As filed with the Securities and Exchange Commission on April 19,
1995
File Nos.
2-77880
811-3479
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. 14 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 17 (X)
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
(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)
[X] on May 1, 1995 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date
for a previously filed post effective amendment
Declaration Pursuant to Rule 24f-2. The issuer has registered an
indefinite number or amount of securities under the Securities Act
of 1933 pursuant to Rule 24f-2 under the Investment Company Act of
1940. The Rule 24f-2 Notice for the issuer`s most recent fiscal
year was filed on July 27, 1994.
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
CROSS REFERENCE SHEET
FORM N-1A
Part A: Information Required in the Prospectus
N-1A Location in
Item No. Item Registration Statement
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";
"General Information"
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"; "Effect of
Federal and New York Taxes
on an Investment in the
Fund"; "General Information"
7. Purchase of "How to Buy Shares of the
Securities Being Fund"; "Other Programs and
Offered Privileges Available to Fund
Shareholders"; "Exchange
Privilege"; "Valuation of
Fund Shares"; "How to Get
Information Regarding an
Investment in the Fund"
8. Redemption or "Exchange Privilege"; "How
Repurchase to Sell Shares of the Fund";
"Valuation of Fund Shares";
"How to Get Information
Regarding an Investment in
the Fund"
9. Pending Legal Not Applicable
Proceedings
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
CROSS REFERENCE SHEET
FORM N-1A
Part B: Information Required in the
Statement of Additional Information
10. Cover Page Cover Page
11. Table of Contents Contents
12. General Information Cover Page
and History
13. Investment Objectives "The Fund's Investment
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 the Prospectus "How to
Other Securities Get Information Regarding an
Investment in the Fund" and
"General Information"
19. Purchase, Redemption "Additional Information
and Pricing of Regarding Fund Shares" (See
Securities Being also the Prospectus "How to
Offered Buy Shares of the Fund";
"How to Sell Shares of the
Fund"; and "Valuation of
Fund Shares")
20. Tax Status "Effect of Federal and New
York Taxes on an Investment
in the Fund" in the
Prospectus
21. Underwriters "The Fund's Underwriter"
22. Calculation of See subheadings
Performance Data "Performance" and
"Comparison" under "General
Information"
23. Financial Statements "Financial Statements"
15 P
SUPPLEMENT DATED MAY 1, 1995
TO THE PROSPECTUS FOR
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
dated October 1, 1994
INTRODUCTION. As of May 1, 1995, the Franklin New York Tax-Free
Income Fund, Inc. (the "Fund") offers two classes to its investors:
Franklin New York Tax-Free Income Fund, Inc. - Class I ("Class I")
and Franklin New York Tax-Free Income Fund, Inc. - Class II ("Class
II"). Investors can choose between Class I shares, which generally
bear a higher front-end sales charge and lower ongoing Rule 12b-1
distribution fees ("Rule 12b-1 fees"), and Class II shares, which
generally have a lower front-end sales charge and higher ongoing
Rule 12b-1 fees. Investors should consider the differences between
the two classes, including the impact of sales charges and
distribution fees, in choosing the more suitable class given their
anticipated investment amount and time horizon.
This Supplement must be read in conjunction with the Prospectus for
this Fund. All investment objectives and policies described in the
Prospectus apply equally to both classes of shares in the new
multiclass structure. Further, all operational procedures apply
equally to both classes, unless otherwise specified in the
following discussion.
THE NEW APPLICATION FORM INCLUDED WITH THIS SUPPLEMENT MUST BE USED
FOR ALL PURCHASES. DO NOT USE THE APPLICATION FORM INCLUDED IN THE
PROSPECTUS.
MULTICLASS FUND STRUCTURE. The Fund has two classes of shares
available for investment: Class I and Class II. ALL FUND SHARES
OUTSTANDING BEFORE THE IMPLEMENTATION OF THE MULTICLASS STRUCTURE
HAVE BEEN REDESIGNATED AS CLASS I SHARES, AND WILL RETAIN THEIR
PREVIOUS RIGHTS AND PRIVILEGES. VOTING RIGHTS ATTRIBUTABLE TO EACH
CLASS WILL, HOWEVER, BE DIFFERENT. See the Prospectus for more
details about Class I shares. Class II shares are explained in
detail in the following discussion. Except as described below,
shares of both classes represent identical interests in the Fund's
investment portfolio.
EXPENSE TABLE
The purpose of this table is to assist an investor in understanding
the various costs and expenses that a shareholder will bear
directly or indirectly in connection with an investment in the
Fund. The figures are estimates of the Fund's expenses for the
fiscal year ended May 31, 1994, restated to reflect current sales
charges and Rule 12b-1 fees for each class.
SHAREHOLDER TRANSACTION EXPENSES
Class I Class II
Maximum Sales Charge Imposed on
Purchases
(as a percentage of offering 4.25% 1.00%^
price)
NONE^^ 1.00%+
Deferred Sales Charge
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees 0.46% 0.46%
Rule 12b-1 Fees 0.10%* 0.65%*
Other Expenses 0.05% 0.05%
Total Fund Operating Expenses 0.61% 1.16%
^Although Class II has a lower front-end sales charge than Class I,
over time the higher Rule 12b-1 fee for Class II may cause
shareholders to pay more for Class II shares than for Class I
shares. Given the maximum front-end sales charge and the rate of
Rule 12b-1 fees of each class, it is estimated that this will take
less than six years for shareholders who maintain total shares
valued at less than $100,000 in the Franklin Templeton Funds.
Shareholders with larger investments in the Franklin Templeton
Funds will reach the break-even point more quickly.
^^Class I investments of $1 million or more are not subject to a
front-end sales charge; however, a contingent deferred sales charge
of 1%, which has not been reflected in the Example below, is
generally imposed on certain redemptions within a "contingency
period" of 12 months of the calendar month following such
investments. See "How to Sell Shares of the Fund - Contingent
Deferred Sales Charge."
+Class II shares redeemed within a "contingency period" of 18
months of the calendar month following such investments are subject
to a 1% contingent deferred sales charge. See "How to Sell Shares
of the Fund - Contingent Deferred Sales Charge."
*Consistent with National Association of Securities Dealers, Inc.'s
rules, it is possible that the combination of front-end sales
charges and Rule 12b-1 fees could cause long-term shareholders to
pay more than the economic equivalent of the maximum front-end
sales charges permitted under those same rules.
Investors should be aware that the above table is not intended to
reflect in precise detail the fees and expenses associated with an
individual's own investment in the Fund. Rather the table has been
provided only to assist investors in gaining a more complete
understanding of fees, charges and expenses, that an investor in
the classes will bear directly or indirectly. For a more detailed
discussion of these matters, investors should refer to the
appropriate sections of the Prospectus and this Supplement.
EXAMPLE
As required by SEC regulations, the following example illustrates
the expenses, including the maximum front-end sales charge and
applicable contingent deferred sales charge, that apply to a $1,000
investment in the Fund over various time periods assuming (1) a 5%
annual rate of return and (2) redemption at the end of each time
period.
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
CLASS I $48 $61 $75 $115
CLASS II+ $32 $46 $73 $149
THIS EXAMPLE IS BASED ON THE RESTATED ANNUAL OPERATING EXPENSES
SHOWN ABOVE AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES, WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. The operating
expenses are borne by the Fund and only indirectly by shareholders
as a result of their investment in the Fund. In addition, federal
securities regulations require the example to assume an annual
return of 5%, but the Fund's actual return may be more or less than
5%.
FINANCIAL HIGHLIGHTS
The following unaudited financial highlights for the six months
ended November 30, 1994, pertaining to Class I, supplements the
information included under "Financial Highlights" in the
Prospectus. Similar information for Class II will be included after
its shares have been offered to the public for a reasonable period
of time.
SIX MONTHS
ENDED
NOVEMBER
30, 1994
(UNAUDITED)
PER SHARE OPERATING PERFORMANCE
Net asset value at beginning of period $11.72
Net investment income 0.37
Net realized and unrealized loss on (0.742)
securities
Total from investment operations (0.372)
Distributions from net investment income (0.378)
Net asset value at end of period $10.97
TOTAL RETURN* (3.29%)
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period(in 000's) 4,346,329
Ratio of expenses to average net assets 0.58%+
Ratio of net investment income to average 6.40%+
net assets
Portfolio turnover rate 14.97%
*Total return measures the change in value of an investment over
the period indicated. It does not include the maximum 4.25% initial
sales charge, assumes reinvestment of dividends and capital gains,
if any, at net asset value and is not annualized.
+Annualized
INVESTMENT OBJECTIVE AND POLICIES OF THE FUND
The first sentence of paragraph one is changed to read:
"The fund's investment objective is to provide as high a level of
dividend income exempt from federal, New York state and New York
city income taxes as is consistent with prudent investing, while
seeking preservation of shareholder's capital, by investing the
Fund's assets in municipal securities exempt from such taxes."
DECIDING WHICH CLASS TO PURCHASE. Investors should carefully
evaluate their anticipated investment amount and time horizon prior
to determining which class of shares to purchase. Generally, over
time an investor who expects to invest less than $100,000 in the
Franklin Templeton Funds and who expects to make substantial
redemptions within approximately seven years or less of investment
should consider purchasing Class II shares. Over time, however, the
higher annual Rule 12b-1 fees on Class II shares will accumulate
over time to outweigh the difference in initial sales charges. For
this reason, Class I shares may be more attractive to long-term
investors even if no sales charge reductions are available to them.
Investors should also consider that the higher Rule 12b-1 fees for
Class II shares will generally result in lower dividends and
consequently lower yields for Class II shares. See "General
Information" in the SAI for more information regarding the
calculation of dividends and yields.
Investors who qualify to purchase Class I shares at reduced sales
charges definitely should consider purchasing Class I shares,
especially if they intend to hold their shares for six years or
more. Investors who qualify to purchase Class I shares at reduced
sales charges but who intend to hold their shares less than six
years should evaluate whether it is more economical to purchase
Class I shares through a Letter of Intent or under Rights of
Accumulation or other means rather than purchasing Class II shares.
INVESTORS INVESTING $1 MILLION OR MORE IN A SINGLE PAYMENT AND
OTHER INVESTORS WHO QUALIFY TO PURCHASE CLASS I SHARES AT NET ASSET
VALUE WILL BE PRECLUDED FROM PURCHASING CLASS II SHARES. See "How
to Buy Shares of the Fund" in the Prospectus.
Each class represents the same interest in the investment portfolio
of the Fund and has the same rights, except that each class has a
different sales charge, bears the separate expenses of its Rule 12b-
1 distribution plan, and has exclusive voting rights with respect
to such plan. The two classes also have separate exchange
privileges.
Each class also has a separate schedule for compensating securities
dealers for selling Fund shares. Investors should take all the
factors regarding an investment in each class into account before
deciding which class of shares to purchase.
ALTERNATIVE PURCHASE ARRANGEMENTS. The difference between Class I
and Class II shares lies primarily in their front-end and
contingent deferred sales charges and Rule 12b-1 fees as described
below.
A separate Plan of Distribution has been approved and adopted for
each class ("Class I Plan" and "Class II Plan," respectively)
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended ("1940 Act"). The Rule 12b-1 fees charged to each class
will be based solely on the distribution and servicing fees
attributable to that particular class. Any portion of fees
remaining from either plan distribution to securities dealers up to
the maximum amount permitted under each Plan may be used by the
class to reimburse Franklin Templeton Distributors, Inc.
("Distributors") for routine ongoing promotion and distribution
expenses incurred with respect to such class. See "Plan of
Distribution" in the Prospectus for a description of such expenses.
CLASS I. Class I shares are generally subject to a variable sales
charge upon purchase and not subject to any sales charge upon
redemption. Class I shares are subject to Rule 12b-1 fees of up to
an annual maximum of .10% of average daily net assets of such
shares. With this structure, Class I shares have higher front-end
sales charges than Class II shares and comparatively lower Rule 12b-
1 fees.
Plan of Distribution. Under the Class I Plan, the Fund will
reimburse Distributors or other securities dealers for expenses
incurred in the promotion, servicing, and distribution of Class I
Fund shares. (See "Plan of Distribution" in the Prospectus and in
the Statement of Additional Information ("SAI").)
QUANTITY DISCOUNTS AND PURCHASES AT NET ASSET VALUE. Class I shares
may be purchased at a reduced front-end sales charge or at net
asset value if certain conditions are met. See "How to Buy Shares
of the Fund."
CONTINGENT DEFERRED SALES CHARGE. In most circumstances, a
contingent deferred sales charge will not be assessed against
redemptions of Class I shares. A contingent deferred sales charge
will be imposed on Class I shares only if shares valued at $1
million or more are purchased after February 1, 1995, and are
subsequently redeemed within 12 months of the calendar month
following their purchase. See "Contingent Deferred Sales Charge"
under "How to Sell Shares of the Fund" in this Supplement.
