As Filed with the Securities and Exchange Commission on April 21,
1995.
File Nos.
2-30761
811-1700
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. 43 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 18 (X)
FRANKLIN GOLD FUND
(Exact Name of Registrant as Specified in Charter)
777 MARINERS ISLAND BLVD., SAN MATEO, CA 94404
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (415) 312-2000
Harmon E. Burns, 777 Mariners Island Blvd., San Mateo, CA 94404
(Name and Address of Agent of 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
EXHIBITS INDEX PAGE ____
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 Section 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 September 23, 1994.
FRANKLIN GOLD FUND
CROSS REFERENCE SHEET
FORM N-1A
Part A: Information Required in 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
4. General Description "About the Fund";
"Investment Objectives and
Policies of the Fund";
"General Information"
5. Management of the Fund "Management of the Fund";
"Portfolio Operations"
5A. Management's Discussion Response contained in
of Fund Performance Registrant's Annual Report
to Shareholders
6. Capital Stock and Other "Distributions to
Securities Shareholders"; "Taxation of
the Fund and Its
Shareholders"; "General
Information"
7. Purchase of Securities "How to Buy Shares of the
Being Offered Fund"; "Purchasing Shares
of the Fund in Connection
with Retirement Plans
Involving Tax-Deferred
Investments"; "Other
Programs and Privileges
Available to Fund
Shareholders"; "Exchange
Privilege"; "Valuation of
Fund Shares"
8. Redemption or Repurchase "How to Sell Shares of the
Fund"; "Valuation of Fund
Shares"; "How to get
Information Regarding an
Investment in the Fund";
"General Information";
"Telephone Transactions"
9. Pending Legal Proceedings Not Applicable
FRANKLIN GOLD FUND
CROSS REFERENCE SHEET
FORM N-1A
Part B: Information Required in
Statement of Additional Information
N-1A Location In
Item No. Item Registration Statement
10. Cover Page Cover Page
11. Table of Contents Contents
12. General Information and "Cover Page"; "About the
History Fund" (See also the
Prospectus "About the
Fund"; "General
Information")
13. Investment Objectives and "The Fund's Investment
Policies Objectives and Policies"
(See also the Prospectus
"Investment Objectives and
Policies of the Fund");
"Investment Restrictions";
"Special Considerations as
a Result of the Fund's
Investment Policies"
14. Management of the Fund "Officers and
Directors","Investment
Advisory and Other
Services" (See also the
Prospectus ; "Management
of the Fund"; "Portfolio
Operations")
15. Control Persons and "Officers and Directors"
Principal Holders of
Securities
16. Investment Advisory and "Investment Advisory 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 Other See the Prospectus
Securities "General Information"
19. Purchase, Redemption and "Additional Information
Pricing of Securities Regarding Fund Shares"
Being Offered (See also the Prospectus
"How to Buy Shares of the
Fund"; "How to sell Shares
of the Fund"; "Valuation
of Fund Shares")
20. Tax Status "Additional Information
Regarding Taxation" (See
also the Prospectus
"Taxation of the Fund and
its Shareholders")
21. Underwriters "The Fund's Underwriter"
22. Calculation of Performance "General Information"
Data
23. Financial Statements Financial Statements
01 P
SUPPLEMENT DATED MAY 1, 1995
TO THE PROSPECTUS FOR
FRANKLIN GOLD FUND
dated December 1, 1994
INTRODUCTION. As of May 1, 1995, the Franklin Gold Fund (the
"Fund") offers two classes to its investors: Franklin Gold Fund -
Class I ("Class I") and Franklin Gold Fund - 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 for both classes of shares are based on
aggregate operating expenses of the Class I shares for the fiscal
year ended July 31, 1994.
CLASS I CLASS II
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on
Purchases
(as a percentage of offering 4.50% 1.00%^
price)
Deferred Sales Charge NONE^^ 1.00%+
Exchange Fee (per transaction) $5.00++ $5.00++
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees 0.51% 0.51%
Rule 12b-1 Fees 0.22%* 1.00%*
Other Expenses:
Shareholder Servicing Costs 0.08% 0.08%
Reports to Shareholders 0.08% 0.08%
Other 0.09% 0.09%
Total Other Expenses 0.25% 0.25%
Total Fund Operating Expenses 0.98% 1.76%
^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 approximately 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 crossover 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."
++$5.00 fee imposed only on Timing Accounts as described under
"Exchange Privilege" in the Prospectus. All other exchanges are
processed without a fee.
*Rule 12b-1 fees for Class I are annualized. Actual Rule 12b-1
fees incurred by Class I for the three months ended July 31, 1994
were 0.05%. See "Plan of Distribution" under "Management of the
Fund" in the Prospectus. 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^^ $55 $75 $97 $160
CLASS II+ $38 $65 $104 $215
THIS EXAMPLE IS BASED ON THE AGGREGATE 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. (See
"Management of the Fund" in the Prospectus for a description of
the Fund's expenses.) 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
Set forth below is a table containing the unaudited financial
highlights for a share of Class I of the Fund for the 6-month
period ended January 31, 1995. Information regarding Class II
shares will be included in this table after they have been
offered to the public for a reasonable period of time. See the
discussion "Reports to Shareholders" under "General Information."
Six Months
Ended
January 31,
1995
PER SHARE OPERATING
PERFORMANCE
Net asset value at $14.88
beginning of period
Net investment income 0.10
Net realized & unrealized (2.136)
gain (loss) on securities
Total from investment (2.036)
operations
Less distributions:
Dividends from net (0.074)
investment income
Distributions from ----
capital gains
Total distributions (0.074)
Net asset value at end of $12.77
period
TOTAL RETURN** (13.75)%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period $337,521
(in 000's)
Ratio of expenses to .99%*
average net assets
Ratio of net investment 1.24%*
income to average net
assets
Portfolio turnover rate 4.56%
*Annualized.
**Total return measures the change in value of an investment
during the period indicated. It does not include the maximum
front-end sales charge and assumes reinvestment of dividends and
capital gains, if any, at net asset value and is not annualized.
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, an investor who expects to invest less than $100,000
in the Franklin Templeton Funds and who expects to make
substantial redemptions within approximately six 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 to outweigh the difference in front-end 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 Statement of Additional
Information ("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 of 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 after 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
"Management of the Fund - 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 .25% 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
"The Fund's Underwriter - Distribution Plan" in the 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 without a
sales charge 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 1.0% 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 1.0% of the 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 Charge" 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 0.75% per annum of Class II shares' average
daily net assets, payable quarterly. 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 0.25% per
annum of the class' average daily net assets as a servicing fee,
payable quarterly. 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 Class II 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 "Plan of Distribution" in the "Management of the Fund"
section in the Prospectus and 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 distributed 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.
PURCHASE PRICE OF FUND SHARES
Shares of both classes of the Fund are offered at the public
offering price, which is 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 4.50% 4.71% 4.00%
$100,000
$100,000 but 3.75% 3.90% 3.25%
less than
$250,000
$250,000 but 2.75% 2.83% 2.50%
less than
$500,000
$500,000 but 2.25% 2.30% 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: 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. 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 the
definitions under "Description of Special Net Asset Value
Purchases" and as set forth in the 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 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.
PURCHASES AT NET ASSET VALUE
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 or selling assets pursuant to a merger, acquisition or
exchange offer; (3) insurance company separate accounts for
pension plan contracts; (4) accounts managed by the Franklin
Templeton Group; (5) shareholders of Templeton Institutional
Funds, Inc. reinvesting redemption proceeds from that fund under
an employee benefit plan qualified under Section 401 of the Code
in shares of the Fund; (6) certain unit investment trusts and
unit holders of such trusts reinvesting their distributions from
the trusts in the Fund; (7) registered securities dealers and
their affiliates, for their investment account only; and (8)
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."
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 and
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 be purchased at net asset value and without
the imposition of a contingent deferred sales charge by anyone
who has taken a distribution from an existing retirement plan
already invested in the Franklin Templeton Funds (including
former participants of the Franklin Templeton Profit Sharing
401(k) plan), to the extent of such distribution. In order to
exercise this privilege, a written order for the purchase of
shares of the Fund must be received by Franklin Templeton Trust
Company (the "Trust Company"), the Fund or Investor Services,
within 120 days after the plan distribution.
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 its 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 shares may also be purchased at net asset value and
without the imposition of a contingent deferred sales charge by
certain designated retirement plans, including profit sharing,
pension, 401(k) and simplified employee pension plans
("designated plans"), subject to minimum requirements with
respect to number of employees or amount of purchase, which may
be established by Distributors. Currently, those criteria require
that the employer establishing the plan have 200 or more
employees or that the amount invested or to be invested during
the subsequent 13-month period in the Fund or in any of the
Franklin Templeton Investments totals at least $1,000,000.
Employee benefit plans not designated above or qualified under
Section 401 of the Code ("non-designated plans") may be afforded
the same privilege if they meet the above requirements as well as
the uniform criteria for qualified groups previously described
under "Group Purchases" which enable Distributors to realize
economies of scale in its sales efforts and sales related
expenses.
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.
Class I shares may be purchased at net asset value and without
the imposition of a contingent deferred sales charge by trustees
or other fiduciaries purchasing securities for certain retirement
plans of organizations with collective retirement plan assets of
$10 million or more, without regard to where such assets are
currently invested.
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" 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 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% semiannually, 3% quarterly). For example, if
the account maintained an annual balance of $10,000, only $1,200
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.
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 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
or her 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 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;
distributions to participants in Trust Company qualified
retirement plans due to death, disability or attainment of age 59
1/2; tax-free returns of excess contributions to employee benefit
plans; distributions from employee benefit plans, including
those due to termination or plan transfer; 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. In addition, shares of
participants in Trust Company retirement plan accounts will, in
the event of death, no longer be subject to the contingent
deferred sales charge.
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 this section; the subsequent paragraph is added to
the end of this 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 1:00 p.m. Pacific 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 101 for Class I and 232 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 state corporation law, 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 objectives 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 "Voting Rights" in the Prospectus
under the heading "General Information."
01 S
SUPPLEMENT DATED MAY 1, 1995
TO THE STATEMENT OF ADDITIONAL INFORMATION OF
FRANKLIN GOLD FUND
dated December 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 FIRST PARAGRAPH OF THE SECTION "THE FUND'S
UNDERWRITER - DISTRIBUTION PLAN" HAS BEEN REPLACED WITH THE
FOLLOWING PARAGRAPH:
PLANS OF DISTRIBUTION
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 0.25% per annum (0.25 of 1%) of its average
daily net assets for expenses incurred in the promotion
and distribution of its shares.
THE NEXT THREE PARAGRAPHS OF THIS SECTION IN THE STATEMENT
OF ADDITIONAL INFORMATION ONLY 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 CLASS II
PLAN:
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 .75% 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 .25% 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 THE SECTION "DISTRIBUTION PLAN"
APPLY EQUALLY TO BOTH CLASS I AND CLASS II PLANS, WITH THE
EXCEPTION THAT THE SENTENCE REGARDING UNREIMBURSED EXPENSES
REFERS TO THE CLASS I PLAN ONLY.
THE OFFICERS AND DIRECTORS SECTION IS REVISED TO READ AS
FOLLOWS:
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 (*).
NAME, POSITIONS AND
ADDRESS OFFICES WITH PRINCIPAL OCCUPATIONS
AND AGE THE FUND DURING PAST FIVE YEARS
Frank H. Abbott, III (74)
1045 Sansome St.
San Francisco, CA 94111
Director
President and Director, Abbott Corporation (an investment
company); and director, trustee or managing general
partner, as the case may be, of 30 of the investment
companies in the Franklin Group of Funds.
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.
*Harmon E. Burns (50)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President and Director
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.
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.
David W. Garbellano (80)
111 New Montgomery St., #402
San Francisco, CA 94105
Director
Private Investor; Assistant Secretary/Treasurer and
Director, Berkeley Science Corporation (a venture capital
company); and director, trustee or managing general
partner, as the case may be, of 29 of the investment
companies in the Franklin Group of Funds.
*Charles B. Johnson (62)
777 Mariners Island Blvd.
San Mateo, CA 94404
Chairman of the Board 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.
Frank W. T. LaHaye (66)
20833 Stevens Creek Blvd.
Suite 102
Cupertino, CA 95014
Director
General Partner, Peregrine Associates and Miller & LaHaye,
which are General Partners of Peregrine Ventures and
Peregrine Ventures II (venture capital firms); Chairman of
the Board and Director, Quarterdeck Office Systems, Inc.;
Director, FischerImaging Corporation; and director or
trustee, as the case may be, of 25 of the investment
companies in the Franklin Group of Funds.
*R. Martin Wiskemann (68)
777 Mariners Island Blvd.
San Mateo, CA 94404
President and Director
Senior Vice President, Portfolio Manager and Director,
Franklin Advisers, Inc.; Senior Vice President, Franklin
Management, Inc.; Vice President, Treasurer and Director,
ILA Financial Services, Inc. and Arizona Life Insurance
Company of America; and officer and/or director, as the
case may be, of 19 of the investment companies in the
Franklin 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 and Secretary
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.
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.
Edward V. McVey (57)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Senior Vice President/National Sales Manager, Franklin
Templeton Distributors, Inc.; and officer of 31 of the
investment companies in the Franklin Group of Funds.
Directors not affiliated with the investment manager
("nonaffiliated directors") are currently paid fees of
$150 per month plus $150 per meeting attended. During
the fiscal year ended July 31, 1994, fees totaling
$18,300 were paid to nonaffiliated directors of the
Fund. 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
nonaffiliated 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
NUMBER OF COMPENSATION
FRANKLIN FROM FRANKLIN
TEMPLETON TEMPLETON
AGGREGATE FUND BOARDS FUNDS,
COMPENSATION ON WHICH EACH INCLUDING THE
NAME FROM FUND* SERVES FUND**
Mr. Abbott $3,750 30 $176,870
Mr. Ashton $3,600 54 $319,925
Mr. Fortunato $3,600 56 $336,065
Mr.Garbellano $3,600 29 $153,300
Mr. LaHaye $3,750 25 $150,817
* For the fiscal year ended July 31, 1994.
** For the calendar year ended December 31, 1994.
Nonaffiliated directors are also reimbursed for expenses
incurred in connection with attending Board meetings, paid
pro rata by each Franklin Templeton Fund for which they
serve as directors, trustees or managing general partners.
No officer or director received any other compensation
directly from the Fund. As of March 31, 1995, the
directors and officers, as a group, owned of record and
beneficially approximately 10,186 shares or less than 1%
of the total outstanding shares of the Fund. In addition,
many of the Fund's directors own shares in various of the
other funds in the Franklin Templeton Funds. 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 knowledge of
the Fund, no other person holds beneficially or of
record more than 5% of the Fund's outstanding common
stock.
THE FOLLOWING SUBSTITUTES THE 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 dealer 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 is
filed will be counted towards completion of the Letter
but will not be entitled to a retroactive downward
adjustment of sales charge. Any redemptions made by the
shareholder, other than by a qualifying employee
benefit plan (the "Benefit Plan"), 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. The upward adjustment does not apply
to qualifying employee benefit plans. 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 the new sales charge structure
or 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 unless the investor is a Benefit Plan.
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, the additional sales charge due will be
deducted from the proceeds of the redemption, and the
balance will be forwarded to the investor.
If a Letter is executed on behalf of a benefit plan
(such plans are described under "Purchases at Net Asset
Value" in the Prospectus), the level and any reduction
in sales charge for these employee benefit plans will
be based on actual plan participation and the projected
investments in the Franklin Templeton Group under the
Letter. Benefit Plans are not subject to the
requirement to reserve 5% of the total intended
purchase, or to any penalty as a result of the early
termination of a plan, nor are Benefit Plans entitled
to receive retroactive adjustments in price for
investments made before executing Letters.
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 1:00 P.M. PACIFIC TIME).
THE FOLLOWING SUBSTITUTES FOR THE SUBSECTION "REINVESTMENT DATE"
UNDER "ADDITIONAL INFORMATION REGARDING FUND SHARES":
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.
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 21, 1995, Accession
Number..0000083293-95-000001.
FRANKLIN GOLD FUND
File Nos. 2-30761
811-1700
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 January 31, 1995, as filed with the
SEC electroically on Form Type N-30D on March 21, 1995.
(i) Statement of Investments in Securities and
Net Assets - January 31, 1995.
(ii) Statement of Assets and Liabilities - January
31, 1995.
(iii)Statement of Operations - for the six months
ended January 31, 1995.
(iv) Statements of Changes in Net Assets - for the
six months ended January 31, 1995 and the
year ended July 31, 1994.
(v) Notes to Financial Statements
(b) Audited Financial Statements dated July 31, 1994 are
incorporated herein by reference to the Statement of
Additional Information Form Type 497 filed
electronically by Registrant with the U.S. Securities
and Exchange Commission on February 24, 1995,
Accession Number: 0000083293-95-000001
(i) Report of Independent Auditors - August 26,
1994.
(ii) Statement of Investments in Securities and
Net Assets - July 31, 1994.
(iii)Statement of Assets and Liabilities - July
31, 1994.
(iv) Statement of Operations - for the year ended
July 31, 1994.
(v) Statements of Changes in Net Assets - for the
years ended July 31, 1994 and 1993.
(vi) Notes to Financial Statements
b) Exhibits:
The following exhibits, are attached herewith, except
exhibits 6(ii), 8(ii), 8(iii), (14)(i) and (16)(i) which
are incorporated by reference as noted.
(1) copies of the charter as now in effect;
(i) Restated Articles of Incorporation dated
March 19, 1973
(ii) Certificate of Amendment to Articles of
Incorporation dated October 21, 1983
(iii)Certificate of Amendment of Articles of
Incorporation dated March 21, 1995
(2) copies of the existing By-Laws or instruments
corresponding thereto;
(i) By-Laws dated January 29, 1973.
(ii) Amendment to By-Laws dated December 18, 1973.
(iii)Amendment to By-Laws dated September 5, 1974.
(iv) Amendment to By-Laws dated November 29, 1976.
(v) Certificate of Secretary dated November 17,
1987.
(vi) Certificate of Secretary dated March 16,
1993.
(vii)Certificate of Secretary dated February 28,
1994.
