As filed with the Securities and Exchange Commission on March 28,
1995.
File Nos.
2-75925
811-3395
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post Effective Amendment No. 17 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 18 (X)
FRANKLIN FEDERAL TAX-FREE INCOME FUND
(Exact Name of Registrant as Specified in Charter)
777 MARINERS ISLAND BLVD., SAN MATEO, CA 94404
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (415) 312-2000
Harmon E. Burns, 777 Mariners Island Blvd., San Mateo, CA 94404
(Name and Address of Agent for Service of Process)
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check
appropriate box)
[ ]immediately upon filing pursuant to paragraph (b)
[ ]on (date) pursuant to paragraph (b)
[.]60 days after filing pursuant to paragraph (a)(i)
[ ]on June 16, 1995 pursuant to paragraph (a)(i)
[ ]75 days after filing pursuant to paragraph (a)(ii)
[ ]on (date), pursuant to paragraph (a)(ii) of Rule 485
EXHIBIT INDEX PAGE
If appropriate, check the following box:
[x] This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
Declaration Pursuant to Rule 24f-2. The Registrant has
registered an indefinite number or amount of securities under the
Securities Act of 1933 pursuant to Rule 24(f)(2) under the
Investment Company Act of 1940. The Rule 24f-2 Notice for the
issuer's most recent fiscal year was filed on June 29, 1994.
FRANKLIN FEDERAL TAX-FREE INCOME FUND
CROSS REFERENCE SHEET
FORM N-1A
N-1A Location in
Item No. Item Registration
Statement
Part A: Information Required in Prospectus
1. Cover Page Cover Page
2. Synopsis "Expense Table"
3. Condensed Financial "Financial Highlights";
Information "Performance"
4. General Description "About the Fund";
"Investment Objective and
Policies of the Fund"
5. Management of the "Management of the Fund"
Fund
5A. Management's Contained in Registrant's
Discussion of Fund Annual Report to
Performance Shareholders
6. Capital Stock and "Distributions to
Other Securities Shareholders"; "Taxation of
the Fund and Its
Shareholders"
7. Purchase of "How to Buy Shares of the
Securities Being Fund"; "Other Programs and
Offered Privileges Available to Fund
Shareholders"; "Exchange
Privilege"
8. Redemption or "How to Sell Shares of the
Repurchase Fund"; "Valuation of Fund
Shares"; "Exchange
Privilege"; "How to Get
Information Regarding an
Investment in the Fund"
9. Pending Legal Not Applicable
Proceedings
10. Cover Page Cover Page
11. Table of Contents Contents
Part B: Information Required in
Statement of Additional Information
12. General Information Cover Page, (See also the
and History Prospectus "About the Fund")
13. Investment Objectives "The Fund's Investment
and Policies Objective and Policies";
(See also the Prospectus
"Investment Objective and
Policies of the Fund")
14. Management of the "Officers and Directors"
Fund
15. Control Persons and "Officers and Directors"
Principal Holders of
Securities
16. Investment Advisory "Investment Advisory and
and Other Services Other Services" (See also
the Prospectus "Management
of the Fund")
17. Brokerage Allocation "The Fund's Policies
Regarding Brokers Used on
Portfolio Transactions"
18. Capital Stock and See Prospectus, "General
Other Securities Information"; "About the
Fund"
19. Purchase, Redemption "Additional Information
and Pricing of Regarding Purchases and
Securities Being Redemptions of Fund Shares"
Offered (See also the Prospectus
"How to Buy Shares of the
Fund"; "How to Sell Shares
of the Fund"; "Valuation of
Fund Shares")
20. Tax Status "Additional Information
Regarding Taxation" (See
also the Prospectus
"Taxation of the Fund and
Its Shareholders")
21. Underwriters "The Fund's Underwriter"
22. Calculation of "General Information"
Performance Data
23. Financial Statements Financial Statements
Franklin Federal Tax-Free Income Fund
File Nos. 2-75925
811-3395
This amendment, post-effective amendment #17, which relates to
the Fund's previously filed post-effective amendment #16, filed
January 27, 1995, including the Prospectus and Statement of
Additional Information contained therein, is being filed to
prevent the Fund's previously filed amendment from becoming
effective April 1, 1995, and to extend the time within which the
amendment will become effective either automatically or as and
when declared effective by the Commission as explained more fully
in the accompanying letter. The earlier filing was made in
connection with the introduction of the Fund's new multi class
distribution structure. After resolving any outstanding
comments, the Fund expects to requet that all amendments filed in
connection with the implementations of the multi-class structure
be accelerated to become effective on or about May 1, 1995.
FORM N-1A
PART C
Other Information
Item 24 Financial Statements and Exhibits
a) Financial Statements filed in Part B
(1) Unaudited financial statements dated October 31,
1994
(i) Statement of Investments in Securities and
Net Assets - October 31, 1994
(ii) Statement of assets and Liabilities - October
31, 1994
(iii)Statement of Operations - for the six months
ended October 31, 1994
(iv) Statement of changes in net assets - for the
six months ended October 31, 1994 and for the
year ended April 30, 1994
(v) Notes to Financial Statements
(2) Audited financial statements dated April 30, 1994
(i) Report of Independent Auditors - June 3, 1994
(ii) Statement of Investments in Securities and
Net Assets - April 30, 1994.
(iii)Statement of Assets and Liabilities - April
30, 1994.
(iv) Statement of Operations - for the year ended
April 30, 1994.
(v) Statements of Changes in Net Assets - for the
years ended April 30, 1994 and 1993.
(vi) Notes to Financial Statements
b) Exhibits:
The following exhibits are attached herewith,
except 8(iii), 8(iv), and 16(i), which are
incorporated by reference as noted.
(1) copies of the charter as now in effect;
(i) Articles of Incorporation dated January 5,
1981
(ii) Certificate of Amendment to Articles of
Incorporation dated November 1, 1982
(iii)Certificate of Amendment to Articles of
Incorporation dated June 20, 1983
(iv) Certificate of Amendment to Articles of
Incorporation dated September 20, 1983
(2) copies of the existing By-Laws or instruments
corresponding thereto;
(i) By-Laws
(ii) Amendment to By-Laws dated November 17, 1987
(iii)Amendment to By-Laws dated February 28, 1994
(3) copies of any voting trust agreement with respect
to more than five percent of any class of equity
securities of the Registrant;
Not Applicable
(4) specimens or copies of each security issued by the
Registrant, including copies of all constituent
instruments, defining the rights of the holders of
such securities, and copies of each security being
registered;
Not Applicable
(5) copies of all investment advisory contracts
relating to the management of the assets of the
Registrant;
(i) Management Agreement between Registrant and
Franklin Advisers Inc. dated May 1, 1994
(6) copies of each underwriting or distribution
contract between the Registrant and a principal
underwriter, and specimens or copies of all
agreements between principal underwriters and
dealers;
(i) Form of Amended and Restated Distribution
Agreement between Registrant and
Franklin/Templeton Distributors, Inc.
(ii) Form of Dealer Agreement between
Franklin/Templeton Distributors, Inc. and
dealers
(7) copies of all bonus, profit sharing, pension or
other similar contracts or arrangements wholly or
partly for the benefit of directors or officers of
the Registrant in their capacity as such; any such
plan that is not set forth in a formal document,
furnish a reasonably detailed description thereof;
Not Applicable
(8) copies of all custodian agreements and depository
contracts under Section 17(f) of the 1940 Act, with
respect to securities and similar investments of
the Registrant, including the schedule of
renumeration;
(i) Custodian Agreement between Registrant and
Bank of America NT & SA dated December 1,
1982
(ii) Amendment to Custodian Agreement between
Registrant and Bank of America NT & SA dated
April 2, 1990
(iii)Copy of Custodian Agreements between
Registrant and Citibank Delaware:
1.Citicash Management ACH Customer Agreement
2.Citibank Cash Management Services Master
Agreement
3.Short Form Bank Agreement - Deposits and
Disbursements of Funds
Registrant: Franklin Premier Return Fund
Filing: Post-Effective Amendment No. 54 to
Registration on Form N-1A
File No. 2-12647
Filing Date: February 27, 1995
(iv) Amendment to Custodian Agreement between
Registrant and Bank of America NT & SA dated
December 1, 1994 is Incorporated by Reference
to:
Registrant: Franklin Premier Return Fund
Filing: Post-Effective Amendment No. 54 to
Registration on Form N-1A
File No. 2-12647
Filing Date: February 27, 1995
(9) copies of all other material contracts not made in
the ordinary course of business which are to be
performed in whole or in part at or after the date
of filing the Registration Statement;
Not Applicable
(10)an opinion and consent of counsel as to the
legality of the securities being registered,
indicating whether they will when sold be legally
issued, fully paid and nonassessable;
Not Applicable
(11)copies of any other opinions, appraisals or rulings
and consents to the use thereof relied on in the
preparation of this registration statement and
required by Section 7 of the 1933 Act;
Not Applicable
(12)all financial statements omitted from Item 23;
Not Applicable
(13)copies of any agreements or understandings made in
consideration for providing the initial capital
between or among the Registrant, the underwriter,
adviser, promoter or initial stockholders and
written assurances from promoters or initial
stockholders that their purchases were made for
investment purposes without any present intention
of redeeming or reselling;
Not Applicable
(14)copies of the model plan used in the establishment
of any retirement plan in conjunction with which
Registrant offers its securities, any instructions
thereto and any other documents making up the model
plan. Such form(s) should disclose the costs and
fees charged in connection therewith;
Not Applicable
(15)copies of any plan entered into by Registrant
pursuant to Rule 12b-1 under the 1940 Act, which
describes all material aspects of the financing of
distribution of Registrant's shares, and any
agreements with any person relating to
implementation of such plan.
(i) Plan of Distribution effective May 1, 1994
(ii) Form of Class II Distribution Plan pursuant to
Rule 12b-1
(16) schedule for computation of each performance
quotation provided in the registration statement
in response to Item 22 (which need not be
audited).
(i) Schedule for Computation of Performance
Quotations
Filing: Post-Effective Amendment No. 13 to
Registration Statement of Registrant on Form N-
1A
File No. 2-75925
Filing Date: July 1, 1992
(17) Power of Attorney
(i) Power of Attorney dated January 17, 1995
(ii) Certificate of Secretary dated January 17,
1995
Item 25 Persons Controlled by or under Common Control with
Registrant
None
Item 26 Number of Holders of Securities
As of December 31, 1994, the number of record holders of the only
class of securities of the Registrant was as follows:
Number of
Title of Class Record Holders
Capital Stock 163,749
Item 27 Indemnification
Please see Section 6 of the Management Agreement, and Section 16
of Distribution Agreement, previously filed as an exhibit and
incorporated herein by reference.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court or
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
Item 28 Business and Other Connections of Investment Adviser
The officers and directors of the Registrant's investment advisor
also serve as officers and/or directors for (1) the advisor's
corporate parent, Franklin Resources, Inc., and/or (2) other
investment companies in the Franklin Group of Funds. In addition,
Mr. Charles B. Johnson is a director of General Host Corporation.
For additional information please see Part B.
Item 29 Principal Underwriters
a) Franklin/Templeton Distributors, Inc., ("Distributors") also
acts as principal underwriter of shares of AGE High Income
Fund, Inc., Franklin Custodian Funds, Inc., Franklin Gold
Fund, Franklin Equity Fund, Franklin California Tax-Free
Income Fund, Inc., Franklin New York Tax-Free Income Fund,
Inc., Franklin California Tax-Free Trust, Franklin Investors
Securities Trust, Franklin Premier Return Fund, Franklin Tax-
Free Trust, Franklin New York Tax-Free Trust, Franklin
Strategic Mortgage Portfolio, Franklin Strategic Series,
Franklin International Trust, Franklin Tax-Advantaged
International Bond Fund, Franklin Tax-Advantaged U.S.
Government Securities Fund, Franklin Tax-Advantaged High
Yield Securities Fund, Franklin Managed Trust, Franklin
Balance Sheet Investment Fund, Franklin Municipal Securities
Trust, Franklin Real Estate Securities Trust,
Franklin/Temleton Annuity Fund, Franklin/Templeton Global
Trust, Franklin/Templeton Japan Fund, , Templeton Variable
Products Series Fund, Templeton Real Estate Securities Fund,
Templeton Growth Fund, Inc., Templeton Funds, Inc.,
Templeton Smaller Companies Growth Fund, Inc., Templeton
Income Trust, Templeton Global Opportunities Trust,
Templeton Institutional Funds, Inc., Templeton American
Trust, Inc., Templeton Capital Accumulator Fund, Inc.,
Templeton Global Investment Trust and Templeton Developing
Markets Trust.
(b) The information required by this Item 29 with respect to
each director and officer of Distributors is incorporated by
reference to Part B of this N-1A and Schedule A of Form BD
filed by Distributors with the Securities and Exchange
Commission pursuant to the Securities Act of 1934 (SEC File
No. 8-5889).
(c) Not Applicable. Registrant's principal underwriter is an
affiliated person of an affiliated person of the Registrant.
Item 30 Location of Accounts and Records
The accounts, books or other documents required to be maintained
by Section 31 (a) of the Investment Company Act of 1940 are kept
by the Fund or its shareholder services agent, Franklin/Templeton
Investor Services, Inc., both of whose address is 777 Mariners
Island Blvd., San Mateo, CA. 94404.
Item 31 Management Services
There are no management-related service contracts not discussed
in Part A or Part B.
Item 32 Undertakings
The Registrant hereby undertakes to comply with the information
requirement in Item 5A of the Form N-1A including the required
information in the Fund's annual report and to furnish each
person to whom a prospectus is delivered a copy of the annual
report upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly
caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized in the City of San
Mateo and the State of California, on the 27th day of March,
1995.
FRANKLIN FEDERAL TAX-FREE INCOME FUND
By: Rupert H. Johnson, Jr.*
Rupert H. Johnson, Jr., President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated:
Rupert H. Johnson, Jr.* Director and
(Rupert H. Johnson, Jr.) Principal Executive Officer
Dated: March 28, 1995
Martin L. Flanagan* Principal Financial Officer
(Martin L. Flanagan) Dated: March 28, 1995
Diomedes Loo-Tam* Principal Accounting Officer
(Diomedes Loo-Tam) Dated: March 28, 1995
Frank H. Abbott, III* Director
(Frank H. Abbott, III) Dated: March 28, 1995
Harris J. Ashton* Director
(Harris J. Ashton) Dated: March 28, 1995
Harmon E. Burns* Director
(Harmon E. Burns) Dated: March 28, 1995
S. Joseph Fortunato* Director
(S. Joseph Fortunato) Dated: March 28, 1995
David W. Garbellano* Director
(David W. Garbellano) Dated: March 28, 1995
Charles B. Johnson* Director
(Charles B. Johnson) Dated: March 28, 1995
Frank W.T. La Haye* Director
(Frank W.T. La Haye) Dated: March 28, 1995
Gordon S. Macklin* Director
(Gordon S. Macklin) Dated: March 28, 1995
*By: /s/Larry L. Greene
Larry L. Greene, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
FRANKLIN FEDERAL TAX-FREE INCOME FUND
REGISTRATION STATEMENT
EXHIBITS INDEX
EXHIBIT NO. DESCRIPTION LOCATION
EX-99.B1(i) Articles of Incorporation Attached
dated January 5, 1981
EX-99.B1(ii) Certificate of Amendment to Attached
Articles of Incorporation
dated November 1, 1982
EX-99.B1(iii) Certificate of Amendment to Attached
Articles of Incorporation
dated June 20, 1983
EX-99.B1(iv) Certificate of Amendment to Attached
Articles of Incorporation
dated September 20, 1983
EX-99.B2(i) By-Laws Attached
EX-99.B2(ii) Amendment to By-Laws dated Attached
November 17, 1987
EX-99.B2(iii) Amendment to By-Laws dated Attached
February 28, 1994
EX-99.B5(i) Management Agreement Attached
between Registrant and
Franklin Advisors Inc.
dated May 1, 1994
EX-99.B6(i) Form of Amended and Attached
Restated Distribution
Agreement between
Registrant and
Franklin/Templeton
Distributors, Inc.
EX-99.B6(ii) Form of Dealer Agreements Attached
between Franklin/Templeton
Distributors, Inc. and
dealers
EX-99.B8(i) Custodian Agreement between Attached
Registrant and Bank of
America NT & SA dated
December 1, 1982
EX-99.B8(ii) Amendment to Custodian Attached
Agreement between
Registrant and Bank of
America NT & SA dated April
2, 1990
EX-99.B8(iii) Copy of Custodian *
Agreements between
Registrant and Citibank
Delaware
Registrant: Franklin
Premier Return Fund
Filing: Post-Effective
Amendment No. 54 to
Registration on Form N-1A
File No. 2-12647
Filing Date: February 27,
1995
EX-99.B8(iv) Amendment to Custodian *
Agreement between
Registrant and Bank of
America NT & SA dated
December 1, 1994
Registrant: Franklin
Premier Return Fund
Filing: Post-Effective
Amendment No. 54 to
Registration on Form N-1A
File No. 2-12647
Filing Date: February 27,
1995
EX-99B.15(i) Plan of Distribution Attached
effective May 1, 1994
EX-99B.15(ii) Form of Class II Attached
Distribution Plan pursuant
to Rule 12b-1
EX-99B.16(i) Schedule for computation of *
Performance Quotations
EX-99B.17(i) Power of Attorney dated Attached
January 17, 1995
EX-99B.17(ii) Certificate of Secretary Attached
dated January 17, 1995
ARTICLES OF INCORPORATION
OF
FRANKLIN CASH MANAGEMENT FUND
I
The name of this corporation is FRANKLIN CASH MANAGEMENT FUND.
II
The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General
Corporation Law of California other than the banking business, the trust
company business, or the practice of a profession permitted to be
incorporated by the California Corporations Code.
III
The name and address in the State of California of this corporation's
initial agent for service of process is: HARMON E. BURNS, 155 Bovet
Road, San Mateo, California 94402.
IV
This corporation is authorized to issue only one class of shares of
stock, to wit, common stock, and the total number of shares of common
stock which this corporation is authorized to issue is Five Billion
(5,000,000,000).
