As filed with the Securities and Exchange Commission on January 28, 2000.
File Nos.
33-39088
811-6243
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. 38 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 41 (X)
FRANKLIN STRATEGIC SERIES
(Exact Name of Registrant as Specified in Charter)
777 MARINERS ISLAND BOULEVARD, SAN MATEO, CA 94404 (Address of
Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (650) 312-2000
MURRAY L. SIMPSON, 777 MARINERS ISLAND BLVD., SAN MATEO, CA 94404
(Name and Address of Agent for Service of Process)
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[x] on February 1, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant's FSS1 prospectus dated September 1, 1999, and Statement
of Additional Information dated September 1, 1999, as amended January 1, 2000,
as filed with the Securities and Exchange Commission under Form Type 497 on
September 7, 1999, and December 20, 1999, respectively (File Nos. 033-39088 and
811-6243), are hereby incorporated by reference.
o FSS1 P-3
SUPPLEMENT DATED FEBRUARY 1, 2000
TO THE PROSPECTUS OF
FRANKLIN STRATEGIC SERIES
(FSS1 - FRANKLIN AGGRESSIVE GROWTH, BLUE CHIP, CALIFORNIA GROWTH,
LARGE CAP GROWTH, MIDCAP GROWTH AND SMALL CAP GROWTH FUNDS)
DATED SEPTEMBER 1, 1999
The prospectus is amended as follows:
I. As of February 1, 2000, the Blue Chip Fund offers three classes of shares:
Class A, Class B and Class C.
II. The following new section is added after the "Management" section for the
Aggressive Growth Fund:
FINANCIAL HIGHLIGHTS [Insert graphic of dollar bill]
This table presents the fund's financial performance since its inception.
OCTOBER 31, 1999
CLASS A (UNAUDITED) 1,2
- -------------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 10.00
-------
Net investment loss (.02)
Net realized and unrealized gains 6.41
-------
Total from investment operations 6.39
-------
Net asset value, end of period 16.39
=======
Total return (%)3 63.90
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period($ x 1,000) 11,363
Ratios to average net assets: (%)
Expenses 1.23 4
Expenses excluding waiver and
payments by affiliate 1.61 4
Net investment loss (.44)4
Portfolio turnover rate (%) 91.19
OCTOBER 31, 1999
CLASS B (UNAUDITED)1,2
- -------------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 10.00
------
Net investment loss (.05)
Net realized and unrealized gains 6.44
------
Total from investment operations 6.39
------
Net asset value, end of period 16.39
======
Total return (%)3 63.90
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 1,494
Ratios to average net assets: (%)
Expenses 1.80 4
Expenses excluding waiver and
payments by affiliate 2.18 4
Net investment loss (1.05)4
Portfolio turnover rate (%) 91.19
OCTOBER 31, 1999
CLASS C (UNAUDITED)1,2
- -------------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 10.00
-------
Net investment loss (.05)
Net realized and unrealized gains 6.43
-------
Total from investment operations 6.38
-------
Net asset value, end of period 16.38
=======
Total return (%)3 63.80
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 3,999
Ratios to average net assets: (%)
Expenses 1.83 4
Expenses excluding waiver and
payments by affiliate 2.21 4
Net investment loss (1.11)4
Portfolio turnover rate (%) 91.19
1. Based on average shares outstanding.
2. For the period June 23, 1999 (effective date) to October 31, 1999.
3. Total return does not include sales charges, and is not annualized.
4. Annualized.
III. The section "Performance" for the Blue Chip Fund, found on page 12, is
replaced with the following:
PERFORMANCE [Insert graphic of bull and bear]
This bar chart and table show the volatility of the fund's returns, which is one
indicator of the risks of investing in the fund. The bar chart shows changes in
the fund's returns from year to year over the past three calendar years. The
table shows how the fund's average annual total returns compare to those of two
broad-based securities market indices. Of course, past performance cannot
predict or guarantee future results.
ANNUAL TOTAL RETURNS1
[Begin callout]
BEST
QUARTER:
Q4 '99
20.63%
WORST
QUARTER:
Q3 '98
- -10.85%
[End callout]
- --------------------------------------------------------------------------------
7.45% 18.24% 34.62%
- --------------------------------------------------------------------------------
97 98 99
- --------------------------------------------------------------------------------
YEAR
AVERAGE ANNUAL TOTAL RETURNS
For the periods ended December 31, 1999
SINCE INCEPTION
(6/3/96)
1 YEAR
- -----------------------------------------------------------------
Blue Chip Fund2 26.87% 16.00%
S&P 500 Index3,4 21.04% 26.58%
MSCI World Index4,5 25.34% 20.33%
1. Figures do not reflect sales charges. If they did, returns would be lower.
2. Figures reflect sales charges. All fund performance assumes reinvestment of
dividends and capital gains.
3. Source: Standard & Poor's(R) Micropal. The S&P 500(R) Index is an unmanaged
group of widely held common stocks covering a variety of industries. It includes
reinvested dividends. One cannot invest directly in an index, nor is an index
representative of the fund's portfolio.
4. The S&P 500 Index is replacing the MSCI World Index as the fund's benchmark.
The manager believes the composition of the S&P 500 Index provides a more
appropriate comparison to the fund's current portfolio because the fund now has
a more domestic focus. The MSCI World Index may be excluded from this comparison
in the future.
5. Source: Standard & Poor's(R) Micropal. The unmanaged MSCI World Index tracks
the performance of approximately 1500 securities in 22 countries and is designed
to measure world stock market performance. It includes reinvested dividends. One
cannot invest directly in an index, nor is an index representative of the fund's
portfolio.
IV. The section "Fees and Expenses" for the Blue Chip Fund, found on page 13, is
replaced with the following:
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
CLASS A CLASS B1 CLASS C1
- -------------------------------------------------------------------------------
Maximum sales charge (load) as a 5.75% 4.00% 1.99%
percentage of offering price
Load imposed on purchases 5.75% None 1.00%
Maximum deferred sales charge (load) None 2 4.00% 3 0.99% 4
Exchange fee5 $5.00 $5.00 $5.00
Please see "Choosing a Share Class" on page 49 for an explanation of how and
when these sales charges apply.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
CLASS A CLASS B 1 CLASS C 1
- ----------------------------------------------------------------------------
Management fees6 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.46% 0.46% 0.46%
-------------------------------
Total annual fund operating expenses6 1.51% 2.21% 2.21%
===============================
1. The fund began offering Class B and C shares on February 1, 2000. Annual fund
operating expenses for Class B and C are based on the expenses for Class A for
the fiscal year ended April 30, 1999. The distribution and service (12b-1) fees
are based on the maximum fees allowed under the respective Rule 12b-1 plan for
Class B and C.
2. Except for investments of $1 million or more (see page 50) and purchases by
certain retirement plans without an initial sales charge.
3. Declines to zero after six years.
4. This is equivalent to a charge of 1% based on net asset value.
5. This fee is only for market timers (see page 62).
6. For the fiscal year ended April 30, 1999, the manager had agreed in advance
to limit its management fees. With this reduction, management fees were 0.49%
and total annual fund operating expenses were 1.25% for Class A, and would have
been 1.95% for Class B and C. The manager may end this arrangement at any time
upon notice to the fund's Board of Trustees.
EXAMPLE
This example can help you compare the cost of investing in the fund with the
cost of investing in other mutual funds. It assumes:
o You invest $10,000 for the periods shown;
o Your investment has a 5% return each year; and
o The fund's operating expenses remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
If you sell your shares at the end of the period:
CLASS A $7201 $1,026 $1,353 $2,277
CLASS B $624 $991 $1,385 $2,367 2
CLASS C $420 $784 $1,273 $2,619
If you do not sell your shares:
CLASS B $224 $691 $1,185 $2,367 2
CLASS C $322 $784 $1,273 $2,619
- --------------------------------------------------------------------------------
1. Assumes a contingent deferred sales charge (CDSC) will not apply.
2. Assumes conversion of Class B shares to Class A shares after eight years,
lowering your annual expenses from that time on.
V. The following information is added to the section "Financial Highlights" for
the Blue Chip Fund, found on page 15:
SIX MONTHS ENDED
OCTOBER 31, 1999
(UNAUDITED)1
- --------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 14.41
-------
Net realized and unrealized gains 1.08
-------
Net asset value, end of period 15.49
=======
Total return (%)2 7.49
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 74,779
Ratios to average net assets: (%)
Expenses 1.25 3
Expenses excluding waiver and
payments by affiliate 1.39 3
Net investment loss (.06)3
Portfolio turnover rate (%) 29.38
1. Based on average shares outstanding.
2. Total return does not include sales charges, and is not annualized.
3. Annualized.
VI. The section "Performance" for the California Fund, found on page 19, is
replaced with the following:
PERFORMANCE [Insert graphic of bull and bear]
This bar chart and table show the volatility of the fund's returns, which is one
indicator of the risks of investing in the fund. The bar chart shows changes in
the fund's returns from year to year over the past eight calendar years. The
table shows how the fund's average annual total returns compare to those of two
broad-based securities market indices. Of course, past performance cannot
predict or guarantee future results.
CLASS A ANNUAL TOTAL RETURNS1
[Begin callout]
BEST
QUARTER:
Q4 '99
56.36%
WORST
QUARTER:
Q3 '98
- -15.27%
[End callout]
- --------------------------------------------------------------------------------
5.50% 17.57% 16.53% 47.63% 30.44% 15.70% 10.72% 95.17%
92 93 94 95 96 97 98 99
- --------------------------------------------------------------------------------
YEAR
AVERAGE ANNUAL TOTAL RETURNS
For the periods ended December 31, 1999
SINCE
INCEPTION
1 YEAR 5 YEARS (10/30/91)
- --------------------------------------------------------------------------------
California Fund - Class A2 83.97% 35.33% 26.35%
S&P 500 Index3 21.04% 28.56% 20.24%
Franklin California 250 Index4 75.20% 36.83% 25.66%
SINCE
INCEPTION
1 YEAR (01/01/99)
- --------------------------------------------------------------------------------
California Fund - Class B2 89.59% 89.59%
S&P 500 Index3 21.04% 21.04%
Franklin California 250 Index4 75.20% 75.20%
SINCE
INCEPTION
1 YEAR (9/3/96)
- --------------------------------------------------------------------------------
California Fund - Class C2 90.91% 36.30%
S&P 500 Index3 21.04% 29.63%
Franklin California 250 Index4 75.20% 39.99%
1. Figures do not reflect sales charges. If they did, returns would be lower.
2. Figures reflect sales charges. All fund performance assumes reinvestment of
dividends and capital gains.
3. Source: Standard & Poor's(R) Micropal. The S&P 500(R) Index is an unmanaged
group of widely held common stocks covering a variety of industries. It includes
reinvested dividends. One cannot invest directly in an index, nor is an index
representative of the fund's portfolio.
