SUBADVISORY AGREEMENT
FRANKLIN GLOBAL TRUST
(on behalf of Fiduciary Small Capitalization Equity Fund)
THIS SUBADVISORY AGREEMENT made as of the March 1, 2006 by and between
FIDUCIARY INTERNATIONAL, INC., a corporation organized and existing under the
laws of the State of New York (hereinafter called "Fiduciary"), and
FRANKLIN XXXXXXXXX INSTITUTIONAL, LLC, a Delaware limited liability company
(hereinafter called ("FT Institutional").
W I T N E S S E T H
WHEREAS, Fiduciary and FT Institutional are each registered as an
investment adviser under the Investment Advisers Act of 1940 (the "Advisers
Act"), and engaged in the business of supplying investment advice, and
investment management services, as an independent contractor; and
WHEREAS, Fiduciary has been retained to render investment advisory
services to Fiduciary Small Capitalization Equity Fund (the "Fund"), a series of
FRANKLIN GLOBAL TRUST (the "Trust"), an investment management company registered
with the U.S. Securities and Exchange Commission (the "SEC") pursuant to the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, Fiduciary desires to retain FT Institutional to render investment
advisory, research and related services to the Fund pursuant to the terms and
provisions of this Agreement, and FT Institutional is interested in furnishing
said services.
NOW, THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties hereto, intending to be legally bound hereby,
mutually agree as follows:
1. Fiduciary hereby retains FT Institutional and FT Institutional hereby
accepts such engagement, to furnish certain investment advisory services with
respect to the assets of the Fund, as more fully set forth herein.
(a) Subject to the overall policies, control, direction and review of
the Trust's Board of Trustees (the "Board") and to the instructions and
supervision of Fiduciary, FT Institutional will provide a continuous investment
program for the Fund, including allocation of the Fund's assets among the
various securities markets of the world and, investment research and advice with
respect to securities and investments and cash equivalents in the Fund. So long
as the Board and Fiduciary determine, on no less frequently than an annual
basis, to grant the necessary delegated authority to FT Institutional, and
subject to paragraph (b) below, FT Institutional will determine what securities
and other investments will be purchased, retained or sold by the Fund, and will
place all purchase and sale orders on behalf of the Fund except that orders
regarding U.S. domiciled securities and money market instruments may also be
placed on behalf of the Fund by Fiduciary.
(b) In performing these services, FT Institutional shall adhere to
the Fund's investment objectives, policies and restrictions as contained in its
Prospectus and Statement of Additional Information, and in the Trust's Agreement
and Declaration of Trust, and to the investment guidelines most recently
established by Fiduciary and shall comply with the provisions of the 1940 Act
and the rules and regulations of the SEC thereunder in all material respects and
with the provisions of the United States Internal Revenue Code of 1986, as
amended, which are applicable to regulated investment companies.
(c) Unless otherwise instructed by Fiduciary or the Board, and
subject to the provisions of this Agreement and to any guidelines or limitations
specified from time to time by Fiduciary or by the Board, FT Institutional shall
report daily all transactions effected by FT Institutional on behalf of the Fund
to Fiduciary and to other entities as reasonably directed by Fiduciary or the
Board.
(d) FT Institutional shall provide the Board at least quarterly, in
advance of the regular meetings of the Board, a report of its activities
hereunder on behalf of the Fund and its proposed strategy for the next quarter,
all in such form and detail as requested by the Board. FT Institutional shall
also make an investment officer available to attend such meetings of the Board
as the Board may reasonably request.
(e) In carrying out its duties hereunder, FT Institutional shall
comply with all reasonable instructions of the Fund or Fiduciary in connection
therewith. Such instructions may be given by letter, telex, telefax or telephone
confirmed by telex, by the Board or by any other person authorized by a
resolution of the Board, provided a certified copy of such resolution has been
supplied to FT Institutional.
