Exhibit d(2)(e)
SECOND AMENDED AND RESTATED SUB-ADVISORY AGREEMENT
MAINSTAY MAP FUND
Second Amended and Restated Sub-Advisory Agreement, made as of November
25, 2002 (the "Agreement"), between New York Life Investment Management LLC., a
Delaware limited liability company (the "Manager"), on behalf of The MainStay
Funds (the "Trust"), and Markston International LLC, a New York limited
liability corporation (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 Subadviser entered into an Amended and Restated
Sub-Advisory Agreement, dated August 1, 2002, with the Manager, which amends and
restates in its entirety the Sub-Advisory Agreement, dated June 1, 1999, as
further amended effective October 1, 1999 (collectively, the "Sub-Advisory
Agreement"); and
WHEREAS, under the Sub-Advisory Agreement, the Subadviser has agreed to
provide certain investment advisory and related administrative services to the
MainStay MAP Fund (the "Fund"), a series of the Trust; and
WHEREAS, the Manager entered into an Amended and Restated Management
Agreement, dated August 1, 2002, 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 October 1, 1999 (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 desires to retain the Subadviser to furnish
certain investment advisory services with respect to the Fund and the Subadviser
is willing to furnish such services; and
WHEREAS, the Board of Trustees of the Trust, at a meeting held on
September 9, 2002, and the shareholders of the Fund, at a special meeting duly
called and held on November 22, 2002, have approved an amendment to this
Agreement providing that the Subadviser will manage a portion of the Fund's
assets, as the Manager shall determine from time to time; and
WHEREAS, this Agreement amends and restates, in its entirety, the First
Amended and Restated Agreement in order to reflect that the Subadviser will
manage such portion of the Fund's assets;
NOW, THEREFORE, the parties hereto agree as follows:
1. Appointment. For the periods and on the terms set forth in
this Agreement, the Manager hereby appoints the Subadviser as an investment
sub-adviser with respect to that portion of the assets of the Fund designated by
the Manager as allocated to the Subadviser ("Allocated Assets"), subject to such
written instructions, including any redesignation of the Allocated Assets, and
supervision as the Manager may from time to time furnish. The Subadviser accepts
that appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Duties as Subadviser. Subject to the supervision of the Board
of Trustees of the Trust and the Manager, the Subadviser shall manage the
investment operations and portfolio composition of the Allocated Assets,
including the purchase, retention and disposition of securities in accordance
with the investment objectives, policies and restrictions of the Fund, as
specified in the currently effective Prospectus (as hereinafter defined) and
subject to the following understandings:
(a) The Subadviser shall provide supervision of the
investments of the Allocated Assets and determine from time to time what
investments or securities will be purchased, retained, sold or lent by or for
the Allocated Assets, and what portion of the Allocated Assets will be invested
or held uninvested as cash.
(b) The Subadviser shall use its best judgment in the
performance of its duties under this Agreement.
(c) The Subadviser, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the Declaration
of Trust, By-Laws and Prospectus (each as hereinafter defined) of the Trust and
with the instructions and directions of the Board of Trustees and the Manager,
and will conform to and comply with the requirements of the 1940 Act and all
other applicable federal and state laws and regulations.
(d) The Subadviser shall determine the securities to be
purchased or sold by the Fund with respect to the Allocated Assets and will
place orders pursuant to its determination with or through such persons, brokers
or dealers (including NYLIFE Securities Inc.) in conformity with the policy with
respect to brokerage as set forth in the Trust's Registration Statement and
Prospectus (each as hereinafter defined) or as the Board of Trustees may direct
from time to time. It is recognized that, in providing the Fund with investment
supervision or the placing of orders for portfolio transactions, the Subadviser
will give primary consideration to securing the most favorable price and
efficient execution. Consistent with this policy, the Subadviser may consider
the financial responsibility, research and investment information and other
services provided by brokers or dealers who may effect or be a party to any such
transaction or other transactions to which other clients of the Subadviser may
be a party. It is understood that none of the Fund, the Trust, the Manager nor
the Subadviser has adopted a formula for allocation of the Fund's investment
transaction business. It is
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also understood that it is desirable for the Fund that the Subadviser have
access to supplemental investment and market research and security and economic
analyses provided by certain brokers who may execute brokerage transactions at a
higher cost to the Fund than may result when allocating brokerage to other
brokers on the basis of seeking the most favorable price and efficient
execution. Therefore, the Subadviser is authorized to place orders for the
purchase and sale of securities for the Fund with respect to the Allocated
Assets with such certain brokers, subject to review by the Trust's Board of
Trustees from time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such brokers may be
useful to the Subadviser in connection with its services to other clients.
On occasions when the Subadviser deems the purchase
or sale of a security to be in the best interest of the Fund as well as other
clients, the Subadviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be so sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as expenses incurred in the
transaction, will be made by the Subadviser in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Fund and to
such other clients.
(e) The Subadviser shall maintain all books and records
with respect to the Allocated Assets of the Fund's securities transactions
required by sub-paragraphs (b)(5), (6), (9) and (10) and paragraph (f) of Rule
31a-1 under the 1940 Act and any other books and records required to be
maintained by it under the 1940 Act and the Rules thereunder, and shall render
to the Manager and to the Trust's Trustees such periodic and special reports as
the Manager or the Trustees may reasonably request.
(f) The Subadviser shall provide the Fund's Custodian on
each business day with information relating to the execution of all portfolio
transactions for the Allocated Assets pursuant to standing instructions.
