ECLIPSE FUNDS INC. FOR PERIOD ENDED 10/31/08 ECLIPSE FUNDS INC. AMENDED AND RESTATED MANAGEMENT AGREEMENT
AMENDED
AND RESTATED MANAGEMENT AGREEMENT
This
Amended and Restated Management Agreement is hereby made as of the 1st
day of
August, 2008 (the “Agreement”) between Eclipse Funds Inc., a Maryland
corporation (the “Company”), further amended from time to time, on behalf of its
series as set forth on Schedule A (each, a “Fund,” and collectively, the
“Funds”) 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”); and
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 (the “Board”) and the Directors may from time to time
terminate such series or establish and terminate additional series; and
WHEREAS,
the Manager is engaged in rendering investment management services and is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended (the “Advisers Act”); and
WHEREAS,
the Company desires to retain the Manager to provide investment advisory and
related administrative services to each of the Funds, and the Manager is willing
to provide or procure such services on the terms and conditions hereinafter
set
forth; and
WHEREAS,
the Company and the Manager entered into an Amended and Restated Management
Agreement, dated as of May 1, 2008 (the “Prior Agreement”); and
WHEREAS,
the parties hereto now desire to amend and restate the Prior Agreement;
and
WHEREAS,
this Agreement restates, in its entirety, the Prior Agreement; and
WHEREAS,
the parties to this Agreement acknowledge that the Agreement is not intended
to
materially change the services provided under the Prior Agreement; and
NOW,
THEREFORE, the parties agree as follows:
ARTICLE
I. APPOINTMENT
A.
Appointment. The Company hereby appoints NYLIM to act as Manager to the Funds
for the period and on the terms set forth in this Agreement. The Manager accepts
such appointment and agrees to provide the advisory and administrative services
herein described, for the compensation herein provided.
ARTICLE
II. ADVISORY SERVICES
A. Advisory
Duties of Manager. Subject to the supervision of the Board, the
Manager shall manage all aspects of the advisory operations of each Fund and
the
composition of the portfolio of each Fund, including the purchase, retention
and
disposition of securities therein, in accordance with the investment objectives,
policies and restrictions of the Fund, as stated in the currently effective
Prospectus (as hereinafter defined); in conformity with the Articles of
Incorporation and By-Laws (each as hereinafter defined) of the Company; under
the instructions and directions of the Directors of the Company; and in
accordance with the applicable provisions of the 1940 Act and the rules and
regulations thereunder, the provisions of the Internal Revenue Code of 1986,
as
amended (the “Code”), relating to regulated investment companies and all rules
and regulations thereunder, and all other applicable federal and state laws
and
regulations. In connection with the services provided under this
Agreement, the Manager will use its best efforts to manage each Fund so that
it
will qualify as a regulated investment company under Subchapter M of the Code
and regulations issued thereunder. In managing each Fund in
accordance with the requirements set out in this section, the Manager will
be
entitled to receive and act upon advice of counsel for the Company or a
Fund.
1. Portfolio
Management. The Manager will determine the securities and other
instruments to be purchased, sold or entered into by each Fund and place orders
with broker-dealers, foreign currency dealers, futures commission merchants
or
others pursuant to the Manager’s determinations and all in accordance with each
Fund’s policies as set out in the Prospectus of the Fund or as adopted by the
Board of Directors and disclosed to the Manager. The Manager will
determine what portion of each Fund’s portfolio will be invested in securities
and other assets and what portion, if any, should be held uninvested in cash
or
cash equivalents. Each Fund will have the benefit of the investment
analysis and research, the review of current economic conditions and trends
and
the consideration of long-range investment policy generally available to the
Manager’s investment advisory clients.
2. Selection
of Brokers. Subject to the policies established by, and any direction
from, the Company’s Board, the Manager will be responsible for selecting the
brokers or dealers that will execute the purchases and sales for a Fund. The
Manager 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 or as the Board may direct from time to
time. It is recognized that, in providing the Funds with investment
supervision or the placing of orders for portfolio transactions, the Manager
will give primary consideration to securing the most favorable price and
efficient execution. Consistent with this policy, the Manager 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
may be a party. It is understood that neither the Funds, the Company
nor the Manager has adopted a formula for allocation of the Funds’ investment
transaction business. It is also understood that it is desirable for
the Funds that the Manager 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 Funds 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 subadvisor is authorized to place orders for the purchase and sale of
securities for the Funds 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 subadvisor in
connection with its services to other clients.
Subject
to the foregoing, it is understood that the Manager will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the Company or be
in
breach of any obligation owing to the Company under this Agreement, or
otherwise, solely by reason of its having directed a securities transaction
on
behalf of a Fund to a broker-dealer in compliance with the provisions of Section
28(e) of the Securities Exchange Act of 1934, and the rules and interpretations
of the Securities and Exchange Commission (“SEC”) thereunder, or as otherwise
permitted from time to time by a Fund’s Prospectus.
On
occasions when the Manager deems the purchase or sale of a security to be in
the
best interest of the Funds as well as other clients, the Manager, 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 in the manner it considers to be the most equitable and consistent
with
its fiduciary obligations to the Funds and to such other clients.