4. The unmanaged Franklin California 250 Growth Index consists of the 250
largest California based companies on an equal weighted basis chosen to
approximate the business segment weightings of the California economy. It
includes reinvested dividends. One cannot invest directly in an index, nor is an
index representative of the fund's portfolio.
VII. The following information is added to the section "Financial Highlights"
for the California Fund, which begins on page 24:
SIX MONTHS ENDED
OCTOBER 31, 1999
CLASS A (UNAUDITED)1
- ---------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 25.82
-------------------------
Net investment income .01
Net realized and unrealized gains 8.25
-------------------------
Total from investment operations 8.26
-------------------------
Distributions from net investment
income (.06)
In excess of net investment income (.02)
-------------------------
Total distributions (.08)
=========================
Net asset value, end of period 34.00
=========================
Total return (%)2 32.10
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 1,063,395
Ratios to average net assets: (%)
Expenses .96 3
Net investment income .04 3
Portfolio turnover rate (%) 38.20
SIX MONTHS ENDED
OCTOBER 31, 1999
CLASS B (UNAUDITED)1
- -------------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 25.75
-----------------------
Net investment loss (.10)
Net realized and unrealized gains 8.20
-----------------------
Total from investment operations 8.10
-----------------------
Distributions from net investment
income (.06)
In excess of net investment income (.01)
-----------------------
Total distributions (.07)
=======================
Net asset value, end of period 33.78
=======================
Total return (%)2 31.58
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 10,469
Ratios to average net assets: (%)
Expenses 1.71 3
Net investment loss (.68)3
Portfolio turnover rate (%) 38.20
SIX MONTHS ENDED
OCTOBER 31, 1999
CLASS C (UNAUDITED)1
- -------------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 25.63
-----------------------
Net investment loss (.10)
Net realized and unrealized gains 8.20
-----------------------
Total from investment operations 8.10
-----------------------
Distributions from net investment
income (.02)4
-----------------------
Net asset value, end of period 33.71
=======================
Total return (%)2 31.62
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 214,780
Ratios to average net assets: (%)
Expenses 1.71 3
Net investment loss (.72)3
Portfolio turnover rate (%) 38.20
1. Based on average shares outstanding.
2. Total return does not include sales charges, and is not annualized.
3. Annualized.
4. Includes distributions in excess of net investment income in the amount of
$.004.
VIII. The following new section is added after the "Management" section for the
Large Cap Fund:
FINANCIAL HIGHLIGHTS [Insert graphic of dollar bill]
This table presents the fund's financial performance since its inception.
OCTOBER 31, 1999
CLASS A (UNAUDITED)1,2
- ----------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 10.00
----------------------
Net investment loss (.01)
Net realized and unrealized gains 1.24
----------------------
Total from investment operations 1.23
----------------------
Net asset value, end of period 11.23
======================
Total return (%)3 12.30
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 6,040
Ratios to average net assets: (%)
Expenses 1.21 4
Expenses excluding waiver and
payments by affiliate 1.71 4
Net investment loss (.31)4
Portfolio turnover rate (%) 52.60
OCTOBER 31, 1999
CLASS B (UNAUDITED)1,2
- ----------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 10.00
----------------------
Net investment loss (.04)
Net realized and unrealized gains 1.24
----------------------
Total from investment operations 1.20
======================
Net asset value, end of period 11.20
======================
Total return (%)3 12.00
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 976
Ratios to average net assets: (%)
Expenses 1.85 4
Expenses excluding waiver and
payments by affiliate 2.35 4
Net investment loss (.94)4
Portfolio turnover rate (%) 52.60
OCTOBER 31, 1999
CLASS C (UNAUDITED)1,2
- ----------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 10.00
----------------------
Net investment loss (.04)
Net realized and unrealized gains 1.23
----------------------
Total from investment operations 1.19
======================
Net asset value, end of period 11.19
======================
Total return (%)3 11.90
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 6,750
Ratios to average net assets: (%)
Expenses 1.86 4
Expenses excluding waiver and
payments by affiliate 2.36 4
Net investment loss (.97)4
Portfolio turnover rate (%) 52.60
1. Based on average shares outstanding.
2. For the period June 7, 1999 (effective date) to October 31, 1999.
3. Total return does not include sales charges, and is not annualized.
4. Annualized.
IX. The section "Performance" for the MidCap Fund, found on page 35, is replaced
with the following:
PERFORMANCE [Insert graphic of bull and bear]
This bar chart and table show the volatility of the fund's returns, which is one
indicator of the risks of investing in the fund. The bar chart shows changes in
the fund's returns from year to year over the past six calendar years. The table
shows how the fund's average annual total returns compare to those of two
broad-based securities market indices. Of course, past performance cannot
predict or guarantee future results.
ANNUAL TOTAL RETURNS1
[Begin callout]
BEST
QUARTER:
Q4 '99
46.08%
WORST
QUARTER:
Q3 '98
- -23.19%
[End callout]
- --------------------------------------------------------------------------------
-2.90% 33.07% 23.47% 14.94% -1.84% 54.32%
94 95 96 97 98 99
- --------------------------------------------------------------------------------
YEAR
AVERAGE ANNUAL TOTAL RETURNS
For the periods ended December 31, 1999
SINCE
INCEPTION
1 YEAR 5 YEARS (8/17/93)
- --------------------------------------------------------------------------------
MidCap Fund2 45.44% 22.47% 17.57%
S&P 500 Index3 21.04% 28.56% 22.66%
S&P MidCap 400 Index4 14.72% 23.05% 18.03%
1. Figures do not reflect sales charges. If they did, returns would be lower.
2. Figures reflect sales charges. All fund performance assumes reinvestment of
dividends and capital gains. June 1, 1996, the fund implemented a Rule 12b-1
plan, which affects subsequent performance.
3. Source: Standard & Poor's(R) Micropal. The S&P 500(R) Index is an unmanaged
group of widely held common stocks covering a variety of industries. It includes
reinvested dividends. One cannot invest directly in an index, nor is an index
representative of the fund's portfolio.
4. Source: Standard & Poor's(R) Micropal. The unmanaged S&P MidCap 400 Index
consists of 400 domestic stocks chosen for market size, liquidity, and industry
group representation. It is a market-value weighted index and includes
reinvested dividends. One cannot invest directly in an index, nor is an index
representative of the fund's portfolio.
X. The following information is added to the section "Financial Highlights" for
the MidCap Fund, found on page 38:
SIX MONTHS ENDED
OCTOBER 31, 1999
(UNAUDITED)1
- --------------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 16.15
----------------------
Net investment loss (.02)
Net realized and unrealized gains 2.18
----------------------
Total from investment operations 2.16
----------------------
Distributions from net investment income (.02)
In excess of net investment income (.02)
----------------------
Total distributions (.04)
======================
Net asset value, end of period 18.27
======================
Total return (%)2 13.41
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 40,535
Ratios to average net assets: (%)
Expenses 1.24 3
Net investment loss (.24)3
Portfolio turnover rate (%) 33.79
1. Based on average shares outstanding.
2. Total return does not include sales charges, and is not annualized.
3. Annualized.
XI. The section "Performance" for the Small Cap Fund, which begins on page 42,
is replaced with the following:
PERFORMANCE [Insert graphic of bull and bear]
This bar chart and table show the volatility of the fund's returns, which is one
indicator of the risks of investing in the fund. The bar chart shows changes in
the fund's returns from year to year over the past seven calendar years. The
table shows how the fund's average annual total returns compare to those of two
broad-based securities market indices. Of course, past performance cannot
predict or guarantee future results.
CLASS A ANNUAL TOTAL RETURNS1
[BEGIN CALLOUT]
BEST
QUARTER:
Q4 '99
59.78%
WORST
QUARTER:
Q3 '98
- -23.56%
[End callout]
- --------------------------------------------------------------------------------
21.77% 9.22% 42.20% 27.07% 15.78% -0.02% 97.08%
93 94 95 96 97 98 99
- --------------------------------------------------------------------------------
YEAR
AVERAGE ANNUAL TOTAL RETURNS
For the periods ended December 31, 1999
SINCE
INCEPTION
1 YEAR 5 YEARS (2/14/92)
- -------------------------------------------------------------------------------
Small Cap Fund - Class A2 85.73% 31.19% 24.83%
S&P 500 Index3 21.04% 28.56% 20.23%
Russell 2500 Index4 24.14% 19.43% 15.26%
SINCE
INCEPTION
1 YEAR (10/2/95)
- -------------------------------------------------------------------------------
Small Cap Fund - Class C2 92.63% 27.70%
S&P 500 Index3 21.04% 26.39%
Russell 2500 Index4 24.14% 16.23%
1. Figures do not reflect sales charges. If they did, returns would be lower.
2. Figures reflect sales charges. All fund performance assumes reinvestment of
dividends and capital gains.
3. Source: Standard & Poor's(R) Micropal. The S&P 500(R) Index is an unmanaged
group of widely held common stocks covering a variety of industries. It includes
reinvested dividends. One cannot invest directly in an index, nor is an index
representative of the fund's portfolio.
4. Source: Standard & Poor's(R) Micropal. The Russell 2500 Index is an unmanaged
group of 2,500 stocks of smaller capitalization companies. It includes
reinvested dividends. One cannot invest directly in an index, nor is an index
representative of the fund's portfolio.
XII. The following information is added to the section "Financial Highlights"
for the Small Cap Fund, found on page 46:
SIX MONTHS ENDED
OCTOBER 31, 1999
CLASS A (UNAUDITED)1
- ---------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 24.65
----------------------
Net investment income .01
Net realized and unrealized gains 6.44
----------------------
Total from investment operations 6.45
======================
Net asset value, end of period 31.10
======================
Total return (%)2 26.17
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 5,754,813
Ratios to average net assets: (%)
Expenses .91 3
Net investment income .06 3
Portfolio turnover rate (%) 17.18
SIX MONTHS ENDED
OCTOBER 31, 1999
CLASS C (UNAUDITED)1
- ---------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 24.32
----------------------
Net investment loss (.09)
Net realized and unrealized gains 6.34
----------------------
Total from investment operations 6.25
======================
Net asset value, end of period 30.57
======================
Total return (%)2 25.70
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($ x 1,000) 993,786
Ratios to average net assets: (%)
Expenses 1.66 3
Net investment loss (.69)3
Portfolio turnover rate (%) 17.18
1. Based on average shares outstanding.
2. Total return does not include sales charges, and is not annualized.
3. Annualized.
XIII. The first paragraph of the section "Income and capital gains
distributions" on page 47 is replaced with the following:
Each fund intends to pay a dividend at least annually representing substantially
all of its net investment income and any net realized capital gains. The amount
of this distribution will vary and there is no guarantee any fund will pay
dividends.
XIV. In the section "Choosing a Share Class", which begins on page 49, the first
paragraph is replaced with the following:
The Aggressive Growth, California and Large Cap Funds each offer Class A, B and
C shares. As of February 1, 2000, the Blue Chip Fund also offers Class A, B and
C shares. The Small Cap Fund offers Class A and C shares and the MidCap Fund
offers Class A shares. Each class has its own sales charge and expense
structure, allowing you to choose the class that best meets your situation. Your
investment representative can help you decide.
