SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT ("Agreement") is made this 23rd day of
November, 2009, by and between Xxxx Xxxxx Partners Fund Advisor, LLC, a
Delaware limited liability company (the "Manager"), and Western Asset
Management Company, a California corporation (the "Subadviser").
WHEREAS, the Manager has been retained by 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")
to provide investment advisory, management, and administrative services to the
Fund; and
WHEREAS, the Manager wishes to engage the Subadviser to provide certain
investment advisory services to the Fund, and the Subadviser 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 Management
Agreement between the Fund and the Manager (the "Management Agreement"), the
Manager hereby appoints the Subadviser to act as Subadviser with respect to
the Fund for the period and on the terms set forth in this Agreement. The
Subadviser accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.
2. The Manager shall cause the Subadviser 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. Manager shall furnish the Subadviser with
such other documents and information with regard to the Fund's affairs as the
Subadviser may from time to time reasonably request.
3. (a) Subject to the supervision of the Fund's
Board of Directors (the "Board") and the Manager, Subadviser shall regularly
provide the Fund with respect to such portion of the Fund's assets as shall be
allocated to the Subadviser by the Manager 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 Prospectus and Statement of Additional Information.
The Subadviser 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 the Subadviser.
The Subadviser 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. The Subadviser 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
the Subadviser or its affiliates exercise investment discretion. The
Subadviser 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 the Subadviser
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 the Subadviser
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 the Subadviser's authority regarding the execution of the Fund's
portfolio transactions provided herein. The Subadviser 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 the Subadviser 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, the Subadviser 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 the Subadviser or its affiliates is participating,
or arrange for purchases and sales of securities between the Fund and another
account advised by the Subadviser 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 Prospectus and
Statement of Additional Information relative to the Subadviser and its
directors and officers.
4. The Subadviser may delegate to any other one or more
companies that the Subadviser controls, is controlled by, or is under common
control with, or to specified employees of any such companies, certain of the
Subadviser's duties under this Agreement, provided in each case the Subadviser
will supervise the activities of each such entity or employees thereof, that
such delegation will not relieve the Subadviser 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. The Subadviser 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, the
Subadviser 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. The Subadviser 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) The Subadviser, at its expense, shall
supply the Board, the officers of the Fund, and the Manager with all
information and reports reasonably required by them and reasonably available
to the Subadviser relating to the services provided by the Subadviser
hereunder.
(b) The Subadviser 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, the Subadviser 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 the Subadviser or any affiliated company of the
Subadviser, 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 the Subadviser's or any affiliated company's staff.
8. As compensation for the services performed by the
Subadviser, including the services of any consultants retained by the
Subadviser, the Manager shall pay the Subadviser out of the management 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 the Subadviser 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 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
managed as the number of business days in such period bears to the number of
business days in such month. The 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. The Subadviser 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 the Subadviser against any liability to the
Manager or the Fund to which the Subadviser 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
"Subadviser" shall include any affiliates of the Subadviser performing
services for the Fund contemplated hereby and the partners, shareholders,
directors, officers and employees of the Subadviser and such affiliates.
10. Nothing in this Agreement shall limit or restrict the
right of any director, officer, or employee of the Subadviser 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 the Subadviser 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 the
Subadviser is considered at or about the same time, transactions in such
securities will be allocated among the accounts in a manner deemed equitable
by the Subadviser. Such transactions may be combined, in accordance with
applicable laws and regulations, and consistent with the Subadviser'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 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 the Subadviser, or by the Subadviser upon not
less than 90 days' written notice to the Fund and the Manager, and will be
terminated upon the mutual written consent of the Manager and the Subadviser.
This Agreement shall terminate automatically in the event of its assignment.
14. The Subadviser agrees that for any claim by it against the
Fund in connection with this Agreement or the services rendered under this
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.
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By
:
Name:
Title:
WESTERN ASSET MANAGEMENT COMPANY
By
:
Name:
Title:
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
the Subadviser.
WESTERN ASSET GLOBAL CORPORATE DEFINED
OPPORTUNITY FUND INC.
By
:
Name:
Title:
ANNEX I
Not applicable.
SCHEDULE A
Western Asset Global Corporate Defined Opportunity Fund Inc.
Date:
November 23, 2009
Fee:
The sub-advisory fee will be 70% of the management fee paid to Xxxx Xxxxx
Partners Fund Advisor, LLC, net of expense waivers and reimbursements.
