This SUBADVISORY AGREEMENT ("Agreement") is made this 23rd day of November,
2009, by and between Western Asset Management Company, a corporation organized
under the laws of California (the "Subadviser") and Western Asset Management
Company Limited, a corporation organized under the laws of England and Wales
("WESTERN LONDON").
WHEREAS, the Subadviser has been retained by Xxxx Xxxxx Partners Fund
Advisor, LLC to provide investment advisory, management, and administrative
services to WESTERN ASSET GLOBAL CORPORATE DEFINED OPPORTUNITY FUND INC. (the
"Fund"), a registered management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Subadviser wishes to engage WESTERN LONDON to provide certain
investment advisory services to the Fund, and WESTERN LONDON 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. In accordance with and subject to the Subadvisory Agreement between
the Subadviser and Xxxx Xxxxx Partners Fund Advisor, LLC with respect to the
Fund (the "Subadvisory Agreement"), the Subadviser hereby appoints WESTERN
LONDON to act as a subadviser with respect to the Fund for the period and on
the terms set forth in this Agreement. WESTERN LONDON accepts such appointment
and agrees to render the services herein set forth, for the compensation
herein provided.
2. The Subadviser shall cause WESTERN LONDON to be kept fully informed at
all times with regard to the securities owned by the Fund, its funds
available, or to become available, for investment, and generally as to the
condition of the Fund's affairs. The Subadviser shall furnish WESTERN LONDON
with such other documents and information with regard to the Fund's affairs as
WESTERN LONDON may from time to time reasonably request.
3. (a) Subject to the supervision of the Fund's Board of Directors (the
"Board"), Xxxx Xxxxx Partners Fund Advisor, LLC and the Subadviser, WESTERN
LONDON shall regularly provide the Fund with respect to such portion of the
Fund's assets as shall be allocated to WESTERN LONDON by the Subadviser from
time to time (the "Allocated Assets"), with investment research, advice,
management and supervision and shall furnish a continuous investment program
for the Allocated Assets consistent with the Fund's investment objectives,
policies and restrictions, as stated in the Fund's current Prospectus and
Statement of Additional Information. WESTERN LONDON shall, with respect to the
Allocated Assets, determine from time to time what securities and other
investments will be purchased (including, as permitted in accordance with this
paragraph, swap agreements, options and futures), retained, sold or exchanged
by the Fund and what portion of the Allocated Assets will be held in the
various securities and other investments in which the Fund invests, and shall
implement those decisions (including the execution of investment
documentation), all subject to the provisions of the Fund'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 WESTERN LONDON. WESTERN LONDON is authorized as the agent of
the Fund to give instructions with respect to the Allocated Assets 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, the investment program to be provided hereunder may entail
the investment of all or substantially all of the assets of the Fund in one or
more investment companies. WESTERN LONDON 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, as amended (the "Exchange Act")) to the Fund and/or the other accounts
over which WESTERN LONDON or its affiliates exercise investment discretion.
WESTERN LONDON is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
WESTERN LONDON 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
WESTERN LONDON 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 WESTERN LONDON's authority regarding the
execution of the Fund's portfolio transactions provided herein. WESTERN LONDON
shall exercise voting rights, rights to consent to corporate action and any
other rights pertaining to the Allocated Assets 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) The Fund hereby authorizes any entity or person associated with
WESTERN LONDON 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 Exchange Act 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,
WESTERN LONDON 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 WESTERN LONDON or its affiliates is participating, or arrange
for purchases and sales of securities between the Fund and another account
advised by WESTERN LONDON 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 the 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 WESTERN LONDON and its
directors and officers.
4. WESTERN LONDON may delegate to any other one or more companies that
WESTERN LONDON controls, is controlled by, or is under common control with, or
to specified employees of any such companies, certain of WESTERN LONDON's
duties under this Agreement, provided in each case WESTERN LONDON will
supervise the activities of each such entity or employees thereof, that such
delegation will not relieve WESTERN LONDON of any of its duties or obligations
under this Agreement and provided further that any such arrangements are
entered into in accordance with all applicable requirements of the 1940 Act.
5. WESTERN LONDON agrees that it will keep records relating to its
services hereunder in accordance with all applicable laws, and in compliance
with the requirements of Rule 31a-3 under the 1940 Act, WESTERN LONDON 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. WESTERN LONDON 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.