V
The shares of common stock of the corporation shall be subject to
redemption as hereinafter set forth:
(1) Redemption by Shareholders:
(a) Each shareholder of this corporation at any time may
redeem all or any portion of such shareholder's shares by tendering the
shares to be redeemed in such manner as the Board of Directors of the
corporation may determine, and to receive the redemption price next
determined after a proper tender is made to the corporation. The
redemption price shall be determined in accordance with the provisions
set forth in the By-Laws of the corporation, and shall be paid in cash
or in kind in such manner as the Board of Directors shall determine.
(b) The right of redemption by the shareholder may be
suspended (i) for any periods during which the New York Stock Exchange
is closed (other than for customary weekend and holiday closings), (ii)
when trading in the markets the corporation normally utilizes is
restricted or when an emergency exists as determined by the United
States Securities and Exchange Commission as a result of which disposal
of the corporation's portfolio securities or a fair determination of the
value of the corporation's net assets is not reasonably practicable; or
(iii) for such other periods as the United States Securities and
Exchange Commission by order may permit for protection of the
corporation's shareholders.
(2) Redemption by Corporation:
(a) At the option of the corporation, to be exercised at the
discretion of the Board of Directors, the corporation may redeem the
shares owned by a shareholder if at any time the shares of such
shareholder do not have a total value (per share net asset value times
the number of shares held) of at least $500. The Board of Directors
shall cause written notice to be mailed to any such shareholder at the
address of such shareholder as then reflected on the books of the
corporation of the corporation's intention to exercise its option of
redemption, and, unless such shareholder within 30 days following the
mailing of such notice purchases such additional number of shares so
that the value of all such shares then owned by such shareholder is at
least $500, the corporation shall on the date specified in such written
notice redeem all shares owned by such shareholder at the aggregate per
share redemption price next determined as provided in the By-Laws of the
corporation. Said redemption price shall be paid in cash or in kind in
such manner as the Board of Directors shall determine.
(b) At the option of the corporation, to be exercised by the
Board of Directors, the corporation may redeem all or a portion of the
shares owned by a shareholder if at any time in the opinion of the Board
of Directors ownership of the corporation's shares has or may fail to
qualify for tax treatment applicable to a "regulated investment company"
under Subchapter M of the United States Internal Revenue Code of 1954,
as amended, or any successor statute. No shareholder (or group of
shareholders deemed to be a single shareholder under said Subchapter M)
holding less than 5% of the net asset value of the corporation shall be
subject to redemption under this paragraph. Such option shall be
exercised by the Board of Directors causing written notice to be mailed
to such shareholder at the shareholder's address as then reflected on
the books of the corporation of its intention to redeem all or a portion
of such shares, and the corporation shall redeem such shares upon the
date specified in such notice at the redemption price thereof next
determined as provided in the By-Laws of the corporation.
(3) General
Upon redemption by the shareholder or by the corporation as
provided hereunder, the shareholder shall have no further rights
relative to or interest in the shares redeemed, including without
limitation the right to vote such shares or to receive further dividends
in respect thereto, other than the right to receive payment of the
redemption price on the date and in the manner specified by the Board of
Directors.
DATED: January 5, 1981
/s/ Harmon E. Burns
Harmon E. Burns, Incorporator
I hereby declare that I am the person who executed the foregoing
Articles of Incorporation, which execution is my act and deed.
/s/ Harmon E. Burns
Harmon E. Burns
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
FRANKLIN CASH MANAGEMENT FUND
CHARLES B. JOHNSON and HARMON E. BURNS certify that:
1. They are the president and secretary, respectively, of
FRANKLIN CASH MANAGEMENT FUND, a California corporation.
2. Article IV of the Articles of Incorporation of this
corporation is amended to read as follows:
"(1) This corporation is authorized to issue only one class of
shares of stock, to wit, common stock, and the total number of
shares of common stock which this corporation is authorized to
issue is Twenty Billion (20,000,000,000).
(2) The authorized shares of common stock shall be divided into
two (2) separate series, designated as the "Prime Portfolio" and
the "Federal Portfolio", with each series consisting of Ten
Billion (10,000,000,000) shares.
(3) The corporation's board of directors is empowered to create
one or more additional series and to allocate thereto any portion
of the authorized shares of the other series not yet issued and
outstanding.
(4) Each share of common stock, regardless of series, shall have
one vote per share on all matters requiring shareholder approval
under the California Corporations Code, except that shares shall
be voted separately by individual series when (a) required by the
Investment Company Act of 1940 and the Rules and Regulations
promulgated thereunder or (b) the matter being voted upon only
affects the interests of the shareholders of that particular
series, in which event only shareholders of the affected series
shall be entitled to vote thereon."
3. The foregoing Amendment of the Articles of Incorporation
has been duly approved by the corporation's board of directors.
4. The foregoing Amendment of the Articles of Incorporation
has been duly approved by the required vote of shareholders in
accordance with Section 902 of the Corporations Code. The total
number of outstanding shares of the corporation entitled to vote
was 125,000 and the number of shares voting in favor of such
amendment was in excess of the vote required. The percentage vote
required was a majority of outstanding shares.
/s/ Charles B. Johnson
Charles B. Johnson
/s/ Harmon E. Burns
Harmon E. Burns
The undersigned declare under penalty of perjury that the
matters set forth in the foregoing Certificate are true of their
own knowledge.
Executed at San Mateo, California on November 1, 1982.
/s/ Charles B. Johnson
Charles B. Johnson
/s/ Harmon E. Burns
Harmon E. Burns
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
FRANKLIN CASH MANAGEMENT FUND
CHARLES B. JOHNSON and HARMON E. BURNS certify that:
1. They are the president and secretary, respectively, of
FRANKLIN CASH MANAGEMENT FUND, a California corporation.
2. Article I of the Articles of Incorporation of this
corporation is amended to read as follows:
"The name of this corporation is FRANKLIN MUNICIPAL BOND FUND."
3. Article IV of the Articles of Incorporation of this
corporation is amended to read as follows:
"This corporation is authorized to issue only one class
of shares of stock, to wit, common stock, and the total number
of shares of common stock which this corporation is authorized
to issue is Ten Billion (10,000,000,000)."
4. The foregoing Amendment of the Articles of
Incorporation has been duly approved by the corporation's
board of directors.
5. The foregoing Amendment of the Articles of
Incorporation has been duly approved by the required vote of
shareholders in accordance with Section 902 of the
Corporations Code. The total number of outstanding shares of
the corporation entitled to vote was 134,501 and the number of
shares voting in favor of such amendment was in excess of the
vote required. The percentage vote required was a majority of
outstanding shares.
/s/ Charles B. Johnson
Charles B. Johnson
/s/ Harmon E. Burns
Harmon E. Burns
The undersigned declare under penalty of perjury that the
matters set forth in the foregoing Certificate are true of
their own knowledge.
Executed at San Mateo, California on June 20, 1983.
/s/ Charles B. Johnson
Charles B. Johnson
/s/ Harmon E. Burns
Harmon E. Burns
CERTIFICATES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
FRANKLIN MUNICIPAL BOND FUND
CHARLES B. JOHNSON and HARMON E. BURNS certify that:
1. They are the president and secretary, respectively, of
FRANKLIN MUNICIPAL BOND FUND, a California corporation.
2. Article I of the Articles of Incorporation of this
corporation is amended to read as follows:
"The name of this corporation is FRANKLIN FEDERAL TAX-FREE INCOME
FUND."
3. The foregoing Amendment of the Articles of Incorporation has
been duly approved by the corporation's board of directors.
4. The foregoing Amendment of the Articles of Incorporation has
been duly approved by the required vote of the shareholders in
accordance with Section 902 of the Corporations Code. The total
number of outstanding shares of the corporation entitled to vote
was 134,501 and the number of shares voting in favor of such
amendment was in excess of the vote required. The percentage vote
required was a majority of outstanding shares.
/s/ Charles B. Johnson
Charles B. Johnson
/s/ Harmon E. Burns
Harmon E. Burns
The undersigned declare under penalty of perjury that the
matters set forth in the foregoing Certificate are true of their
own knowledge.
Executed at San Mateo, California on September 20, 1983.
/s/ Charles B. Johnson
Charles B. Johnson
/s/ Harmon E. Burns
Harmon E. Burns
BY-LAWS
OF
FRANKLIN FEDERAL TAX-FREE INCOME FUND,
A California Corporation
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICES. The Board of Directors shall fix the
location of the principal executive office of the corporation at any
place within or outside the State of California. If the principal
executive office is located outside this state and the corporation has
one or more business offices in this state, the Board of Directors shall
fix and designate a principal business office in the State of California.
Section 2. OTHER OFFICES. The Board of Directors may at any time
establish branch or subordinate offices at any place or places where the
corporation is qualified to do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held
at any place within or outside the State of California designated by the
Board of Directors. In the absence of any such designation, shareholders'
meetings shall be held at the principal executive office of the
corporation.
Section 2. ANNUAL MEETING. The annual meeting of shareholders shall
be held each year at 11:00 a.m. on the last Wednesday of the third month
following the end of the corporation's fiscal year, or at such other date
as the Board of Directors may set by resolution. However, if this day
falls on a legal holiday, then the meeting shall be held at the same time
and place on the next succeeding full business day. At this meeting
directors shall be elected and any other proper business may be
transacted.
Section 3. SPECIAL MEETING. A special meeting of the shareholders
may be called at any time by the Board of Directors or by the chairman of
the board or by the president or by one or more shareholders holding
shares of the aggregate entitled to cast not less than ten (10%) percent
of the votes at that meeting.
If a special meeting is called by any person or persons other than
the Board of Directors, the request shall be in writing, specifying the
time of such meeting and the general nature of the business proposed to
be transacted and shall be delivered personally or sent by registered
mail or by telegraphic or other facsimile transmission to the chairman of
the board, the president, any vice president or the secretary of the
corporation. The officer receiving the request shall cause notice to be
promptly given to the shareholders entitled to vote, in accordance with
the provisions of Sections 4 and 5 of this Article II, that a meeting
shall be held at the time requested by the person or persons calling the
meeting not less than thirty-five (35) nor more than sixty (60) days
after the receipt of the request. If the notice is not given within
twenty (20) days after receipt of the request, the person or persons
requesting the meeting may give the notice. Nothing contained in this
paragraph of this Section 3 shall be construed as limiting, fixing or
affecting the time when a meeting of the shareholders called by action of
the Board of Directors may be held.
Section 4. NOTICE OF SHAREHOLDERS' MEETING. All notices of meetings
of shareholders shall be sent or otherwise given in accordance with
Section 5 of this Article II not less than ten (10) nor more than sixty
(60) days before the date of the meeting. The notice shall specify the
place, date and hour of the meeting and (i) in the case of a special
meeting, the general nature of the business to be transacted, or (ii) in
the case of the annual meeting, those matters which the Board of
Directors at the time of giving the notice, intends to present for action
by the shareholders. The notice of any meeting at which directors are to
be elected shall include the name of any nominee or nominees whom at the
time of the notice management intends to present for election.
If action is proposed to be taken at any meeting for approval of (i)
a contract or transaction in which a director has a direct or indirect
financial interest, (ii) an amendment of the Articles of Incorporation,
(iii) a reorganization of the corporation, (iv) a voluntary dissolution
of the corporation, or (v) a distribution in dissolution other than in
accordance with the rights of outstanding preferred shares, the notice
shall also state the general nature of that proposal.
Section 5. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of
any meeting of shareholders shall be given either personally or by first-
class mail or telegraphic or other written communication, charges
prepaid, addressed to the shareholder at the address of that shareholder
appearing on the books of the corporation or given by the shareholder to
the corporation for the purpose of notice. If no such address appears on
the corporation's books or is given, notice shall be deemed to have been
given if sent to that shareholder by first-class mail or telegraphic or
other written communication to the corporation's principal executive
office, or if published at least once in a newspaper of general
circulation in the county where that office is located. Notice shall be
deemed to have been given at the time when delivered personally or
deposited in the mail or sent by telegram or other means of written
communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the corporation is returned to the
corporation by the United States Postal Service marked to indicate that
the United States Postal Service is unable to deliver the notice to the
shareholder at that address, all future notices or reports shall be
deemed to have been duly given without further mailing if these shall be
available to the shareholder on written demand of the shareholder at the
principal execute office of the corporation for a period of one year from
the date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of
any shareholder's meeting shall be executed by the secretary, assistant
secretary or any transfer agent of the corporation giving the notice and
shall be filed and maintained in the minute book of the corporation.
Section 6. QUORUM. The presence in person or by proxy of the holders of a
majority of the shares entitled to vote at any meeting of shareholders
shall constitute a quorum for the transaction of business. The
shareholders present at a duly called or held meeting at which a quorum
is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any
action taken (other than adjournment) is approved by at least a majority
of the shares required to constitute a quorum.
Section 7. ADJOURNED MEETING; NOTICE. Any shareholder's meeting,
annual or special, whether or not a quorum is present, may be adjourned
from time to time by the vote of the majority of the shares represented
at that meeting, either in person or by proxy, but in the absence of a
quorum no other business may be transacted at that meeting, except as
provided in Section 6 of this Article II.
When any meeting of shareholders, either annual or special, is
adjourned to another time or place, notice need not be given of the
adjourned meeting at which the adjournment is taken, unless a new record
date of the adjourned meeting is fixed or unless the adjournment is for
more than forty-five (45) days from the date set for the original
meeting, in which case the Board of Directors shall set a new record
date. Notice of any such adjourned meeting shall be given to each
shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Sections 4 and 5 of this Article II.
At any adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting.
Section 8. VOTING. The shareholders entitled to vote at any meeting
of shareholders shall be determined in accordance with the provisions of
Section 11 of this Article II, subject to the provisions of the
Corporations Code of California relating to voting shares held by a
fiduciary in the name of a corporation or in joint ownership. The
shareholders' vote may be by voice vote or by ballot, provided, however,
that any election for directors must be by ballot if demanded by any
shareholder before the voting has begun. On any matter other than
elections of directors any shareholder may vote part of the shares in
favor of the proposal and refrain from voting the remaining shares or
vote them against the proposal, but if the shareholder fails to specify
the number of shares which the shareholder is voting affirmatively, it
will be conclusively presumed that the shareholder's approving vote is
with respect total shares that the shareholder is entitled to vote. If a
quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and entitled to vote on any matter (other than
the election of directors) shall be the act of the shareholders, unless
the vote of a greater number or voting by classes is required by the
California General Corporation Law or by the Articles of Incorporation.
At a shareholder's meeting at which directors are to be elected, no
shareholder shall be entitled to cumulate votes (i.e., cast for any one
or more candidates a number of votes greater than the number of the
shareholder's shares) unless the candidates' names have been placed in
nomination prior to commencement of the voting and a shareholder has
given notice prior to commencement of the voting of the shareholder's
intention to cumulate votes. If any shareholder has given such a notice,
then every shareholder entitled to vote may cumulate votes for candidates
in nomination and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of votes to
which that shareholder's shares are entitled, or distribute the
shareholder's votes on the same principle among any or all of the
candidates as the shareholder thinks fit. The candidates receiving the
highest number of votes up to the number of directors to be elected shall
be elected.
Section 9. WAIVER OF NOTICE OF CONSENT BY ABSENT SHAREHOLDERS. The
transactions of the meeting of shareholders, either annual or special,
however called and noticed and wherever held, shall be as valid as though
had at a meeting duly held after regular call and notice if a quorum be
present either in person or by proxy and if either before or after the
meeting, each person entitled to vote who was not present in person or by
proxy signs a written waiver of notice or a consent to a holding of the
meeting or an approval of the minutes. The waiver of notice or consent
need not specify either the business to be transacted or the purpose of
any annual or special meeting of shareholders, except that if action is
taken or proposed to be taken for approval of any of those matters
specified in the second paragraph of Section 4 of this Article II, the
waiver of notice or consent shall state the general nature of the
proposal. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
Attendance by a person at a meeting shall also constitute a waiver
of notice of that meeting, except when the person objects at the
beginning of the meeting to the transaction of any business because the
meeting is not lawfully called or convened and except that attendance at
a meeting is not a waiver of any right to object to the consideration of
matters not included in the notice of the meeting if that objection is
expressly made at the meeting.
Section 10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.
Any action which may be taken at any annual or special meeting of
shareholders may be taken without a meeting and without prior notice if a
consent in writing setting forth the action so taken is signed by the
holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take that action at a
meeting at which all shares entitled to vote on that action were present
and voted. In the case of election of directors, such a consent shall be
effective only if signed by the holder of all outstanding shares entitled
to vote for the election of directors; provided however, that a director
may be elected at any time to fill a vacancy on the Board of Directors
that has not been filled by the directors by the written consent of the
holders of a majority of the outstanding shares entitled to vote for the
election of directors. All such consents shall be filed with the
Secretary of the corporation and shall be maintained in the corporate
records. Any shareholder giving a written consent or the shareholder's
proxy holder or a transferee of the shares or a personal representative
of the shareholder or their respective proxy holders may revoke the
consent by a writing received by the Secretary of the corporation before
written consents of the number of shares required to authorize the
proposed action have been filed with the Secretary.
If the consents of all shareholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
shareholders shall not have been received the Secretary shall give prompt
notice of the corporate action approved by the shareholders without a
meeting. This notice shall be given in the manner specified in Section 5
of this Article II. In the case of approval of (i) contracts or
transactions in which a director has a direct or indirect financial
interest, (ii) indemnification of agents of the corporation, (iii) a
reorganization of the corporation, and (iv) a distribution in dissolution
other than in accordance with the rights of outstanding preferred share,
the notice shall be given at least ten (10) days before the consummation
of any action authorized by that approval.
Section 11. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING
CONSENTS. For purposes of determining the shareholders entitled to notice
of any meeting or to vote or entitled to give consent to corporate action
without a meeting, the Board of Directors may fix in advance a record
date which shall not be more than sixty (60) days nor less than ten (10)
days before the date of any such meeting nor more than sixty (60) days
before such action without a meeting and in this event only shareholders
of record on the date so fixed are entitled to notice and to vote or to
give consents as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date, except as
otherwise provided in the California General Corporation Law.
If the Board of Directors does not so fix a record date:
(a) The record date for determining shareholders entitled to notice
of or to vote at a meeting of shareholders shall be at the
close of business on the business day next preceding the day on
which notice is given or if notice is waived, at the close of
business on the business day next preceding the day on which
the meeting is held.