CLASS II. The current public offering price of Class II shares is
equal to the net asset value, plus a sales charge of 1% of the
amount invested. Class II shares are also subject to a contingent
deferred sales charge of 1.0% if shares are redeemed within 18
months of the calendar month following purchase. In addition, Class
II shares are subject to Rule 12b-1 fees of up to a maximum of
0.65% of average daily net assets of such shares. Class II shares
have lower front-end sales charges than Class I shares and
comparatively higher Rule 12b-1 fees.
PURCHASES OF CLASS II SHARES ARE LIMITED TO AMOUNTS BELOW $1
MILLION. Any purchases of $1 million or more will automatically be
invested in Class I shares, since that is more beneficial to
investors. Such purchases, however, may be subject to a contingent
deferred sales charge. Investors may exceed $1 million in Class II
shares by cumulative purchases over a period of time. Investors who
intend to make investments exceeding $1 million, however, should
consider purchasing Class I shares through a Letter of Intent
instead of purchasing Class II shares. See "How to Buy Shares of
the Fund" in the Prospectus for more information.
PLAN OF DISTRIBUTION. Class II's operating expenses will generally
be higher under the Class II Plan. During the first year following
a purchase of Class II shares, Distributors will keep a portion of
the Plan fees attributable to those shares to partially recoup fees
Distributors pays to securities dealers. Distributors, or its
affiliates, may pay, from its own resources, a commission of up to
1% of the amount invested to securities dealers who initiate and
are responsible for purchases of Class II shares.
CONTINGENT DEFERRED SALES CHARGE. Unless a waiver applies, a
contingent deferred sales charge of 1% will be imposed on Class II
shares redeemed within 18 months of their purchase. See "Contingent
Deferred Sales Charges" under "How to Sell Shares of the Fund" in
this Supplement.
MANAGEMENT OF THE FUND
The subsidiaries of Resources are described as the "Franklin
Templeton Group."
The Board of Directors has carefully reviewed the multiclass
structure to ensure that no material conflict exists between the
two classes of shares. Although the Board does not expect to
encounter material conflicts in the future, the Board will continue
to monitor the Fund and will take appropriate action to resolve
such conflicts if any should later arise.
In developing the multiclass structure, the Fund has retained the
authority to establish additional classes of shares. It is the
Fund's present intention to offer only two classes of shares, but
new classes may be offered in the future.
For more information regarding the responsibilities of the Board
and the management of the Fund, please see "Management of the Fund"
in the Prospectus.
CLASS II PLAN OF DISTRIBUTION
Under the Class II Plan, the maximum amount which the Fund is
permitted to pay to Distributors or others for distribution and
related expenses is 0.50% per annum of Class II shares' daily net
assets, payable on a quarterly basis. All expenses of distribution,
marketing and related services over that amount will be borne by
Distributors or others who have incurred them, without
reimbursement by the Fund. In addition, the Class II Plan provides
for an additional payment by the Fund of up to 0.15% per annum of
the class' average daily net assets as a servicing fee, payable on
a quarterly basis. This fee will be used to pay securities dealers
or others for, among other things, assisting in establishing and
maintaining customer accounts and records; assisting with purchase
and redemption requests; receiving and answering correspondence;
monitoring dividend payments from the Fund on behalf of the
customers, or similar activities related to furnishing personal
services and/or maintaining shareholder accounts.
The Class II Plan also covers any payments to or by the Fund,
Advisers, Distributors, or other parties on behalf of the Fund,
Advisers or Distributors, to the extent such payments are deemed to
be for the financing of any activity primarily intended to result
in the sale of Class II shares issued by the Fund within the
context of Rule 12b-1. The payments under the Plan are included in
the maximum operating expenses which may be borne by Class II of
the Fund.
During the first year after the purchase of Class II shares,
Distributors will keep a portion of the Plan fees assessed on Class
II shares to partially recoup fees Distributors pays to securities
dealers.
See the "Plan of Distribution" discussion in the "Management of the
Fund" section in the Prospectus and in the SAI for more information
about both Class I and Class II Plans.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and capital gains will be calculated and distributed in
the same manner for Class I and Class II shares. The per share
amount of any income dividends will generally differ only to the
extent that each class is subject to different Rule 12b-1 fees.
Because ongoing Rule 12b-1 expenses will be lower for Class I than
Class II, the per share dividends to Class I shares will generally
be higher than those distributed to Class II shares.
Unless otherwise requested in writing or on the Shareholder
Application, income dividends and capital gain distributions, if
any, will be automatically reinvested in the shareholder's account
in the form of additional shares, valued at the closing net asset
value (without a front-end sales charge) on the dividend
reinvestment date. Dividend and capital gain distributions are only
eligible for investment at net asset value in the same class of
shares of the Fund or the same class of another of the Franklin
Templeton Funds. See "Distributions to Shareholders" in the
Prospectus and the SAI for more information.
HOW TO BUY SHARES OF THE FUND
The following discussion supplements the one included in the
Prospectus under "How to Buy Shares of the Fund." THE APPLICATION
FORM INCLUDED WITH THIS SUPPLEMENT MUST ACCOMPANY ANY PURCHASE OF
SHARES. DO NOT USE THE APPLICATION INCLUDED IN THE PROSPECTUS.
Timing Accounts are not permitted to purchase shares either class
of the Fund. See "Exchange Privilege" for a description.
PURCHASE PRICE OF FUND SHARES
Shares of both classes of the Fund are offered at their respective
public offering price, which are determined by adding the net asset
value per share plus a front-end sales charge, next computed (1)
after the shareholder's securities dealer receives the order which
is promptly transmitted to the Fund, or (2) after receipt of an
order by mail from the shareholder directly in proper form (which
generally means a completed Shareholder Application accompanied by
a negotiable check).
CLASS I. The sales charge for Class I shares is a variable
percentage of the offering price depending upon the amount of the
sale. On orders for 100,000 shares or more, the offering price will
be calculated to four decimal places. On orders for less than
100,000 shares, the offering price will be calculated to two
decimal places using standard rounding criteria. A description of
the method of calculating net asset value per share is included
under the caption "Valuation of Fund Shares" in the Prospectus.
Set forth below is a table of total front-end sales charges or
underwriting commissions and dealer concessions for Class I shares:
TOTAL SALES CHARGE
SIZE OF AS A PERCENTAGE AS A PERCENTAGE DEALER
TRANSACTION AT OF OFFERING OF NET AMOUNT CONCESSION AS A
OFFERING PRICE PRICE INVESTED PERCENTAGE OF
OFFERING
PRICE*, ***
Less than 4.25% 4.44% 4.00%
$100,000
$100,000 but 3.50% 3.63% 3.25%
less than
$250,000
$250,000 but 2.75% 2.83% 2.50%
less than
$500,000
$500,000 but 2.15% 2.20% 2.00%
less than
$1,000,000
$1,000,000 or none none (see below)**
more
*Financial institutions or their affiliated brokers may receive an
agency transaction fee in the percentages set forth above.
**The following commissions will be paid by Distributors, out of
its own resources, to securities dealers who initiate and are
responsible for purchases of $1 million or more: 0.75% on sales of
$1 million but less than $2 million, plus 0.60% on sales of $2
million but less than $3 million, plus 0.50% on sales of $3 million
but less than $50 million, plus 0.25% on sales of $50 million but
less than $100 million, plus 0.15% on sales of $100 million or
more. Dealer concession breakpoints are reset every 12 months for
purposes of additional purchases.
***At the discretion of Distributors, all sales charges may at
times be allowed to the securities dealer. If 90% or more of the
sales commission is allowed, such securities dealer may be deemed
to be an underwriter as that term is defined in the Securities Act
of 1933, as amended.
No front-end sales charge applies on investments of $1 million or
more, but a contingent deferred sales charge of 1% is imposed on
certain redemptions of all or a portion of investments of $1
million or more within the contingency period. See "How to Sell
Shares of the Fund - Contingent Deferred Sales Charge" in this
Supplement.
The size of a transaction which determines the applicable sales
charge on the purchase of Class I shares is determined by adding
the amount of the shareholder's current purchase plus the cost or
current value (whichever is higher) of a shareholder's existing
investment in one or more of the funds in the Franklin Group of
Funds(Registered Trademark) and the Templeton Group of Funds.
Included for these aggregation purposes are (a) the mutual funds in
the Franklin Group of Funds except Franklin Valuemark Funds and
Franklin Government Securities Trust (the "Franklin Funds"), (b)
other investment products underwritten by Distributors or its
affiliates (although certain investments may not have the same
schedule of sales charges and/or may not be subject to reduction)
and (c) the U.S. registered mutual funds in the Templeton Group of
Funds except Templeton Capital Accumulator Fund, Inc., Templeton
Variable Annuity Fund, and Templeton Variable Products Series Fund
(the "Templeton Funds"). (Franklin Funds and Templeton Funds are
collectively referred to as the "Franklin Templeton Funds.") Sales
charge reductions based upon aggregate holdings of (a), (b) and (c)
above ("Franklin Templeton Investments") may be effective only
after notification to Distributors that the investment qualifies
for a discount.
Distributors, or one of its affiliates, may make payments, out of
its own resources, of up to 1% of the amount purchased to
securities dealers who initiate and are responsible for purchases
made at net asset value by certain designated retirement plans
(excluding IRA and IRA rollovers), certain non-designated plans,
certain trust companies and trust departments of banks and certain
retirement plans of organizations with collective retirement plan
assets of $10 million or more. See definitions under "Description
of Special Net Asset Value Purchases" and as set froth in then SAI.
CLASS II. Unlike Class I shares, the front-end sales charges and
dealer concessions for Class II shares do not vary depending on the
amount of purchase. See table below:
TOTAL SALES CHARGE
AS A DEALER
SIZE OF TRANSACTION AS A PERCENTAGE PERCENTAGE CONCESSION AS
AT OFFERING PRICE OF NET OFFERING OF NET A PERCENTAGE
PRICE AMOUNT OF OFFERING
INVESTED PRICE*
any amount (less
than $1 million) 1.00% 1.01% 1.00%
*During the first year following a purchase of Class II shares,
Distributors will keep a portion of the Plan fees attributable to
those shares to partially recoup fees Distributors pays to
securities dealers. Distributors, or one of its affiliates, may
make an additional payment to the securities dealer, from its own
resources, of up to 1% of the amount invested
Class II shares redeemed within eighteen months of their purchase
will be assessed a contingent deferred sales charge of 1.0% on the
lesser of the then-current net asset value or the net asset value
of such shares at the time of purchase, unless such charge is
waived as described below.
PURCHASES AT NET ASSET VALUE
The following section, which supersedes that included in the
Prospectus, describes the categories of investors who may purchase
Class I shares of the Fund at net asset value and when Class I and
Class II shares may be purchased at net asset value. The sections
in the Prospectus titled "Quantity Discounts in Sales Charges" and
"Group Purchases" only apply to Class I shares. Although sales
charges on Class II shares may not be reduced through a Letter of
Intent or Rights of Accumulation as described under "Quantity
Discounts in Sales Charges," the value of Class II shares owned by
an investor may be included in determining the appropriate sales
charges for Class I shares.
Class I shares may be purchased without the imposition of either a
front-end sales charge ("net asset value") or a contingent deferred
sales charge by (1) officers, trustees, directors and full-time
employees of the Fund, any of the Franklin Templeton Funds, or of
the Franklin Templeton Group, and by their spouses and family
members, including any subsequent payments by such parties after
cessation of employment; (2) companies exchanging shares with or
selling assets pursuant to a merger, acquisition or exchange offer;
(3) accounts managed by the Franklin Templeton Group; (4)
registered securities dealers and their affiliates, for their
investment account only; and (5) registered personnel and employees
of securities dealers and by their spouses and family members, in
accordance with the internal policies and procedures of the
employing securities dealer.
For either Class I or Class II, the same class of shares of the
Fund may be purchased at net asset value by persons who have
redeemed, within the previous 120 days, their shares of the Fund or
another of the Franklin Templeton Funds which were purchased with a
front-end sales charge or assessed a contingent deferred sales
charge on redemption. If a different class of shares is purchased,
the full front-end sales charge must be paid at the time of
purchase of the new shares. An investor may reinvest an amount not
exceeding the redemption proceeds. Credit will be given for any
contingent deferred sales charge paid on the shares redeemed and
subsequently repurchased, but the period for which such shares may
be subject to a contingent deferred sales charge will begin as of
the date the proceeds are reinvested. Shares of the Fund redeemed
in connection with an exchange into another fund (see "Exchange
Privilege") are not considered "redeemed" for this privilege. In
order to exercise this privilege, a written order for the purchase
of shares of the Fund must be received by the Fund or the Fund's
Shareholder Services Agent within 120 days after the redemption.
The 120 days, however, do not begin to run on redemption proceeds
placed immediately after redemption in a Franklin Bank Certificate
of Deposit ("CD") until the CD (including any rollover) matures.
