EXHIBIT 5(a)
MANAGEMENT CONTRACT
SALOMON BROTHERS SERIES FUNDS INC
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
November 28, 1997
Salomon Brothers Asset Management Inc
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Company") and you (the "Investment Manager") as follows:
1. The Company is an open-end investment company which
currently has nine investment portfolios -- Salomon Brothers Cash Management
Fund, Salomon Brothers New York Municipal Money Market Fund, Salomon Brothers
Institutional Money Market Fund, Salomon Brothers Total Return Fund, Salomon
Brothers National Intermediate Municipal Fund, Salomon Brothers U.S. Government
Income Fund, Salomon Brothers High Yield Bond Fund, Salomon Brothers Strategic
Bond Fund and Salomon Brothers Asia Growth Fund. The Company proposes to engage
in the business of investing and reinvesting the assets of Salomon Brothers Cash
Management Fund (the "Fund") in the manner and in accordance with the investment
objective and limitations specified in the Company's Articles of Incorporation,
as amended (the "Articles") and the currently effective prospectus, including
the documents incorporated by reference therein (the "Prospectus"), relating to
the Company and the Fund, included in the Company's Registration Statement, as
amended from time to time (the "Registration Statement"), filed by the Company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and the
Securities Act of 1933, as amended. Copies of the documents referred to in the
preceding sentence have been furnished to the Investment Manager. Any amendments
to these documents shall be furnished to the Investment Manager.
2. The Company employs the Investment Manager to (a) make
investment strategy decisions for the Fund, (b) manage the investing and
reinvesting of the Fund's assets as specified in paragraph 1, (c) place purchase
and sale orders on behalf of the Fund and (d) provide continuous supervision of
the Fund's investment portfolio.
3. (a) The Investment Manager shall, at its expense, (i)
provide the Fund with office space, office facilities and personnel reasonably
necessary for performance of the services to be provided by the Investment
Manager pursuant to this Agreement, (ii) provide
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the Fund with persons satisfactory to the Company's Board of Directors to serve
as officers and employees of the Fund and (iii) provide the office space,
facilities, equipment and personnel necessary to perform the following services
for the Fund: (A) Securities and Exchange Commission ("SEC") compliance,
including record keeping, reporting requirements and registration statements and
proxies; (B) supervision of Fund operations, including coordination of functions
of administrator, transfer agent, custodian, accountants, counsel and other
parties performing services or operational functions for the Fund; (C) certain
administrative and clerical services, including certain accounting services,
facilitation of redemption requests, exchange privileges, and account
adjustments, development of new shareholder services and maintenance of certain
books and records; and (D) certain services to the Fund's shareholders,
including assuring that investments and redemptions are handled efficiently,
responding to shareholder inquiries and maintaining a flow of information to
shareholders.
(b) Except as provided in subparagraph (a), the Company shall
be responsible for all of the Fund's expenses and liabilities, including
organizational expenses; taxes; interest; fees (including fees paid to its
directors who are not affiliated with the Investment Manager or any of its
affiliates); fees payable to the SEC; state securities qualification fees; costs
of preparing and printing prospectuses for regulatory purposes and for
distribution to existing shareholders; advisory and administration fees; charges
of the custodian and transfer agent; insurance premiums; auditing and legal
expenses; costs of shareholders' reports and shareholders' meetings; any
extraordinary expenses; and brokerage fees and commissions, if any, in
connection with the purchase or sale of portfolio securities.
4. As manager of the Fund's assets, the Investment Manager
shall make investments for the Fund's account in accordance with the investment
objective and limitations set forth in the Articles, the Prospectus, the 1940
Act, the provisions of the Internal Revenue Code relating to regulated
investment companies, applicable banking laws and regulations, and policy
decisions adopted by the Company's Board of Directors from time to time. The
Investment Manager shall advise the Company's officers and Board of Directors,
at such times as the Company's Board of Directors may specify, of investments
made for the Fund's account and shall, when requested by the Company's officers
or Board of Directors, supply the reasons for making such investments.
5. The Investment Manager is authorized on behalf of the
Company, from time to time when deemed to be in the best interests of the
Company and to the extent permitted by applicable law, to purchase and/or sell
securities in which the Investment Manager or any of its affiliates underwrites,
deals in and/or makes a market and/or may perform or seek to perform investment
banking services for issuers of such securities. The Investment Manager is
further authorized, to the extent permitted by applicable law, to select brokers
for the execution of trades for the Company, which broker may be an affiliate of
the Investment Manager, provided that the best competitive execution price is
obtained at the time of the trade execution.