6. (a)WESTERN LONDON, at its expense, shall supply the Board, the officers
of the Fund, Xxxx Xxxxx Partners Fund Advisor, LLC and the Subadviser with all
information and reports reasonably required by them and reasonably available
to WESTERN LONDON relating to the services provided by WESTERN LONDON
hereunder.
(b)WESTERN LONDON 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, WESTERN LONDON 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.
7. No member of the Board, officer or employee of the Fund shall receive
from the 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 WESTERN LONDON or any affiliated company of WESTERN LONDON, 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 WESTERN LONDON's or any affiliated company's staff.
8. As compensation for the services performed by WESTERN LONDON, including
the services of any consultants retained by WESTERN LONDON, the Subadviser
shall pay WESTERN LONDON out of the subadvisory fee it receives with respect
to the Fund, and only to the extent thereof, as promptly as possible after the
last day of each month, a fee, computed daily at an annual rate set forth on
Schedule A annexed hereto. 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 WESTERN
LONDON 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
managed assets of the Fund or, if less, the portion thereof comprising the
Allocated Assets in that period from the beginning of such month to such date
of termination, and shall be that proportion of such average daily managed
assets as the number of business days in such period bears to the number of
business days in such month. The average daily managed assets of the Fund or
the portion thereof comprising the Allocated Assets 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.
9. WESTERN LONDON 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 the Fund, provided that nothing in this Agreement
shall protect WESTERN LONDON against any liability to the Subadviser, Xxxx
Xxxxx Partners Fund Advisor, LLC or the Fund to which WESTERN LONDON 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 9,
the term "WESTERN LONDON" shall include any affiliates of WESTERN LONDON
performing services for the Fund contemplated hereby and the partners,
shareholders, directors, officers and employees of WESTERN LONDON and such
affiliates.
10. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of WESTERN LONDON who may also be a Board
member, officer, or employee of 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 WESTERN LONDON 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
the Fund or one or more other accounts of WESTERN LONDON is considered at or
about the same time, transactions in such securities will be allocated among
the accounts in a manner deemed equitable by WESTERN LONDON. Such transactions
may be combined, in accordance with applicable laws and regulations, and
consistent with WESTERN LONDON's policies and procedures as presented to the
Board from time to time.
11. For the purposes of this Agreement, the Fund's "managed 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.
12. 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 Fund's Board and, if so required by
the 1940 Act, 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 through November 21, 2011. 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.
13. 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 WESTERN LONDON, or by WESTERN LONDON upon not less than 90 days
written notice to the Fund and the Subadviser, and will be terminated upon the
mutual written consent of the Subadviser and WESTERN LONDON. This Agreement
shall terminate automatically in the event of its assignment.
14. WESTERN LONDON agrees that for any claim by it against the Fund in
connection with this Agreement or the services rendered under the Agreement,
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 Fund.
15. 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.
16. This Agreement, and any supplemental terms contained on Annex I hereto,
if applicable, 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.
17. This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of New York.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
WESTERN ASSET MANAGEMENT COMPANY
By
:
Name: W. Xxxxxxx Xxxxxxx, Xx.
Title: Manager, US Legal and Corporate
Affairs
WESTERN ASSET MANAGEMENT COMPANY LIMITED
By
:
Name: Xxxxxx X. Xxxxxxxx
Title: Manager, International Legal and
Compliance
The foregoing is acknowledged:
The undersigned officer of the Fund has executed this Agreement not
individually but in his/her capacity as an officer of the Fund. The Fund does
not hereby undertake, on behalf of the Fund or otherwise, any obligation to
Western Asset Management Company Limited.
WESTERN ASSET GLOBAL CORPORATE DEFINED
OPPORTUNITY FUND INC.
By
:
Name: R. Xxx Xxxxxx
Title: Chairman, President and Chief
Executive Officer
ANNEX I
This Annex I forms a part of the Subadvisory Agreement dated as of
2009, by and between Western Asset Management Company, a California
corporation, and Western Asset Management Company Limited ("Western Asset
London"), an entity authorized and regulated in the United Kingdom by the
Financial Services Authority (the "FSA").
1. Western Asset London represents, warrants and covenants that it is
authorized and regulated by the FSA.
2. Western Asset London has classified the Fund as an Intermediate
Customer as defined by the FSA Rules.
SCHEDULE A
WESTERN ASSET GLOBAL CORPORATE DEFINED OPPORTUNITY FUND INC.
November 23, 2009
Fee: The sub-advisory fee will be the following percentage of Allocated
Assets: 0.56%