Reinvestment at net asset value may also be handled by a securities
dealer or other financial institution, who may charge the
shareholder a fee for this service. The redemption is a taxable
transaction but reinvestment without a sales charge may affect the
amount of gain or loss recognized and the tax basis of the shares
reinvested. If there has been a loss on the redemption, the loss
may be disallowed if a reinvestment in the same fund is made within
a 30-day period. Information regarding the possible tax
consequences of such a reinvestment is included in the tax section
of the Prospectus and the SAI.
For either Class I or Class II, the same class of shares of the
Fund or of another of the Franklin Templeton Funds may be purchased
at net asset value and without a contingent deferred sales charge
by persons who have received dividends and capital gain
distributions in cash from investments in that class of shares of
the Fund within 120 days of the payment date of such distribution.
To exercise this privilege, a written request to reinvest the
distribution must accompany the purchase order. Additional
information may be obtained from Shareholder Services at 1-800/632-
2301. See "Distributions in Cash" under "Distributions to
Shareholders." in the Prospectus.
Class I shares may be purchased at net asset value and without the
imposition of a contingent deferred sales charge by investors who
have, within the past 60 days, redeemed an investment in a mutual
fund which is not part of the Franklin Templeton Funds which
charged the investor a contingent deferred sales charge upon
redemption and which has investment objectives similar to those of
the Fund.
Class I shares may be purchased at net asset value and without the
imposition of a contingent deferred sales charge by broker-dealers
who have entered into a supplemental agreement with Distributors,
or by registered investment advisors affiliated with such broker-
dealers, on behalf of their clients who are participating in a
comprehensive fee program (sometimes known as a wrap fee program).
Class I shares may also be purchased at net asset value and without
the imposition of a contingent deferred sales charge by any state,
county, or city, or any instrumentality, department, authority or
agency thereof which has determined that the Fund is a legally
permissible investment and which is prohibited by applicable
investment laws from paying a sales charge or commission in
connection with the purchase of shares of any registered management
investment company ("an eligible governmental authority"). SUCH
INVESTORS SHOULD CONSULT THEIR OWN LEGAL ADVISORS TO DETERMINE
WHETHER AND TO WHAT EXTENT THE SHARES OF THE FUND CONSTITUTE LEGAL
INVESTMENTS FOR THEM. Municipal investors considering investment of
proceeds of bond offerings into the Fund should consult with expert
counsel to determine the effect, if any, of various payments made
by the Fund or its investment manager on arbitrage rebate
calculations. If an investment by an eligible governmental
authority at net asset value is made through a securities dealer
who has executed a dealer agreement with Distributors, Distributors
or one of its affiliates may make a payment, out of their own
resources, to such securities dealer in an amount not to exceed
0.25% of the amount invested. Contact Franklin's Institutional
Sales Department for additional information.
DESCRIPTION OF SPECIAL NET ASSET VALUE PURCHASES - CLASS I ONLY
Class I shares may be purchased at net asset value and without the
imposition of a contingent deferred sales charge by trust companies
and bank trust departments for funds over which they exercise
exclusive discretionary investment authority and which are held in
a fiduciary, agency, advisory, custodial or similar capacity. Such
purchases are subject to minimum requirements with respect to
amount of purchase, which may be established by Distributors.
Currently, those criteria require that the amount invested or to be
invested during the subsequent 13-month period in this Fund or any
of the Franklin Templeton Investments must total at least
$1,000,000. Orders for such accounts will be accepted by mail
accompanied by a check or by telephone or other means of electronic
data transfer directly from the bank or trust company, with payment
by federal funds received by the close of business on the next
business day following such order.
For a complete understanding of how to buy shares of the Fund, this
Supplement must be read in conjunction with the Prospectus. Refer
to the SAI for further information regarding net asset value
purchases of Class I shares.
PURCHASING CLASS I AND CLASS II SHARES
When placing purchase orders, investors should clearly indicate
which class of shares they intend to purchase. A purchase order
that fails to specify a class will automatically be invested in
Class I shares. Initial purchases of $1 million or more in a single
payment will be invested in Class I shares. There are no conversion
features attached to either class of shares.
Investors who qualify to purchase Class I shares at net asset value
should purchase Class I rather than Class II shares. See the
section "Purchases at Net Asset Value" and "Description of Special
Net Asset Value Purchases - Class I Shares Only" above for a
discussion of when shares may be purchased at net asset value.
OTHER PROGRAMS AND PRIVILEGES AVAILABLE TO FUND SHAREHOLDERS
With the exception of Systematic Withdrawal Plans, all programs and
privileges detailed under the discussion of "Other Programs and
Privileges Available to the Fund Shareholders" will remain in
effect as described in the Prospectus for the new multiclass
structure. For a complete discussion of these programs, see "Other
Programs and Privileges Available to Fund Shareholders" in the
Prospectus.
SYSTEMATIC WITHDRAWAL PLANS. Subject to the requirements outlined
in the Prospectus, a shareholder may establish a Systematic
Withdrawal Plan for his or her account. With respect to Class I
shares, the contingent deferred sales charge is waived for
redemptions through a Systematic Withdrawal Plan set up prior to
February 1, 1995. With respect to Systematic Withdrawal Plans set
up on or after February 1, 1995, the applicable contingent deferred
sales charge is waived for Class I and Class II share redemptions
of up to 1% monthly of an account's net asset value (12% annually,
6% semi-annually, 3% quarterly). For example, if the account
maintained an annual balance of $1,000,000, only $120,000 could be
withdrawn through a once-yearly Systematic Withdrawal Plan free of
charge; any amount over that $1,200 would be assessed a 1% (or
applicable) contingent deferred sales charge. Likewise, if a Class
II account maintained an annual balance of $10,000 only $1,200
could be withdrawn through a once-yearly Systematic Withdrawal Plan
free of charge.
EXCHANGE PRIVILEGE
Shareholders are entitled to exchange their shares for shares of
the same class of other Franklin Templeton Funds which are eligible
for sale in the shareholder's state of residence and in conformity
with such fund's stated eligibility requirements and investment
minimums. Some funds, however, may not offer Class II shares. Class
I shares may be exchanged for Class I shares of any Franklin
Templeton Funds. Class II shares may be exchanged for Class II
shares of any Franklin Templeton Funds. No exchanges between
different classes of shares will be allowed. A contingent deferred
sales charge will not be imposed on exchanges. If, however, the
exchanged shares were subject to a contingent deferred sales charge
in the original fund purchased and shares are subsequently redeemed
within twelve months (Class I shares) or eighteen months (Class II
shares) of the calendar month of the original purchase date, a
contingent deferred sales charge will be imposed. Investors should
review the prospectus of the fund they wish to exchange from and
the fund they wish to exchange into for all specific requirements
or limitations on exercising the exchange privilege, for example,
minimum holding periods or applicable sales charges.
EXCHANGES BY TELEPHONE
The following paragraph supplements the information regarding
"Exchanges by Telephone" included in the Prospectus:
The automatic TeleFACTS system at 1-800/247-1753 is available for
processing exchanges (day or night). During periods of drastic
economic or market changes, however, this option may not be
available, in which event the shareholder should follow other
exchange procedures discussed in the Prospectus.
TIMING ACCOUNTS
"Timing Accounts" are not permitted to exchange into the Fund.
This policy does not affect any other type of investor. "Timing
Accounts" generally include market timing or allocation services;
accounts administered so as to redeem or purchase shares based upon
certain predetermined market indicators; or any person whose
transactions seem to follow a timing pattern.
EXCHANGES OF CLASS I SHARES
The contingency period of Class I shares will be tolled (or
stopped) for the period such shares are exchanged into and held in
a Franklin or Templeton money market fund. If a Class I account has
shares subject to a contingent deferred sales charge, Class I
shares will be exchanged into the new account on a "first-in, first-
out" basis. See also "How to Sell Shares of the Fund - Contingent
Deferred Sales Charge."
EXCHANGES OF CLASS II SHARES
When an account is composed of Class II shares subject to the
contingent deferred sales charge, and shares that are not, the
shares will be transferred proportionately into the new fund.
Shares received from reinvestment of dividends and capital gains
are referred to as "free shares," shares which were originally
subject to a contingent deferred sales charge but to which the
contingent deferred sales charge no longer applies are called
"matured shares," and shares still subject to the contingent
deferred sales charge are referred to as "CDSC liable shares." CDSC
liable shares held for different periods of time are considered
different types of CDSC liable shares. For instance, if a
shareholder has $1,000 in free shares, $2,000 in matured shares,
and $3,000 in CDSC liable shares, and the shareholder exchanges
$3,000 into a new fund, $500 will be exchanged from free shares,
$1,000 from matured shares, and $1,500 from CDSC liable shares.
Similarly, if CDSC liable shares have been purchased at different
periods, a proportionate amount will be taken from shares held for
each period. If, for example, a shareholder holds $1,000 in shares
bought 3 months ago, $1,000 bought 6 months ago, and $1,000 bought
9 months ago, and the shareholder exchanges $1,500 into a new fund,
$500 from each of these shares will be deemed exchanged into the
new fund.
The only money market fund exchange option available to Class II
shareholders is the Franklin Templeton Money Fund II ("Money Fund
II"), a series of the Franklin Templeton Money Fund Trust. No
drafts (checks) may be written on Money Fund II accounts, nor may
shareholders purchase shares of Money Fund II directly. Class II
shares exchanged for shares of Money Fund II will continue to age
and a contingent deferred sales charge will be assessed if CDSC
liable shares are redeemed. No other money market funds are
available for Class II shareholders for exchange purposes. Class I
shares may be exchanged for shares of any of the money market funds
in the Franklin Templeton Funds except Money Fund II. Draft writing
privileges and direct purchases are allowed on these other money
market funds as described in their respective prospectuses.
To the extent shares are exchanged proportionately, as opposed to
another method, such as first-in first-out, or free-shares followed
by CDSC liable shares, the exchanged shares may, in some instances,
be CDSC liable even though a redemption of such shares, as
discussed elsewhere herein, may no longer be subject to a CDSC. The
proportional method is believed by management to more closely meet
and reflect the expectations of Class II shareholders in the event
shares are redeemed during the contingency period. For federal
income tax purposes, the cost basis of shares redeemed or exchanged
is determined under the Code without regard to the method of
transferring shares chosen by the Fund for purposes of exchanging
or redeeming shares.
TRANSFERS. Transfers between identically registered accounts in the
same fund and class are treated as non-monetary and non-taxable
events, and are not subject to a contingent deferred sales charge.
The transferred shares will continue to age from the date of
original purchase. Like exchanges, shares will be moved
proportionately from each type of shares in the original account.
CONVERSION RIGHTS. It is not presently anticipated that Class II
shares will be converted to Class I shares. A shareholder may,
however, sell his Class II shares and use the proceeds to purchase
Class I shares, subject to all applicable sales charges.
See "Exchange Privilege" in the Prospectus for more information.
HOW TO SELL SHARES OF THE FUND
For a discussion regarding the sale of either class of Fund shares,
refer to the section in the Prospectus titled "How to Sell Shares
of the Fund." In addition, the charges described in this Supplement
will also apply to the sale of all Fund shares.
CONTINGENT DEFERRED SALES CHARGE
CLASS I. In order to recover commissions paid to securities dealers
on investments of $1 million or more, a contingent deferred sales
charge of 1% applies to redemptions of those investments within the
contingency period of 12 months of the calendar month following
their purchase. The charge is 1% of the lesser of the value of the
shares redeemed (exclusive of reinvested dividends and capital gain
distributions) or the total cost of such shares at the time of
purchase, and is retained by Distributors. The contingent deferred
sales charge is waived in certain instances. See below and
"Purchases at Net Asset Value" under "How To Buy Shares of the
Fund."
CLASS II. Class II shares redeemed within the contingency period of
18 months of the calendar month following their purchase will be
assessed a contingent deferred sales charge, unless one of the
exceptions described below applies. The charge is 1% of the lesser
of the net asset value of the shares redeemed (exclusive of
reinvested dividends and capital gain distributions) or the net
asset value at the time of purchase of such shares, and is retained
by Distributors. The contingent deferred sales charge is waived in
certain instances. See below.
CLASS I AND CLASS II. In determining if a contingent deferred sales
charge applies, shares not subject to a contingent deferred sales
charge are deemed to be redeemed first, in the following order: (i)
Shares representing amounts attributable to capital appreciation of
those shares held less than the contingency period (12 months in
the case of Class I shares and 18 months in the case of Class II
shares); (ii) shares purchased with reinvested dividends and
capital gain distributions; and (iii) other shares held longer than
the contingency period; and followed by any shares held less than
the contingency period, on a "first in, first out" basis. For tax
purposes, a contingent deferred sales charge is treated as either a
reduction in redemption proceeds or an adjustment to the cost basis
of the shares redeemed.