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6. In consideration of the Investment Manager's undertaking to
render the services described in this agreement, the Company agrees that the
Investment Manager shall not be liable under this agreement for any error of
judgment or mistake of law or for any loss suffered by the Company in connection
with the performance of this agreement, provided that nothing in this agreement
shall be deemed to protect or purport to protect the Investment Manager against
any liability to the Company or its stockholders to which the Investment Manager
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Investment Manager's duties under this
agreement or by reason of the Investment Manager's reckless disregard of its
obligations and duties hereunder.
7. In consideration of the services to be rendered by the
Investment Manager under this agreement, the Company shall pay the Investment
Manager a monthly fee on the first Business Day (as defined in the Prospectus)
of each month at an annual rate of 0.20% of the average daily value (as
determined on the days and at the time set forth in the Prospectus for
determining net asset value per share) of the Fund's net assets during the
preceding month. If the fee payable to the Investment Manager pursuant to this
paragraph 7 begins to accrue before the end of any month or if this agreement
terminates before the end of any month, the fee for the period from such date to
the end of such month or from the beginning of such month to the date of
termination, as the case may be, shall be prorated according to the proportion
which such period bears to the full month in which such effectiveness or
termination occurs. For purposes of calculating each such monthly fee, the value
of the Fund's net assets shall be computed in the manner specified in the
Prospectus and the Articles for the computation of the value of the Fund's net
assets in connection with the determination of the net asset value of shares of
the Fund's capital stock.
8. If the aggregate expenses incurred by, or allocated to, the
Fund in any fiscal year shall exceed the expense limitations applicable to the
Fund imposed by state securities laws or regulations thereunder, as such
limitations may be raised or lowered from time to time, the Investment Manager
shall reimburse the Fund for such excess. The Investment Manager's reimbursement
obligation will be limited to the amount of fees it received under this
agreement during the period in which such expense limitations were exceeded,
unless otherwise required by applicable laws or regulations. With respect to
portions of a fiscal year in which this contract shall be in effect, the
foregoing limitations shall be prorated according to the proportion which that
portion of the fiscal year bears to the full fiscal year. Any payments required
to be made by this paragraph 8 shall be made once a year promptly after the end
of the Company's fiscal year.
9. This agreement shall continue in effect until two years
from the date hereof and thereafter for successive annual periods, provided that
such continuance is specifically approved at least annually (a) by the vote of a
majority of the Fund's outstanding voting securities (as defined in the 0000
Xxx) or by the Company's Board of Directors and (b) by the vote, cast in person
at a meeting called for the purpose, of a majority of the Company's directors
who are not parties to this agreement or "interested persons" (as defined in the
0000 Xxx) of any such party. This agreement may be terminated at any time,
without the payment of any penalty, by a vote of a majority of the Fund's
outstanding voting securities (as defined in the 0000 Xxx) or by a vote of a
majority of the Company's entire
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Board of Directors on 60 days' written notice to the Investment Manager or by
the Investment Manager on 60 days' written notice to the Company. This agreement
shall terminate automatically in the event of its assignment (as defined in the
1940 Act).
10. Upon expiration or earlier termination of this agreement,
the Company shall, if reference to "Salomon Brothers" is made in the corporate
name of the Company or in the name of the Fund and if the Investment Manager
requests in writing, as promptly as practicable change its corporate name and
the name of the Fund so as to eliminate all reference to "Salomon Brothers", and
thereafter the Company and the Fund shall cease transacting business in any
corporate name using the words "Salomon Brothers" or any other reference to the
Investment Manager or "Salomon Brothers". The foregoing rights of the Investment
Manager and obligations of the Company shall not deprive the Investment Manager,
or any affiliate thereof which has "Salomon Brothers" in its name, of, but shall
be in addition to, any other rights or remedies to which the Investment Manager
and any such affiliate may be entitled in law or equity by reason of any breach
of this agreement by the Company, and the failure or omission of the Investment
Manager to request a change of the Company's or the Fund's name or a cessation
of the use of the name of "Salomon Brothers" as described in this paragraph 10
shall not under any circumstances be deemed a waiver of the right to require
such change or cessation at any time thereafter for the same or any subsequent
breach.
11. Except to the extent necessary to perform the Investment
Manager's obligations under this agreement, nothing herein shall be deemed to
limit or restrict the right of the Investment Manager, or any affiliate of the
Investment Manager, or any employee of the Investment Manager, to engage in any
other business or to devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other corporation, firm, individual or
association.
12. This agreement shall be governed by the laws of the State
of New York.
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If the foregoing correctly sets forth the agreement between
the Company and the Investment Manager, please so indicate by signing and
returning to the Company the enclosed copy hereof.
Very truly yours,
SALOMON BROTHERS SERIES
FUNDS INC
By: s/ Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
ACCEPTED:
SALOMON BROTHERS ASSET
MANAGEMENT INC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