XV. The section "Sales charge waivers" on page 54 is replaced with the
following:
SALES CHARGE WAIVERS Class A shares may be purchased without an initial sales
charge or CDSC by various individuals, institutions and retirement plans or by
investors who reinvest certain distributions and proceeds within 365 days.
Certain investors also may buy Class C shares without an initial sales charge.
The CDSC for each class may be waived for certain redemptions and distributions.
If you would like information about available sales charge waivers, call your
investment representative or call Shareholder Services at 1-800/632-2301. For
information about retirement plans, you may call Retirement Plan Services at
1-800/527-2020. A list of available sales charge waivers also may be found in
the Statement of Additional Information (SAI).
XVI. The following sentence is added after the minimum investments table on page
54:
Please note that you may only buy shares of a fund eligible for sale in your
state or jurisdiction.
XVII. In the Selling Shares table on page 60 the section "By Wire" is replaced
with the following:
- --------------------------------------------------------------------------------
[Insert graphic of three You can call or write to have redemption proceeds
lightning bolts] sent to a bank account. See the policies above
BY ELECTRONIC FUNDS for selling shares by mail or phone.
TRANSFER (ACH)
Before requesting to have redemption proceeds sent
to a bank account, please make sure we have your
bank account information on file. If we do not
have this information, you will need to send
written instructions with your bank's name and
address, a voided check or savings account deposit
slip, and a signature guarantee if the ownership
of the bank and fund accounts is different.
If we receive your request in proper form by 1:00
p.m. Pacific time, proceeds sent by ACH generally
will be available within two to three business
days.
- --------------------------------------------------------------------------------
XVIII. The section "Statements and reports" on page 61 is replaced with the
following:
STATEMENTS AND REPORTS You will receive quarterly account statements that show
all your account transactions during the quarter. You also will receive written
notification after each transaction affecting your account (except for
distributions and transactions made through automatic investment or withdrawal
programs, which will be reported on your quarterly statement). You also will
receive the fund's financial reports every six months. To reduce fund expenses,
we try to identify related shareholders in a household and send only one copy of
the financial reports. If you need additional copies, please call 1-800/DIAL
BEN.
If there is a dealer or other investment representative of record on your
account, he or she also will receive copies of all notifications and statements
and other information about your account directly from the fund.
XIX. The section "Dealer compensation" on page 63 is replaced with the
following:
DEALER COMPENSATION Qualifying dealers who sell fund shares may receive sales
commissions and other payments. These are paid by Franklin Templeton
Distributors, Inc. (Distributors) from sales charges, distribution and service
(12b-1) fees and its other resources.
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
COMMISSION (%) - 4.00 2.00
Investment under $50,000 5.00 - -
$50,000 but under $100,000 3.75 - -
$100,000 but under $250,000 2.80 - -
$250,000 but under $500,000 2.00 - -
$500,000 but under $1 million 1.60 - -
$1 million or more up to 1.00 1 - -
12B-1 FEE TO DEALER 0.252 0.253 1.004
A dealer commission of up to 1% may be paid on Class A NAV purchases by certain
retirement plans1 and on Class C NAV purchases. A dealer commission of up to
0.25% may be paid on Class A NAV purchases by certain trust companies and bank
trust departments, eligible governmental authorities, and broker-dealers or
others on behalf of clients participating in comprehensive fee programs.
1. During the first year after purchase, dealers may not be eligible to receive
the 12b-1 fee. 2. The Aggressive Growth Fund, Blue Chip Fund, Large Cap Fund and
MidCap Fund may each pay up to 0.35% to Distributors or others, out of which
0.10% generally will be retained by Distributors for its distribution expenses.
3. Dealers may be eligible to receive up to 0.25% from the date of purchase.
After 8 years, Class B shares convert to Class A shares and dealers may then
receive the 12b-1 fee applicable to Class A. 4. Dealers may be eligible to
receive up to 0.25% during the first year after purchase and may be eligible to
receive the full 12b-1 fee starting in the 13th month.
Please keep this supplement for future reference.
o FSS1 SA-3
SUPPLEMENT DATED FEBRUARY 1, 2000
TO THE STATEMENT OF ADDITIONAL INFORMATION OF
FRANKLIN STRATEGIC SERIES
(FSS1 - FRANKLIN AGGRESSIVE GROWTH, BLUE CHIP, CALIFORNIA GROWTH,
LARGE CAP GROWTH, MIDCAP GROWTH AND SMALL CAP GROWTH FUNDS)
DATED SEPTEMBER 1, 1999, AS AMENDED JANUARY 1, 2000
The Statement of Additional Information is amended as follows:
I. As of February 1, 2000, the Blue Chip Fund offers three classes of shares:
Class A, Class B and Class C.
II. The following is added at the end of the second paragraph on page 1:
The unaudited financial statements in the funds' Semiannual Report to
Shareholders, for the six-month period ended October 31, 1999, also are
incorporated by reference.
III. In the section "Organization, Voting Rights and Principal Holders", the
following changes are made:
(a) The sixth paragraph is replaced with the following:
The Blue Chip and California Funds currently offer three classes of shares,
Class A, Class B and Class C. The Blue Chip Fund began offering Class B and C
shares on February 1, 2000. The funds may offer additional classes of shares in
the future. The full title of each class is:
o Franklin Blue Chip Fund - Class A o Franklin Blue Chip Fund - Class B o
Franklin Blue Chip Fund - Class C o Franklin California Growth Fund - Class A o
Franklin California Growth Fund - Class B o Franklin California Growth Fund -
Class C
(b) The eighth paragraph is replaced with the following:
The MidCap Fund offers only one share class. Because the MidCap Fund's sales
charge structure and Rule 12b-1 plan are similar to those of Class A shares,
shares of the fund are considered Class A shares for redemption, exchange and
other purposes. The fund may offer additional classes of shares in the future.
(c) The following is added to the section:
As of January 3, 2000, the principal shareholders of the funds, beneficial or
of record, were:
SHARE PERCENTAGE
NAME AND ADDRESS CLASS (%)
- -------------------------------------------------------------------------------
MIDCAP FUND
Franklin Resources, Inc.1
Corporate Accounting
Attn: Michael Corcoran
555 Airport Blvd., 4th Floor
Burlingame, CA 94010 Class A 26
SMALL CAP FUND
First Union National Bank Ttee
FBO Willis Coroon Corporation
A/C 1040108756
1525 West WT Harris Blvd
NC-1151 Advisor
Charlotte, NC 28288 Class 8
The Northern Trust Company Trst
For the Nalco Chemical Co Ret Trst
50 S. LaSalle St. Advisor
Chicago, IL 60675 Class 5
Old Second National Bank
of Aurora
C/O Trust Operations Division
37 South River St. Advisor
Aurora, IL 60506-4173 Class 6
Trust Company of Illinois
45 S. Park Blvd., Ste. 315 Advisor
Glen Ellyn, IL 60137-6282 Class 7
SHARE PERCENTAGE
NAME AND ADDRESS CLASS (%)
- -------------------------------------------------------------------------------
AGGRESSIVE GROWTH FUND
Franklin Resources, Inc.1
Corporate Accounting
Attn: Michael Corcoran
555 Airport Blvd., 4th Floor
Burlingame, CA 94010 Class B 6
FT Fund Allocator
Conservative Target Fund
C/O Fund Accounting Dept.
Kimberley Monasterio
1810 Gateway, 3rd Flr. Advisor
San Mateo, CA 94404-2470 Class 8
FT Fund Allocator
Moderate Target Fund
C/O Fund Accounting Dept.
Kimberley Monasterio
1810 Gateway, 3rd Flr. Advisor
San Mateo, CA 94404-2470 Class 25
FT Fund Allocator
Growth Target Fund
C/O Fund Accounting Dept.
Kimberley Monasterio
1810 Gateway, 3rd Flr. Advisor
San Mateo, CA 94404-2470 Class 47
SHARE PERCENTAGE
NAME AND ADDRESS CLASS (%)
- -------------------------------------------------------------------------------
LARGE CAP FUND
Franklin Resources, Inc.1
Corporate Accounting
Attn: Michael Corcoran
555 Airport Blvd., 4th Floor
Burlingame, CA 94010 Class A 7
FTTC Ttee For Valuselect
Pinnacle
Attn: Trading
P.O. Box 2438
Rancho Cordova, CA 95741-2438 Class A 7
Franklin Resources, Inc.1
Corporate Accounting
Attn: Michael Corcoran
555 Airport Blvd., 4th Floor
Burlingame, CA 94010 Class B 16
Painewebber for the Benefit of
Painewebber CDN FBO
Barbara C. Gillespie, Dec'd
P.O. Box 3321
Weehawken, NJ 07087-8154 Class B 18
NFSC FEBO OBP-424994
Anthony Doria Ttee
Anthony Doria Family Trust
U/A 7/11/94
1805 Tanager Drive
Costa Mesa, CA 92626 Class B 5
SHARE PERCENTAGE
NAME AND ADDRESS CLASS (%)
- -------------------------------------------------------------------------------
Franklin Resources, Inc.1
Corporate Accounting
Attn: Michael Corcoran
555 Airport Blvd., 4th Floor Advisor
Burlingame, CA 94010 Class 8
FT Fund Allocator
Conservative Target Fund
C/O Fund Accounting Dept.
Kimberley Monasterio
1810 Gateway, 3rd Flr. Advisor
San Mateo, CA 94404-2470 Class 10
FT Fund Allocator Moderate
Target Fund
C/O Fund Accounting Dept.
Kimberley Monasterio
1810 Gateway, 3rd Flr. Advisor
San Mateo, CA 94404-2470 Class 27
FT Fund Allocator Growth
Target Fund
C/O Fund Accounting Dept.
Kimberley Monasterio
1810 Gateway, 3rd Flr. Advisor
San Mateo, CA 94404-2470 Class 53
1. Franklin Resources, Inc. is a Delaware Corporation.
Note: Charles B. Johnson and Rupert H. Johnson, Jr., who are officers and/or
trustees of the trust, may be considered beneficial holders of the fund
shares held by Franklin Resources, Inc. (Resources). As principal
shareholders of Resources, they may be able to control the voting of
Resources' shares of the MidCap, Aggressive Growth and Large Cap Funds.
As of January 3, 2000, the officers and board members, as a group, owned of
record and beneficially less than 1% of the outstanding shares of each fund and
class.
