MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT is made between FRANKLIN XXXXXXXXX GLOBAL
TRUST, a Delaware business trust (successor to Franklin Xxxxxxxxx Global
Trust, a Massachusetts business trust formerly known as Huntington Funds),
hereinafter called the "Trust," on behalf of its various separate series, and
FRANKLIN ADVISERS, INC., a California corporation, hereinafter called the
"Manager."
WHEREAS, the Trust has been organized and intends to operate as an
investment company registered under the Investment Company Act of 1940 (the
"1940 Act") for the purpose of investing and reinvesting its assets in
securities, as set forth in its Agreement and Declaration of Trust, its
By-Laws and its Registration Statements under the 1940 Act and the Securities
Act of 1933, all as heretofore and hereafter amended and supplemented;
WHEREAS, the Trust desires to avail itself of the services,
information, advice, assistance and facilities of an investment manager and
to have an investment manager perform various management, statistical,
research, investment advisory and other services for each of the funds
currently or hereafter organized as separate series of the Trust (the "Fund"
or together, the "Funds"); and
WHEREAS, the Manager is registered as an investment adviser under the
Investment Advisers Act of 1940, is engaged in the business of rendering
management, investment advisory, counselling and supervisory services to
investment companies and other investment counselling clients, and desires to
provide these services to the Funds.
NOW THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is mutually agreed as follows:
l. EMPLOYMENT OF THE MANAGER. The Trust hereby employs the Manager
to manage the investment and reinvestment of each Fund's assets and to
administer its affairs, subject to the direction of the Board of Trustees and
the officers of the Trust, for the period and on the terms hereinafter set
forth. The Manager hereby accepts such employment and agrees during such
period to render the services and to assume the obligations herein set forth
for the compensation herein provided. The Manager shall for all purposes
herein be deemed to be an independent contractor and shall, except as
expressly provided or authorized (whether herein or otherwise), have no
authority to act for or represent the Funds in any way or otherwise be deemed
an agent of the Funds or the Trust.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY THE MANAGER. The
Manager undertakes to provide the services hereinafter set forth and to
assume the following obligations:
A. ADMINISTRATIVE SERVICES. The Manager shall furnish each
Fund adequate (i) office space, which may be space within the offices of the
Manager or in such other place as may be agreed upon from time to time, (ii)
office furnishings, facilities and equipment as may be reasonably required
for managing the affairs and conducting the business of the Funds, including
conducting correspondence and other communications with the shareholders of
the Funds, maintaining all internal bookkeeping, accounting and auditing
services and records in connection with the Funds' investment and business
activities. The Manager shall employ or provide and compensate the
executive, secretarial and clerical personnel necessary to provide such
services. The Manager shall also compensate all officers and employees of
the Trust who are officers or employees of the Manager or its affiliates.
B. INVESTMENT MANAGEMENT SERVICES.
(a) The Manager shall manage each Fund's assets subject
to and in accordance with the respective investment objectives and policies
of each Fund and any directions which the Trust's Board of Trustees may issue
from time to time. In pursuance of the foregoing, the Manager shall make all
determinations with respect to the investment of each Fund's assets and the
purchase and sale of its investment securities, and shall take such steps as
may be necessary to implement the same. Such determinations and services
shall include determining the manner in which any voting rights, rights to
consent to corporate action and any other rights pertaining to each Fund's
investment securities shall be exercised. The Manager shall render or cause
to be rendered regular reports to the Trust, at regular meetings of its Board
of Trustees and at such other times as may be reasonably requested by the
Trust's Board of Trustees, of (i) the decisions made with respect to the
investment of each Fund's assets and the purchase and sale of their
investment securities, (ii) the reasons for such decisions, and (iii) the
extent to which those decisions have been implemented.
