on behalf of
GLOBAL ALLOCATION FUND
SUBADVISORY AGREEMENT made as of August 1, 2011, and
amended as of April 1, 2014, by and between FRANKLIN XXXXXXXXX INSTITUTIONAL,
LLC (“FTI, LLC”), a Delaware limited liability company and FRANKLIN XXXXXXXXX
INVESTMENT MANAGEMENT LIMITED (“FTIML”), a corporation existing under the laws
of the United Kingdom.
WHEREAS, FTIML and
FTI, LLC 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 an independent
Alternative Strategies Advisers, LLC, a Delaware limited liability company
(“FASA”), pursuant to an investment management agreement (“Investment
Management Agreement”), has been retained to render investment advisory
services to Franklin Xxxxxxxxx Global Allocation Fund, a series of Franklin
Xxxxxxxxx International Trust (hereinafter referred to as the “Fund”), 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 FASA has retained FTI, LLC to render investment
advisory services to the Fund; and
WHEREAS, Xxxxx Xxxx,
a member of the Fund’s portfolio management team, is employed by FTIML, and
FTI, LLC wishes to enter into this Agreement with FTIML to enable Xx. Xxxx to
perform his responsibilities as a member of the Fund’s portfolio management
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
. FTI, LLC
hereby retains FTIML and FTIML hereby accepts such engagement, to furnish
certain investment advisory services with respect to the assets of the Fund, as
more fully set forth herein.
() Subject to the overall policies, control, direction and review of the
Fund’s Board of Trustees (the “Board”) and to the instructions and supervision
of FTI, LLC, FTIML agrees to provide certain investment advisory services with
respect to securities and investments and cash equivalents in the Fund. FTI,
LLC will continue to provide all research services in respect of the Fund and
have full responsibility for all investment advisory services provided to the
Fund. FTI, LLC acknowledges that the only services that FTIML will provide under this Agreement are the portfolio management services
of Xxxxx Xxxx while he remains employed by FTIML.
() Both FTIML and FTI, LLC may place purchase and sale orders on behalf of
() For the term of this Agreement, FTI, LLC 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. Xxxxx
Xxxx shall also be available to attend such meetings of the Board as the Board
may reasonably request.
performing its services under this Agreement, FTIML shall adhere to the Fund’s
investment objective, policies and restrictions as contained in the Fund’s
Prospectus and Statement of Additional Information, and in the Trust’s
Declaration of Trust, and to the investment guidelines most recently
established by FTI, LLC 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.
carrying out its duties hereunder, FTIML shall comply with all reasonable
instructions of the Fund or FTI, LLC 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 resolutions has been supplied to
2. (a) FTI, LLC shall pay to FTIML a fee
equal to 10% of the management fee paid to FTI, LLC by FASA with respect to the
Franklin Xxxxxxxxx Low Duration Bond strategy, 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 FTIML 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 day of this Agreement
and shall be reduced by the amount of any advance payments made by FTI, LLC
relating to the previous month.
LLC and FTIML shall share equally in any voluntary reduction or waiver by FTI,
LLC of the management fee due under the Investment Management Agreement between
FTI, LLC and the Fund.
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.
3. It is
understood that the services provided by FTIML are not to be deemed exclusive.
FTI, LLC acknowledges that FTIML 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”). FTI, LLC agrees
that FTIML 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, FTIML may use information furnished by others to FTI, LLC and FTIML
in providing services to other such Clients.
agrees to use its best efforts in performing the services to be provided by it
pursuant to this Agreement.
the term of this Agreement, FTIML 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 and FTI, LLC will be responsible for all of their
respective expenses and liabilities.
shall, unless otherwise expressly provided and authorized, have no authority to
act for or represent FTI, LLC or the Fund in any way, or in any way be deemed
an agent for FTI, LLC or the Fund.
7. FTIML 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 FTIML 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
8. This Agreement shall become effective on the
date that first written above and shall continue in effect until Xxxxx Xxxx
ceases to be employed by FTIML for whatever reason. This Agreement shall
continue in effect for successive periods of 12 months each thereafter,
provided that each such continuance shall be specifically approved annually by
the vote of a majority of the Fund’s Board of Trustees who are not parties to
this Agreement or “interested persons” (as defined in the 0000 Xxx) of any such
party, cast in person at a meeting called for the purpose of voting on such
approval, and either the vote of (a) a majority of the outstanding voting securities
of the Fund, as defined in the 1940 Act, or (b) a majority of the Fund’s Board
of Trustees as a whole.
9. (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 FTI, LLC and FTIML, and by FTI, LLC or FTIML upon not less
than sixty (60) days’ written notice to the other party.
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 Subadvisory Agreement between FTI, LLC and FASA.
10. (a) In
the absence of willful misfeasance, bad faith, gross negligence, or reckless
disregard of its obligations or duties hereunder on the part of FTIML, neither
FTIML nor any of its directors, officers, employees or affiliates shall be
subject to liability to FTI, 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
paragraph 10(a), to the extent that FTI, LLC 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 FTIML
pursuant to authority delegated as described in Paragraph 1(a), FTIML shall
indemnify FTI, 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.
provision of this Agreement shall be construed to protect any director or officer
of FTI, LLC or FTIML from liability in violation of Sections 17(h) or (i),
respectively, of the 0000 Xxx.
compliance with the requirements of Rule 31a-3 under the 1940 Act, FTIML 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.
FTIML further agrees to preserve for periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under the 1940
termination of FTIML’s engagement under this Agreement or at the Fund’s
direction, FTIML 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 FTIML and relate directly and exclusively to the
performance by FTIML of its obligations under this Agreement; provided,
however, that FTIML 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 FTIML 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.
of this Agreement or FTIML’s engagement hereunder shall be without prejudice to
the rights and liabilities created hereunder prior to such termination.
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. FTI, LLC will furnish to FTIML properly certified or authenticated copies of the resolutions of the Board authorizing the appointment of FTIML and approving this Agreement as soon as such copies are available.
15. 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.
16. This Agreement shall be interpreted in accordance with and governed by the laws of the State of Delaware.
17. FTIML acknowledges that it has received notice of and accepts the limitations of the Fund’s liability as set forth in its Declaration of Trust. FTIML agrees that the Fund’s obligations hereunder shall be limited to the assets of the Fund, and that FTIML 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 by their duly authorized officers.
FRANKLIN XXXXXXXXX INSTITUTIONAL, LLC
By: /s/XXXXXXX X. XXX
Xxxxxxx X. Xxx
Title: Executive Vice President
FRANKLIN XXXXXXXXX INVESTMENT MANAGEMENT LIMITED
By: /s/XXXXX XXXXXXX
Title: Chief Executive Officer