MULTIPLE CLASS PLAN
ON BEHALF OF
FRANKLIN GROWTH AND INCOME FUND
This Multiple Class Plan (the "Plan") has been adopted unanimously by the
Board of Trustees of FRANKLIN GROWTH AND INCOME FUND (the "Fund"). The Board has
determined that the Plan, including the expense allocation methods among the
classes, is in the best interests of each class of the Fund and the Fund as a
whole. The Plan sets forth the provisions relating to the establishment of
multiple classes of shares of the Fund.
1. The Fund shall offer four classes of shares, to be known as Class A
Shares, Class B Shares, Class C Shares and Advisor Class Shares.
2. Class A Shares shall carry a front-end sales charge ranging from 0% -
5.75 %, and Class C Shares shall carry a front-end sales charge of 1.00%. Class
B Shares and the Advisor Class Shares shall not be subject to any front-end
sales charges.
3. Class A Shares shall not be subject to a contingent deferred sales
charge ("CDSC"), except in the following limited circumstances. On investments
of $1 million or more, a contingent deferred sales charge of 1.00% of the lesser
of the then-current net asset value or the original net asset value at the time
of purchase applies to redemptions of those investments within the contingency
period of 12 months from the calendar month following their purchase. The CDSC
is waived in certain circumstances, as described in the Fund's prospectus.
Class B Shares shall be subject to a CDSC with the following CDSC
schedule: (a) Class B Shares redeemed within 2 years of their purchase shall be
assessed a CDSC of 4% on the lesser of the then-current net asset value or the
original net asset value at the time of purchase; (b) Class B Shares redeemed
within the third and fourth years of their purchase shall be assessed a CDSC of
3% on the lesser of the then-current net asset value or the original net asset
value at the time of purchase; (c) Class B Shares redeemed within 5 years of
their purchase shall be assessed a CDSC of 2% on the lesser of the then-current
net asset value or the original net asset value at the time of purchase; and (d)
Class B Shares redeemed within 6 years of their purchase shall be assessed a
CDSC of 1% on the lesser of the then-current net asset value or the original net
asset value at the time of purchase. The CDSC is waived in certain circumstances
described in the Fund's prospectus.
Class C Shares redeemed within 18 months of their purchase shall be
assessed a CDSC of 1.00% on the lesser of the then-current net asset value or
the original net asset value at the time of purchase. The CDSC is waived in
certain circumstances as described in the Fund's prospectus.
Advisor Class Shares shall not be subject to any CDSC.
4. The distribution plan adopted by the Fund pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended, (the "Rule 12b-1 Plan")
associated with the Class A Shares may be used to compensate Franklin/Templeton
Distributors, Inc. (the "Distributor") or others for expenses incurred in the
promotion and distribution of the Class A Shares. Such expenses include, but are
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 the Distributor's overhead expenses attributable to the
distribution of the Class A Shares, as well as any distribution or shareholder
servicing fees paid to securities firms or others who have provided personal
assistance to shareholders in servicing their accounts and have executed a
servicing agreement with the Fund for the Class A Shares, the Distributor or its
affiliates.
The Rule 12b-1 Plan associated with the Class B Shares has two components.
The first component is an asset-based sales charge to be retained by Distributor
to compensate Distributor for amounts advanced to securities dealers or their
firms or others with respect to the sale of Class B Shares. In addition, such
payments may be retained by the Distributor to be used in the promotion and
distribution of Class B Shares in a manner similar to that described above for
Class A Shares. The second component is a shareholder servicing fee to be paid
to securities firms or others who have provided personal assistance to
shareholders in servicing their accounts and have executed a servicing agreement
with the Fund for the Class B Shares, the Distributor or its affiliates.
The Rule 12b-1 Plan associated with the Class C Shares has two components.
The first component is a shareholder servicing fee to be paid to securities
firms or others who have provided personal assistance to shareholders in
servicing their accounts and have executed a servicing agreement with the Fund
for the Class C Shares, the Distributor or its affiliates. The second component
is an asset-based sales charge to be retained by the Distributor during the
first year after the sale of shares and, in subsequent years, to be paid to
dealers or retained by the Distributor to be used in the promotion and
distribution of Class C Shares, in a manner similar to that described above for
Class A Shares.
No Rule 12b-1 Plan has been adopted on behalf of the Advisor Class Shares
and, therefore, the Advisor Class Shares shall not be subject to deductions
relating to Rule 12b-1 fees.
The Rule 12b-1 Plans for the Class A, Class B and Class C Shares shall
operate in accordance with Rule 2830(d) of the Conduct Rules of the National
Association of Securities Dealers, Inc.
5. The only difference in expenses as between Class A, Class B, Class C,
and Advisor Class Shares shall relate to differences in Rule 12b-1 plan
expenses, as described in the applicable Rule 12b-1 Plans; however, to the
extent that the Rule 12b-1 Plan expenses of one Class are the same as the Rule
12b-1 Plan expenses of another Class, such classes shall be subject to the same
expenses.
6. There shall be no conversion features associated with the Class A,
Class C, and Advisor Class Shares. Each Class B Share, however, shall be
converted automatically, and without any action or choice on the part of the
holder of the Class B Shares, into Class A Shares on the conversion date
specified, and in accordance with the terms and conditions approved by the
Franklin Growth and Income Fund's Board of Trustees and as described, in the
Fund's prospectus relating to the Class B Shares, as such prospectus may be
amended from time to time; provided, however, that the Class B Shares shall be
converted automatically into Class A Shares to the extent and on the terms
permitted by the Investment Company Act of 1940 and the rules and regulations
adopted thereunder.
7. Shares of Class A, Class B, Class C and Advisor Class may be exchanged
for shares of another investment company within the Franklin Templeton Group of
Funds according to the terms and conditions stated in the fund's prospectus, as
it may be amended from time to time, to the extent permitted by the Investment
Company Act of 1940 and the rules and regulations adopted thereunder.
8. Each class will vote separately with respect to any Rule 12b-1 Plan
related to, or which now or in the future may affect, that class.
9. On an ongoing basis, the Board members, pursuant to their fiduciary
responsibilities under the Investment Company Act of 1940 and otherwise, will
monitor the Fund for the existence of any material conflicts between the
interests of the various classes of shares. The Board members, including a
majority of the independent Board members, shall take such action as is
reasonably necessary to eliminate any such conflict that may develop. Franklin
Advisers, Inc. and Franklin/Templeton Distributors, Inc. shall be responsible
for alerting the Board to any material conflicts that arise.
10. All material amendments to this Plan must be approved by a majority of
the Board members, including a majority of the Board members who are not
interested persons of the Fund.
11. I, Murray L. Simpson, Secretary of the Franklin Growth and
Income Fund, do hereby certify that this Multiple Class Plan
was adopted by a majority of the Trustees of the Fund on
August 10, 2000.
/s/MURRAY L. SIMPSON
Murray L. Simpson
Secretary