(3) copies of any voting trust agreement with respect
to more than five percent of any class of equity
securities of the Registrant;
Not Applicable
(4) specimens or copies of each security issued by the
Registrant, including copies of all constituent
instruments, defining the rights of the holders of
such securities, and copies of each security
being registered;
Not Applicable
(5) copies of all investment advisory contracts
relating to the management of the assets of the
Registrant;
(i) Management Agreement between Registrant and
Franklin Advisors, Inc. dated December 1,
1986
(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 Statement on Form N-1A
File No. 2-75925
Filing Date: March 27, 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;
Not Applicable
(8) copies of all custodian agreements and depository
contracts under Section 17(f) of the 1940 Act,
with respect to securities and similar investments
of the Registrant, including the schedule of
remuneration;
(i) Custodian Agreement between Registrant and
Bank of America NT & SA dated September 17,
1991
(ii) Amendment to Custodian Agreement between
Registrant and Bank of America 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
(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
Incorporated herein by reference to:
Registrant: Franklin Equity Fund
Filing: Post-Effective Amendment No. 79 to
Registration on Form N-1A
File No. 2-10103
Filing Date: September 1, 1992
(iv) Precious Metals Storage & Custodian Agreement
between Registrant and Wilmington Trust
Company dated January 1, 1988
(9) copies of all other material contracts not made in
the ordinary course of business which are to be
performed in whole or in part at or after the date
of filing the Registration Statement;
Not Applicable
(10) an opinion and consent of counsel as to the
legality of the securities being registered,
indicating whether they will when sold be legally
issued, fully paid and nonassessable;
Not Applicable
(11) copies of any other opinions, appraisals or
rulings and consents to the use thereof relied on
in the preparation of this registration statement
and required by Section 7 of the 1933 Act;
(i) Consent of Independent Auditors
(12) all financial statements omitted from Item 23;
Not Applicable
(13) copies of any agreements or understandings made in
consideration for providing the initial capital
between or among the Registrant, the underwriter,
adviser, promoter or initial stockholders and
written assurances from promoters or initial
stockholders that their purchases were made for
investment purposes without any present intention
of redeeming or reselling;
(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;
(i) Copy of model retirement plan
Registrant: AGE High Income Fund, Inc.
Filing: Post-effective Amendment No. 26 to
Registration Statement on Form N-1A
File No. 2-30203
Filing Date: August 1, 1989
(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
(ii) Form of Class II Distribution Plan pursuant
to Rule 12b-1
(16) schedule for computation of each performance
quotation provided in the registration statement
in response to Item 22 (which need not be
audited).
(i) Schedule for Computation of Performance
Quotation
Registrant: Franklin Tax-Advantaged U.S.
Government Securities Fund
Filing: Post Effective Amendment No. 8 to
Registration Statement on Form N-1A
File No. 33-11963
Filing Date: March 1, 1995
(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 class of securities of the Registrant was as follows:
Number of
Title of Class Record Holders
Capital Stock 51,695
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 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 Balance Sheet Fund, Franklin
Custodian Funds, Inc., Franklin Equity Fund, Franklin
Federal Money Fund, Franklin Municipal Securities Trust,
Franklin California Tax-Free Income Fund, Inc., Franklin New
York Tax-Free Income Fund, Inc., Franklin New York Tax-Free
Trust, Franklin California Tax-Free Trust, Franklin
Investors Securities Trust, Franklin International Trust,
Franklin Premier Return Fund, Franklin Tax-Free Trust,
Franklin Strategic Mortgage Portfolio, Franklin Strategic
Series, Franklin Tax-Advantaged International Bond Fund,
Franklin Tax-Advantaged U.S. Government Securities Fund,
Franklin Tax-Advantaged High Yield Securities Fund, Franklin
Managed Trust, Franklin Federal Tax-Free Income Fund,
Institutional Fiduciary Trust, Franklin 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, and
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 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
a) The Registrant hereby undertakes to promptly call a
meeting of the Shareholders for the purpose of voting
upon the question of removal of any director or
directors when requested in writing to do so by the
record holders of not less than 10 per cent of the
Registrant's outstanding shares and to assist its
shareholders in communicating with other shareholders
in accordance with the requirements of Section 16(c) of
the Investment Company Act of 1940.
b) The Registrant hereby undertakes to comply with the
information requirement in Item 5A of 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 21th day of April 1995.
FRANKLIN GOLD FUND
(Registrant)
By: R. Martin Wiskemann*
R Martin Wiskemann, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
R. Martin Wiskemann* Principal Executive Officer and Director
R. Martin Wiskemann Dated: April 21, 1995
Charles B. Johnson* Director
Charles B. Johnson Dated: April 21, 1995
Harmon E. Burns* Director
Harmon E. Burns Dated: April 21, 1995
Martin L. Flanagan* Principal Financial Officer
(Martin L. Flanagan) Dated: April 21, 1995
Diomedes Loo-Tam* Principal Accounting Officer
(Diomedes Loo-Tam) Dated: April 21, 1995
Frank H. Abbott III* Director
Frank H. Abbott III Dated: April 21, 1995
Harris J. Ashton* Director
Harris J. Ashton Dated: April 21, 1995
S. Joseph Fortunato* Director
S. Joseph Fortunato Dated: April 21, 1995
David W. Garbellano* Director
David W. Garbellano Dated: April 21, 1995
Rupert H. Johnson, Jr.* Director
Rupert H. Johnson, Jr. Dated: April 21, 1995
Frank W.T. LaHaye* Director
Frank W.T. LaHaye Dated: April 21, 1995
*By /s/ Larry L. Greene
Larry L. Greene, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
FRANKLIN GOLD FUND
REGISTRATION STATEMENT
EXHIBITS
EXHIBIT NO. DESCRIPTION LOCATION
EX-99.B1(i) Restated Articles of Attached
Incorporation dated March
19, 1973
EX-99.B1(ii) Certificate of Amendment Attached
to Articles of
Incorporation dated
October 21, 1983
EX-99.B1(iii) Certificate of Amendment Attached
of Articles of
Incorporation dated March
21, 1995
EX-99.B2(i) By-laws dated January 29, Attached
1973
EX-99.B2(ii) Amendment to By-laws dated Attached
December 18, 1973
EX-99.B2(iii) Amendment to By-Laws dated Attached
September 5, 1974
EX-99.B2(iv) Amendment to By-Laws dated Attached
November 29, 1976
EX-99.B2(v) Certificate of Secretary Attached
dated November 17, 1987
EX-99.B2(vi) Certificate of Secretary Attached
dated March 16, 1993
EX-99.B2(vii) Certificate of Secretary Attached
dated February 28, 1994
EX-99.B5(i) Management Agreement Attached
between Registrant and
Franklin Advisors, Inc.
dated December 1, 1986
EX-99.B6(i) Form of Amended and Attached
Restated Distribution
Agreement between
Franklin/Templeton
Distributors, Inc. and
Registrant
EX-99.B6(ii) Form of Dealer Agreement *
between Franklin/Templeton
Distributors, Inc. and
Securities dealers
EX-99.B8(i) Custodian Agreement Attached
between Registrant and
Bank of America NT & SA
dated September 17, 1991
*
EX-99.B8(ii) Amendment to Custodian
Agreement Between Bank of
America NT & SA and
Franklin Gold Fund dated
December 1, 1994
EX-99.B8(iii) Copy of Custodian *
Agreements between
Registrant and Citibank
Delaware
EX-99.B8(iv) Precious Metals Storage & Attached
Custodian Agreement
between Registrant and
Wilmington Trust Company
dated January 1, 1988
EX-99.B11(i) Consent of Independent Attached
Auditors
EX-99.B13(i) Letter of Understanding Attached
EX-99.B14(i) Copy of model retirement *
plan
EX-99.B15(i) Distribution Plan pursuant Attached
to Rule 12b-1 dated May 1,
1994
EX-99.B15(ii) Form of Class II Attached
Distribution Plan pursuant
to Rule 12b-1
EX-99.B16(i) Schedule for Computation *
of Performance Quotation
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
RESTATED ARTICLES OF INCORPORATION OF RESEARCH
CAPITAL FUND, INC.
This Restated Articles of Incorporation of RESEARCH
CAPITAL FUND, INC., incorporated under the name "Winfield Capital
Fund" on June 20, 1968 (the date of filing of its original
Articles of Incorporation with the Secretary of State of
California), has been duly adopted by a resolution of the Beard
of Directors of said Corporation on December l4, 1972 without a
vote of stockholder in accordance with the provisions of section
3800 of the General Corporation Law of California as amended, and
only restates and integrates and does not further amend the
provisions of the Corporation's Articles of Incorporation as
thereafter amended or supplemented. There is no discrepancy
between those provisions and the provisions of this Restated
Certificate of Incorporation except that the signatures and
acknowledgments of the incorporators have been omitted.
FIRST: The name of this Corporation is Research Capital
Fund, Inc.
SECOND: The purposes for which the Corporation is
formed are:
(a) The specific business in which the Corporation is
primarily to engage is that of an open-end investment company,
investing reinvesting, owning, holding or trading in securities.
(b) The general purposes and powers of this
Corporation shall include:
(1) To invest and reinvest its capital and/or surplus
and/or reserves, and to acquire by purchase, subscription,
contract or otherwise, and to guarantee, underwrite, hold, sell,
exchange, mortgage, pledge, or hypothecate or otherwise dispose
of, and generally deal in and with, alone or in syndicates or
otherwise in conjunction with others, all forms of securities as
hereinafter defined, both within and without the State of
California, to issue in exchange therefor the stocks, bonds or
other obligations or evidences of interest of the Corporation,
and while the owner or holder of any such, to exercise all of the
rights, powers and privileges of ownership or interest in respect
to the same including but not by way of limitation, the right to
vote, to subscribe for additional stock, and to purchase or
exercise rights in connection therewith; to aid by loan, subsidy
or otherwise those issuing, creating or responsible for any such
securities or obligations or evidences of any interest in respect
thereof, and to do any and all acts and things for the
preservation, protection, improvement and enhancement in value
thereof, or designed to accomplish any such purpose, all to such
extent as now or hereafter permitted under the laws of the State
of California or otherwise.
The term "securities" is defined for the purpose of the
Articles of Incorporation to be shares, stocks, bonds,
debentures, notes, scrip, trust certificates, subscription
rights, warrants and options, mortgages, evidences of
indebtedness, commercial paper, acceptances, certificates of
indebtedness or other obligations and certificates of interest,
and/or all forms of securities issued created in any or all parts
of the world by any corporation; trust, association, partnership,
syndicate, entity, person, government, state municipality or
other political and governmental division and/or subdivision,
and/or evidence of any interest or other evidences of
indebtedness and obligations in respect of any such securities.
All terms used in the Articles of Incorporation shall include the
singular as well as the plural unless otherwise expressly
indicated.
(2) To acquire, or become interested in any such
securities or evidences of interest therein as aforesaid by
original subscription, underwriting, participation in syndicates,
or otherwise, and to make payments thereon as called for, and to
underwrite or subscribe for the same conditionally or otherwise.
(3) To purchase or otherwise acquire and to hold, own,
mortgage or otherwise lien, pledge, lease, sell, exchange,
transfer or in any manner dispose of, and to invest, deal and
trade in and with personal property of any and every class and
description, within or without the State of California.
(4) As principal, agent or broker and on commission or
otherwise, to buy, sell, exchange, lease, let, grant or take
licenses in respect of, improve, develop, repair, manage,
maintain and operate real property of every kind, corporeal, and
incorporeal, and every kind of estate, right or interest therein
or pertaining thereto, to advance loans secured by mortgages of
other liens on real estate, and generally to transact, promote or
carry on the business, objects and purposes aforesaid, within or
without the State of California.
(5) To acquire the good will, rights and property and
to undertake the whole or any part of the assets and liabilities
of any person, partnership, firm, association or corporation; to
pay for the same in cash, the stock of this company, bonds or
otherwise; to hold or in any manner to dispose of the whole or
any part of the property so purchased; to conduct in any lawful
manner the whole or any part of any business so acquired and to
exercise all the powers necessary or convenient in and about the
conduct and management of such business.
(6) To enter into any lawful arrangements for sharing
profits, union of interest, reciprocal concession, management or
cooperation, with any partnership, corporation, association,
syndicate, entity, person or governmental, municipal or public
authority, domestic or foreign, in carrying on any business which
the corporation is authorized to carry on or any business or
transaction deemed necessary, convenient or incidental to
carrying out any of the purposes of the Corporation.
(7) To enter into, make, form, carry out or cancel and
rescind contracts for any lawful purposes pertaining to its
business with any person, entity, syndicate, partnership,
association, corporation or governmental, municipal or public
authority, domestic or foreign, including, but not by way of
limitation, contracts for the management and/or the operation of
the business and affairs of any person, entity, syndicate,
partnership, association, corporation or governmental, municipal
or public authority, domestic or foreign.
(8) To cause to be formed, sold, merged, recapitalized,
reorganized or liquidated, and to promote, take charge of and aid
in any way permitted by law the formation, sale, merger,
recapitalization, reorganization or liquidation of, any
corporation, association, or entity in the United States or
abroad.
(9) To purchase, hold, sell and transfer the shares of
its own capital stock from time to time to such an extent and in
such manner and upon such terms as the Board of Directors shall
determine; all to the extent permitted by the laws of the State
of California; provided, however, that shares of its own capital
stock belonging to it shall not be voted upon directly or
indirectly.
(10) To conduct researches, investigations and
examinations of businesses and enterprises of every kind and
description in the United States and elsewhere throughout the
world with the aim of securing information and particulars for
the investment and employment of capital.
(11) To undertake and transact all kinds of business
relating to the gathering and distribution of financial and
investment information and statistics in the United States and
elsewhere throughout the world.
(12) To borrow money for its corporate purposes, and to
secure and discharge the same or any other debt or obligation of
or binding on the Corporation in such manner as may be thought
fit by the Board of Directors, and, in particular, by mortgages
and charges upon any or all of the real and personal property
(present or future) of the Corporation, both within and without
the State of California, or by the creation and issue, upon such
terms as may be throughout expedient by the Board of Directors of
the Corporation, of bonds, notes, debentures or other securities
of any description, all to the extent permitted by the laws of
the State of California.
(13) To have one or more offices and to carry on all or
any of its operations and business in any of the states,
districts, territories or colonies of the United States and
anywhere throughout the world, and to have one or more offices
out of the State of California,
(14) To do and perform every lawful act and thing
necessary to carry out the above enumerated objects and/or
purposes in this state and in other states and jurisdictions
which like corporations organized under the laws of such States
and jurisdictions may lawfully do or cause to be done therein.
(15) To do any and all things necessary, suitable,
convenient or proper for or in connection with or incidental to
the accomplishment of any of the purposes or the attainment of
any one or more of the objects herein enumerated or designed
directly or indirectly to promote the interest of the Corporation
or enhance the value of any of its property, and in general to do
any and all things and exercise any and all powers which may now
or hereafter be lawful for the Corporation to do or exercise
under the laws of the State of California that may now or
hereafter be applicable to the Corporation.
The objects and purposes specified in the foregoing
clauses shall, except where otherwise expressed, be in nowise
limited or restricted by reference to, or inference from, the
terms of any other clause in the Articles of Incorporation, but
the objects and purposes specified in each of the foregoing
clauses of this article shall be regarded as independent objects
and purposes.
THIRD; The county in this State where the principal
office for the transaction of the business of the Corporation is
located is the County of San Mateo.
FOURTH: The number of directors of this Corporation
shall be not less than seven nor more than ten; the exact
number
of directors to be fixed by a By-Law or amendment thereof, duly
adopted by the shareholders or by the Board of Directors. The
names and addresses of the persons who are hereby appointed to
act as the first directors of this Corporation are as follows:
Henry L. Jamieson David H. Meid
315 Montgomery St. 315 Montgomery St.
San Francisco, CA. San Francisco, CA.
R. Martin Wiskemann George A. Blackstone
315 Montgomery St. 44 Montgomery St.
San Francisco, CA. San Francisco, CA.
Michael J. Cullen Charles H.Clifford
44 Montgomery St. 44 Montgomery St.
San Francisco, CA. San Francisco, CA.
Philip S. Heinecke
44 Montgomery St.
San Francisco, CA.
FIFTH: This Corporation is authorized to issue only one class of
shares of stock; the total number of shares which the Corporation
is authorized to issue is One Hundred Million (100,000,000); the
aggregate par value of all shares is Ten Million Dollars
($10,000,000); and the par value of each share is ten cents
($.10). Fractional shares may be issued unless otherwise
determined by the Board of Directors. Each holder of any
outstanding share or shares upon presentation thereof to the
Corporation is entitled to receive approximately his
proportionate share of the current net assets of the Corporation
applicable to such share or shares, or the cash equivalent
thereof in accordance with provisions in the By-Laws of the
Corporation for the determination of the liquidating value of a
share of stock.
IN WITNESS WHEREOF, the undersigned, have executed these Restated
Articles of Incorporation this 19th day of March, 1973.
/s/ Henry L. Jamieson
Henry L. Jamieson, President
/s/ Harmon E. Burns
Harmon E. Burns, Secretary
Each of the undersigned declares under penalty of perjury that he
has been authorized to execute and file the certificate of
Restated Articles of Incorporation by resolution of the Board of
Directors adopted on December 14, 1972, and that the certificate
correctly sets forth the text of the Articles of Incorporation as
amended to the date of the certificate. Executed at San Mateo,
California, on this 19th day of March, 1973.
/s/ Henry L. Jamieson
Henry L. Jamieson, President
/s/ Harmon E. Burns
Harmon E. Burns, Secretary
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
RESEARCH CAPITAL FUND, INC.
RUPERT H. JOHNSON, JR. and HARMON E. BURNS certify that:
1. They are the Vice President and Secretary, respectively,
of RESEARCH CAPITAL FUND, INC., a California corporation.
2. Article First of the Articles of Incorporation of this
corporation is amended to read as follows:
"First: The name of this corporation is FRANKLIN GOLD FUND"
3. The foregoing Amendment of the Articles of Incorporation
has been duly approved by the corporation's board of directors.
4. The foregoing Amendment of the Articles of Incorporation
has been duly approved by the required vote of the shareholders
in accordance with Section 902 of the Corporations Code. The
total number of outstanding shares of the corporation entitled to
vote was 9,021,285.406 and the number of shares voting in favor
of such amendment was in excess of the vote required. The
percentage vote required was a majority of outstanding shares.
/s/ Rupert H. Johnson, Jr.
Rupert H. Johnson, Jr.
/s/ Harmon E. Burns
Harmon E. Burns
The undersigned declare under penalty of perjury that the
matters set forth in the foregoing Certificate are true of their
own knowledge.
Executed at San Mateo, California on October 21, 1983.
/s/ Rupert H. Johnson, Jr.
Rupert H. Johnson, Jr.
/s/ Harmon E. Burns
Harmon E. Burns
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
FRANKLIN GOLD FUND
R. MARTIN WISKEMANN and DEBORAH R. GATZEK certify that:
1. They are the President and Secretary, respectively, of
FRANKLIN GOLD FUND, a California corporation.
2. Article Fifth of the Restated Articles of Incorporation
of this corporation is hereby amended to read in its entirety as
follows:
"The total number of shares of capital stock which the
Corporation shall have authority to issue is One
Hundred Million (100,000,000) shares of capital stock,
$0.10 par value per share. The shares shall be issued
in one class, to be known as the "Franklin Gold Fund
Series" and all One Hundred Million Shares shall be
allocated to such class. Fractional shares may be
issued unless otherwise determined by the Board of
Directors.
Subject to the provisions of these Articles of
Incorporation, the Board of Directors shall have the
power to issue shares of stock of the Corporation from
time to time, at prices not less than the net asset
value or par value thereof, whichever is greater, for
such consideration as may be fixed from time to time
pursuant to the direction of the Board of Directors.
