MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this
1st day of December, 2005, by and between Salomon Brothers
Institutional Series Funds 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 with respect to the series of the Corporation
designated in Schedule A annexed hereto (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 daily 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 daily 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 daily net assets
as the number of business days in such period bears to the number of
business days in such month. The average daily 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
INSTITUTIONAL SERIES
FUNDS INC
By: _____________________________
By:_______________________________
R. Xxx Xxxxxx
Chairman
ATTEST: SALOMON BROTHERS ASSET MANAGEMENT INC
By: _____________________________
By:_______________________________
Xxxxxx Xxxxxxx
Managing Director
Schedule A
Salomon Brothers Institutional High Yield Bond Fund
0.550%
Salomon Brothers Institutional Emerging Markets Debt Fund
0.750%
7
082221-0123-11259-NY01.2530525.1
082221-0123-11259-NY01.2530525.1