(b) The Manager, subject to and in accordance with any
directions which the Trust's Board of Trustees may issue from time to time,
shall place, in the name of each Fund, orders for the execution of the Fund's
securities transactions. When placing such orders the Manager shall seek to
obtain the best net price and execution for the Funds, but this requirement
shall not be deemed to obligate the Manager to place any order solely on the
basis of obtaining the lowest commission rate if the other standards set
forth in this section have been satisfied. The parties recognize that there
are likely to be many cases in which different brokers or dealers are equally
able to provide such best price and execution and that, in selecting among
such brokers or dealers with respect to particular trades, it is desirable to
choose those brokers or dealers who furnish research, statistical quotations
and other information to the Funds and the Manager in accord with the
standards set forth below. Moreover, to the extent that it continues to be
lawful to do so and so long as the Board of Trustees determines that the
Funds will benefit, directly or indirectly, by doing so, the Manager may
place orders with a broker who charges a commission for that transaction
which is in excess of the amount of commission that another broker would have
charged for effecting that transaction, provided that the excess commission
is reasonable in relation to the value of "brokerage and research services"
(as defined in Section 28(e) (3) of the Securities Exchange Act of 1934)
provided by that broker.
Accordingly, the Trust and the Manager agree that the Manager shall select
brokers for the execution of each Fund's transactions from among:
(i) those brokers and dealers who provide
quotations and other services to the Funds,
specifically including the quotations necessary
to determine the Funds' net assets, in such
amount of total brokerage as may reasonably be
required in light of such services; and
(ii) those brokers and dealers who supply research,
statistical and other data to the Manager or
its affiliates which the Manager or its
affiliates may lawfully and appropriately use
in their investment advisory capacities, which
relate directly to securities, actual or
potential, of the Funds, or which place the
Manager in a better position to make decisions
in connection with the management of each
Fund's assets and securities, whether or not
such data may also be useful to the Manager and
its affiliates in managing other portfolios or
advising other clients, in such amount of total
brokerage as may reasonably be required.
Provided that the Trust's officers are
satisfied that the best execution is obtained,
the sale of shares of the Funds may also be
considered as a factor in the selection of
broker-dealers to execute the Funds' portfolio
transactions.
(c) It is acknowledged that the Manager may contract with
one or more firms to undertake some or all of the manager's investment
management services as set forth herein pursuant to an agreement which is
subject to substantially the same provisions as contained in paragraphs 6, 7
and 10 herein.
(d) When the Manager has determined that any of the Funds
should tender securities pursuant to a "tender offer solicitation,"
Franklin/Xxxxxxxxx Distributors, Inc. ("Distributors") shall be designated
as the "tendering dealer" so long as it is legally permitted to act in such
capacity under the federal securities laws and rules thereunder and the rules
of any securities exchange or association of which Distributors may be a
member. Neither the Manager nor Distributors shall be obligated to make any
additional commitments of capital, expense or personnel beyond that already
committed (other than normal periodic fees or payments necessary to maintain
its corporate existence and membership in the National Association of
Securities Dealers, Inc.) as of the date of this Agreement. This Agreement
shall not obligate the Manager or Distributors (i) to act pursuant to the
foregoing requirement under any circumstances in which they might reasonably
believe that liability might be imposed upon them as a result of so acting,
or (ii) to institute legal or other proceedings to collect fees which may be
considered to be due from others to it as a result of such a tender, unless
the applicable Fund shall enter into an agreement with the Manager and/or
Distributors to reimburse them for all such expenses connected with
attempting to collect such fees, including legal fees and expenses and that
portion of the compensation due to their employees which is attributable to
the time involved in attempting to collect such fees.
(e) The Manager shall render regular reports to the
Trust, not more frequently than quarterly, of how much total brokerage
business has been placed by the Manager with brokers falling into each of the
categories referred to above and the manner in which the allocation has been
accomplished.
(f) The Manager agrees that no investment decision will
be made or influenced by a desire to provide brokerage for allocation in
accordance with the foregoing, and that the right to make such allocation of
brokerage shall not interfere with the Manager's paramount duty to obtain the
best net price and execution for each Fund.
C. PROVISION OF INFORMATION NECESSARY FOR PREPARATION OF
SECURITIES REGISTRATION STATEMENTS - AMENDMENTS AND OTHER MATERIALS. The
Manager, its officers and employees will make available and provide
accounting and statistical information required by the Funds in the
preparation of registration statements, reports and other documents required
by federal and state securities laws and with such information as the Funds
may reasonably request for use in the preparation of such documents or of
other materials necessary or helpful for the underwriting and distribution of
the Funds' shares.
D. OTHER OBLIGATIONS AND SERVICES. The Manager shall make its
officers and employees available to the Board of Trustees and officers of the
Trust for consultation and discussions regarding the administration and
management of the Funds and their investment activities.