The Franklin Gold Fund Series shall be issued in two or
more series, and the initial two series are "Franklin
Gold Fund - Class I" ("Class I") and "Franklin Gold
Fund - Class II" ("Class II"). Forty-Five Million
(45,000,000) shares shall be allocated to each such
series, and each outstanding share or fractional share
of the Corporation shall be reclassified as one share
or fractional share of Class I.
Pursuant to Sections 202, 203.5, 400 and 401 of the
California General Corporation Law, the Board of
Directors of the Corporation shall have the power
(subject to any applicable rule, regulation or order fo
the Securities and Exchange Commission or other
applicable law or regulation) to create additional
series of shares, to determine or alter the rights,
preferences, privileges and restrictions granted to or
imposed upon any wholly unissued series, to determine
the designation of such series and to fix the number of
shares of such series.
The Board of Directors is also hereby expressly granted
authority to increase or decrease the number of shares
of any series provided that the number of shares in any
series shall not be decreased below the number of
shares thereof then issued and outstanding.
Each share of a series shall have equal rights with
each other share of that series with respect to the
assets of the Corporation pertaining to that series.
The dividends payable to the holders of any series
(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 series
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 by the Board or a duly authorized committee
thereof and paid in accordance with a formula adopted
by the Board. Except as otherwise provided herein, all
references in these Articles of Incorporation to stock
or series of stock shall apply without discrimination
to the shares of each series of stock.
The shares of Class I and Class II and of any
subsequent series of the Franklin Gold Fund Series
subsequently authorized by the Board shall represent
proportionate interests in the same portfolio of
investments. 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 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.
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 series, shall
be voted in the aggregate and not by series except (1)
when otherwise expressly provided by the California
General Corporation Law, or (2) when required by the
Investment Company Act of 1940, as amended, shares
shall be voted by series and (3) when the matter does
not affect any interest of the particular series, then
only shareholders of the affected series shall be
entitled to vote thereon.
Each holder of any outstanding shares of capital stock
upon presentation thereof to the Corporation is
entitled to receive approximately his proportionate
share of the current net assets of the Corporation
applicable to such share or shares, or the cash
equivalent thereof in accordance with provisions in the
By-Laws of the Corporation for the determination of the
liquidating value of a share of stock. The shares of
capital stock of the Corporation may, upon the adoption
of the appropriate resolutions by the favorable vote of
a majority of the Board of Directors and subject to any
provisions set forth in the Corporation's By-Laws
and/or in the California Corporations Code, be called
for redemption by and be redeemed by the Corporation."
3. The foregoing Amendment of the Restated Articles of
Incorporation has been duly approved by the corporation's Board
of Directors.
4. The foregoing Amendment of the Restated Articles of
Incorporation has been duly approved by the required vote of
shareholders in accordance with Section 902 of the California
General Corporation Law. The total number of outstanding shares
of the corporation entitled to vote was 26,792,074.819 and the
number of shares voting in favor of such Amendment was in excess
of the vote required. The percentage vote required was a
majority of the outstanding shares.
/s/ R. Martin Wiskemann
R. Martin Wiskemann
/s/ Deborah R. Gatzek
Deborah R. Gatzek
The undersigned declare under penalty of perjury that the
matters set forth in the foregoing Certificate are true of their
own knowledge.
Executed at San Mateo, California on March 21, 1995.
/s/ Martin Wiskemann
R. Martin Wiskemann
/s/ Deborah R. Gatzek
Deborah R. Gatzek
BY-LAWS
OF RESEARCH CAPITAL FUND, INC.
(Formerly WinCap Fund)
(As Amended, Restated and Effective on December 14, 1972 and
Effective on January 29, 1973)
ARTICLE I
Section 1. (As amended October 28, 197l.) Annual
Meeting and Notice: All meetings of stockholders shall be held in
the office of the Corporation in the City and County of San
Mateo, California, or at such place within or without the State
as from time to time may be designated by the By-Laws or by
Resolution of the Board of Directors.
The Annual Meeting of Stockholders shall be held on the
last Tuesday of November at 11:00 o'clock in the forenoon for the
election of directors and for such other business as may properly
come before said meeting. Notice of the time, place and purpose
of such meeting shall be given, either personally or by mail, not
less than ten days before the meeting, by serving such notice
upon each stockholder of record entitled to vote at such meeting,
or by mailing such notice to such stockholder at his last known
post office address as it appears upon the stock book unless he
shall have filed with the Secretary of the Corporation a written
request that notices intended for him be mailed to some other
address, in which case it shall be mailed to the address
designated in such request. No notice of the time, place, or
purpose of any meeting of stockholders, whether prescribed by
law, by the charter, or by these By-Laws, need be given to any
stockholder who attends in person or by proxy, or who, in writing
executed and filed with the records of the meeting either before
or after the holding thereof, waives such notice. Failure to
give notice of any annual meeting, or any irregularity in such
notice, shall not affect the validity of any annual meeting or of
any proceedings at any such meeting. No notice of an adjourned
meeting of stockholders need be given.
Section 2. Special Meetings: Special Meetings of the
stockholders entitled to vote at such meetings may be called at
any time by the President or by any three of the Directors, and
shall be called at the request in writing of the stockholders of
record owning one-fifth of the shares entitled to vote at such
meeting. Notice of special meetings shall be given as provided
in the case of annual meetings.
Section 3. Quorum: At all meetings of stockholders
there shall be present, either in person or by proxy,
stockholders owning a majority of the shares entitled to vote
thereat in order to constitute a quorum, but in the absence of a
quorum the stockholders present in person or by proxy at the time
and place fixed by Section 1 of this Article I for an annual
meeting, or designated in the notice of a special meeting, or at
the time and place of any adjournment thereof, may adjourn the
meeting from time to time without notice, other than by
announcement at the meeting, until a quorum shall attend, except
that when a meeting is adjourned for thirty (30) days or more,
notice of the adjourned meeting shall be given as in the case of
an original meeting. At any such adjourned meeting at which a
quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally noticed.
Section 4. Voting: At all meetings of stockholders the
voting shall be via voce, except that whenever a vote by the
holders of the outstanding shares of stock is required by law or
is for the purpose of electing a director or directors, or where
a stockholder present in person or by proxy at any such meeting
requires a vote by ballot, the voting shall be by ballot, each of
which shall state the name of the stockholder voting and the
number of shares voted by him, and, if such ballot is cast by
proxy, it shall also state the name of such proxy. The holders
of the Common Stock shall have the right to vote at any meeting
of the stockholders or at any election of the Corporation, and
otherwise to participate in any action taken by the stockholders
thereof, and each such holder shall be entitled to one vote for
each share of stock that he holds, provided, however, that in the
election of directors each shareholder entitled to vote may
cumulate his votes and give one candidate a number of votes equal
to the number of directors to be elected, multiplied by the
number of votes to which his shares are entitled, or distribute
his votes on the same principle among as many candidates as he
thinks fit. Except in cases in which it is by statute, by the
Articles of Incorporation, or by these By-Laws otherwise
provided, the votes of a majority of the shares of Common Stock
of the Corporation present or represented at any meeting of
stockholders shall be sufficient to elect and to pass any
resolution.
Section 5. Proxies: Any stockholder entitled to vote
at any meeting of stockholders may vote either in person or by
proxy, but no proxy which is dated more than eleven (11) months
before the meeting at which it is offered shall be accepted,
unless such proxy shall on its face name a longer period for
which it is to remain in force. Every proxy shall be in writing,
subscribed by the stockholder or his duly authorized attorney,
and dated, but need not be sealed, witnessed, or acknowledged.
ARTICLE II
Section 1. (As amended September 10, 1970.) Powers and
Election: The Directors of the Corporation shall have the powers
as stated in the Articles of Incorporation and as provided in
these By-Laws, and such as are prescribed by the laws of the
State of California. They shall be residents of the United
States of America and they shall be elected for the term of one
year at the annual meeting of stockholders, except as hereinafter
otherwise provided for filling vacancies. They shall be chosen
at such meeting in accordance with the provisions of Article I,
Section 4 of these By-Laws. They shall hold office until the
next annual election and until their successors are elected and
qualify.
Section 2. Meetings: Regular meetings of the Board of
Directors shall be held at such times as may from time to time be
fixed by resolution of the Board and no notice need be given of
such regular meetings. Special meetings may be called on two
days' written notice to each Director by the President or in his
absence by a Vice President or by any two Directors. Such notice
may be served personally upon each director or mailed, cabled or
telegraphed to him at his address appearing upon the books of the
Corporation. Such notice may also be telephoned, provided that
any director so notified shall be actually reached by telephone.
Section 3. Quorum: The presence of not less than three
of the Directors or of one-third of the total number of
Directors, whichever shall be greater, shall be necessary to
constitute a quorum for the transaction of business at any
meeting of the Board, but a majority of the Directors present at
the time and place of any regular or special meeting, although
less than a quorum, may adjourn the same from time to time
without further notice until a quorum shall attend. At any such
adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at
the meeting as originally noticed.
Section 4. Place of Meetings and Office: The Board of
Directors may hold their meetings and have an office or offices
within or without the State.
Section 5. Vacancies: Except as law or valid
regulations may require of regulated investment companies, any
vacancy in the Board of Directors occurring through death,
resignation, removal or other cause, shall be filled for the
unexpired portion of the term by a majority vote of the remaining
Directors at any regular or special meeting of the Board of
Directors. Whenever the number of Directors shall be increased
pursuant to law, such increase shall be deemed to create
vacancies in the Board to be filled in the manner above
described.
Section 6. (As amended October 5, 1972.) Number: The
Board of Directors shall be eight (8) in number. The number may
be changed at any time or times by a resolution adopted by a
majority of the Board of Directors, provided such number is not
less than seven (7) nor more than ten (10); or by the
stockholders at any stockholders' meeting.
Section 7. (As amended August 5, 1971.) Compensation:
The Board of Directors may by resolution prescribe that each
director, except a director who is affiliated with the
corporation's investment adviser or principal underwriter, may
receive such a fee, not to exceed $100.00 per meeting, as may be
fixed by resolution by the Board of Directors for attendance,
and the expenses of attendance, if any, at each regular or
special meeting of the Board. Any director receiving
compensation under these provisions shall not be barred from
serving the Corporation in any other capacity and receiving
reasonable compensation for such other services.
Section 8. Action by Written Consent: Any action
required or permitted to be taken by the Board of Directors may
be taken without a meeting, if all members of the Board
individually or collectively consent in writing to such action.
ARTICLE III
Officers
Section 1. Election and Appointment: After each annual
election the Board of Directors shall elect a President, one or
more Vice Presidents, a Secretary, a Treasurer, a Comptroller,
and one or more Assistant Secretaries and Assistant Treasurers.
Any two or more officers, except those of President and
Secretary, may be held by the same person. The officers need not
be Directors. Each of the officers shall serve during the
pleasure of the Board of Directors. Any vacancy in any of the
above offices shall be filled for the unexpired portion of the
term by the Board of Directors at any regular or special meeting.
Section 2. President: The President shall be the chief
executive officer of the Corporation. He shall preside at all
meetings of the Board of Directors and of the stockholders. He
may sign certificates of stock; sign and execute all contracts in
the name of the Corporation; and appoint and discharge agents and
employees, subject to the approval of the Board of Directors.
Section 3. Vice Presidents: The Vice Presidents, in
the order of their seniority shall, in the absence or disability
of the President, perform the duties and exercise the powers of
the President, and shall perform such other duties as the Board
of Directors shall prescribe.
Section 4. Secretary: The Secretary shall keep the
minutes of the meetings of the Board of Directors, of the
Executive Committee, and of the stockholders. He shall attend to
the giving and serving of all notices of the Corporation, and may
affix the seal of the Corporation to all certificates of stock.
He shall have charge of the certificate book and such other books
and papers as the Board may direct. He shall attend to such
correspondence as may be assigned to him from time to time by the
Board of Directors, and perform all duties incidental to his
office.
Section 5. Treasurer: The Treasurer shall have the
custody of the funds and securities of the Corporation and shall
deposit the same in the name of the Corporation in such bank or
trust companies as the Directors may elect. He shall keep full
and accurate accounts of receipts and disbursements of the
Corporation, and shall disburse Funds of the Corporation as may
be ordered by the Board of Directors, the President or the Vice
Presidents, taking proper vouchers for such disbursements. He
shall render to the President and the Directors at the regular
meetings of the Board, or whenever they may require it, an
account of all his transactions as Treasurer and of the financial
condition of the Corporation, and at the regular meetings of the
Board next preceding the annual stockholders meeting a like
report for the preceding year. He shall give such bond for the
faithful performance of his duties as may be required by the
Board of Directors. He shall perform such other duties as the
Board of Directors may from time to time prescribe.
Section 6. Assistant Secretary: The Assistant
Secretary in the absence or at the request of the Secretary shall
perform all of the duties of the Secretary, and shall perform
such other duties as may from time to time be prescribed by the
Board of Directors.
Section 7. Assistant Treasurer: The Assistant
Treasurer in the absence or at the request of the Treasurer shall
perform all the duties of the Treasurer and shall perform such
other duties as may from time to time be prescribed by the Board
of Directors.
Section 8. Compensation: The Board of Directors shall
have power to fix the compensation of all officers of the
Corporation. It may authorize any officer upon whom the power of
appointing subordinate officers may have been conferred, to fix
the compensation of such subordinate officers.
Section 9. Removal: Any officer of the Corporation may
be removed, with or without cause, by a vote of a majority of the
entire Board of Directors, or (except in case of an officer
elected by the Board of Directors) by the Executive Committee or
by an officer upon who such power of removal may have been
conferred.
ARTICLE IV
Executive and Other Committees
Section 1. Election of Executive Committee: The Board
of Directors may elect from their number an Executive Committee
of three or more and may designate a Chairman for said Committee.
The Chairman of the Committee and the members of the Executive
Committee shall continue in office at the pleasure of the Board.
The Board of Directors shall fill vacancies in the Executive
Committee by election of members from the Board of Directors, and
at all times it shall be the duty of the Board of Directors to
keep the membership of such committee full, if such Executive
Committee has been elected.
Section 2. Powers and Supervision by the Board: During
the intervals between the meetings of the Board of Directors, the
Executive Committee shall possess and may exercise all the powers
of the Board of Directors in the management and direction of the
business of the Corporation, except as to matters wherein action
of the Board of Directors is specifically required, in such
manner as the Executive Committee shall deem best for the
interest of the Corporation in all cases in which specific
directions shall not have been given by the Board of Directors.
All actions of the Executive Committee shall be
reported to the Board of Directors at its next meeting and shall
be subject to revision or alteration by the Board, provided that
no rights or acts of third parties shall be affected by any such
revision or alteration.
Section 3. Meetings: The Executive Committee shall
meet upon such day or days and at such hour or hours as may be
designated from time to time by resolution passed by a majority
of such committee and whenever called together by its Chairman
upon notice given to each member of the committee not later than
the day next preceding the date of the meeting. Upon the written
request of any two members of the Committee, the Chairman shall
call a special meeting of the Committee. The presence of at
least a majority of the Executive Committee shall be necessary to
constitute a quorum for the transaction of business. The
affirmative vote of at least a majority of the entire Committee
shall be necessary to adopt any resolution.
Section 4. Other Committees: The Board of Directors
may by resolution provide for such Administrative, Standing
and/or special Committees as it may deem desirable and may
discontinue the same at pleasure, and the membership of any such
committee may be made up in whole or in part by persons who are
not members of the Board of Directors. Each such committee shall
have such powers and shall perform such duties, not inconsistent
with law, as may be assigned to it by the Board of Directors.
ARTICLE V
Capital Stock
Section 1. Payments on Subscription: Cash
subscriptions to the shares of the Corporation shall be paid to
the Treasurer at such time or times in such installments as the
Board of Directors may by resolution require.
Section 2. Certificates: Certificates of stock shall
be numbered in the order of issuance thereof and shall be signed
by the President or a Vice President and by the Secretary or an
Assistant Secretary of the Corporation, and the seal of the
Corporation shall be affixed thereto. Facsimile signatures and
seals may be used on stock certificates in accordance with
California law.
Section 3. Transfers: Transfers of shares shall be
made upon the books of the Corporation only by a holder in
person, or by power of attorney duly executed and witnessed and
filed with the Secretary of the Corporation or with its duly
appointed transfer agents, upon the surrender of the certificate
or certificates of such shares.
Section 4. Transfer Agents and Registrars: The Board
of Directors may be separate resolutions appoint corporate
transfer agents, clerks and/or corporate registrars to perform
such duties in respect to the issuance and transfer of the
certificates of capital stock of the Corporation as such
resolutions may provide.
Section 5. Fixing Date for Stockholders of Record: The
Board of Directors by resolution may fix in advance a date, not
exceeding fifty (50) days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or
conversion or exchange of capital stock shall go into effect, as
a record date for the determination of the stockholders entitled
to notice of, and to vote at, any such meeting, or entitled to
receive payment of any such dividend or any such allotment of
rights, or to exercise the rights in respect of any such change
or conversion or exchange of capital stock, and in such case only
such stockholders as shall be stockholders of record on the date
so fixed shall be entitled to such notice of, and to vote at,
such meeting, or to receive payment of such dividend, or to
receive such allotment of rights, or to exercise such rights, as
the case may be notwithstanding any transfer of any stock on the
books of the Corporation after any such record date fixed as
aforesaid.
Section 6. Holder of Record as Exclusive Owner: The
Corporation shall be entitled to treat the holder of record of
any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or
other claim to, or interest in, such shares on the part of any
other persons whether or not it shall have express or other
notice thereof, save as expressly provided by the laws of the
State of California.
Section 7. Lost Certificates: If a certificate of
stock be lost or destroyed, another may be issued in its stead
upon sworn proof of such loss or destruction and upon the giving
of a satisfactory bond of indemnity in an amount satisfactory to
the Board of Directors or Executive Committee.
ARTICLE VI
Contracts, Loans, Checks, Deposits, Custody, Etc.
Section 1. Contracts, etc., How Executed: The Board of
Directors, or the Executive Committee, except as in these By-Laws
otherwise provided, may authorize any officer or officers, agent
or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and
such authority may be general or confined to specific instances;
and, unless so authorized by the Board of Directors or by the
provisions of these By-Laws, no officer, agent or employee shall
have any power or authority to bind the Corporation by any
contract or engagement or to pledge its credit or to render it
liable pecuniarily for any purpose or to any account.
Section 2. Loans and Investments: No loans shall be
contracted on behalf of the Corporation and no negotiable paper
shall be issued in its name, unless authorized by the vote of the
Board of Directors or of the Executive Committee. When so
authorized by the Board of Directors or by the Executive
Committee, and subject to the provisions of the Articles of
Incorporation, any officer or agent of the Corporation may effect
loans and advances at any time for the Corporation from any bank,
trust company or other institution, or from any firm, corporation
or individual, and for such loans and advances at any time for
the Corporation from any bank, trust company or other
institution, or from any firm, corporation or individual, and for
such loans and advances may make, execute and deliver promissory
notes or other evidences of indebtedness of the Corporation, and
when authorized as aforesaid, as security for the payment of any
and all loans, advances, indebtedness and liabilities of the
Corporation, may pledge, hypothecate, or transfer any and all
stock, securities and other personal property at any time held by
the Corporation, and to that end endorse, assign and deliver the
same. Such authority may be general or confined to specific
instances.