3. Delegation
of Investment Advisory Services. Subject to the prior approval of a
majority of the members of the Board, including a majority of the Board who
are
not “interested persons” and, to the extent required by applicable law, by the
shareholders of a Fund, the Manager may, through a subadvisory agreement or
other arrangement, delegate to a subadvisor any of the duties enumerated in
this
Agreement, including the management of all or a portion of the assets being
managed. Subject to the prior approval of a majority of the members
of the Board, including a majority of the Board who are not “interested persons”
and, to the extent required by applicable law, by the shareholders of a Fund,
the Manager may adjust such duties, the portion of assets being managed, and
the
fees to be paid by the Manager; provided, that in each case the Manager will
continue to oversee the services provided by such company or employees and
any
such delegation will not relieve the Manager of any of its obligations under
this Agreement.
The
Company and Manager understand and agree that the Manager may manage a Fund
in a
“manager-of-managers” style with either a single or multiple subadvisors, which
contemplates that the Manager will, among other things and pursuant to an Order
issued by the SEC, and subject to shareholder approval if
required: (i) continually evaluate the performance of each
Subadvisor to a Fund, if applicable, through quantitative and qualitative
analysis and consultations with such Subadvisor; (ii) periodically make
recommendations to the Board as to whether the contract with one or more
Subadvisors should be renewed, modified, or terminated; and
(iii) periodically report to the Board regarding the results of its
evaluation and monitoring functions. The Company recognizes that a
Subadvisor’s services may be terminated or modified pursuant to the
“manager-of-managers” process, and that the Manager may appoint a new Subadvisor
for a Subadvisor that is so removed.
4. Instructions
to Custodian. The Manager or any subadvisor shall provide the
Company’s custodian on each business day with information relating to the
execution of all portfolio transactions pursuant to standing
instructions.
5. Valuation. The
Manager will provide assistance to the Board in valuing the securities and
other
instruments held by each Fund, to the extent reasonably required by such
valuation policies and procedures as may be adopted by each Fund.
B. Books
and
Records. The Manager further agrees to preserve for the periods
prescribed by Rule 31a-2 as promulgated by the SEC under the 1940 Act any such
records as are required to be maintained by the Manager. The Manager
shall render to the Company’s Directors such periodic and special reports as the
Directors may reasonably request.
C. Advisory
Services Not Exclusive. The Manager’s services to the Company and
each Fund pursuant to this Agreement are not exclusive and it is understood
that
the Manager may render investment advice, management and services to other
persons (including other investment companies) and engage in other activities,
so long as its services under this Agreement are not impaired by such other
activities. It is understood and agreed that officers or directors of
the Manager are not prohibited from engaging in any other business activity
or
from rendering services to any other person, or from serving as partners,
officers, trustees or directors of any other firm, trust or corporation,
including other investment companies. Whenever a Fund and one or more
other accounts or investment companies advised by the Manager have available
funds for investment, investments suitable and appropriate for each will be
allocated in accordance with procedures believed by the Manager to be equitable
to each entity over time. Similarly, opportunities to sell securities
will be allocated in a manner believed by the Manager to be equitable to each
entity over time. The Company and each Fund recognize that in some
cases this procedure may adversely affect the size of the position that may
be
acquired or disposed of for a Fund.
ARTICLE
III. ADMINISTRATIVE SERVICES
A. Administrative
Duties of Manager. The
Manager shall: (i) furnish the Funds with office facilities;
(ii) be responsible for the financial and accounting records required to be
maintained by the Funds (excluding those being maintained by the Funds’
custodian and transfer agent). The Manager will also monitor each
Fund’s compliance with its investment and tax guidelines and other compliance
policies.
1. Instructions
to
Custodian. The Manager or any subadministrator shall provide
the Company’s custodian on each business day with information relating to the
execution of all portfolio transactions pursuant to standing
instructions.
2. Books
and
Records. The Manager shall keep the Funds’ books and records required
to be maintained by it. The Manager agrees that all records which it
maintains for the Funds are the property of the Funds, and it will surrender
promptly to the Funds any of such records upon the Funds’
request. Moreover, the Manager shall maintain all books and records
with respect to the Funds’ 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. The Manager shall render to the Company’s
Directors such periodic and special reports as the Directors may reasonably
request.
3. Administrative
Services Not Exclusive. The Manager’s services to the Company and
each Fund pursuant to this Agreement are not exclusive and it is understood
that
the Manager may render administrative services to other persons and to engage
in
other activities, so long as its services under this Agreement are not impaired
by such other activities. It is understood and agreed that officers
or directors of the Manager may serve as officers or directors of the Company,
and that officers or directors of the Company may serve as officers or directors
of the Manager to the extent permitted by law; and that the officers and
directors of the Manager are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, trustees or directors of any other firm, trust or
corporation, including other investment companies.