2. In performing the services described above, FT Institutional shall use
its best efforts to obtain for the Fund the most favorable price and execution
available. Subject to prior authorization of appropriate policies and procedures
by the Board, FT Institutional may, to the extent authorized by law and in
accordance with the terms of the Fund's Prospectus and Statement of Additional
Information, cause the Fund to pay a broker who provides brokerage and research
services an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker would have
charged for effecting that transaction, in recognition of the brokerage and
research services provided by the broker. To the extent authorized by applicable
law, FT Institutional shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
such action.
3. (a) FT Institutional shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent Fiduciary or the Fund in
any way, or in any way be deemed an agent for Fiduciary or the Fund.
(b) It is understood that the services provided by FT Institutional
are not to be deemed exclusive. Fiduciary acknowledges that FT Institutional may
have investment responsibilities, or render investment advice to, or perform
other investment advisory services, for individuals or entities, including other
investment companies registered pursuant to the 1940 Act, ("Clients") which may
invest in the same type of securities as the Fund. Fiduciary agrees that FT
Institutional may give advice or exercise investment responsibility and take
such other action with respect to such Clients which may differ from advice
given or the timing or nature of action taken with respect to the Fund.
4. FT Institutional agrees to use its best efforts in performing the
services to be provided by it pursuant to this Agreement.
5. Fiduciary has furnished or will furnish to FT Institutional as soon as
available copies properly certified or authenticated of each of the following
documents:
(a) the Trust's Certificate of Trust and Agreement and Declaration of
Trust, as filed with the Secretary of State of the State of Delaware on
September 26, 2000, and any other organizational documents and all amendments
thereto or restatements thereof;
(b) resolutions of the Trust's Board of Trustees authorizing the
appointment of FT Institutional and approving this Agreement;
(c) the Trust's original Notification of Registration on Form N-8A
under the 1940 Act as filed with the SEC and all amendments thereto;
(d) the Trust's current Registration Statement on Form N-1A under the
Securities Act of 1933, as amended and under the 1940 Act as filed with the SEC,
and all amendments thereto, as it relates to the Fund;
(e) the Fund's most recent Prospectus and Statement of Additional
Information; and
(f) the Investment Advisory Agreement between the Fund and Fiduciary.
Fiduciary will furnish FT Institutional with copies of all amendments of or
supplements to the foregoing documents.
6. FT Institutional will treat confidentially and as proprietary
information of the Fund all records and other information relative to the Fund
and prior, present or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund, which approval shall not be unreasonably withheld and may not be
withheld where FT Institutional may be exposed to civil or criminal contempt
proceedings for failure to comply when requested to divulge such information by
duly constituted authorities, or when so requested by the Fund.
7. (a) Fiduciary shall pay a monthly fee in cash to FT Institutional of
equivalent to 70% of the investment advisory fee paid to Fiduciary by the Fund,
which fee shall be payable on the first business day of each month in each year
as compensation for the services rendered and obligations assumed by FT
Institutional during the preceding month. The advisory fee under this Agreement
shall be payable on the first business day of the first month following the
effective date of this Agreement, and shall be reduced by the amount of any
advance payments made by Fiduciary relating to the previous month.
(b) Fiduciary and FT Institutional shall share equally in any
voluntary reduction or waiver by Fiduciary of the management fee due Fiduciary
under the Investment Advisory Agreement between Fiduciary and the Fund.
(c) If this Agreement is terminated prior to the end of any month,
the monthly fee shall be prorated for the portion of any month in which this
Agreement is in effect which is not a complete month according to the proportion
which the number of calendar days in the month during which the Agreement is in
effect bears to the total number of calendar days in the month, and shall be
payable within 10 days after the date of termination.
8. Nothing herein contained shall be deemed to relieve or deprive the
Board of its responsibility for and control of the conduct of the affairs of the
Fund.