Section 3. Deposits: All funds of the Corporation
shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositaries
as the Board of Directors or the Executive Committee may select
or as may be selected by any officer or officers, agent or agents
of the Corporation to whom such power may from time to time be
delegated by the Board of Directors or by the Executive
Committee; and for the purpose of such deposit the President or
Vice President, or the Treasurer or the Secretary, or any other
officer or agent to whom such power may be delegated by the Board
of Directors or by the Executive Committee, may endorse, assign
and deliver checks, drafts and other orders for the payment of
money which are payable to the order of the Corporation.
Section 4. Checks, Drafts, etc.: All checks, notes,
drafts and other instruments in writing for the payment of money
shall be signed only by such officer or officers as shall be
designated from time to time by resolution of the Board of
Directors.
Section 5. Custody of Securities: Securities of the
Corporation may be deposited in such safe deposit vaults in the
United States or elsewhere as the Board of Directors or the
Executive Committee may approve. Access to such vaults shall be
only by such officer together with such additional officer or
officers and/or employee or employees as may from time to time be
designated for the purpose by resolution of the Board of
Directors.
From time to time the Board of Directors of the
Executive Committee may deposit for safekeeping with one or more
banks, trust companies, or other financial institutions or firms
to be selected by them in the United States or elsewhere, any
securities owned by the Corporation and not otherwise deposited
or pledged as security. Any and all securities so deposited may
be withdrawn from time to time only by order of such two or more
officers of the Corporation as may from time to time be
designated for the purpose by resolution of the Board of
Directors of the Executive Committee.
ARTICLE VII
Dividends
Section 1. Declaration of Dividends: Dividends upon
the capital stock of the Corporation may be declared by the Board
of Directors at any regular or special meeting out of the surplus
or net profits of the Corporation, subject, however, to the
provision of the Articles of Incorporation.
Section 2. Reserves: The Board of Directors shall in
its own discretion have the right to set apart out of the
earnings of the Corporation reserve and surplus funds to be held
for the purpose of the Corporation, and may invest and reinvest
the same in the same way and subject to the same restrictions as
are provided for the investment and reinvestment of the capital
of the Corporation. When, and only when, the Board of Directors
shall decide that it is advisable or necessary to pay dividends
out of the reserve and surplus funds, shall such funds be subject
to the payment of dividends
ARTICLE VIII
Seal
Section 1. The seal of the Corporation shall be in the
form of a circle, shall bear the name of the Corporation, the
year and State of its incorporation and the word "Seal".
ARTICLE IX
Waiver of Notice
Section 1. Whenever under the provisions of these By-
Laws or any of the laws of the State of California the
stockholders or Directors are authorized to hold any meeting
after notice or after the lapse of any prescribed period of time,
such meeting may be held without notice and without such lapse of
time by a written waiver of such notice signed by every person
entitled to notice.
ARTICLE X
Section 1. The Fiscal Year of the Corporation shall
end on July 31st of each year.
ARTICLE XI
Determination of Liquidating Value of Shares of Capital Stock
Section 1. (As amended April 9, 1970.) The Corporation
shall purchase it shares of capital stock at the request of any
holder thereof at a liquidating value equal to the quotient
obtained by dividing the net assets of the Corporation by the
number of shares of Common Stock outstanding, all determined and
computed as follows:
(i) The assets of the Corporation shall be deemed to
include (a) all cash on hand, on deposit, or on call, (b) all
bills and notes and accounts receivable, (c) all shares of stock,
bonds, subscription rights, and other securities owned or
contracted for by the Corporation other than its own capital
stock, (d) all stock and cash dividends and cash distributions to
be received by the Corporation and not yet received by it but
declared to stockholders of record on a date on or before the
date as of which the net asset value is being determined, (e) all
interest accrued on any interest bearing securities owned by the
Corporation and (f) all other property of every kind and nature
including prepaid expenses, the value of such assets to be
determined as follows:
(a) The value of any cash on hand, on deposit, or on
call, bills and notes and accounts receivable, prepaid
expenses, cash dividends and accrued interest declared
or accrued as aforesaid and not yet received, shall be
deemed to be the face amount thereof unless the Board
of Directors of the Corporation shall have determined
that any such deposit, call loan, bill note or account
receivable, is not worth the face amount thereof, in
which event the value thereof shall be deemed to be
such value as the Board of Directors shall deem to be
the reasonable value thereof;
(b) The value of any share of stock, bond, subscription
right or other security which shall be listed or dealt
in upon any Stock Exchange or Exchanges shall be
determined by taking the last sale price that day, or
if there is no sale price that day the last bid price
that day on the day such value is being determined.
(c) The value of any share of stock, bond, subscription
right or other security which is not listed or dealt in
on any Exchange shall be determined by taking the
latest available bid price as of the close of trading
on the New York Stock Exchange on the day such value is
being determined; and
(d) In the case of any security or property for which
no price quotations are available as above provided,
the value thereof shall be determined in good faith
from time to time by the Board of Directors in such
manner as they shall deem appropriate.
(ii) The liabilities of the Corporation shall be deemed
to include (a) all bills and notes and accounts payable, (b) all
administrative expenses payable and/or accrued (including
management fees), (c) all contractual obligations for the payment
of money or property, including the amount of any unpaid dividend
declared upon the Corporation's stock and payable to stockholders
of record on or before the time as of which the value of the
Corporation's stock is being determined, (d) all reserves
authorized or approved by the Board of Directors for taxes or
contingencies, and (e) all other liabilities of the Corporation
of whatsoever kind and nature except liabilities represented by
outstanding capital stock and surplus of the Corporation.
(iii) For the purposes hereof
(a) Capital stock subscribed for shall be deemed to be
outstanding as of the time of acceptance of any
subscription and the entry thereof on the books of the
Corporation and the net price thereof (i.e., less
commission) shall be deemed to be an asset of the
Corporation.
Section 2. Capital stock surrendered for purchase by
the Corporation shall be deemed to be outstanding until the close
of business on the first full business day on which the New York
Stock Exchange is open, next succeeding the date on which such
capital stock is surrendered to the Corporation for purchase and
thereupon and until paid the price thereof shall be deemed to be
a liability of the Corporation.
ARTICLE XII
Investment Restrictions
Section 1. The Corporation may not invest more than
five per cent (5%) of its total assets, taken at market value in
the securities of any one issuer, or hold more than ten percent
(10%) of any class of securities of any one issuer, but these
limitations, do not apply to the obligations of the United
States.
Section 2. The Corporation may not borrow or loan
funds except in compliance with the restrictions of the
Investment Company Act of 1940.
Section 3. (As amended September 3, 1968 and December
10, 1971 (by stockholders). The Corporation will not invest in
commodities or real estate, invest in securities of another
investment company (except that the Corporation may invest in the
shares of closed-end investment companies to the extent
permissible under federal or state law), purchase securities on
margin, effect short sales, or invest for the purpose of
exercising control or management.
Section 4. No securities may be purchased from or sold
to any officers or Directors of the Corporation or companies in
which any of them has a financial interest, except on an agency
basis with the standard commissions. No officer or Director of
the Corporation may take a short position in the shares of the
Corporation or withhold or buy in anticipation of orders.
ARTICLE XIII
Indemnification
(As amended August 21, 1968.) Each director and officer
(and his heirs, executors, and administrators) may be indemnified
by the Corporation against reasonable costs and expenses incurred
by him in connection with any action, suit or proceeding to which
he may be made a party by reason of his being or having been a
director or officer of the Corporation, except in relation to any
actions, suits or proceedings, in which he has been adjudged
liable because of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office. In the absence of an adjudication which
expressly absolves the director or officer of liability to the
Corporation or its stockholders for willful misfeasance, bad
faith, gross negligence and reckless disregard of the duties
involved in the conduct of his office, or in the event of a
settlement, each director and officer (and his heirs, executors
and administrators) may be indemnified by the Corporation against
payments made, including reasonable costs and expenses, provided
that such indemnity shall be conditioned upon the prior
determination by a resolution of two-thirds of those members of
the Board of Directors of the Corporation who are not involved in
the action, suit or proceeding that the director or officer has
no liability by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office, and provided further that if a majority of
the members of the Board of Directors of the Corporation are
involved in action, suit or proceeding, such determination shall
have been made by a written opinion of independent counsel.
Amounts paid in settlement shall not exceed costs, fees and
expenses which would have been reasonably incurred if the action,
suit or proceeding had been litigated to a conclusion. Such
determination by the Board of Directors, or by independent
counsel, and the payments of amounts by the Corporation on the
basis thereof shall not prevent a stockholder from challenging
such indemnification by appropriate legal proceedings on the
grounds that the person indemnified was liable to the Corporation
or its security holders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. The foregoing rights and
indemnification shall be exclusive of any other rights against
the Corporation to which the officers and directors may be
entitled according to law.
ARTICLE XIV
Other Matters Section 1. (As amended December 10, 1971 (by
stockholders). The Corporation will not engage in the business
of underwriting or distributing as agent the securities of other
issuers, but shall not prevent the Corporation from becoming an
"underwriter" as such term is defined in connection with the
Securities Act of 1933, as amended (and the rules and regulations
promulgated thereunder, or any successor statute) to the extent
necessary to permit it to acquire or dispose of portfolio
securities. In connection with the disposition of any such
securities, the Corporation may bear all or a portion of the
costs of registration under the Securities Act of 1933. The
Corporation may not invest more than 10% of its net assets (at
the time the investment is made) in "restricted securities"
and/or other illiquid assets.
Section 2. The Board of Directors of the Corporation
may grant to others, with or without consideration therefor, the
non-exclusive right to use "Win" as part of a business name.
ARTICLE XV
Amendments
Section 1. By-Laws may be adopted, amended or repealed
by a vote or written assent of stockholders entitled to exercise
a majority of the voting power.
Section 2. The By-Laws may be adopted, amended or
repealed by the stockholders or by the Board of Directors, except
that the following By-Laws may be amended or repealed only by the
stockholders: (i) that portion of Section 6 of Article II which
specifies that the number of Directors shall not be less than
seven nor more than ten (ii) Section 1 of Article VII, (iii)
Article XII and (iv) Section 1 of Article XIV.
This is to certify that the foregoing is a true and
correct copy of the By-Laws, as theretofore amended, of Research
Capital Fund, inc., a California corporation; that such By-Laws
were readopted as the Restated By-Laws of Research Capital Fund,
Inc. at a meeting of the Board of Directors of said corporation
held on the 14th day of December, 1972 at which meetings all of
the Directors were then and there present and which meetings were
duly held in accordance with law; and that said By-Laws are in
full force and effect and have not as of this date in any manner
been amended or modified.
Dated: January 29, 1973
/s/ Harmon E. Burns
Harmon E. Burns
AMENDMENT TO BY-LAWS
RESEARCH CAPITAL FUND, INC.
(As approved by shareholders on December 18, 1973)
Article XII is amended as follows:
a) amending Section 2 to read:
"Section 2. The Corporation may not borrow money in an
amount in excess of 5% of the value of its total assets.
Such borrowing shall be made only from banks and only for
temporary or emergency purposes as defined in the Investment
Company Act of 1940, and not for direct investment in
securities."
b) adding a new Section 5:
"Section 5. The Corporation will have at least 25% of
the value of its assets invested in the securities of
issuers engaged in mining processing or dealing in gold or
other precious metals, except for temporary periods when
unusual and adverse economic conditions exist in that
industry, and may invest up to 100% of the value of its
assets in such securities."
c) adding a new Section 6:
"Section 6. The Corporation will not make loans to
other persons except by the purchase of bonds, debentures,
or similar obligations which are publicly distributed or of
a character usually acquired by institutional investors;
provided, however that the Corporation's Board of Directors
may, on the request of broker-dealers or other institutional
investors which it deems qualified, authorize the
Corporation to lend securities, but only when the borrower
pledges cash collateral to the Corporation and agrees to
maintain such collateral so that it amounts to at least 100%
of the value of the securities. Such security loans may not
be made if as a result the aggregate of such loans exceeds
10% of the value of the Corporation's total assets at the
time of the most recent loan."
AMENDMENT TO BY-LAWS
RESEARCH CAPITAL FUND, INC.
(As approved by shareholders on September 5, 1974)
Article XII is amended by adding a new section 7:
"Section 7. The Corporation shall not underwrite or engage in
the agency distribution of securities of other issuers, and shall
not acquire securities, which, at the time of acquisition could
be disposed of publicly by the Fund only after registration
underthe Securities Act of 1933."
AMENDMENTS TO BY-LAWS
RESEARCH CAPITAL FUND, INC
(As approved by shareholders on November 29, 1976)
Article XII is amended as follows:
"Section 3. The Corporation will not invest in real
estate, invest in securities of another investment company
(except that the Corporation may invest in the shares of
closed-end investment companies to the extent permissible
under federal or state law), purchase securities on margin,
effect short sales, or invest for the purpose of exercising
control or management"
"Section 8. The Corporation may not invest in commodities or
commodity contracts, except that the Corporation may invest in
gold bullion and foreign currencies in the form of gold coins."
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, Secretary of Franklin Gold Fund (the
"Fund"), a corporation organized under the laws of the State of
California, do hereby certify that the following resolution was
adopted by a majority of the directors present at a meeting held
at the offices of the Fund at 777 Mariners Island Boulevard, San
Mateo, California, on November 17, 1987.
RESOLVED, that the first sentence of paragraph 2, Section 1,
Article I of the By-Laws of the Fund, be amended to read as
follows:
"Section 2. ANNUAL MEETINGS. The annual meeting of
stockholders shall be held on a date and at a time as
the Board of Directors shall determine, for the
election of directors and for such other business as
may properly come before said meeting, provided that
annual meetings of shareholders need not be held in any
year in which such is not required by the Investment
Company Act of 1940."
I declare under penalty of perjury that the matters set forth in
this certificate are true and correct of my own knowledge.
Dated: 11/17/87
/s/ Deborah R. Gatzek
Deborah R. Gatzek
Secretary
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, Secretary of Franklin Gold Fund (the
"Fund"), a corporation organized under the laws of the State of
California, do hereby certify that the following resolution was
adopted by a majority of the directors present at a meeting held
at the offices of the Fund at 777 Mariners Island Boulevard, San
Mateo, California, on March 16, 1993.
RESOLVED, that Article III, Section 1 of the Fund's By-Laws,
as amended, which provides for the election and appointment
of officers of the Fund, be, and it hereby is, amended to
add the following paragraph:
"The board may appoint such other officers and agents
as it shall deem necessary, who shall hold their
offices for such terms and shall exercise such powers
and perform such duties as shall be determined from
time to time by the board."
I declare under penalty of perjury that the matters set forth in
this certificate are true and correct of my own knowledge.
Dated: 03/16/93
/s/ Deborah R. Gatzek
Deborah R. Gatzek
Secretary
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, Secretary of Franklin Gold Fund (the
"Fund"), a corporation organized under the laws of the State of
California, do hereby certify that the following resolution was
adopted by a majority of the directors present at a meeting held
at the offices of the Fund at 777 Mariners Island Boulevard, San
Mateo, California, on January 18, 1994.
WHEREAS, the Directors have determined that it is necessary
to amend Section 1 of Article 1 to remove the requirement of
using first class mail for notice of any meeting of
shareholders to the extent permitted under applicable
California corporate law; it is
RESOLVED, that in accordance with Article XV, Section 2 of
the Fund's By-Laws, Section 1 of Article 1 is hereby amended
to read as follows:
Section 1. Annual Meeting and Notice: All meetings of
stockholders shall be held in the office of the
Corporation in the City and County of San Mateo,
California, or at such place within or without the
State as from time to time may be designated by the By-
Laws or by Resolution of the Board of Directors.
The annual meeting of stockholders shall be held on a
date and at a time as the Board of Directors shall
determine, for the election of directors and for such
other business as may properly come before said
meeting, provided that annual meetings of stockholders
need not be held in any year in which such is not
required by the Investment Company Act of 1940.
Failure to give notice of any annual meeting, or any
irregularity in such notice, shall not effect the
validity of any annual meeting or of any proceedings at
any such meeting. No notice of an adjourned meeting of
stockholders need be given.
All notices of meetings of stockholders shall be sent
or otherwise given as provided herein, not less than
ten (10) nor more than sixty (60) days before the date
of the meeting. The notice shall specify the place,
date and hour of the meeting and (i) in the case of a
special meeting, the general nature of the business to
be transacted, or (ii) in the case of the annual
meeting, those matters which the Board of Directors at
the time of giving the notice, intends to present for
action by the stockholders. The notice of any meeting
at which directors are to be elected shall include the
name of any nominee or nominees whom at the time of the
notice management intends to present for election.
If action is proposed to be taken at any meeting for
approval of (i) a contract or transaction in which a
director has a direct or indirect financial interest,
(ii) an amendment of the Articles of Incorporation,
(iii) a reorganization of the corporation, (iv) a
voluntary dissolution of the corporation, or (v) a
distribution in dissolution other than in accordance
with the rights of outstanding preferred shares, the
notice shall also state the general nature of that
proposal.
Notice of any meeting of stockholders shall be given
either personally or by first-class mail, or, if the
corporation has outstanding shares held of record by
five hundred (500) or more persons (determined as
provided in Section 605 of the California Corporations
Code) on the record date for such meeting, notice may
be sent by third class mail or by telegraphic or other
written communication, charges prepaid, addressed to
the stockholder at the address of that stockholder
appearing on the books of the corporation or given by
the stockholder to the corporation for the purpose of
notice. If no such address appears on the
corporation's books or is given, notice shall be deemed
to have been given if sent to that stockholder by first-
class mail or by third-class mail or by telegraphic or
other written communication (as provided herein) to the
corporation's principal executive office, or if
published at least once in a newspaper of general
circulation in the county where that office is located.
Notice shall be deemed to have been given at the time
when delivered personally or deposited in the mail or
sent by telegram or other means of written
communication.
If any notice addressed to a stockholder at the address
of that stockholder appearing on the books of the
corporation is returned to the corporation by the
United States Postal Service marked to indicate that
the United States Postal Service is unable to deliver
the notice to the stockholder at that address, all
future notices or reports shall be deemed to have been
duly given without further mailing if these shall be
available to the stockholder on written demand of the
stockholder at the principal executive office of the
corporation for a period of one year from the date of
the giving of the notice.
An affidavit of the mailing or other means of giving
any notice of any stockholder's meeting shall be
executed by the secretary, assistant secretary or any
transfer agent of the corporation giving the notice and
shall be filed and maintained in the minute book of the
corporation.
and it is
FURTHER RESOLVED, that the officers of the Fund be, and they
hereby are, authorized and directed to execute and deliver any
and all documents and take any and all other actions that they
may deem necessary or advisable in order to effectuate the
foregoing resolution.
I declare under penalty of perjury that the matters set forth in
this certificate are true and correct of my own knowledge.
