MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of
December, 2005, by and between Salomon Brothers High Income 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 weekly 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 weekly 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 weekly net assets as the number of
business days in such period bears to the number of business days
in such month. The average weekly 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 HIGH INCOME FUND INC
By: _____________________________ By:_______________________________
R. Xxx Xxxxxx
Chairman
ATTEST: SALOMON BROTHERS ASSET MANAGEMENT INC
By: _____________________________ By:_______________________________
Managing Director
Schedule A
Salomon Brothers High Income Fund Inc 0.700%