IV. In the section "The Class B and C plans", found on page 34 under
"Distribution and service (12b-1) fees", the first paragraph is replaced with
the following:
Under the Class B and C plans, the funds pay Distributors up to 0.75% per year
of the class's average daily net assets, payable monthly for the Aggressive
Growth, Blue Chip, Large Cap and Small Cap Funds and the Class B plan of the
California Fund and quarterly for the Class C plan of the California Fund, to
pay Distributors or others for providing distribution and related services and
bearing certain expenses. All distribution expenses over this amount will be
borne by those who have incurred them. The funds also may pay a servicing fee
of up to 0.25% per year of the class's average daily net assets, payable
monthly for the Aggressive Growth, Blue Chip, Large Cap and Small Cap Funds and
the Class B plan of the California Fund and quarterly for the Class C plan of
the California Fund. This fee may be used to pay securities dealers or others
for, among other things, helping to establish and maintain customer accounts
and records, helping with requests to buy and sell shares, receiving and
answering correspondence, monitoring dividend payments from the funds on behalf
of customers, and similar servicing and account maintenance activities.
V. The following information is added to the applicable sections under
"Performance", which begins on page 36:
AVERAGE ANNUAL TOTAL RETURN
The average annual total returns for the indicated periods ended October 31,
1999, were:
SINCE
INCEPTION 1 YEAR 5 YEARS INCEPTION
DATE (%) (%) (%)
- -------------------------------------------------------------------------------
CLASS A
Blue Chip Fund 06/03/96 21.00 - 12.49
California Fund 10/30/91 52.76 26.98 21.84
MidCap Fund 08/17/93 27.20 15.89 13.42
Small Cap Fund 02/14/92 50.64 21.79 19.75
SINCE
INCEPTION 1 YEAR INCEPTION
DATE (%) (%)
- -------------------------------------------------------------------------------
CLASS C
California Fund 09/03/96 58.31 24.84
Small Cap Fund 10/02/95 56.12 18.21
CUMULATIVE TOTAL RETURN
The cumulative total returns for the indicated periods ended October 31, 1999,
were:
SINCE
INCEPTION 1 YEAR 5 YEARS INCEPTION
DATE (%) (%) (%)
- -------------------------------------------------------------------------------
CLASS A
Aggressive Growth Fund 06/23/99 - - 54.48
Blue Chip Fund 06/03/96 21.00 - 49.54
California Fund 10/30/91 52.76 230.18 385.79
Large Cap Fund 06/07/99 - - 5.84
MidCap Fund 08/17/93 27.20 109.08 118.42
Small Cap Fund 02/14/92 50.64 167.92 301.44
SINCE
INCEPTION INCEPTION
DATE (%)
- -------------------------------------------------------------------------------
CLASS B
Aggressive Growth Fund 06/23/99 59.90
California Fund 01/01/99 35.32
Large Cap Fund 06/07/99 8.00
SINCE
INCEPTION 1 YEAR INCEPTION
DATE (%) (%)
- -------------------------------------------------------------------------------
CLASS C
Aggressive Growth Fund 06/23/99 - 61.19
California Fund 09/03/96 58.31 101.53
Large Cap Fund 06/07/99 - 9.80
Small Cap Fund 10/02/95 56.12 98.05
Please keep this supplement for future reference.
FRANKLIN STRATEGIC SERIES
FILE NOS. 33-39088 &
811-6243
FORM N-1A
PART C
OTHER INFORMATION
PART C: OTHER INFORMATION
ITEM 23 EXHIBITS. The following exhibits are incorporated by reference to the
previously filed document indicated below, except as noted:
(a) Agreement and Declaration of Trust
(i) Agreement and Declaration of Trust of Franklin California
250 Growth Index Fund dated January 22, 1991
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(ii) Certificate of Trust dated January 22, 1991
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(iii) Certificate of Amendment to the Certificate of Trust
dated November 19, 1991
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(iv) Certificate of Amendment to the Certificate of Trust of
Franklin Strategic Series dated May 14, 1992
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(v) Certificate of Amendment of Agreement and Declaration of
Trust of Franklin Strategic Series dated April 18, 1995
Filing: Post-Effective Amendment No. 21 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: August 6, 1996
(b) By-Laws
(i) Amended and Restated By-Laws as of April 25, 1991
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(ii) Amendment to By-Laws dated October 27, 1994
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(c) Instruments Defining Rights of Security Holders
Not Applicable
(d) Investment Advisory Contracts
(i) Management Agreement between the Registrant, on behalf of
Franklin Global Health Care Fund, Franklin Small Cap
Growth Fund, Franklin Global Utilities Fund, and Franklin
Natural Resources Fund, and Franklin Advisers, Inc.,
dated February 24, 1992
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(ii) Management Agreement between the Registrant, on behalf of
Franklin Strategic Income Fund, and Franklin Advisers,
Inc., dated May 24, 1994
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(iii) Subadvisory Agreement between Franklin Advisers, Inc., on
behalf of the Franklin Strategic Income Fund, and
Templeton Investment Counsel, Inc., dated May 24, 1994
Filing: Post-Effective Amendment No. 21 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: August 6, 1996
(iv) Amended and Restated Management Agreement between the
Registrant, on behalf of Franklin California Growth Fund,
and Franklin Advisers, Inc., dated July 12, 1993
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(v) Management Agreement between the Registrant, on behalf of
Franklin Blue Chip Fund, and Franklin Advisers, Inc.,
dated February 13, 1996
Filing: Post-Effective Amendment No. 18 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 14, 1996
(vi) Management Agreement between the Registrant, on behalf of
Franklin Institutional MidCap Growth Fund (now known as
Franklin MidCap Growth Fund), and Franklin Advisers,
Inc., dated January 1, 1996
Filing: Post-Effective Amendment No. 19 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 27, 1996
(vii) Amendment dated August 1, 1995 to the Management
Agreement between the Registrant, on behalf of Franklin
California Growth Fund, and Franklin Advisers, Inc.,
dated July 12, 1993
Filing: Post-Effective Amendment No. 21 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: August 6, 1996
(viii) Amendment dated August 1, 1995 to the Management
Agreement between the Registrant, on behalf of Franklin
Global Health Care Fund, Franklin Small Cap Growth Fund,
Franklin Global Utilities Fund, and Franklin Natural
Resources Fund, and Franklin Advisers, Inc., dated
February 24, 1992
Filing: Post-Effective Amendment No. 21 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: August 6, 1996
(ix) Amendment dated August 1, 1995 to the Management Agreement
between the Registrant, on behalf of Franklin Strategic
Income Fund, and Franklin Advisers, Inc., dated
May 24, 1994
Filing: Post-Effective Amendment No. 21 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: August 6, 1996
(x) Management Agreement between the Registrant, on behalf of
Franklin Biotechnology Discovery Fund, and Franklin
Advisers, Inc., dated July 15, 1997
Filing: Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: August 22, 1997
(xi) Investment Advisory Agreement between the Registrant, on
behalf of Franklin U.S. Long-Short Fund, and Franklin
Advisers, Inc. dated February 18, 1999 Filing:
Post-Effective Amendment No. 31 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 11, 1999
(xii) Investment Advisory Agreement between the Registrant,
on behalf of Franklin Large Cap Growth Fund, and
Franklin Advisers, Inc. dated May 18, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(xiii) Investment Advisory Agreement between the Registrant, on
behalf of Franklin Aggressive Growth Fund, and Franklin
Advisers, Inc. dated May 18, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(e) Underwriting Contracts
(i) Amended and Restated Distribution Agreement between the
Registrant, on behalf of all Series except Franklin
Strategic Income Fund, and Franklin/Templeton
Distributors, Inc., dated April 23, 1995
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(ii) Amended and Restated Distribution Agreement between the
Registrant, on behalf of Franklin Strategic Income Fund,
and Franklin/Templeton Distributors, Inc., dated March
29, 1995
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(iii) Forms of Dealer Agreements between Franklin/Templeton
Distributors, Inc. and Securities Dealers dated March 1,
1998
Filing: Post-Effective Amendment No. 30 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: December 23, 1998
(iv) Amendment of Amended and Restated Distribution Agreement
between the Registrant on behalf of Franklin Strategic
Income Fund, and Franklin/Templeton Distributors, Inc.
dated January 12, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(v) Amendment of Amended and Restated Distribution Agreement
between the Registrant on behalf of all series except
Franklin Strategic Income Fund dated January 12, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(f) Bonus or Profit Sharing Contracts
Not Applicable
(g) Custodian Agreements
(i) Master Custody Agreement between the Registrant and Bank
of New York dated February 16, 1996
Filing: Post-Effective Amendment No. 19 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 14, 1996
(ii) Terminal Link Agreement between the Registrant and Bank
of New York dated February 16, 1996
Filing: Post-Effective Amendment No. 19 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 14, 1996
(iii) Amendment dated May 7, 1997 to Master Custody Agreement
between Registrant and Bank of New York dated February
16, 1996
Filing: Post-Effective Amendment No. 27 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 13, 1998
(iv) Amendment dated February 27, 1998 to Master Custody
Agreement between Registrant and Bank of New York dated
February 16, 1996
Filing: Post-Effective Amendment No. 30 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: December 23, 1998
(v) Foreign Custody Manager Agreement between the Registrant
and The Bank of New York dated February 27, 1998
Filing: Post-Effective Amendment No. 30 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: December 23, 1998
(vi) Amendment dated September 16, 1999 to Exhibit A of the
Master Custody Agreement
(h) Other Material Contracts
(i) Subcontract for Fund Administrative Services dated
October 1, 1996 and Amendment thereto dated April 30,
1998 between Franklin Advisers, Inc. and Franklin
Templeton Services, Inc.
