MANAGEMENT AGREEMENT
SALOMON BROTHERS INVESTORS FUND INC
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Salomon Brothers Asset Management Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
November 28, 1997
Dear Sirs:
We herewith confirm our agreement with you as follows:
We are engaged in the business of investing and reinvesting
our assets in securities of the type and in accordance with the limitations
specified in our Articles of Incorporation, By-Laws, Registration Statement
filed with the Securities and Exchange Commission under the Investment Company
Act of 1940, and any representation made in our Prospectus. We have previously
forwarded to you copies of the documents listed above and will from time to time
furnish you with any amendments thereof.
We hereby employ you to manage the investing and reinvesting
of our assets as above specified, and, without limiting the generality of the
foregoing, to provide management and other services specified below.
You will provide us, at your expense, with office facilities,
including space, furniture and equipment, and all personnel reasonably necessary
for our operations. Other than as herein specifically indicated, you will not be
responsible for any of our expenses. Specifically you will not be responsible,
except to the extent of the reasonable compensation of our employees whose
services may be involved, for our legal and auditing expenses; taxes and
governmental fees and any membership dues; fees of custodian, transfer agent and
registrar, if any; expense of preparing share certificates and other expenses of
issue, sale, underwriting, distribution, redemption or repurchase of our shares;
expense of registering or qualifying securities for sale; expense of preparing
and distributing reports, notices and dividends to stockholders; cost of
stationery; cost of stockholders' and other meetings; compensation of our Board
of Directors and its Executive Committee; and traveling expenses of officers,
directors and employees, if any. Should you determine that services which would
ordinarily be rendered by our employees at our office can be better rendered by
some other outside agency, you shall bear the costs of employing that agency.
As manager of our portfolio, it shall be your duty to make
purchases and sales of securities on our behalf in accordance with your best
judgment and within the investment objectives and restrictions set forth in our
Articles of Incorporation, By-Laws, Registration Statement and Prospectus, the
Investment Company Act of 1940, the provisions of the Internal Revenue Code with
respect to regulated investment companies, and such policy decisions as the
Board of Directors shall from time to time adopt. You will further advise
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our Board of Directors, at such intervals as it may require, of purchases and
sales during such intervals and will, when requested by the Board of Directors,
supply the reasons and considerations that prompted your decisions.
It is understood that you will from time to time employ or
associate with you such persons as you believe to be particularly fitted to
assist you in the execution of your performance of this agreement, the
compensation of such persons to be paid by you. No obligation may be incurred on
our behalf in any such respect. During the continuance of this agreement you
will provide persons satisfactory to our Board of Directors to serve us as
officers and employees, if elected or appointed as such. These shall be a
president, one or more vice presidents, a secretary, a treasurer and such
additional officers and employees as may reasonably be necessary for the conduct
of our business, and you agree to pay the reasonable compensation of all such
persons.
We shall expect of you, and you will give us the benefit of,
your best judgment and efforts in rendering these services to us, and we agree
as an inducement to your undertaking these services that you shall not be liable
hereunder for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, you against any liability to us or to our stockholders to
which you would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of your duties hereunder, or by reason of
your reckless disregard of your obligations and duties hereunder.
In consideration of the foregoing, we will pay you quarterly,
promptly after the last day of each March, June, September and December, a fee
consisting of a base fee as computed below (the 'Base Fee') plus a performance
adjustment.
The Base Fee shall be calculated as follows:
BASE FEE (AVERAGE DAILY NET ASSETS) QUARTERLY FEE RATE
----------------------------------------------------------------------------------------------
First $350 million.................................................................. .16250%
Next $150 million................................................................... .13750%
Next $250 million................................................................... .13125%
Next $250 million................................................................... .12500%
Over $1 billion..................................................................... .11250%
The Base Fee shall be calculated using the daily net assets
averaged over the most recent quarter. For each percentage point by which our
investment performance exceeds or is exceeded by the investment record of the
Standard & Poor's Composite Index of 500 Stocks (the 'S&P 500 Index') over the
one year period ending on the last day of each calendar quarter, the Base Fee
will be adjusted upward or downward by the product of (i) 1/4 of .01% multiplied
by (ii) our average daily net assets for the one year period ending on the last
day of each calendar quarter. If the amount by which we outperform or
underperform the S&P 500 Index is not a whole percentage point, a pro rata
adjustment shall be made. However, there will be no performance adjustment
unless our investment performance
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exceeds or is exceeded by the investment record of the S&P 500 Index by at least
one percentage point over the same period. The maximum quarterly adjustment is
1/4 of .1%, which would occur if our performance exceeds or is exceeded by the
S&P 500 Index by ten or more percentage points.