4. Delegation
of Administration Services. With respect to any or all series of the
Company, including the Funds, the Manager may enter into one or more contracts
with a sub-administrator (“Sub-Administration Contract”) in which the Manager
delegates to such sub-administrator any or all its duties specified in this
Agreement, provided that the Sub-Administration Contract meets all applicable
requirements of the 1940 Act and rules thereunder, as applicable. The
Manager will at all times maintain responsibility for providing the
administration services, and will supervise any sub-administrator.
5. Valuation. The
Manager will provide assistance to the Board in valuing the securities and
other
instruments held by each Fund, to the extent reasonably required by such
valuation policies and procedures as may be adopted by each Fund.
ARTICLE
IV. EXPENSES
A. Expenses
Borne by Manager.
1. 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 the salary (or a portion thereof) of the Company’s Chief
Compliance Officer that the Board approves for payment by the Funds;
and
(ii) All
expenses incurred by the Manager in connection with managing the investment
operations of the Funds other than those assumed by the Company, Fund or
administrator of the Fund or the Company or other third party under a separate
agreement.
2. The
Manager will not be required to pay expenses of any activity which is primarily
intended to result in sales of Shares if and to the extent
that: (i) such expenses are required to be borne by a principal
underwriter that acts as the distributor of the Fund's Shares pursuant to an
underwriting agreement that provides that the underwriter will assume some
or
all of such expenses, or (ii) the Company on behalf of the Fund will have
adopted a plan in conformity with Rule 12b-1 under the 1940 Act providing that
the Fund (or some other party) will assume some or all of such
expenses. The Manager will pay such sales expenses only to the extent
they are not required to be paid by the principal underwriter pursuant to the
underwriting agreement or are not permitted to be paid by a Fund (or some other
party) pursuant to such a plan.
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A.
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Expenses
Borne by the Company/Fund.
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1. 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,
the Fund shall be liable only for its allocable portion of the
expenses):
(i) The
fees
of any investment adviser or expenses otherwise incurred by the Company in
connection with the management of the investment and reinvestment of the assets
of the Funds;
(ii) Brokers’
commissions and any issue or transfer taxes chargeable to the Company in
connection with its securities transactions on behalf of the Funds;
(iii) Litigation
and indemnification expenses and other extraordinary expenses not incurred
in
the ordinary course of the Company’s business;
(iv) The
fees
and expenses of Directors who are not interested persons of the Manager, of
any
investment adviser, and the salary (or a portion thereof) of the Company’s Chief
Compliance Officer that the Board approves for payment by the
Funds;
(v) The
fees
and expenses of the Funds’ custodian which relate to: (a) the
custodial function and the recordkeeping connected therewith; (b) the
preparation and maintenance of the general required accounting records of the
Funds 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 Funds’ Shares;
(vi) The
fees
and expenses of the Funds’ transfer and dividend disbursing agent, which may be
a custodian of the Funds, which relate to the maintenance of each shareholder
account;
(vii) The
charges and expenses of legal counsel (including an allocable portion of the
cost of maintaining an internal legal department (provided pursuant to a
separate legal services agreement) and compliance department) and independent
accountants for the Company;
(viii) All
taxes
and business fees payable by the Funds to federal, state or other governmental
agencies;
(ix) The
fees
of any trade association of which the Company may be a member;
(x) The
cost
of share certificates representing the Funds’ shares;
(xi) The
cost
of fidelity, Directors and officers and errors and omissions
insurance;
(xii) Allocable
communications expenses with respect to investor services and all expenses
of
shareholders’ and Directors meetings and of preparing, printing and mailing
prospectuses, proxies and other reports to shareholders in the amount necessary
for distribution to the shareholders;
(xiii) The
fees
and expenses involved in registering and maintaining registrations of the
Company and of its Shares with the SEC, registering the Company with 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;
(xiv) The
Company hereby agrees to reimburse the Manager for the organization expenses
of,
and the expenses incurred in connection with, the initial offering of any new
share classes of a Fund or the initial offering of a new series of the
Company.
ARTICLE
V. COMPENSATION
A. Compensation. For
the services provided and the facilities furnished pursuant to this Agreement,
the Company will pay to the Manager as full compensation therefore a fee at
the
annual rate for each Fund as set forth on Schedule A. This fee will
be computed daily and will be paid to the Manager monthly. This fee
will be chargeable only to the applicable Fund, and no other series of the
Company shall be liable for the fee due and payable hereunder. The
Funds shall not be liable for any expense of any other series of the
Company.
The
Manager may from time to time agree not to impose all or a portion of its fee
otherwise payable under this Agreement and/or undertake to pay or reimburse
a
Fund for all or a portion of its expenses not otherwise required to be paid
by
or reimbursed by the Manager. Unless otherwise agreed, any fee
reduction or undertaking may be discontinued or modified by the Manager at
any
time. For the month and year in which this Agreement becomes
effective or terminates, there will be an appropriate pro ration of any fee
based on the number of days that the Agreement is in effect during such month
and year, respectively.