(b) The record date for determining shareholders entitled to give
consent to corporate action in writing without a meeting, (i)
when no prior action by the Board of Directors has been taken,
shall be the day on which the first written consent is given,
or (ii) when prior action of the Board of Directors has been
taken, shall be at the close of business on the day on which
the Board of Directors adopts the resolution relating to that
action or the sixtieth day before the date of such other
action, whichever is later.
Section 12. PROXIES. Every person entitled to vote for directors or
on any other matter shall have the right to do so either in person or by
one or more agents authorized by a written proxy signed by the person and
filed with the Secretary of the corporation. A proxy shall be deemed
signed if the shareholder's name is placed on the proxy (whether by
manual signature, typewriting, telegraphic transmission or otherwise) by
the shareholder or the shareholder's attorney-in-fact. A validly executed
proxy which does not state that it is irrevocable shall continue in full
force and effect unless (i) revoked by the person executing it before the
vote pursuant to that proxy by a writing delivered to the corporation
stating that the proxy is revoked or by a subsequent proxy executed by or
attendance at the meeting and voting in person by the person executing
that proxy; or (ii) written notice of the death or incapacity of the
maker of that proxy is received by the corporation before the vote
pursuant to that proxy is counted; provided however, that no proxy shall
be valid after the expiration of eleven (11) months from the date of the
proxy unless otherwise provided in the proxy. The revocability of a proxy
that states on its face that it is irrevocable shall be governed by the
provisions of the California General Corporation Law.
Section 13. INSPECTORS OF ELECTION. Before any meeting of
shareholders the Board of Directors may appoint any persons other than
nominees for office to act as inspectors of election at the meeting or
its adjournment. If no inspectors of election are so appointed, the
chairman of the meeting may and on the request of any shareholder or a
shareholder's proxy shall, appoint inspectors of election at the meeting.
The number of inspectors shall be either one (1) or three (3). If
inspectors are appointed at a meeting on the request of one or more
shareholders or proxies, the holders of a majority of shares of their
proxies present at the meeting shall determine whether one (1) or three
(3) inspectors are to be appointed. If any person appointed as inspector
fails to appear or fails or refuses to act, the chairman of the meeting
may and on the request of any shareholder or a shareholder's proxy, shall
appoint a person to fill the vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the voting power
of each, the shares represented at the meeting, the existence
of a quorum and the authenticity, validity and effect of
proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way
arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or
vote with fairness to all shareholders.
ARTICLE III
DIRECTORS
Section 1. POWERS. Subject to the provisions of the California
General Corporation Law and any limitations in the Articles of
Incorporation and these By-Laws relating to action required to be
approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers
shall be exercised by or under the direction of the Board of Directors.
Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized
number of directors shall be not less than five (5) nor more than nine
(9), until changed by a duly adopted amendment to the Articles of
Incorporation or by an amendment to this ByLaw adopted by the vote or
written consent of holders of a majority of the outstanding shares
entitled to vote; provided however, that an amendment reducing the number
of directors to a fixed number or a minimum number less than five (5)
cannot be adopted if the votes cast against its adoption at a meeting or
the shares not consenting in the case of action by written consent are
equal to more than sixteen and two-thirds (16 2/3%) percent of the
outstanding shares entitled to vote. The Board of Directors shall by
resolution fix the exact number of directors within the limits set forth
herein.
Section 3. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall
be elected at each annual meeting of the shareholders to hold office
until the next annual meeting. Each director, including a director
elected to fill a vacancy, shall hold office until the expiration of the
term for which elected and until a successor has been elected and
qualified.
Section 4. VACANCIES. Vacancies in the Board of Directors may be
filled by a majority of the remaining directors, though less than a
quorum, or by a sole remaining director, except that a vacancy created by
the removal of a director by the vote or written consent of the
shareholders or by court order may be filled only by the vote of a
majority of the shares entitled to vote represented at a duly held
meeting at which a quorum is present or by the written consent of holders
of a majority of the outstanding shares entitled to vote. Each director
so elected shall hold office until the next annual meeting of the
shareholders and until a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in the event of the death, resignation or removal of any director,
or if the Board of Directors by resolution declares vacant the office of
a director who has been declared of unsound mind by an order of court or
convicted of a felony or if the authorized number of directors is
increased or if the shareholders fail at any meeting of shareholders at
which any director or directors are elected to elect the number of
directors to be voted for at that meeting.
The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors, but any such
election by written consent shall require the consent of a majority of
the outstanding shares entitled to vote; provided, however, that any
vacancy created by removal of any director may be filled by written
consent only by unanimous written consent of all shares entitled to vote
for the election of directors.
Any director may resign effective on giving written notice to the
chairman of the board, the president, the secretary or the Board of
Directors, unless the notice specifies a later time for that resignation
to become effective. If the resignation of a director is effective at a
future time, the Board of Directors may elect a successor to take office
when the resignation becomes effective.
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office
expires.
In the event that at any time less than a majority of the directors
of the corporation holding office at that time were so elected by the
holders of the outstanding voting securities, the Board of Directors of
the corporation shall forthwith cause to be held as promptly as possible,
and in any event within sixty (60) days, a meeting of such holders for
the purpose of electing directors to fill any existing vacancies in the
Board of Directors, unless such period is extended by order of the United
States Securities and Exchange Commission.
Notwithstanding the above, whenever and for so long as the
corporation is a participant in or otherwise has in effect a Plan under
which the corporation may be deemed to bear expenses of distributing its
shares as that practice is described in Rule 12b-1 under the Investment
Company Act of 1940, then the selection and nomination of the directors
who are not interested persons of the corporation (as that term is
defined in the Investment Company Act of 1940) shall be, and is,
committed to the discretion of such disinterested directors.
Section 5. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. Regular
meetings of the Board of Directors may be held at any place within or
outside the State of California that has been designated from time to
time by resolution of the board. In the absence of such a designation,
regular meetings shall be held at the principal executive office of the
corporation. Special meetings of the board shall be held at any place
within or outside the State of California that has been designated in the
notice of the meeting or if not stated in the notice or there is no
notice, at the principal executive office of the corporation. Any
meeting, regular or special, may be held by conference telephone or
similar communication equipment, so long as all directors participating
in the meeting can hear one another and all such directors shall be
deemed to be present in person at the meeting.
Section 6. ANNUAL MEETING. Immediately following each annual meeting
of shareholders, the Board of Directors shall hold a regular meeting of
the purpose of organization, any desired election of officers, and the
transaction of other business. Notice of this meeting shall not be
required.
Section 7. OTHER REGULAR MEETINGS. Other regular meetings of the
Board of Directors shall be held without call at such time as shall from
time to time be fixed by the Board of Directors. Such regular meetings
may be held without notice.
Section 8. SPECIAL MEETINGS. Special meetings of the Board of
Directors for any purpose or purposes may be called at any time by the
chairman of the board or the president or any vice president or the
secretary or any two (2) directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail
or telegram, charges prepaid, addressed to each director at that
director's address as it is shown on the records of the corporation. In
case the notice is mailed, it shall be deposited in the United States
mail at least four (4) days before the time of the holding of the
meeting. In case the notice is delivered personally or by telephone or to
the telegraph company, it shall be given at least forty-eight (48) hours
before the time of the holding of the meeting. Any oral notice given
personally or by telephone may be communicated either to the director or
to a person at the office of the director who the person giving the
notice has reason to believe will promptly communicate it to the
director. The notice need not specify the purpose of the meeting or the
place if the meeting is to be held at the principal executive office of
the corporation.
Section 9. QUORUM. A majority of the authorized number of directors
shall constitute a quorum for the transaction of business, except to
adjourn as provided in Section 11 of this Article III. Every act or
decision done or made by a majority of the directors present at a meeting
duly held at which a quorum is present shall be regarded as the act of
the Board of Directors, subject to the provisions of the California
General Corporation Law relating to approval of contracts or transactions
in which a director has a direct or indirect material financial interest,
to appointment of committee, and to indemnification of directors. A
meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors if any action taken
is approved by a least a majority of the required quorum for that
meeting.
Section 10. WAIVER OF NOTICE. Notice of any meeting need not be
given to any director who either before or after the meeting signs a
written waiver of notice, a consent to holding the meeting or an approval
of the minutes. The waiver of notice or consent need not specify the
purpose of the meeting. All such waivers, consents and approval shall be
filed with the corporate records or made a part of the minutes of the
meeting. Notice of a meeting shall also be deemed given to any director
who attends the meeting without protesting before or at its commencement
the lack of notice to that director.
Section 11. ADJOURNMENT. A majority of the directors present,
whether or not constituting a quorum, may adjourn any meeting to another
time and place.
Section 12. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given unless the meeting is
adjourned for more than twenty-four (24) hours, in which case notice of
the time and place shall be given before the time of the adjourned
meeting in the manner specified in Section 8 of this Article III to the
directors who were present at the time of the adjournment.
Section 13. ACTION WITHOUT MEETING. Any action required or permitted
to be taken by the Board of Directors may be taken without a meeting if
all members of the Board of Directors shall individually or collectively
consent in writing to that action. Such action by written consent shall
have the same force and effect as a unanimous vote of the Board of
Directors. Such written consent or consents shall be filed with the
minutes of the proceedings of the Board of Directors.
Section 14. FEES AND COMPENSATION OF DIRECTORS. Directors and
members of committees may receive such compensation, if any, for their
services and such reimbursement of expenses as may be fixed or determined
by resolution of the Board of Directors. This Section 14 shall not be
construed to preclude any director from serving the corporation in any
other capacity as an officer, agent, employee or otherwise and receiving
compensation for those services.
ARTICLE IV
COMMITTEE
Section 1. COMMITTEES OF DIRECTORS. The Board of Directors may by
resolution adopted by a majority of the authorized number of directors
designate one or more committees, each consisting of two (2) or more
directors, to serve at the pleasure of the board. The board may designate
one or more directors as alternate members of any committee who may
replace any absent member at any meeting of the committee. Any committee
to the extent provided in the resolution of the board, shall have the
authority of the board, except with respect to:
(a) the approval of any action which under the California General
Corporation Law also requires shareholders' approval or
approval of the outstanding shares;
(b) the filling of vacancies on the Board of Directors or in any
committee;
(c) the fixing of compensation of the directors for serving on the
Board of Directors or on any committee;
(d) the amendment or repeal of By-Laws or the adoption of new By-
Laws;
(e) the amendment or repeal of any resolution of the Board of
Directors which by its express terms is not so amendable or
repealable;
(f) a distribution to the shareholders of the corporation, except
at a rate or in a periodic amount or within a price range
determined by the Board of Directors; or
(g) the appointment of any other committees of the Board of
Directors or the members of these committees.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
committees shall be governed by and held and taken in accordance with the
provisions of Article III of these By-Laws, Sections 5 (place of
meetings), 7 (regular meetings), 8 (special meetings and notice), 9
(quorum), 10 (waiver of notice), 11 (adjournment), 12 (notice of
adjournment), and 13 (action without meeting), with such changes in the
context of those By-Laws as are necessary to substitute the committee and
its members for the Board of Directors and its members, except that the
time of regular meetings of committees may be determined either by
resolution of the Board of Directors or by resolution of the committee;
special meetings of committees may also be called by resolution of the
Board of Directors; and notice of special meetings of committees shall
also be given to all alternate members who shall have the right to attend
all meetings of the committee. The Board of Directors may adopt rules for
the government of any committee not inconsistent with the provisions of
these By-Laws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the corporation shall be a
president, a secretary, and a chief financial officer. The corporation
may also have at the discretion of the Board of Directors, a chairman of
the board, one or more vice presidents, one or more assistant
secretaries, one or more assistant treasurers, one or more assistant
financial officers and such other officers as may be appointed in
accordance with the provisions of Section 3 of this Article V. Any number
of offices may be held by the same person.
Section 2. ELECTION OF OFFICERS. The officers of the corporation,
except such officers as may appointed in accordance with the provisions
of Section 3 or Section 5 of this Article V, shall be chosen by the Board
of Directors, and each shall serve at the pleasure of the Board of
Directors, subject to the rights, if any, of an officer under any
contract of employment.
Section 3. SUBORDINATE OFFICERS. The Board of Directors may appoint
and may empower the president to appoint such other officers as the
business of the corporation may require, each of whom shall hold office
for such period, have such authority and perform such duties as are
provided in the By-Laws or as the Board of Directors may from time to
time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the
rights, if any, of an officer under any contract of employment, any
officer may be removed, either with or without cause, by the Board of
Directors at any regular or special meeting of the Board of Directors or
except in the case of an officer chosen by the Board of Directors, by any
officer upon whom such power or removal may be conferred by the Board of
Directors.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt
of that notice or at any later time specified in that notice; and unless
otherwise specified in that notice, the acceptance of the resignation
shall not be necessary to make it effective. Any resignation is without
prejudice to the rights, if any, of the corporation under any contract to
which the officer is a party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office because of
death, resignation, removal, disqualification or other cause shall be
filled in the manner prescribed in these By-Laws for regular appointment
to that office.
Section 6. CHAIRMAN OF THE BOARD. The chairman of the board, if such
an officer is elected, shall if present preside at meetings of the Board
of Directors and exercise and perform such other powers and duties as may
be from time to time assigned to him by the Board of Directors or
prescribed by the By-Laws.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as
may be given by the Board of Directors to the chairman of the board, if
there be such an officer, the president shall be the chief executive
officer of the corporation and shall, subject to the control of the Board
of Directors, have general supervision, direction and control of the
business and the officers of the corporation. He shall preside at all
meetings of the shareholders and in the absence of the chairman of the
board or if there be none, at all meetings of the Board of Directors. He
shall have the general powers and duties of management usually vested in
the office of president of a corporation and shall have such other powers
and duties as may be prescribed by the Board of Directors or the By-Laws.
Section 8. VICE PRESIDENTS. In the absence or disability of the
president, the vice presidents, if any, in order of their rank as fixed
by the Board of Directors or if not ranked, a vice president designated
by the Board of Directors, shall perform all the duties of the president
and when so acting shall have all powers of and be subject to all the
restrictions upon the president. The vice presidents shall have such
other powers and perform such other duties as from time to time may be
prescribed for them respectively by the Board of Directors or by the By-
Laws and the president or the chairman of the board.
Section 9. SECRETARY. The secretary shall keep or cause to be kept
at the principal executive office or such other place as the Board of
Directors may direct a book of minutes of all meetings and actions of
directors, committees of directors and shareholders with the time and
place of holding, whether regular or special, and if special, how
authorized, the notice given, the names of those present at directors'
meetings or committee meetings, the number of shares present or
represented at shareholders' meetings and the proceedings.
The secretary shall keep or cause to be kept at the principal
executive office or at the office of the corporation's transfer agent or
registrar, as determined by resolution of the Board of Directors, a share
register or a duplicate share register showing the names of all
shareholders and their addresses, the number and classes of shares held
by each, the number and date of certificates issued for the same and the
number and date of cancellation of every certificate surrendered for
cancellation.
The secretary shall give or cause to be given notice of all meetings
of the shareholders and of the Board of Directors required by the By-Laws
or by law to be given and he shall keep the seal of the corporation if
one be adopted in safe custody and shall have such other powers and
perform such other duties as may be prescribed by the Board of Directors
or by the By-Laws.
Section 10. CHIEF FINANCIAL OFFICER. The chief financial officer
shall keep and maintain or cause to be kept and maintained adequate and
correct books and records of accounts of the properties and business
transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained
earnings and shares. The books of account shall at all reasonable times
be open to inspection by any director.
The chief financial officer shall deposit all monies and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board of Directors. He shall
disburse the funds of the corporation as may be ordered by the Board of
Directors, shall render to the president and directors, whenever they
request it, an account of all of his transactions as chief financial
officer and of the financial condition of the corporation and shall have
other powers and perform such other duties as may be prescribed by the
Board of Directors or the By-Laws.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a director, officer,
employee or other agent of this corporation or is or was serving at the
request of this corporation as a director, officer, employee or agent of
another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise or was a director, officer, employee or agent
of a foreign or domestic corporation which was a predecessor corporation
of this corporation or of another enterprise at the request of such
predecessor corporation; "proceeding" means any threatened, pending or
completed action or proceeding, whether civil, criminal, administrative
or investigative; and "expenses" includes without limitation attorney's
fees and any expenses of establishing a right to indemnification under
this Article.
Section 2. ACTIONS OTHER THAN BY CORPORATION. This corporation shall
indemnify any person who was or is a party or is threatened to be made a
party to any proceeding (other than an action by or in the right of this
corporation) by reason of the fact that such person is or was an agent of
this corporation, against expenses, judgments, fines, settlements and
other amounts actually and reasonably incurred in connection with such
proceeding if that person acted in good faith and in a manner that person
reasonably believed to be in the best interests of this corporation and
in the case of a criminal proceeding, had no reasonable cause to believe
the conduct of that person was unlawful. The termination of any
proceeding by judgment, order, settlement, conviction or upon a plea of
nolo contendere or its equivalent shall not of itself create a
presumption that the person did not act in good faith and in a manner
which the person reasonably believed to be in the best interests of this
corporation or that the person had reasonable cause to believe that the
person's conduct was unlawful.
Section 3. ACTIONS BY THE CORPORATION. This corporation shall
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action by or in the right
of this corporation to procure a judgment in its favor by reason of the
fact that that person is or was an agent of this corporation, against
expenses actually and reasonably incurred by that person in connection
with the defense or settlement of that action if that person acted in
good faith, in a manner that person believed to be in the best interests
of this corporation and with such care, including reasonable inquiry, as
an ordinarily prudent person in a like position would use under similar
circumstances.
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any
provision to the contrary contained herein, there shall be no right to
indemnification for any liability arising by reason of willful
misfeasance, bad faith, gross negligence, or the reckless disregard of
the duties involved in the conduct of the agent's office with the
corporation.
No indemnification shall be made under Sections 2 or 3 of this
Article:
(a) In respect of any claim, issue or matter as to which that
person shall have been adjudged to be liable in the performance
of that person's duty to this corporation, unless and only to
the extent that the court in which that action was brought
shall determine upon application that in view of all the
circumstances of the case, that person was not liable by reason
of the disabling conduct set forth in the preceding paragraph
and is fairly and reasonably entitled to indemnity for the
expenses which the court shall determine; or
(b) Of amounts paid in settling or otherwise disposing of a
threatened or pending action, with or without court approval,
or of expenses incurred in defending a threatened or pending
action which is settled or otherwise disposed of without court
approval, unless the required approval set forth in Section 6
of this Article is obtained.
Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent
of this corporation has been successful on the merits in defense of any
proceeding referred to in Sections 2 or 3 of this Article or in defense
of any claim, issue or matter therein, before the court or other body
before whom the proceeding was brought, the agent shall be indemnified
against expenses actually and reasonably incurred by the agent in
connection therewith, provided that the Board of Directors, including a
majority who are disinterested, non-party directors, also determines that
based upon a review of the facts, the agent was not liable by reason of
the disabling conduct referred to in Section 4 of this Article.
Section 6. REQUIRED APPROVAL. Except as provided in Section 5 of
this Article, any indemnification under this Article shall be made by
this corporation only if authorized in the specific case on a
determination that indemnification of the agent is proper in the
circumstances because the agent has met the applicable standard of
conduct set forth in Sections 2 or 3 of this Article and is not
prohibited from indemnification because of the disabling conduct set
forth in Section 4 of this Article, by:
(a) A majority vote of a quorum consisting of directors who are not
parties to the proceeding and are not interested persons of the
corporation as defined in the Investment Company Act of 1940;
(b) Approval by the affirmative vote of a majority of the shares of
this corporation entitled to vote represented at a duly held
meeting at which a quorum is present or by the written consent
of holders of a majority of the outstanding shares entitled to
vote. For this purpose the shares owned by the person to be
indemnified shall not be considered outstanding or entitled to
vote thereon;
(c) The court in which the proceeding is or was pending, on
application made by this corporation or the agent or the
attorney or other person rendering services in connection with
the defense, whether or not such application by the agent,
attorney or other person is opposed by this corporation; or
(d) A written opinion by an independent legal counsel.
Section 7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this corporation before the final
disposition of the proceeding on receipt of an undertaking by or on
behalf of the agent to repay the amount of the advance unless it shall be
determined ultimately that the agent is entitled to be indemnified as
authorized in this Article, provided the agent provides a security for
his undertaking, or a majority of a quorum of the disinterested, non-
party directors, or an independent legal counsel in a written opinion,
determine that based on a review of readily available facts, there is
reason to believe that said agent ultimately will be found entitled to
indemnification.
Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this
Article shall affect any right to indemnification to which persons other
than directors and officers of this corporation or any subsidiary hereof
may be entitled by contract or otherwise.
Section 9. LIMITATIONS. No indemnification or advance shall be made
under this Article, except as provided in Section 5 or Section 6(c) in
any circumstances where it appears:
(a) That it would be inconsistent with a provision of the Articles
of Incorporation, a resolution of the shareholders or an
agreement in effect at the time of accrual of the alleged cause
of action asserted in the proceeding in which the expenses were
incurred or other amounts were paid which prohibits or
otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
Section 10. INSURANCE. Upon and in the event of a determination by
the Board of Directors of this corporation to purchase such insurance,
this corporation shall purchase and maintain insurance on behalf of any
agent of the corporation against any liability asserted against or
incurred by the agent in such capacity or arising out of the agent's
status as such, but only to the extent that this corporation would have
the power to indemnify the agent against that liability under the
provisions of this Article.
Section 11. FIDUCIARIES OF CORPORATE EMPLOYEE BENEFIT PLAN. This
Article does not apply to any proceeding against any trustee, investment
manager or other fiduciary of an employee benefit plan in that person's
capacity as such, even though that person may also be an agent of the
corporation as defined in Section 1 of this Article. Nothing contained in
this Article shall limit any right to indemnification to which such a
trustee, investment manager or other fiduciary may be entitled by
contract or otherwise which shall be enforceable to the extent permitted
by applicable law other than this Article.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. The
corporation shall keep at its principal executive office or at the office
of its transfer agent or registrar, if either be appointed and as
determined by resolution of the Board of Directors, a record of its
shareholders, giving the names and addresses of all shareholders and the
number and class of shares held by each shareholder.
A shareholder or shareholders of the corporation holding at least
five percent (5%) in the aggregate of the outstanding voting shares of
the corporation may (i) inspect and copy the records of shareholders'
names and addresses and shareholdings during usual business hours on five
(5) days' prior written demand on the corporation, and (ii) obtain from
the transfer agent of the corporation, on written demand and on the
tender of such transfer agent's usual charges for such list, a list of
the shareholder's names and addresses who are entitled to vote for the
election of directors and their shareholdings as of the most recent
record date for which that list has been compiled or as of a date
specified by the shareholder after the date of demand. This list shall be
made available to any such shareholder by the transfer agent on or before
the later of five (5) days after the demand is received or the date
specified in the demand as the date as of which the list is to be
compiled. The record of shareholders shall also be open to inspection on
the written demand of any shareholder or holder of a voting trust
certificate at any time during usual business hours for a purpose
reasonably related to the holder's interests as a shareholder or as the
holder of a voting trust certificate. Any inspection and copying under
this Section 1 may be made in person or by an agent or attorney of the
shareholder or holder of voting trust certificate making the demand.
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS. The corporation
shall keep at its principal executive office or if its principal
executive office is not in the State of California, at its principal
business office in this state, the original or a copy of the By-Laws as
amended to date, which shall be open to inspection by the shareholders at
all reasonable times during office hours. If the principal executive
office of the corporation is outside the State of California and the
corporation has no principal business office in this state, the secretary
shall upon the written request of any shareholder furnish to that
shareholder a copy of the By-Laws as amended to date.
Section 3. MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS.
The accounting books and records and minutes of proceedings of the
shareholders and the Board of Directors and any committee or committees
of the Board of Directors shall be kept at such place or places
designated by the Board of Directors or in the absence of such
designation, at the principal executive office of the corporation. The
minutes shall be kept in written form and the accounting books and
records shall be kept either in written form or in any other form capable
of being converted into written form. The minutes and accounting books
and records shall be open to inspection upon the written demand of any
shareholder or holder of a voting trust certificate at any reasonable
time during usual business hours for a purpose reasonably related to the
holder's interests as a shareholder or as the holder of a voting trust
certificate. The inspection may be made in person or by an agent or
attorney and shall include the right to copy and make extracts. These
rights of inspection shall extend to the records of each subsidiary
corporation of the corporation.
Section 4. INSPECTION BY DIRECTORS. Every director shall have the
absolute right at any reasonable time to inspect all books, records, and
documents of every kind and the physical properties of the corporation
and each of its subsidiary corporations. This inspection by a director
may be made in person or by an agent or attorney and the right of
inspection includes the right to copy and make extracts of documents.
Section 5. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in the California General Corporation Law is
expressly dispensed with, but nothing herein shall be interpreted as
prohibiting the Board of Directors from issuing annual or other periodic
reports to the shareholders of the corporation as they consider
appropriate.
Section 6. FINANCIAL STATEMENTS. A copy of any annual financial
statements and any income statement of the corporation for each quarterly
period of each fiscal year and accompanying balance sheet of the
corporation as of the end of each such period that has been prepared by
the corporation shall be kept on file in the principal executive office
of the corporation for twelve (12) months and each such statement shall
be exhibited at all reasonable times to any shareholder demanding an
examination of any such statement or a copy shall be mailed to any such
shareholder.
If a shareholder or shareholders holding at least five percent (5%)
of the outstanding shares of any class of stock of the corporation makes
a written request to the corporation for an income statement of the
corporation for the three (3) -month, six (6) -month, or nine (9) -month
period of the then current fiscal year ended more than thirty (30) days
before the date of the request and a balance sheet of the corporation as
of the end of that period, the chief financial officer shall cause that
statement to be prepared, if not already prepared, and shall deliver
personally or mail that statement or statements to the person making the
request within thirty (30) days after the receipt of the request. If the
corporation has not sent to the shareholders its annual report for the
last fiscal year, this report shall likewise be delivered or mailed to
the shareholder or shareholders within thirty (30) days after the
request.
The corporation shall also on the written request of any shareholder
mail to the shareholder a copy of the last annual, semi-annual or
quarterly income statement which it has prepared and a balance sheet as
of the end of that period.
The quarterly income statements and balance sheets referred to in
this section shall be accompanied by the report, if any, of any
independent accountants engaged by the corporation or the certificate of
an authorized officer of the corporation that the financial statements
were prepared without audit from the books and records of the
corporation.
Section 7. ANNUAL STATEMENT OF GENERAL INFORMATION. The corporation
shall during the month in which the anniversary of its incorporation
occurs in each year, file with the California Secretary of State on the
prescribed form a statement setting forth the authorized number of
directors, the names and complete business or residence addresses of all
incumbent directors, the names and complete business or residence
addresses of the chief executive officer, secretary and chief financial
officer, the street address of its principal executive office or
principal business office in this state and the general type of business
constituting the principal business activity of the corporation, together
with a designation of the agent of the corporation for the purpose of
service of process, all in compliance with the California General
Corporation Law.
ARTICLE VIII
GENERAL CORPORATE MATTERS
Section 1. RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING.
For purposes of determining the shareholders entitled to receive payment
of any dividend or other distribution or allotment of any rights or
entitled to exercise any rights in respect of any other lawful action
(other than action by shareholders by written consent without a meeting),
the Board of Directors may fix in advance a record date which shall not
be more than sixty (60) days before any such action and in that case only
shareholders of record on the date so fixed are entitled to receive the
dividend, distribution or allotment of rights or to exercise the rights
as the case may be, notwithstanding any transfer of any shares on the
books of the corporation after the record date so- fixed, except as
provided in the California General Corporations Law.
If the Board of Directors does not so fix a record date, the record
date for determining shareholders for any such purpose shall be at the
close of business on the day on which the Board of Directors adopts the
applicable resolution or the sixtieth day before the date of that action,
whichever is later.
Section 2. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All checks,
drafts, or other orders for payment of money, notes or other evidences of
indebtedness issued in the name of or payable to the corporation shall be
signed or endorsed by such person or persons and in such manner as from
time to time shall be determined by resolution of the Board of Directors.
Section 3. CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The
Board of Directors, except as otherwise provided in these By-Laws, may
authorize any officer or officers, agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation and this authority may be general or confined to specific
instances; and unless so authorized or ratified by the Board of Directors
or within the agency power of an officer, no officer, agent, or employee
shall have any power or authority to bind the corporation by any contract
or engagement or to pledge its credit or to render it liable for any
purpose or for any amount.
Section 4. CERTIFICATES FOR SHARES. A certificate or certificates
for shares of the capital stock of the corporation shall be issued to
each shareholder when any of these shares if fully paid and the Board of
Directors may authorize the issuance of certificates or shares as partly
paid provided that these certificates shall state the amount of the
consideration to be paid for them and the amount paid. All certificates
shall be signed in the name of the corporation by the chairman of the
board or vice chairman of the board or the president or vice president
and by the chief financial officer or an assistant treasurer or the
secretary or any assistant secretary, certifying the number of shares and
the class or series of shares owned by the shareholders. Any or all of
the signatures on the certificate may be facsimile. In case any officer,
transfer agent, or registrar who has signed or whose facsimile signature
has been placed on a certificate shall have ceased to be that officer,
transfer agent, or registrar before that certificate is issued, it may be
issued by the corporation with the same effect as if that person were an
officer, transfer agent or registrar at the date of issue.
Notwithstanding the foregoing, the corporation may adopt and use a system
of issuance, recordation and transfer of its shares by electronic or
other means as provided in the General Corporation Law.
Section 5. LOST CERTIFICATES. Except as provided in this Section 5,
no new certificates for shares shall be issued to replace an old
certificate unless the latter is surrendered to the corporation and
cancelled at the same time. The Board of Directors may in case any share
certificate or certificate for any other security is lost, stolen, or
destroyed, authorize the issuance of a replacement certificate on such
terms and conditions as the Board of Directors may require, including a
provision for indemnification of the corporation secured by a bond or
other adequate security sufficient to protect the corporation against any
claim that may be made against it, including any expense or liability on
account of the alleged loss, theft, or destruction of the certificate or
the issuance of the replacement certificate.
Section 6. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
chairman of the board, the president or any vice president or any other
person authorized by resolution of the Board of Directors or by any of
the foregoing designated officers, is authorized to vote on behalf of the
corporation any and all shares of any other corporation or corporations,
foreign or domestic, standing in the name of the corporation. The
authority granted to these officers to vote or represent on behalf of the
corporation any and all shares held by the corporation in any other
corporation or corporations may be exercised by any of these officers in
person or by any person authorized to do so by a proxy duly executed by
these officers.
ARTICLE IX
AMENDMENTS
Section 1. AMENDMENT BY SHAREHOLDERS. New By-Laws may be adopted or
these By-Laws may be amended or repealed by the vote or written consent
of holders of a majority of the outstanding shares entitled to vote.
Section 2. AMENDMENT BY DIRECTORS. Subject to the right of
shareholders as provided in Section 1 of this Article IX, By-Laws may be
adopted, amended, or repealed by the Board of Directors.
ARTICLE X
REIMBURSEMENT OF EXPENSES
Section 1. DISALLOWED EXPENSES. Any payments made to or on behalf of
an officer of the corporation, such as salary, bonus, interest, rent,
medical, entertainment or travel expenses, which shall be disallowed in
whole or in part as a deductible expense to the corporation by the
Internal Revenue Service, shall be reimbursed by such officer to the
corporation to the full extent of such disallowance. It shall be the duty
of the Board of Directors to enforce payment of such amount disallowed.
In lieu of payment by the officer, subject to the determination of the
Board of Directors, proportionate amounts may be withheld from such
officer's future compensation payments until the amount owed to the
corporation has been recovered.
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, Secretary of Franklin Federal Tax-Free
Income Fund (the "Fund"), a corporation organized under the laws
of the State of California, do hereby certify that the following
resolution was adopted by a majority of the directors present at a
meeting held at the offices of the Fund at 777 Mariners Island
Boulevard, San Mateo, California, on November 17, 1987.
RESOLVED, that Section 2, Article II of the By-Laws of the
Fund, be amended to read as follows:
"Section 2. ANNUAL MEETINGS. The annual meeting of
shareholders shall be held on a date and at a time as
the Board of Directors shall determine, provided that
annual meetings of shareholders need not be held in any
year in which such is not required by the Investment
Company Act of 1940."
I declare under penalty of perjury that the matters set forth in
this certificate are true and correct of my own knowledge.
Dated: 11/17/87 /s/ Deborah R. Gatzek
Deborah R. Gatzek
Secretary
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, Secretary of Franklin Federal Tax-Free
Income Fund (the "Fund"), a corporation organized under the laws
of the State of California, do hereby certify that the following
resolution was adopted by a majority of the directors present at a
meeting held at the offices of the Fund at 777 Mariners Island
Boulevard, San Mateo, California, on January 18, 1994.
WHEREAS, the Directors have determined that it is necessary
to amend Section 5 of Article II in order to remove the
requirement of using first class mail for notice of any
meeting of shareholders to extent permitted under applicable
California corporate law; it is
RESOLVED, that in accordance with Article IX, Section 2 of
the Fund's By-Laws, Section 5 of Article II is hereby amended
to read as follows:
Section 5. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.
Notice of any meeting of shareholders shall be given
either personally or by first-class mail, or, if the
corporation has outstanding shares held of record by
five hundred (500) or more persons (determined as
provided in Section 605 of the California Corporations
Code) on the record date for such meeting, notice may be
sent by third class mail, or by telegraphic or other
written communication, charges prepaid, addressed to the
shareholder at the address of the shareholder appearing
on the books of the corporation or given by the
shareholder to the corporation for the purpose of
notice. If no such address appears on the Corporation's
books or is given, notice shall be deemed to have been
given if sent to that shareholder by first-class mail or
by third-class mail by telegraphic or other written
communication (as provided herein) to the corporation's
principal executive office, or if published at least
once in the newspaper of general circulation in the
county where that office is located. Notice shall be
deemed to have been given at the time when delivered
personally or deposited in the mail or sent by telegram
or other means of written communication.
If any notice addressed to a shareholder at the address
of that shareholder appearing on the books of the
corporation is returned to the corporation by the United
States Postal Service marked to indicate that the United
States Postal Service is unable to deliver the notice to
the shareholder at that address, all future notices or
reports shall be deemed to have been fully given without
further mailing if these shall be available to the
shareholder on written demand of the shareholder at the
principal executive office of the corporation for a
period of one year from the date of the giving of the
notice.
An affidavit of the mailing or other means of giving any
notice of any shareholder's meeting shall be executed by
the secretary, assistant secretary or any transfer agent
of the corporation giving the notice and shall be filed
and maintained in the minute book of the corporation.
and it is
FURTHER RESOLVED, that the officers of the Fund be, and they
hereby are, authorized and directed to execute and deliver
any and all documents and take any and all other actions that
they may deem necessary or advisable in order to effectuate
the foregoing resolution.
I declare under penalty of perjury that the matters set forth in
this certificate are true and correct of my own knowledge.
Dated: February 28, 1994 /s/ Deborah R. Gatzek
Deborah R. Gatzek
Secretary
FRANKLIN FEDERAL TAX-FREE INCOME FUND
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT made between FRANKLIN FEDERAL TAX-FREE INCOME
FUND, a California Corporation hereinafter called the "Fund" and
FRANKLIN ADVISERS, INC., a California Corporation hereinafter called
the "Manager."
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the
purpose of investing and reinvesting its assets in securities, as set
forth in its Articles of Incorporation, its By-Laws and its
Registration Statements under the Investment Company Act of 1940 and
the Securities Act of 1933, all as heretofore amended and supplemented;
and the Fund desires to avail itself of the services, information,
advice, assistance and facilities of an investment manager and to have
an investment manager perform for its various management, statistical,
research, investment advisory and other services; and,
WHEREAS, the Manager is registered as an investment adviser under the
Investment Advisor's Act of 1940, is engaged in the business of
rendering management, investment advisory, counselling and supervisory
services to investment companies and other investment counselling
clients, and desires to provide these services to the Fund.
