Form Type: EX-99-DXI
Comment/Description:
(this header is not part of the document)
SUBADVISORY AGREEMENT
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FRANKLIN ▇▇▇▇▇▇▇▇▇ VARIABLE INSURANCE PRODUCTS TRUST
(on behalf of the Templeton Growth Securities Fund)
This SUBADVISORY AGREEMENT made as of December 31, 2001 (this "Agreement"),
by and between ▇▇▇▇▇▇▇▇▇ GLOBAL ADVISORS LIMITED, a limited liability company
existing under the laws of the Bahamas ("TGAL") and ▇▇▇▇▇▇▇▇▇ ASSET MANAGEMENT
LIMITED ("TAML"), a corporation existing under the laws of Singapore.
WITNESSETH
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WHEREAS, TGAL and TAML are each registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and are engaged in the business of supplying
investment management services, each as an independent
contractor;
WHEREAS, TGAL, pursuant to an investment management agreement, has
been retained to render investment advisory services to the
Templeton Growth Securities Fund (the "Fund"), a series of the
Franklin ▇▇▇▇▇▇▇▇▇ Variable Insurance Products 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, ▇▇▇▇ ▇▇▇▇▇, an employee of TGAL and lead portfolio manager for the
Fund, will temporarily be residing in Singapore during which time he will be
employed by TAML and TGAL wishes to enter into this Agreement with TAML to
enable ▇▇. ▇▇▇▇▇ to continue to perform his responsibilities as lead portfolio
manager of the Fund during his employment with TAML.
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. TGAL hereby retains 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
the Trust's Board of Trustees (the "Board") and to the instructions and
supervision of TGAL, TAML agrees to provide certain investment advisory services
with respect to securities and investments and cash equivalents in the Fund.
TGAL will continue to have full responsibility for all investment
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advisory services provided to the Fund. TGAL acknowledges that the only services
that TAML will provide under this Agreement are the portfolio management
services of ▇▇▇▇ ▇▇▇▇▇ while he remains employed by TAML. Nothing in this
Agreement grants to TGAL any right to receive any research undertaken by TAML's
Emerging Markets Group.
(b) Both TAML and TGAL may place all purchase and sale orders on
behalf of the Fund. The placement of these orders will take place exclusively
in Singapore or Nassau, Bahamas..
(c) Unless otherwise instructed by TGAL or the Board, and subject to
the provisions of this Agreement and to any guidelines or limitations specified
from time to time by TGAL or by the Board, TAML shall report daily all
transactions effected by TAML on behalf of the Fund to TGAL and to other
entities as reasonably directed by TGAL or the Board.
(d) For the term of this Agreement, TGAL 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. ▇▇▇▇ ▇▇▇▇▇
shall also be available to attend such meetings of the Board 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
contained in the Fund's 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 TGAL 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.
(f) In carrying out its duties hereunder, TAML shall comply with all
reasonable instructions of the Fund or TGAL 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 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 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, 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.
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3. (a) TGAL shall pay to TAML a monthly fee in U.S. dollars based on a
percentage of the Fund's average daily net assets. The advisory fee under this
Agreement shall be payable 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 and shall be reduced by the amount of any advance
payments made by TGAL relating to the previous month. This fee shall be
calculated daily at the following annual rates:
0.80% of the value of net assets up to $100 million;
0.72% of the value of net assets over $100 million up to and including
$250 million;
0.64% of the value of net assets over %250 million up to and including
$500 million;
0.60% of the value of net assets over $500 million.
(b) TGAL and TAML shall share in any voluntary reduction or waiver by
TGAL of the management fee due under the Investment Advisory Agreement between
TGAL and the Trust 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. TGAL acknowledges 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"). TGAL agrees 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 TGAL 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 and TGAL 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 TGAL or the Fund in any
way, or in any
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way be deemed an agent for TGAL 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.
9. This Agreement shall be effective on the date of ▇▇▇▇ ▇▇▇▇▇'▇
employment by TAML and shall continue in effect until ▇▇▇▇ ▇▇▇▇▇
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 TGAL and TAML, and by TGAL or TAML upon not
less than sixty (60) days' written notice to the other party.
(b) 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 TGAL
and 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 TGAL or the Fund or to any shareholder of the Fund
for any error of judgement 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 TGAL 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 TAML pursuant to authority delegated as described in Paragraph
11(a), TAML shall indemnify TGAL 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 TGAL or TAML from liability in violation of Sections
17(h) or (i), respectively, of the ▇▇▇▇ ▇▇▇.
12. In compliance with the requirements of Rule 31a-3 under the 1940
Act, TAML 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
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Fund, or to any third party at the Fund's direction, any of such
records upon the Fund's request. TAML 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
Act.
13. 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 of TAML's engagement hereunder shall be
without prejudice to the rights and liabilities created hereunder prior to such
termination.
14. 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.
15. TGAL 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.
16. 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:
to TGAL:
Nassau, Bahamas
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
to TAML:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇-▇▇▇-▇▇▇▇
17. This Agreement shall be interpreted in accordance with and governed by
the laws of the Bahamas.
18. TAML 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. TAML agrees that the Trust's
obligations hereunder shall be limited to the assets of the Fund,
and that TAML shall not seek
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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.
▇▇▇▇▇▇▇▇▇ GLOBAL ADVISORS LIMITED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
▇▇▇▇▇▇▇▇▇ ASSET MANAGEMENT LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
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