ARTICLE
VI. ADDITIONAL OBLIGATIONS OF THE FUNDS/COMPANY
A. 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:
1. Articles
of Incorporation of the Company, as amended from time to time, as filed with
the
Department of Assessments and Taxation of the State of Maryland (such Articles
of Incorporation, as in effect on the date hereof and as amended from time
to
time, is herein called the “Articles of Incorporation”);
2. By-Laws
of the Company, as amended from time to time (such By-Laws, as in effect on
the
date hereof and as amended from time to time, are herein called the
“By-Laws”);
3. Certified
Resolutions of the Directors of the Company authorizing the appointment of
the
Manager and approving the form of this Agreement;
4. Registration
Statement under the 1940 Act and the Securities Act of 1933, as amended, on
Form
N-1A (the “Registration Statement”), as filed with the SEC, relating to the
Funds and the Funds’ Shares and all amendments thereto;
5. Notification
of Registration of the Company under the 1940 Act on Form N-8A as filed with
the
SEC and all amendments thereto; and
6. The
form
of Prospectus and Statement of Additional Information of the Company pursuant
to
which the Funds’ shares are offered for sale to the public (such Prospectus and
Statement of Additional Information, as currently in effect and as amended
or
supplemented from time to time, being herein called collectively the
“Prospectus”).
B. 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 the Funds 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 that 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 the
Funds
as the Manager at any time, or from time to time, reasonably requests in order
to discharge its obligations hereunder.
ARTICLE
VII. LIMITATION OF LIABILITY OF MANAGER
A. Limitation
of Liability of Manager.
1. As
an
inducement to the Manager undertaking to provide services to the Company and
each Fund pursuant to this Agreement, the Company and each Fund agrees that
the
Manager will not be liable under this Agreement for any error of judgment or
mistake of law or for any loss suffered by the Company or a Fund in connection
with the matters to which this Agreement relates, provided that nothing in
this
Agreement will be deemed to protect or purport to protect the Manager against
any liability to the Company, a Fund or its shareholders to which the Manager
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 its obligations and duties under this Agreement.
2. The
rights of exculpation provided under this section are not to be construed so as
to provide for exculpation of any person described in this section for any
liability (including liability under U.S. federal securities laws that, under
certain circumstances, impose liability even on persons that act in good faith)
to the extent (but only to the extent) that exculpation would be in violation
of
applicable law, but will be construed so as to effectuate the applicable
provisions of this section to the maximum extent permitted by applicable
law.
ARTICLE
IX. MISCELLANEOUS
A. 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. The Manager shall make its directors, officers and
employees available to attend Company Board meetings as may be reasonably
requested by the Board from time to time. The Manager shall prepare
and provide such reports on the funds and their operations as may be reasonably
requested by the board from time to time. The Manager shall implement
Board-approved proxy voting policies and procedures, and shall respond to
corporate actions taken by issuers of the Fund’s portfolio holdings consistent
with its fiduciary duty to the Funds.
B. Duration
and Termination. This Agreement shall continue in effect with respect
to the Funds for a period of more than two (2) years from the date hereof
following shareholder approval, as necessary, and thereafter only so long as
such continuance is specifically approved at least annually with respect to
the
Funds in conformity with the requirements of the 1940 Act and the Rules
thereunder and any applicable SEC or SEC staff guidance or
interpretation. This Agreement shall continue in effect with respect
to the Funds for a period of more than one (1) year from the date hereof in
circumstances when shareholder approval is not required, and thereafter only
so
long as such continuance is specifically approved at least annually with respect
to the Funds in conformity with the requirements of the 1940 Act and the rules
thereunder and any applicable SEC or SEC staff guidance or
interpretation. However, this Agreement may be terminated with
respect to the Funds 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 1940 Act) of the Funds, or by the Manager at
any
time, without the payment of any penalty, on not more than sixty (60) days’ nor
less than thirty (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).
C. Additional
Series. In the event the Company establishes one or more Funds after
the effective date of this Agreement, such Funds will become Funds under this
Agreement upon approval of this Agreement by the Board with respect to the
Funds
and the execution of an amended Schedule A reflecting the Funds.
D. Independent
Contractor. Except as otherwise provided herein or authorized by the
Board 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 the Funds or the Company in any way or otherwise be deemed
an agent of the Funds or the Company.
E. Amendment. This
Agreement may be amended in writing by mutual consent, but the consent of the
Funds, if required, must be obtained in conformity with the requirements of
the
1940 Act and the Rules thereunder.
F. 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: Secretary; or (2) to the Company at 00 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President.
G. Governing
Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
H. Use
of
Name. The Funds may use any name including the words MainStay,
Eclipse or any derivative thereof for so long as this Agreement or any other
agreement between the Managers 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 and/or
administrator. At such time as such an agreement shall no longer be
in effect, each 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 that shall have so succeeded to its
respective business.
I. Captions
and Headings. 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.
J. Severability. 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.
K. Interpretation
of Law. 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 SEC,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
*
* *
IN
WITNESS WHEREOF, the parties hereto have caused this instrument to be executed
by their officers designated below as of the 1st
day of
August, 2008. This Agreement may be signed in counterparts.
NEW
YORK
LIFE INVESTMENT MANAGEMENT LLC
Attest:
Xxxxxxxxxx X. X.
Xxxxxxxx
By: /s/ Xxxxx
X. Xxxxx
Name:
Xxxxxxxxxx X. X.