NOW THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. Employment of the Manager. The Fund hereby employs the Manager to
manage the investment and reinvestment of the Fund's assets and to
administer its affairs, subject to the direction of the Board of
Directors and the officers of the Fund, for the period and on the
terms hereinafter set forth. The Manager hereby accepts such
employment and agrees during such period to render the services
and to assume the obligations herein set forth for the
compensation herein provided. The Manager shall for all purposes
herein be deemed to be an independent contractor and shall, except
as expressly provided or authorized (whether herein or otherwise),
have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
2. Obligations of and Services to be Provided by the Manager. The
Manager undertakes to provide the services hereinafter set forth
and to assume the following obligations:
A. Office Space, Furnishings, Facilities, Equipment, and
Personnel. The Manager shall furnish to the Fund adequate
(i) office space, which may be space within the offices of
the Manager or in such other place as may be agreed upon from
time to time, (ii) office furnishings, facilities and
equipment as may be reasonably required for managing the
corporate affairs and conducting the business of the Fund,
including complying with the corporate and securities
reporting requirements of the United States and the various
states in which the Fund does business, conducting
correspondence and other communications with the shareholders
of the Fund, maintaining all internal bookkeeping, accounting
and auditing services and records in connection with the
Fund's investment and business activities, and computing net
asset value. The Manager shall employ or provide and
compensate the executive, secretarial and clerical personnel
necessary to provide such services. The Manager shall also
compensate all officers and employees of the Fund who are
officers or employees of the Manager.
B. Investment Management Services
(a) The Manager shall manage the Fund's assets and portfolio
subject to and in accordance with the investment objectives
and policies of the Fund and any directions which the Fund's
Board of Directors may issue from time to time. In pursuance
of the foregoing, the Manager shall make all determinations
with respect to the investment of the Fund's assets and the
purchase and sale of portfolio securities, and shall take
such steps as may be necessary to implement the same. Such
determinations and services shall also include determining
the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the
Fund's portfolio securities shall be exercised. The Manager
shall render regular reports to the Fund, at regular meetings
of the Board of Directors and at such other times as may be
reasonably requested by the Fund's Board of Directors, of (i)
the decisions which it has made with respect to the
investment of the Fund's assets and the purchase and sale of
portfolio securities, (ii) the reasons for such decisions and
(iii) the extent to which those decisions have been
implemented.
(b) The Manager, subject to and in accordance with any
directions which the Fund's Board of Directors may issue from
time to time, shall place, in the name of the Fund, orders
for the execution of the Fund's portfolio transactions. When
placing such orders the Manager shall seek to obtain the best
net price and execution for the Fund, but this requirement
shall not be deemed to obligate the Manager to place any
order solely on the basis of obtaining the lowest commission
rate if the other standards set forth in this section have
been satisfied. The parties recognize that there are likely
to be many cases in which different brokers are equally able
to provide such best price and execution and that, in
selecting among such brokers with respect to particular
trades, it is desirable to choose those brokers who furnish
research, statistical quotations and other information to the
Fund and the Manager in accord with the standards set forth
below. Moreover, to the extent that it continues to be
lawful to do so and so long as the Board determines that the
Fund will benefit, directly or indirectly, by doing so, the
Manager may place orders with a broker who charges a
commission for that transaction which is in excess of the
amount of commission that another broker would have charged
for effecting that transaction, provided that the excess
commission is reasonable in relation to the value of
"brokerage and research services" (as defined in Section
28(e)(3) of the Securities Exchange Act of 1934) provided by
that broker. Accordingly, the Fund and the Manager agree
that the Manager shall select brokers for the execution of
the Fund's portfolio transactions from among:
(i) Those brokers and dealers who provide quotations and
other services to the Fund, specifically including the
quotations necessary to determine the Fund's net assets,
in such amount of total brokerage as may reasonably be
required in light of such services;
(ii) Those brokers and dealers who supply research,
statistical and other data to the Manager or its
affiliates which relate directly to portfolio
securities, actual or potential, of the Fund or which
place the Manager in a better position to make decisions
in connection with the management of the Fund's assets
and portfolio, whether or not such data may also be
useful to the Manager and its affiliates in managing
other portfolios or advising other clients, in such
amount of total brokerage as may reasonably be required.
Provided that the Fund's officers are satisfied that the best
execution is obtained, the sale of Fund shares may also be
considered as a factor in the selection of broker-dealers to
execute the Fund's portfolio transactions.
(c) When the Manager has determined that the Fund should
tender securities pursuant to a "tender offer solicitation,"
Franklin Distributors, Inc. ("Distributors") shall be
designated as the "tendering dealer" so long as it is legally
permitted to act in such capacity under the Federal
securities laws and rules thereunder and the rules of any
securities exchange or association of which it may be a
member. Neither the Manager nor Distributors shall not be
obligated to make any additional commitments of capital,
expense or personnel beyond that already committed (other
than normal periodic fees or payments necessary to maintain
its corporate existence and membership in the National
Association of Securities Dealers, Inc.) as of the date of
this Agreement and this Agreement shall not obligate the
Manager or Distributors (i) to act pursuant to the foregoing
requirement under any circumstances in which they might
reasonably believe that liability might be imposed upon them
as a result of so acting, or (ii) to institute legal or other
proceedings to collect fees which may be considered to be due
from others to it as a result of such a tender, unless the
Fund shall enter into an agreement with the Manager to
reimburse them for all expenses connected with attempting to
collect such fees including legal fees and expenses and that
portion of the compensation due to their employees which is
attributable to the time involved in attempting to collect
such fees.
(d) The Manager shall render regular reports to the Fund, not
more frequently than quarterly, of how much total brokerage
business has been placed by the Manager with brokers falling
into each of the foregoing categories and the manner in which
the allocation has been accomplished.
The Manager agrees that no investment decision will be made
or influenced by a desire to provide brokerage for allocation
in accordance with the foregoing, and that the right to make
such allocation of brokerage shall not interfere with the
Manager's paramount duty to obtain the best net price and
execution for the Fund.
C. Provision of Information Necessary for Preparation of
Securities Registration Statements, Amendments and Other
Materials. The Manager, its officers and employees will make
available and provide accounting and statistical information
required by the Underwriter in the preparation of
registration statements, reports and other documents required
by Federal and state securities laws and with such
information as the Underwriter may reasonably request for use
in the preparation of such documents or of other materials
necessary or helpful for the underwriting and distribution of
the Fund's shares.
D. Other Obligations and Services. The Manager shall make
available its officers and employees to the Board of
Directors and officers of the Fund for consultation and
discussions regarding the administrative management of the
Fund and its investment activities.
3. Expenses of the Fund. It is understood that the Fund will pay all
its expenses other than those expressly assumed by the Manager
herein, which expenses payable by the Fund shall include:
A. Fees to the Manager as provided herein;
B. Expenses of all audits by independent public accountants;
C. Expenses of transfer agent, registrar, custodian, dividend
disbursing agent and shareholder record-keeping services;
D. Expenses of obtaining quotations for calculating the value of
the Fund's net assets;
E. Salaries and other compensation of any of its executive
officers who are not officers, directors, stockholders or
employees of the Manager;
F. Taxes levied against the Fund;
G. Brokerage fees and commissions in connection with the
purchase and sale of portfolio securities for the Fund;
H. Costs, including the interest expense, of borrowing money;
I. Costs incident to corporate meetings of the Fund, reports to
the Fund to its shareholders, the filing of reports with
regulatory bodies and the maintenance of the Fund's corporate
existence;
J. Legal fees, including the legal fees related to the
registration and continued qualification of the Fund shares
for sale;
K. Costs of printing stock certificates representing shares of
the Fund;
L. Directors' fees and expenses to directors who are not
directors, officers, employees or stockholders of the Manager
or any of its affiliates; and
M. Its pro rata portion of the fidelity bond insurance premium.
4. Compensation of the Manager. The Fund shall pay a monthly
management fee in cash to the Manager based upon a percentage of
the value of the Fund's net assets, calculated as set forth below,
on the first business day of each month in each year as
compensation for the services rendered and obligations assumed by
the Manager during the preceding month. The initial management
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 the Fund relating to the month.
A. For purposes of calculating such fee, the value of the net
assets of the Fund shall be the net assets computed as of the
close of business on the last business day of the month
preceding the month in which the payment is being made,
determined in the same manner as the Fund uses to compute the
value of its net assets in connection with the determination
of the net asset value of Fund shares, all as set forth more
fully in the Fund's current prospectus. The rate of the
monthly management fee shall be as follows:
5/96 of 1% of the value of net assets up to and including
$100,000,000;
1/24 of 1% of the value of net assets in excess of
$100,000,000 up to $250,000,000;
9/240 of 1% of the value of net assets in excess of
$250,000,000 up to $10 billion.
11/300 of 1% of the value of net assets in excess of $10
billion up to $12.5 billion;
7/200 of 1% of the value of net assets in excess of $12.5
billion up to $15 billion;
1/30 of 1% of the value of net assets in excess of $15
billion up to $17.5 billion;
19/600 of 1% of the value of net assets in excess of $17.5
billion up to $20 billion; and
3/100 of 1% of the value of net assets in excess of $20
billion.
B. The Management fee payable by the Fund shall be reduced or
eliminated to the extent that Franklin Distributors, Inc. has
actually received cash payments of tender offer solicitation
fees less certain costs and expenses incurred in connection
therewith; and to the extent necessary to comply with the
limitations on expenses which may be borne by the Fund as set
forth in the laws, regulations and administrative
interpretations of those states in which the Fund's shares
are registered.
C. If this Agreement is terminated prior to the end of any
month, the management 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 number of calendar days
in the month, and shall be payable within 10 days after the
date of termination.
5. Activities of the Manager. The services of the Manager to the
Fund hereunder are not to be deemed exclusive, and the Manager and
any of its affiliates shall be free to render similar services to
others. Subject to and in accordance with the Articles of
Incorporation and By-Laws of the Fund and to Section 10(a) of the
Federal Investment Company Act of 1940, it is understood that
directors, officers, agents and stockholders of the Fund are or
may be interested in the Manager or its affiliates as directors,
officers, agents or stockholders, and that directors, officers,
agents or stockholders of the Manager or its affiliates or may be
interested in the Fund as directors, officers, agents stockholders
or otherwise, that the Manager or its affiliates may be interested
in the Fund as stockholders or otherwise; and that the effect of
any such interests shall be governed by said Articles of
Incorporation, the By-Laws of the Act.
6. Liabilities of the Manager.
A. In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of obligations or duties
hereunder on the part of the Manager, the Manager shall not
be subject to liability to the Fund or to any shareholder of
the Fund for any act of 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 the foregoing, the Manager agrees to
reimburse the Fund for any and all costs, expenses, and
counsel and directors' fees reasonably incurred by the Fund
in the preparation, printing and distribution of proxy
statements, amendments to its Registration Statement,
holdings of meetings of its shareholders or directors, the
conduct of factual investigations, any legal or
administrative proceedings (including any applications for
exemptions or determinations by the Securities and Exchange
Commission) which the Fund incurs as the result of action or
inaction of the Manager or any of its affiliates or any of
their officers, directors, employees or shareholders where
the actions or inaction necessitating such expenditures (i)
is directly or indirectly related to any transactions or
proposed transaction in the shares or control of the Manager
or its affiliates (or litigation related to any pending or
proposed or future transaction in such shares or control)
which shall have been undertaken without the prior, express
approval of the Fund's Board of Directors; or, (ii) is within
the control of the Manager or any of its affiliates or any of
their officers, directors, employees or shareholders. The
Manager shall not be obligated pursuant to the provisions of
this Subsection 6(B), to reimburse the Fund for any
expenditures related to the institution of an administrative
proceeding or civil litigation by the Fund or a Fund
Shareholder seeking to recover all or a portion of the
proceeds derived by any shareholder of the Manager or any of
its affiliates from the sale of his shares of the Manager, or
similar matters. So long as this Agreement is in effect, the
Manager shall pay to the Fund the amount due for expenses
subject to this Subsection 6(B) Agreement within 30 days
after a bill or statement has been received by the Fund
therefore. This provision shall not be deemed to be a waiver
of any claim the Fund may have or may assert against the
Manager or others for costs, expenses or damages heretofore
incurred by the Fund or for costs, expenses or damages the
Fund may hereafter incur which are not reimbursable to it
hereunder.
C. No provision of this Agreement shall be construed to protect
any director or officer of the Fund, or the Manager, from
liability in violation of Sections 17(h) and (i) of the
Investment Company Act of 1940.
7. Renewal and Termination
A. This Agreement shall become effective on the date written
below and shall continue in effect for two years. The
Agreement is renewable annually thereafter for successive
periods not to exceed one year (i) by a vote of a majority of
the outstanding voting securities of the Fund or by a vote of
the Board of Directors of the Fund, and (ii) by a vote of a
majority of the directors of the Fund who are not parties to
the Agreement or interested persons of any parties to the
Agreement (other than as Directors of the Fund) cast in
person at a meeting called for the purpose of voting on the
Agreement.
B. This Agreement.
(i) may at any time be terminated without the payment of
any penalty either by vote of the Board of Directors
of the Fund or by vote of a majority of the
outstanding voting securities of the Fund, on 30 day's
written notice to the Manager;
(ii) shall immediately terminate in the event of its
assignment; and
(iii) may be terminated by the Manager on 30 days' written
notice to the Fund.
C. As used in this Section the terms "assignment ," "interested
persons" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth for any such
terms in the Investment Company Act of 1940, as amended.
D. 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.
8. Severability. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed effective as of the 1st day of May, 1994.
FRANKLIN FEDERAL TAX-FREE INCOME FUND
By /s/ Charles B. Johnson
Charles B. Johnson
FRANKLIN ADVISERS, INC.
By /s/ Rupert H. Johnson, Jr.
Rupert H. Johnson, Jr.
FRANKLIN FEDERAL TAX-FREE INCOME FUND
777 Mariners Island Blvd.
San Mateo, California 94404
Franklin/Templeton Distributors, Inc.
777 Mariners Island Blvd.
San Mateo, California 94404
Re: Amended and Restated Distribution Agreement
Gentlemen:
We (the "Fund") are a corporation or business trust operating as
an open-end management investment company or "mutual fund", which
is registered under the Investment Company Act of 1940 (the "1940
Act") and whose shares are registered under the Securities Act of
1933 (the "1933 Act"). We desire to issue one or more series or
classes of our authorized but unissued shares of capital stock or
beneficial interest (the "Shares") to authorized persons in
accordance with applicable Federal and State securities laws.
The Fund's Shares may be made available in one or more separate
series, each of which may have one or more classes.
You have informed us that your company is registered as a broker-
dealer under the provisions of the Securities Exchange Act of
1934 and that your company is a member of the National
Association of Securities Dealers, Inc. You have indicated your
desire to act as the exclusive selling agent and distributor for
the Shares. We have been authorized to execute and deliver this
Distribution Agreement ("Agreement") to you by a resolution of
our Board of Directors or Trustees ("Board") passed at a meeting
at which a majority of Board members, including a majority who
are not otherwise interested persons of the Fund and who are not
interested persons of our investment adviser, its related
organizations or with you or your related organizations, were
present and voted in favor of the said resolution approving this
Agreement.
1. Appointment of Underwriter. Upon the execution of this
Agreement and in consideration of the agreements on your part
herein expressed and upon the terms and conditions set forth
herein, we hereby appoint you as the exclusive sales agent for
our Shares and agree that we will deliver such Shares as you may
sell. You agree to use your best efforts to promote the sale of
Shares, but are not obligated to sell any specific number of
Shares.
However, the Fund and each series retain the right to make
direct sales of its Shares without sales charges consistent with
the terms of the then current prospectus and applicable law, and
to engage in other legally authorized transactions in its Shares
which do not involve the sale of Shares to the general public.
Such other transactions may include, without limitation,
transactions between the Fund or any series or class and its
shareholders only, transactions involving the reorganization of
the Fund or any series, and transactions involving the merger or
combination of the Fund or any series with another corporation or
trust.
2. Independent Contractor. You will undertake and
discharge your obligations hereunder as an independent contractor
and shall have no authority or power to obligate or bind us by
your actions, conduct or contracts except that you are authorized
to promote the sale of Shares. You may appoint sub-agents or
distribute through dealers or otherwise as you may determine from
time to time, but this Agreement shall not be construed as
authorizing any dealer or other person to accept orders for sale
or repurchase on our behalf or otherwise act as our agent for any
purpose.
3. Offering Price. Shares shall be offered for sale at a
price equivalent to the net asset value per share of that series
and class plus any applicable percentage of the public offering
price as sales commission or as otherwise set forth in our then
current prospectus. On each business day on which the New York
Stock Exchange is open for business, we will furnish you with the
net asset value of the Shares of each available series and class
which shall be determined in accordance with our then effective
prospectus. All Shares will be sold in the manner set forth in
our then effective prospectus and statement of additional
information, and in compliance with applicable law.
4. Compensation.
A. Sales Commission. You shall be entitled to charge
a sales commission on the sale or redemption, as appropriate, of
each series and class of each Fund's Shares in the amount of any
initial, deferred or contingent deferred sales charge as set
forth in our then effective prospectus. You may allow any sub-
agents or dealers such commissions or discounts from and not
exceeding the total sales commission as you shall deem advisable,
so long as any such commissions or discounts are set forth in our
current prospectus to the extent required by the applicable
Federal and State securities laws. You may also make payments to
sub-agents or dealers from your own resources, subject to the
following conditions: (a) any such payments shall not create any
obligation for or recourse against the Fund or any series or
class, and (b) the terms and conditions of any such payments are
consistent with our prospectus and applicable federal and state
securities laws and are disclosed in our prospectus or statement
of additional information to the extent such laws may require.
B. Distribution Plans. You shall also be entitled to
compensation for your services as provided in any Distribution
Plan adopted as to any series and class of any Fund's Shares
pursuant to Rule 12b-1 under the 1940 Act.
5. Terms and Conditions of Sales. Shares shall be offered
for sale only in those jurisdictions where they have been
properly registered or are exempt from registration, and only to
those groups of people which the Board may from time to time
determine to be eligible to purchase such shares.
6. Orders and Payment for Shares. Orders for Shares shall
be directed to the Fund's shareholder services agent, for
acceptance on behalf of the Fund. At or prior to the time of
delivery of any of our Shares you will pay or cause to be paid to
the custodian of the Fund's assets, for our account, an amount in
cash equal to the net asset value of such Shares. Sales of
Shares shall be deemed to be made when and where accepted by the
Fund's shareholder services agent. The Fund's custodian and
shareholder services agent shall be identified in its prospectus.
7. Purchases for Your Own Account. You shall not purchase
our Shares for your own account for purposes of resale to the
public, but you may purchase Shares for your own investment
account upon your written assurance that the purchase is for
investment purposes and that the Shares will not be resold except
through redemption by us.
8. Sale of Shares to Affiliates. You may sell our Shares
at net asset value to certain of your and our affiliated persons
pursuant to the applicable provisions of the federal securities
statutes and rules or regulations thereunder (the "Rules and
Regulations"), including Rule 22d-1 under the 1940 Act, as
amended from time to time.
9. Allocation of Expenses. We will pay the expenses:
(a) Of the preparation of the audited and
certified financial statements of our company to
be included in any Post-Effective Amendments
("Amendments") to our Registration Statement under
the 1933 Act or 1940 Act, including the prospectus
and statement of additional information included
therein;
(b) Of the preparation, including legal
fees, and printing of all Amendments or
supplements filed with the Securities and Exchange
Commission, including the copies of the
prospectuses included in the Amendments and the
first 10 copies of the definitive prospectuses or
supplements thereto, other than those necessitated
by your (including your "Parent's") activities or
Rules and Regulations related to your activities
where such Amendments or supplements result in
expenses which we would not otherwise have
incurred;
(c) Of the preparation, printing and
distribution of any reports or communications
which we send to our existing shareholders; and
(d) Of filing and other fees to Federal and
State securities regulatory authorities necessary
to continue offering our Shares.
You will pay the expenses:
(a) Of printing the copies of the
prospectuses and any supplements thereto and
statements of additional information which are
necessary to continue to offer our Shares;
(b) Of the preparation, excluding legal
fees, and printing of all Amendments and
supplements to our prospectuses and statements of
additional information if the Amendment or
supplement arises from your (including your
"Parent's") activities or Rules and Regulations
related to your activities and those expenses
would not otherwise have been incurred by us;
(c) Of printing additional copies, for use
by you as sales literature, of reports or other
communications which we have prepared for
distribution to our existing shareholders; and
(d) Incurred by you in advertising,
promoting and selling our Shares.
10. Furnishing of Information. We will furnish to you such
information with respect to each series and class of Shares, in
such form and signed by such of our officers as you may
reasonably request, and we warrant that the statements therein
contained, when so signed, will be true and correct. We will
also furnish you with such information and will take such action
as you may reasonably request in order to qualify our Shares for
sale to the public under the Blue Sky Laws of jurisdictions in
which you may wish to offer them. We will furnish you with
annual audited financial statements of our books and accounts
certified by independent public accountants, with semi-annual
financial statements prepared by us, with registration statements
and, from time to time, with such additional information
regarding our financial condition as you may reasonably request.
11. Conduct of Business. Other than our currently
effective prospectus, you will not issue any sales material or
statements except literature or advertising which conforms to the
requirements of Federal and State securities laws and regulations
and which have been filed, where necessary, with the appropriate
regulatory authorities. You will furnish us with copies of all
such materials prior to their use and no such material shall be
published if we shall reasonably and promptly object.
You shall comply with the applicable Federal and State
laws and regulations where our Shares are offered for sale and
conduct your affairs with us and with dealers, brokers or
investors in accordance with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc.
12. Redemption or Repurchase Within Seven Days. If Shares
are tendered to us for redemption or repurchase by us within
seven business days after your acceptance of the original
purchase order for such Shares, you will immediately refund to us
the full sales commission (net of allowances to dealers or
brokers) allowed to you on the original sale, and will promptly,
upon receipt thereof, pay to us any refunds from dealers or
brokers of the balance of sales commissions reallowed by you. We
shall notify you of such tender for redemption within 10 days of
the day on which notice of such tender for redemption is received
by us.
13. Other Activities. Your services pursuant to this
Agreement shall not be deemed to be exclusive, and you may render
similar services and act as an underwriter, distributor or dealer
for other investment companies in the offering of their shares.
14. Term of Agreement. This Agreement shall become
effective on the date of its execution, and shall remain in
effect for a period of two (2) years. The Agreement is renewable
annually thereafter, with respect to the Fund or, if the Fund has
more than one series, with respect to each series, for successive
periods not to exceed one year (i) by a vote of (a) a majority of
the outstanding voting securities of the Fund or, if the Fund has
more than one series, of each series, or (b) by a vote of the
Board, and (ii) by a vote of a majority of the members of the
Board who are not parties to the Agreement or interested persons
of any parties to the Agreement (other than as members of the
Board), cast in person at a meeting called for the purpose of
voting on the Agreement.
This Agreement may at any time be terminated by the
Fund or by any series without the payment of any penalty, (i)
either by vote of the Board or by vote of a majority of the
outstanding voting securities of the Fund or any series on 90
days' written notice to you; or (ii) by you on 90 days' written
notice to the Fund; and shall immediately terminate with respect
to the Fund and each series in the event of its assignment.
15. Suspension of Sales. We reserve the right at all times
to suspend or limit the public offering of Shares upon two days'
written notice to you.
16. Miscellaneous. This Agreement shall be subject to the
laws of the State of California and shall be interpreted and
construed to further promote the operation of the Fund as an open-
end investment company. This Agreement shall supersede all
Distribution Agreements and Amendments previously in effect
between the parties. As used herein, the terms "Net Asset
Value," "Offering Price," "Investment Company," "Open-End
Investment Company," "Assignment," "Principal Underwriter,"
"Interested Person," "Parent," "Affiliated Person," and "Majority
of the Outstanding Voting Securities" shall have the meanings set
forth in the 1933 Act or the 1940 Act and the Rules and
Regulations thereunder.
Nothing herein shall be deemed to protect you against any
liability to us or to our securities holders to which you would
otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of your duties hereunder,
or by reason of your reckless disregard of your obligations and
duties hereunder.
If the foregoing meets with your approval, please acknowledge
your acceptance by signing each of the enclosed copies, whereupon
this will become a binding agreement as of the date set forth
below.
Very truly yours,
FRANKLIN FEDERAL TAX-FREE INCOME FUND
By:
Accepted:
Franklin/Templeton Distributors, Inc.
By:
DATED:
DEALER AGREEMENT
Effective: XXXXX YY, 1995
Franklin/Templeton Distributors, Inc. - Principal Underwriter
777 Mariners Island Blvd., San Mateo, CA 94404
700 Central Avenue, St. Petersburg, Florida 33701-3628
Franklin Divisions
Franklin Group of Funds
777 Mariners Island Blvd., San Mateo, CA 94404
415/312-2000 800/632-2350
and
500 5th Avenue, 55th Floor, New York, NY 212/869-1776
Templeton Divisions
Templeton Group of Funds
700 Central Avenue, St. Petersburg, Florida 33701-3628
813/823-8712 800/237-0738
Dear Securities Dealer:
Franklin/Templeton Distributors, Inc. ("we" or "us") invites
you to participate in the distribution of shares of the mutual
funds in the Franklin Templeton Group of Funds (the "Funds") for
which we now or in the future serve as principal underwriter,
subject to the terms of this Agreement. We will notify you from
time to time of the Funds which are eligible for distribution and
the terms of compensation under this Agreement. This Agreement
is cumulative and supersedes any agreement in effect prior to the
effective date listed above. Your first trade or acceptance of
payments from us after receipt of this Agreement, as it may be
amended pursuant to paragraph 16, below, shall constitute your
acceptance of its terms.
1. Licensing.
(a) You represent that you are a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD")
and are presently licensed to the extent necessary by the
appropriate regulatory agency of each state in which you will
offer and sell shares of the Funds. You agree that termination
or suspension of such membership with the NASD, or of your
license to do business by any state or federal regulatory
agency, at any time shall terminate or suspend this Agreement
forthwith and shall require you to notify us in writing of
such action; or, if you are not a member of the NASD but are a
dealer subject to the laws of a foreign country, you agree to
conform to the rules of fair practice of such association.
This Agreement is in all respects subject to Rule 26 of the
Rules of Fair Practice of the NASD which shall control any
provision to the contrary in this Agreement.
(b) You agree to notify us immediately in writing if at any
time you are not a member in good standing of the Securities
Investor Protection Corporation ("SIPC").
2. Sales of Fund Shares. You may offer and sell shares of
each Fund and class only at the public offering price which shall
be applicable to, and in effect at the time of, each transaction.
The procedures relating to all orders and the handling of them
shall be subject to the terms of the then current prospectus and
statement of additional information (hereafter, the "prospectus")
and new account application, including amendments, for each such
Fund, and our written instructions from time to time. This
Agreement is not exclusive, and either party may enter into
similar agreements with third parties.
3. Duties of Dealer: In General. You agree:
(a) To act as principal, or as agent on behalf of your
customers, in all transactions in shares of the Funds except
as provided in paragraph 4 hereof. You shall not have any
authority to act as agent for the issuer (the Funds), for the
Principal Underwriter, or for any other dealer in any respect,
nor will you represent to any third party that you have such
authority or are acting in such capacity.
(b) To purchase shares only from us or from your customers.
(c) To enter orders for the purchase of shares of the Funds
only from us and only for the purpose of covering purchase
orders you have already received from your customers or for
your own bona fide investment.
(d) To maintain records of all sales and redemptions of
shares made through you and to furnish us with copies of such
records on request.
(e) To distribute prospectuses and reports to your customers
in compliance with the applicable requirements, except to the
extent that we expressly undertake to do so on your behalf.
(f) That you will not withhold placing customers' orders for
shares so as to profit yourself as a result of such
withholding or place orders for shares in amounts just below
the point at which sales charges are reduced so as to benefit
from a higher sales charge applicable to an amount below the
breakpoint.
(g) That if any shares confirmed to you hereunder are
repurchased or redeemed by any of the Funds within seven
business days after such confirmation of your original order,
you shall forthwith refund to us the full concession allowed
to you on such orders. We shall forthwith pay to the
appropriate Fund our share, if any, of the "charge" on the
original sale and shall also pay to such Fund the refund from
you as herein provided. We shall notify you of such repurchase
or redemption within ten days from the date of settlement.
Termination or cancellation of this Agreement shall not
relieve you or us from the requirements of this subparagraph.
(h) That if payment for the shares purchased is not received
within the time customary or the time required by law for such
payment, the sale may be canceled forthwith without any
responsibility or liability on our part or on the part of the
Funds, or at our option, we may sell the shares ordered back
to the Funds, in which latter case we may hold you responsible
for any loss to the Fund or loss of profit suffered by us
resulting from your failure to make payment as aforesaid. We
shall have no liability for any check or other item returned
unpaid to you after you have paid us on behalf of a purchaser.
We may refuse to liquidate the investment unless we receive
the purchaser's signed authorization for the liquidation.
(i) That you shall assume responsibility for any loss to a
Fund(s) caused by a correction made subsequent to trade date,
provided such correction was not based on any error, omission
or negligence on our part, and that you will immediately pay
such loss to the Fund(s) upon notification.
(j) That if on a redemption which you have ordered,
instructions in proper form, including outstanding
certificates are not received within the time customary or the
time required by law, the redemption may be canceled forthwith
without any responsibility or liability on our part or on the
part of any Fund, or at our option, we may buy the shares
redeemed on behalf of the Fund, in which latter case we may
hold you responsible for any loss to the Fund or loss of
profit suffered by us resulting from your failure to settle
the redemption.
4. Duties of Dealer: Retirement Accounts. In connection with
orders for the purchase of shares on behalf of an Individual
Retirement Account, Self-Employed Retirement Plan or other
retirement accounts, by mail, telephone, or wire, you shall act
as agent for the custodian or trustee of such plans (solely with
respect to the time of receipt of the application and payments)
and shall not place such order until you have received from your
customer payment for such purchase and, if such purchase
represents the first contribution to such a plan, the completed
documents necessary to establish the plan. You agree to indemnify
us and Franklin Templeton Trust Company and/or Templeton Funds
Trust Company as applicable for any claim, loss, or liability
resulting from incorrect investment instructions received from
you which cause a tax liability or other tax penalty.
5. Conditional Orders; Certificates. We will not accept from
you any conditional orders for shares of any of the Funds.
Delivery of certificates for shares purchased shall be made by
the Funds only against constructive receipt of the purchase
price, subject to deduction for your concession and our portion
of the sales charge, if any, on such sale. No certificates will
be issued unless specifically requested.
6. Dealer Compensation.
(a) On each purchase of shares by you from us, the total
sales charges and your dealer concessions shall be as stated
in each Fund's then current prospectus, subject to NASD rules
and applicable state and federal laws. Such sales charges and
dealer concessions are subject to reductions under a variety
of circumstances as described in the Funds' prospectuses. To
obtain these reductions, we must be notified when the sale
takes place which would qualify for the reduced charge. If you
fail to notify us of the applicability of a reduction in the
sales charge at the time the trade is placed, neither we nor
any of the Funds will be liable for amounts necessary to
reimburse any investor for the reduction which should have
been effected.
(b) In accordance with the Funds' prospectuses, we or our
affiliates may, but are not obligated to, make payments to
dealers from our own resources as compensation for certain
sales which are made at net asset value and are not subject to
any contingent deferred sales charges ("Qualifying Sales").
If you notify us of a Qualifying Sale, we may make a
contingent advance payment up to the maximum amount available
for payment on the sale. If any of the shares purchased in a
Qualifying Sale are redeemed within twelve months of the end
of the month of purchase, the advance shall not be earned and
we shall be entitled to recover any advance payment
attributable to the redeemed shares by reducing any account
payable or other monetary obligation we may owe to you or by
making demand upon you for repayment in cash. We reserve the
right to withhold advances to any dealer, if for any reason we
believe that we may not be able to recover unearned advances
from such dealer.
7. Redemptions. Redemptions or repurchases of shares will be
made at the net asset value of such shares, less any applicable
deferred sales or redemption charges, in accordance with the
applicable prospectuses. Except as permitted by applicable law,
you agree not to purchase any shares from your customers at a
price lower than the redemption or repurchase prices then
computed by the Funds. You shall, however, be permitted to sell
shares for the account of the record owner to the Funds at the
repurchase price then currently in effect for such shares and may
charge the owner a fair commission for handling the transaction.
8. Exchanges. Telephone exchange orders will be effective
only for shares in plan balance (uncertificated shares) or for
which share certificates have been previously deposited and may
be subject to any fees or other restrictions set forth in the
applicable prospectuses. You may charge the shareholder a fair
commission for handling an exchange transaction. Exchanges from a
Fund sold with no sales charge to a Fund which carries a sales
charge, and exchanges from a Fund sold with a sales charge to a
Fund which carries a higher sales charge may be subject to a
sales charge in accordance with the terms of each Fund's
prospectus. You will be obligated to comply with any additional
exchange policies described in each Fund's prospectus, including
without limitation any policy restricting or prohibiting "Timing
Accounts" as therein defined.
9. Transaction Processing. All orders are subject to
acceptance by us and by the Fund or its transfer agent, and
become effective only upon confirmation by us. If required by
law, each transaction shall be confirmed in writing on a fully
disclosed basis and if confirmed by us, a copy of each
confirmation shall be sent simultaneously to you if you so
request. All sales are made subject to receipt of shares by us
from the Funds. We reserve the right in our discretion, without
notice, to suspend the sale of shares or withdraw the offering of
shares entirely. Telephone orders will be effected at the
price(s) next computed on the day they are received from you if,
as set forth in each Fund's current prospectus, they are received
prior to the time the price of its shares is calculated. Orders
received after that time will be effected at the price(s)
computed on the next business day. Orders for the purchase of
100,000 shares or more of any of the Funds will be effected at an
offering price calculated to four decimal places. All orders must
be accompanied by payment in U.S. dollars. Orders payable by
check must be drawn payable in U.S. dollars on a U.S. bank, for
the full amount of the investment.
10. Multiple Classes. We may from time to time provide to
you written compliance guidelines or standards relating to the
sale or distribution of Funds offering multiple classes of shares
with different sales charges and distribution-related operating
expenses. In addition, you will be bound by any applicable rules
or regulations of government agencies or self-regulatory
organizations generally affecting the sale or distribution of
mutual funds offering multiple classes of shares.
11. Rule 12b-1 Plans. You are also invited to participate in
all Plans adopted by the Funds (the "Plan Funds") pursuant to
Rule 12b-1 under the 1940 Act.
To the extent you provide administrative and other services,
including, but not limited to, furnishing personal and other
services and assistance to your customers who own shares of a
Plan Fund, answering routine inquiries regarding a Fund,
assisting in changing account designations and addresses,
maintaining such accounts or such other services as a Fund may
require, to the extent permitted by applicable statutes, rules,
or regulations, we shall pay you a Rule 12b-1 servicing fee. To
the extent that you participate in the distribution of Fund
shares which are eligible for a Rule 12b-1 distribution fee, we
shall also pay you a Rule 12b-1 distribution fee. All Rule 12b-1
servicing and distribution fees shall be based on the value of
shares attributable to customers of your firm and eligible for
such payment, and shall be calculated on the basis and at the
rates set forth in the compensation schedule then in effect.
Without prior approval by a majority of the outstanding shares of
a Fund, the aggregate annual fees paid to you pursuant to each
Plan shall not exceed the amounts stated as the "annual maximums"
in each Fund's prospectus, which amount shall be a specified
percent of the value of the Fund's net assets held in your
customers' accounts which are eligible for payment pursuant to
this Agreement (determined in the same manner as each Fund uses
to compute its net assets as set forth in its effective
Prospectus).
You shall furnish us and each Fund with such information as
shall reasonably be requested by the Board of Directors or
Trustees with respect to the fees paid to you pursuant to the
Schedule. We shall furnish to the Boards of Directors, Trustees
or Managing General Partners (hereinafter referred to as
"Directors") of the Plan Funds, for their review on a quarterly
basis, a written report of the amounts expended under the Plans
and the purposes for which such expenditures were made.
The Plans and provisions of any agreement relating to such
Plans must be approved annually by a vote of the Plan Funds'
Directors, including such persons who are not interested persons
of the Plan Funds and who have no financial interest in the Plans
or any related agreement ("Rule 12b-1 Directors"). The Plans or
the provisions of this Agreement relating to such Plans may be
terminated at any time by the vote of a majority of the Plan
Funds' Boards of Directors, including Rule 12b-1 Directors, or by
a vote of a majority of the outstanding shares of the Plan Funds,
on sixty (60) days' written notice, without payment of any
penalty. The Plans or the provisions of this Agreement may also
be terminated by any act that terminates the Underwriting
Agreement between us and the Plan Funds, and/or the management or
administration agreement between Franklin Advisers, Inc. or
Templeton Investment Counsel, Inc. or their affiliates and the
Plan Funds. In the event of the termination of the Plans for any
reason, the provisions of this Agreement relating to the Plans
will also terminate.