3. EXPENSES OF THE FUNDS. It is understood that each Fund will pay
all of its own expenses other than those expressly assumed by the Manager
herein, which expenses payable by the Funds shall include:
A. Fees and expenses paid to the Manager as provided herein;
B. Expenses of all audits by independent public accountants;
C. Expenses of transfer agent, registrar, custodian, dividend
disbursing agent and shareholder record-keeping services, including the
expenses of issue, repurchase or redemption of their shares;
D. Expenses of obtaining quotations for calculating the value
of each Fund's net assets;
E. Salaries and other compensations of executive officers of
the Trust who are not officers, directors, stockholders or employees of the
Manager or its affiliates;
F. Taxes levied against the Fund;
G. Brokerage fees and commissions in connection with the
purchase and sale of securities for each Fund;
H. Costs, including the interest expense, of borrowing money;
I. Costs incident to meetings of Board of Trustees and
shareholders of each Fund, reports to each Fund's shareholders, the filing of
reports with regulatory bodies and the maintenance of each Fund's and the
Trust's legal existence;
J. Legal fees, including the legal fees related to the
registration and continued qualification of each Fund's shares for sale;
K. Trustees' fees and expenses to trustees who are not
directors, officers, employees or stockholders of the Manager or any of its
affiliates;
L. Costs and expense of registering and maintaining the
registration of the Funds and their shares under federal and any applicable
state laws; including the printing and mailing of prospectuses to their
shareholders;
M. Trade association dues; and
N. Each Fund's pro rata portion of fidelity bond, errors and
omissions, and trustees and officer liability insurance premiums.
4. COMPENSATION OF THE MANAGER. Each Fund shall pay a monthly
management fee in cash to the Manager based upon a percentage of the value of
the respective Fund's net assets, calculated as set forth below, as
compensation for the services rendered and obligations assumed by the
Manager, during the preceding month, on the first business day of the month
in each year. The initial management 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 the Funds relating to the previous month.
A. For purposes of calculating such fee, the value of the net
assets of each Fund shall be the average daily net assets of each Fund during
each month, determined in the same manner as each Fund uses to compute the
value of its net assets in connection with the determination of the net asset
value of its shares, all as set forth more fully in the Trust's current
prospectus and statement of additional information. The rate of the monthly
fee payable to the Manager by each of the Funds shall be based upon the
following annual rates:
0.65% of the value of the average daily net assets of each of the
Franklin Xxxxxxxxx Global Currency Fund, the Franklin Xxxxxxxxx
High Income Currency Fund, and the Franklin Xxxxxxxxx Hard
Currency Fund; and
0.55% of the value of the average daily net assets of the
Franklin Xxxxxxxxx German Government Bond Fund.
B. The management fee payable by a Fund shall be reduced or
eliminated to the extent that Distributors has actually received cash
payments of tender offer solicitation fees less certain costs and expenses
incurred in connection therewith as set forth in paragraph 2. B. (c) of this
Agreement and to the extent necessary to comply with the limitations on
expenses which may be borne by the Fund as set forth in the laws, regulations
and administrative interpretations of those states in which the Fund's shares
are registered. The Manager may waive all or a portion of its fees provided
for hereunder and such waiver shall be treated as a reduction in purchase
price of its services. The Manager shall be contractually bound hereunder by
the terms of any publicly announced waiver of its fee, or any limitation of a
Fund's expenses, as if such waiver or limitation were full set forth herein.
C. If this Agreement is terminated prior to the end of any
month, the management fee shall be paid to the date of termination.
5. ACTIVITIES OF THE MANAGER. The services of the Manager to the
Funds hereunder are not to be deemed exclusive, and the Manager and any of
its affiliates shall be free to render similar services to others. Subject
to and in accordance with the Agreement and Declaration of Trust and By-Laws
of the Trust and Section 10(a) of the 1940 Act, it is understood that
trustees, officers, agents and shareholders of the Trust are or may be
interested in the Manager or its affiliates as directors, officers, agents or
stockholders; that directors, officers, agents or stockholders of the Manager
or its affiliates are or may be interested in the Trust as trustees,
officers, agents, shareholders or otherwise; that the Manager or its
affiliates may be interested in the Funds as shareholders or otherwise; and
that the effect of any such interests shall be governed by said Agreement and
Declaration of Trust, By-Laws and the 1940 Act.
