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 U.S. Treasury
Securities Money Market Fund, Salomon Brothers Asia Growth 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 Total Return Fund. The Company proposes to engage
in the business of investing and reinvesting the assets of Salomon Brothers
Total Return 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 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
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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; and (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.
(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; 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 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 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 best competitive execution price is obtained at the
time of the trade execution.
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.
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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 of each month at an annual rate of 0.55%
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 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).
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
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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.
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