Filing: Post-Effective Amendment No. 30 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: December 23, 1998
(ii) Administration Agreement between the Registrant, on
behalf of Franklin Biotechnology Discovery Fund, and
Franklin Templeton Services, Inc., dated July 15, 1997
Filing: Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: August 22, 1997
(iii) Fund Administration Agreement between the Registrant, on
behalf of Franklin U.S. Long-Short Fund, and Franklin
Templeton Services, Inc. dated February 18, 1999
Filing: Post-Effective Amendment No. 31 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 11, 1999
(iv) Fund Administration Agreement between the Registrant, on
behalf of Franklin Large Cap Growth Fund, and Franklin
Templeton Services, Inc. dated May 18, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(v) Fund Administration Agreement between the Registrant, on
behalf of Franklin Aggressive Growth Fund, and Franklin
Templeton Services, Inc. dated May 18, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(i) Legal Opinion
(i) Opinion and consent of counsel dated March 8, 1999
Filing: Post-Effective Amendment No. 31 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 11, 1999
(j) Other Opinions
(i) Consent of Independent Auditors
(k) Omitted Financial Statements
Not Applicable
(l) Initial Capital Agreements
(i) Letter of Understanding for Franklin California Growth
Fund dated August 20, 1991
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(ii) Letter of Understanding for Franklin Global Utilities Fund -
Class II dated April 12, 1995 Filing: Post-Effective
Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(iii) Letter of Understanding for Franklin Natural Resources
Fund dated June 5, 1995
Filing: Post-Effective Amendment No. 17 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: December 5, 1995
(iv) Letter of Understanding for Franklin California Growth
Fund-Class II dated August 30, 1996
Filing: Post-Effective Amendment No. 27 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 13, 1998
(v) Letter of Understanding for Franklin Global Health Care
Fund dated August 30, 1996
Filing: Post-Effective Amendment No. 27 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 13, 1998
(vi) Letter of Understanding for Franklin Blue Chip Fund dated
May 24, 1996
Filing: Post-Effective Amendment No. 27 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 13, 1998
(vii) Letter of Understanding for Franklin Biotechnology
Discovery Fund dated September 5, 1997
Filing: Post-Effective Amendment No. 27 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 13, 1998
(viii) Letter of Understanding for Franklin U.S. Long-Short Fund
dated March 11, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(ix) Letter of Understanding for Franklin Large Cap Growth
Fund dated June 4, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(x) Letter of Understanding for Franklin Aggressive Growth
Fund dated June 22, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(m) Rule 12b-1 Plan
(i) Amended and Restated Distribution Plan between the
Registrant, on behalf of Franklin California Growth Fund,
Franklin Small Cap Growth Fund, Franklin Global Health
Care Fund and Franklin Global Utilities Fund, and
Franklin/Templeton Distributors, Inc., dated July 1, 1993
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(ii) Distribution Plan between the Registrant, on behalf of
Franklin Global Utilities Fund - Class II, and
Franklin/Templeton Distributors, Inc., dated March 30,
1995
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(iii) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of the Franklin Strategic Income
Fund, and Franklin/Templeton Distributors, Inc., dated
May 24, 1994
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(iv) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of the Franklin Natural Resources
Fund, and Franklin/Templeton Distributors, Inc., dated
June 1, 1995
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 1, 1995
(v) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of the Franklin MidCap Growth Fund,
and Franklin/Templeton Distributors, Inc., dated June 1,
1996
Filing: Post-Effective Amendment No. 21 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: August 7, 1996
(vi) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of the Franklin Blue Chip Fund, and
Franklin/Templeton Distributors, Inc., dated May 28, 1996
Filing: Post-Effective Amendment No. 21 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: August 7, 1996
(vii) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Small Cap Growth Fund -
Class II, and Franklin/Templeton Distributors, Inc.,
dated September 29, 1995
Filing: Post-Effective Amendment No. 21 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: August 7, 1996
(viii) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Biotechnology Discovery
Fund and Franklin/Templeton Distributors, Inc., dated
September 15, 1997
Filing: Post-Effective Amendment No. 27 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 13, 1998
(ix) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin California Growth Fund -
Class II and Franklin Global Health Care Fund - Class II,
and Franklin/Templeton Distributors, Inc., dated
September 3, 1996
Filing: Post-Effective Amendment No. 26 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: August 29, 1997
(x) Distribution Plan pursuant to Rule 12b-1 between
Registrant, on behalf of Franklin Strategic Income Fund -
Class II, and Franklin/Templeton Distributors, Inc. dated
February 26, 1998
Filing: Post-Effective Amendment No. 28 to Registration
Statement on Form N-1A
File No. 33-39088
Filing date: April 21, 1998
(xi) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin California Growth Fund -
Class B, and Franklin/Templeton Distributors, Inc. dated
October 16, 1998 Filing: Post-Effective Amendment No. 33 to
Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 24, 1999
(xii) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Global Health Care Fund -
Class B, and Franklin/Templeton Distributors, Inc. dated
October 16, 1998 Filing: Post-Effective Amendment No. 33 to
Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 24, 1999
(xiii) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Global Utilities Fund -
Class B, and Franklin/Templeton Distributors, Inc. dated
October 16, 1998
Filing: Post-Effective Amendment No. 33 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 24, 1999
(xiv) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Strategic Income Fund -
Class B, and Franklin/Templeton Distributors, Inc. dated
October 16, 1998
Filing: Post-Effective Amendment No. 33 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 24, 1999
(xv) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin U.S. Long-Short Fund,
and Franklin Templeton Distributors, Inc. dated April 15,
1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(xvi) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Large Cap Growth Fund -
Class A, and Franklin Templeton Distributors, Inc. dated
May 18, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(xvii) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Aggressive Growth Fund
- Class A, and Franklin Templeton Distributors, Inc.
dated May 18, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(xviii) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Large Cap Growth Fund
- Class B, and Franklin/Templeton Distributors, Inc.
dated May 18, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(xix) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Aggressive Growth Fund
- Class B, and Franklin/Templeton Distributors, Inc.
dated May 18, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(xx) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Large Cap Growth Fund -
Class C, and Franklin/Templeton Distributors, Inc. dated
May 18, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(xxi) Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Aggressive Growth Fund -
Class C, and Franklin/Templeton Distributors, Inc. dated May
18, 1999 Filing: Post-Effective Amendment No. 37 to
Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(xxii) Form of Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Blue Chip Fund - Class B,
and Franklin/Templeton Distributors, Inc.
(xxiii) Form of Distribution Plan pursuant to Rule 12b-1 between the
Registrant, on behalf of Franklin Blue Chip Fund - Class C,
and Franklin/Templeton Distributors, Inc.
(o) Rule 18f-3 Plan
(i) Multiple Class Plan for Franklin Global Utilities Fund
dated April 16, 1998
Filing: Post-Effective Amendment No. 33 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 24, 1999
(ii) Multiple Class Plan for Franklin California Growth Fund
dated April 16, 1998
Filing: Post-Effective Amendment No. 33 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 24, 1999
(iii) Multiple Class Plan for Franklin Global Health Care Fund
dated April 16, 1998
Filing: Post-Effective Amendment No. 33 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 24, 1999
(iv) Multiple Class Plan for Franklin Small Cap Growth Fund
dated June 18, 1996
Filing: Post-Effective Amendment No. 24 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: December 11, 1996
(v) Multiple Class Plan for Franklin Natural Resources Fund
dated June 18, 1996
Filing: Post-Effective Amendment No. 24 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: December 11, 1996
(vi) Multiple Class Plan for Franklin Strategic Income Fund
dated February 18, 1999
Filing: Post-Effective Amendment No. 32 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: March 24, 1999
(vii) Multiple Class Plan for Franklin Large Cap Growth Fund
dated May 18, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(viii) Multiple Class Plan for Franklin Aggressive Growth Fund
dated May 18, 1999
Filing: Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A
File No. 33-39088
Filing Date: June 25, 1999
(ix) Form of Multiple Class Plan for Franklin Blue Chip Fund
(p) Power of Attorney
(i) Power of Attorney for Franklin Strategic Series dated
January 20, 2000
(ii) Certificate of Secretary dated January 27, 2000
ITEM 24 PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
None
ITEM 25. INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to trustees, 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 trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, 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 of 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 26 BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
a) Franklin Advisers, Inc.
The officers and directors of the Registrant's manager Franklin Advisers, Inc.
("Advisers") also serve as officers and/or directors for (1) Advisers' corporate
parent, Franklin Resources, Inc., and/or (2) other investment companies in the
Franklin Templeton Group of Funds. In addition, Mr. Charles B. Johnson was
formerly a director of General Host Corporation. For additional information
please see Part B and Schedules A and D of Form ADV of Advisers (SEC File
801-26292) incorporated herein by reference, which sets forth the officers and
directors of Advisers and information as to any business, profession, vocation
or employment of a substantial nature engaged in by those officers and directors
during the past two years.
b) Templeton Investment Counsel, Inc.
Templeton Investment Counsel, Inc. ("TICI"), an indirect, wholly owned
subsidiary of Franklin Resources, Inc., serves as the Franklin Strategic Income
Fund's Sub-adviser, furnishing to Franklin Advisers, Inc. in that capacity,
portfolio management services and investment research. For additional
information please see Part B and Schedules A and D of Form ADV of the Franklin
Strategic Income Fund's Sub-adviser (SEC File 801-15125), incorporated herein by
reference, which sets forth the officers and directors of the Sub-adviser and
information as to any business, profession, vocation or employment of a
substantial nature engaged in by those officers and directors during the past
two years.
ITEM 27 PRINCIPAL UNDERWRITERS
a) Franklin/Templeton Distributors, Inc., ("Distributors") also acts as
principal underwriter of shares of:
Franklin Asset Allocation Fund
Franklin California Tax-Free Income Fund, Inc.
Franklin California Tax-Free Trust
Franklin Custodian Funds, Inc.
Franklin Equity Fund
Franklin Federal Money Fund
Franklin Federal Tax-Free Income Fund
Franklin Floating Rate Trust
Franklin Gold Fund
Franklin High Income Trust
Franklin Investors Securities Trust
Franklin Managed Trust
Franklin Money Fund
Franklin Mutual Series Fund Inc.
Franklin Municipal Securities Trust
Franklin New York Tax-Free Income Fund
Franklin New York Tax-Free Trust
Franklin Real Estate Securities Trust
Franklin Strategic Mortgage Portfolio
Franklin Tax-Exempt Money Fund
Franklin Tax-Free Trust
Franklin Templeton Fund Allocator Series
Franklin Templeton Global Trust
Franklin Templeton International Trust
Franklin Templeton Money Fund Trust
Franklin Templeton Variable Insurance Products Trust
Franklin Value Investors Trust
Institutional Fiduciary Trust
Templeton Capital Accumulator Fund, Inc.
Templeton Developing Markets Trust
Templeton Funds, Inc.
Templeton Global Investment Trust
Templeton Global Opportunities Trust
Templeton Global Real Estate Fund
Templeton Global Smaller Companies Fund, Inc.
Templeton Growth Fund, Inc.
Templeton Income Trust
Templeton Institutional Funds, Inc.
Templeton Variable Products Series 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 28 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 Registrant or its
shareholder services agent, Franklin/Templeton Investor Services, Inc., both of
whose address is 777 Mariners Island Blvd., San Mateo, CA 94404.
ITEM 29 MANAGEMENT SERVICES
There are no management-related service contracts not discussed in Part A or
Part B.
ITEM 30 UNDERTAKINGS
Not Applicable
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of San Mateo and the State of California, on the 27th day
of January, 2000.
FRANKLIN STRATEGIC SERIES
(Registrant)
By: RUPERT H. JOHNSON, JR.
Rupert H. Johnson, Jr.
