Exhibit d(9)
MANAGEMENT CONTRACT
SALOMON BROTHERS VARIABLE SERIES FUNDS INC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
January 2, 1998 as amended
through July 30, 2004
Salomon Brothers Asset Management Inc
000 Xxxx 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
seven investment portfolios -- Salomon Brothers Variable All Cap Fund, Salomon
Brothers Variable High Yield Bond Fund, Salomon Brothers Variable Investors
Fund, Salomon Brothers Variable Large Cap Growth Fund, Salomon Brothers Variable
Small Cap Growth Fund, Salomon Brothers Variable Strategic Bond Fund, Salomon
Brothers Variable Total Return Fund. The Company proposes to engage in the
business of investing and reinvesting the assets of the Salomon Brothers
Variable All Cap Fund (the "Fund") in the manner and in accordance with the
investment objective and limitations specified in the Company's Articles of
Incorporation, (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 portfolios. At the Investment Manager's own expense and subject to
its supervision, the Investment Manager may delegate the performance of all or a
part of its services under this agreement to others.
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 the Fund with persons satisfactory to the Company's
Board of Directors to serve as officers and employees of
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the Fund and (iii) provide the office space, facilities, equipment and personnel
necessary to perform the following services for the Fund: (A) review purchases
and sales of portfolio instruments and review the Fund's portfolios to assess
compliance with the Fund's stated investment objectives and limitations and
compliance with the 1940 Act and other applicable laws and regulations, (B)
record keeping, reporting, and maintaining registration statements and proxy
statements to the extent such records, reports and documents are not maintained
or furnished by the Fund's transfer agent, custodian, administrative and
accounting services agent, or other agents employed by the Fund, (C) supervision
of Fund operations, including coordination of functions of transfer agent,
custodian, administrative and accounting services agent, accountants, counsel
and other parties performing services or operational functions for the Fund; and
(D) certain administrative and clerical services not otherwise provided by the
Fund's transfer agent, custodian, administrative and accounting services agent,
or other agents employed by the Fund.
(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 Securities and Exchange Commission; 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, transfer agent, administrative
and accounting services agent and any other agent employed by the Fund;
insurance premiums; auditing and legal expenses; costs of shareholders' reports
and shareholders' meetings; charges and expenses of any entity used for pricing
the Fund's portfolio securities and calculating the net asset value of the
Fund's shares; any extraordinary expenses; brokerage fees and commissions, if
any, in connection with the purchase or sale of portfolio securities; and
payments to the Fund's distributor for activities intended to result in the sale
of Fund shares.
4. As manager of the Fund's assets, the Investment Manager shall make
investments for the Fund's accounts in accordance with the investment objectives
and limitations set forth in the Articles, the Prospectus, the 1940 Act, the
provisions of the Internal Revenue Code of 1986, as amended, 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 affiliated broker's charge for the transaction is
reasonable and fair compared to the usual and
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customary levels charged by other brokers in connection with comparable
transactions involving similar securities.
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 its duties under this agreement or by reason of
its reckless disregard of its obligations and duties hereunder ("disabling
conduct"). The Fund will indemnify the Investment Manager against, and hold it
harmless from, any and all losses, claims, damages, liabilities or expenses,
including reasonable counsel fees and expenses and any amounts paid in
satisfaction of judgments, in compromise or as fines or penalties, not resulting
from disabling conduct by the Investment Manager. Indemnification shall be made
only following: (i) a final decision on the merits by a court or other body
before whom the proceeding was brought that the Investment Manager was not
liable by reason of disabling conduct, or (ii) in the absence of such a
decision, a reasonable determination, based upon a review of the facts, that the
Investment Manager was not liable by reason of disabling conduct by (a) the vote
of a majority of a quorum of directors of the Company who are neither
"interested persons" of the Company nor parties to the proceeding
("disinterested non-party directors"), or (b) an independent legal counsel in a
written opinion. The Investment Manager shall be entitled to advances from the
Fund for payment of the reasonable expenses incurred by it in connection with
the matter as to which it is seeking indemnification in the manner and to the
fullest extent permissible under law. The Investment Manager shall provide to
the Fund a written affirmation of its good faith belief that the standard of
conduct necessary for indemnification by the Fund has been met and a written
undertaking to repay any such advance if it should ultimately be determined that
the standard of conduct has not been met. In addition, at least one of the
following additional conditions shall be met: (a) the Investment Manager shall
provide security in form and amount acceptable to the Fund for its undertaking;
(b) the Fund is insured against losses arising by reason of the advance; or (c)
a majority of a quorum of disinterested non-party directors, or independent
legal counsel, in a written opinion, shall have determined, based on a review of
facts readily available to the Fund at the time the advance is proposed to be
made, that there is reason to believe that the Investment Manager will
ultimately be found to be entitled to indemnification. For purposes of this
paragraph 6 only, the term "Investment Manager" shall be deemed to include
affiliates of the Investment Manager to whom the Investment Manager has
delegated the exercise of all or any of its powers, discretion and duties under
this agreement.
7. In consideration of the services to be rendered by the Investment
Manager under this agreement, each Fund shall pay the Investment Manager a
monthly fee on the first business day of each month, based upon 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 at the following annual rates:
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Average Daily Net Assets Fee
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First $1.50 Billion 0.75%
Next $0.50 Billion 0.70%
Next $0.50 Billion 0.65%
Next $1.00 Billion 0.60%
Over $3.50 Billion 0.50%
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. 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 1940
Act) 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
1940 Act) 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 1940 Act) or by a vote of a
majority of the Company's entire 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). The respective agreements,
covenants, indemnities and other statements set forth in Section 6 hereof shall
remain in full force and effect regardless of any termination or cancellation of
this agreement. All property of the Fund shall be returned to the Fund as soon
as reasonably practicable after the termination of this agreement.
9. 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
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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 9 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.
10. 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.
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11. This agreement shall be governed by the laws of the State of New
York.
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 VARIABLE SERIES
FUNDS INC
By: /s/ X. Xxx Xxxxxx
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ACCEPTED:
SALOMON BROTHERS ASSET MANAGEMENT INC
By: /s/ Xxxxx X. Xxxxx
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