The contingent deferred sales charge on each class of shares is
waived, as applicable, for: exchanges; any account fees;
redemptions through a Systematic Withdrawal Plan set up for shares
prior to February 1, 1995, and for Systematic Withdrawal Plans set
up thereafter, redemptions of up to 1% monthly of an account's net
asset value (3% quarterly, 6% semiannually or 12% annually);and
redemptions initiated by the Fund due to a shareholder's account
falling below the minimum specified account size.
All investments made during a calendar month, regardless of when
during the month the investment occurred, will age one month on the
last day of that month and each subsequent month.
REQUESTS FOR REDEMPTIONS FOR A SPECIFIED DOLLAR AMOUNT, UNLESS
OTHERWISE SPECIFIED, WILL RESULT IN ADDITIONAL SHARES BEING
REDEEMED TO COVER ANY APPLICABLE CONTINGENT DEFERRED SALES CHARGE
WHILE REQUESTS FOR REDEMPTION OF A SPECIFIC NUMBER OF SHARES WILL
RESULT IN THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE BEING
DEDUCTED FROM THE TOTAL DOLLAR AMOUNT REDEEMED.
VALUATION OF FUND SHARES
The following sentence replaces the first sentence of the first
paragraph in the section; the subsequent paragraph is added to the
end of the section.
The net asset value per share of each class of the Fund is
determined as of the scheduled closing time of the New York Stock
Exchange ("Exchange") (generally 3:00 p.m. Eastern time) each day
that the Exchange is open for trading.
Each of the Fund's classes will bear, pro-rata, all of the common
expenses of the Fund. The net asset value of all outstanding shares
of each class of the Fund will be computed on a pro-rata basis for
each outstanding share based on the proportionate participation in
the Fund represented by the value of shares of such classes, except
that the Class I and Class II shares will bear the Rule 12b-1
expenses payable under their respective plans. Due to the specific
distribution expenses and other costs that will be allocable to
each class, the dividends paid to each class of the Fund may vary.
HOW TO GET INFORMATION REGARDING AN INVESTMENT IN THE FUND
The following paragraph replaces the second paragraph in this
section of the Prospectus:
From a touch-tone phone, shareholders may access the automated
Franklin TeleFACTS system (day or night) at 1-800/247-1753 to
obtain current price, yield or other performance information
specific to a fund in the Franklin Funds, process an exchange as
discussed under the "Exchange Privilege" in the Prospectus, and
request duplicate confirmation or year-end statements, money fund
checks, if applicable, and deposit slips. Current prices for the
Templeton Funds are also available through TeleFACTS. The system
code for the Fund's two classes of shares, which will be needed to
access system information, is 115 for Class I and 215 for Class II
followed by the # sign. The system's automated operator will prompt
the caller with easy to follow step-by-step instructions from the
main menu. Other features may be added in the future.
PERFORMANCE (CLASS II)
Because Class II shares were not offered prior to May 1, 1995, no
performance data is available for these shares. After a sufficient
period of time has passed, Class II performance data as described
in the "Performance" section of the Prospectus will be available.
Except as noted, it is likely that the performance data relating to
Class II shares will reflect lower total return and yield figures
than those for Class I shares because Class II Rule 12b-1 fees are
higher than Class I Rule 12b-1 fees. During at least the first year
of operation Class II share performance will be higher than Class I
in light of the higher initial sales charge applicable to Class I
shares.
GENERAL INFORMATION
With the exception of Voting Rights, all rights and privileges
detailed under the discussion of "General Information" will remain
in effect as described in the Prospectus for the new multiclass
structure. For a complete discussion of these rights and
privileges, see "General Information" in the Prospectus.
VOTING RIGHTS. Shares of each class represent proportionate
interests in the assets of the Fund and have the same voting and
other rights and preferences as the other class of the Fund for
matters that affect the Fund as a whole. For matters that only
affect a certain class of the Fund's shares, however, only
shareholders of that class will be entitled to vote. Therefore,
each class of shares will vote separately on matters (1) affecting
only that class, (2) expressly required to be voted on separately
by the New York Business Corporation Act, or (3) required to be
voted on separately by the 1940 Act or the rules adopted
thereunder. For instance, if a change to the Rule 12b-1 plan
relating to Class I shares requires shareholder approval, only
shareholders of Class I may vote on changes to the Rule 12b-1 plan
affecting that class. Similarly, if a change to the Rule 12b-1 plan
relating to Class II shares requires shareholder approval, only
shareholders of Class II may vote on the change to such plan. On
the other hand, if there is a proposed change to the investment
objective of the Fund, this affects all shareholders, regardless of
which class of shares they hold, and therefore, each share has the
same voting rights. For more information regarding voting rights,
see the "Voting Rights" discussion in the Prospectus under the
heading "General Information."
15 S
SUPPLEMENT DATED MAY 1, 1995
TO THE STATEMENT OF ADDITIONAL INFORMATION OF
FRANKLIN NEW YORK TAX-FREE INCOME FUND
dated October 1, 1994
As described in the Prospectus, this Fund now offers two classes of
shares to its investors. This new structure allows investors to
consider, among other features, the impact of sales charges and
distribution fees ("Rule 12b-1 fees") on their investments in this
Fund.
ADD THE FOLLOWING AS THE LAST SENTENCE OF THE PARAGRAPH DESCRIBING
FEES PAID TO THE MANAGER UNDER "INVESTMENT ADVISORY AND OTHER
SERVICES":
Each class will pay its share of the fee as determined by the
proportion of the Fund that it represents.
EACH NEW CLASS OF SHARES HAS A SEPARATE DISTRIBUTION PLAN. FOR THIS
REASON, THE NAME OF THE SECTION "PLAN OF DISTRIBUTION" IS CHANGED
TO "PLANS OF DISTRIBUTION" AND THE FIRST PARAGRAPH IS SUBSTITUTED
WITH THE FOLLOWING PARAGRAPH:
Each class of the Fund has adopted a Distribution Plan ("Class
I Plan" and "Class II Plan," respectively, or "Plans")
pursuant to Rule 12b-1 under the 1940 Act.
Pursuant to the Class I Plan, the Fund may pay up to a
maximum of 0.10% per annum of its average daily net assets for
expenses incurred in the promotion and distribution of its
shares.
THE NEXT THREE PARAGRAPHS OF THIS SECTION CONCERN THE CLASS I PLAN.
THE FOLLOWING PARAGRAPHS HAVE BEEN ADDED TO THIS SECTION AFTER THE
DISCUSSION OF THE CLASS I PLAN TO DESCRIBE THE PLAN FOR CLASS II:
THE CLASS II PLAN
Under the Class II Plan, the Fund is permitted to pay to
Distributors or others annual distribution fees, payable
quarterly of 0.50% of Class II's daily net assets, in order to
compensate Distributors or others for providing distribution
and related services and bearing certain expenses of the
Class. All expenses of distribution and marketing over that
amount will be borne by Distributors, or others who have
incurred them, without reimbursement by the Fund. In addition
to this amount, under the Class II Plan, the Fund shall pay
0.15% per annum, payable quarterly, of the Class' average
daily net assets as a servicing fee. This fee will be used to
pay dealers or others for, among other things, assisting in
establishing and maintaining customer accounts and records;
assisting with purchase and redemption requests; receiving and
answering correspondence; monitoring dividend payments from
the Fund on behalf of the customers, and similar activities
related to furnishing personal services and maintaining
shareholder accounts. Distributors may pay the securities
dealer, from its own resources, a commission of up to 1% of
the amount invested.
THE SUBSEQUENT PARAGRAPHS IN THIS SECTION APPLY EQUALLY TO BOTH
CLASS I AND CLASS II PLANS, WITH THE EXCEPTION THAT THE SENTENCE
REGARDING UNREIMBURSED EXPENSES REFERS ONLY TO CLASS I.
THE "OFFICERS AND DIRECTORS" SECTION IS REVISED TO READ AS FOLLOWS:
Positions and Principal
Name, Age Offices with the Occupation
Address Fund During Past Five Years
OFFICERS AND DIRECTORS.
The Board of Directors has the responsibility for the overall
management of the Fund, including general supervision and
review of its investment activities. The directors, in turn,
elect the officers of the Fund who are responsible for
administering the day-to-day operations of the Fund. The
affiliations of the officers and directors and their principal
occupations for the past five years are listed below.
Directors who are deemed to be "interested persons" of the
Fund, as defined in the 1940 Act, are indicated by an asterisk
(*).
Harris J. Ashton (62)
General Host Corporation
Metro Center, 1 Station Place
Stamford, CT 06904-2045
Director
President, Chief Executive Officer and Chairman of the Board,
General Host Corporation (nursery and craft centers);
Director, RBC Holdings, Inc. (a bank holding company) and Bar-
S Foods; and director, trustee or managing general partner, as
the case may be, of 54 of the investment companies in the
Franklin Templeton Group of Funds.
S. Joseph Fortunato (62)
Park Avenue at Morris County
P. O. Box 1945
Morristown, NJ 07962-1945
Director
Member of the law firm of Pitney, Hardin, Kipp & Szuch;
Director of General Host Corporation; director, trustee or
managing general partner, as the case may be, of 56 of the
investment companies in the Franklin Templeton Group of Funds.
*Charles B. Johnson (62)
777 Mariners Island Blvd.
San Mateo, CA 94404
President and Director
President and Director, Franklin Resources, Inc.; Chairman of
the Board and Director, Franklin Advisers, Inc. and Franklin
Templeton Distributors, Inc.; Director, Franklin/Templeton
Investor Services, Inc. and General Host Corporation; and
officer and/or director, trustee or managing general partner,
as the case may be, of most other subsidiaries of Franklin
Resources, Inc. and of 55 of the investment companies in the
Franklin Templeton Group of Funds.
*Rupert H. Johnson, Jr. (54)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President and Director
Executive Vice President and Director, Franklin Resources,
Inc. and Franklin Templeton Distributors, Inc.; President and
Director, Franklin Advisers, Inc.; Director,
Franklin/Templeton Investor Services, Inc.; and officer and/or
director, trustee or managing general partner, as the case may
be, of most other subsidiaries of Franklin Resources, Inc. and
of 42 of the investment companies in the Franklin Templeton
Group of Funds.
Gordon S. Macklin (66)
8212 Burning Tree Road
Bethesda, MD 20817
Director
Chairman, White River Holdings, Inc., (information services);
Director, Fund American Enterprises Holdings, Inc., Martin
Marietta Corporation, MCI Communications Corporation,
MedImmune, Inc. (biotechnology), Infovest Corporation
(information services), and Fusion Systems Corporation
(industrial technology); and director, trustee or managing
general partner, as the case may be, of 51 of the investment
companies in the Franklin Templeton Group of Funds; formerly,
Chairman, Hambrecht and Quist Group; Director, H & Q
Healthcare Investors; and President, National Association of
Securities Dealers, Inc.
Harmon E. Burns (50)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Executive Vice President, Secretary and Director, Franklin
Resources, Inc.; Executive Vice President and Director,
Franklin Templeton Distributors, Inc.; Executive Vice
President, Franklin Advisers, Inc.; Director,
Franklin/Templeton Investor Services, Inc.; officer and/or
director, as the case may be, of other subsidiaries of
Franklin Resources, Inc.; and officer and/or director or
trustee of 41 of the investment companies in the Franklin
Templeton Group of Funds.
Kenneth V. Domingues (62)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President - Financial Reporting and Accounting Standards
Senior Vice President, Franklin Resources, Inc., Franklin
Advisers, Inc., and Franklin Templeton Distributors, Inc.;
Officer and/or director, as the case may be, of other
subsidiaries of Franklin Resources, Inc.; and Officer and/or
managing general partner, as the case may be, of 36 of the
investment companies in the Franklin Group of Funds.
Martin L. Flanagan (34)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President and Chief Financial Officer
Senior Vice President, Chief Financial Officer and Treasurer,
Franklin Resources, Inc.; Executive Vice President, Templeton
Worldwide, Inc.; Senior Vice President and Treasurer, Franklin
Advisers, Inc. and Franklin Templeton Distributors, Inc.;
Senior Vice President, Franklin/Templeton Investor Services,
Inc.; officer of most other subsidiaries of Franklin
Resources, Inc.; and officer of 60 of the investment companies
in the Franklin Templeton Group of Funds.
Deborah R. Gatzek (46)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Senior Vice President - Legal, Franklin Resources, Inc. and
Franklin Templeton Distributors, Inc.; Vice President,
Franklin Advisers, Inc. and officer of 36 of the investment
companies in the Franklin Group of Funds.
Thomas J. Kenny (32)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Senior Vice President, Franklin Advisers, Inc. and officer of
eight of the investment companies in the Franklin Group of
Funds.
Diomedes Loo-Tam (56)
777 Mariners Island Blvd.
San Mateo, CA 94404
Treasurer and Principal Accounting Officer
Employee of Franklin Advisers, Inc.; and officer of 36 of the
investment companies in the Franklin Group of Funds.