9. (a) In the absence of willful misfeasance, bad faith, gross negligence,
or reckless disregard of its obligations or duties hereunder on the part of FT
Institutional, neither FT Institutional nor any of its directors, officers,
employees or affiliates shall be subject to liability to Fiduciary or the Fund
or to any shareholder of the Fund for any error of judgment or mistake of law or
any other act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security by the Fund.
(b) Notwithstanding paragraph 9(a), to the extent that Fiduciary is
found by a court of competent jurisdiction, or the SEC or any other regulatory
agency to be liable to the Fund or any shareholder (a "liability"), for any acts
undertaken by FT Institutional pursuant to authority delegated as described in
Paragraph 1(a), FT Institutional shall indemnify and save Fiduciary and each of
its affiliates, officers, directors and employees (each a "Franklin Indemnified
Party") harmless from, against, for and in respect of all losses, damages, costs
and expenses incurred by a Franklin Indemnified Party with respect to such
liability, together with all legal and other expenses reasonably incurred by any
such Franklin Indemnified Party, in connection with such liability.
(c) No provision of this Agreement shall be construed to protect any
director or officer of Fiduciary or FT Institutional, from liability in
violation of Sections 17(h) or (i), respectively, of the 0000 Xxx.
10. During the term of this Agreement, FT Institutional will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Fund. The Fund and Fiduciary will be responsible for all of
their respective expenses and liabilities.
11. This Agreement shall be effective as of the date given above, and
shall continue in effect for two years. It is renewable annually thereafter for
successive periods not to exceed one year each (i) by a vote of the Board or by
the vote of a majority of the outstanding voting securities of the Fund, and
(ii) by the vote of a majority of the Trustees of the Trust who are not parties
to this Agreement or interested persons thereof, cast in person at a meeting
called for the purpose of voting on such approval.
12. This Agreement may be terminated at any time, without payment of any
penalty, by the Board or by vote of a majority of the outstanding voting
securities of the Fund, upon sixty (60) days' written notice to Fiduciary and FT
Institutional, and by Fiduciary or FT Institutional upon sixty (60) days'
written notice to the other party.
13. This Agreement shall terminate automatically in the event of any
transfer or assignment thereof, as defined in the 1940 Act, and in the event of
any act or event that terminates the Investment Advisory Agreement between
Fiduciary and the Fund.
14. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
FT Institutional hereby agrees that all records which it maintains for the Fund
are the property of the Fund and further agrees to surrender promptly to the
Fund, or to any third party at the Fund's direction, any of such records upon
the Fund's request. FT Institutional further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
15. This Agreement may not be materially amended, transferred, assigned,
sold or in any manner hypothecated or pledged without the affirmative vote or
written consent of the holders of a majority of the outstanding voting
securities of the Fund and may not be amended without the written consent of
Fiduciary and FT Institutional.
16. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder of this Agreement
shall not be affected thereby.
17. The terms "majority of the outstanding voting securities" of the Fund
and "interested persons" shall have the meanings as set forth in the 1940 Act.
18. This Agreement shall be interpreted in accordance with and governed by
the laws of the State of New York of the United States of America.
19. FT Institutional acknowledges that it has received notice of and
accepts the limitations of the Trust's liability as set forth in its Agreement
and Declaration of Trust. FT Institutional agrees that the Trust's obligations
hereunder shall be limited to the assets of the Fund, and that FT Institutional
shall not seek satisfaction of any such obligation from any shareholders of the
Fund nor from any trustee, officer, employee or agent of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers.
FIDUCIARY INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx
Title: President
FRANKLIN XXXXXXXXX INSTITUTIONAL, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Title: Executive Vice President
Fiduciary Small Capitalization Equity Fund hereby acknowledges and agrees to the
provisions of paragraphs 9(a) and 10 of this Agreement.
FRANKLIN GLOBAL TRUST on behalf of
Fiduciary Small Capitalization Equity Fund
By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Title: Vice President & Assistant Secretary
