EXHIBIT (d)(II)(1)(a)
ECLIPSE FUNDS
MainStay Balanced Fund
MainStay Mid Cap Opportunity Fund
MainStay Small Cap Opportunity Fund
AMENDED AND RESTATED MANAGEMENT AGREEMENT
The Amended and Restated Management Agreement, made between Eclipse
Funds, a Massachusetts business trust ("Trust"), as of the 12th day of December,
2000, and any amendments thereto, are hereby amended and restated effective as
of May 1, 2006, on behalf of MainStay Balanced Fund, MainStay Mid Cap
Opportunity Fund, and MainStay Small Cap Opportunity Fund (each a "Fund" and
collectively, "Funds"), each a separate series of the Trust, and New York Life
Investment Management LLC, a Delaware limited liability company ("Manager").
W I T N E S S E T H:
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WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended ("1940 Act");
WHEREAS, the shares of beneficial interest of the Trust ("Shares") are
divided into separate series, each of which is established by resolution of the
Board of Trustees of the Trust and the Trustees may from time to time terminate
such series or establish and terminate additional series; and
WHEREAS, the Trust desires to retain the Manager to render investment
advisory and related administrative services to each of the Funds, and the
Manager is willing to render such services on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, the parties agree as follows:
1. Appointment. The Trust hereby appoints New York Life Investment
Management LLC to act as manager to each of the Funds for the period and on the
terms set forth in this Agreement. The Manager accepts such appointment and
agrees to render the services herein described, for the compensation herein
provided.
2. Duties as Manager. Subject to the supervision of the Trustees of the
Trust, the Manager shall administer each Fund's business affairs and manage the
investment operations of each Fund and the composition of the portfolio of each
Fund, including the purchase, retention and disposition thereof, in accordance
with the investment objectives, policies and restrictions of each Fund, as
stated in its currently effective Prospectus (as hereinafter defined) and
subject to the following understandings:
(a) The Manager shall (i) furnish each Fund with office
facilities; (ii) be responsible for the financial and
accounting records required to be maintained by each Fund
(excluding those being maintained by the Fund's custodian and
transfer agent except as to which the Manager has supervisory
functions) and other than those being maintained by the Fund's
subadviser, if any; and (iii) furnish each Fund with ordinary
clerical, bookkeeping and recordkeeping services at such
office facilities.
(b) The Manager shall provide supervision of each Fund's
investments and determine from time to time what investments
or securities will be purchased, retained, sold or lent by
each Fund, and what portion of each Fund's assets will be
invested or held uninvested as cash.
(c) The Manager shall use its best judgment in the performance
of its duties under this Agreement.
(d) The Manager, in the performance of its duties and
obligations under this Agreement, shall act in conformity with
the Declaration of Trust, By-Laws and Prospectus (each as
hereinafter defined) of the Trust and with the instructions
and directions of the trustees of the Trust, and will conform
to and comply with the requirements of the 1940 Act and all
other applicable federal and state laws and regulations.
(e) The Manager, and any subadviser to whom such authority has
been delegated, shall determine the securities to be purchased
or sold by each Fund and will place orders pursuant to its
determination with or through such persons, brokers or dealers
(including NYLIFE Securities Inc.) in conformity with the
policy with respect to brokerage as set forth in the Trust's
Registration Statement and Prospectus (each as hereinafter
defined) or as the Trustees may direct from time to time. It
is recognized that, in providing a Fund with investment
supervision or the placing of orders for portfolio
transactions, the Manager or any subadviser will give primary
consideration to securing the most favorable price and
efficient execution. Consistent with this policy, the Manager
or any 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 transactions or other transactions to which other clients
of the Manager or any subadviser may be a party. It is
understood that none of the Funds, nor the Trust or the
Manager or subadviser has adopted a formula for allocation of
a Fund's investment transaction business. It is also
understood that it is desirable for each Fund that the Manager
or any 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 a Fund than may result when allocating
brokerage to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore, the
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Manager or any subadviser is authorized to place orders for
the purchase and sale of securities for a Fund with such
certain brokers, subject to review by the Trust's 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 Manager or any subadviser
in connection with its services to other clients.
On occasions when the Manager or any subadviser deems the purchase or
sale of a security to be in the best interest of a Fund as well as other
clients, the Manager or any subadviser, to the extent permitted by applicable
laws and regulations, may, but shall be under no obligation to, aggregate the
securities to be sold or purchased in order to obtain the most favorable price
or lower brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as expenses incurred
in the transaction, will be made by the Manager or any subadviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to that Fund and to such other clients.
