MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st
day of December, 2005, by and between Salomon Brothers
Opportunity 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 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 OPPORTUNITY FUND INC
By: /s/ Xxxxx Xxxx-Xxxxx By: /s/ R. Xxx Xxxxxx
Xxxxx Xxxx-Xxxxx X. Xxx Xxxxxx
Executive Vice President
ATTEST: SALOMON BROTHERS ASSET MANAGEMENT INC
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxx
Xxxxx Xxxxxxx Xxxxxx Xxxxxxx
Managing Director
Schedule A
Salomon Brothers Opportunity Fund Inc
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 %
