Exhibit 10.2
INVESTMENT MANAGEMENT AGREEMENT
________________________________
THIS AGREEMENT is made the 15th day of February, 1996.
BETWEEN: TEMPLETON GLOBAL STRATEGY SICAV, a Societe
d'Investissement a Capital Variable, incorporated
in the Grand Duchy of Luxembourg whose registered
office is at Centre Neuberg, 30, Grand-Rue, L-1660
Luxembourg
(hereinafter called the "Company"), of the first
part
AND: FRANKLIN ADVISERS, INC., a company incorporated in
California whose principal office is located at
777 Mariners Island Blvd, San Mateo, CA 94404,
(hereinafter called the "Investment Manager") of
the second part.
WHEREAS:
(A) The Company was incorporated on 6th November, 1990 as a
Societe d'Investissement a Capital Variable (SICAV)
under the law of 30th March 1988 concerning collective
investment undertakings.
(B) The Company is engaged in the business of investment
and re-investment of its assets in investments and
securities of all types in accordance with the
investment objectives, subject to the restrictions and
limitations, specified in its Articles of Incorporation
("Articles") and in its Prospectus ("Prospectus") in
such manner and to such extent as may from time to time
be determined by the Board of Directors ("Board") of
the Company.
(C) The Company is desirous of being provided with
investment management and advisory services and the
Investment Manager is willing to provide the same.
(D) This Agreement shall supercede all prior agreements
between the parties.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. Appointment
-----------
The Company hereby appoints the Investment Manager to
act as the investment manager and investment adviser of
the Company upon the terms and conditions hereinafter
appearing and the Investment Manager agrees to accept
such appointment.
2. Control of Directors
--------------------
The Directors of the Company may at all times give to
the Investment Manager guidelines and/or directions
relating to the conduct of the business of the Company,
both in regard to the general policy of the Company and
in regard to specific matters and the Investment
Manager shall exercise its powers and duties hereunder
subject at all times to the control of and review by
the Directors of the Company. In particular, the
management of the relevant assets of the Company shall
be subject to any specific or general directions which
the Directors of the Company may give to the Investment
Manager with regard to the acquisition, holding or
disposal of investments to the extent that the
Directors of the Company may at any time and from time
to time take over either generally or to a limited
extent and either in collaboration with or to the
exclusion of the Investment Manager the making, varying
or disposal of any or all of the investments and
securities of the Company.
3. Management of Investments
-------------------------
(a) Subject to the provisions of Clause 2 above, the
Investment Manager shall manage the investment,
realisation and reinvestment of the assets of the
Company corresponding to the relevant classes of shares
of the Company as are described in the Appendix
attached hereto ("assets") with power on behalf of and
in the name of the Company at its discretion to
purchase, subscribe to, otherwise acquire or deal in
investments and securities and to sell, redeem,
exchange, vary or transpose the same provided that as
manager of the assets of the Company, the Investment
Manager shall observe and comply with the Articles of
the Company, all regulations set out in the Prospectus
of the Company and the laws and regulations under which
the Company is incorporated.
(b) Subject to the provisions of Clause 2 above, all rights
of voting conferred by investments and securities of
the Company shall be exercised in such manner as the
Investment Manager may determine and the Investment
Manager may in its discretion refrain from the exercise
of such voting rights. The Company shall from time to
time execute and deliver to the Investment Manager or
procure the Custodian of the Company to execute and
deliver such powers of attorney or proxies as may
reasonably be required authorising such attorney or
proxies to vote, consent or otherwise act in respect of
(or any part of) the investments and securities of the
Company.
(c) The Investment Manager may enter into such contracts in
the name of the Company as may be necessary to carry
out its duties hereunder.
(d) The Company shall ratify and confirm all and whatever
the Investment Manager (or any Adviser appointed
pursuant to Clause 5 hereof) shall lawfully do or cause
to be done in good faith in the proper performance of
its duties hereunder and the Company shall at all times
keep the Investment Manager indemnified against all
actions, proceedings, claims and liabilities whatsoever
arising out of the proper performance of its duties as
aforesaid which may be brought against or prosecuted
against or incurred by the Investment Manager save in
the case of willful default, gross negligence, bad
faith or reckless disregard of duty.