Continuation of the Plans and provisions of this Agreement
relating to such Plans are conditioned on Rule 12b-1 Directors
being ultimately responsible for selecting and nominating any new
Rule 12b-1 Directors. Under Rule 12b-1, Directors of any of the
Plan Funds have a duty to request and evaluate, and persons who
are party to any agreement related to a Plan have a duty to
furnish, such information as may reasonably be necessary to an
informed determination of whether the Plan or any agreement
should be implemented or continued.
Parties to this Agreement who provide services to Plan Funds
in the promotion of shares of such Funds should be aware that
under Rule 12b-1 Plan Funds are permitted to implement or
continue Plans or the provisions of this Agreement relating to
such Plans from year-to-year only if, based on certain legal
considerations, the board is able to conclude that the Plans will
benefit the Plan Funds. Absent such yearly determination the
Plans and the provisions of this Agreement relating to the Plans
must be terminated as set forth above. In addition, any
obligation assumed by a Fund pursuant to this Agreement shall be
limited in all cases to the assets of such Fund and no person
shall seek satisfaction thereof from shareholders of a Fund.
You agree to waive payment of any amounts payable to you by us
under a Fund's Plan of Distribution pursuant to Rule 12b-1 until
such time as we are in receipt of such fee from the Fund.
The provisions of the management agreements between the Plan
Funds and Franklin Advisers, Inc. or Templeton Investment
Counsel, Inc. or their affiliates, and/or of the Underwriting
Agreements and Rule 12b-1 Plans between the Plan Funds and us,
insofar as they relate to Plans, are incorporated herein by
reference, and shall control in the event of any inconsistency.
12. Registration of Shares. Upon request, we shall notify
you of the states or other jurisdictions in which Fund shares are
currently registered or qualified for sale to the public. We
shall have no obligation to register or qualify, or to maintain
registration or qualification of, Fund shares in any state or
other jurisdiction. We shall have no responsibility, under the
laws regulating the sale of securities in any U.S. or foreign
jurisdiction, for the qualification or status of persons selling
Fund shares or for the manner of sale of Fund shares. Except as
stated in this paragraph, we shall not, in any event, be liable
or responsible for the issue, form, validity, enforceability and
value of such shares or for any matter in connection therewith,
and no obligation not expressly assumed by us in this Agreement
shall be implied. Nothing in this Agreement, however, shall be
deemed to be a condition, stipulation or provision binding any
person acquiring any security to waive compliance with any
provision of the Securities Act of 1933, or of the rules and
regulations of the Securities and Exchange Commission, or to
relieve the parties hereto from any liability arising under the
Securities Act of 1933.
13. Additional Registrations. If it is necessary to register
or qualify the shares in any foreign jurisdictions in which you
intend to offer the shares, it will be your responsibility to
arrange for and to pay the costs of such registration or
qualification; prior to any such registration or qualification
you will notify us of your intent and of any limitations that
might be imposed on the Funds and you agree not to proceed with
such registration or qualification without the written consent of
the Funds and of ourselves.
14. Fund Information. No person is authorized to give any
information or make any representations concerning shares of the
Funds except those contained in the current prospectus, or
statement of additional information issued by the Fund or by us
as information supplemental to such prospectus or statement of
additional information. We will supply prospectuses, reasonable
quantities of supplemental sale literature, sales bulletins, and
additional information as issued. You agree not to use other
advertising or sales material relating to the Funds except that
which (a) conforms to the requirements of any applicable laws or
regulations of any government or authorized agency in the U.S. or
any other country, having jurisdiction over the offering or sale
of shares of the Funds, and (b) is approved in writing by us in
advance of such use. Such approval may be withdrawn by us in
whole or in part upon notice to you, and you shall, upon receipt
of such notice, immediately discontinue the use of such sales
literature, sales material and advertising. You are not
authorized to modify or translate any such materials without our
prior written consent.
15. Indemnification. You further agree to indemnify, defend
and hold harmless the Principal Underwriter, the Funds, their
officers, directors and employees from any and all losses,
claims, liabilities and expenses, whether or not resulting in any
liability to any of the parties indemnified under this
subparagraph, arising out of (1) any alleged violation of any
statute or regulation (including without limitation the
securities laws and regulations of the United States or any state
or foreign country) or any alleged tort or breach of contract, in
or related to the offer and sale by you of shares of the Funds
pursuant to this Agreement (except to the extent that our
negligence or failure to follow correct instructions received
from you is the cause of such loss, claim, liability or expense),
(2) any redemption or exchange pursuant to telephone instructions
received from you or your agent or employees, or (3) the breach
by you of any of the terms and conditions of this Agreement.
16. Termination; Succession; Amendment. Each party to this
Agreement may cancel its participation in this Agreement by
giving written notice to the other parties. Such notice shall be
deemed to have been given and to be effective on the date on
which it was either delivered personally to the other parties or
any officer or member thereof, or was mailed postpaid or
delivered to a telegraph office for transmission to the other
parties' Chief Legal Officers at the addresses shown herein or in
the most recent NASD Manual. This Agreement shall terminate
immediately upon the appointment of a Trustee under the
Securities Investor Protection Act or any other act of insolvency
by you. The termination of this Agreement by any of the
foregoing means shall have no effect upon transactions entered
into prior to the effective date of termination. A trade placed
by you subsequent to your voluntary termination of this Agreement
will not serve to reinstate the Agreement. Reinstatement, except
in the case of a temporary suspension of a dealer will only be
effective upon written notification by us. Unless terminated,
this Agreement shall be binding upon each party's successors or
assigns. This Agreement may be amended by us at any time by
written notice to you and your placing of an order or acceptance
of payments of any kind after the effective date and receipt of
notice of any such Amendment shall constitute your acceptance of
such Amendment.
17. Setoff; Dispute Resolution. Should any of your
concession accounts with us have a debit balance, we may offset
and recover the amount owed from any other account you have with
us, without notice or demand to you. In the event of a dispute
concerning any provision of this Agreement, either party may
require the dispute to be submitted to binding arbitration under
the commercial arbitration rules of the NASD or the American
Arbitration Association. Judgment upon any arbitration award may
be entered by any state or federal court having jurisdiction.
This Agreement shall be construed in accordance with the laws of
the State of California, not including any provision which would
require the general application of the law of another
jurisdiction, and shall be binding upon the parties hereto when
signed by us and accepted by you, either by your signature in the
space provided below or by your first trade entered after receipt
of this Agreement.
Date:
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By:
(Signature)
Name: Greg Johnson
Title: President
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, CA 94403-7777
Attention: Chief Legal Officer
(415) 312-2000
Dealer Services - (800) 524-4040
Order Room - (800) 227-5041
700 Central Avenue
St. Petersburg, Florida 33701-3628
(813) 823-8712
Account Information - (800) 354-9191
Switchboard - (800) 237-0738
[DEALER NAME]
By:
(Signature)
Name:
Title:
Address:
Attention: Chief Legal Officer
Telephone:
NASD CRD #
Franklin Templeton Dealer #
(Internal Use Only)
AGREEMENT
AGREEMENT, made as of December 1, 1982, between Franklin Cash
Management Fund a California corporation (hereinafter called the "Fund")
and Bank of America NT & SA, a national banking association (hereinafter
called the "Custodian").
WITNESSETH:
WHEREAS, the Fund is registered as an investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"), as a
diversified, open-end management company and desires that its securities
and cash shall be held and administered by the Custodian pursuant to the
terms of this Agreement; and
WHEREAS, the Custodian has an aggregate capital, surplus, and
undivided profits in excess of Two Million Dollars ($2,000,000), and has
its functions and physical facilities supervised by federal authority
and is ready and willing to serve pursuant to and subject to the terms
of this Agreement:
NOW, THEREFORE, in consideration of the mutual agreements
herein made, the Fund, and Custodian agree as follows:
Sec. 1. Definitions:
The word "securities" as used herein includes stocks, shares,
bonds, debentures, notes, mortgages and other obligations and any
certificates, receipts, warrants or other instruments representing
rights to receive, purchase, or subscribe for the same, or evidencing or
representing any other rights or interests therein, or in any property
or assets.
The term "proper instructions" shall mean a request or
direction by telephone or any other communication device from an
authorized Fund designee to be followed by a certification in writing
signed in the name of the Fund by any two of the following persons: the
Chairman of the Executive Committee, the President, a Vice-President,
the Secretary and Treasurer of the Corporation, or any other persons
duly authorized to sign by the Board of Directors of the Fund and for
whom authorization has been communicated in writing to the Custodian.
The term "proper officers" shall mean the officers authorized above to
give proper instructions.
Sec. 2. Names, Titles and Signatures of Authorized Signers:
An officer of the Corporation will certify to Custodian the
names and signatures of those persons authorized to sign in accordance
with Sec. 1 hereof, and on a timely basis, of any changes which
thereafter may occur.
Sec. 3. Receipt and Disbursement of Money:
A. Custodian shall open and maintain a separate account or
accounts in the name of the Fund, subject only to draft or order by
Custodian acting pursuant to the terms of this Agreement ("Direct Demand
Deposit Account"). Custodian shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or for
the accounts of the Fund. This shall include, without limitation, the
proceeds from the sale of shares of the capital stock of the Fund which
shall be received along with proper instructions from the Fund. All
such payments received by Custodian shall be converted to Federal Funds
no later than the day after receipt and deposited to such Direct Demand
Deposit Account.
B. Custodian shall make payments of cash to, or for the account
of, the Fund from such cash or Direct Demand Deposit Account only (a)
for the purchase of securities for the portfolio of the Fund upon the
delivery of such securities to Custodian registered in the name of the
Custodian or of the nominee or nominees thereof, in the proper form for
transfer, (b) for the redemption of shares of the capital stock of the
Fund, (c) for the payment of interest, dividends, taxes, management or
supervisory fees or any operating expenses (including, without
limitations thereto, fees for legal, accounting and auditing services),
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Fund held by or to
be delivered to Custodian; or (e) for other proper corporate purposes.
Before making any such payment Custodian shall receive and may rely
upon, proper instructions requesting such payment and setting forth the
purposes of such payment.
Custodian is hereby authorized to endorse and collect for the
account of the Fund all checks, drafts or other orders for the payment
of money received by Custodian for the account of the Fund.
Sec. 4. Holding of Securities:
Custodian shall hold all securities received by it for the
account of the Fund, pursuant to the provisions hereof, in accordance
with the provisions of Section 17(f) of the Investment Company Act of
1940 and the regulations thereunder. All such securities are to be held
or disposed of by the Custodian for, and subject at all times to the
proper instructions of, the Fund, pursuant to the terms of this
Agreement. The Custodian shall have no power of authority to assign,
hypothecate, pledge or otherwise dispose of any such securities and
investments, except pursuant to the proper instructions of the Fund and
only for the account of the Fund as set forth in Sec. 5 of this
Agreement.
Sec. 5. Transfer, Exchange or Delivery, of Securities:
Custodian shall have sole power to release or to deliver any
securities of the Fund held by it pursuant to this Agreement.
Custodian agrees to transfer, exchange, or deliver securities held by it
hereunder only (a) for the sales of such securities for the account of
the Fund upon receipt by Custodian of payment therefor, (b) when such
securities are called, redeemed or retired or otherwise become payable,
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom,(d) in exchange for or upon
conversion into other securities alone or other securities and cash
whether pursuant to any plan or merger, consolidation, reorganization,
recapitalization or readjustment, or otherwise, (e) upon conversion of
such securities pursuant to their terms into other securities, (f) upon
exercise of subscription, purchase or other similar rights represented
by such securities, (g) for the purpose of exchanging interim receipts
or temporary securities for definitive securities, (h) for the purpose
of redeeming in kind shares of capital stock of the Fund upon delivery
thereof to Custodian, or (i) for other proper corporate purposes. Any
securities or cash receivable in exchange for such deliveries made by
Custodian, shall be deliverable to Custodian. Before making any such
transfer, exchange or delivery, the Custodian shall receive, and may
rely upon, proper instructions authorizing such transfer, exchange or
delivery and setting forth the purpose thereof.
Sec. 6. Other Actions of Custodians:
(a) The Custodian shall collect, receive and deposit income
dividends, interest and other payments or distribution of cash or
property of whatever kind with respect to the securities held hereunder;
receive and collect securities received as a distribution upon portfolio
securities as a result of a stock dividend, share split-up,
reorganization, recapitalization, consolidation, merger, readjustment,
distribution of rights and other items of like nature, or otherwise, and
execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with the collection of coupons upon
corporate securities, setting forth in any such certificate or affidavit
the name of the Fund as owner of such securities; and do all other
things necessary or proper in connection with the collection, receipt
and deposit of such income and securities, including without limiting
the generality of the foregoing, presenting for payment all coupons and
other income items requiring presentation and presenting for payment all
securities which may be called, redeemed, retired or otherwise become
payable. Amounts to be collected hereunder shall be credited to the
account of the Fund according to the following formula:
(1) Periodic interest payments and final payments on
maturities of Federal instruments such as U.S. Treasury bills, bonds and
notes; interest payments and final payments on maturities of other money
market instruments including tax-exempt money market instruments payable
in federal or depository funds; and payments on final maturities of GNMA
instruments, shall be credited to the account of the Fund on payable or
maturity date.
(2) Dividends on equity securities and interest payments, and
payments on final maturities of municipal bonds (except called bonds)
shall be credited to the account of the Fund on payable or maturity date
plus one.
(3) Payments for the redemption of called bonds, including
called municipal bonds shall be credited to the account of the Fund on
the payable date except that called municipal bonds paid in other than
Federal or depository funds shall be credited on payable date plus one.
(4) Periodic payments of interest and/or of partial principal
on GNMA instruments (other than payments on final maturity) shall be
credited to the account of the Fund on payable date plus three.
(5) Should the Custodian fail to credit the account of the
Fund on the date specified in paragraphs (1) - (4) above, the Fund may
at its option, require compensation from the Custodian of foregone
interest (at the rate of prime plus one) and for damages, if any.
(b) Payments to be received or to be paid in connection with
purchase and sale transactions shall be debited or credited to the
account of the Fund on the contract settlement date with the exception
of "when-issued" municipal bonds. Payments to be made for purchase by
the Fund of when issued municipal bonds shall be debited to the account
of the Fund on actual settlement date.
(1) In the event a payment is wrongfully debited to the
account of the Fund due to an error by the Custodian, the Custodian will
promptly credit such amount to the Fund, plus interest (prime plus one)
and damages, if any.
(2) In the event a payment is credited to the account of the
Fund and the Custodian is unable to deliver securities being sold due to
an error on the part of the Fund, such payment shall be debited to the
account of the Fund, and an appropriate charge for costs of the
transaction may be sent by the Custodian to the Fund.
Sec. 7. Reports by Custodian:
Custodian shall each business day furnish the Fund with a
statement summarizing all transactions and entries for the account of
the Fund for the preceding day. At the end of every month Custodian
shall furnish the Fund with a list of the portfolio securities showing
the quantity of each issue owned, the cost of each issue and the market
value of each issue at the end of each month. Such monthly report shall
also contain separate listings of (a) unsettled trades and (b) when
issued securities. Custodian shall furnish such other reports as may be
mutually agreed upon from time-to-time.
Sec. 8. Compensation:
Custodian shall be paid as compensation for its services
pursuant to this Agreement such compensation as may from time-to-time be
agreed upon in writing between the two parties.
Sec. 9. Liabilities and Indemnifications:
(a) Custodian shall not be liable for any action taken in good
faith upon any proper instructions herein described or certified copy of
any resolution of, the Board of Directors, and may rely on the
genuineness of any such document which it may in good faith believe to
have been validly executed.
(b) The Fund agrees to indemnify and hold harmless the
Custodian and its nominee from all taxes, charges, expenses assessments,
claims and liabilities (including counsel fees) incurred or assigned
against it or its nominee in connection with the performance of this
Agreement, except such as may arise from negligent action, negligent
failure to act or willful misconduct of Custodian or its nominee.
Sec. l0. Records:
The Custodian hereby acknowledges that all of the records it
shall prepare and maintain pursuant to this Agreement shall be the
property of the Fund and, if and to the extent applicable, of the
principal underwriter of the shares of the Fund, and that upon proper
instructions of the Fund or such principal underwriter, if any, or both,
it shall:
(a) Deliver said records to the Fund, principal underwriter or
a successor custodian, as appropriate:
(b) Provide the auditors of the Fund or principal underwriter
or any securities regulatory agency with a copy of such records without
charge; and provide the Fund and successor custodian with a reasonable
number of reports and copies of such records at a mutually agreed upon
charge appropriate to the circumstances.
(c) Permit any securities regulatory agency to inspect or copy
during normal business hours of the Custodian any such records.
Sec. 11. Appointment of Agents:
(a) The Custodian shall have the authority, in its discretion,
to appoint an agent or agents to do and perform any acts or things for
and on behalf of the Custodian, pursuant at all times to its
instructions, as the Custodian is permitted to do under this Agreement.
(b) Any agent or agents appointed to have physical custody of
securities held under this Agreement or any part thereof must be: (1) a
bank or banks, as that term is defined in Section 2(a)(5) of the 1940
Act, having an aggregate, surplus and individual profits of not less
than $2,000,000 (or such greater sum as may then be required by
applicable laws), or (2) a securities depository, (the "Depository") as
that term is defined in Rule 17f-4 under the 1940 Act, upon proper
instructions from the Fund and subject to any applicable regulations, or
(3) the book-entry system of the U.S. Treasury Department and Federal
Reserve Board, (the "System") upon proper instructions and subject to
any applicable regulations.
(c) With respect to portfolio securities deposited or held in
the System or the Depository, Custodian shall:
1) hold such securities in a nonproprietary account which
shall not include securities owned by Custodian;
2) on each day on which there is a transfer to or from the
Fund in such portfolio securities, send a written
confirmation to the Fund;
3) upon receipt by Custodian, send promptly to Fund (i) a
copy of any reports Custodian receives from the System or
the Depository concerning internal accounting controls,
and (ii) a copy of such reports on Custodian's systems of
internal accounting controls as Fund may reasonably
request.
