SUBADVISORY AGREEMENT
FRANKLIN GLOBAL TRUST
THIS SUBADVISORY AGREEMENT made as of the ____ day of _____,
2003, by and between FIDUCIARY INTERNATIONAL, INC., a corporation
organized and existing under the laws of the State of New York
(hereinafter called "FII"), and FRANKLIN ADVISERS, INC., a
California corporation (hereinafter called "FAV").
W I T N E S S E T H
WHEREAS, FII and FAV 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, FII has been retained to render investment advisory
services to FIDUCIARY HIGH INCOME 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 (the "1940 Act"); and
WHEREAS, FII desires to retain FAV to render investment
advisory, research and related services to the Fund pursuant to
the terms and provisions of this Agreement, and FAV 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. FII hereby retains FAV and FAV 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 FII, FAV 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 FII determine, on no less
frequently than an annual basis, to grant the necessary delegated
authority to FAV, and subject to paragraph (b) below, FAV 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 FII.
(b) In performing these services, FAV 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 Declaration of Trust, and to the
investment guidelines most recently established by FII 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 FII or the Board,
and subject to the provisions of this Agreement and to any
guidelines or limitations specified from time to time by FII or
by the Board, FAV shall report daily all transactions effected by
FAV on behalf of the Fund to FII and to other entities as
reasonably directed by FII or the Board.
(d) FAV 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. FAV 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, FAV shall
comply with all reasonable instructions of the Fund or FII in
connection therewith. Such instructions may be given by letter,
e-mail, 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 FAV.
2. In performing the services described above, FAV 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, FAV 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, FAV
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) FAV shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent FII or the
Fund in any way, or in any way be deemed an agent for FII or the
Fund.
(b) It is understood that the services provided by FAV
are not to be deemed exclusive. FII acknowledges that FAV 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. FII agrees that FAV may
give advice or exercise investment responsibility and take such
other action with respect to such Clients that may differ from
advice given or the timing or nature of action taken with respect
to the Fund.
4. FAV agrees to use its best efforts in performing the
services to be provided by it pursuant to this Agreement.
5. FII has furnished or will furnish to FAV as soon as
available copies properly certified or authenticated of each of
the following documents:
(a) the Trust's 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 FAV 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 FII.
FII will furnish FAV with copies of all amendments of or
supplements to the foregoing documents.
6. FAV 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 Trust, which approval shall not be unreasonably
withheld and may not be withheld where FAV 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 Trust.
7. (a) FII shall pay a monthly fee in cash to FAV based
upon a percentage of the value of the Fund's net assets,
calculated as set forth below as compensation for the services
rendered and obligations assumed by FAV, during the preceding
month, on the first business day of the month in each year.
(b) For purposes of calculating such fee, the value of
the net assets of the Fund shall be determined in the same manner
as that 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 Fund's current
prospectus and statement of additional information. The rate of
the monthly fee payable to FAV shall be calculated daily at the
following annual rate:
0.30% of the average daily net assets of 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,
negligence, or reckless disregard of its obligations or duties
hereunder on the part of FAV, neither FAV nor any of its
directors, officers, employees or affiliates shall be subject to
liability to FII 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
FII is found by a court of competent jurisdiction, or the SEC or
any other regulatory agency, by order that cannot be appealed or
with respect to which no appeal was undertaken, to be liable to
the Fund or any shareholder (a "liability"), for any acts
undertaken by FAV pursuant to authority delegated to FAV as
described in Paragraph 1(a), FAV shall indemnify and save FII 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 FII or FAV from liability
in violation of Sections 17(h) or (i), respectively, of the 0000
Xxx.
10. During the term of this Agreement, FAV 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 FII 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) with respect to the Fund, 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 FII and FAV and by FII or FAV 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 FII and the Fund.
14. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, FAV 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, copies of any of such records upon the
Fund's request. FAV 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 FII
and FAV.
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. FAV 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. FAV agrees that the
Trust's obligations hereunder shall be limited to the assets of
the Fund, and that FAV 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: ________________________
Xxxxxxx X. Xxx
Title: Vice President
FRANKLIN ADVISERS, INC.
By: _______________________
Xxxxxxx X. Xxxxxxx
Title: Vice President
Fiduciary High Income Fund hereby acknowledges and agrees to the
provisions of paragraphs 9(a) and 10 of this Agreement.
FRANKLIN GLOBAL TRUST on behalf of
FIDUCIARY HIGH INCOME FUND
By: __________________________
Xxxxx X. Xxxxxxxx
Title: Assistant Vice President and
Assistant Secretary