(e) The Investment Manager shall render to the Directors
written reports of the composition of the assets of the
Company as often as the Directors shall reasonably
require.
(f) It is hereby expressly declared and understood that the
appointment of the Investment Manager as manager of the
assets of the Company shall in no way discharge or
relieve the Directors of the Company from their general
liabilities and obligations to the shareholders of the
Company.
(g) The Investment Manager shall forthwith, on receipt, pay
to or deposit with the Custodian of the Company all
moneys, investments and securities received by it on
behalf of the Company.
4. Investment Advice
-----------------
(a) The Investment Manager shall as investment adviser
advise the Company concerning the investment,
realisation and reinvestment of the assets of the
Company and Company's general investment policy.
(b) In connection with its obligations hereunder, the
Investment Manager shall, with regard to the relevant
classes of shares of the Company as are described in
the Appendix hereto:
(i) evaluate investments and securities which appear
to the Investment Manager as being appropriate for
the Company, and on the price movements in respect
of such investments and securities and on such
other factors relating thereto as the Investment
Manager considers relevant for its management of
the investment, realisation and reinvestment of
the assets of the Company;
(ii) analyse continually the progress of all
investments and securities which are for the time
being and from time to time represented in the
portfolio of investments and securities of the
Company and provide reports requested by the Board
of the Company from time to time;
(iii) analyse the manner in which moneys required
for redemptions of shares or other purposes of the
Company should be realised;
(iv) analyse all actions which it appears to the
Investment Manager it should take in order to
carry into effect the investment objectives of the
Company in relation to investments and securities
for the time being and from time to time forming
part of the assets of the Company;
(v) prepare material for inclusion in any reports
required by the Board of the Company; and
(vi) advise the Company concerning all actions which it
appears to the Investment Manager should be taken
to carry out the investment policies of the
Company.
5. Delegation
----------
(a) The Investment Manager shall be entitled to seek advice
from and to delegate its functions, powers,
discretions, privileges and duties hereunder or any of
them to one or more persons, firms or corporations
approved by the Company (hereinafter referred to as
"Adviser") and any such delegation may be on such terms
and conditions as the Investment Manager shall think
fit, provided always that the Investment Manager shall
remain liable to the Company for the acts and omissions
of the Adviser and its Directors, Officers, Employees
and agents in such capacity.
(b) The Investment Manager shall be entitled to instruct
the Company to pay any Adviser from the consideration
payable to the Investment Manager hereunder and any
such amounts so paid shall be deducted from the amount
of the consideration payable to the Investment Manager
hereunder pursuant to Clause 6 below.
(c) The Investment Manager (or any Adviser appointed
pursuant to Clause 5 hereof) shall be at liberty in the
performance of its duties and in the exercise of the
powers, discretions, privileges and duties vested in it
hereunder to act by responsible officers or a
responsible officer for the time being and to employ
and pay an agent to perform or concur in performing any
of the services required to be performed hereunder and
may act or rely in good faith upon the reasonable
opinion or advice or any information obtained from any
broker, lawyer, valuer, surveyor, auctioneer or expert
reporting to the Company.
6. Remuneration
------------
(a) For the investment management and advisory services
rendered by the Investment Manager pursuant to Clause 3
and 4 hereof, the Company shall pay to the Investment
Manager a fee calculated as a percentage of the average
net asset value of each relevant class of shares during
each month. The relevant classes of shares concerned
by the present Agreement and the rates of fees
applicable to each class of shares are described in the
Appendix attached hereto.
For the purpose of this Clause, the net asset value of
each relevant class of shares shall be determined in
the manner laid down in Article 23 of the Articles of
the Company.
(b) In the event of any dispute arising as to the
calculation of the fee payable hereunder the same shall
be referred to the Auditors for the time being of the
Company whose decision shall be final and binding on
the parties hereto.
7. Costs to be borne by the Investment Manager
-------------------------------------------
Except as provided in Clauses 6 and 8 hereof, the
Investment Manager shall pay all its own expenses
incurred in the provision of its services hereunder
including the fees, charges and expenses of any
Adviser.