Brian E. Lorenz (56)
One North Lexington Avenue
White Plains, New York 10001-1700
Secretary
Attorney, member of the law firm of Bleakley Platt & Schmidt;
officer of three of the investment companies in the Franklin
Group of Funds.
John B. Pinkham (65)
16 South Main Street
Norwalk, CT 06854
Vice President
Vice President of Franklin Advisers, Inc. in portfolio
management capacities.
Directors not affiliated with the investment manager ("non
affiliated directors") are currently paid fees of $$800 per month
plus $800 per meeting attended. During the fiscal year ended May
31, 1994, fees totaling $57,600 were paid to non affiliated
directors. As indicated above, certain of the directors and
officers hold positions with other companies in the Franklin Group
of Funds(Registered Trademark) and the Templeton Funds("Franklin
Templeton Funds"). The following table shows the fees paid by the
Fund to its non affiliated directors and the total fees paid to
such directors by the Fund and other Franklin Templeton Funds for
which they serve as directors, trustees or managing general
partners.
Total
Compensati
on from
Franklin
Number of Templeton
Aggregate Franklin Funds,
Compensation Templeton Funds including
from Fund* Boards on Which the Fund
Name Each Serves **
Harris J. Ashton $19,200 54 $319,925
S. Joseph Fortunato 19,200 56 336,065
Gordon S. Macklin 19,200 51 303,685
*For the fiscal year ended May 31, 1994
**For the calendar year ended December 31, 1994
Non affiliated directors are also reimbursed for expenses incurred
in connection with attending Board meetings, paid pro rata by each
Franklin Templeton fund in which they serve.
Legal fees and expense reimbursements of $32,733 were paid to the
law firm of which Mr. Lorenz, an officer of the Fund, is a partner,
and which acts as counsel to the Fund. No other officer or
director received any other compensation directly from the Fund.
As of February 28, 1995, the directors and officers, as a group,
owned or record and beneficially approximately 20,672 shares or less
than 1% of the total outstanding shares of the Fund. Certain officers
or directors who are shareholders of Franklin Resources, Inc. may be
deemed to receive indirect remuneration by virtue of their
participation, if any, in the fees paid to its subsidiaries. Charles
B. Johnson and Rupert H. Johnson, Jr. are brothers.
From time to time, the number of Fund shares held in the "street
name" accounts of various securities dealers for the benefit of
their clients or in centralized securities depositories may exceed
5% of the total shares outstanding. To the best of the Fund's
knowledge, no other person holds beneficially or of record more
than 5% of the Fund's outstanding shares.
THE FOLLOWING SUBSTITUTES SUBSECTION "PURCHASES AT NET ASSET VALUE"
UNDER ADDITIONAL INFORMATION REGARDING FUND SHARES":
SPECIAL NET ASSET VALUE PURCHASES. As discussed in the Prospectus
under "How to Buy Shares of the Fund - Description of Special Net
Asset Value Purchases," certain categories of investors may
purchase Class I shares of the Fund at net asset value (without a
front-end or contingent deferred sales charge). Distributors or one
of its affiliates may make payments, out of its own resources, to
securities dealers who initiate and are responsible for such
purchases, as indicated below. Distributors may make these payments
in the form of contingent advance payments, which may require
reimbursement from the securities dealers with respect to certain
redemptions made within 12 months of the calendar month following
purchase, as well as other conditions, all of which may be imposed
by an agreement between Distributors, or its affiliates, and the
securities dealer.
The following amounts will be paid by Distributors or one of its
affiliates, out of its own resources, to securities dealers who
initiate and are responsible for (i) purchases of most equity and
fixed-income Franklin Templeton Funds made at net asset value by
certain designated retirement plans (excluding IRA and IRA
rollovers): 1.00% on sales of $1 million but less than $2 million,
plus 0.80% on sales of $2 million but less than $3 million, plus
0.50% on sales of $3 million but less than $50 million, plus 0.25%
on sales of $50 million but less than $100 million, plus 0.15% on
sales of $100 million or more; and (ii) purchases of most fixed-
income Franklin Templeton Funds made at net asset value by non-
designated retirement plans: 0.75% on sales of $1 million but less
than $2 million, plus 0.60% on sales of $2 million but less than $3
million, plus 0.50% on sales of $3 million but less than $50
million, plus 0.25% on sales of $50 million but less than $100
million, plus 0.15% on sales of $100 million or more. These
payment breakpoints are reset every 12 months for purposes of
additional purchases. With respect to purchases made at net asset
value by certain trust companies and trust departments of banks and
certain retirement plans of organizations with collective
retirement plan assets of $10 million or more, Distributors, or one
of its affiliates, out of its own resources, may pay up to 1% of
the amount invested.
THE FOLLOWING PARAGRAPHS ARE ADDED TO ADDITIONAL INFORMATION
REGARDING FUND SHARES":
The Fund may impose a $10 charge for each returned item against any
shareholder account which, in connection with the purchase of Fund
shares, submits a check or a draft which is returned unpaid to the
Fund.
LETTER OF INTENT
An investor may qualify for a reduced sales charge on the purchase
of Class I shares, as described in the Prospectus. At any time
within 90 days after the first investment which the investor wants
to qualify for the reduced sales charge, a signed Shareholder
Application, with the Letter of Intent ("Letter") section
completed, may be filed with the Fund. After the Letter is filed,
each additional investment made will be entitled to the sales
charge applicable to the level of investment indicated on the
Letter. Sales charge reductions based upon purchases in more than
one company in the Franklin Templeton Group will be effective only
after notification to Distributors that the investment qualifies
for a discount. The shareholder's holdings in the Franklin
Templeton Group, including Class II shares, acquired more than 90
days before the Letter of Intent is filed will be counted towards
completion of the Letter of Intent but will not be entitled to a
retroactive downward adjustment of sales charge. Any redemptions
made by the shareholder during the 13-month period will be
subtracted from the amount of the purchases for purposes of
determining whether the terms of the Letter have been completed.
If the Letter is not completed within the 13-month period, there
will be an upward adjustment of the sales charge, depending upon
the amount actually purchased (less redemptions) during the period.
An investor who executes a Letter prior to a change in the sales
charge structure for the Fund will be entitled to complete the
Letter at the lower of (i) the new sales charge structure; or (ii)
the sales charge structure in effect at the time the Letter was
filed with the Fund.
As mentioned in the Prospectus, five percent (5%) of the amount of
the total intended purchase will be reserved in shares of the Fund
registered in the investor's name. If the total purchases, less
redemptions, equal the amount specified under the Letter, the
reserved shares will be deposited to an account in the name of the
investor or delivered to the investor or the investor's order. If
the total purchases, less redemptions, exceed the amount specified
under the Letter and is an amount which would qualify for a further
quantity discount, a retroactive price adjustment will be made by
Distributors and the dealer through whom purchases were made
pursuant to the Letter (to reflect such further quantity discount)
on purchases made within 90 days before and on those made after
filing the Letter. The resulting difference in offering price will
be applied to the purchase of additional shares at the offering
price applicable to a single purchase or the dollar amount of the
total purchases. If the total purchases, less redemptions, are less
than the amount specified under the Letter, the investor will remit
to Distributors an amount equal to the difference in the dollar
amount of sales charge actually paid and the amount of sales charge
which would have applied to the aggregate purchases if the total of
such purchases had been made at a single time. Upon such remittance
the reserved shares held for the investor's account will be
deposited to an account in the name of the investor or delivered to
the investor or to the investor's order. If within 20 days after
written request such difference in sales charge is not paid, the
redemption of an appropriate number of reserved shares to realize
such difference will be made. In the event of a total redemption of
the account prior to fulfillment of the Letter of Intent, the
additional sales charge due will be deducted from the proceeds of
the redemption, and the balance will be forwarded to the investor.
THE "PURCHASES AND REDEMPTIONS THROUGH SECURITIES DEALERS" AND
"CALCULATION OF NET ASSET VALUE" SUBSECTIONS ARE MODIFIED TO
REFLECT THAT THE FUND'S NET ASSET VALUE IS CALCULATED FOR EACH
CLASS SEPARATELY AS OF THE SCHEDULED CLOSING OF THE NEW YORK STOCK
EXCHANGE (GENERALLY 3:00 P.M. EASTERN TIME).
THE FOLLOWING SUBSTITUTES THE SUBSECTION "REINVESTMENT DATE":
REINVESTMENT DATE
Shares acquired through the reinvestment of dividends will be
purchased at the net asset value determined on the business day
following the dividend record date (sometimes known as "ex-dividend
date"). The processing date for the reinvestment of dividends may
vary from month to month, and does not affect the amount or value
of the shares acquired.
FINANCIAL STATEMENTS
The unaudited financial statements of the Fund for the six months
ended November 30, 1994 contained in the Semi Annual Report to
Shareholders dated November 30, 1994 are incorporated herein by
reference.
The current Prospectus and Statement of Additional Information are
incorporated herein by reference to Form Type 497 filed
electronically by Registrant with the U.S. Securities and Exchange
Commission on February 17, 1995, Accession Number 0000703112-95-
000003.
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
FILE NOS. 2-77880
811-3479
FORM N-1A
PART C
Other Information
Item 24 Financial Statements and Exhibits
a) Unaudited Financial Statements incorporated herein by
reference to the Registrant's Semi-Annual Report to
Shareholders dated November 30, 1994, as filed with
the SEC electronically on Form Type N-30D on February
24, 1995
(i) Statement of Investments in Securities and Net
Assets - November 30, 1994
(ii) Statement of Assets and Liabilities - November
30, 1994
(iii) Statement of Operations - for the six months
ended November 30, 1994
(iv) Statements of Changes in Net Assets - for the
six months ended November 30, 1994 and the year
ended May 31, 1994
(v) Notes to Financial Statements
b) Audited Financial Statements for Franklin New York
Tax-Free Income Fund, Inc. dated May 31, 1994 are
incorporated herein by reference to the Statement of
Additional Information in Form Type 497 filed
electronically by Registrant with the U.S. Securities
and Exchange Commission on February 17, 1995,
Accession Number: 0000703112-95-000003
(i) Report of Independent Auditors - June 24, 1994
(ii) Statement of Investments in Securities and Net
Assets - May 31, 1994
(iii) Statement of Assets and Liabilities - May 31,
1994
(iv) Statement of Operations - for the year ended May
31, 1994
(v) Statements of Changes in Net Assets - for the
years ended May 31, 1994 and 1993
(vi) Notes to Financial Statements
c) Exhibits:
The following exhibits are attached herewith, except
exhibits 6(ii), 8(iii), and 8(iv), which are
incorporated by reference as noted.
(1) copies of the charter as now in effect;
(i) Certificate of Incorporation dated May 5, 1982
(ii) Certificate of Amendment of the Certificate of
Incorporation of Franklin New York Tax-Free
Income Fund dated March 5, 1995
(2) copies of the existing By-Laws or instruments
corresponding thereto;
(i) By-Laws dated September 17, 1986
(3) copies of any voting trust agreement with respect to
more than five percent of any class of equity
securities of the Registrant;
N/A
(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;
N/A
(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
Securities Dealers
Registrant: Franklin Federal Tax-Free Income
Fund
Filing: Post-Effective Amendment No. 17 to
Registration on Form N-1A
File No. 2-75925
Filing Date: March 28, 1995
(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;
N/A
(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 remuneration;
(i) Custodian Agreement between Registrant and Bank
of America NT & SA dated February 1, 1983
(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
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;
N/A
(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;
N/A
(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;
(i) Consent of Independent Auditors dated April 14,
1995
(12) all financial statements omitted from Item 23;
N/A
(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;
(i) Letter of Understanding dated April 12, 1995
(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;
N/A
(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) Distribution Plan pursuant to Rule 12b-1 dated
May 1, 1994 between Franklin/Templeton
Distributors, Inc. and the Registrant on behalf of
Franklin New York Tax-Free Income Fund
(ii) Form of Distribution Plan pursuant to Rule
12b-1 between Franklin/Templeton
Distributors, Inc. and the Registrant on
behalf of Franklin New York Tax-Free Income
Fund - Class II
(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
(17) Power of Attorney
(i) Power of Attorney dated February 16, 1995
(ii) Certificate of Secretary dated February 16, 1995
Item 25 Persons Controlled by or under Common Control with
Registrant
NONE
Item 26 Number of Holders of Securities
As of February 28, 1995, the number of record holders of The only
classes of securities of the Registrant was as follows:
Title of Class Number of Record Holders
Capital Stock
Franklin New York Tax-Free
Income Fund, Inc. - Class I 103,902
Franklin New York Tax-Free
Income Fund, Inc. - Class II None
Item 27 Indemnification
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 adviser
also serve as officers and/or directors for (1) the adviser'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 Premier Return Fund, Franklin Custodian Funds, Inc.,
Franklin Gold Fund, Franklin Equity Fund, Franklin California Tax-
Free Income Fund, Inc., Franklin Municipal Securities Trust,
Franklin Federal Tax-Free Income Fund, Franklin Investors
Securities Trust, Franklin Tax-Advantaged High Yield Securities
Fund, Franklin Tax-Advantaged International Bond Fund, Franklin Tax-
Advantaged U.S. Government Securities Fund, Franklin California Tax-
Free Trust, Franklin Tax-Free Trust, Franklin New York Tax-Free
Trust, Franklin Strategic Series, Franklin International Trust,
Franklin Managed Trust, Franklin Balance Sheet Investment Fund,
Franklin Strategic Mortgage Portfolio, Institutional Fiduciary
Trust, Franklin Money Fund, Franklin Federal Money Fund, Franklin
Tax Exempt Money Fund, Franklin Real Estate Securities Trust,
Franklin Templeton Global Trust, 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
Developing Markets Trust, Templeton Global Investment Trust,
Templeton Variable Annuity Fund, Franklin Templeton Japan Fund
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 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 by 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, as amended, the Registrant
certifies that it meets all of the requirements for effectiveness
of this Post-Effective Amendment to the Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to its 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 19th
day of April 1995.