Xxxxxxxx
Name: Xxxxx X. Xxxxx
Title:
Managing
Director
Title: Executive Vice President
Attest:
Xxxxxxxxxx X. X.
Xxxxxxxx
By: /s/
Xxxxxxx X. Xxxxxx
Name:
Xxxxxxxxxx X. X.
Xxxxxxxx
Name: Xxxxxxx X. Xxxxxx
Title:
Managing
Director
Title: President
SCHEDULE
A
(As
of
August 1, 2008)
For
all
services rendered by the Manager hereunder, each Fund of the Company shall
pay
the Manager and the Manager agrees to accept as full compensation for all
services rendered hereunder, at annual fee equal to the following:
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FUND
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ANNUAL
RATE
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Effective
through May 1, 2009:
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All
Cap Growth Fund
|
0.850%
up to $500 million;
0.825%
$500 million to $1 billion; and
0.800%
in excess of $1 billion
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Cash
Reserves Fund
|
0.450%
up to $500 million;
0.400%
from $500 million to $1 billion; and
0.350%
in excess of $1 billion
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|
Conservative
Allocation Fund
|
0.000%*
|
|
Floating
Rate Fund
|
0.600%
up to $1 billion; and
0.575%
in excess of $1 billion
|
|
Growth
Allocation Fund
|
0.000%*
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Growth
Equity Fund
|
0.700%
up to $500 million; and
0.675%
in excess of $500 million
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Income
Manager Fund
|
0.650%
up to $1 billion; and
0.625%
in excess of $1 billion
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Indexed
Bond Fund
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0.350%
up to $1 billion; and
0.300%
in excess of $1 billion
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Intermediate
Term Bond Fund
|
0.600%
up to $500 million; and
0.575%
from $500 million to $1 billion; and
0.550%
in excess of $1 billion
|
|
Large
Cap Opportunity Fund
|
0.700%
up to $500 million; and
0.650%
in excess of $500 million
|
|
Moderate
Allocation Fund
|
0.000%*
|
|
Moderate
Growth Allocation Fund
|
0.000%*
|
|
S&P
500 Index Fund
|
0.250%
up to $1 billion;
0.225%
from $1 billion to $2 billion;
0.215%
from $2 billion to $3 billion; and
0.200%
in excess of $3 billion
|
|
Short
Term Bond Fund
|
0.600%
up to $500 million; and
0.575%
in excess of $500 million
|
|
Effective
through June 18, 2009:
|
|
|
130/30
Core Fund
|
1.000%
|
|
130/30
Growth Fund
|
1.000%
|
|
130/30
International Fund
|
1.100%
|
|
Retirement
2010 Fund
|
0.100%
|
|
Retirement
2020 Fund
|
0.100%
|
|
Retirement
2030 Fund
|
0.100%
|
|
Retirement
2040 Fund
|
0.100%
|
|
Retirement
2050 Fund
|
0.100%
|
|
Effective
through December 7, 2009:
|
|
|
130/30
High Yield Fund
|
0.800%
|
*
The
Manager will receive no fee from the
Fund, although the parties acknowledge that the Manager or its affiliates shall
receive compensation from other registered investment companies, including
other
series of the Company, in connection with assets of the Fund that are invested
in such investment companies.
C:\Documents
and Settings\e466824\Local Settings\Temporary Internet Files\OLK13D\ECLIPSE
INC
N-SAR EXHIBITS_#228660_v1.doc
AMENDMENT
TO THE AMENDED AND
RESTATED
MANAGEMENT AGREEMENT
This
Amendment (the “Amendment”) to the
Amended and Restated Management Agreement is made as of the 30th day of October,
2008, by and between Eclipse Funds Inc., a Maryland corporation (the “Company”),
and New York Life Investment Management LLC, a Delaware limited liability
company (“NYLIM” or the “Manager”).
WHEREAS,
the parties hereto have entered
into an Amended and Restated Management Agreement (the “Agreement”) dated as of
August 1, 2008;
NOW,
THEREFORE, for good and adequate
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree to amend the Agreement as follows:
1.
Schedule
A of the Agreement is hereby
deleted in its entirety and replaced with the attached Schedule A, which removes
the Large Cap Opportunity Fund effective upon its liquidation on October 30,
2008.
IN
WITNESS WHEREOF, the parties have
executed this Amendment to be effective as of the date first written
above.