8. Costs to be borne by the Company
--------------------------------
The Company shall pay all its own expenses (whether
incurred directly or by the Investment Manager or any
Adviser) including without limitation:
(i) fees and expenses of the Directors of the Company
including traveling expenses;
(ii) charges and expenses of the Custodian;
(iii) charges and expenses incurred in determining
the value of the net assets of the Company and the
keeping of its books and records;
(iv) charges and expenses of Auditors, Legal Advisers
and other professional advisers of the Company;
(v) charges and expenses of the agents and
representatives of the Company along with any and
all appropriate insurance policies;
(vi) all taxes, corporate fees and governmental charges
and duties payable by the Company in Luxembourg or
elsewhere;
(vii) the cost of preparing, printing and
distributing share certificates, interim and
annual reports, prospectuses and any marketing
material of the Company;
(viii) the fees and expenses involved in registering
(and maintaining the registration of) the Company
with governmental agencies or stock exchanges to
permit the sale of or dealing in, its shares
including the preparation, printing and filing of
the prospectuses or similar material for use in
any particular jurisdiction;
(ix) any advertising and promotional costs;
(x) brokerage commissions, fiscal or governmental
charges or duties in respect of or in connection
with the acquisition, holding or disposal of any
of the assets of the Company or otherwise in
connection with its business;
(xi) the expenses of any fiscal and governmental
charges and duties relating to the purchase, sale,
issue, transfer or redemption of shares in the
Company and of making any distributions to the
shareholders;
(xii) any interest, fees or charges payable on
account of any borrowing by the Company;
(xiii)all expenses of shareholders' and Directors'
meetings and of preparing and printing reports to
shareholders; and
(xiv) all other expenses not related to the
functions undertaken by the Investment Manager
hereunder.
9. Duties of Investment Manager
----------------------------
(a) In carrying out their duties and functions
hereunder, the Investment Manager (and any Adviser
appointed pursuant to Clause 5 hereof) shall act
for the benefit of the Company and shall act with
all reasonable care and diligence normally
expected of an investment manager.
The Investment Manager shall not deal with the
Company on the sale or purchase of investments to
or from the Company or otherwise deal with the
Company as principal without the consent of the
Directors.
(b) Generally, the Investment Manager will select
brokers or dealers to execute securities
transactions for the Company that the Investment
Manager reasonably believes will provide best
price and execution for each transaction. Certain
of these brokers may refer advisory clients to the
Investment Manager or recommend the purchase of
shares of the Company. These referrals or
recommendations may provide a direct or indirect
benefit to the Investment Manager in addition to
the remuneration described in Clause 6 of this
Agreement and the Appendix thereto. In addition,
the Investment Manager may direct brokerage
transactions for the Company's account to brokers
who provide research services to the Investment
Manager and who may charge higher commissions than
other brokers. Commissions paid by the Company to
such brokers may be used to pay for research that
is not used in managing the assets of the Company.
10. Conflicts of Interest
---------------------
(a) Any director, officer or employee of the Company or of
the Investment Manager or any Adviser may act in the
capacity of director, officer, employee or agent of the
other and the services being supplied by the Investment
Manager or any Adviser under this Agreement to the
Company may, at the option of the Investment Manager or
Adviser, be supplied through directors, officers,
employees or agents acting in such capacity.
(b) The directors, officers and employees of the Investment
Manager or any Adviser who may or may not also be
directors, officers or employees of the Company, may
engage simultaneously with their activities as such in
other businesses and may render services for other
individuals, companies, trusts or persons. No such
director, officer or employee shall be deemed to have
an individual interest which is in conflict with the
interests of the Company or of the Investment Manager
by reason of rendering or of having any interest in or
position with any person directly or indirectly
rendering to the Company, the Investment Manager or any
Adviser investment advisory, management, office or
clerical services, banking, custodian, accounting, or
transfer agent services, legal or auditing services or
engaging in the sale and distribution of the Company's
shares.
(c) As described in Clause 9, the Investment Manager may
refer transactions for the Company's account to brokers
or dealers that refer advisory clients to the
Investment Manager or that recommend the purchase of
shares of the Company, provided that in each case the
Investment Manager reasonably believes the broker or
dealer will provide best price and execution for the
transaction. This practice may result in a potential
conflict of interest between the Company's interest in
obtaining best price and execution and the Investment
Manager's interest in obtaining client referrals and
selling additional shares of the Company. A similar
conflict of interest may arise when the Investment
Manager causes transactions for the Company to be
executed through brokers that provide research services
to the Investment Manager.
