SUBADVISORY CONSULTING AGREEMENT
Agreement dated January 2, 1998, by and between SALOMON BROTHERS ASSET
MANAGEMENT INC, a Delaware Corporation ("SBAM") and SALOMON BROTHERS ASSET
MANAGEMENT LIMITED, a company incorporated under the laws of England ("SBAM
Limited").
WHEREAS, pursuant to the Management Contract dated as of January 2, 1998
between SBAM and Salomon Brothers Variable Series Funds Inc (the "Management
Contract"), SBAM is the Investment Manager to the Salomon Brothers Strategic
Bond Fund (the "Fund") portfolio of Salomon Brothers Variable Series Funds Inc
(the "Company"), an open-end management investment company;
WHEREAS, SBAM desires to retain SBAM Limited to assist SBAM in
furnishing an investment program to the Fund;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
SBAM and SBAM Limited agree as follows:
1. SBAM hereby employs SBAM Limited to serve as Sub-Adviser Consultant
to SBAM with respect to such portion of the assets of the Fund as SBAM shall
allocate (the "Designated Portion"), it being contemplated that all of such
assets are to be invested in the securities of non-U.S. issuers. SBAM Limited
will have full power to direct the investment and reinvestment of the assets of
the Designated Portion of the Fund in accordance with the requirements of the
Management Contract. SBAM Limited hereby accepts such employment and agrees, for
the compensation herein provided, to assume all obligations herein set forth.
2. SBAM will pay SBAM Limited, as full compensation for all services
provided under this Subadvisory Consulting Agreement, a portion of the fee (such
portion herein referred to as the "Subadvisory Consulting Fee") payable to SBAM
under the Management Contract. The Subadvisory Consulting Fee shall be an amount
equal to the fee payable under the Management Contract multiplied by the current
value of the net assets of the Designated Portion of the Fund and divided by the
current value of the net assets of the Fund. The Subadvisory Consulting Fee
shall be accrued for each calendar day in the period commencing as of the date
first above written and ending on the date on which this Subadvisory Consulting
Agreement terminates and the sum of the daily fee accruals shall be paid to SBAM
Limited by SBAM at such times and for such periods as SBAM Limited and SBAM
shall agree.
3. This Agreement shall become effective as of the date first above
written and shall remain in force for two years from the date hereof, and for
such successive annual periods thereafter but only so long as each such
continuance is specifically approved at least annually by (1) a vote of the
holders of a majority of the outstanding voting securities of the Fund (as
defined in the Investment Company Act of 1940, as amended (the "1940 Act")) or
by the Company's Board of Directors and (2) a majority of the Directors of the
Company who are not parties to this Agreement or interested persons of any such
parties (other than as Directors of the Company), by vote cast in person at a
meeting duly called for the purpose of voting on such approval.
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4. This Agreement may be terminated at any time without the payment of
any penalty: (1) by a vote of a majority of the entire Board of Directors of the
Company on sixty (60) days' written notice to SBAM Limited and SBAM; (2) by vote
of the holders of a majority of the outstanding voting securities of the Fund
(as defined in the 1940 Act); or (3) by SBAM Limited or SBAM on 60 days' written
notice to the Company.
This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" for this purpose having the meaning defined in
Section 2(a)(4) of the 1940 Act and the rules thereunder.
5. Nothing contained herein shall limit the obligations of SBAM under
the Management Contract.
6. To the extent that state law is not preempted by the provisions of
any law of the United States heretofore or hereafter enacted, as the same may be
amended from time to time, this Agreement shall be administered, construed and
enforced in accordance with the laws of the State of New York.
7. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Subadvisory
Consulting Agreement to be executed by their officers thereunto duly authorized.
SALOMON BROTHERS ASSET MANAGEMENT INC
By:_____________________________________
Xxxxxxx X. Xxxxxx
President
SALOMON BROTHERS ASSET MANAGEMENT
LIMITED
By:_____________________________________
Name:
Title:
