MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of December,
2005, by and between Salomon Brothers Variable Series Funds Inc, a
Maryland corporation (the "Corporation") and Salomon Brothers Asset
Management Inc, a Delaware corporation (the "Manager").
WHEREAS, the Corporation is registered as a management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Manager is engaged primarily in rendering investment advisory,
management and administrative services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended;
WHEREAS, the Corporation wishes to retain the Manager to provide investment
advisory, management, and administrative services to the Corporation with
respect to the series of the Corporation designated in Schedule A annexed
hereto (the "Fund"); and
WHEREAS, the Manager is willing to furnish such services on the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed as follows:
1. The Corporation hereby appoints the Manager to act as investment adviser
and administrator of the Fund for the period and on the terms set forth in
this Agreement. The Manager accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
2. The Fund shall at all times keep the Manager fully informed with regard
to the securities owned by it, its funds available, or to become available,
for investment, and generally as to the condition of its affairs. It shall
furnish the Manager with such other documents and information with regard to
its affairs as the Manager may from time to time reasonably request.
3.(a)Subject to the supervision of the Corporation's Board of Directors
(the "Board"), the Manager shall regularly provide the Fund with investment
research, advice, management and supervision and shall furnish a continuous
investment program for the Fund's portfolio of securities and other investments
consistent with the Fund's investment objectives, policies and restrictions, as
stated in the Fund's current Prospectus and Statement of Additional
Information.The Manager shall determine from time to time what securities and
other investments will be purchased, retained, sold or exchanged by the Fund
and whatportion of the assets of the Fund's portfolio will be held in the
various securities and other investments in which the Fund invests, and shall
implementthose decisions, all subject to the provisions of the Corporation's
Articles ofIncorporation, and By-Laws(collectively, the "Governing Documents"),
the 1940 Act, and the applicable rules and regulations promulgated thereunder
bythe Securities and Exchange Commission (the "SEC") and interpretive guidance
issued thereunder by the SEC staff and any other applicable federal and state
law, as well as the investment objectives, policies and restrictions of the
Fund referred to above, and any other specific policies adopted by the Board
and disclosed to the Manager. The Manager is authorized as the agent of the
Corporation to give instructions to the custodian of the Fund as to deliveries
of securities and other investments and payments of cash for the account of the
Fund. Subject to applicable provisions of the 1940 Act and direction from the
Board, the investment program to be provided hereunder may entail the
investmentof all or substantially all of the assets of a Fund in one or more
investment companies. The Manager will place orders pursuant to its investment
determinations for the Fund either directly with the issuer or with any broker
or dealer, foreign currency dealer, futures commission merchant or others
selected by it. In connection with the selection of such brokers or dealers
and the placing of such orders, subject to applicable law, brokers or dealers
may be selected who also provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934) to
the Funds and/or the other accounts over which the Manager or its affiliates
exercise investment discretion. The Manager is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for a Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if the Manager determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed
in terms of either that particular transaction or the overall responsibilities
which the Manager and its affiliates have with respect to accounts over which
they exercise investment discretion. The Board may adopt policies and
procedures that modify and restrict the Manager's authority regarding the
execution of the Fund's portfolio transactions provided herein. The Manager
shall also provide advice and recommendations with respect to other aspects of
the business and affairs of the Fund, shall exercise voting rights, rights to
consent to corporate action and any other rights pertaining to a Fund's
portfoliosecurities subject to such direction as the Board may provide, and
shall perform such other functions of investment management and supervision
as may be directed by the Board.
(b) Subject to the direction and control of the Board, the Manager shall
perform such administrative and management services as may from time to time
be reasonably requested by the Fund as necessary for the operation of the
Fund,suchas (i) supervising the overall administration of the Fund, including
negotiation of contracts and fees with and the monitoring of performance and
xxxxxxxx of the Fund's transfer agent, shareholder servicing agents, custodian
and other independent contractors or agents, (ii) providing certain compliance,
fund accounting, regulatory reporting, and tax reporting services, (iii)
preparing or participating in the preparation of Board materials, registration
statements,proxy statements and reports and other communications to
shareholders, (iv) maintaining the Fund's existence, and (v) during such times
as shares are publicly offered, maintaining the registration and qualification
of the Fund's shares under federal and state laws. Notwithstanding the
foregoing, the Manager shall not be deemed to have assumed any duties with
respect to, and shall not be responsible for, the distribution of the shares
of any Fund, nor shall the Manager be deemed to have assumed or have any
responsibility with respect to functions specifically assumed by any transfer
agent, fund accounting agent, custodian, shareholder servicing agent or other
agent, in each case employed by the Fund to perform such functions.
(c)The Fund hereby authorizes any entity or person associated with
the Manager which is a member of a national securities exchange to effect any
transaction on the exchange for the account of the Fund which is permitted by
Section 11(a) of the Securities Exchange Act of 1934, as amended, and
Rule 11a2-2(T) thereunder, and the Fund hereby consents to the retention of
compensation for such transactions in accordance with Rule 11a2-2(T)(a)(2)(iv).
