EXHIBIT 10.2

[FORM]

SUBADVISORY AGREEMENT

[NAME OF TRUST]

(on behalf of the Name of Fund)

THIS SUBADVISORY AGREEMENT made as of the                      by and between
FRANKLIN ADVISERS, INC., a corporation organized and existing under the laws of
the State of California (hereinafter called “FAV”), and TEMPLETON INVESTMENT
COUNSEL, LLC, a Delaware limited liability company (hereinafter called “TIC,
LLC”).

W I T N E S S E T H

WHEREAS, FAV and TIC, 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 advice, and investment management services,
as an independent contractor; and

WHEREAS, FAV has been retained to render investment advisory services to [NAME
OF FUND] (the “Fund”), a series of [NAME OF 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, FAV desires to retain TIC, LLC to render investment advisory, research
and related services to the Fund pursuant to the terms and provisions of this
Agreement, and TIC, LLC 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. FAV hereby retains TIC, LLC and TIC, LLC 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 FAV, TIC, LLC 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 FAV
determine, on no less frequently than an annual basis, to grant the necessary
delegated authority to TIC, LLC, and subject to paragraph (b) below, TIC, LLC
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 FAV.

 

1

--------------------------------------------------------------------------------

(b) In performing these services, TIC, LLC 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 Declaration of Trust,
and to the investment guidelines most recently established by FAV 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 FAV or the Board, and subject to the
provisions of this Agreement and to any guidelines or limitations specified from
time to time by FAV or by the Board, TIC, LLC shall report daily all
transactions effected by TIC, LLC on behalf of the Fund to FAV and to other
entities as reasonably directed by FAV or the Board.

(d) TIC, 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. TIC, LLC 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, TIC, LLC shall comply with all
reasonable instructions of the Fund or FAV 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 TIC,
LLC.

2. In performing the services described above, TIC, LLC 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, TIC, LLC 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, TIC, LLC 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) TIC, LLC shall, unless otherwise expressly provided and authorized, have
no authority to act for or represent FAV or the Fund in any way, or in any way
be deemed an agent for FAV or the Fund.

 

2

--------------------------------------------------------------------------------

(b) It is understood that the services provided by TIC, LLC are not to be deemed
exclusive. FAV acknowledges that TIC, LLC 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. FAV agrees that TIC, LLC 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. TIC, LLC agrees to use its best efforts in performing the services to be
provided by it pursuant to this Agreement.

5. FAV has furnished or will furnish to TIC, LLC as soon as available copies
properly certified or authenticated of each of the following documents:

(a) the Trust’s Declaration of Trust, as filed with the Secretary of State of
the state of Delaware on                     , 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
TIC, LLC 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 Management Agreement between the Fund and FAV.

FAV will furnish TIC, LLC with copies of all amendments of or supplements to the
foregoing documents.

6. TIC, LLC 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 TIC,
LLC 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.

 

3

--------------------------------------------------------------------------------

7. (a) FAV shall pay a monthly fee in cash to TIC, LLC of [insert applicable
fee] of the fees FAV receives for providing investment management services to
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
TIC, LLC 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 FAV relating to the previous month.

(b) FAV and TIC, LLC shall share equally in any voluntary reduction or waiver by
FAV of the management fee due FAV under the Investment Management Agreement
between FAV 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 TIC,
LLC, neither TIC, LLC nor any of its directors, officers, employees or
affiliates shall be subject to liability to FAV 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 FAV 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 TIC, LLC pursuant to authority delegated as described in Paragraph 1(a), TIC,
LLC shall indemnify and save FAV 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 FAV or TIC, LLC, from liability in violation of Sections 17(h) or
(i), respectively, of the 1940 Act.

 

4

--------------------------------------------------------------------------------

10. During the term of this Agreement, TIC, LLC 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 FAV 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 FAV and TIC,
LLC, and by FAV or TIC, LLC 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 management Agreement between FAV and the
Fund.

14. In compliance with the requirements of Rule 31a-3 under the 1940 Act, TIC,
LLC 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. TIC, LLC 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 FAV and TIC, LLC.

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.

 

5

--------------------------------------------------------------------------------

19. TIC, LLC 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. TIC, LLC agrees that the Trust’s obligations hereunder
shall be limited to the assets of the Fund, and that TIC, LLC 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:  

 

Title:   TEMPLETON INVESTMENT COUNSEL, LLC By:  

 

Title:  

[Name of Fund] hereby acknowledges and agrees to the provisions of paragraphs
9(a) and 10 of this Agreement.

 

[NAME OF TRUST on behalf of NAME OF FUND]

By:  

 

Title:  

 

6