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
RUPERT H. JOHNSON, JR.* Principal Executive Officer
Rupert H. Johnson, Jr. and Trustee
Dated: January 27, 2000
MARTIN L. FLANAGAN* Principal Financial Officer
Martin L. Flanagan Dated: January 27, 2000
KIMBERLEY H. MONASTERIO* Principal Accounting Officer
Kimberley H. Monasterio Dated: January 27, 2000
FRANK H. ABBOTT, III* Trustee
Frank H. Abbott, III Dated: January 27, 2000
HARRIS J. ASHTON* Trustee
Harris J. Ashton Dated: January 27, 2000
HARMON E. BURNS* Trustee
Harmon E. Burns Dated: January 27, 2000
S. JOSEPH FORTUNATO* Trustee
S. Joseph Fortunato Dated: January 27, 2000
EDITH E. HOLIDAY* Trustee
Edith E. Holiday Dated: January 27, 2000
CHARLES B. JOHNSON* Trustee
Charles B. Johnson Dated: January 27, 2000
FRANK W.T. LAHAYE* Trustee
Frank W.T. LaHaye Dated: January 27, 2000
GORDON S. MACKLIN* Trustee
Gordon S. Macklin Dated: January 27, 2000
By:/s/ David P. Goss
Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
FRANKLIN STRATEGIC SERIES
REGISTRATION STATEMENT
EXHIBITS INDEX
EXHIBIT NO. DESCRIPTION LOCATION
EX-99.(a)(i) Agreement and Declaration of Trust dated *
January 22, 1991
EX-99.(a)(ii) Certificate of Trust dated January 22, *
1991
EX-99.(a)(iii) Certificate of Amendment to the *
Certificate of Trust dated November 19,
1991
EX-99.(a)(iv) Certificate of Amendment to the *
Certificate of Trust of Franklin
Strategic Series dated May 14, 1992
EX-99.(a)(v) Certificate of Amendment of Agreement *
and Declaration of Trust of Franklin
Strategic Series dated April 18, 1995
EX-99.(b)(i) Amended and Restated By-Laws as of April *
25, 1991
EX-99.(b)(ii) Amendment to By-Laws dated October 27, *
1994
EX-99.(d)(i) Management Agreement between the *
Registrant, on behalf of Franklin Global
Health Care Fund, Franklin Small Cap
Growth Fund, Franklin Global Utilities
Fund, and Franklin Natural Resources
Fund, and Franklin Advisers, Inc., dated
February 24, 1992
EX-99.(d)(ii) Management Agreement between the *
Registrant, on behalf of Franklin
Strategic Income Fund, and Franklin
Advisers, Inc., dated May 24, 1994
EX-99.(d)(iii) Subadvisory Agreement between Franklin *
Advisers, Inc., on behalf of the
Franklin Strategic Income Fund, and
Templeton Investment Counsel, Inc.,
dated May 24, 1994
EX-99.(d)(iv) Amended and Restated Management *
Agreement between the Registrant, on
behalf of Franklin California Growth
Fund, and Franklin Advisers, Inc., dated
July 12, 1993
EX-99.(d)(v) Management Agreement between the *
Registrant, on behalf of Franklin Blue
Chip Fund, and Franklin Advisers, Inc.,
dated February 13, 1996
EX-99.(d)(vi) Management Agreement between the *
Registrant, on behalf of Franklin
Institutional MidCap Growth Fund (now
known as Franklin MidCap Growth Fund),
and Franklin Advisers, Inc., dated
January 1, 1996
EX-99.(d)(vii) Amendment dated August 1, 1995 to the *
Management Agreement between the
Registrant, on behalf of Franklin
California Growth Fund, and Franklin
Advisers, Inc., dated July 12, 1993
EX-99.(d)(viii) Amendment dated August 1, 1995 to the *
Management Agreement between the
Registrant, on behalf of Franklin Global
Health Care Fund, and Franklin Small Cap
Growth Fund, Franklin Global Utilities
Fund, and Franklin Natural Resources
Fund, and Franklin Advisers, Inc., dated
February 24, 1992
EX-99.(d)(ix) Amendment dated August 1, 1995 to the *
Management Agreement between the
Registrant on behalf of Franklin
Strategic Income Fund, and Franklin
Advisers, Inc., dated May 24, 1994
EX-99.(d)(x) Management Agreement between the *
Registrant, on behalf of Franklin
Biotechnology Discovery Fund, and
Franklin Advisers, Inc., dated July 15,
1997
EX-99.(d)(xi) Investment Advisory Agreement between *
the Registrant, on behalf of Franklin
U.S. Long-Short Fund, and Franklin
Advisers, Inc. dated February 18, 1999
EX-99.(d)(xii) Investment Advisory Agreement between *
the Registrant, on behalf of Franklin
Large Cap Growth Fund, and Franklin
Advisers, Inc. dated May 18, 1999
EX-99.(d)(xiii) Investment Advisory Agreement between *
the Registrant, on behalf of Franklin
Aggressive Growth Fund, and Franklin
Advisers, Inc. dated May 18, 1999
EX-99.(e)(i) Amended and Restated Distribution *
Agreement between the Registrant, on
behalf of all Series except Franklin
Strategic Income Fund, and
Franklin/Templeton Distributors, Inc.,
dated April 23, 1995
EX-99.(e)(ii) Amended and Restated Distribution *
Agreement between the Registrant, on
behalf of Franklin Strategic Income
Fund, and Franklin/Templeton
Distributors, Inc., dated March 29, 1995
EX-99.(e)(iii) Forms of Dealer Agreements between *
Franklin/Templeton Distributors, Inc.,
and Securities Dealers dated March 1,
1998
EX-99.(e)(iv) Amendment of Amended and Restated *
Distribution Agreement between the
Registrant on behalf of Franklin
Strategic Income Fund, and
Franklin/Templeton Distributors, Inc.
dated January 12, 1999
EX-99.(e)(v) Amendment of Amended and Restated *
Distribution Agreement between the
Registrant on behalf of all series
except Franklin Strategic Income Fund
dated January 12, 1999
EX-99.(g)(i) Master Custody Agreement between the *
Registrant and Bank of New York dated
February 16, 1996
EX-99.(g)(ii) Terminal Link Agreement between the *
Registrant and Bank of New York dated
February 16, 1996
EX-99.(g)(iii) Amendment dated May 7, 1997 to Master *
Custody Agreement between Registrant and
Bank of New York dated February 16, 1996
EX-99.(g)(iv) Amendment dated February 27, 1998 to *
Master Custody Agreement between
Registrant and Bank of New York dated
February 16, 1996
EX-99.(g)(v) Foreign Custody Manager Agreement *
between the Registrant and The Bank of
New York dated February 27, 1998
EX-99.(g)(vi) Amendment dated September 16, 1999 to Attached
Exhibit A of the Master Custody Agreement
EX-99.(h)(i) Subcontract for Fund Administrative *
Services dated October 1, 1996 and
Amendment thereto dated April 30, 1998
between Franklin Advisers, Inc. and
Franklin Templeton Services, Inc.
EX-99.(h)(ii) Administration Agreement between the *
Registrant, on behalf of Franklin
Biotechnology Discovery Fund, and
Franklin Templeton Services, Inc., dated
July 15, 1997
EX-99.(h)(iii) Fund Administration Agreement between *
the Registrant, on behalf of Franklin
U.S. Long-Short Fund, and Franklin
Templeton Services, Inc. dated February
18, 1999
EX-99.(h)(iv) Fund Administration Agreement between *
the Registrant, on behalf of Franklin
Large Cap Growth Fund, and Franklin
Templeton Services, Inc. dated May 18,
1999
EX-99.(h)(v) Fund Administration Agreement between *
the Registrant, on behalf of Franklin
Aggressive Growth Fund, and Franklin
Templeton Services, Inc. dated May 18,
1999
EX-99.(i)(i) Opinion and consent of counsel dated *
March 8, 1999
EX-99.(j)(i) Consent of Independent Auditors Attached
EX-99.(l)(i) Letter of Understanding for Franklin *
California Growth Fund dated August 20,
1991
EX-99.(l)(ii) Letter of Understanding for Franklin *
Global Utilities Fund - Class II dated
April 12, 1995
EX-99.(l)(iii) Letter of Understanding for Franklin *
Natural Resources Fund dated June 5, 1995
EX-99.(l)(iv) Letter of Understanding for Franklin *
California Growth Fund - Class II dated
August 30, 1996
EX-99.(l)(v) Letter of Understanding for Franklin *
Global Health Care Fund dated August 30,
1996
EX-99.(l)(vi) Letter of Understanding for Franklin *
Blue Chip Fund dated May 24, 1996
EX-99.(l)(vii) Letter of Understanding for Franklin *
Biotechnology Discovery Fund dated
September 5, 1997
EX-99.(l)(viii) Letter of Understanding for Franklin *
U.S. Long-Short Fund dated March 11, 1999
EX-99.(l)(ix) Letter of Understanding for Franklin *
Large Cap Growth Fund dated June 4, 1999
EX-99.(l)(x) Letter of Understanding for Franklin *
Aggressive Growth Fund dated June 22,
1999
EX-99.(m)(i) Amended and Restated Distribution Plan *
between the Registrant, on behalf of
Franklin California Growth Fund,
Franklin Small Cap Growth Fund, Franklin
Global Health Care Fund and Franklin
Global Utilities Fund, and
Franklin/Templeton Distributors, Inc.,
dated July 1, 1993
EX-99.(m)(ii) Distribution Plan between the *
Registrant, on behalf of Franklin Global
Utilities Fund - Class II, and
Franklin/Templeton Distributors, Inc.,
dated March 30, 1995
EX-99.(m)(iii) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of
Franklin Strategic Income Fund, and
Franklin/Templeton Distributors, Inc.,
dated May 24, 1994
EX-99.(m)(iv) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of the
Franklin Natural Resources Fund, and
Franklin/Templeton Distributors, Inc.,
dated June 1, 1995
EX-99.(m)(v) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of the
Franklin MidCap Growth Fund, and
Franklin/Templeton Distributors, Inc.,
dated June 1, 1996
EX-99.(m)(vi) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of the
Franklin Blue Chip Fund, and
Franklin/Templeton Distributors, Inc.,
dated May 28, 1996
EX-99.(m)(vii) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of
Franklin Small Cap Growth Fund - Class
II, and Franklin/Templeton Distributors,
Inc., dated September 29, 1995
EX-99.(m)(viii) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of
Franklin Biotechnology Discovery Fund,
and Franklin/Templeton Distributors,
Inc., dated September 15, 1997
EX-99.(m)(ix) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of
Franklin California Growth Fund - Class
II, and Franklin Global Health Care Fund
- Class II, and Franklin/Templeton
Distributors, Inc., dated September 3,
1996
EX-99.(m)(x) Distribution Plan pursuant to Rule 12b-1 *
between Registrant on behalf of Franklin
Strategic Income Fund - Class II, and
Franklin/Templeton Distributors, Inc.
dated February 26, 1998
EX-99.(m)(xi) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of
California Growth Fund - Class B, and
Franklin/Templeton Distributors, Inc.
dated October 16, 1998
EX-99.(m)(xii) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of Franklin
Global Health Care Fund - Class B, and
Franklin/Templeton Distributors, Inc.
dated October 16, 1998
EX-99.(m)(xiii) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of
Franklin Global Utilities Fund - Class B,
and Franklin/Templeton Distributors, Inc.
dated October 16, 1998
EX-99.(m)(xiv) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of Franklin
Strategic Income Fund - Class B, and
Franklin/Templeton Distributors, Inc. dated
October 16, 1998
EX-99.(m)(xv) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of
Franklin U.S. Long-Short Fund and
Franklin/Templeton Distributors, Inc.
dated April 15, 1999
EX-99.(m)(xvi) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of Franklin
Large Cap Growth Fund - Class A and
Franklin/Templeton Distributors, Inc.
dated May 18, 1999
EX-99.(m)(xvii) Distribution Plan pursuant to the Rule *
12b-1 between the Registrant, on behalf
of Franklin Aggressive Growth Fund -
Class A and Franklin/Templeton
Distributors, Inc. dated May 18, 1999
EX-99.(m)(xviii) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of Franklin
Large Cap Growth Fund - Class B, and
Franklin/Templeton Distributors, Inc. dated
May 18, 1999
EX-99.(m)(xix) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of Franklin
Aggressive Growth Fund - Class B, and
Franklin/Templeton Distributors, Inc.
dated May 18, 1999
EX-99.(m)(xx) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of Franklin
Large Cap Growth Fund - Class C, and
Franklin/Templeton Distributors, Inc. dated
May 18, 1999
EX-99.(m)(xxi) Distribution Plan pursuant to Rule 12b-1 *
between the Registrant, on behalf of Franklin
Aggressive Growth Fund - Class C, and
Franklin/Templeton Distributors, Inc.
dated May 18, 1999
EX-99.(m)(xxii) Form of Distribution Plan pursuant to Attached
Rule 12b-1 between the Registrant, on behalf
of Franklin Blue Chip Fund Class B, and
Franklin/Templeton Distributors, Inc.