6. LIABILITIES OF THE MANAGER.
A. In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of obligations or duties hereunder on the
part of the Manager, the Manager shall not be subject to liability to the
Trust or any of the Funds or to any shareholder of the Funds for any 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 any of the Funds.
B. Notwithstanding the foregoing the Manager agrees to
reimburse the Trust for any and all costs, expenses, and counsel and
trustees' fees reasonably incurred by the Trust in the preparation, printing
and distribution of proxy statements, amendments to its Registration
Statement, holdings of meetings of its shareholders or trustees, the conduct
of factual investigations, any legal or administrative proceedings (including
any applications for exemptions or determinations by the Securities and
Exchange Commission) which the Trust incurs as the result of action or
inaction of the Manager or any of its affiliates or any of their officers,
directors, employees or stockholders where the action or inaction
necessitating such expenditures (i) is directly or indirectly related to any
transactions or proposed transaction in the stock or control of the Manager
or its affiliates (or litigation related to any pending or proposed or future
transaction in such shares or control) which shall have been undertaken
without the prior, express approval of the Trust's Board of Trustees; or,
(ii) is within the control of the Manager or any of its affiliates or any of
their officers, directors, employees or stockholders. The Manager shall not
be obligated, pursuant to the provisions of this Subparagraph 6 B., to
reimburse the Trust for any expenditures related to the institution of an
administrative proceeding or civil litigation by the Trust or a shareholder
seeking to recover all or a portion of the proceeds derived by any
stockholder of the Manager or any of its affiliates from the sale of his
shares of the Manager, or similar matters. So long as this Agreement is in
effect, the Manager shall pay to the Trust the amount due for expenses
subject to this Subparagraph 6 B. within 30 days after a xxxx or statement
has been received by the Manager therefor. This provision shall not be
deemed to be a waiver of any claim the Trust may have or may assert against
the Manager or others for costs, expenses or damages heretofore incurred by
the Trust or for costs, expenses or damages the Trust may hereafter incur
which are not reimbursable to it hereunder.
C. No provision of this Agreement shall be construed to
protect any trustee or officer of the Trust, or director or officer of the
Manager, from liability in violation of Sections 17(h) and (i) of the 1940
Act.
7. RENEWAL AND TERMINATION.
A. This Agreement shall become effective on the date written
below and shall continue in effect for two (2) years thereafter, unless
sooner terminated as hereinafter provided and shall continue in effect
thereafter as to each Fund for periods not exceeding one (1) year so long as
such continuation is approved at least annually (i) by a vote of a majority
of the outstanding voting securities of each Fund or by a vote of the Board
of Trustees of the Trust, and (ii) by a vote of a majority of the Trustees of
the Trust who are not parties to the Agreement or interested persons of any
parties to the Agreement (other than as Trustees of the Trust), cast in
person at a meeting called for the purpose of voting on the Agreement.
B. This Agreement:
(i) may at any time be terminated with respect to any of
the Funds without the payment of any penalty either by vote of the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the Fund, on 60 days' written notice to the Manager;
(ii) shall immediately terminate with respect to all of
the Funds in the event of its assignment; and
(iii) may be terminated by the Manager with respect to any
of the Funds on 60 days' written notice to the applicable Fund.
C. As used in this Paragraph the terms "assignment,"
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth for any such terms in the 1940
Act.
D. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at any
office of such party.
8. SEVERABILITY. 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.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
10. LIMITATION OF LIABILITY. The Manager acknowledges that it has
received notice of and accepts the limitations of each Fund's liability as
set forth in its Agreement and Declaration of Trust. The Manager agrees that
each Fund's obligations hereunder shall be limited to the assets of the Fund,
and that the Manager 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 executed and effective on the 28TH day of AUGUST , 1996.
FRANKLIN XXXXXXXXX GLOBAL TRUST
By: /S/ XXXXXXX X. XXXXXX
Xxxxxxx X. Xxxxxx
Vice President & Secretary
FRANKLIN ADVISERS, INC.
By: /S/ XXXXXX X. XXXXX
Xxxxxx X. Xxxxx
Executive Vice President