Our investment performance, for a period of one year, shall
mean the sum of (i) the change in our net asset value per share during such
period, (ii) the value of cash distributions per share accumulated to the end of
such period and (iii) the value of capital gains taxes per share paid or payable
on undistributed realized long-term capital gains accumulated to the end of such
period; expressed as a percentage of our net asset value per share at the
beginning of such period. For this purpose, the value of distributions per share
of realized capital gains, of dividends per share paid from investment income
and of capital gains taxes per share paid or payable on undistributed realized
long-term capital gains shall be treated as reinvested in our shares at the net
asset value per share in effect at the close of business on the record date for
the payment of such distributions and dividends and the date on which provision
is made for such taxes, after giving effect to such distributions, dividends and
taxes.
The investment record of the S&P 500 Index, for a period of
one year, shall mean the sum of (i) the change in the level of the index during
such period and (ii) the value, computed consistently with the index, of cash
distributions made by companies whose securities comprise the index accumulated
to the end of such period; expressed as a percentage of the index level at the
beginning of such period. For this purpose, cash distributions on the securities
which comprise the index shall be treated as reinvested in the index at least as
frequently as the end of each calendar quarter following the payment of the
dividend.
For this purpose the value of our net assets shall be computed
in the manner specified in our Articles of Incorporation for the computation of
the value of such net assets in connection with the determination of the net
asset value of our shares.
If the fee payable to the Investment Manager pursuant to this
agreement begins to accrue on a date prior to the end of any quarter or if this
agreement terminates before the end of any quarter, compensation for the period
from such date to the end of such quarter or from the end of the last quarter
ending prior to such termination to the date of termination shall be prorated
and shall be payable promptly at the end of such quarter or after the date of
termination, as the case may be.
Notwithstanding the foregoing, if the aggregate expenses
(excluding interest, taxes, brokerage commissions and other portfolio
transaction expenses and any extraordinary expenses, but including the
management fee) incurred by, or allocated to, us in any fiscal year shall exceed
the most stringent expense limitations applicable to us imposed by state
securities laws or regulations thereunder, as such limitations may be raised or
lowered from time to time, you shall reimburse us for such excess. Your
reimbursement obligation will be limited to the amount of fees you received
under this agreement during the period in which such expense limitations were
exceeded, unless otherwise required by applicable laws or
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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 such payments required to be made shall be made once a year promptly after
the end of our fiscal year.
You will (i) not make a short sale of any share of our capital
stock, (ii) not purchase any such share otherwise than for investment and (iii)
advise us of any sale of such share made by you less than two months after the
date of acquisition.
This agreement shall remain in effect for twelve months from
the date hereof and thereafter shall continue automatically for successive
annual periods, provided that such continuance is specifically approved at least
annually (i) by the vote of a majority of our directors who are not parties to
this agreement or 'interested persons' (as defined in the Investment Company Act
of 1940) of any such party, cast in person at a meeting called for the purpose
of voting on such approval and (ii) either by the vote of (x) the Board of
Directors or (y) a majority of our outstanding voting securities (as so
defined). This agreement may be terminated at any time, without the payment of
any penalty, by vote of a majority of our outstanding voting securities (as so
defined), or by a vote of a majority of our entire Board of Directors, on sixty
days' written notice to you, or by you on sixty days' written notice to us.
This agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you. This agreement shall terminate
automatically in the event of its assignment (as defined in the Investment
Company Act of 1940) by you.
Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any parent, subsidiary or affiliate of yours, or the right of any
employees of yours or any of them who may also be a director, officer or
employee of ours, to engage in any other business or to devote time and
attention to the management of 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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If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
SALOMON BROTHERS INVESTORS FUND INC
By:________________________________
ACCEPTED:
SALOMON BROTHERS ASSET
MANAGEMENT INC
By:_________________________