Dated: February 28, 1994
/s/ Deborah R. Gatzek
Deborah R. Gatzek
Secretary
FRANKLIN GOLD FUND
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT made between FRANKLIN GOLD FUND, a
California Corporation, hereinafter called the "Fund" and
FRANKLIN ADVISERS, INC., a California Corporation, hereinafter
called the "Manager."
WHEREAS, the Fund has been organized and operates as an
investment company registered under the Investment Company Act of
1940 for the purpose of investing and reinvesting its assets in
securities, as set forth in its Articles of Incorporation, its By-
Laws and its Registration Statements under the Investment Company
Act of 1940 and the Securities Act of 1933, all as heretofore
amended and supplemented; and the Fund desires to avail itself of
the services, information, advice, assistance and facilities of
an investment manager and to have an investment manager perform
for its various management, statistical, research, investment
advisory and other services; and,
WHEREAS, the Manager is registered as an investment adviser under
the Investment Advisor's Act of 1940, is engaged in the business
of rendering management, investment advisory, counselling and
supervisory services to investment companies and other investment
counselling clients, and desires to provide these services to the
Fund.
NOW THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Manager. The Fund hereby employs the
Manager to manage the investment and reinvestment of the
Fund's assets and to administer its affairs, subject to the
direction of the Board of Directors and the officers of the
Fund, for the period and on the terms hereinafter set forth.
The Manager hereby accepts such employment and agrees during
such period to render the services and to assume the
obligations herein set forth for the compensation herein
provided. The Manager shall for all purposes herein be
deemed to be an independent contractor and shall, except as
expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
2. Obligations of and Services to be Provided by the Manager.
The Manager undertakes to provide the services hereinafter
set forth and to assume the following obligations:
A. Office Space, Furnishings, Facilities, Equipment, and
Personnel. The Manager shall furnish to the Fund adequate
(i) office space, which may be space within the offices of
the Manager or in such other place as may be agreed upon
from time to time, (ii) office furnishings, facilities and
equipment as may be reasonably required for managing the
corporate affairs and conducting the business of the Fund,
including complying with the corporate and securities
reporting requirements of the United States and the various
states in which the Fund does business, conducting
correspondence and other communications with the
shareholders of the Fund, maintaining all internal
bookkeeping, accounting and auditing services and records in
connection with the Fund's investment and business
activities, and computing net asset value. The Manager
shall employ or provide and compensate the executive,
secretarial and clerical personnel necessary to provide such
services. The Manager shall also compensate all officers
and employees of the Fund who are officers or employees of
the Manager.
B. Investment Management Services.
(a) The Manager shall manage the Fund's assets and
portfolio subject to and in accordance with the
investment objectives and policies of the Fund and any
directions which the Fund's Board of Directors may
issue from time to time. In pursuance of the
foregoing, the Manager shall make all determinations
with respect to the investment of the Fund's assets and
the purchase and sale of portfolio securities, and
shall take such steps as may be necessary to implement
the same. Such determinations and services shall also
include determining the manner in which voting rights,
rights to consent to corporate action and any other
rights pertaining to the Fund's portfolio securities
shall be exercised. The Manager shall render regular
reports to the Fund, at regular meetings of the Board
of Directors and at such other times as may be
reasonably requested by the Fund's Board of Directors,
of (i) the decisions which it has made with respect to
the investment of the Fund's assets and the purchase
and sale of portfolio securities, (ii) the reasons for
such decisions and (iii) the extent to which those
decisions have been implemented.
(b) The Manager, subject to and in accordance with any
directions which the Fund's Board of Directors may
issue from time to time, shall place, in the name of
the Fund, orders for the execution of the Fund's
portfolio transactions. When placing such orders the
Manager shall seek to obtain the best net price and
execution for the Fund, but this requirement shall not
be deemed to obligate the Manager to place any order
solely on the basis of obtaining the lowest commission
rate if the other standards set forth in this section
have been satisfied. The parties recognize that there
are likely to be many cases in which different brokers
are equally able to provide such best price and
execution and that, in selecting among such brokers
with respect to particular trades, it is desirable to
choose those brokers who furnish research, statistical
quotations and other information to the Fund and the
Manager in accord with the standards set forth below.
Moreover, to the extent that it continues to be lawful
to do so and so long as the Board determines that the
Fund will benefit, directly or indirectly, by doing so,
the Manager may place orders with a broker who charges
a commission for that transaction which is in excess of
the amount of commission that another broker would have
charged for effecting that transaction, provided that
the excess commission is reasonable in relation to the
value of "brokerage and research services" (as defined
in Section 28(e)(3) of the Securities Exchange Act of
1934) provided by that broker.
Accordingly, the Fund and the Manager agree that the
Manager shall select brokers for the execution of the
Fund's portfolio transactions from among:
(i) Those brokers and dealers who provide
quotations and other services to the Fund,
specifically including the quotations
necessary to determine the Fund's net assets,
in such amount of total brokerage as may
reasonably be required in light of such
services;
(ii) Those brokers and dealers who supply
research, statistical and other data to the
Manager or its affiliates which relate
directly to portfolio securities, actual or
potential, of the Fund or which place the
Manager in a better position to make
decisions in connection with the management
of the Fund's assets and portfolio, whether
or not such data may also be useful to the
Manager and its affiliates in managing other
portfolios or advising other clients, in such
amount of total brokerage as may reasonably
be required.
Provided that the Fund's officers are satisfied that
the best execution is obtained, the sale of Fund shares
may also be considered as a factor in the selection of
broker-dealers to execute the Fund's portfolio
transactions.
(c) When the Manager has determined that the Fund should
tender securities pursuant to a "tender offer
solicitation," Franklin Distributors, Inc.
("Distributors") shall be designated as the "tendering
dealer" so long as it is legally permitted to act in
such capacity under the Federal securities laws and
rules thereunder and the rules of any securities
exchange or association of which it may be a member.
Neither the Manager nor Distributors shall be obligated
to make any additional commitments of capital, expense
or personnel beyond that already committed (other than
normal periodic fees or payments necessary to maintain
its corporate existence and membership in the National
Association of Securities Dealers, Inc.) as of the date
of this Agreement and this Agreement shall not obligate
the Manager or Distributors (i) to act pursuant to the
foregoing requirement under any circumstances in which
they might reasonably believe that liability might be
imposed upon them as a result of so acting, or (ii) to
institute legal or other proceedings to collect fees
which may be considered to be due from others to it as
a result of such a tender, unless the Fund shall enter
into an agreement with the Manager to reimburse them
for all expenses connected with attempting to collect
such fees including legal fees and expenses and that
portion of the compensation due to their employees
which is attributable to the time involved in
attempting to collect such fees.
(d) The Manager shall render regular reports to the Fund,
not more frequently than quarterly, of how much total
brokerage business has been placed by the Manager with
brokers falling into each of the foregoing categories
and the manner in which the allocation has been
accomplished.
(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 $1O0,000,000
and not over $250,000,000; and
9/240 of 1% of the value of net assets in excess of
$250,000,000.
B. The Management fee payable by the Fund shall be reduced or
eliminated to the extent that Franklin Distributors, Inc.
has actually received cash payments of tender offer
solicitation fees less certain costs and expenses incurred
in connection therewith; and to the extent necessary to
comply with the limitations on expenses which may be borne
by the Fund as set forth in the laws, regulations and
administrative interpretations of those states in which the
Fund's shares are registered.
C. If this Agreement is terminated prior to the end of any
month, the 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 for two years. The
Agreement is renewable annually thereafter for successive
periods not to exceed one year (i) by a vote of a majority
of the outstanding voting securities of the Fund or by a
vote of the Board of Directors of the Fund, and (ii) by a
vote of a majority of the directors of the Fund who are not
parties to the Agreement or interested persons of any
parties to the Agreement (other than as Directors of the
Fund) cast in person at a meeting called for the purpose of
voting on the Agreement.
B. This Agreement.
(i) may at any time be terminated without the payment of
any penalty either by vote of the Board of Directors of
the Fund or by vote of a majority of the outstanding
voting securities of the Fund, on 30 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
term in the Investment Company Act of 1940, as amended.
D. Any notice under this Agreement shall be give 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 reminder of this Agreement shall not be
affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed the 1st day of December , 1986.
FRANKLIN GOLD FUND
/s/ Charles B. Johnson
By: Charles B. Johnson
FRANKLIN ADVISERS, INC.
/s/ Rupert H. Johnson Jr.
By: Rupert H. Johnson Jr.
FRANKLIN GOLD FUND
777 Mariners Island Blvd.
San Mateo, California 94404
Franklin/Templeton Distributors, Inc.
777 Mariners Island Blvd.
San Mateo, California 94404
Re: Amended and Restated Distribution Agreement
Gentlemen:
We (the "Fund") are a corporation or business trust operating as
an open-end management investment company or "mutual fund", which
is registered under the Investment Company Act of 1940 (the "1940
Act") and whose shares are registered under the Securities Act of
1933 (the "1933 Act"). We desire to issue one or more series or
classes of our authorized but unissued shares of capital stock or
beneficial interest (the "Shares") to authorized persons in
accordance with applicable Federal and State securities laws.
The Fund's Shares may be made available in one or more separate
series, each of which may have one or more classes.
You have informed us that your company is registered as a broker-
dealer under the provisions of the Securities Exchange Act of
1934 and that your company is a member of the National
Association of Securities Dealers, Inc. You have indicated your
desire to act as the exclusive selling agent and distributor for
the Shares. We have been authorized to execute and deliver this
Distribution Agreement ("Agreement") to you by a resolution of
our Board of Directors or Trustees ("Board") passed at a meeting
at which a majority of Board members, including a majority who
are not otherwise interested persons of the Fund and who are not
interested persons of our investment adviser, its related
organizations or with you or your related organizations, were
present and voted in favor of the said resolution approving this
Agreement.
1. Appointment of Underwriter. Upon the execution of this
Agreement and in consideration of the agreements on your part
herein expressed and upon the terms and conditions set forth
herein, we hereby appoint you as the exclusive sales agent for
our Shares and agree that we will deliver such Shares as you may
sell. You agree to use your best efforts to promote the sale of
Shares, but are not obligated to sell any specific number of
Shares.
However, the Fund and each series retain the right to make
direct sales of its Shares without sales charges consistent with
the terms of the then current prospectus and applicable law, and
to engage in other legally authorized transactions in its Shares
which do not involve the sale of Shares to the general public.
Such other transactions may include, without limitation,
transactions between the Fund or any series or class and its
shareholders only, transactions involving the reorganization of
the Fund or any series, and transactions involving the merger or
combination of the Fund or any series with another corporation or
trust.
2. Independent Contractor. You will undertake and
discharge your obligations hereunder as an independent contractor
and shall have no authority or power to obligate or bind us by
your actions, conduct or contracts except that you are authorized
to promote the sale of Shares. You may appoint sub-agents or
distribute through dealers or otherwise as you may determine from
time to time, but this Agreement shall not be construed as
authorizing any dealer or other person to accept orders for sale
or repurchase on our behalf or otherwise act as our agent for any
purpose.
3. Offering Price. Shares shall be offered for sale at a
price equivalent to the net asset value per share of that series
and class plus any applicable percentage of the public offering
price as sales commission or as otherwise set forth in our then
current prospectus. On each business day on which the New York
Stock Exchange is open for business, we will furnish you with the
net asset value of the Shares of each available series and class
which shall be determined in accordance with our then effective
prospectus. All Shares will be sold in the manner set forth in
our then effective prospectus and statement of additional
information, and in compliance with applicable law.
4. Compensation.
A. Sales Commission. You shall be entitled to charge
a sales commission on the sale or redemption, as appropriate, of
each series and class of each Fund's Shares in the amount of any
initial, deferred or contingent deferred sales charge as set
forth in our then effective prospectus. You may allow any sub-
agents or dealers such commissions or discounts from and not
exceeding the total sales commission as you shall deem advisable,
so long as any such commissions or discounts are set forth in our
current prospectus to the extent required by the applicable
Federal and State securities laws. You may also make payments to
sub-agents or dealers from your own resources, subject to the
following conditions: (a) any such payments shall not create any
obligation for or recourse against the Fund or any series or
class, and (b) the terms and conditions of any such payments are
consistent with our prospectus and applicable federal and state
securities laws and are disclosed in our prospectus or statement
of additional information to the extent such laws may require.
B. Distribution Plans. You shall also be entitled to
compensation for your services as provided in any Distribution
Plan adopted as to any series and class of any Fund's Shares
pursuant to Rule 12b-1 under the 1940 Act.
5. Terms and Conditions of Sales. Shares shall be offered
for sale only in those jurisdictions where they have been
properly registered or are exempt from registration, and only to
those groups of people which the Board may from time to time
determine to be eligible to purchase such shares.
6. Orders and Payment for Shares. Orders for Shares shall
be directed to the Fund's shareholder services agent, for
acceptance on behalf of the Fund. At or prior to the time of
delivery of any of our Shares you will pay or cause to be paid to
the custodian of the Fund's assets, for our account, an amount in
cash equal to the net asset value of such Shares. Sales of
Shares shall be deemed to be made when and where accepted by the
Fund's shareholder services agent. The Fund's custodian and
shareholder services agent shall be identified in its prospectus.
7. Purchases for Your Own Account. You shall not purchase
our Shares for your own account for purposes of resale to the
public, but you may purchase Shares for your own investment
account upon your written assurance that the purchase is for
investment purposes and that the Shares will not be resold except
through redemption by us.
8. Sale of Shares to Affiliates. You may sell our Shares
at net asset value to certain of your and our affiliated persons
pursuant to the applicable provisions of the federal securities
statutes and rules or regulations thereunder (the "Rules and
Regulations"), including Rule 22d-1 under the 1940 Act, as
amended from time to time.
9. Allocation of Expenses. We will pay the expenses:
(a) Of the preparation of the audited and
certified financial statements of our company to
be included in any Post-Effective Amendments
("Amendments") to our Registration Statement under
the 1933 Act or 1940 Act, including the prospectus
and statement of additional information included
therein;
(b) Of the preparation, including legal
fees, and printing of all Amendments or
supplements filed with the Securities and Exchange
Commission, including the copies of the
prospectuses included in the Amendments and the
first 10 copies of the definitive prospectuses or
supplements thereto, other than those necessitated
by your (including your "Parent's") activities or
Rules and Regulations related to your activities
where such Amendments or supplements result in
expenses which we would not otherwise have
incurred;
(c) Of the preparation, printing and
distribution of any reports or communications
which we send to our existing shareholders; and
(d) Of filing and other fees to Federal and
State securities regulatory authorities necessary
to continue offering our Shares.
You will pay the expenses:
(a) Of printing the copies of the
prospectuses and any supplements thereto and
statements of additional information which are
necessary to continue to offer our Shares;
(b) Of the preparation, excluding legal
fees, and printing of all Amendments and
supplements to our prospectuses and statements of
additional information if the Amendment or
supplement arises from your (including your
"Parent's") activities or Rules and Regulations
related to your activities and those expenses
would not otherwise have been incurred by us;
(c) Of printing additional copies, for use
by you as sales literature, of reports or other
communications which we have prepared for
distribution to our existing shareholders; and
(d) Incurred by you in advertising,
promoting and selling our Shares.
10. Furnishing of Information. We will furnish to you such
information with respect to each series and class of Shares, in
such form and signed by such of our officers as you may
reasonably request, and we warrant that the statements therein
contained, when so signed, will be true and correct. We will
also furnish you with such information and will take such action
as you may reasonably request in order to qualify our Shares for
sale to the public under the Blue Sky Laws of jurisdictions in
which you may wish to offer them. We will furnish you with
annual audited financial statements of our books and accounts
certified by independent public accountants, with semi-annual
financial statements prepared by us, with registration statements
and, from time to time, with such additional information
regarding our financial condition as you may reasonably request.
11. Conduct of Business. Other than our currently
effective prospectus, you will not issue any sales material or
statements except literature or advertising which conforms to the
requirements of Federal and State securities laws and regulations
and which have been filed, where necessary, with the appropriate
regulatory authorities. You will furnish us with copies of all
such materials prior to their use and no such material shall be
published if we shall reasonably and promptly object.
You shall comply with the applicable Federal and State
laws and regulations where our Shares are offered for sale and
conduct your affairs with us and with dealers, brokers or
investors in accordance with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc.
12. Redemption or Repurchase Within Seven Days. If Shares
are tendered to us for redemption or repurchase by us within
seven business days after your acceptance of the original
purchase order for such Shares, you will immediately refund to us
the full sales commission (net of allowances to dealers or
brokers) allowed to you on the original sale, and will promptly,
upon receipt thereof, pay to us any refunds from dealers or
brokers of the balance of sales commissions reallowed by you. We
shall notify you of such tender for redemption within 10 days of
the day on which notice of such tender for redemption is received
by us.
13. Other Activities. Your services pursuant to this
Agreement shall not be deemed to be exclusive, and you may render
similar services and act as an underwriter, distributor or dealer
for other investment companies in the offering of their shares.
14. Term of Agreement. This Agreement shall become
effective on the date of its execution, and shall remain in
effect for a period of two (2) years. The Agreement is renewable
annually thereafter, with respect to the Fund or, if the Fund has
more than one series, with respect to each series, for successive
periods not to exceed one year (i) by a vote of (a) a majority of
the outstanding voting securities of the Fund or, if the Fund has
more than one series, of each series, or (b) by a vote of the
Board, and (ii) by a vote of a majority of the members of the
Board who are not parties to the Agreement or interested persons
of any parties to the Agreement (other than as members of the
Board), cast in person at a meeting called for the purpose of
voting on the Agreement.
This Agreement may at any time be terminated by the
Fund or by any series without the payment of any penalty, (i)
either by vote of the Board or by vote of a majority of the
outstanding voting securities of the Fund or any series on 90
days' written notice to you; or (ii) by you on 90 days' written
notice to the Fund; and shall immediately terminate with respect
to the Fund and each series in the event of its assignment.
15. Suspension of Sales. We reserve the right at all times
to suspend or limit the public offering of Shares upon two days'
written notice to you.
16. Miscellaneous. This Agreement shall be subject to the
laws of the State of California and shall be interpreted and
construed to further promote the operation of the Fund as an open-
end investment company. This Agreement shall supersede all
Distribution Agreements and Amendments previously in effect
between the parties. As used herein, the terms "Net Asset
Value," "Offering Price," "Investment Company," "Open-End
Investment Company," "Assignment," "Principal Underwriter,"
"Interested Person," "Parent," "Affiliated Person," and "Majority
of the Outstanding Voting Securities" shall have the meanings set
forth in the 1933 Act or the 1940 Act and the Rules and
Regulations thereunder.
Nothing herein shall be deemed to protect you against any
liability to us or to our securities holders to which you would
otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of your duties hereunder,
or by reason of your reckless disregard of your obligations and
duties hereunder.
If the foregoing meets with your approval, please acknowledge
your acceptance by signing each of the enclosed copies, whereupon
this will become a binding agreement as of the date set forth
below.
Very truly yours,
FRANKLIN GOLD FUND
By: /s/ Deborah R. Gatzek
Accepted:
Franklin/Templeton Distributors, Inc.
