EXHIBIT 10.55
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SUB-ADVISORY AGREEMENT
on behalf of
Xxxxxxxxx International Smaller Companies Fund
THIS SUB-ADVISORY AGREEMENT is made as of January 23, 2001, by and between
XXXXXXXXX INVESTMENT COUNSEL, LLC ("TIC, LLC"), a limited liability company
existing under the laws of Delaware, and XXXXXXXXX ASSET MANAGEMENT LIMITED
("TAML"), a corporation existing under the laws of Singapore.
WITNESSETH
WHEREAS, FTTRUST COMPANY ("FTTrust") entered into an Amended and Restated
Investment Management Contract on September 11, 2000, with XXXXXXXXX INVESTMENT
COUNSEL, INC. ("TICI") to render investment advisory services to Xxxxxxxxx
International Smaller Companies Fund (the "Fund");
WHEREAS, TICI was merged into TIC, LLC, on January 1, 2001;
WHEREAS, FTTrust and TIC, LLC seek to engage the services of TAML as a
Sub-Advisor to the Fund;
WHEREAS, Xxxxx Xxxxxxx, Senior Vice President of TIC, LLC and a member of
the Fund's portfolio management team, will be residing temporarily in Singapore
during which time he will be employed by TAML;
WHEREAS, FTTrust and TIC, LLC wish to enable Xx. Xxxxxxx to continue to
serve as a portfolio manager of the Fund during his TAML employment; and
WHEREAS, TIC, LLC and TAML are each registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
engaged in the business of supplying investment management services as
independent contractors.
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. FTTrust and TIC, LLC hereby retain TAML, and TAML 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
FTTrust's Board of Directors (the "Board") and to the instructions and
supervision of FTTrust, TAML agrees to provide certain investment advisory
services with respect to securities and investments and cash equivalents in the
Fund. FTTrust will continue to have full responsibility for all investment
advisory services provided to the Fund. FTTrust acknowledges that the only
services that TAML will provide under this Agreement are the portfolio
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management services of Xxxxx Xxxxxxx while he remains employed by TAML. Nothing
in this Agreement grants to TIC, LLC any right to receive any research
undertaken by TAML's Emerging Markets Group.
(b) Both TAML and TIC, LLC may place all purchase and sale orders on
behalf of the Fund. The placement of these orders will take place in Ft.
Lauderdale, Florida, Nassau, Bahamas or Hong Kong.
(c) Unless otherwise instructed by TIC, LLC or the Board of Directors of
FTTrust (the "Board"), and subject to the provisions of this Agreement and to
any guidelines or limitations specified from time to time by TIC, LLC or by the
Board, TAML shall report daily all transactions effected by TAML on behalf of
the Fund to TIC, LLC and to other entities as reasonably directed by TIC, LLC or
the Board.
(d) For the term of this Agreement, in addition to quarterly reports
prepared by TIC, LLC, Xxxxx Xxxxxxx will also prepare a portfolio report in the
form and detail as the Board may reasonably request.
(e) In performing its services under this Agreement, TAML shall adhere
to the Fund's investment objective, policies and restrictions as well as
diversification, concentration and liquidity considerations as contained in the
Fund's Declaration of Trust and Plan of Operation, and will ensure that the Fund
will be maintained in accordance with Florida trust law, prudent investor
principles and the rules and regulations of the U.S. Comptroller of the
Currency.
(f) In carrying out its duties hereunder, TAML shall comply with all
reasonable instructions of the Fund, FTTrust or TIC, LLC in connection
therewith. Such instructions may be given by letter, facsimile, e-mail, telex,
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 resolutions has
been supplied to TAML.
2. In performing the services described above, TAML 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, TAML may, to the extent authorized by law and in accordance with the
terms of the Fund's Declaration of Trust and Plan of Operation, 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, TAML 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) TIC, LLC shall pay to TAML a fee equal to one-third of the advisory
fee paid to TIC, LLC by the Fund, which fee shall be payable in U.S. dollars on
the first business day of each month as compensation for the services to be
rendered and obligations assumed by TAML during the preceding month. The
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advisory fee under this Agreement shall be payable on the first business day of
the first month following the effective day of this Agreement and shall be
reduced by the amount of any advance payments made by TIC, LLC relating to the
previous month.
(b) TIC, LLC and TAML shall share equally in any voluntary reduction or
waiver by TIC, LLC of the management fee due under the Investment Management
Contract between TIC, LLC and FTTrust on behalf 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.
4. It is understood that the services provided by TAML are not to be deemed
exclusive. FTTrust and TIC, LLC acknowledge that TAML may have investment
responsibilities, render investment advice to, or perform other investment
advisory services to other investment companies and clients, which may invest in
the same type of securities as the Fund (collectively, "Clients"). FTTrust and
TIC, LLC agree that TAML 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.