Notwithstanding the foregoing, the Manager agrees that it will not deal with
itself, or with members of the Board or any principal underwriter of the Fund,
as principals or agents in making purchases or sales of securities or other
property for the account of the Fund, nor will it purchase any securities from
an underwriting or selling group in which the Manager or its affiliates is
participating, or arrange for purchases and sales of securities between a Fund
and another account advised by the Manager or its affiliates, except in each
case as permitted by the 1940 Act and in accordance with such policies and
procedures as may be adopted by a Fund from time to time, and will comply with
all other provisions of the Governing Documents and the Fund's then-current
Prospectus and Statement of Additional Information relative to the Manager and
its directors and officers.
4. Subject to the Board's approval, the Manager or the Fund may enter into
contracts with one or more investment subadvisers or subadministrators,
including without limitation, affiliates of the Manager, in which the Manager
delegates to such investment subadvisers or subadministrators any or all its
duties specified hereunder, on such terms as the Manager will determine to be
necessary, desirable or appropriate, provided that in each case the Manager
shall supervise the activities of each such subadviser or subadministrator
and further provided that such contracts impose on any investment subadviser
or subadministrator bound thereby all the conditions to which the Manager is
subject hereunder and that such contracts are entered into in accordance with
and meet all applicable requirements of the 1940 Act.
5.(a) The Manager, at its expense, shall supply the Board and officers of the
Corporation with all information and reports reasonably required by them and
reasonably available to the Manager and shall furnish the Fund with office
facilities, including space, furniture and equipment and all personnel
reasonably necessary for the operation of the Fund. The Manager shall oversee
the maintenance of all books and records with respect to the Fund's securities
transactions and the keeping of the Fund's books of account in accordance with
all applicable federal and state laws and regulations. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Manager hereby agrees that
any records that it maintains for the Fund are the property of the Fund, and
further agrees to surrender promptly to the Fund any of such records upon the
Fund's request. The Manager further agrees to arrange for the preservation of
the records required to be maintained by Rule 31a-1 under the 1940 Act for the
periods prescribed by Rule 31a-2 under the 1940 Act. The Manager shall
authorize and permit any of its directors, officers and employees, who may be
elected as Board members or officers of the Fund, to serve in the capacities
in which they are elected.
(b) The Manager shall bear all expenses, and shall furnish all
necessary services, facilities and personnel, in connection with its
responsibilities under this Agreement. Other than as herein specifically
indicated, the Manager shall not be responsible for the Fund's expenses,
including, without limitation, advisory fees; distribution fees; interest;
taxes; governmental fees; voluntary assessments and other expenses incurred
in connection with membership in investment company organizations;
organization costs of the Fund; the cost (including brokerage commissions,
transaction fees or charges, if any) in connection with the purchase or sale
of the Fund's securities and other investments and any losses in connection
therewith; fees and expenses of custodians, transfer agents, registrars,
independent pricing vendors or other agents; legal expenses; loan commitment
fees; expenses relating to share certificates; expenses relating to the
issuing and redemption or repurchase of the Fund's shares and servicing
shareholder accounts; expenses of registering and qualifying the Fund's shares
for sale under applicable federal and state law; expenses of preparing,
setting in print, printing and distributing prospectuses and statements of
additional information and any supplements thereto, reports, proxy statements,
notices and dividends to the Fund's shareholders; costs of stationery;
website costs; costs of meetings of the Board or any committee thereof,
meetings of shareholders and other meetings of the Fund; Board fees; audit
fees; travel expenses of officers, members of the Board and employees of the
Fund, if any; and the Fund's pro rata portion of premiums on any fidelity
bond and other insurance covering the Fund and its officers, Board members
and employees; litigation expenses and any non-recurring or extraordinary
expenses as may arise, including, without limitation, those relating to
actions, suits or proceedings to which the Fund is a party and the legal
obligation which the Fund may have to indemnify the Fund's Board members and
officers with respect thereto.
6. No member of the Board, officer or employee of the Corporation or Fund
shall receive from the Corporation or Fund any salary or other compensation
as such member of the Board, officer or employee while he is at the same time
a director, officer, or employee of the Manager or any affiliated company of
the Manager, except as the Board may decide. This paragraph shall not apply
to Board members, executive committee members, consultants and other persons
who are not regular members of the Manager's or any affiliated company's
staff.
