SUBADVISORY AGREEMENT
FRANKLIN GLOBAL TRUST
(on behalf of Franklin International Smaller Companies Growth Fund)
THIS SUBADVISORY AGREEMENT made as of the March 1, 2006 by and between
FRANKLIN ADVISERS, INC., a corporation organized and existing under the laws of
the State of California (hereinafter called "Franklin Advisers"), and FRANKLIN
XXXXXXXXX INSTITUTIONAL, LLC, a Delaware limited liability company (hereinafter
called ("FT Institutional").
W I T N E S S E T H
WHEREAS, Franklin Advisers and FT Institutional 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, Franklin Advisers has been retained to render investment advisory
services to Franklin International Smaller Companies Growth 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, as amended (the "1940 Act"); and
WHEREAS, Franklin Advisers desires to retain FT Institutional to render
investment advisory, research and related services to the Fund pursuant to the
terms and provisions of this Agreement, and FT Institutional 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. Franklin Advisers hereby retains FT Institutional and FT Institutional
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 Franklin Advisers, FT Institutional 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 Franklin Advisers determine, on no less frequently than an
annual basis, to grant the necessary delegated authority to FT Institutional,
and subject to paragraph (b) below, FT Institutional 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 Franklin Advisers.
(b) In performing these services, FT Institutional 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 Agreement
and Declaration of Trust, and to the investment guidelines most recently
established by Franklin Advisers 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 Franklin Advisers or the Board,
and subject to the provisions of this Agreement and to any guidelines or
limitations specified from time to time by Franklin Advisers or by the Board, FT
Institutional shall report daily all transactions effected by FT Institutional
on behalf of the Fund to Franklin Advisers and to other entities as reasonably
directed by Franklin Advisers or the Board.
(d) FT Institutional 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. FT Institutional 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, FT Institutional shall
comply with all reasonable instructions of the Fund or Franklin Advisers in
connection therewith. Such instructions may be given by letter, 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 FT Institutional.
2. In performing the services described above, FT Institutional 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, FT Institutional 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, FT Institutional 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) FT Institutional shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent Franklin Advisers or the
Fund in any way, or in any way be deemed an agent for Franklin Advisers or the
Fund.
(b) It is understood that the services provided by FT Institutional
are not to be deemed exclusive. Franklin Advisers acknowledges that FT
Institutional 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.
Franklin Advisers agrees that FT Institutional 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.
4. FT Institutional agrees to use its best efforts in performing the
services to be provided by it pursuant to this Agreement.
5. Franklin Advisers has furnished or will furnish to FT Institutional as
soon as available copies properly certified or authenticated of each of the
following documents:
(a) the Trust's Certificate of Trust and Agreement and 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 FT Institutional 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 Franklin
Advisers.
Franklin Advisers will furnish FT Institutional with copies of all amendments of
or supplements to the foregoing documents.
6. FT Institutional 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 FT Institutional 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.
7. (a) Franklin Advisers shall pay a monthly fee in cash to FT
Institutional of an annual fee rate of 0.5625% of the average daily net assets
of the Fund, which fee shall be payable on the first business day of each month
in each year as compensation for the services rendered and obligations assumed
by FT Institutional during the preceding month. The advisory 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 Franklin Advisers relating to the
previous month.
(b) Franklin Advisers and FT Institutional shall share equally in any
voluntary reduction or waiver by Franklin Advisers of the management fee due
Franklin Advisers under the Investment Advisory Agreement between Franklin
Advisers and 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, gross negligence,
or reckless disregard of its obligations or duties hereunder on the part of FT
Institutional, neither FT Institutional nor any of its directors, officers,
employees or affiliates shall be subject to liability to Franklin Advisers 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 Franklin
Advisers is found by a court of competent jurisdiction, or the SEC or any other
regulatory agency to be liable to the Fund or any shareholder (a "liability"),
for any acts undertaken by FT Institutional pursuant to authority delegated as
described in Paragraph 1(a), FT Institutional shall indemnify and save Franklin
Advisers 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 Franklin Advisers or FT Institutional, from liability in
violation of Sections 17(h) or (i), respectively, of the 0000 Xxx.
10. During the term of this Agreement, FT Institutional 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 Franklin Advisers 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) 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 Franklin
Advisers and FT Institutional, and by Franklin Advisers or FT Institutional 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
Franklin Advisers and the Fund.
14. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
FT Institutional 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, any of such records upon
the Fund's request. FT Institutional 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
Franklin Advisers and FT Institutional.
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 California of the United States of America.
19. FT Institutional 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. FT Institutional agrees that the Trust's obligations
hereunder shall be limited to the assets of the Fund, and that FT Institutional
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.
FRANKLIN ADVISERS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Title: President
FRANKLIN XXXXXXXXX INSTITUTIONAL, LLC
By: /s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
Title: Senior Vice President &
Chief Financial Officer
Franklin International Smaller Companies Growth Fund hereby acknowledges and
agrees to the provisions of paragraphs 9(a) and 10 of this Agreement.
FRANKLIN GLOBAL TRUST on behalf of
Franklin International Smaller Companies Growth Fund
By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Title: Vice President & Assistant Secretary