By: /s/ Gregory E. Johnson
DATED: March 29, 1995
CUSTODY AGREEMENT
THIS CUSTODY AGREEMENT ("Agreement") is made and entered
into as of September 17, 1991, by and between Franklin Gold
Fund, a California Corporation (the "Fund"), and Bank of America
National Trust and Savings Association, a banking association
organized under the laws of the United States (the "Custodian").
RECITALS
A. The Fund is an investment company registered under
the Investment Company Act of 1940, as amended (the "Investment
Company Act") that invests and reinvests, in Domestic Securities
and Foreign Securities.
B. The Custodian is, and has represented to the
Fund that the Custodian is, a "bank" as that term is defined in
Section 2(a)(5) of the Investment Company Act of 1940, as amended
and is eligible to receive and maintain custody of investment
company assets pursuant to Section 17(f) and Rule 17f-2
thereunder.
C. The Fund and the Custodian desire to provide for
the retention of the Custodian as the custodian of the assets of
the Fund, and such subsequent series as the parties hereto may
determine from time-to-time, on the terms and subject to the
provisions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants
and agreements contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. DEFINITIONS
For purposes of this Agreement, the following terms
shall have the respective meanings specified below:
"Agreement" shall mean this Custody Agreement.
"Board of Directors" shall mean the Board of Directors
of the Fund.
"Business Day" with respect to any Domestic Security
means any day, other than a Saturday or Sunday, that is not a day
on which banking institutions are authorized or required by law
to be closed in The City of New York and, with respect to Foreign
Securities, a London Business Day. "London Business Day" shall
mean any day on which dealings and deposits in U.S. dollars are
transacted in the London interbank market.
"Custodian" shall mean Bank of America National Trust and
Savings Association.
"Domestic Securities" shall have the meaning provided in
Subsection 2.1 hereof.
"Executive Committee" shall mean the executive committee
of the Board of Directors.
"Foreign Custodian" shall have the meaning provided in
Section 4.1 hereof.
"Foreign Securities" shall have the meaning provided in
Section 2.1 hereof.
"Foreign Securities Depository" shall have the meaning
provided in Section 4.1 hereof.
"Fund" shall mean the Franklin Gold Fund and any
separate series of the Fund hereinafter organized.
"Guidelines" shall have the meaning provided in
Subsection 3.5(a) hereof.
"Investment Company Act" shall mean the Investment
Company Act of 1940, as amended.
"Securities" shall have the meaning provided in Section
2.1 hereof.
"Securities System" shall have the meaning provided in
Section 3.1 hereof.
"Securities System Account" shall have the meaning
provided in Subsection 3.8(a) hereof.
"Shares" shall mean shares of beneficial interest of the
Fund.
"Subcustodian" shall have the meaning provided in
Subsection 3.7 hereof, but shall not include any Foreign
Custodian.
"Transfer Agent" shall mean the duly appointed and
acting transfer agent for the Fund.
"U.S." shall mean United States.
"Writing" shall mean a communication in writing, a
communication by telex, the Custodian's Global Custody
Instruction SystemTM, facsimile transmission, bankwire or other
teleprocess or electronic instruction system acceptable to the
Custodian.
Section 2. APPOINTMENT OF CUSTODIAN; DELIVERY OF ASSETS
2.1 Appointment of Custodian. The Fund hereby appoints
and designates the Custodian as the custodian of the assets of
the Fund including cash, securities the Fund desires to be held
within the United States ("Domestic Securities") and securities
it desires to be held outside the United States ("Foreign
Securities"). Domestic Securities and Foreign Securities are
sometimes referred to herein, collectively, as "Securities." The
Custodian hereby accepts such appointment and designation and
agrees that it shall maintain custody of the assets of the Fund
delivered to it hereunder in the manner provided for herein.
2.2 Delivery of Assets. The Fund agrees to deliver to
the Custodian Securities and cash owned by the Fund, payments of
income, principal or capital distributions received by the Fund
with respect to Securities owned by the Fund from time to time,
and the consideration received by it for such Shares or other
securities of the Fund as may be issued and sold from time to
time. The Custodian shall have no responsibility whatsoever for
any property or assets of the Fund held or received by the Fund
and not delivered to the Custodian pursuant to and in accordance
with the terms hereof. All Securities accepted by the Custodian
on behalf of the Fund under the terms of this Agreement shall be
in "street name" or other good delivery form as determined by the
Custodian.
2.3 Subcustodians. Upon receipt of Proper Instructions
and a certified copy of a resolution of the Board of Directors or
of the Executive Committee certified by the Secretary or an
Assistant Secretary of the Fund, the Custodian may from time to
time appoint one or more Subcustodians or Foreign Custodians to
hold assets of the Fund in accordance with the provisions of this
Agreement.
2.4 No Duty to Manage. The Custodian, a Subcustodian
or a Foreign Custodian shall not have any duty or responsibility
to manage or recommend investments of the assets of the Fund held
by them or to initiate any purchase, sale or other investment
transaction in the absence of Proper Instructions or except as
otherwise specifically provided herein.
Section 3. DUTIES OF THE CUSTODIAN WITH RESPECT TO
ASSETS OF THE FUND HELD BY THE CUSTODIAN
3.1 Holding Securities. The Custodian shall hold and
physically segregate from any property owned by the Custodian,
for the account of the Fund, all non-cash property delivered by
the Fund to the Custodian hereunder other than Securities which,
pursuant to Subsection 3.8 hereof, are held through a registered
clearing agency, a registered securities depository, the Federal
Reserve's book-entry securities system (referred to herein,
individually, as a "Securities System"), or held by a
Subcustodian, Foreign Custodian or in a Foreign Securities
Depository.
3.2 Delivery of Securities. Except as otherwise
provided in Subsection 3.5 hereof, the Custodian, upon receipt of
Proper Instructions, shall release and deliver Securities owned
by the Fund and held by the Custodian in the following cases or
as otherwise directed in Proper Instructions:
(a) except as otherwise provided herein,
upon sale of such Securities for the account of the
Fund and receipt by the Custodian, a Subcustodian or a
Foreign Custodian of payment therefor;
(b) upon the receipt of payment by the
Custodian, a Subcustodian or a Foreign Custodian in
connection with any repurchase agreement related to
such Securities entered into by the Fund;
(c) in the case of a sale effected through a
Securities System, in accordance with the provisions of
Subsection 3.8 hereof;
(d) to a tender agent or other authorized
agent in connection with (i) a tender or other similar
offer for Securities owned by the Fund, or (ii) a
tender offer or repurchase by the Fund of its own
Shares;
(e) to the issuer thereof or its agent when
such Securities are called, redeemed, retired or
otherwise become payable; provided, that in any such
case, the cash or other consideration is to be
delivered to the Custodian, a Subcustodian or a Foreign
Custodian;
(f) to the issuer thereof, or its agent, for
transfer into the name or nominee name of the Fund, the
name or nominee name of the Custodian, the name or
nominee name of any Subcustodian or Foreign Custodian;
or for exchange for a different number of bonds,
certificates or other evidence representing the same
aggregate face amount or number of units; provided
that, in any such case, the new Securities are to be
delivered to the Custodian, a Subcustodian or Foreign
Custodian;
(g) to the broker selling the same for
examination in accordance with the "street delivery"
custom;
(h) for exchange or conversion pursuant to
any plan of merger, consolidation, recapitalization, or
reorganization of the issuer of such Securities, or
pursuant to a conversion of such Securities; provided
that, in any such case, the new Securities and cash, if
any, are to be delivered to the Custodian or a
Subcustodian;
(i) in the case of warrants, rights or
similar securities, the surrender thereof in connection
with the exercise of such warrants, rights or similar
Securities or the surrender of interim receipts or
temporary Securities for definitive Securities;
provided that, in any such case, the new Securities and
cash, if any, are to be delivered to the Custodian, a
subcustodian or a Foreign Custodian;
(j) for delivery in connection with any
loans of Securities made by the Fund, but only against
receipt by the Custodian, a Subcustodian or a Foreign
Custodian of adequate collateral as determined by the
Fund (and identified in Proper Instructions
communicated to the Custodian), which may be in the
form of cash or obligations issued by the United
States government, its agencies or instrumentalities,
except that in connection with any loans for which
collateral is to be credited to the account of the
Custodian, a Subcustodian or a Foreign Custodian in
the Federal Reserve's book-entry securities system, the
Custodian will not be held liable or responsible for
the delivery of Securities owned by the Fund prior to
the receipt of such collateral;
(k) for delivery as security in connection
with any borrowings by the Fund requiring a pledge of
assets by the Fund, but only against receipt by the
Custodian, a Subcustodian or a Foreign Custodian of
amounts borrowed;
(l) for delivery in accordance with the
provisions of any agreement among the Fund, the
Custodian, a Subcustodian or a Foreign Custodian and a
broker-dealer relating to compliance with the rules of
registered clearing corporations and of any registered
national securities exchange, or of any similar
organization or organizations, regarding escrow or
other arrangements in connection with transactions by
the Fund;
(m) for delivery in accordance with the
provisions of any agreement among the Fund, the
Custodian, a Subcustodian or a Foreign Custodian and a
futures commission merchant, relating to compliance
with the rules of the Commodity Futures Trading
Commission and/or any contract market, or any similar
organization or organizations, regarding account
deposits in connection with transactions by the Fund;
(n) upon the receipt of instructions from
the Transfer Agent for delivery to the Transfer Agent
or to the holders of Shares in connection with
distributions in kind in satisfaction of requests by
holders of Shares for repurchase or redemption; and
(o) for any other proper purpose, but only
upon receipt of Proper Instructions, and a certified
copy of a resolution of the Directors or of the
Executive Committee certified by the Secretary or an
Assistant Secretary of the Fund, specifying the
securities to be delivered, setting forth the purpose
for which such delivery is to be made, declaring such
purpose to be a proper purpose, and naming the person
or persons to whom delivery of such securities shall be
made.
3.3 Registration of Securities. Securities held by the
Custodian, a Subcustodian or a Foreign Custodian (other than
bearer Securities) shall be registered in the name or nominee
name of the Fund, in the name or nominee name of the Custodian or
in the name or nominee name of any Subcustodian or Foreign
Custodian. The Fund agrees to hold the Custodian, any such
nominee, Subcustodian or Foreign Custodian harmless from any
liability as a holder of record of such Securities.
3.4 Bank Accounts. The Custodian shall open and
maintain a separate bank account or accounts for the Fund,
subject only to draft or order by the Custodian acting pursuant
to the terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by
it hereunder from or for the account of the Fund, other than cash
maintained by the Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act.
Funds held by the Custodian for the Fund may be deposited by it
to its credit as Custodian in the banking departments of the
Custodian, a Subcustodian or a Foreign Custodian. It is
understood and agreed by the Custodian and the Fund that the rate
of interest, if any, payable on such funds (including foreign
currency deposits) that are deposited with the Custodian may not
be a market rate of interest and that the rate of interest
payable by the Custodian to the Fund shall be agreed upon by the
Custodian and the Fund from time to time. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall
be withdrawable by the Custodian only in that capacity.
3.5 Collection of Income; Trade Settlement; Crediting
of Accounts. The Custodian shall collect income payable with
respect to Securities owned by the Fund, settle Securities trades
for the account of the Fund and credit and debit the Fund's
account with the Custodian in connection therewith as follows:
(a) Upon receipt of Proper Instructions, the
Custodian shall effect the purchase of a Security by
charging the account of the Fund on the contractual
settlement date; provided, however, that in the case of
Foreign Securities, Proper Instructions are provided to
the Custodian by the Fund prior to the contractual
settlement date in accordance with, and within the time
period specified in the "Global Custody Guidelines for
the Franklin Gold Fund" (the "Guidelines") as adopted
for the use of this Fund, as may be amended by the
Custodian from time to time in its sole discretion.
The Custodian shall have no liability of any kind to
any person, including the Fund, if the Custodian
effects payment on behalf of the Fund as provided for
herein or in Proper Instructions, and the seller or
selling broker fails to deliver the Securities
purchased.
(b) Upon receipt of Proper Instructions, the
Custodian shall effect the sale of a Security by
delivering a certificate or other indicia of ownership,
and shall credit the account of the Fund with the
proceeds of such sale on the contractual settlement
date; provided, however, that in the case of Foreign
Securities, Proper Instructions are provided to the
Custodian by the Fund prior to the contractual
settlement date in accordance with, and within the time
period specified in, the Guidelines. The Custodian
shall have no liability of any kind to any person,
including the Fund, if the Custodian delivers such a
certificate(s) or other indicia of ownership as
provided for herein or in Proper Instructions, and the
purchaser or purchasing broker fails to effect payment
to the Fund within a reasonable time period, as
determined by the Custodian in its sole discretion. In
such event, the Custodian shall be entitled to
reimbursement of the amount so credited to the account
of the Fund in connection with such sale.
(c) The Fund is responsible for ensuring
that the Custodian receives timely and accurate Proper
Instructions to enable the Custodian to effect
settlement of any purchase or sale. If the Custodian
does not receive such instructions within the required
time period, the Custodian shall have no liability of
any kind to any person, including the Fund, for failing
to effect settlement on the contractual settlement
date. However, the Custodian shall use its best
reasonable efforts to effect settlement as soon as
possible after receipt of Proper Instructions.
(d) The Custodian shall credit the account
of the Fund with interest income payable on interest
bearing Securities on payable date. Interest income on
cash balances will be credited monthly to the account
of the Fund on the first Business Day (on which the
Custodian is open for business) following the end of
each month. Dividends and other amounts payable with
respect to Domestic Securities and Foreign Securities
shall be credited to the account of the Fund when
received by the Custodian. The Custodian shall not be
required to commence suit or collection proceedings or
resort to any extraordinary means to collect such
income and other amounts payable with respect to
Securities owned by the Fund. The collection of income
due the Fund on Domestic Securities loaned pursuant to
the provisions of Subsection 3.2(j) shall be the
responsibility of the Fund. The Custodian will have
no duty or responsibility in connection therewith,
other than to provide the Fund with such information or
data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of
the income to which the Fund is entitled. The
Custodian shall have no liability to any person,
including the Fund, if the Custodian credits the
account of the Fund with such income or other amounts
payable with respect to Securities owned by the Fund
(other than Securities loaned by the Fund pursuant to
Subsection 3.2(j) hereof) and the Custodian
subsequently is unable to collect such income or other
amounts from the payors thereof within a reasonable
time period, as determined by the Custodian in its
sole discretion. In such event, the Custodian shall be
entitled to reimbursement of the amount so credited to
the account of the Fund.
3.6 Payment of Fund Monies. Upon receipt of Proper
Instructions the Custodian shall pay out monies of the Fund in
the following cases or as otherwise directed in Proper
Instructions:
(a) upon the purchase of Securities, futures
contracts or options on futures contracts for the
account of the Fund but only, except as otherwise
provided herein, (i) against the delivery of such
securities, or evidence of title to futures contracts
or options on futures contracts, to the Custodian or a
Subcustodian registered pursuant to Subsection 3.3
hereof or in proper form for transfer; (ii) in the case
of a purchase effected through a Securities System, in
accordance with the conditions set forth in Subsection
3.8 hereof; or (iii) in the case of repurchase
agreements entered into between the Fund and the
Custodian, another bank or a broker-dealer (A) against
delivery of the Securities either in certificated form
to the Custodian or a Subcustodian or through an entry
crediting the Custodian's account at the appropriate
Federal Reserve Bank with such Securities or (B)
against delivery of the confirmation evidencing
purchase by the Fund of Securities owned by the
Custodian or such broker-dealer or other bank along
with written evidence of the agreement by the Custodian
or such broker-dealer or other bank to repurchase such
Securities from the Fund;
(b) in connection with conversion, exchange
or surrender of Securities owned by the Fund as set
forth in Subsection 3.2 hereof;
(c) for the redemption or repurchase of
Shares issued by the Fund;
(d) for the payment of any expense or
liability incurred by the Fund, including but not
limited to the following payments for the account of
the Fund: custodian fees, interest, taxes, management,
accounting, transfer agent and legal fees and operating
expenses of the Fund whether or not such expenses are
to be in whole or part capitalized or treated as
deferred expenses; and
(e) for the payment of any dividends or
distributions declared by the Board of Directors with
respect to the Shares.
3.7 Appointment of Subcustodians. The Custodian may,
upon receipt of Proper Instructions, appoint another bank or
trust company, which is itself qualified under the Investment
Company Act to act as a custodian (a "Subcustodian"), as the
agent of the Custodian to carry out such of the duties of the
Custodian hereunder as the Custodian may from time to time
direct; provided, however, that the appointment of any
Subcustodian shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
3.8 Deposit of Securities in Securities Systems. The
Custodian may deposit and/or maintain Domestic Securities owned
by the Fund in a Securities System in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following
provisions:
(a) the Custodian may hold Domestic
Securities of the Fund in the Depository Trust Company
or the Federal Reserve's book entry system or, upon
receipt of Proper Instructions, in another Securities
System provided that such securities are held in an
account of the Custodian in the Securities System
("Securities System Account") which shall not include
any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
(b) the records of the Custodian with
respect to Domestic Securities of the Fund which are
maintained in a Securities System shall identify by
book-entry those Domestic Securities belonging to the
Fund;
(c) the Custodian shall pay for Domestic
Securities purchased for the account of the Fund upon
(i) receipt of advice from the Securities System that
such securities have been transferred to the Securities
System Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian
shall transfer Domestic Securities sold for the account
of the Fund upon (A) receipt of advice from the
Securities System that payment for such securities has
been transferred to the Securities System Account, and
(B) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the
Securities System of transfers of Domestic Securities
for the account of the Fund shall be maintained for the
Fund by the Custodian and be provided to the Fund at
its request. Upon request, the Custodian shall furnish
the Fund confirmation of each transfer to or from the
account of the Fund in the form of a written advice or
notice; and
(d) upon request, the Custodian shall
provide the Fund with any report obtained by the
Custodian on the Securities System's accounting system,
internal accounting control and procedures for
safeguarding domestic securities deposited in the
Securities System.
3.9 Segregated Account. The Custodian shall upon
receipt of Proper Instructions establish and maintain a
segregated account or accounts for and on behalf of the Fund,
into which account or accounts may be transferred cash and/or
Securities, including Securities maintained in an account by the
Custodian pursuant to Section 3.8 hereof, (i) in accordance with
the provisions of any agreement among the Fund, the Custodian and
a broker-dealer or futures commission merchant, relating to
compliance with the rules of registered clearing corporations and
of any national securities exchange (or the Commodity Futures
Trading Commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii)
for purposes of segregating cash or securities in connection with
options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the
Fund and (iii) for other proper corporate purposes, but only, in
the case of this clause (iii), upon receipt of, in addition to
Proper Instructions, a certified copy of a resolution of the
Board of Directors or of the Executive Committee certified by the
Secretary or an Assistant Secretary, setting forth the purpose or
purposes of such segregated account and declaring such purposes
to be proper corporate purposes.
3.10 Ownership Certificates for Tax Purposes. The
Custodian shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in connection
with receipt of income or other payments with respect to domestic
securities of the Fund held by it and in connection with
transfers of such securities.