EX-99.(m)(xxiii) Form of Distribution Plan pursuant to Attached
Rule 12b-1 between the Registrant, on behalf
of Franklin Blue Chip Fund Class C, and
Franklin/Templeton Distributors, Inc.
EX-99.(o)(i) Multiple Class Plan for Franklin Global *
Utilities Fund dated April 16, 1998
EX-99.(o)(ii) Multiple Class Plan for Franklin *
California Growth Fund dated April 16,
1998
EX-99.(o)(iii) Multiple Class Plan for Franklin Global *
Health Care Fund dated April 16, 1998
EX-99.(o)(iv) Multiple Class Plan for Franklin Small *
Cap Growth Fund dated June 18, 1996
EX-99.(o)(v) Multiple Class Plan for Franklin Natural *
Resources Fund dated June 18, 1996
EX-99.(o)(vi) Multiple Class Plan for Franklin *
Strategic Income Fund dated February 18,
1999
EX-99.(o)(vii) Multiple Class Plan for Franklin Large *
Cap Growth Fund dated May 18, 1999
EX-99.(o)(viii) Multiple Class Plan for Franklin *
Aggressive Growth Fund dated May 18, 1999
EX-99.(o)(ix) Form of Multiple Class Plan for Franklin Attached
Blue Chip Fund
EX-99.(p)(i) Power of Attorney for Franklin Strategic Attached
Series dated January 20, 2000
EX-99.(p)(ii) Certificate of Secretary dated January Attached
27, 2000
* Incorporated by reference
MASTER CUSTODY AGREEMENT
EXHIBIT A
The following is a list of the Investment Companies and their respective
Series for which the Custodian shall serve under the Master Custody Agreement
dated as of February 16, 1996.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT COMPANY ORGANIZATION SERIES ---(IF APPLICABLE)
- -----------------------------------------------------------------------------------------------
Adjustable Rate Securities Delaware Business U.S. Government Adjustable Rate Mortgage
Portfolios Trust Portfolio
Franklin Asset Allocation Fund Delaware Business
Trust
Franklin California Tax-Free Maryland Corporation
Income
Fund, Inc.
Franklin California Tax-Free Massachusetts Franklin California Insured Tax-Free
Trust Business Trust Income Fund
Franklin California Tax-Exempt Money Fund
Franklin California Intermediate-Term
Tax-Free
Income Fund
Franklin Custodian Funds, Inc. Maryland Corporation Growth Series
Utilities Series
Dynatech Series
Income Series
U.S. Government Securities Series
Franklin Equity Fund California
Corporation
Franklin Federal Money Fund California
Corporation
Franklin Federal Tax- Free California
Income Fund Corporation
- -----------------------------------------------------------------------------------------------
INVESTMENT COMPANY ORGANIZATION SERIES ---(IF APPLICABLE)
- -----------------------------------------------------------------------------------------------
Franklin Gold Fund California
Corporation
Franklin High Income Trust Delaware Business AGE High Income Fund
Trust
Franklin Investors Securities Massachusetts Franklin Global Government Income Fund
Trust Business Trust Franklin Short-Intermediate U.S. Govt
Securities Fund
Franklin Convertible Securities Fund
Franklin Adjustable U.S. Government
Securities Fund
Franklin Equity Income Fund
Franklin Bond Fund
Franklin Managed Trust Delaware Business Franklin Rising Dividends Fund
Trust
Franklin Money Fund California
Corporation
Franklin Municipal Securities Delaware Business Franklin California High Yield Municipal
Trust Trust Fund
Franklin Tennessee Municipal Bond Fund
Franklin Mutual Series Fund Maryland Corporation Mutual Shares Fund
Inc. Mutual Beacon Fund
Mutual Qualified Fund
Mutual Discovery Fund
Mutual European Fund
Mutual Financial Services Fund
- -----------------------------------------------------------------------------------------------
INVESTMENT COMPANY ORGANIZATION SERIES ---(IF APPLICABLE)
Franklin New York Tax-Free Delaware Business
Income Fund Trust
Franklin New York Tax-Free Massachusetts Franklin New York Tax-Exempt Money Fund
Trust Business Trust Franklin New York Intermediate-Term
Tax-Free
Income Fund
Franklin New York Insured Tax-Free
Income Fund
Franklin Real Estate Delaware Business Franklin Real Estate Securities Fund
Securities Trust Trust
Franklin Strategic Mortgage Delaware Business
Portfolio Trust
Franklin Strategic Series Delaware Business Franklin California Growth Fund
Trust Franklin Strategic Income Fund
Franklin MidCap Growth Fund
Franklin Global Utilities Fund
Franklin Small Cap Growth Fund
Franklin Global Health Care Fund
Franklin Natural Resources Fund
Franklin Blue Chip Fund
Franklin Biotechnology Discovery Fund
Franklin U.S. Long-Short Fund
Franklin Large Cap Growth Fund
Franklin Aggressive Growth Fund
Franklin Tax-Exempt Money Fund California
Corporation
- -----------------------------------------------------------------------------------------------
INVESTMENT COMPANY ORGANIZATION SERIES---(IF APPLICABLE)
Franklin Tax-Free Trust Massachusetts Franklin Massachusetts Insured Tax-Free
Business Trust Income Fund
Franklin Michigan Insured Tax-Free
Income Fund
Franklin Minnesota Insured Tax-Free
Income Fund
Franklin Insured Tax-Free Income Fund
Franklin Ohio Insured Tax-Free Income
Fund
Franklin Puerto Rico Tax-Free Income Fund
Franklin Arizona Tax-Free Income Fund
Franklin Colorado Tax-Free Income Fund
Franklin Georgia Tax-Free Income Fund
Franklin Pennsylvania Tax-Free Income
Fund
Franklin High Yield Tax-Free Income Fund
Franklin Missouri Tax-Free Income Fund
Franklin Oregon Tax-Free Income Fund
Franklin Texas Tax-Free Income Fund
Franklin Virginia Tax-Free Income Fund
Franklin Alabama Tax-Free Income Fund
Franklin Florida Tax-Free Income Fund
Franklin Connecticut Tax-Free Income Fund
Franklin Louisiana Tax-Free Income Fund
Franklin Maryland Tax-Free Income Fund
Franklin North Carolina Tax-Free Income
Fund
Franklin New Jersey Tax-Free Income Fund
Franklin Kentucky Tax-Free Income Fund
Franklin Federal Intermediate-Term
Tax-Free Income
Fund
Franklin Arizona Insured Tax-Free Income
Fund
Franklin Florida Insured Tax-Free Income
fund
- -----------------------------------------------------------------------------------------------
INVESTMENT COMPANY ORGANIZATION SERIES ---(IF APPLICABLE)
Franklin Templeton Fund Delaware Business Franklin Templeton Conservative Target
Allocator Series Trust Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Global Trust Delaware Business Franklin Templeton Global Currency Fund
Trust Franklin Templeton Hard Currency Fund
Franklin Templeton Delaware Business Templeton Pacific Growth Fund
International Trust Trust Templeton Foreign Smaller Companies Fund
Franklin Templeton Money Fund Delaware Business Franklin Templeton Money Fund
Trust Trust
Franklin Value Investors Trust Massachusetts Franklin Balance Sheet Investment Fund
Business Trust Franklin MicroCap Value Fund
Franklin Value Fund
Franklin Templeton Variable Massachusetts Franklin Money Market Fund
Insurance Products Trust Business Trust Franklin Growth and Income Fund
Franklin Natural Resources Securities
Fund
Franklin Real Estate Fund
Franklin Global Communications
Securities Fund
Franklin High Income Fund
Templeton Global Income Securities Fund
Franklin Income Securities Fund
Franklin U.S. Government Fund
Zero Coupon Fund - 2000
Zero Coupon Fund - 2005
Zero Coupon Fund - 2010
Franklin Rising Dividends Securities Fund
- -----------------------------------------------------------------------------------------------
INVESTMENT COMPANY ORGANIZATION SERIES ---(IF APPLICABLE)
Franklin Templeton Variable Massachusetts Templeton Pacific Growth Fund
Insurance Products Trust Business Trust Templeton International Equity Fund
(cont.) Templeton Developing Markets Equity Fund
Templeton Global Growth Fund
Templeton Global Asset Allocation Fund
Franklin Small Cap Fund
Franklin Large Cap Growth Securities Fund
Templeton International Smaller
Companies Fund
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Franklin Global Health Care Securities
Fund
Franklin Value Securities Fund
Franklin Aggressive Growth Securities
Fund
- -----------------------------------------------------------------------------------------------
Institutional Fiduciary Trust Massachusetts Money Market Portfolio
Business Trust Franklin U.S. Government Securities
Money Market
Portfolio
Franklin Cash Reserves Fund
The Money Market Portfolios Delaware Business The Money Market Portfolio
Trust The U.S. Government Securities Money
Market Portfolio
Templeton Variable Products Franklin Growth Investments Fund
Series Fund Mutual Shares Investments Fund
Mutual Discovery Investments Fund
Franklin Small Cap Investments Fund
- -----------------------------------------------------------------------------------------------
INVESTMENT COMPANY ORGANIZATION SERIES---(IF APPLICABLE)
- -----------------------------------------------------------------------------------------------
CLOSED END FUNDS:
Franklin Multi-Income Trust Massachusetts
Business Trust
Franklin Universal Trust Massachusetts
Business Trust
Franklin Floating Rate Trust Delaware Business
Trust
- -----------------------------------------------------------------------------------------------
</TABLE>
Revised: 9/16/99
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Post-Effective Amendment No. 38
to the Registration Statement of Franklin Strategic Series on Form N-1A (File
No. 33-39088) of our report dated June 4, 1999 on our audit of the financial
statements and financial highlights of Franklin Strategic Series, which report
is included in the Annual Report to Shareholders for the year ended April 30,
1999, which is incorporated by reference in the Registration Statement. We also
consent to the reference to our firm under the captions "Financial Highlights"
and "Auditor."