3. Subadviser Personnel. The Subadviser shall authorize and
permit any of its directors, officers and employees who may be elected or
appointed as Trustees or officers of the Trust to serve in the capacities in
which they are elected or appointed. Services to be furnished by the Subadviser
under this Agreement may be furnished through the medium of any of such
directors, officers, or employees.
4. Books and Records. The Subadviser shall keep the books and
records with respect to the Allocated Assets of the Fund as required to be
maintained by it, pursuant to paragraph 2 hereof. The Subadviser agrees that all
records that it maintains for the Fund are the property of the Fund, and it will
surrender promptly to the Fund any of such records upon the Fund's request. The
Subadviser further agrees to preserve for the periods prescribed by the Rules of
the Securities and Exchange Commission (the "Commission") under the 1940 Act any
such records as are required to be maintained by the Subadviser pursuant to
paragraph 2 hereof. The Subadviser may make and retain copies of such records.
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5. Services Not Exclusive. The services furnished by the
Subadviser hereunder are not to be deemed exclusive and the Subadviser shall be
free to furnish similar or different services to others so long as its services
under this Agreement are not impaired thereby.
6. Documents. The Manager has delivered to the Subadviser copies
of each of the following documents and will deliver to it all future amendments
and supplements, if any:
(a) Declaration of Trust of the Trust, filed with the
Secretary of The Commonwealth of Massachusetts (such Declaration of Trust, as in
effect on the date hereof and as amended from time to time, is herein called the
"Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on
the date hereof and as amended from time to time, are herein called the
"By-Laws");
(c) Certified Resolutions of the Board of Trustees of the
Trust authorizing the appointment of the Subadviser and approving the form of
this Agreement;
(d) Written Instrument to Establish and Designate
Separate Series of Shares;
(e) Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-lA (the "Registration Statement"),
as filed with the Commission relating to the Fund and the Fund's Shares and all
amendments thereto;
(f) Notification of Registration of the Trust under the
1940 Act on Form N-8A as filed with the Commission and all amendments thereto;
and
(g) Prospectus and Statement of Additional Information of
the Trust (such Prospectus and Statement of Additional Information, as currently
in effect and as amended or supplemented from time to time, being herein called
the "Prospectus").
7. Expenses. During the term of this Agreement, the Subadviser
will bear all expenses incurred by it in connection with its services under this
Agreement. The Subadviser shall not be responsible for any expenses incurred by
the Trust, the Fund or the Manager.
8. Compensation. For the services provided and the expenses
assumed by the Subadviser pursuant to this Agreement, the Manager, not the Trust
or the Fund, will pay to the Subadviser a fee, computed daily and payable
monthly, at an annual rate, as set forth in Schedule A, of the average daily net
assets of the Allocated Assets of the Fund.
9. Standard of Care. Subject to applicable law, the Subadviser
shall not be liable for any error of judgment or for any loss suffered by the
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.
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10. 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 two (2) years
from the date first indicated above and shall continue on an annual basis
thereafter with respect to the Fund, provided that such annual 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 Fund, and (b) the vote of
a majority of those Trustees who are not parties to this Agreement or interested
persons (as 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.
Notwithstanding the foregoing, this Agreement may be terminated: (a) with
respect to the Fund, at any time without penalty upon the vote of a majority of
the Trustees or by vote of the majority of the Fund's outstanding voting
securities, upon sixty (60) days' written notice to the Subadviser; (b) by the
Manager, at any time without penalty upon sixty (60) days' written notice to the
Subadviser or immediately upon material breach by the Subadviser, after the
Subadviser has received notice and an opportunity to cure such breach, or
immediately if, in the reasonable judgment of the Manager, the Subadviser
becomes unable to discharge its duties and obligations under this Agreement; or
(c) by the Subadviser, at any time without penalty, upon sixty (60) days'
written notice to the Fund. This Subadvisory Agreement also will terminate
automatically in the event of its assignment (as defined in the 0000 Xxx) or the
assignment or termination of the Management Agreement.
11. Other Business. Nothing in this Agreement shall limit or
restrict the right of any of the Subadviser's directors, officers, or employees
who may also be a Trustee, officer, or employee of the Trust to engage in any
other business or to devote his or her time and attention in part to the
management or other aspects of any business, whether of a similar or dissimilar
nature, nor limit or restrict the Subadviser's right to engage in any other
business or to render services of any kind to any other corporation, trust,
firm, individual or association.
12. 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 Fund, 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.
13. Amendment. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought. No material amendment of this Agreement shall be
effective until approved (i) by a vote of a majority of those Trustees of the
Trust who are not parties to this Agreement or interested persons of any such
party, and (ii) by a vote of a majority of the Fund's outstanding voting
securities (unless, in the case of (ii), the Trust receives a Commission order
or no-action letter permitting it to modify the Agreement without such vote).
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
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15. 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 00 Xxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx X. Xxxxxxxxx, Managing Member.
16. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. As used in this Agreement, the terms "majority of the
outstanding voting securities," "affiliated person," "interested person,"
"assignment," "broker," "investment adviser," "net assets," "sale," "sell" and
"security" shall have the same meaning as such terms have in the 1940 Act. Where
the effect of a requirement of the federal securities laws reflected in any
provision of this Agreement is made less restrictive by a rule, regulation or
order of the Commission, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order. This Agreement may be signed in counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Operating Officer
MARKSTON INTERNATIONAL LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Partner
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SCHEDULE A
FUND ANNUAL RATE(1)
MAP Fund 0.450% up to $250 million;
0.400% from $250 million to $500
million; and
0.350% on assets in excess of $500
million.
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(1) Expressed as a percentage of the average daily net assets of the Allocated
Assets of the Fund.
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