Exhibit (d)(l)(1)(b)
ECLIPSE FUNDS INC.
MANAGEMENT AGREEMENT
Agreement, made as of the 18th day of June, 2007 (the "Agreement")
between Eclipse Funds Inc. (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 (the "Manager").
WITNESSETH:
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 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 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; and
NOW, THEREFORE, the parties agree as follows:
I. Appointment. The Company hereby appoints New York Life Investment Management
LLC 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 render the
services herein described, for the compensation herein provided.
II. Duties as Manager. Subject to the supervision of the Directors of the
Company, the Manager shall administer each Fund's business affairs and manage
the investment operations of the Fund and the composition of the portfolio of
the 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 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 under the Code. The Manager will
also monitor, to the extent not monitored by another agent, each Fund's
compliance with its investment and tax guidelines and other compliance policies.
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.
A. Administration: 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 except as to which the Manager has
supervisory functions) and other than those being maintained by the Funds'
subadvisor, if any; and (iii) furnish the Funds with board materials, legal,
ordinary clerical, bookkeeping and recordkeeping services at such office
facilities, and such other services as the parties may agree.
B. Advisory: 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.
C. Valuation: The Manager will provide assistance to the Board of Directors
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.
D. Selection of Brokers: Subject to the policies established by, and any
direction from, the Company's Board of Directors, 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 and Prospectus (each as
hereinafter defined) or as the Directors 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
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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 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.
E. Delegation of Investment Advisory Services. Subject to the prior
approval of a majority of the members of the Board of Directors, including a
majority of the Directors 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 of Directors, including a majority of the
Directors 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 Securities and Exchange Commission (SEC): (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.
F. 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.
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G. 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 "Sub-Administration Contract") with a sub-administrator 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.
III. 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.
IV. Books and Records. The Manager shall keep the Funds' books and records
required to be maintained by it, pursuant to Section II hereof. 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 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 Section II hereof. The
Manager shall render to the Company's Directors such periodic and special
reports as the Directors may reasonably request.
V. 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 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. 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.
VI. 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:
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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, is 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 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 the Funds and the Funds' Shares and all amendments
thereto;
E. Notification of Registration of the Company under the 1940 Act on Form
N-8A as filed with the Commission and all amendments thereto; and
F. 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").
VII. Expenses. A. In connection with the services rendered by the Manager under
this Agreement, the Manager will bear all of the following expenses:
1. 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
2. all expenses incurred by the Manager in connection with managing
the investment operations of the Funds and administering the ordinary course of
the Funds' business, other than those assumed by the Funds herein.
B. Each Fund assumes and will pay its expenses, including but not limited
to those described below (where any such category applies to more than one
series of the Company, the Fund shall be liable only for its allocable portion
of the expenses):
1. the fees and expenses of Directors who are not interested persons
of the Manager or of the Company;
2. 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;
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3. the fees and expenses of the Company's transfer and dividend
disbursing agent, which may be the custodian, which relate to the maintenance of
the shareholder account;
4. the charges and expenses of legal counsel (including an allocable
portion of the cost of maintaining internal legal and compliance departments)
and independent accountants for the Company;
5. brokers' commissions and any issue or transfer taxes chargeable to
the Company in connection with its securities transactions on behalf of the
Funds;
6. all taxes and business fees payable by the Company or the Funds to
federal, state or other governmental agencies;
7. the fees of any trade association of which the Company may be a
member;
8. the cost of share certificates representing Fund Shares;
9. the cost of fidelity, directors and officers and errors and
omissions insurance;
10. the fees and expenses involved in registering and maintaining
registrations of the Company and of its Shares with the Commission, registering
the Company as a broker or dealer and qualifying its Shares under state
securities laws, including the preparation and printing of the Company's
registration statements and prospectuses for filing under federal and state
securities laws for such purposes;
11. 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; and
12. litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Company's business.
C. 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.
VIII. Organization Expenses. 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.
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IX. Compensation. For the services provided and the facilities furnished
pursuant to this Agreement, the Company will pay to the Manager as full
compensation therefor a fee at 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.
X. Limitation of Liability of Manager:
(a) 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.
(b) 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.
XI. Duration and Termination. This Agreement shall continue in effect with
respect to the Funds 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 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;
provided, however, that 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 0000 Xxx) of the Funds, 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).
XII. 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
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approval of this Agreement by the Board of Directors with respect to the Funds
and the execution of an amended Schedule A reflecting the Funds.
XIII. Independent Contractor. Except as otherwise provided herein or authorized
by the Directors of the Company from time to time, the Manager shall for all
purposes herein be deemed to be an independent contractor and shall have no
authority to act for or represent the Funds or the Company in any way or
otherwise be deemed an agent of the Funds or the Company.
XIV. 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 which refer in any way to
the Manager. The Company shall furnish or otherwise make available to the
Manager such other information relating to the business affairs of the Funds as
the Manager at any time, or from time to time, reasonably requests in order to
discharge its obligations hereunder.
XV. 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.
XVI. 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 Attention: Secretary; or (2) to the Company at NYLIM Center, 169
Lackawanna Avenue, Parsippany, New Jersey 07054,, Attention: President.
XVII. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
XVIII. Limitation of Liability of the Company and the Shareholders. It is
understood and expressly stipulated that none of the Directors, officers, agents
or shareholders of the Company shall be personally liable hereunder. All persons
dealing with the Company must look solely to the property of the Company for the
enforcement of any claims against the Company, as neither the Directors,
officers, agents or shareholders assume any personal liability for obligations
entered into on behalf of the Company. No series of the Company shall be liable
for any claims against any other series of the Company.
XIX. Use of Name. The Funds may use any name including the word MainStay only
for so long as this Agreement or any other agreement between the Manager or any
other affiliate of New York Life Insurance Company and the Company or any
extension, renewal or amendment thereof remains in effect, including any similar
agreement with any organization which shall have succeeded to the Manager's
business as investment adviser. At such time as such an
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agreement shall no longer be in effect, the Funds will (to the extent that it
lawfully can) cease to use such name or any other name indicting that it is
advised by or otherwise connected with the Manager or any organization which
shall have so succeeded to its business.
XX. 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.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the 18th day of June, 2007.
ECLIPSE FUNDS INC., on behalf of
each series listed on Schedule A
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
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SCHEDULE A
For all services rendered by the Manager hereunder, the below named Fund of
the Company shall pay the Manager and the Manager agrees to accept as full
compensation for all services rendered hereunder, at annual advisory fee equal
to the following:
FUND ANNUAL RATE
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130/30 Core Fund 1.00 % of the average daily net assets of the Fund
130/30 Growth Fund 1.00 % of the average daily net assets of the Fund
130/30 International Fund 1.10 % of the average daily net assets of the Fund
Retirement 2010 Fund 0.10 % of the average daily net assets of the Fund
Retirement 2020 Fund 0.10 % of the average daily net assets of the Fund
Retirement 2030 Fund 0.10 % of the average daily net assets of the Fund
Retirement 2040 Fund 0.10 % of the average daily net assets of the Fund
Retirement 2050 Fund 0.10 % of the average daily net assets of the Fund
The portion of the fee based upon the average daily net assets of the respective
Fund shall be accrued daily at the rate of 1/365th of the annual rate applied to
the daily net assets of the Fund.
The advisory fee so accrued shall be paid monthly to the Manager.
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