(f) The Manager shall maintain all books and records with
respect to each Fund's securities transactions required by
sub-paragraphs (b)(5), (6), (9) and (10) and paragraph (f) of
Rule 31a-1 under the 1940 Act and any other books and records
required to be maintained by it under the 1940 Act and the
Rules thereunder and shall render to the Trust's Trustees such
periodic and special reports as the Trustees may reasonably
request.
(g) The Manager shall provide the Trust's custodian on each
business day with information relating to the execution of all
portfolio transactions pursuant to standing instructions.
(h) With respect to any or all series of the Trust, including
the Funds, the Manager may enter into one or more contracts
("Sub-Advisory Contract or Sub-Administration Contract") with
a subadviser or sub-administrator in which the Manager
delegates to such subadviser or sub-administrator any or all
its duties specified in this Agreement, provided that each
Sub-Advisory Contract or Sub-Administration Contract meets all
requirements of the 1940 Act and rules thereunder.
3. Manager Personnel. The Manager shall authorize and permit any of its
directors, officers and employees who may be elected or appointed as Trustees or
officers of the Trust to serve in the capacities in which they are elected or
appointed. Services to be furnished by the Manager under this Agreement may be
furnished through the medium of any of such directors, officers or employees.
4. Books and Records. The Manager shall keep each Fund's books and
records required to be maintained by it, pursuant to paragraph 2 hereof. The
Manager agrees that all records which it maintains for a Fund are the property
of that Fund, and it will surrender promptly to that Fund any of such records
upon the Fund's request. The
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Manager further agrees to preserve for the periods prescribed by Rule 31a-2 as
promulgated by the Securities and Exchange Commission (the "Commission") under
the 1940 Act any such records as are required to be maintained by the Manager
pursuant to paragraph 2 hereof.
5. Services Not Exclusive. The services furnished by the Manager
hereunder are not to be deemed exclusive and the Manager shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby.
6. Documents. The Trust has delivered to the Manager copies of each of
the following documents and will deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust of the Trust, filed with the
Massachusetts Secretary of State (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 Trustees of the Trust
authorizing the appointment of the Manager 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-1A (the
"Registration Statement"), as filed with the Commission,
relating to each Fund and each Fund's Shares and all
amendments thereto;
(e) Notification of Registration of the Trust under the 1940
Act on Form N-8A as filed with the Commission and all
amendments thereto; and
(f) Each form Prospectus and Statement of Additional
Information of the Trust (such Prospectuses and Statement of
Additional Information, as currently in effect and as amended
or supplemented from time to time, being herein called
collectively the "Prospectus").
7. Expenses.
(a) In connection with the services rendered by the manager
under this Agreement, the Manager will bear all of the
following expenses:
(i) the salaries and expenses of all personnel of the
Trust and the Manager, except the fees and expenses
of Trustees who are not interested persons of the
Manager or of the Trust, and
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(ii) all expenses incurred by the Manager in
connection with managing the investment operations of
each Fund and administering the ordinary course of
each Fund's business, other than those assumed by
that Fund herein;
(b) Each Fund assumes and will pay its expenses, including but
not limited to those described below (where any such category
applies to more than one series of the Trust, each Fund shall
be liable only for its allocable portion of the expenses):
(i) the fees and expenses of Trustees who are not
interested persons of the Manager or of the Trust;
(ii) the fees and expenses of the Fund's custodian
which relate to (A) the custodial function and the
recordkeeping connected therewith, (B) the
maintenance of the required accounting records of the
Fund not being maintained by the Manager, (C) the
pricing of the Fund's Shares, including the cost of
any pricing service or services which may be retained
pursuant to the authorization of the Trustees of the
Trust, and (D) for both mail and wire orders; the
cashiering function in connection with the issuance
and redemption of the Fund's Shares;
(iii) the fees and expenses of the Trust's transfer
and dividend disbursing agent, which may be the
custodian, which relate to the maintenance of each
shareholder account,
(iv) the charges and expenses of legal counsel and
independent accountants for the Trust;
(v) brokers' commissions and any issue or transfer
taxes chargeable to the Trust in connection with its
securities transactions on behalf of the Funds;
(vi) all taxes and business fees payable by the Trust
or the Funds to federal, state or other governmental
agencies;
(vii) the fees of any trade association of which the
Trust may be a member;
(viii) the cost of share certificates, if any,
representing Fund Shares;
(ix) the fees and expenses involved in registering
and maintaining registrations of the Trust and of its
Shares with the Commission, registering the Trust as
a broker or dealer and
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qualifying its shares and/or complying with notice
and other applicable requirements under state
securities laws, including the preparation and
printing of the Trust's registration statements and
prospectuses for filing under federal and state
securities laws for such purposes;
(x) allocable communications expenses with respect to
investor services and all expenses of shareholders'
and Trustees' meetings and of preparing printing and
mailing reports to shareholders in the amount
necessary for distribution to the shareholders;
(xi) litigation and indemnification expenses and
other extraordinary expenses not incurred in the
ordinary course of the Trust's business; and
(xii) any expenses assumed by the Funds pursuant to a
Plan of Distribution adopted in conformity with Rule
12b-1 under the 1940 Act.