11. Duration
---------
This Agreement shall become effective on the date as of
which it is made and shall continue and remain in force
and effect unless and until terminated by either party
thereto giving not less than three months prior written
notice (or such shorter notice as the parties hereto
may agree to accept) to the other, provided that this
Agreement may be terminated by the Company forthwith by
notice in writing if:
(i) the Investment Manager commits a material breach
of its obligations under this Agreement and fails
to make good such breach within thirty days of
receipt of notice from the Company requiring it to
do so, or
(ii) the Investment Manager goes into liquidation or
becomes subject to moratorium proceedings (except
a voluntary liquidation for the purpose of
reconstruction or amalgamation upon terms
previously approved by the Company) or if a
receiver is appointed over any of its assets.
12. Assignment
----------
This Agreement shall not be assigned by either party,
save with the prior written consent of the other party,
provided, however, that a transaction which does not
result in a change of actual control or management of
the Investment Manager shall not be an assignment for
purposes of this Clause 12.
13. Confidentiality
---------------
Neither of the parties hereto shall, either before or
after the termination of this Agreement, disclose to
any person not authorised by the relevant party to
receive the same any information relating to such party
or to the affairs of such party of which the party
disclosing the same shall have become possessed during
the period of this Agreement and each party shall use
its best endeavours to prevent any such disclosures
aforesaid.
14. Notices
--------
Any notice required to be given hereunder may be served
by being left at or sent by recorded delivery to the
registered office for the time being of the party on
which it is to be served and any notice given by post
shall be deemed to have been served at the expiration
of seven days after it is posted and in proving such
service it shall be sufficient to prove that the
envelope containing the notice was properly addressed
and sent by recorded delivery.
15. Proper Law
-----------
This Agreement shall be governed by and construed in
accordance with the laws of the Grand Duchy of
Luxembourg and the parties submit to the non-exclusive
jurisdiction of the Courts of Luxembourg.
16. Counterparts
-------------
This Agreement shall be executed in two counterparts,
one such counterpart to be retained by the Company and
Investment Manager respectively.
AS WITNESS the hands of the duly authorised
representatives of the parties hereto on the day and
year first before written.
TEMPLETON GLOBAL STRATEGY SICAV
/s/ Charles E. Johnson
----------------------
By : Charles E. Johnson
/s/ Gregory E. McGowan
______________________
By: Gregory E. McGowan
FRANKLIN ADVISERS, INC.
/s/ Deborah R. Gatzek
_____________________
By: Deborah R. Gatzek
/s/ Harmon E. Burns
______________________
By: Harmon E. Burns
APPENDIX
Relating to the different classes of shares concerned by the
foregoing Agreement and the rates of fees payable to the
Investment Manager as provided under Clause 6 of the
Agreement.
Franklin Templeton High Yield Fund 0.80%
Franklin Templeton US Government Fund 0.65%
Franklin Templeton International Bond Fund 0.90%
The fees referred to hereabove are payable monthly in
arrears to the Investment Manager with respect to each
relevant class of shares of the Company.
AMENDMENT TO
INVESTMENT MANAGEMENT AGREEMENT DATED MARCH 1, 1996
BETWEEN TEMPLETON GLOBAL STRATEGY SICAV
AND FRANKLIN ADVISERS, INC.
The parties hereto agree that the Investment Management
Agreement dated March 1, 1996, shall be and hereby is
amended by adding a third paragraph to Clause 6 (a) to read
as follows:
The Investment Manager may waive all or a portion of its
fees provided for hereunder and such waiver shall be treated
as a reduction in purchase price for its services. The
Investment Manager shall contractually bound hereunder by
the terms of any publicly announced waiver of its fee, or
any limitation of the Fund's expenses, as if such waiver or
limitation were full set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their officers designated below
as of the day and year first written above.
TEMPLETON GLOBAL STRATEGY SICAV
/s/ Charles E. Johnson
-----------------------
By : Charles E. Johnson
/s/ Gregory E. McGowan
_______________________
By : Gregory E. McGowan
FRANKLIN ADVISERS, INC.
/s/ Deborah R. Gatzek
______________________
By: Deborah R. Gatzek
/s/ Harmon E. Burns
______________________
By: Harmon E. Burns