NEW
YORKLIFE INVESTMENT MANAGEMENT
LLC
By:
/s/
Xxxxx X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
Executive Vice President
By:
/s/
Xxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
President
Schedule
A
(As
of
October 30, 2008)
FOR
ALL
SERVICES RENDERED BY THE MANAGER HEREUNDER, EACH FUND OF THE COMPANY SHALL
PAY
THE MANAGER AND THE MANAGER AGREES TO ACCEPT AS FULL COMPENSATION FOR ALL
SERVICES RENDERED HEREUNDER, AN ANNUAL FEE EQUAL TO THE FOLLOWING:
|
FUND
|
ANNUAL
RATE
|
|
EFFECTIVE
THROUGH MAY 1, 2009:
|
|
|
ALL
CAP GROWTH FUND
|
0.850%
UP TO $500 MILLION;
0.825%
$500 MILLION TO $1 BILLION; AND
0.800%
IN EXCESS OF $1 BILLION
|
|
CASH
RESERVES FUND
|
0.450%
UP TO $500 MILLION;
0.400%
FROM $500 MILLION TO $1 BILLION; AND
0.350%
IN EXCESS OF $1 BILLION
|
|
CONSERVATIVE
ALLOCATION FUND
|
0.000%*
|
|
FLOATING
RATE FUND
|
0.600%
UP TO $1 BILLION; AND
0.575%
IN EXCESS OF $1 BILLION
|
|
GROWTH
ALLOCATION FUND
|
0.000%*
|
|
GROWTH
EQUITY FUND
|
0.700%
UP TO $500 MILLION; AND
0.675%
IN EXCESS OF $500 MILLION
|
|
INCOME
MANAGER FUND
|
0.650%
UP TO $1 BILLION; AND
0.625%
IN EXCESS OF $1 BILLION
|
|
INDEXED
BOND FUND
|
0.350%
UP TO $1 BILLION; AND
0.300%
IN EXCESS OF $1 BILLION
|
|
INTERMEDIATE
TERM BOND FUND
|
0.600%
UP TO $500 MILLION; AND
0.575%
FROM $500 MILLION TO $1 BILLION; AND
0.550%
IN EXCESS OF $1 BILLION
|
|
MODERATE
ALLOCATION FUND
|
0.000%*
|
|
MODERATE
GROWTH ALLOCATION FUND
|
0.000%*
|
|
S&P
500 INDEX FUND
|
0.250%
UP TO $1 BILLION;
0.225%
FROM $1 BILLION TO $2 BILLION;
0.215%
FROM $2 BILLION TO $3 BILLION; AND
0.200%
IN EXCESS OF $3 BILLION
|
|
SHORT
TERM BOND FUND
|
0.600%
UP TO $500 MILLION; AND
0.575%
IN EXCESS OF $500 MILLION
|
|
EFFECTIVE
THROUGH JUNE 18, 2009:
|
|
|
130/30
CORE FUND
|
1.000%
|
|
130/30
GROWTH FUND
|
1.000%
|
|
130/30
INTERNATIONAL FUND
|
1.100%
|
|
RETIREMENT
2010 FUND
|
0.100%
|
|
RETIREMENT
2020 FUND
|
0.100%
|
|
RETIREMENT
2030 FUND
|
0.100%
|
|
RETIREMENT
2040 FUND
|
0.100%
|
|
RETIREMENT
2050 FUND
|
0.100%
|
|
EFFECTIVE
THROUGH DECEMBER 7, 2009:
|
|
|
130/30
HIGH YIELD FUND
|
0.800%
|
|
·
|
THE
MANAGER WILL RECEIVE NO FEE FROM THE FUND, ALTHOUGH THE PARTIES
ACKNOWLEDGE THAT THE MANAGER OR ITS AFFILIATES SHALL RECEIVE COMPENSATION
FROM OTHER REGISTERED INVESTMENT COMPANIES, INCLUDING OTHER SERIES
OF THE
COMPANY, IN CONNECTION WITH ASSETS OF THE FUND THAT ARE INVESTED
IN SUCH
INVESTMENT COMPANIES.
|
AMENDED
AND RESTATED SUBADVISORY AGREEMENT
This
Amended and Restated Subadvisory Agreement, made as of the 1st
day of
August, 2008 (the “Agreement”), between New York Life Investment Management LLC,
a Delaware limited liability company (the “Manager”) and MacKay Xxxxxxx LLC, a
Delaware limited liability company (the “Subadvisor”).
WHEREAS,
Eclipse Funds Inc. (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 the Amended and Restated Management Agreement dated
August 1, 2008 with the Company, on behalf of its series, as amended (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 Manager and the Subadvisor
as follows:
1.
Appointment. The Manager hereby appoints MacKay Xxxxxxx LLC to act as Subadvisor
to the series designated on Schedule A of this Agreement (the “Series”) with
respect to all or a portion of the assets of the Series designated by the
Manager as allocated to the Subadvisor (“Allocated Assets”) subject to such
written instructions, including any redesignation of Allocated Assets and
supervision as the Manager may from time to time furnish 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 Manager wishes
to
retain the Subadvisor to render investment advisory services hereunder, it
shall
notify the Subadvisor in writing. If the Subadvisor is willing to
render such services, it shall notify the Manager in writing, whereupon such
series shall become a Series hereunder, and be subject to this Agreement, and
Schedule A shall be revised accordingly.
2.
Portfolio Management Duties. Subject to the supervision of the Company’s Board
of Directors (“Board”) and the Manager, the Subadvisor will provide a continuous
investment program for the Series’ Allocated Assets and determine the
composition of the assets of the Series’ Allocated Assets, including
determination of the purchase, retention or sale of the securities, cash and
other investments contained in the portfolio. The Subadvisor will
conduct investment research and conduct a continuous program of evaluation,
investment, sales and reinvestment of the Series’ Allocated 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 Allocated 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
“SEC”), as amended, copies of which shall be delivered to the Subadvisor by the
Manager. The Subadvisor further agrees as follows:
(a)
The Subadvisor understands that the Allocated Assets of the Series need to
be
managed so as to permit the Series to qualify or continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code,
and will coordinate efforts with the Manager with that objective.