(c) Fees and expenses of legal counsel, of registering shares
and complying with state securities laws, of holding meetings
and of communicating with shareholders as described in
subparagraph (b) above include an allocable portion of the
cost of maintaining an internal legal and compliance
department.
8. Organization Expenses. Each Fund hereby agrees to reimburse the
Manager for the organization expenses of, and the expenses incurred in
connection with, the initial offering of any Shares of that Fund.
9. Compensation. For the services provided and the facilities furnished
pursuant to this Agreement, the Trust will pay to the Manager as full
compensation therefore a fee at an annual rate of the following percentage of
the average daily net assets of each Fund, as set forth in Schedule A.
This fee will be computed daily and will be paid to the Manager
monthly. This fee will be chargeable only to the respective Fund, and no other
series of the Trust shall be liable for the fee due and payable hereunder. No
Fund shall not be liable for any expense of any other series of the Trust.
10. Standard of Care. Subject to applicable law, the Manager shall not
be liable for any error of judgment or for any loss suffered by a Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
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11. Duration and Termination. This Agreement shall continue in effect
with respect to a Fund for a period of more than two years from the date hereof
only so long as such continuance is specifically approved at least annually with
respect to that Fund in conformity with the requirements of the 1940 Act and the
Rules thereunder; provided, however, that this Agreement may be terminated with
respect to any Fund at any time, without the payment of any penalty, by the
Trustees of the Trust or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of that Fund, or by the Manager at any
time, without the payment of any penalty, on not more than 60 days' nor less
than 30 days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).
12. Other Business. Nothing in this Agreement shall limit or restrict
the right of any director, officer or employee of the Manager 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 Manager's right to engage in any other business or to render
services of any kind to any other corporation, trust, firm, individual or
association.
13. Independent Contractor. Except as otherwise provided herein or
authorized by the Trustees of the Trust from time to time, the Manager shall for
all purposes herein be deemed to be an independent contractor and shall have no
authority to act for or represent any Fund or the Trust in any way or otherwise
be deemed an agent of any Fund or the Trust.
14. Trust Materials. During the term of this Agreement, the Trust
agrees to furnish the Manager at its principal office all Prospectuses, proxy
statements, reports to shareholders, sales literature or other materials
prepared for distribution to shareholders of a Fund or to the public, which
refer to the Manager in any way, prior to use thereof and not to use such
materials 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 Trust will continue to furnish to
the Manager copies of any of the above-mentioned materials which refer in any
way to the Manager. The Trust shall furnish or otherwise make available to the
Manager such other information relating to the business affairs of each Fund as
the Manager at any time, or from time to time, reasonably requests in order to
discharge its obligations hereunder.
15. Amendment. This Agreement may be amended in writing by mutual
consent, but the consent of each of the Funds, if required, must be obtained in
conformity with the requirements of the 1940 Act and the Rules thereunder.
16. Notice. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Manager at 00 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; or (2) to the Trust at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxx Xxxxxx 00000.
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17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
18. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. As used in this Agreement, terms shall have the same meaning
as such terms have in the 1940 Act. Where the effect of a requirement of the
federal securities laws reflected in any provision of this Agreement is made
less restrictive by a rule, regulation or order of the Commission, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order. This Agreement may be signed in
counterpart.
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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.
ECLIPSE FUNDS, on behalf of the Funds
By:/s/ Xxxxxxxxxxx X. Xxxxx
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Name: Xxxxxxxxxxx X. Xxxxx
Title: President
NEW YORK LIFE INVESTMENT
MANAGEMENT LLC
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
Title: Chairman and CEO
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SCHEDULE A
(as of May 1, 2006)
FUND ANNUAL RATE 1
Balanced Fund 0.75%2
Mid Cap Opportunity Fund 0.90%
Small Cap Opportunity Fund 1.00%
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1 Of each Fund's average daily net assets.
2 0.75% on assets to $1 billion; 0.70% on remainder of assets.
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