MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of
December, 2005, by and between Salomon Brothers Investors Value
Fund 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 (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 what portion 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 implement those decisions, all subject to the provisions of
the Corporation's Articles of Incorporation, and By-Laws (collectively,
the "Governing Documents"), the 1940 Act, and the applicable rules and
regulations promulgated thereunder by the 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 investment of 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
portfolio securities 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, such as (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 March,
June, September and December, a fee consisting of a base fee plus a
performance adjustment as set forth 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 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 quarter 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 quarter, 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 quarter 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 quarter. 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 INVESTORS VALUE FUND INC
By: _____________________________ By:_______________________________
R. Xxx Xxxxxx
Chairman
ATTEST: SALOMON BROTHERS ASSET MANAGEMENT INC
By: _____________________________ By:_______________________________
Xxxxxx Xxxxxxx
Managing Director
Schedule A
The Fund will pay the Manager quarterly a fee consisting of a base
fee as computed below (the "Base Fee") plus a performance adjustment.
The Base Fee shall be calculated as follows:
Average Daily Net Assets Quarterly Fee Rate
First $350 million 0.16250%
Next $150 million 0.13750%
Next $250 million 0.13125%
Next $250 million 0.12500%
Over $1.00 billion 0.11250%
The Base Fee shall be calculated using the daily net assets
averaged over the most recent quarter. For each percentage point by
which the Fund's investment performance exceeds or is exceeded by the
investment record of the Standard & Poor's Composite Index of 200 Stocks
(the "S&P 500 Index") over the one year period ending on the last day of
each calendar quarter, the Base Fee will be adjusted upward or downward
by the product of (i) 1/4 of.01% multiplied by (ii) the Fund's average daily
net assets for the one year period ending on the last day of each calendar
quarter. If the amount by which the Fund outperforms or underperforms the
S&P 500 Index is not a whole percentage point, a pro rata adjustment shall
be made. However, there will be no performance adjustment unless the Fund's
investment performance exceeds or is exceeded by the investment record of
the S&P 500 Index by at least one percentage point over the same period.
The maximum quarterly adjustment is 1/4 of .1%, which would occur if the
Fund's performance exceeds or is exceeded by the S&P 500 Index by ten or
more percentage points.
The Fund's investment performance, for a period of one year, shall
mean the sum of (i) the change in the Fund's net asset value per share
during such period, (ii) the value of cash distributions per share
accumulated to the end of such period and (iii) the value of capital gains
taxes per share paid or payable on undistributed realized long-term capital
gains accumulated to the end of such period; expressed as a percentage of
the Fund's net asset value per share at the beginning of such period. For
this purpose, the value of distributions per share of realized capital
gains, of dividends per share paid from investment income and of capital
gains taxes per share paid or payable on undistributed realized long-term
capital gains shall be treated as reinvested in the Fund' shares at the
net asset value per share in effect at the close of business on the record
date for the payment of such distributions and dividends and the date on
which provision is made for such taxes, after giving effect to such
distributions, dividends and taxes.
The investment record of the S&P 500 Index, for a period of one
year, shall mean the sum of (i) the change in the level of the index
during such period and (ii) the value, computed consistently with the
index, of cash distributions made by companies whose securities comprise
the index accumulated to the end of such period; expressed as a percentage
of the index level at the beginning of such period. For this purpose,
cash distributions on the securities which comprise the index shall be
treated as reinvested in the index at least as frequently as the end of
each calendar quarter following the payment of the dividend.