(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 which a copy has been
delivered to the Subadvisor, 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, copies of which shall be delivered
to
the Subadvisor by the Manager.
(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, over time, 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. The Manager recognizes that in some cases this procedure may adversely
affect the results obtained for the Series or Company.
(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 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 Allocated 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, for consideration at
meetings of the Board, on the investment program for the Series and the issuers
and securities represented in the Series’ Allocated Assets, and will furnish the
Company’s Board 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 entity, entities, 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 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,
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, within 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 Title 18, United States 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.
(i)
The Subadvisor is authorized to retain legal counsel and financial advisors
and
to negotiate and execute documentation relating to investments in the Allocated
Assets or Series, at the expense of the Allocated Assets or Series. Such
documentation may relate to investments to be made or sold, currently held
or
previously held. The authority shall include, without limitation:
(i) documentation relating to private placements and bank debt;
(ii) waivers, consents, amendments or other modifications relating to
investments; and (iii) purchase agreements, sales agreements, commitment
letters, pricing letters, registration rights agreements, indemnities and
contributions, escrow agreements and other investment related
agreements. Manager represents that the Allocated Assets or Series
can settle such private placements.
3.
Compensation. For the services provided and the expenses assumed pursuant to
this Agreement, the Manager shall pay the Subadvisor as full compensation
therefor, a fee equal to the percentage of the Allocated Assets constituting
the
respective Series’ average daily net assets 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 Company for management services described under the Management
Agreement between the Company and the Manager. Expense caps or fee
waivers for the Series that may be agreed to by the Manager, but not agreed
to
in writing 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’ Allocated Assets, 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 may determine, and consistent with Section 28(e) of the Securities
Exchange Act of 1934, as amended, and the rules and interpretations of the
SEC
thereunder, 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 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 SEC, to its
affiliated broker-dealer, or to such brokers and dealers who also provide
research, 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 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 SEC
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: (i) the custodial
function and recordkeeping connected therewith; (ii) the maintenance of the
required accounting records of the Series not being maintained by the Manager;
(iii) 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 (iv) 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 (provided pursuant to a separate legal
services agreement) and compliance department) 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 the Series’ shares;
(i)
the fees and expenses involved in registering and maintaining registrations
of
the Company and of its Series with the SEC, 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: (i) periodically providing the Company’s Chief
Compliance Officer with information about and independent third-party reports
(if available) in connection with the Subadvisor’s compliance program adopted
pursuant to Rule 206(4)-7 under the Advisers Act (“Subadvisor’s Compliance
Program”); (ii) reporting any material deficiencies in the Subadvisor’s
Compliance Program to the Company’s Chief Compliance Officer within a reasonable
time; and (iii) reporting any material changes to the Subadvisor’s
Compliance Program to the Company’s Chief Compliance Officer within a reasonable
time. The Subadvisor understands that the Board 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’
approval of the Subadvisor’s Compliance Program.
(b)
The Subadvisor agrees that it shall immediately notify the Manager and the
Company’s Chief Compliance Officer: (i) in the event that the
SEC 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 (ii) 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 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: (i) in
the event that the SEC 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
(ii) 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, as amended from time to time, as
filed
with the Department of Assessments and Taxation of the State of Maryland (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, as amended from time to time, (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 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 SEC 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 SEC, 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 SEC) 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 Manager 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.
Nothing
in this section shall be deemed a limitation or waiver of any obligation or
duty
that may not by law be limited or waived.
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: (i) may be
based upon any willful misfeasance, bad faith or gross negligence in the
performance of the Manager’s duties or reckless disregard of the Manager’s
obligations and duties under this Agreement, or by any of its employees or
representatives or any affiliate of or any person acting on behalf of the
Manager, or (ii) 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, 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: (i) may be based upon any 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, or by any of its employees or
representatives, or any affiliate of or any person acting on behalf of the
Subadvisor; (ii) may be based upon a failure to comply with Section 2, Paragraph
(a) of this Agreement; or (iii) 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 or 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 interest 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 interest 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.
15.
Services Not Exclusive. The services furnished by the Subadvisor hereunder
are
not to be deemed exclusive, and except as the Subadvisor may otherwise agree
in
writing, the Subadvisor shall be free to furnish similar services to others
so
long as its services under this Agreement are not impaired thereby. Nothing
in
this Agreement shall limit or restrict the right of any director, officer or
employee of the Subadvisor, who may also be a trustee, officer or employee
of
the Company, 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 other business,
whether of a similar nature or a dissimilar nature.
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 when following a shareholder approval, and otherwise
a period of one (1) year, 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 the Company
or
by the vote of a majority of the outstanding voting securities (as defined
in
the 1940 Act) 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 1940 Act) 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 1940 Act) 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 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 names MainStay, Eclipse or any derivatives thereof
or
logos associated with those names are the valuable property of the Manager
and/or its affiliates, and that the Subadvisor has the right to use such names
(or derivatives or logos) 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 names (or derivatives or logos).