3.11 Proxies. The Custodian shall, with respect to
the Securities held hereunder, promptly deliver to the Fund all
proxies, all proxy soliciting materials and all notices relating
to such Securities. If the Securities are registered otherwise
than in the name of the Fund or a nominee of the Fund, the
Custodian shall use its best reasonable efforts, consistent with
applicable law, to cause all proxies to be promptly executed by
the registered holder of such Securities in accordance with
Proper Instructions.
3.12 Communications Relating to Fund Portfolio
Securities. The Custodian shall transmit promptly to the Fund
all written information (including, without limitation, pendency
of calls and maturities of Securities and expirations of rights
in connection therewith and notices of exercise of put and call
options written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the Custodian from
issuers of Securities being held for the Fund. With respect to
tender or exchange offers, the Custodian shall transmit promptly
to the Fund all written information received by the Custodian
from issuers of the Securities whose tender or exchange is sought
and from the party (or its agents) making the tender or exchange
offer. If the Fund desires to take action with respect to any
tender offer, exchange offer or any other similar transaction,
the Fund shall notify the Custodian at least three Business Days
prior to the date of which the Custodian is to take such action.
3.13 Reports by Custodian. The Custodian shall supply
to the Fund the daily, weekly and monthly reports described in
the Guidelines as well as any other reports which the Custodian
and the Fund may agree upon from time to time.
Section 4. CERTAIN DUTIES OF THE CUSTODIAN WITH RESPECT
TO ASSETS OF THE FUND HELD OUTSIDE THE UNITED
STATES
4.1 Custody outside the United States. The Fund
authorizes the Custodian to hold Foreign Securities and cash in
custody accounts which have been established by the Custodian
with (i) its foreign branches, (ii) foreign banking institutions,
foreign branches of United States banks and subsidiaries of
United States banks or bank holding companies (each a "Foreign
Custodian") and (iii) Foreign Securities depositories or clearing
agencies (each a "Foreign Securities Depository"); provided,
however, that the Board of Directors or the Executive Committee
has approved in advance the use of each such Foreign Custodian
and Foreign Securities Depository and the contract between the
Custodian and each Foreign Custodian and that such approval is
set forth in Proper Instructions and a certified copy of a
resolution of the Board of Directors or of the Executive
Committee certified by the Secretary or an Assistant Secretary of
the Fund. Unless expressly provided to the contrary in this
Section 4, custody of Foreign Securities and assets held outside
the United States by the Custodian, a Foreign Custodian or
through a Foreign Securities Depository shall be governed by
Section 3 hereof.
4.2 Assets to be Held. The Custodian shall limit the
securities and other assets maintained in the custody of its
foreign branches, Foreign Custodians and Foreign Securities
Depositories to: (i) "foreign securities", as defined in
paragraph (c) (1) of Rule 17f-5 under the Investment Company Act,
and (ii) cash and cash equivalents in such amounts as the
Custodian or the Fund may determine to be reasonably necessary to
effect the Fund's Foreign Securities transactions.
4.3 Foreign Securities Depositories. Except as may
otherwise be agreed upon in writing by the Custodian and the
Fund, assets of the Fund shall be maintained in Foreign
Securities Depositories only through arrangements implemented by
the Custodian or Foreign Custodians pursuant to the terms hereof.
4.4 Segregation of Securities. The Custodian shall
identify on its books and records as belonging to the Fund, the
Foreign Securities of the Fund held by each Foreign Custodian.
4.5 Agreements with Foreign Custodians. Each
agreement with a Foreign Custodian shall provide generally that:
(a) the Fund's assets will not be subject to any right, charge,
security interest, lien or claim of any kind in favor of the
Foreign Custodian or its creditors, except a claim of payment for
their safe custody or administration; (b) beneficial ownership
for the Fund's assets will be freely transferable without the
payment of money or value other than for custody or
administration; (c) adequate records will be maintained
identifying the assets as belonging to the Fund; (d) the
independent public accountants for the Fund, will be given access
to the records of the Foreign Custodian relating to the assets of
the Fund or confirmation of the contents of those records; (e)
the disposition of assets of the Fund held by the Foreign
Custodian will be subject only to the instructions of the
Custodian or its agents; (f) the Foreign Custodian shall
indemnify and hold harmless the Custodian and the Fund from and
against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the Foreign Custodian's
performance of its obligations under such agreement; (g) to the
extent practicable, the Fund's assets will be adequately insured
in the event of loss; and (h) the Custodian will receive periodic
reports with respect to the safekeeping of the Fund's assets,
including notification of any transfer to or from the Fund's
account.
4.6 Access of Independent Accountants of the Fund.
Upon request of the Fund, the Custodian will use its best
reasonable efforts to arrange for the independent accountants of
the Fund to be afforded access to the books and records of any
Foreign Custodian insofar as such books and records relate to the
custody by any such Foreign Custodian of assets of the Fund.
4.7 Transactions in Foreign Custody Accounts. Upon
receipt of Proper Instructions, the Custodian shall instruct the
appropriate Foreign Custodian to transfer, exchange or deliver
Foreign Securities owned by the Fund, but, except to the extent
explicitly provided herein, only in any of the cases specified in
Subsection 3.2. Upon receipt of Proper Instructions, the
Custodian shall pay out or instruct the appropriate Foreign
Custodian to pay out monies of the Fund in any of the cases
specified in Subsection 3.6. Notwithstanding anything herein to
the contrary, settlement and payment for Foreign Securities
received for the account of the Fund and delivery of Foreign
Securities maintained for the account of the Fund may be effected
in accordance with the customary or established securities
trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the
purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of
receiving later payment for such securities from such purchaser
or dealer. Foreign Securities maintained in the custody of a
Foreign Custodian may be maintained in the name of such entity or
its nominee name to the same extent as set forth in Section 3.3
of this Agreement and the Fund agrees to hold any Foreign
Custodian and its nominee harmless from any liability as a holder
of record of such securities.
4.8 Liability of Foreign Custodian. Each agreement
between the Custodian and a Foreign Custodian shall require the
Foreign Custodian to exercise reasonable care in the performance
of its duties and to indemnify and hold harmless the Custodian
and the Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the
Foreign Custodian's performance of such obligations. At the
election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claims against a
Foreign Custodian as a consequence of any such loss, damage,
cost, expense, liability or claim if and to the extent that the
Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
4.9 Monitoring Responsibilities.
(a) The Custodian will promptly inform the
Fund in the event that the Custodian learns of a
material adverse change in the financial condition of a
Foreign Custodian or is notified by (i) a foreign
banking institution employed as a Foreign Custodian
that there appears to be a substantial likelihood that
its shareholders' equity will decline below $200
million or that its shareholders' equity has declined
below $200 million (in each case computed in accordance
with generally accepted United States accounting
principles) and denominated in U.S. dollars, or (ii) a
subsidiary of a United States bank or bank holding
company acting as a Foreign Custodian that there
appears to be a substantial likelihood that its
shareholders' equity will decline below $100 million or
that its shareholders' equity has declined below $100
million (in each case computed in accordance with
generally accepted United States accounting principles)
and denominated in U.S. dollars.
(b) The custodian will furnish such
information as may be reasonably necessary to assist
the Fund's Board of Directors in its annual review and
approval of the continuance of all contracts or
arrangements with Foreign Subcustodians.
Section 5. PROPER INSTRUCTIONS
As used in this Agreement, the term "Proper
Instructions" means instructions of the Fund received by the
Custodian via telephone or in Writing which the Custodian
believes in good faith to have been given by Authorized Persons
(as defined below) or which are transmitted with proper testing
or authentication pursuant to terms and conditions which the
Custodian may specify. Any Proper Instructions delivered to the
Custodian by telephone shall promptly thereafter be confirmed in
Writing by an Authorized Person, but the Fund will hold the
Custodian harmless for its failure to send such confirmation in
writing, the failure of such confirmation to conform to the
telephone instructions received or the Custodian's failure to
produce such confirmation at any subsequent time. Unless
otherwise expressly provided, all Proper Instructions shall
continue in full force and effect until cancelled or superseded.
If the Custodian requires test arrangements, authentication
methods or other security devices to be used with respect to
Proper Instructions, any Proper Instructions given by the Fund
thereafter shall be given and processed in accordance with such
terms and conditions for the use of such arrangements, methods or
devices as the Custodian may put into effect and modify from time
to time. The Fund shall safeguard any testkeys, identification
codes or other security devices which the Custodian shall make
available to it. The Custodian may electronically record any
Proper Instructions given by telephone, and any other telephone
discussions, with respect to its activities hereunder. As used
in this Agreement, the term "Authorized Persons" means such
officers or such agents of the Fund as have been designated by a
resolution of the Board of trustees or of the Executive
Committee, a certified copy of which has been provided to the
Custodian, to act on behalf of the Fund under this Agreement.
Each of such persons shall continue to be an Authorized Person
until such time as the Custodian receives Proper Instructions
that any such officer or agent is no longer an Authorized Person.
Section 6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express
authority from the Fund:
(a) make payments to itself or others for
minor expenses of handling Securities or other similar
items relating to its duties under this Agreement,
provided that all such payments shall be accounted for
to the Fund;
(b) endorse for collection, in the name of
the Fund, checks, drafts and other negotiable
instruments; and
(c) in general, attend to all non-
discretionary details in connection with the sale,
exchange, substitution, purchase, transfer and other
dealings with the Securities and property of the Fund
except as otherwise provided in Proper Instructions.
Section 7. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any
instructions (conveyed by telephone or in Writing), notice,
request, consent, certificate or other instrument or paper
believed by it to be genuine and to have been properly given or
executed by or on behalf of the Fund. The Custodian may receive
and accept a certified copy of a resolution of the Board of
Directors or Executive Committee as conclusive evidence (a) of
the authority of any person to act in accordance with such
resolution or (b) of any determination or of any action by the
Board of Directors or Executive Committee as described in such
resolution, and such resolution may be considered as in full
force and effect until receipt by the Custodian of written notice
by an Authorized Person to the contrary.
Section 8. DUTY OF CUSTODIAN TO SUPPLY INFORMATION
The Custodian shall cooperate with and supply necessary
information in its possession (to the extent permissible under
applicable law) to the entity or entities appointed by the Board
of Directors to keep the books of account of the Fund and/or
compute the net asset value per Share of the outstanding Shares
of the Fund.
Section 9. RECORDS
The Custodian shall create and maintain all records
relating to its activities under this Agreement which are
required with respect to such activities under Section 31 of the
Investment Company Act and Rules 31a-1 and 31a-2 thereunder. All
such records shall be the property of the Fund and shall at all
times during the regular business hours of the Custodian be open
for inspection by duly authorized officers, employees or agents
of the Fund and employees and agents of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request,
supply the Fund with a tabulation of Securities owned by the Fund
and held by the Custodian and shall, when requested to do so by
the Fund and for such compensation as shall be agreed upon
between the Fund and the Custodian, include certificate numbers
in such tabulations.
Section 10. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable
compensation for its services and expenses as Custodian, as
agreed upon from time to time between the Fund and the Custodian.
Section 11. RESPONSIBILITY OF CUSTODIAN
The Custodian shall be responsible for the performance
of only such duties as are set forth herein or contained in
Proper Instructions and shall use reasonable care in carrying out
such duties. The Custodian shall be liable to the Fund for any
loss which shall occur as the result of the failure of a Foreign
Custodian or a Foreign Securities Depository engaged by such
Foreign Custodian or the Custodian to exercise reasonable care
with respect to the safekeeping of securities and other assets of
the Fund to the same extent that the Custodian would be liable to
the Fund if the Custodian itself were holding such securities and
other assets. In the event of any loss to the Fund by reason of
the failure of the Custodian, a Foreign Custodian or a Foreign
Securities Depository engaged by such Foreign Custodian or the
Custodian to utilize reasonable care, the Custodian shall be
liable to the Fund to the extent of the Fund's damages, to be
determined based on the market value of the property which is the
subject of the loss at the date of discovery of such loss and
without reference to any special conditions or circumstances.
The Custodian shall be held to the exercise of reasonable care in
carrying out this Agreement. The Fund agrees to indemnify and
hold harmless the Custodian and its nominees from all taxes,
charges, expenses, assessments, claims and liabilities (including
legal fees and expenses) incurred by any of them in connection
with the performance of this Agreement, except such as may arise
from any negligent action, negligent failure to act or willful
misconduct on the part of the indemnified entity or any Foreign
Custodian or Foreign Securities Depository. The Custodian shall
be entitled to rely, and may act, on advice of counsel (who may
be counsel for the Fund) on all matters and shall be without
liability for any action reasonably taken or omitted pursuant to
such advice. The Custodian need not maintain any insurance for
the benefit of the Fund.
All collections of funds or other property paid or
distributed in respect of Securities held by the Custodian,
agent, Subcustodian or Foreign Custodian hereunder shall be made
at the risk of the Fund. The Custodian shall have no liability
for any loss occasioned by delay in the actual receipt of notice
by the Custodian, agent, Subcustodian or by a Foreign Custodian
of any payment, redemption or other transaction regarding
securities in respect of which the Custodian has agreed to take
action as provided in Section 3 hereof. The Custodian shall not
be liable for any action taken in good faith upon Proper
Instructions or upon any certified copy of any resolution of the
Board of Directors and may rely on the genuineness of any such
documents which it may in good faith believe to be validly
executed. The Custodian shall not be liable for any loss
resulting from, or caused by, the direction of the Fund to
maintain custody of any Securities or cash in a foreign country
including, but not limited to, losses resulting from
nationalization, expropriation, currency restrictions, civil
disturbance, acts of war or terrorism, insurrection, revolution,
nuclear fusion, fission or radiation or other similar occurrences
or events beyond the control of the Custodian. Finally, the
Custodian shall not be liable for any taxes, including interest
and penalties with respect thereto, that may be levied or
assessed upon or in respect of any assets of the Fund held by the
Custodian.
Section 12. LIMITED LIABILITY OF THE FUND
The Custodian acknowledges that it has received notice
of and accepts the limitations of the Fund's liability as set
forth in its Agreement and Declaration of Fund. The Custodian
agrees that the Fund's obligation hereunder shall be limited to
the assets of the Fund, and that the Custodian shall not seek
satisfaction of any such obligation from the shareholders of the
Fund nor from any Director, officer, employee, or agent of the
Fund.
Section 13. EFFECTIVE PERIOD; TERMINATION
This Agreement shall become effective as of the date of
its execution and shall continue in full force and effect until
terminated as hereinafter provided. This Agreement may be
terminated by the Fund or the Custodian by 60 days notice in
Writing to the other provided that any termination by the Fund
shall be authorized by a resolution of the Board of Directors, a
certified copy of which shall accompany such notice of
termination, and provided further, that such resolution shall
specify the names of the persons to whom the Custodian shall
deliver the assets of the Fund held by it. If notice of
termination is given by the Custodian, the Fund shall, within 60
days following the giving of such notice, deliver to the
Custodian a certified copy of a resolution of the Board of
Directors specifying the names of the persons to whom the
Custodian shall deliver assets of the Fund held by it. In either
case the Custodian will deliver such assets to the persons so
specified, after deducting therefrom any amounts which the
Custodian determines to be owed to it hereunder (including all
costs and expenses of delivery or transfer of Fund assets to the
persons so specified). If within 60 days following the giving of
a notice of termination by the Custodian, the Custodian does not
receive from the Fund a certified copy of a resolution of the
Board of Directors specifying the names of the persons to whom
the Custodian shall deliver the assets of the Fund held by it,
the Custodian, at its election, may deliver such assets to a bank
or trust company doing business in the State of California to be
held and disposed of pursuant to the provisions of this Agreement
or may continue to hold such assets until a certified copy of one
or more resolutions as aforesaid is delivered to the Custodian.
The obligations of the parties hereto regarding the use of
reasonable care, indemnities and payment of fees and expenses
shall survive the termination of this Agreement.
Section 14. MISCELLANEOUS
14.1 Relationship. Nothing contained in this Agreement
shall (i) create any fiduciary, joint venture or partnership
relationship between the Custodian and the Fund or (ii) be
construed as or constitute a prohibition against the provision by
the Custodian or any of its affiliates to the Fund of investment
banking, securities dealing or brokerages services or any other
banking or financial services.
14.2 Further Assurances. Each party hereto shall
furnish to the other party hereto such instruments and other
documents as such other party may reasonably request for the
purpose of carrying out or evidencing the transactions
contemplated by this Agreement.
14.3 Attorneys' Fees. If any lawsuit or other action
or proceeding relating to this Agreement is brought by a party
hereto against the other party hereto, the prevailing party shall
be entitled to recover reasonable attorneys' fees, costs and
disbursements (including allocated costs and disbursements of in-
house counsel), in addition to any other relief to which the
prevailing party may be entitled.
14.4 Notices. Except as otherwise specified herein,
each notice or other communication hereunder shall be in Writing
and shall be delivered to the intended recipient at the following
address (or at such other address as the intended recipient shall
have specified in a written notice given to the other parties
hereto):
if to the Fund :
Franklin Gold Fund
c/o Franklin Resources, Inc.
777 Mariners Island Blvd.
San Mateo, CA 94404
Attention: Fund Manager
if to the Custodian:
Bank of America NT&SA
International Securities Services
25 Cannon Street
London EC4P HN
England
Attention: Manager
14.5 Headings. The underlined headings contained
herein are for convenience of reference only, shall not be deemed
to be a part of this Agreement and shall not be referred to in
connection with the interpretation hereof.
14.6 Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original and both
of which, when taken together, shall constitute one agreement.
14.7 Governing Law. This Agreement shall be
construed in accordance with, and governed in all respects by,
the laws of the State of California (without giving effect to
principles of conflict of laws).
14.8 Force Majeure. Subject to the provisions of
Section 11 hereof regarding the Custodian's general standard of
care, no failure, delay or default in performance of any
obligation hereunder shall constitute an event of default or a
breach of this agreement, or give rise to any liability
whatsoever on the part of one party hereto to the other, to the
extent that such failure to perform, delay or default arises out
of a cause beyond the control and without negligence of the party
otherwise chargeable with failure, delay or default; including,
but not limited to: action or inaction of governmental, civil or
military authority; fire; strike; lockout or other labor dispute;
flood; war; riot; theft; earthquake; natural disaster; breakdown
of public or common carrier communications facilities; computer
malfunction; or act, negligence or default of the other party.
This paragraph shall in no way limit the right of either party to
this Agreement to make any claim against third parties for any
damages suffered due to such causes.
14.9 Successors and Assigns. This Agreement shall be
binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and assigns, if any.
14.10 Waiver. No failure on the part of any person to
exercise any power, right, privilege or remedy hereunder, and no
delay on the part of any person in the exercise of any power,
right, privilege or remedy hereunder, shall operate as a waiver
thereof; and no single or partial exercise of any such power,
right, privilege or remedy shall preclude any other or further
exercise thereof or of any other power, right, privilege or
remedy.
14.11 Amendments. This Agreement may not be amended,
modified, altered or supplemented other than by means of an
agreement or instrument executed on behalf of each of the parties
hereto.