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
(Registrant)
By: Charles B. Johnson*
Charles B. Johnson
President
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to its Registration Statement has been signed below
by the following persons in the capacities and on the dates
indicated:
Charles B. Johnson* Principal Executive Officer and
Charles B. Johnson Director
Dated: April 19, 1995
Martin L. Flanagan* Principal Financial Officer
Martin L. Flanagan Dated: April 19, 1995
Harris J. Ashton* Director
Harris J. Ashton Dated: April 19, 1995
Diomedes Loo-Tam* Principal Accounting Officer
Diomedes Loo-Tam Dated: April 19, 1995
S. Joseph Fortunato* Director
S. Joseph Fortunato Dated: April 19, 1995
Rupert H. Johnson, Jr.* Director
Rupert H. Johnson, Jr. Dated: April 19, 1995
Gordon S. Macklin* Director
Gordon S. Macklin Dated: April 19, 1995
*BY /s/ Larry L. Greene
Larry L. Greene, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
REGISTRATION STATEMENT
EXHIBITS INDEX
EXHIBIT NO. DESCRIPTION LOCATION
EX-99.B1(i) Certificate of Incorporation Attached
dated May 5, 1982
EX-99.B1(ii) Certificate of Amendment of Attached
the Certificate of
Incorporation of Franklin New
York Tax-Free Income Fund
dated March 5, 1995
EX-99.B2(i) By-Laws dated September 17, Attached
1986
EX-99.B5(i) Management Agreement between Attached
Registrant and Franklin
Advisers, Inc. dated May 1,
1994
EX-99.B6(i) Form of Amended and Restated Attached
Distribution Agreement
between Registrant and
Franklin/Templeton
Distributors, Inc.
EX-99.B6(ii) Form of Dealer Agreement *
between Franklin/Templeton
Distributors, Inc. and
Securities Dealer
EX-99.B8(i) Custodian Agreement between Attached
Registrant and Bank of
America NT & SA dated
February 1, 1983
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
EX-99.B8(iv) Amendment to Custodian *
Agreement between Registrant
and Bank of America NT & SA
dated December 1, 1994
EX-99.B11(i) Consent of Independent Attached
Auditors dated April 14, 1995
EX-99.B13(i) Letter of Understanding dated Attached
April 12, 1995
EX-99.15(i) Distribution Plan pursuant to Attached
Rule 12b-1 dated May 1, 1994
between Franklin/Templeton
Distributors, Inc. and the
Registrant on behalf of
Franklin New York Tax-Free
Income Fund
EX-99.B15(ii) Form of Distribution Plan Attached
pursuant to Rule 12b-1
between Franklin/Templeton
Distributors, Inc. and the
Registrant on behalf of
Franklin New York Tax-Free
Income Fund - Class II
EX-99.B16(i) Schedule for Computation of Attached
Performance Quotations
EX-99.B17(i) Power of Attorney dated Attached
February 16, 1995
EX-99.B17(ii) Certificate of Secretary Attached
dated February 16, 1995
* Incorporated by Reference
CERTIFICATE OF INCORPORATION
OF
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
Under Section 402 of the Business Corporation Law
The undersigned, being of the age of twenty-one years or over,
for the purpose of forming a corporation pursuant to Section 402 of the
Business Corporation Law, does hereby certify:
FIRST: The name of the corporation is FRANKLIN NEW YORK
TAX-FREE INCOME FUND, INC.
SECOND: The purposes for which it is formed are:
To engage in business as a management investment company
registered under the Investment Company Act of 1940 with an
objective of investing primarily in debt obligations exempt from
Federal, New York State and New York City income taxes.
To do everything necessary, proper, advisable or convenient
for the accomplishment of any of the above purposes, and to do
every other act and thing incidental thereto, provided the same
not to be forbidden by the laws of the State of New York.
The Corporation shall be authorized to exercise and enjoy all
other powers, rights and privileges granted to corporations by the
Business Corporation Law of the State of New York and by any other laws of
the State of New York now or hereafter in force, and the enumeration of
the following powers shall not be deemed to exclude or limit any powers,
rights or privileges so granted or conferred.
THIRD: The office of the Corporation is to be located in the
City of New York, County of New York, State of New York.
FOURTH: The aggregate number of shares which the Corporation
shall have authority to issue is twenty million (20,000,000) par value one
cent ($.01) each. Shares of the Corporation's stock shall not entitle
holders to any preemptive rights.
FIFTH: The Secretary of State is designated as the agent of the
Corporation upon whom process against the Corporation may be served. The
post office address to which the Secretary of State shall mail a copy of
any process against the Corporation served upon him is: 101 Park Avenue,
New York, New York 10178, c/o Lovejoy, Wasson & Ashton, Professional
Corporation.
SIXTH: The By-Laws of the Corporation may be amended by an
affirmative vote of a majority of its Board of Directors.
SEVENTH: The Corporation shall indemnify its directors,
officers and representatives to the extent permitted by law.
IN WITNESS WHEREOF, the undersigned has made and signed this
certificate the 5th day of May, 1982, and affirms the statements contained
therein as true under penalties of perjury.
/s/ Brian E. Lorenz
Brian E. Lorenz
101 Park Avenue
New York, New York 10178
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
WE, THE UNDERSIGNED, Charles B. Johnson and Brian E.
Lorenz, being respectively the President and Secretary of
Franklin New York Tax-Free Income Fund, Inc., hereby certify:
1. The name of the Corporation is Franklin New York Tax-
Free Income Fund, Inc.
2. The Certificate of Incorporation of said Corporation
was filed by the Department of State on the 14th day of May,
1982. Certificates of Amendment to the Certificate of
Incorporation were filed by the Department of State on November
21, 1983 and October 7, 1986.
3. The Certificate of Incorporation is being amended so
as to divide the existing authorized shares of stock into two
separate classes, known as class I and Class II, with the
currently issued and outstanding shares being designated Class I
shares and the only difference between such Classes being those
reflecting different distribution costs and expense as permitted
for registered management investment companies such as the
Corporation under the Investment Company Act of 1940. Two Billion
Five Hundred Million (2,500,000,000) shares of stock (par value
$.01) shall be allocated to a class known as FRANKLIN NEW YORK
TAX-FREE INCOME FUND CLASS I which includes Three Hundred and
Ninety Eight Million Two Hundred and Ninety Five Thousand Four
Hundred and Five(398,295,405) shares constituting all of the
currently issued and outstanding shares of the Corporation and
Two Billion One Hundred and One Million Seven Hundred and Four
Thousand Five Hundred and Ninety Five (2,101,704,595) shares
which are unissued. Two Billion Five Hundred Million
(2,500,000,000) unissued shares of stock (par value $.01) shall
be allocated to a class known as FRANKLIN NEW YORK TAX-FREE
INCOME FUND CLASS II. To accomplish this, Article Fourth of the
Certificate of Incorporation relating to the capital stock is
hereby amended to read in its entirety as follows:
"The aggregate number of shares which the Corporation
shall have authority to issue is five billion
(5,000,000,000) par value one cent ($.01) each. Shares
of the Corporation's stock shall not entitle holders to
any preemptive rights. Such shares are hereby divided
into two classes as specified herein. Two Billion Five
Hundred Million (2,500,000,000) shares of stock (par
value $.01) shall be allocated to a class known as
FRANKLIN NEW YORK TAX-FREE INCOME FUND CLASS I (CLASS
I") and Two Billion Five Hundred Million shares of
stock (par value $.01) shall be allocated to a class
known as FRANKLIN NEW YORK TAX-FREE INCOME FUND CLASS
II ("CLASS II"). Except as otherwise provided herein,
all references in these Articles of Incorporation to
Stock or class of stock shall apply without
discrimination to the shares of each such class of
stock.
The shares of Class I and Class II shall represent
proportionate interests in the same portfolio of
investments of the Corporation. The dividends payable
to the holders of any class thereof (subject to any
applicable rules, regulation or order of the Securities
and Exchange Commission or any other applicable law or
regulation) may be charged with any pro rata portion of
distribution expenses paid pursuant to a Plan of
Distribution adopted by such class thereof in
accordance with Investment Company Act of 1940 Rule 12b-
1 or any successor thereto), which dividend shall be
determined as directed by the Board and need not be
individually declared, but may be declared and paid in
accordance with a formula adopted by the Board. The
shares of Class I and Class II shall have the same
rights and privileges, and shall be subject to the same
limitations and priorities, all as set forth herein,
provided that dividends paid on the shares of Class I
shall not reflect any reduction for payment of fees
under the Distribution Plan of Class II, and dividends
paid on the shares of Class II shall not reflect any
reduction for payment of fees under the Distribution
Plan of Class I, adopted pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended, and
provided further, that the shares of Class I shall not
vote upon or with respect to any matter relating to or
arising- from any Distribution Plan of Class II, and
the shares of Class II shall not vote upon or with
respect to any matter relating to or arising from any
Distribution plan of Class I.
The holder of each share of stock of the Corporation
shall be entitled to one vote for each full share, and
a fractional vote for each fractional share of stock,
irrespective of the class then standing in his or her
name in the books of the corporation. On any matter
submitted to a vote of shareholders, all shares of the
corporation then issued and outstanding and entitled to
vote, irrespective of the class shall he voted in the
aggregate and not by class except (1) .when otherwise
expressly provided by the New York Business Corporation
Act, or (2) when required by the Investment Company Act
of 1940, as amended, shares shall be voted by
individual classes and (3) when the matter does not
affect any interest of the particular class, then only
shareholders of the affected class shall be entitled to
vote thereon."
4. The amendment was authorized by vote of
shareholders having a majority of the
Corporation's outstanding stock subsequent to
authorization by the Board of Directors.
IN WITNESS WHEREOF, we have signed this Certificate on
the 7th day of March, 1995 and we affirm the statements contained
therein as true under penalties of perjury.
/s/ Charles B. Johnson
Charles B. Johnson, President
/s/ Brian E. Lorenz
Brian E. Lorenz, Secretary
BY-LAWS
of
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
ARTICLE I
OFFICES
Section 1. The corporation shall have offices at such places
both within and without the State of New York as the board of directors
may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Annual Meetings. Annual meetings of shareholders
shall be held on a date and at a time at such place, within or without
the State of New York, as the board of directors shall determine. The
election of directors by a plurality vote shall take place at the annual
meeting of shareholders together with the transaction of such other
business as may properly come before said meeting.
Section 2. Special Meetings. Special meetings of
shareholders, unless otherwise prescribed by law, may be called for any
purpose or purposes at any time by the President, or by the order of the
board of directors or by the President or Secretary or an Assistant
Secretary whenever requested in writing to do so by shareholders owning
not less than one-third of all the outstanding shares of the corporation
entitled to vote at such meeting. Such request shall state the purpose
or purposes of the proposed special meeting. Such meetings shall be held
at such place and on a date and at such time as may be designated in the
notice thereof by the officer of the corporation calling any such
meeting. The business transacted at any special meeting shall be limited
to the purposes stated in the notice.
Section 3. Notice of Meetings: Notice of every annual and
special meeting of shareholders, other than any meeting the giving of
notice of which is otherwise prescribed by law, stating the date, time,
place and purpose thereof, shall be delivered or mailed at least ten but
not more than fifty days before such meeting, to each shareholder of
record entitled to vote thereat and to each shareholder of record who, by
reason of any action proposed at such meeting would be entitled to have
his shares appraised if such action were taken, and the notice shall
include a statement of that purpose and to that effect. If mailed,
notice shall be directed to each shareholder at his address as the same
appears on the record of shareholders of the corporation.
Section 4. Quorum: At all meetings of shareholders, except as
otherwise expressly provided by law, there must be present either in
person or by proxy shareholders of record holding at least a majority of
the shares issued and outstanding and entitled to vote at such meetings
in order to constitute a quorum, but if less than a quorum is present, a
majority of the shares present either in person or by proxy shall have
power to adjourn any meeting until a quorum shall be present.