(b)
It is understood that the name MacKay Xxxxxxx LLC or any derivative thereof
or
logo associated with that name is the valuable property of the Subadvisor and
its affiliates and that the Company and/or the Series have the right to use
such
name (or derivative or logo) in offering materials of the Company or sales
materials with respect to 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 name (or derivative or logo).
19.
Proxies; Class Actions.
(a)
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.
(b)
Manager acknowledges and agrees that the Subadvisor shall not be responsible
for
taking any action or rendering advice with respect to any class action claim
relating to any assets held in the Allocated Assets or Series. Manager will
instruct the applicable service providers not to forward to the Subadvisor
any
information concerning such actions. The Subadvisor will, however, forward
to
Manager any information it receives regarding any legal matters involving any
asset held in the Allocated Assets or Series.
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
MacKay Xxxxxxx LLC, 0 Xxxx 00xx
Xxxxxx,
00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President.
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 SEC 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 1940 Act;
(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
by their officers designated below as of the 1st
day of
August, 2008. This Agreement may be signed in counterparts.
NEW
YORK
LIFE INVESTMENT MANAGEMENT LLC
Attest:
/s/ Xxxxxxx X.
Xxxxxxxxx
By: Xxxxx X.
Xxxxx
Name:
Xxxxxxx X.
Xxxxxxxxx
Name:
Xxxxx X. Xxxxx
Title:
Director
Title:
Executive Vice President
MACKAY
XXXXXXX LLC
Attest:
/s/ Xxxxx
Xxxxxxx
By: /s/ Xxxxxxx Xxxxxx
Name:
Xxxxx
Xxxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
General Manager
and
Title:
Chief Operating Officer
Senior
Managing Director
SCHEDULE
A
(As
of
August 1, 2008)
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
|
|
Effective
through August 1, 2009:
|
|
|
All
Cap Growth
|
0.250%
|
|
Intermediate
Term Bond
|
0.200%
|
|
Short
Term Bond
|
0.150%
|
|
Effective
through December 7, 2009:
|
|
|
130/30
High Yield Bond
|
0.400%
|
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/(number of days in calendar year)
of the annual rate applied to the daily net assets of the Fund.
|
|
Payment
will be made to the Subadvisor on a monthly basis.
|
NOTICE
OF
FEE WAIVER
THIS
NOTICE OF XXX XXXXXX is provided as of the 1st
day of
May, 2008, to Eclipse Funds Inc., a Maryland corporation (the “Company”) on
behalf of its series listed on Schedule A (each a “Fund”), by New York Life
Investment Management LLC, a Delaware limited liability company (the
“Manager”).
WHEREAS,
the Manager has entered into an Amended and Restated Management Agreement with
the Company (the “Management Agreement”), pursuant to which the Manager is
compensated based on the average net assets of the Fund and such compensation
is
paid by the Fund (“Management Fees”);
WHEREAS,
the Manager believes that it is appropriate and in the best interests of the
Manager, the Fund, and Fund shareholders to reduce the Management Fees of the
Fund; and
WHEREAS,
the Manager understands and intends that the Fund will rely on this Notice
in
preparing amendments to a registration statement on Form N-1A and in accruing
the Fund’s expenses for purposes of calculating net asset value and for other
purposes, and expressly permits the Fund to do so;
NOW,
THEREFORE, the hereby provides notice as follows:
|
|
1.
|
Xxx
Xxxxxx by the Manager. The Manager agrees to waive a portion of its
Management Fees to the levels listed on Schedule A.
|
|
|
2.
|
Duration
and Termination. The Manager’s undertaking to waive fees may be modified
or terminated only with the approval of the Board of Directors; provided,
however, no such modification will be made in a manner inconsistent
with
the terms of the current prospectus.
|
|
|
3.
|
Other
Agreements. This Notice supersedes any prior Notice of Fee Waiver
related
to the Management Agreement.
|
IN
WITNESS WHEREOF, the Manager has signed this Notice as of the date first-above
written.
|
NEW
YORK LIFE INVESTMENT MANAGEMENT LLC
|
|
By:
|
|
Xxxxx
X. Xxxxx
|
|
Executive
Vice President
|
SCHEDULE
A
(As
of
May 1, 2008)
Management
Fee Waiver
The
Manager has agreed to fee waivers such that the management fees for the Funds
listed below shall be:
|
FUND
|
FEE
WAIVER
|
MANAGEMENT
FEE
AFTER
WAIVER
|
|
MainStay
Retirement 2010 Fund
|
0.100%
|
0.00%
|
|
MainStay
Retirement 2020 Fund
|
0.100%
|
0.00%
|
|
MainStay
Retirement 2030 Fund
|
0.100%
|
0.00%
|
|
MainStay
Retirement 2040 Fund
|
0.100%
|
0.00%
|
|
MainStay
Retirement 2050 Fund
|
0.100%
|
0.00%
|