14.12 Severability. In the event that any provision
of this Agreement, or the application of any such provision to
any person or set of circumstances, shall be determined to be
invalid, unlawful, void or unenforceable to any extent, the
remainder of this Agreement, and the application of such
provision to persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and
shall continue to be valid and enforceable to the fullest extent
permitted by law.
14.13 Parties in Interest. None of the provisions of
this Agreement is intended to provide any rights or remedies to
any person other than the Fund and the Custodian and their
respective successors and assigns, if any.
14.14 Entire Agreement. This Agreement sets forth the
entire understanding of the parties hereto and supersedes all
prior agreements and understandings between the parties hereto
relating to the subject matter hereof.
14.15 Variations of Pronouns. Whenever required by
the context hereof, the singular number shall include the
plural, and vice versa; the masculine gender shall include the
feminine and neuter genders; and the neuter gender shall
include the masculine and feminine genders.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first
above written.
"Custodian": BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ John B. Housen
Its
"Fund" Franklin Gold Fund
By /s/ Charles B. Johnson
Its President
PRECIOUS METALS STORAGE AND CUSTODIAN AGREEMENT
This Agreement dated as of the 1st day of January, 1988,
between Wilmington Trust Company, a Delaware corporation, having
its principal office at Rodney Square North, Wilmington, Delaware
19890 ("Custodian"), and Franklin Gold Fund, a California
corporation, having its principal office at 777 Mariners Island
Blvd., San Mateo, CA 94404 (the "Fund"), with respect to the
Custodian's accepting, holding as custodian, storing,
transferring and delivering precious metals owned by the Fund.
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 precious metals 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 the Federal Deposit Insurance Corporation and the
Delaware State Bank Commissioner and is ready and willing to
serve pursuant to and subject to the terms of this Agreement;
WHEREAS, the Fund is authorized to invest in precious metals
and the Fund therefore wishes to enter into this Agreement in
order that it may store the said precious metals;
NOW, THEREFORE, in consideration of the mutual agreements
herein made, the Fund and Custodian agree as follows:
1. Definitions. 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 Board
of Directors, the President, a Vice-President, the Secretary
and Treasurer of the Fund, 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.
2. Names, Titles and Signatures of Authorized Signers.
An officer of the Fund 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.
3. Delivery to Bank. Custodian will receive shipments said to
contain precious metals for the Fund's account and will
store such shipments in safekeeping for the Fund in the
State of Delaware.
4. Accounts. All such shipments said to contain precious
metals delivered to the Custodian hereof will be held and
stored by the Custodian and shall be credited (in accordance
with instructions of the Fund), to the account for the Fund
and maintained in reasonably detailed books of account.
5. Holding of Precious Metals. Custodian shall hold all
precious metals 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 precious
metals 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 or authority to assign,
hypothecate, pledge or otherwise dispose of any such
precious metals, except pursuant to the proper instructions
of the Fund and only for the account of the Fund as set
forth in this Agreement.
6. Instructions-Purchase. Upon receipt of proper instructions
from the Fund, Custodian is hereby authorized to pay for
bullion purchased for the account of the Fund only upon
receipt of bullion by the Custodian for the account of the
Fund.
7. Instructions-Sales. Upon receipt of proper instructions
from the Fund, Custodian is authorized to make delivery of
bullion which has been sold for the account of the Fund, but
only against receipt of cash proceeds by the Custodian for
the account of the Fund.
8. 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 provided activity occurred within the Fund's
account on the preceding business day. At the end of every
month Custodian shall furnish the Fund with an account
statement which summarizes account activity during the month
and provides details of account inventory as of the close of
the last business day of the month, which shall include bar
size, quantity, brand name, serial number, fineness, gross
weight in troy ounces, fine weight in troy ounces and a
total of both gross troy weight and fine troy weight
contained in the Fund's gold bullion inventory. Custodian
shall furnish such other reports as may be mutually agreed
upon from time-to-time.
9. Disclaimer. Custodian will not ascertain nor be responsible
nor liable for the authenticity or correctness of the
markings on, or the weight, contents or fineness of precious
metals held in safekeeping for the Fund.
10. Insurance. Custodian agrees to maintain adequate insurance
coverage on the precious metals stored to the extent it is
reasonably warranted. This insurance consists of a Bankers
Blanket Bond Form 24 followed by all risk property policies
which shall provide that the loss thereunder shall be
payable to the Fund. The Custodian will provide
certificates of insurance to the Fund evidencing such
insurance two business days after receipt of a written
request of the Fund to provide such certificates.
11. Force Majeur. Custodian shall not be liable for any failure
to transfer or redeliver or physically deliver precious
metals as provided in instructions to it pursuant to this
Agreement during any period in which the Custodian is
prevented from doing so as the direct and approximate result
of war (whether an actual declaration thereof is made or
not), sabotage, insurrection, riot, act of civil
disobedience, act of public enemy, act of any government or
any agency or subdivision thereof, judicial action, labor
dispute, explosion, storm, technical failure, fire or flood,
provided, however, that nothing contained herein shall
impair the obligation which the Custodian shall have to
substitute insurance proceeds therefor unless such proceeds
are not payable by the appropriate insurance carriers by
reason of an exclusion contained in applicable policies.
12. Fees. Exhibit A hereto sets forth the Custodian's current
fees and charges for its services hereunder. Fees may be
changed upon not less than ninety (90) days' notice to the
Fund.
13. Liability.
(a) The physical safekeeping and the settlement of
purchase and sale transactions are the responsibility of
Custodian, and the Fund shall have the right to bring
directly against Custodian any claim for failure of
Custodian to perform its obligations hereunder.
(b) Custodian shall not be liable for any action taken
in good faith upon any proper instructions herein describe
or certified copy of any resolution of the Board of
Directors of the Fund, and may rely on the genuineness of
any such document which it may in good faith believe to have
been validly executed.
(c) So long as and to the extent that it is in the
exercise of reasonable care, the Custodian shall not be
responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held
harmless in acting upon any notice, request, consent,
certificate or other instrument from the Fund reasonably
believed by it to be genuine and to be signed by the proper
party or parties.
The Custodian shall be entitled to rely on and may act
upon advice of counsel (who may be in-house counsel or
counsel for the Fund) on all matters, and shall be without
liability for any action reasonably taken or omitted
pursuant to such advice.
The Custodian shall be held to the exercise or use of
reasonable care in carrying out the provisions of this
Agreement but shall be liable only for its failure to
exercise or use reasonable care in carrying out the
provisions of this Agreement, its own negligent or bad faith
acts or failures to act. The Fund shall indemnify the
Custodian and hold it harmless from and against all claims,
liabilities, and expenses (including attorneys' fees) which
the Custodian may suffer or incur on account of being
Custodian hereunder except such claims, liabilities and
expenses arising from the Custodian's own negligence or bad
faith.
If the Fund requires the Custodian to take any action,
which action involves the payment of money or which action
may, in the opinion of the Custodian, result in the
Custodian being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to
requiring the Custodian to take such action, shall provide
indemnity to the Custodian in an amount and form
satisfactory to it.
14. Records. The Custodian hereby acknowledges that all of the
records except the records retained on magnetic tape it
shall prepare and maintain pursuant to this Agreement, shall
be the property of the Fund and to the extent applicable, of
the principal underwriter of the shares of the Funds, 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.
(d) Provide the Fund and its auditors with copies of
the Third Party audit report by the Custodian's auditors
regarding internal control matters.
15. 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 precious metals held under this Agreement or any
part thereof must be a bank or banks, as that term is
defined in Section 2(a)(5) of the 1940 Act, having an
aggregate, surplus and individual profits of not less than
$2,000,000 (or such greater sum as may then be required by
applicable laws).
(c) 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.
16. 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
ninety (90) days written notice thereof delivered by the one
to the other, and upon the expiration of said ninety (90)
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 precious metals 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 all fees due Custodian are paid by Fund 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
precious metals 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.
17. Notices.
(a) Account statements and bills sent from Bank to Fund
shall be sent as follows:
Franklin Resources, Inc.
Fund Accounting
c/o Diomedes Loo-Tam, Controller
777 Mariners Island Blvd.
San Mateo, CA 94404
(b) All notices sent by Fund to Bank shall be sent as
follows:
Wilmington Trust Company
Precious Metals
c/o Michael B. Clark, Vice President
Rodney Square North
Wilmington, DE 19890
18. Fund agrees that jurisdiction and venue for any action
arising under this Agreement shall be exclusively with the State
and Federal Courts located in Delaware.
This Agreement shall be governed by the laws of the State of
Delaware.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date set forth at the beginning of this
Agreement, by the Custodian and the Fund.
The Custodian: The Fund:
WILMINGTON TRUST COMPANY FRANKLIN GOLD FUND
By: /s/ illegible By: /s/ Charles B. Johnson
Charles B. Johnson
Title: Vice President Title: President
Exhibit A
WILMINGTON TRUST COMPANY
CORPORATE PRECIOUS METALS STORAGE FEE SCHEDULE (OFF-EXCHANGE)
GOLD/PLATINUM/PALLADIUM SILVER
0 to 25,000 oz. - 15 basis up to 500,000 oz. - 25 basis points
points over
over 25,000 oz. - 12 1/2 basis 500,001 - 1 million oz.- 20 basis
points points
above 1 million oz. - fee negotiable
Note: Basis Points quoted above are an annual rate. However,
storage charges are billed monthly. For billing purposes,
storage is calculated each month by multiplying the average
number of ounces of each metal type in the account during
the month by the following applicable price(s) on the last
business day of the month:
Gold - Comex Settlement Price
Silver - Comex Settlement Price
Platinum - New York Mercantile Settlement Price
Palladium - New York Mercantile Settlement Price
The result is multiplied by the applicable rate(s) listed
above and divided by 12 to yield the monthly fee.
Note: A minimum charge of $25.00 per account will be charged
each month precious metal in any amount is held on account.
CORPORATE HANDLING CHARGES FOR OUTGOING SHIPMENTS VIA COURIER
$.01 per ounce for all metal other than 1,000 ounce silver bars,
"junk" bags, 100 and 400 ounce gold bars and refiner packages of
10-100 ounce silver bars; for these bars, bags and packages, a
$3.00 per bar/bag/package out-charge will apply. A $10.00
minimum charge per outshipment will apply in every instance.
Exhibit A
DROP SHIPMENT OPTIONS VIA U.S. POSTAL SERVICE
I. Commercial (Direct) Shipment Services:
Broker-dealer instructs Wilmington Trust Company to remove a
specific quantity of metal from its safekeeping account and ship
via U.S.P.S directly to his customer.
Charge: $10.O0 per package handling fee, plus all applicable
postage, registration, and insurance charges.
II. Retail (Indirect) Shipment Services:
Broker-dealer instructs Wilmington Trust Company to transfer
specific metals from its safekeeping account to the custody of
Wilmington Trust Company on behalf of a specifically named
customer. Wilmington Trust forwards to the broker-dealer's
customer the necessary document to indicate to Wilmington Trust
whether he elects long-term individual storage or immediate
shipment of his metal to an address he specifies.
Charge: $25.00 per package handling fee, plus all applicable
postage, registration, and insurance charges. No storage
fees will be charged if shipment is requested by customer
within 30 days of the date receipt is mailed. If shipment
is not requested within the prescribed 30 days, Bank's
standard individual storage rates will apply from the date
Wilmington Trust accepted custody of customer's metal.
DROP SHIPMENT BILLING OPTIONS
The fees listed above may be billed to and collected from the
customer directly by Wilmington Trust on a C.O.D. basis, or they
can be accumulated and billed to the broker-dealer on his monthly
corporate storage bill. They can also be split such that the
customer pays the postage, registration, and insurance charges
and the broker-dealer is billed by Wilmington Trust for the
handling fees.
Note: The retail drop shipment handling fee $25.00 per
package - also applies to personal pick-ups made by broker-
dealer's customers at Wilmington Trust Company.
Revised: 1/18/88
CONSENT OF INDEPENDENT AUDITORS
To the Board of Directors of
Franklin Gold Fund:
We consent to the incorporation by reference in Post-
Effective Amendment No. 43 to the Registration Statement of
Franklin Gold Fund on Form N-1A (File No. 2-30761) of our
report dated August 26, 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 July 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
SCHEDULE A
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
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
FRANKLIN GOLD FUND
Preamble to Distribution Plan
The following Distribution Plan (the "Plan") has been
adopted pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the "Act") by Franklin Gold Fund (the "Fund"), which
Plan shall take effect on the 1st day of May, 1994 (the
"Effective Date of the Plan"). The Plan has been approved by a
majority of the Board of Directors of the Fund (the "Board of
Directors"), including a majority of the directors who are not
interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan (the "non-
interested directors"), cast in person at a meeting called for
the purpose of voting on such Plan.
In reviewing the Plan, the Board of Directors considered the
schedule and nature of payments and terms of the Management
Agreement between the Fund and Franklin Advisers, Inc.
("Advisers") and the terms of the Underwriting Agreement between
the Fund and Franklin/Templeton Distributors, Inc.
("Distributors"). The Board of Directors concluded that the
compensation of Advisers, under the Management Agreement, and of
Distributors, under the Underwriting Agreement, was fair and not
excessive; however, the Board of Directors also recognized that
uncertainty may exist from time to time with respect to whether
payments to be made by the Fund to Advisers, Distributors, or
others or by Advisers or Distributors to others may be deemed to
constitute distribution expenses of the Fund. Accordingly, the
Board of Directors determined that the Plan should provide for
such payments and that adoption of the Plan would be prudent and
in the best interest of the Fund and its shareholders. Such
approval included a determination that in the exercise of their
reasonable business judgment and in light of their fiduciary
duties, there is a reasonable likelihood that the Plan will
benefit the Fund and its shareholders.
DISTRIBUTION PLAN
1. The Fund shall reimburse Distributors or others for all
expenses incurred by Distributors or others in the promotion and
distribution of the shares of the Fund, including but not limited
to, the printing of prospectuses and reports used for sales
purposes, expenses of preparing and distributing sales literature
and related expenses, advertisements, and other distribution-
related expenses, including a prorated portion of Distributors'
overhead expenses attributable to the distribution of Fund
shares, as well as any distribution or service fees paid to
securities dealers or their firms or others who have executed a
servicing agreement with the Fund, Distributors or its
affiliates, which form of agreement has been approved from time
to time by the directors, including the non-interested directors.
2. The maximum amount which may be reimbursed by the Fund to
Distributors or others pursuant to Paragraph 1 herein shall be
0.25% per annum of the average daily net assets of the Fund. Said
reimbursement shall be made quarterly by the Fund to Distributors
or others.
3. In addition to the payments which the Fund is authorized to
make pursuant to paragraphs 1 and 2 hereof, to the extent that
the Fund, Advisers, Distributors or other parties on behalf of
the Fund, Advisers or Distributors make payments that are deemed
to be payments by the Fund for the financing of any activity
primarily intended to result in the sale of shares issued by the
Fund within the context of Rule 12b-1 under the Act, then such
payments shall be deemed to have been made pursuant to the Plan.
In no event shall the aggregate asset-based sales charges
which include payments specified in paragraphs 1 and 2, plus any
other payments deemed to be made pursuant to the Plan under this
paragraph, exceed the amount permitted to be paid pursuant to the
Rules of Fair Practice of the National Association of Securities
Dealers, Inc., Article III, Section 26(d).
4. Distributors shall furnish to the Board of Directors, for
their review, on a quarterly basis, a written report of the
monies reimbursed to it and to others under the Plan, and shall
furnish the Board of Directors with such other information as the
Board of Directors may reasonably request in connection with the
payments made under the Plan in order to enable the Board of
Directors to make an informed determination of whether the Plan
should be continued.
5. The Plan shall continue in effect for a period of more than
one year only so long as such continuance is specifically
approved at least annually by a vote of the Board of Directors,
including the non-interested directors, cast in person at a
meeting called for the purpose of voting on the Plan.
6. The Plan, and any agreements entered into pursuant to this
Plan, may be terminated at any time, without penalty, by vote of
a majority of the outstanding voting securities of the Fund or by
vote of a majority of the non-interested directors, on not more
than sixty (60) days' written notice, or by Distributors on not
more than sixty (60) days' written notice, and shall terminate
automatically in the event of any act that constitutes an
assignment of the Management Agreement between the Fund and
Advisers.
7. The Plan, and any agreements entered into pursuant to this
Plan, may not be amended to increase materially the amount to be
spent for distribution pursuant to Paragraph 2 hereof without
approval by a majority of the Fund's outstanding voting
securities.
8. All material amendments to the Plan, or any agreements
entered into pursuant to this Plan, shall be approved by a vote
of the non-interested directors cast in person at a meeting
called for the purpose of voting on any such amendment.
9. So long as the Plan is in effect, the selection and
nomination of the Fund's non-interested directors shall be
committed to the discretion of such non-interested directors.
This Plan and the terms and provisions thereof are hereby
accepted and agreed to by the Fund and Distributors as evidenced
by their execution hereof.
FRANKLIN GOLD FUND
By: /s/ Deborah R. Gatzek
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By: /s/ Harmon E. Burns
CLASS II DISTRIBUTION PLAN
I. Investment Company: FRANKLIN GOLD FUND
II. Fund and Class: FRANKLIN GOLD FUND - CLASS II
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: 0.75%
B. Service Fee: 0.25%
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: March 30 , 1995
Investment Company
By: /s/ Deborah R. Gatzek
Franklin/Templeton Distributors, Inc.
By: /s/ Gregory E. Johnson
POWER OF ATTORNEY
The undersigned officers and directors of FRANKLIN GOLD FUND
(the "Registrant") hereby MARK H. PLAFKER, 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/ R. Martin Wiskemann /s/ Charles B. Johnson
R. Martin Wiskemann, Principal Charles B. Johnson,
Executive Officer and Director Director
/s/ Frank H. Abbott, III /s/ Harris J. Ashton
Frank H. Abbott, III, Harris J. Ashton,
Director Director
/s/ Harmon E. Burns /s/ S. Joseph Fortunato
Harmon E. Burns, S. Joseph Fortunato,
Director Director
/s/ David W. Garbellano /s/ Rupert H. Johnson, Jr.
David W. Garbellano, Rupert H. Johnson, Jr.,
Director Director
/s/ Frank W. T. LaHaye /s/ Marin L. Flanagan
Frank W. T. LaHaye, Martin L. Flanagan,
Director Principal Financial Officer
/s/ Diomedes Loo-Tam
Diomedes Loo-Tam,
Principal Accounting Officer
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, certify that I am Secretary of
Franklin Gold Fund (the "Fund").
As Secretary of the Fund, I further certify that the following
resolution was adopted by a majority of the Directors of the Fund
present at a meeting held at 777 Mariners Island Boulevard, San
Mateo, California, on 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 Mark H. Plafker
as attorneys-in-fact for the purpose of filing
documents with the Securities and Exchange Commission,
be executed by each Director and designated officer.
I declare under penalty of perjury that the matters set forth in
this certificate are true and correct of my own knowledge.
/s/ Deborah R. Gatzek
Dated: February 16, 1995 Deborah R. Gatzek
Secretary