Section 5. Voting: If a quorum is present, and except as
otherwise expressly provided by law, the affirmative vote of a majority
of the shares of stock represented at the meeting shall be the act of the
shareholders. At any meeting of shareholders each shareholder entitled
to vote any shares on any matter to be voted upon at such meeting shall
be entitled to one vote on such matter for each such share, and may
exercise such voting right either in person or by proxy, except that no
proxy shall be voted on after eleven months from its date unless said
proxy provides for a longer period.
ARTICLE III
DIRECTORS
Section 1. Number: The affairs, business and property of the
corporation shall be managed by a board of directors to consist of not
less than three directors nor more than ten unless the shares of the
corporation are owned beneficially and of record by less than three
shareholders in which case the number of directors may equal the number
of shareholders. Within the limits fixed by these by-laws the number of
directors may be determined either by the vote of a majority of the
entire board or by vote of the shareholders. The directors shall be at
least twenty-one years of age, and need not be shareholders of the
corporation.
Section 2. How Elected: Except as otherwise provided by law
or Section 4 of this Article, the directors of the corporation other than
the first board of directors elected by the incorporator or other person
acting in his stead under 615(c) of the Business Corporation Law shall be
elected at the annual meeting of shareholders. Each director shall be
elected to serve until the next annual meeting of shareholders and until
his successor shall have been duly elected and qualified, except in the
event of his death, resignation, removal or the earlier termination of
his term of office.
Section 3. Removal: Any or all of the directors may be
removed, with or without cause, by a vote of the shareholders. Any
director may be removed for cause by action of the board of directors.
Section 4. Vacancies: Vacancies in the board of directors
occurring by death, resignation, creation of new directorships, failure
of the shareholders to elect the whole board at any annual election of
directors or for any other reason, including removal of directors for or
without cause, may be filled either by the affirmative vote of a majority
of the remaining directors then in office, although less than a quorum,
at any special meeting called for that purpose or at any regular meeting
of the board, or by vote of the shareholders.
Section 5. Regular Meetings: Regular meetings of the board of
directors may be held at such time and place as may be determined by
resolution of the board of directors and no notice shall be required for
any regular meeting. Except otherwise provided by law, any business may
be transacted at any regular meeting.
Section 6. Special Meetings: Special meetings of the board of
directors may, unless otherwise prescribed by law, be called from time to
time by the President, Chairman of the Board or any officer of the
corporation who is also a director. The President or the Secretary shall
call a special meeting of the board upon written request directed to
either of them by any two directors stating the time, place and purposes
of such special meeting. Special meetings of the board shall be held on
a date and at such time and at such place as may be designated in the
notice thereof by the officer calling the meeting.
Section 7. Notice of Special Meetings: Notice of the date,
time and place of each special meeting of the board of directors shall be
given to each director at least forty-eight hours prior to such meeting,
unless the notice is given orally or delivered in person, in which case
it shall be given at least twenty-four hours prior to such meeting. For
the purpose of this section, notice will be deemed to be duly given to a
director if given to him orally (including telephone) or if such notice
be delivered to such director in person or be mailed, telegraphed, cabled
or telexed to his last known address. Notice of a meeting need not be
given to any director who attends the meeting without protesting, prior
thereto or at its commencement, the lack of notice to him.
Section 8. Quorum: At any meeting of the board of directors
one-third of the entire board shall constitute a quorum (except as
provided in Section 4 of this Article III), but less than a quorum may
adjourn a meeting. Except as otherwise by law or in these by-laws
provided, any action taken by a majority of the directors present at a
meeting of the board of directors at which a quorum is present shall be
the action of the board of directors.
Section 9. Compensation of Directors and Members of
Committees: The board may from time to time, in its discretion, fix the
amounts which shall be payable to members of the board of directors and
to members of any committee, for attendance at the meetings of the board
or of such committee and for services rendered to the corporation.
Section 10. Reliance Upon Financial Statements: In
discharging their duties, directors and officers, when acting in good
faith, may rely upon financial statements of the corporation represented
to them to be correct by the President or the officer of the corporation
having charge of its books of accounts, or stated in a written report by
an independent public or certified public accountant or firm of such
accountants fairly to reflect the financial condition of the corporation.
Section 11. Participation in Meeting by Telephone: Any one or
more members of the board of directors may participate in a meeting of
the board of directors by means of a conference telephone call or similar
communications equipment allowing all persons participating in the
meeting to hear each other at the same time.
ARTICLE IV
COMMITTEES
Section 1. Executive Committees and Other Committees: The
board of directors may, by resolution or resolutions passed by a majority
of the entire board, designate from among its members an executive
committee and other committees each to consist of three or more of the
directors of the corporation, each of which, to the extent provided in
said resolution or resolutions, or in these by-laws, shall have and may
exercise, to the extent permitted by law, the powers of the board of
directors in the management of the business and affairs of the
corporation and may have power to authorize the seal of the corporation
to be affixed to all papers which may require it. Members of such
committees shall hold office for such period as may be prescribed by the
vote of a majority of the entire board of directors, subject, however, to
removal at any time by the vote of a majority of the entire board of
directors. Vacancies in membership of such committees shall be filled by
a majority vote of the entire board of directors. Committees may adopt
their own rules of procedure and may meet at stated times or on such
notice as they may determine. Each committee shall keep a record of its
proceedings and report the same to the board when required.
Section 2. Action by Written Consent: Any action required or
permitted to be taken by any committee may be taken without a meeting if
all members of the committee consent in writing to adoption of a
resolution authorizing the action.
Section 3. Participation in Meeting by Telephone: Any one or
more members of a committee may participate in a meeting of the committee
by means of a conference telephone call or similar communications
equipment allowing all persons participating in the meeting to hear each
other at the same time.
ARTICLE V
OFFICERS
Section 1. Number and Designation: The board of directors may
elect a Chairman of the Board, President, one or more Executive Vice-
Presidents, one or more Vice-Presidents, a Secretary and a Treasurer,
Assistant Secretaries, Assistant Treasurers, and such other officers as
it may deem necessary. Any two or more offices may be held by the same
person except the offices of President and Secretary.
The officers shall be elected annually by the board of
directors at its first meeting following the annual election of
directors, but in the event of the failure of the board to so elect any
officer, such officer may be elected at any subsequent meeting of the
board of directors. The salaries of officers and any other compensation
paid to them shall be fixed from time to time by the board of directors.
The board of directors may at any meeting elect additional officers.
Each officer shall hold office until the first meeting of the board of
directors following the next annual election of directors and until his
successor shall have been duly elected and qualified, except in the event
of the earlier termination of his term of office, through death,
resignation, removal or otherwise. Any officer may be removed by the
board at any time with or without cause. Any vacancy in an office may be
filled for the unexpired portion of the term of such office by the board
of directors at any regular or special meeting.
Section 2. Chairman of the Board: The Chairman of the Board
shall preside at all meetings of shareholders and directors at which he
is present and shall have such other powers and perform such other duties
as may be assigned to him by the board of directors.
Section 3. President: The President shall be the chief
executive officer of the corporation and shall have the general
management of the affairs of the corporation together with the powers and
duties usually incident to the office of President except as specifically
limited by appropriate resolution of the board of directors and shall
have such other powers and perform such other duties as may be assigned
to him by the board of directors. In the absence of the Chairman of the
Board, the President shall preside at all meetings of shareholders at
which he is present.
Section 4. Executive Vice-Presidents: In the absence or
inability to act of the President, or if the office of President be
vacant, any Executive Vice-President shall perform all the duties and may
exercise all the powers of the President, subject to the right of the
board of directors to extend or confine such powers and duties or to
assign them to others. The Executive Vice-Presidents shall have such
other powers and shall perform such other duties as may be assigned to
them by the board of directors or the President.
Section 5. Vice-Presidents: In the absence or inability to
act of the President and Executive Vice-Presidents, or if these offices
be vacant, any Vice-President, unless otherwise determined by the board,
shall perform all the duties and may exercise all the powers of the
President and the Executive Vice-Presidents. Each Vice-President shall
have such other powers and shall perform such other duties as may be
assigned to him by the board of directors or the President.
Section 6. Treasurer: The Treasurer shall have general
supervision over the care and custody of the funds, securities, and other
valuable effects of the corporation and shall deposit the same or cause
the same to be deposited in the name of the corporation in such
depositories as the board of directors may designate, shall disburse the
funds of the corporation as may be ordered by the board of directors,
shall have supervision over the accounts of all receipts and
disbursements of the corporation, shall, whenever required by the board,
render or cause to be rendered financial statements of the corporation,
shall have the power and perform the duties usually incident to the
office of Treasurer, and shall have such other powers and perform such
other duties as may be assigned to him by the board of directors or the
President.
Section 7. Secretary: The Secretary shall act as Secretary of
all meetings of the shareholders and of the board of directors at which
he is present, shall have supervision over the giving and serving of
notices of the corporation, shall be the custodian of the corporate
records and of the corporate seal of the corporation, shall exercise the
powers and perform the duties usually incident to the office of
Secretary, and shall exercise such other powers and perform such other
duties as may be assigned to him by the board of directors or the
President.
Section 8. Assistant Secretaries and Assistant Treasurers: An
Assistant Secretary acting as such shall perform in the absence of the
Secretary all the functions of the Secretary and he shall exercise such
other powers and perform such other duties as may be assigned to him by
the board of directors or the President.
An Assistant Treasurer acting as such shall perform in the
absence of the Treasurer all the functions of the Treasurer and he shall
exercise such other powers and perform such other duties as may be
assigned to him by the board of directors or the President.
Section 9. Other Officers: Officers other than those treated
in Sections 2 through 8 of this Article shall exercise such powers and
perform such duties as may be assigned to them by the board of directors
or the President.
Section 10. Delegation of Duties of Officers: The board of
directors may delegate the duties and powers of any officer, agent or
employee of the corporation to any other officer, agent or employee or
director for a specified time during the absence of any such person or
for any other reason that the board of directors may deem sufficient.
Section 11. Bond: The board of directors shall have power to
the extent permitted by law, to require any officer, agent or employee of
the corporation to give bond for the faithful discharge of his duties in
such form and with such surety or sureties as the board of directors may
deem advisable.
ARTICLE VI
CERTIFICATES FOR SHARES
Section 1. Form and Issuance: The shares of the corporation
shall be represented by certificates in a form meeting the requirements
of law and approved by the board of directors. Certificates shall be
signed by the Chairman of the Board or the President or an Executive Vice-
President or a Vice-President, and by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer. These signatures
may be facsimiles if the certificate is counter-signed by a transfer
agent or registered by a registrar other than the corporation itself or
its employee.
Section 2. Transfer: The board of directors shall have power
and authority to make such rules and regulations as they deem expedient
concerning the issuance, registration and transfer of certificates
representing shares of the corporation's stock, and may appoint transfer
agents and registrars thereof.
Section 3. Fixing of Record Date: The board of directors may
fix a time not more than fifty (50) nor less than ten (10) days prior to
the date of any meeting of shareholders, or prior to the last day on
which the consent or dissent of shareholders may be effectively expressed
for any purpose without a meeting, as the time as of which shareholders
entitled to notice of and to vote at such a meeting or whose consent or
dissent is required or may be expressed for any purpose, as the case may
be, shall be determined, and all-persons who were holders of record of
voting shares at such time and no others shall be entitled to notice of
and to vote at such meeting or to express their consent or dissent, as
the case may be. The board of directors may fix a time not exceeding
fifty (50) days preceding the date fixed for the payment of any dividend,
the making of any distribution, the allotment of any rights or the taking
of any other action as a record time for the determination of the
shareholders entitled to receive any such dividend, distribution, or
allotment or for the purpose of such other action. directors is adopted
or amended or repealed by the board of directors, there shall be set
forth in the notice of the next meeting of the shareholders of the
corporation for the election of directors the by-law so adopted or
amended or repealed, together with a concise statement of the changes
made.
ARTICLE VII
DIVIDENDS
Section 1. Declaration and Form: Dividends may be declared in
conformity with law by, and at the discretion of, the board of directors
at any regular or special meeting. Dividends may be declared and paid in
cash, shares or evidences of indebtedness of the corporation, or any
property of the corporation, including the shares or evidences of
indebtedness of any other corporation.
ARTICLE VIII
CORPORATE SEAL
The Seal of the corporation shall be circular in form, with the
name of the corporation in the circumference and the words and figures
"Corporate Seal - 1978 -New York" in the center. Any officer, director or
attorney-in-fact of the corporation may affix the seal of the corporation
to any document.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall be such period of
twelve consecutive months as the board of directors may by resolution
designate.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice is required to be given under the
provisions of these by-laws, the certificate of incorporation or any of
the laws of the State of New York, a waiver thereof, in writing, signed
by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
ARTICLE XI
AMENDMENTS
Section 1. By the Shareholders: These by-laws may be amended,
added to, altered or repealed, or new by-laws may be adopted, at any
meeting of shareholders of the corporation by the affirmative vote of the
holders of a majority of the stock present and voting at such meeting
provided notice that an amendment is to be considered and acted upon is
included in the notice or waiver of notice of said meeting.