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
San Francisco, California
January 26, 2000
CLASS B DISTRIBUTION PLAN
I. Investment Company: FRANKLIN STRATEGIC SERIES
II. Fund: FRANKLIN BLUE CHIP FUND - CLASS B
III. Maximum Per Annum Rule 12b-1 Fees for Class B 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 B 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 B shares
(the "Class") of the Fund named above ("Fund"), which Plan shall take effect as
of the date Class B shares are first offered (the "Effective Date of the Plan").
The Plan has been approved by a majority of the Board of 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.
The Board recognizes that Distributors has entered into an arrangement
with a third party in order to finance the distribution activities of the Class
pursuant to which Distributors may assign its rights to the fees payable
hereunder to such third party. The Board further recognizes that it has an
obligation to act in good faith and in the best interests of the Fund and its
shareholders when considering the continuation or termination of the Plan and
any payments to be made thereunder.
DISTRIBUTION PLAN
1. (a) The Fund shall pay to Distributors a monthly 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 Investment Company'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) The monies paid to Distributors pursuant to Paragraph 1(a) above
shall be treated as compensation for Distributors' distribution-related services
including compensation for amounts advanced to securities dealers or their firms
or others selling shares of the Class who have executed an agreement with the
Investment Company, Distributors or its affiliates, which form of agreement has
been approved from time to time by the Board, including the non-interested Board
members, with respect to the sale of Class shares. In addition, such monies may
be used to compensate Distributors for other expenses incurred 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, or for certain promotional distribution charges paid to
broker-dealer firms or others, or for participation in certain distribution
channels. None of such payments are the legal obligation of Distributors or its
designee.
(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. None of such
payments are the legal obligation of Distributors or its designee.
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 Rule 2830(d) of the Conduct Rules of the National
Association of Securities Dealers, Inc.
4. Distributors shall furnish to the Board, for its review, on a quarterly
basis, a written report of the monies paid 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. (a) Distributors may assign, transfer or pledge ("Transfer") to one or
more designees (each an "Assignee"), its rights to all or a designated portion
of the fees to which it is entitled under paragraph 1 of this Plan from time to
time (but not Distributors' duties and obligations pursuant hereto or pursuant
to any distribution agreement in effect from time to time, if any, between
Distributors and the Fund), free and clear of any offsets or claims the Fund may
have against Distributors. Each such Assignee's ownership interest in a Transfer
of a specific designated portion of the fees to which Distributors is entitled
is hereafter referred to as an "Assignee's 12b-1 Portion." A Transfer pursuant
to this Section 5(a) shall not reduce or extinguish any claims of the Fund
against Distributors.
(b) Distributors shall promptly notify the Fund in writing of each
such Transfer by providing the Fund with the name and address of each such
Assignee.
(c) Distributors may direct the Fund to pay any Assignee's 12b-1
Portion directly to each Assignee. In such event, Distributors shall provide the
Fund with a monthly calculation of the amount to which each Assignee is entitled
(the "Monthly Calculation"). In such event, the Fund shall, upon receipt of such
notice and Monthly Calculation from Distributors, make all payments required
directly to the Assignee in accordance with the information provided in such
notice and Monthly Calculation upon the same terms and conditions as if such
payments were to be paid to Distributors.
(d) Alternatively, in connection with a Transfer, Distributors may
direct the Fund to pay all or a portion of the fees to which Distributors is
entitled from time to time to a depository or collection agent designated by any
Assignee, which depository or collection agent may be delegated the duty of
dividing such fees between the Assignee's 12b-1 Portion and the balance (such
balance, when distributed to Distributors by the depository or collection agent,
the "Distributors' 12b-1 Portion"), in which case only Distributors' 12b-1
Portion may be subject to offsets or claims the Fund may have against
Distributors.
6. 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. In determining whether
there is a reasonable likelihood that the continuation of the Plan will benefit
the Fund and its shareholders, the Board may, but is not obligated to, consider
that Distributors has incurred substantial cost and has entered into an
arrangement with a third party in order to finance the distribution activities
for the Class.
7. This Plan and any agreements entered into pursuant to this Plan may be
terminated with respect to the shares of the Class, without penalty, at any time
by vote of a majority of the non-interested Board members of the Investment
Company, or by vote of a majority of outstanding Shares of such Class. Upon
termination of this Plan with respect to the Class, the obligation of the Fund
to make payments pursuant to this Plan with respect to such Class shall
terminate, and the Fund shall not be required to make payments hereunder beyond
such termination date with respect to expenses incurred in connection with Class
shares sold prior to such termination date, provided, in each case that each of
the requirements of a Complete Termination of this Plan in respect of such
Class, as defined below, are met. For purposes of this Section 7, a "Complete
Termination" of this Plan in respect of the Class shall mean a termination of
this Plan in respect of such Class, provided that: (i) the non-interested Board
members of the Investment Company shall have acted in good faith and shall have
determined that such termination is in the best interest of the Investment
Company and the shareholders of the Fund and the Class; (ii) and the Investment
Company does not alter the terms of the contingent deferred sales charges
applicable to Class shares outstanding at the time of such termination; and
(iii) unless Distributors at the time of such termination was in material breach
under the distribution agreement in respect of the Fund, the Fund shall not, in
respect of such Fund, pay to any person or entity, other than Distributors or
its designee, either the payments described in paragraph 1(a) or 1(b) or in
respect of the Class shares sold by Distributors prior to such termination.
8. 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 outstanding
voting securities of the Class of the Fund.
9. 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.
10. 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: SEPTEMBER 14, 1999
FRANKLIN STRATEGIC SERIES on behalf of
FRANKLIN BLUE CHIP FUND
By:__________________________
Deborah R. Gatzek
Vice President & Secretary
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By:__________________________
Harmon E. Burns
Executive Vice President
CLASS C DISTRIBUTION PLAN
I. Investment Company: FRANKLIN STRATEGIC SERIES
II. Fund: FRANKLIN BLUE CHIP FUND - CLASS C
III. Maximum Per Annum Rule 12b-1 Fees for Class C 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 C 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 C shares
(the "Class") of the Fund named above ("Fund"), which Plan shall take effect as
of the date class C shares are first offered (the "Effective Date of the Plan").
The Plan has been approved by a majority of the Board of 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 monthly 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 Rule 2830(d) of the Conduct Rules of the National
Association of Securities Dealers, Inc.
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: _________________
FRANKLIN STRATEGIC SERIES on behalf of
FRANKLIN BLUE CHIP FUND
By: _________________________
Deborah R. Gatzek
Vice President & Secretary
Franklin/Templeton Distributors, Inc.
By: _________________________
Harmon E. Burns
Executive Vice President
MULTIPLE CLASS PLAN
ON BEHALF OF
FRANKLIN BLUE CHIP FUND
This Multiple Class Plan (the "Plan") has been adopted by a majority of
the Board of Trustees of FRANKLIN STRATEGIC SERIES (the "Investment Company")
for its series, FRANKLIN BLUE CHIP FUND (the "Fund"). The Board has determined
that the Plan, including the expense allocation, is in the best interests of
each class of the Fund and the Investment Company as a whole.
1. The Fund shall offer three classes of shares, to be known as Class A
Shares, Class B Shares and Class C 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 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.
4. The distribution plan adopted by the Investment Company 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 reimburse
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
service fees paid to securities dealers or their firms or others who have
executed a servicing agreement with the Investment Company 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 dealers or others who provide personal assistance to shareholders
in servicing their accounts.
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
broker-dealers, banks, trust companies and others who maintain shareholder
accounts or provide personal assistance to shareholders in servicing their
accounts. 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.
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 and Class C
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 and
Class C 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 Strategic Series' Board
of Trustees and as described, in each 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 and Class C may be exchanged for shares of
another investment company within the Franklin Templeton Group of Funds
according to the terms and conditions stated in each 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 Board
members 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 Investment Company.
11. I, Deborah R. Gatzek, Secretary of the Franklin Group of Funds, do
hereby certify that this Multiple Class Plan was adopted by FRANKLIN STRATEGIC
SERIES, on behalf of its series FRANKLIN BLUE CHIP FUND, by a majority of the
Trustees of the Trust on September 14, 1999.
--------------------
Deborah R. Gatzek
Secretary
POWER OF ATTORNEY
The undersigned officers and trustees of FRANKLIN STRATEGIC SERIES (the
"Registrant") hereby appoint MARK H. PLAFKER, HARMON E. BURNS, DEBORAH R.
GATZEK, KAREN L. SKIDMORE, LEIANN NUZUM, Murray L. Simpson, Barbara J. Green and
David P. Goss (with full power to each of them to act alone) his
attorney-in-fact and agent, in all capacities, to execute, deliver and file in
the names of the undersigned, any and all instruments that said attorneys and
agents may deem necessary or advisable to enable the Registrant to comply with
or register any security issued by the Registrant under the Securities Act of
1933, as amended, and/or the Investment Company Act of 1940, as amended, and the
rules, regulations and interpretations thereunder, including but not limited to,
any registration statement, including any and all pre- and post-effective
amendments thereto, any other document to be filed with the U.S. Securities and
Exchange Commission and any and all documents required to be filed with respect
thereto with any other 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.
This Power of Attorney may be executed in one or more counterparts, each
of which shall be deemed to be an original, and all of which shall be deemed to
be a single document.
The undersigned officers and trustees hereby execute this Power of
Attorney as of the 20th day of January, 2000.
/s/ Rupert H. Johnson, Jr., /s/Frank H. Abbott, III,
Principal Executive Officer and Trustee Trustee
/s/Harris J. Ashton, /s/Harmon E. Burns,
Trustee Trustee
/s/S. Joseph Fortunato, /s/Edith E. Holiday,
Trustee Trustee
/s/Charles B. Johnson, /s/Frank W.T. LaHaye,
Trustee Trustee
/s/Gordon S. Macklin, /s/Martin L. Flanagan,
Trustee Principal Financial Officer
/s/Kimberley H. Monasterio,
Principal Accounting Officer
CERTIFICATE OF SECRETARY
I, David P. Goss, certify that I am Assistant Secretary of FRANKLIN STRATEGIC
SERIES (the "Trust").
As Assistant Secretary of the Trust, I further certify that the following
resolution was adopted by a majority of the Trustees of the Trust present at a
meeting held at 777 Mariners Island Boulevard, San Mateo, California 94404, on
January 20, 2000.
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, Mark H. Plafker, Karen L. Skidmore,
Leiann Nuzum, Murray L. Simpson, Barbara J. Green and David P.
Goss as attorneys-in-fact for the purpose of filing documents
with the Securities and Exchange Commission, be executed by each
Trustee 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.
Dated: January 27, 2000 /s/David P. Goss
Assistant Secretary