In providing services, TAML may use information furnished by others to TIC, LLC
and TAML in providing services to other such Clients.
5. TAML agrees to use its best efforts in performing the services to be
provided by it pursuant to this Agreement.
6. During the term of this Agreement, TAML will pay all expenses incurred
by it in connection with the services to be provided by it under this Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Fund. The Fund, FTTrust and TIC, LLC will be responsible for
all of their respective expenses and liabilities.
7. TAML shall, unless otherwise expressly provided and authorized, have no
authority to act for or represent FTTrust, TIC, LLC or the Fund in any way, or
in any way be deemed an agent for FTTrust, TIC, LLC or the Fund.
8. TAML 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 TAML
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.
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9. This Agreement shall become effective on January 23, 2001, and shall
continue in effect until Xxxxx Xxxxxxx ceases to be employed by TAML for
whatever reason.
10. (a) Notwithstanding the foregoing, this Agreement may be terminated at
any time, without the payment of any penalty, by the Board upon not less than
sixty (60) days' written notice to FTTrust, TIC, LLC and TAML, and by FTTrust,
TIC, LLC or TAML upon not less than sixty (60) days' written notice to the other
party, unless an earlier date shall be agreed upon by both parties.
(b) This Agreement shall terminate automatically in the event of any
transfer or assignment thereof, as defined in the Investment Advisers Act of
1940, and in the event of any act or event that terminates the Investment
Management Contract between TIC, LLC and FTTrust on behalf of the Fund.
11. (a) In the absence of willful misfeasance, bad faith, gross negligence,
or reckless disregard of its obligations or duties hereunder on the part of
TAML, neither TAML nor any of its directors, officers, employees or affiliates
shall be subject to liability to FTTrust, TIC, LLC, 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 11(a), to the extent that TIC, LLC is
found by a court of competent jurisdiction, or the Florida Office of the
Comptroller or any other regulatory agency to be liable to the Fund or any
shareholder (a "liability"), for any acts undertaken by TAML pursuant to
authority delegated as described in Paragraph 1(a), TAML shall indemnify
FTTrust, TIC, LLC 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.
12. Upon termination of TAML's engagement under this Agreement or at the
Fund's direction, TAML shall forthwith deliver to the Fund, or to any third
party at the Fund's direction, all records, documents and books of accounts
which are in the possession or control of TAML and relate directly and
exclusively to the performance by TAML of its obligations under this Agreement;
provided, however, that TAML shall be permitted to keep such records or copies
thereof for such periods of time as are necessary to comply with applicable
laws, in which case TAML shall provide the Fund or a designated third party with
copies of such retained documents unless providing such copies would contravene
such rules, regulations and laws.
Termination of this Agreement or TAML's engagement hereunder shall be
without prejudice to the rights and liabilities created hereunder prior to such
termination.
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13. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, in whole or in part, the other
provisions hereof shall remain in full force and effect. Invalid provisions
shall, in accordance with the intent and purpose of this Agreement, be replaced
by such valid provisions which in their economic effect come as closely as
legally possible to such invalid provisions.
14. FTTrust will furnish to TAML properly certified or authenticated copies
of the resolutions of the Board authorizing the appointment of TAML and
approving this Agreement as soon as such copies are available.
15. Any notice or other communication required to be given pursuant to this
Agreement shall be in writing and given by personal delivery or by facsimile
transmission and shall be effective upon receipt. Notices and communications
shall be given:
(a) to TAML:
0 Xxxxxxx Xxxxxxxxx #00-00
Xxxxxx Xxxxx Xxx
Xxxxxxxxx 000000
Facsimile: 000-00-000-0000
(b) to FTTrust or TIC, LLC:
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000
Facsimile: 000-000-0000
16. This Agreement shall be interpreted in accordance with and governed by
the laws of the State of Florida.
17. TAML acknowledges that it has received notice of and accepts the
limitations of FTTrust's liability as set forth in its Articles of
Incorporation. TAML agrees that FTTrust's obligations hereunder shall be limited
to the assets of the Fund, and that TAML shall not seek satisfaction of any such
obligation from any shareholders of the Fund nor from any trustee, officer,
employee or agent of FTTrust.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and their respective corporate
seals to be hereunto duly affixed and attested.
FTTRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, President and CEO
Attest: /s/ Xxxxxxxxx X. Xxxxxxxx
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Xxxxxxxxx X. Xxxxxxxx
XXXXXXXXX ASSET MANAGEMENT LIMITED
By: /s/ Xxxxxxx X. XxXxxxx
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Xxxxxxx X. XxXxxxx, Director
Attest: /s/ Xxxxxxxxx X. Xxxxxxxx
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Xxxxxxxxx X. Xxxxxxxx
XXXXXXXXX INVESTMENT COUNSEL, LLC
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, President
Attest: /s/ Xxxxxxxxx X. Xxxxxxx
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Xxxxxxxxx X. Xxxxxxxx