Section 2. By the Directors: These by-laws may be amended,
added to, altered or repealed, or new by-laws may be adopted, at any
regular or special meeting of the board of directors by the affirmative
vote of a majority of the entire board. If any by-law regulating an
impending election of directors is adopted or amended or repealed by the
board of directors, there shall be set forth in the notice of the next
meeting of the shareholders of the corporation for the election of
directors the by-law so adopted or amended or repealed together with a
concise statement of the changes made.
ARTICLE XII
INDEMNIFICATION
The corporation shall indemnify any
person made or threatened to be made party to an action or Proceeding,
including actions brought by or in the right of the corporation to
procure judgment in its favor, by reason of the fact that such person is
or was a director or officer of the corporation against judgments, fines,
amounts paid in settlement and reasonable expenses incurred in such
actions or proceedings and shall advance expenses to such persons in such
actions or proceedings, provided that no indemnification may be made to
or on behalf of any director or officer if a judgment or other final
adjudication adverse to the director or officer establishes that his acts
were committed in bad faith or were the result of active and deliberate
dishonesty and were material to the cause of action so adjudicated, or
that he personally gained in fact a financial profit or other advantage
to which he was not legally entitled. This by-law shall not be construed
to protect or indemnify any director or officer against any liability to
the corporation or its shareholders to which he would be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office."(As
amended September 17, 1986).
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT made between FRANKLIN NEW YORK TAX-FREE INCOME
FUND, INC., a New York 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 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/Templeton 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 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 categories set forth in (b)(i) and (ii) above
and the manner in which the allocation has been accomplished.
(e) 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 previous 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; and
1/24 of 1% of the value of net assets over $100,000,000 and not
over $250,000,000; and
9/240 of 1% of the value of net assets over $250,000,000 and
not over $10 billion; and
11/300 of 1% of the value of net assets over $10 billion and
not over $12.5 billion; and
7/200 of 1% of the value of net assets over $12.5 billion and
not over $15 billion; and
1/30 of 1% of the value of net assets over $15 billion and not
over $17.5 billion; and
19/600 of 1% of the value of net assets over from $17.5 billion
and not over $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 Advisers,
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 monthly 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 fiscal quarter 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 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 are 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 and 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 or omission in the course of, or connected
with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security
by the Fund.
B. Notwithstanding 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 action 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 until September 30, 1995. 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
days' 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
person" 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 here to have caused this
Agreement to be executed the 1st day of May, 1994.
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
/s/ Deborah R. Gatzek
By: Deborah R. Gatzek
FRANKLIN ADVISERS, INC.
/s/ Harmon E. Burns
By: Harmon E. Burns
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
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 NEW YORK TAX-FREE INCOME FUND, INC.
By:_______________________________
Accepted:
Franklin/Templeton Distributors, Inc.
By:__________________________________
DATED: ________________
AGREEMENT
AGREEMENT, made as of February 1, 1983, between Franklin New
York Tax-Free Income Fund, Inc. a New York 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. 10. 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,OOO,OOO (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 New York Tax-Free Income Fund
/s/ Harmon E. Burns
By: Harmon E. Burns
Attest:
/s/ Deborah R. Gatzek
By: Deborah R. Gatzek
Bank of America, NT & SA
/s/ Paul Fitzpatrick
By: Paul Fitzpatrick
Attest:
/s/ S. Kozmell
By: S. Kozmell
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
CONSENT OF INDEPENDENT AUDITORS
To the Board of Directors of
Franklin New York Tax-Free Income Fund:
We consent to the incorporation by reference in Post-
Effective Amendment No. 14 to the Registration Statement of
Franklin New York Tax-Free Income Fund on Form N-1A (File
No. 2-77880) of our report dated June 24, 1994 on our audit
of the financial statements and financial highlights of the
Fund, which report is included in the Annual Report to
Shareholders for the year ended May 31, 1994, which is
incorporated by reference in the Registration Statement.
/s/ COOPERS & LYBRAND L.L.P.
San Francisco, California
April 14, 1995
To: All Franklin Templeton Funds Listed on Schedule A
777 Mariners Island Blvd.
San Mateo, CA 94404
Gentlemen:
We propose to invest $100.00 in the Class II shares (the "Shares") of
each of the Funds listed on the attached Schedule A (the "Funds"), on the
business day immediately preceding the effective date for each Fund's Class
II shares, at a purchase price per share equivalent to the net asset value
per share of each Fund's Class I shares on the date of purchase. We will
purchase the Shares in a private offering prior to the effectiveness of the
post-effective amendment to the Form N-1A registration statement under which
each Fund's Class II shares are initially offered, as filed by the Fund under
the Securities Act of 1933. The Shares are being purchased to serve as the
seed money for each Fund's Class II shares prior to the commencement of the
public offering of Class II shares.
In connection with such purchase, we understand that we, the purchaser,
intend to acquire the Shares for our own account as the sole beneficial owner
thereof and have no present intention of redeeming or reselling the Shares so
acquired.
We consent to the filing of this Investment Letter as an exhibit to the
form N-1A registration statement of each Fund.
Sincerely,
FRANKLIN RESOURCES, INC.
By: /s/ Harmon E. Burns
Harmon E. Burns
Executive Vice President
Date: April 12, 1995
<TABLE>
<CAPTION>
SCHEDULE A
<S> <C>
INVESTMENT COMPANY FUND & CLASS; TITAN NUMBER
Franklin Gold Fund Franklin Gold Fund - Class II; 232
Franklin Equity Fund Franklin Equity Fund - Class II; 234
AGE High Income Fund, Inc. AGE High Income Fund - Class II; 205
Franklin Custodian Funds, Inc. Growth Series - Class II; 206
Utilities Series - Class II; 207
Income Series - Class II; 209
U.S. Government Securities
Series - Class II; 210
Franklin California Tax-Free Franklin California Tax-Free Income
Income Fund, Inc. Fund - Class II; 212
Franklin New York Tax-Free Franklin New York Tax-Free Income
Income Fund, Inc. Fund - Class II; 215
Franklin Federal Tax-Free Franklin Federal Tax-Free Income
Income Fund Fund -Class II; 216
Franklin Managed Trust Franklin Rising Dividends
Fund - Class II; 258
Franklin California Tax-Free Franklin California Insured Tax-Free
Trust
Income Fund - Class II; 224
Franklin New York Tax-Free Trust Franklin New York Insured Tax-Free
Income Fund - Class II; 281
Franklin Investors Securities Franklin Global Government Income
Trust
Fund - Class II; 235
Franklin Equity Income
Fund - Class II; 239
Franklin Strategic Series Franklin Global Utilities
Fund - Class II; 297
Franklin Real Estate Securities Franklin Real Estate Securities
Trust
Fund - Class II; 292
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT COMPANY FUND AND CLASS; TITAN NUMBER
Franklin Tax-Free Franklin Alabama Tax-Free Income Fund - Class II; 264
Trust Franklin Arizona Tax-Free Income Fund - Class II; 226
Franklin Colorado Tax-Free Income Fund - Class II; 227
Franklin Connecticut Tax Free Income
Fund - Class II; 266
Franklin Florida Tax-Free Income Fund - Class II; 265
Franklin Georgia Tax-Free Income Fund - Class II; 228
Franklin High Yield Tax-Free Income Fund - Class II; 230
Franklin Insured Tax-Free Income Fund - Class II; 221
Franklin Louisiana Tax-Free Income Fund - Class II; 268
Franklin Maryland Tax-Free Income Fund - Class II; 269
Franklin Massachusetts Insured Tax-Free Income
Fund - Class II; 218
Franklin Michigan Insured Tax-Free Income
Fund - Class II; 219
Franklin Minnesota Insured Tax-Free Income
Fund - Class II; 220
Franklin Missouri Tax-Free Income Fund - Class II; 260
Franklin New Jersey Tax-Free Income
Fund - Class II; 271
Franklin North Carolina Tax-Free Income
Fund - Class II; 270
Franklin Ohio Insured Tax-Free Income
Fund - Class II; 222
Franklin Oregon Tax-Free Income Fund - Class II; 261
Franklin Pennsylvania Tax-Free Income
Fund - Class II; 229
Franklin Puerto Rico Tax-Free Income
Fund - Class II; 223
Franklin Texas Tax-Free Income Fund - Class II; 262
Franklin Virginia Tax-Free Income Fund - Class II; 263
</TABLE>
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
Preamble to Distribution Plan
The following Distribution Plan (the "Plan") has been
adopted pursuant to Rule l2b-1 under the Investment Company Act
of 1940 (the "Act") by Franklin New York Tax-Free Income Fund,
Inc. (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. 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 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 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 or the Underwriting Agreement between the Fund and
Distributors.
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 NEW YORK TAX-FREE INCOME FUND, INC.
By: /s/ Deborah R. Gatzek
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By: /s/ Harmon E. Burns
CLASS II DISTRIBUTION PLAN
I. Investment Company: FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
II. Fund: FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
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:_____________________________________
SEC STANDARD TOTAL RETURN
AS OF: 3/31/95
MAX OFFER NAV
ONE YEAR 1.82% 6.40%
P= 1000.00 1000.00
T= 0.0182 0.0640
n= 1 1
ERV= 1018.20 1064.00
FIVE YEAR 6.72% 7.66%
P= 1000.00 1000.00
T= 0.0672 0.0766
n= 5 5
ERV= 1384.30 1446.34
TEN YEAR 8.33% 8.79%
P= 1000.00 1000.00
T= 0.0833 0.0879
n= 10 10
ERV= 2225.81 2322.15
FROM INCEPTION 02/01/77 5.75% 6.00%
P= 1000.00 1000.00
T= 0.0575 0.0600
n= 18.1726 18.1726
ERV= 2762.09 2883.19
AGGREGATE TOTAL RETURN
1 YEAR 1.82% 6.40%
5 YEAR 38.40% 44.63%
10 YEAR 122.48 132.23
FROM INCEPTION 176.01% 188.16%
30-DAY SEC YIELD 5.43%
30-DAY SEC YIELD W/O WAIVER NA
TAXABLE EQUIVALENT SEC 10.10%
YIELD
FISCAL YEAR-END 5.98%
DISTRIBUTION RATE (ON MAX
OFFERING)
FISCAL YEAR-END 6.24%
DISTRIBUTION RATE (ON NAV)
SEC - YIELD CALCULATION
a = interest/dividends earned 66,055,858
b = expenses accrued 5,442,410
c = avg # of shares o/s 1,878,917,345
d = maximum offering price 7,411
a - b 6
SEC Yield= 2[(------------------------- + 1) -1]
cd
66,055.858 - 5,442,410 6
= 2[(----------------------------------- + 1) -1]
1,878,917,345 * 7.411
60,613,448 6
= 2[(------------------------- + 1) -1]
13,924,656,444
6
= 2[( 1.00435295823956 ) -1]
= 2( 1.02640362813221 - 1)
= 0.0528072563
= 5.28%
TAXABLE EQUIVALENT YIELD CALCULATION
TAXABLE EQUIVALENT YIELD = tax-exempt current yield
------------------------
1 - f + s x (1 - f)) ]
WHERE:
f = federal income tax rate
s = state and local income tax rate
yield = 5.28%
f = 39.60%
s = 11.00%
TAXABLE EQUIVALENT YIELD = 5.28%
------------------------
1 - [.395+(.1 X (1-.396))]
= 5.28%
-------------------
1 - ( 0.396 + 0.66 )
5.28%
= -------------------
0.538
= 9.81%
POWER OF ATTORNEY
The undersigned officers and directors of Franklin New York
Tax-Free Income Fund, Inc. (the "Registrant") hereby appoint
BRIAN E. LORENZ, HARMON E. BURNS, DEBORAH R. GATZEK, 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 16th day of February, 1995.
/s/ Charles B. Johnson /s/ Gordon S. Macklin
Charles B. Johnson, Gordon S. Macklin,
Principal Executive Officer and Director
Director
/s/ Harris J. Ashton /s/ Martin L. Flanagan
Harris J. Ashton, Martin L. Flanagan,
Director Principal Financial Officer
/s/ S. Joseph Fortunato /s/ Diomedes Loo-Tam
S. Joseph Fortunato, Diomedes Loo-Tam,
Director Principal Accounting Officer
/s/ Rupert H. Johnson, Jr.
Rupert H. Johnson, Jr.
Director
CERTIFICATE OF SECRETARY
I, Brian E. Lorenz, certify that I am Secretary of Franklin
New York Tax-Free Income Fund, Inc. (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 February 16, 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,
Karen L. Skidmore, Larry L. Greene and Brian E. Lorenz
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/ Brian E. Lorenz
Brian E. Lorenz
Secretary
Dated February 16, 1995