(d) The delegation of any responsibilities or activities by
the Custodian to any agent or agents shall not relieve the Custodian
from any liability which would exist if there were no such delegation.
Sec. 12. Assignment and Termination:
(a) This Agreement may not be assigned by the Fund or the
Custodian without written consent of the other party.
(b) Either the Custodian or the Fund may terminate this
Agreement without payment of any penalty, at any time upon one hundred
twenty (120) days written notice thereof delivered by the one to the
other, and upon the expiration of said one hundred twenty (120) days,
this Agreement shall terminate; provided, however, that this Agreement
shall continue thereafter for such period as may be necessary for the
complete divestiture of all assets held hereinunder, as next herein
provided. In the event of such termination, the Custodian will
immediately upon the receipt or transmittal of such notice, as the case
may be, commence and prosecute diligently to completion the transfer of
all cash and the delivery of all portfolio securities, duly endorsed, to
the successor of the Custodian when appointed by the Fund. The Fund
shall select such successor custodian within sixty (60) days after the
giving of such notice of termination, and the obligation of the
Custodian named herein to deliver and transfer over said assets directly
to such successor custodian shall commence as soon as such successor is
appointed and shall continue until completed, as aforesaid. At any time
after termination hereof the Fund may have access to the records of the
administration of this custodianship whenever the same may be necessary.
(c) If, after termination of the services of the custodian,
no successor custodian has been appointed within the period above
provided, the custodian may deliver the cash and securities owned by the
fund to a bank or trust company of its own selection having an aggregate
capital, surplus and undivided profits of not less than Two Million
Dollars ($2,000,000) (or such greater sum as may then be required by the
laws and regulations governing the conduct by the Fund of its business
as an investment company) and having its functions and physical
facilities supervised by federal or state authority, to be held as the
property of the Fund under the terms similar to those on which they were
held by the retiring Custodian, whereupon such bank or trust company so
selected by the custodian shall become the successor custodian with the
same effect as though selected by the Board of Directors of the Fund.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement.
Franklin Cash Management Fund
By: /s/ Harmon E. Burns
Harmon E. Burns
Attest:
/s/ Deborah R. Gatzek
Deborah R. Gatzek
Bank of America, NT & SA
/s/ Paul Fitzpatrick
By: Paul Fitzpatrick
Attest:
/s/ S. Koznell
By: S. Koznell
FRANKLIN
GROUP OF FUNDS
(FRANKLIN LOGO)
777 Mariners Island Blvd.
San Mateo, CA 94404-1585
415/570-3000
April 2, 1990
Lee D. Harbert, Vice President & Mgr.
Bank of America NT & SA
555 California St. 4th Floor
San Francisco, CA 94104
Dear Lee:
This will confirm our agreement to modify the Custodian
Agreement for the funds listed below as follows:
Section 6(a) (4) will be modified to read: "Periodic
payments of interest and/or of partial principal on GNMA
instruments (other than payments on final maturity) shall be
credited to the account of the Fund on payable date plus two."
FRANKLIN GROUP OF FUNDS
Franklin Investors Securities Trust
Franklin Tax-Free Trust
Franklin California Tax-Free Income Fund, Inc.
Franklin Federal Tax-Free Income Fund
AGE High Income Fund, Inc.
Franklin New York Tax-Free Income Fund, Inc.
Franklin Equity Fund
Franklin California Tax-Free Trust
Institutional Fiduciary Trust
Franklin Gold Fund
Franklin Tax-Exempt Money Fund
Franklin Pennsylvania Investors Fund
Franklin Money Fund
Franklin Federal Money Fund
Franklin Custodian Funds, Inc.
Franklin Option Fund
Franklin Tax-Advantaged U.S. Government Securities Fund
Franklin Tax-Advantaged High Yield Securities Fund
Franklin Managed Trust
Franklin Valuemark Funds
Franklin Government Securities Trust
Franklin New York Tax-Exempt Money Fund
Franklin Balance Sheet Investment Fund
Please sign the enclosed copy of this letter in the space
indicated and return it to me. If you have any questions,
please call me.
Sincerely,
/s/ Deborah R. Gatzek
Deborah R. Gatzek
Approved and agreed:
/s/ Lee D. Harbert
By: Lee D. Harbert
FRANKLIN FEDERAL TAX-FREE INCOME FUND
Preamble to Distribution Plan
The following Distribution Plan (the "Plan") has been
adopted pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the "Act") by Franklin Federal Tax-Free Income Fund (the
"Fund"), which Plan shall take effect on the 1st day of May, 1994
(the "Effective Date of the Plan"). The Plan has been approved by
a majority of the Board of Directors of the Fund (the "Board of
Directors"), including a majority of the directors who are not
interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan (the
"non-interested directors"), cast in person at a meeting called
for the purpose of voting on such Plan.
In reviewing the Plan, the Board of Directors considered the
schedule and nature of payments and terms of the Management
Agreement between the Fund and Franklin Advisers, Inc.
("Advisers") and the terms of the Underwriting Agreement between
the Fund and Franklin/Templeton Distributors, Inc.
("Distributors"). The Board of Directors concluded that the
compensation of Advisers, under the Management Agreement, and of
Distributors, under the Underwriting Agreement, was fair and not
excessive; however, the Board of Directors also recognized that
uncertainty may exist from time to time with respect to whether
payments to be made by the Fund to Advisers, Distributors, or
others or by Advisers or Distributors to others may be deemed to
constitute distribution expenses of the Fund. Accordingly, the
Board of Directors determined that the Plan should provide for
such payments and that adoption of the Plan would be prudent and
in the best interest of the Fund and its shareholders. Such
approval included a determination that in the exercise of their
reasonable business judgment and in light of their fiduciary
duties, there is a reasonable likelihood that the Plan will
benefit the Fund and its shareholders.
DISTRIBUTION PLAN
1. The Fund shall reimburse Distributors or others for all
expenses incurred by Distributors or others in the promotion and
distribution of the shares of the Fund, including but not limited
to, the printing of prospectuses and reports used for sales
purposes, expenses of preparing and distributing sales literature
and related expenses, advertisements, and other distribution-
related expenses, including a prorated portion of Distributors'
overhead expenses attributable to the distribution of Fund
shares, as well as any distribution or service fees paid to
securities dealers or their firms or others who have executed a
servicing agreement with the Fund, Distributors or its
affiliates, which form of agreement has been approved from time
to time by the directors, including the non-interested directors.
2. The maximum amount which may be reimbursed by the Fund to
Distributors or others pursuant to Paragraph 1 herein shall be
0.10% per annum of the average daily net assets of the Fund. Said
reimbursement shall be made quarterly by the Fund to Distributors
or others.
3. In addition to the payments which the Fund is authorized to
make pursuant to paragraphs 1 and 2 hereof, to the extent that
the Fund, Advisers, Distributors or other parties on behalf of
the Fund, Advisers or Distributors make payments that are deemed
to be payments by the Fund for the financing of any activity
primarily intended to result in the sale of shares issued by the
Fund within the context of Rule 12b-1 under the Act, then such
payments shall be deemed to have been made pursuant to the Plan.
In no event shall the aggregate asset-based sales charges
which include payments specified in paragraphs 1 and 2, plus any
other payments deemed to be made pursuant to the Plan under this
paragraph, exceed the amount permitted to be paid pursuant to the
Rules of Fair Practice of the National Association of Securities
Dealers, Inc., Article III, Section 26(d).
4. Distributors shall furnish to the Board of Directors, for
their review, on a quarterly basis, a written report of the
monies reimbursed to it and to others under the Plan, and shall
furnish the Board of Directors with such other information as the
Board of Directors may reasonably request in connection with the
payments made under the Plan in order to enable the Board of
Directors to make an informed determination of whether the Plan
should be continued.
5. The Plan shall continue in effect for a period of more than
one year only so long as such continuance is specifically
approved at least annually by a vote of the Board of Directors,
including the non-interested directors, cast in person at a
meeting called for the purpose of voting on the Plan.
6. The Plan, and any agreements entered into pursuant to this
Plan, may be terminated at any time, without penalty, by vote of
a majority of the outstanding voting securities of the Fund or by
vote of a majority of the non-interested directors, on not more
than sixty (60) days' written notice, or by Distributors on not
more than sixty (60) days' written notice, and shall terminate
automatically in the event of any act that constitutes an
assignment of the Management Agreement between the Fund and
Advisers.
7. The Plan, and any agreements entered into pursuant to this
Plan, may not be amended to increase materially the amount to be
spent for distribution pursuant to Paragraph 2 hereof without
approval by a majority of the Fund's outstanding voting
securities.
8. All material amendments to the Plan, or any agreements
entered into pursuant to this Plan, shall be approved by a vote
of the non-interested directors cast in person at a meeting
called for the purpose of voting on any such amendment.
9. So long as the Plan is in effect, the selection and
nomination of the Fund's non-interested directors shall be
committed to the discretion of such non-interested directors.
This Plan and the terms and provisions thereof are hereby
accepted and agreed to by the Fund and Distributors as evidenced
by their execution hereof.
FRANKLIN FEDERAL TAX-FREE INCOME FUND
By: /s/ Deborah R. Gatzek
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By: /s/ Harmon E. Burns
CLASS II DISTRIBUTION PLAN
I. Investment Company: FRANKLIN FEDERAL TAX-FREE INCOME FUND
II. Fund: FRANKLIN FEDERAL TAX-FREE INCOME
FUND
III. Maximum Per Annum Rule 12b-1 Fees for Class II Shares
(as a percentage of average daily net assets of the class)
A. Distribution Fee: 0.50%
B. Service Fee: 0.15%
PREAMBLE TO CLASS II DISTRIBUTION PLAN
The following Distribution Plan (the "Plan") has been
adopted pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the "Act") by the Investment Company named above
("Investment Company") for the class II shares (the "Class") of
each Fund named above ("Fund"), which Plan shall take effect as
of the date class II shares are first offered (the "Effective
Date of the Plan"). The Plan has been approved by a majority of
the Board of Directors or Trustees of the Investment Company (the
"Board"), including a majority of the Board members who are not
interested persons of the Investment Company and who have no
direct, or indirect financial interest in the operation of the
Plan (the "non-interested Board members"), cast in person at a
meeting called for the purpose of voting on such Plan.
In reviewing the Plan, the Board considered the schedule and
nature of payments and terms of the Management Agreement between
the Investment Company and Franklin Advisers, Inc. and the terms
of the Underwriting Agreement between the Investment Company and
Franklin/Templeton Distributors, Inc. ("Distributors"). The
Board concluded that the compensation of Advisers, under the
Management Agreement, and of Distributors, under the Underwriting
Agreement, was fair and not excessive. The approval of the Plan
included a determination that in the exercise of their reasonable
business judgment and in light of their fiduciary duties, there
is a reasonable likelihood that the Plan will benefit the Fund
and its shareholders.
DISTRIBUTION PLAN
1. (a) The Fund shall pay to Distributors a quarterly fee
not to exceed the above-stated maximum distribution fee per annum
of the Class' average daily net assets represented by shares of
the Class, as may be determined by the Board from time to time.
(b) In addition to the amounts described in (a) above,
the Fund shall pay (i) to Distributors for payment to dealers or
others, or (ii) directly to others, an amount not to exceed the
above-stated maximum service fee per annum of the Class' average
daily net assets represented by shares of the Class, as may be
determined by the Fund's Board from time to time, as a service
fee pursuant to servicing agreements which have been approved
from time to time by the Board, including the non-interested
Board members.
2. (a) Distributors shall use the monies paid to it
pursuant to Paragraph 1(a) above to assist in the distribution
and promotion of shares of the Class. Payments made to
Distributors under the Plan may be used for, among other things,
the printing of prospectuses and reports used for sales purposes,
expenses of preparing and distributing sales literature and
related expenses, advertisements, and other distribution-related
expenses, including a pro-rated portion of Distributors' overhead
expenses attributable to the distribution of Class shares, as
well as for additional distribution fees paid to securities
dealers or their firms or others who have executed agreements
with the Investment Company, Distributors or its affiliates,
which form of agreement has been approved from time to time by
the Trustees, including the non-interested trustees. In
addition, such fees may be used to pay for advancing the
commission costs to dealers or others with respect to the sale of
Class shares.
(b) The monies to be paid pursuant to paragraph 1(b)
above shall be used to pay dealers or others for, among other
things, furnishing personal services and maintaining shareholder
accounts, which services include, among other things, assisting
in establishing and maintaining customer accounts and records;
assisting with purchase and redemption requests; arranging for
bank wires; monitoring dividend payments from the Fund on behalf
of customers; forwarding certain shareholder communications from
the Fund to customers; receiving and answering correspondence;
and aiding in maintaining the investment of their respective
customers in the Class. Any amounts paid under this paragraph
2(b) shall be paid pursuant to a servicing or other agreement,
which form of agreement has been approved from time to time by
the Board.
3. In addition to the payments which the Fund is authorized
to make pursuant to paragraphs 1 and 2 hereof, to the extent that
the Fund, Advisers, Distributors or other parties on behalf of
the Fund, Advisers or Distributors make payments that are deemed
to be payments by the Fund for the financing of any activity
primarily intended to result in the sale of Class shares issued
by the Fund within the context of Rule 12b-1 under the Act, then
such payments shall be deemed to have been made pursuant to the
Plan.
In no event shall the aggregate asset-based sales charges
which include payments specified in paragraphs 1 and 2, plus any
other payments deemed to be made pursuant to the Plan under this
paragraph, exceed the amount permitted to be paid pursuant to the
Rules of Fair Practice of the National Association of Securities
Dealers, Inc., Article III, Section 26(d).
4. Distributors shall furnish to the Board, for its review,
on a quarterly basis, a written report of the monies reimbursed
to it and to others under the Plan, and shall furnish the Board
with such other information as the Board may reasonably request
in connection with the payments made under the Plan in order to
enable the Board to make an informed determination of whether the
Plan should be continued.
5. The Plan shall continue in effect for a period of more
than one year only so long as such continuance is specifically
approved at least annually by the Board, including the non-
interested Board members, cast in person at a meeting called for
the purpose of voting on the Plan.
6. The Plan, and any agreements entered into pursuant to
this Plan, may be terminated at any time, without penalty, by
vote of a majority of the outstanding voting securities of the
Fund or by vote of a majority of the non-interested Board
members, on not more than sixty (60) days' written notice, or by
Distributors on not more than sixty (60) days' written notice,
and shall terminate automatically in the event of any act that
constitutes an assignment of the Management Agreement between the
Fund and Advisers.
7. The Plan, and any agreements entered into pursuant to
this Plan, may not be amended to increase materially the amount
to be spent for distribution pursuant to Paragraph 1 hereof
without approval by a majority of the Fund's outstanding voting
securities.
8. All material amendments to the Plan, or any agreements
entered into pursuant to this Plan, shall be approved by the non-
interested Board members cast in person at a meeting called for
the purpose of voting on any such amendment.
9. So long as the Plan is in effect, the selection and
nomination of the Fund's non-interested Board members shall be
committed to the discretion of such non-interested Board members.
This Plan and the terms and provisions thereof are hereby
accepted and agreed to by the Investment Company and Distributors
as evidenced by their execution hereof.
Date: , 1995
Investment Company
By:
Franklin/Templeton Distributors, Inc.
By:
POWER OF ATTORNEY
The undersigned officers and directors of FRANKLIN FEDERAL TAX-F
REE INCOME FUND (the "Registrant") hereby appoint HARMON E.
BURNS, DEBORAH R. GATZEK, MARK H. PLAFKER, KAREN L. SKIDMORE and
LARRY L. GREENE (with full power to each of them to act alone)
his attorney-in-fact and agent, in all capacities, to execute,
and to file any of the documents referred to below relating to
Post-Effective Amendments to the Registrant's registration
statement on Form N-1A under the Investment Company Act of 1940,
as amended, and under the Securities Act of 1933 covering the
sale of shares by the Registrant under prospectuses becoming
effective after this date, including any amendment or amendments
increasing or decreasing the amount of securities for which
registration is being sought, with all exhibits and any and all
documents required to be filed with respect thereto with any
regulatory authority. Each of the undersigned grants to each of
said attorneys, full authority to do every act necessary to be
done in order to effectuate the same as fully, to all intents and
purposes as he could do if personally present, thereby ratifying
all that said attorneys-in-fact and agents, may lawfully do or
cause to be done by virtue hereof.
The undersigned officers and directors hereby execute this Power
of Attorney as of this 17 day of January 1995.
/s/ Rupert H. Johnson, Jr. /s/ Charles B. Johnson
Rupert H. Johnson, Jr. Charles B. Johnson,
Principal Executive Officer Director
and Director
/s/ Frank H. Abbott, III /s/ Harris J. Ashton
Frank H. Abbott, III, Harris J. Ashton,
Director Director
/s/ Harmon E. Burns /s/ S. Joseph Fortunato
Harmon E. Burns, S. Joseph Fortunato,
Director Director
/s/ David W. Garbellano /s/ Frank W. T. LaHaye
David W. Garbellano, Frank W. T. LaHaye,
Director Director
/s/ Gordon S. Macklin /s/ Martin L. Flanagan
Gordon S. Macklin, Martin L. Flanagan,
Director Principal Financial Officer
/s/ Diomedes Loo-Tam
Diomedes Loo-Tam,
Principal Accounting Officer
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, certify that I am Secretary of Franklin
Federal Tax-Free Income Fund (the "Fund").
As Secretary of the Fund, I further certify that the following
resolution was adopted by a majority of the Directors of the Fund
present at a meeting held at 777 Mariners Island Boulevard, San
Mateo, California, on January 17, 1995.
RESOLVED, that a Power of Attorney, substantially in
the form of the Power of Attorney presented to this
Board, appointing Harmon E. Burns, Deborah R. Gatzek,
Larry L. Greene, Karen L. Skidmore, and Mark H. Plafker
as attorneys-in-fact for the purpose of filing
documents with the Securities and Exchange Commission,
be executed by each Director and designated officer.
I declare under penalty of perjury that the matters set forth in
this certificate are true and correct of my own knowledge.
/s/ Deborah R. Gatzek
Dated: January 17, 1995 Deborah R. Gatzek
Secretary