7. As compensation for the services performed and the facilities furnished and
expenses assumed by the Manager, including the services of any consultants
retained by the Manager, the Fund shall pay the Manager, as promptly as
possible after the last day of each month, a fee, computed daily at an annual
rate set forth opposite the Fund's name on Schedule A annexed hereto, provided
however, that if the Fund invests all or substantially all of its assets in
another registered investment company for which the Manager or an affiliate of
the Manager serves as investment adviser or investment manager, the annual
fee computed as set forth on such Schedule A shall be reduced by the aggregate
management fees allocated to that Fund for the Fund's then-current fiscal year
from such other registered investment company. The first payment of the fee
shall be made as promptly as possible at the end of the month succeeding the
effective date of this Agreement, and shall constitute a full payment of the
fee due the Manager for all services prior to that date. If this Agreement
is terminated as of any date not the last day of a month, such fee shall be
paid as promptly as possible after such date of termination, shall be based on
the average daily net assets of the Fund in that period from the beginning of
such month to such date of termination, and shall be that proportion of such
average daily net assets as the number of business days in such period bears
to the number of business days in such month. The average daily net assets of
the Fund shall in all cases be based only on business days and be computed as
of the time of the regular close of business of the New York Stock Exchange,
or such other time as may be determined by the Board.
8. The Manager assumes no responsibility under this Agreement other than to
render the services called for hereunder, in good faith, and shall not be
liable for any error of judgment or mistake of law, or for any loss arising
out of any investment or for any act or omission in the execution of
securities transactions for a Fund, provided that nothing in this Agreement
shall protect the Manager against any liability to the Fund 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 hereunder. As used in
this Section 8, the term "Manager" shall include any affiliates of the
Manager performing services for the Corporation or the Fund contemplated
hereby and the partners, shareholders, directors, officers and employees of
the Manager and such affiliates.
9. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Manager who may also be a Board member,
officer, or employee of the Corporation or the Fund, to engage in any other
business or to devote his time and attention in part to the management or
other aspects of any other business, whether of a similar nature or a
dissimilar nature, nor to limit or restrict the right of the Manager to
engage in any other business or to render services of any kind, including
investment advisory and management services, to any other fund, firm,
individual or association. If the purchase or sale of securities
consistent with the investment policies of a Fund or one or more other
accounts of the Manager is considered at or about the same time,
transactions in such securities will be allocated among the accounts in a
manner deemed equitable by the Manager. Such transactions may be
combined, in accordance with applicable laws and regulations, and
consistent with the Manager's policies and procedures as presented to
the Board from time to time.
10. For the purposes of this Agreement, the Fund's "net assets" shall be
determined as provided in the Fund's then-current Prospectus and Statement
of Additional Information and the terms "assignment," "interested person,"
and "majority of the outstanding voting securities" shall have the meanings
given to them by Section 2(a) of the 1940 Act, subject to such exemptions
as may be granted by the SEC by any rule, regulation or order.
11.This Agreement will become effective with respect to the Fund on the
date set forth opposite the Fund's name on Schedule A annexed hereto,
provided that it shall have been approved by the Corporation's Board and
by the shareholders of the Fund in accordance with the requirements of
the 1940 Act and, unless sooner terminated as provided herein, will
continue in effect for two years from the above written date.
Thereafter, if not terminated, this Agreement shall continue in effect
with respect to the Fund, so long as such continuance is specifically
approved at least annually (i) by the Board or (ii) by a vote of a
majority of the outstanding voting securities of the Fund, provided
that in either event the continuance is also approved by a majority
of the Board members who are not interested persons of any party to
this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval.
12. This Agreement is terminable with respect to the Fund without penalty
by the Board or by vote of a majority of the outstanding voting securities
of the Fund, in each case on not more than 60 days' nor less than 30 days'
written notice to the Manager, or by the Manager upon not less than 90
days' written notice to the Fund, and will be terminated upon the mutual
written consent of the Manager and the Corporation. This Agreement shall
terminate automatically in the event of its assignment by the Manager and
shall not be assignable by the Corporation without the consent of the
Manager.
13. The Manager agrees that for services rendered to the Fund, or for
any claim by it in connection with services rendered to the Fund, it shall
look only to assets of the Fund for satisfaction and that it shall have no
claim against the assets of any other portfolios of the Corporation.
14. 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 the Agreement shall be effective
until approved, if so required by the 1940 Act, by vote of the holders of
a majority of the Fund's outstanding voting securities.
15. This Agreement embodies the entire agreement and understanding
between the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter hereof. Should any part of
this Agreement be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding on and shall inure to the
benefit of the parties hereto and their respective successors.
16. This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
ATTEST: SALOMON BROTHERS VARIABLE SERIES FUNDS INC
By: _____________________________ By:_______________________________
R. Xxx Xxxxxx
Chairman
ATTEST: SALOMON BROTHERS ASSET MANAGEMENT INC
By: _____________________________ By:_______________________________
Xxxxxx Xxxxxxx
Managing Director
Schedule A
Salomon Brothers Variable Large Cap Growth Fund
First $1.00 billion 0.750%
Next $1.00 billion 0.725%
Next $3.00 billion 0.700%
Next $5.00 billion 0.675%
Over $10.00 billion 0.650%
