as
the Manager at any time, or from time to time, reasonably requests in order to
discharge its obligations hereunder.
15. Amendment. This Agreement may be amended in writing by mutual
consent, but the consent of each of the Funds, if required, must be obtained
in conformity with the requirements of the 1940 Act and the Rules thereunder.
16. Notice. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage
-6-
prepaid, (1) to the Manager at Xxxxxx Corporate Center I, Building A, 000
Xxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000; or (2) to the Company at 00
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000.
17. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
18. Use of Name. Each Fund may use any name including the word "MainStay"
only for so long as this Agreement or any other investment advisory agreement
between the Manager or any other affiliate of New York Life Insurance Company
and the Company or any extension, renewal or amendment thereof remains in
effect, including any similar agreement with any organization which shall have
succeeded to the Manager's business as investment adviser. At such time as such
an agreement shall no longer be in effect, the respective Fund will (to the
extent that it lawfully can) cease to use such name or any other name indicating
that it is advised by or otherwise connected with the Manager or any
organization which shall have so succeeded to its business.
19. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. As used in this Agreement, terms shall have the same meaning
as such terms have in the 1940 Act. Where the effect of a requirement of the
federal securities laws reflected in any provision of this Agreement is made
less restrictive by a rule, regulation or order of the Commission, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order. This Agreement may be signed in
counterpart.
-7-
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.
MAINSTAY INSTITUTIONAL FUNDS INC., on behalf of
the Funds
By:
------------------------------------------
Name:
Title:
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
By:
------------------------------------------
Name:
Title
-8-
