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 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.
0.Xx 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 Investors Fund
First $350 million 0.650%
Next $150 million 0.550%
Next $250 million 0.525%
Next $250 million 0.500%
Over $1.00 billion 0.450
