As filed with the Securities and Exchange Commission on August 31, 1995.
File Nos.
33-88924
811-8962
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. 1 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 3 (X)
FRANKLIN TEMPLETON MONEY FUND TRUST
(Exact Name of Registrant as Specified in Charter)
777 MARINERS ISLAND BLVD., SAN MATEO, CALIFORNIA 94404
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (415) 312- 2000
HARMON E. BURNS, 777 MARINERS ISLAND BLVD. SAN MATEO, CA. 94404
(Name and Address of Agent for Service of Process)
It is proposed that this filing will become effective (check appropriate box)
[ ]immediately upon filing pursuant to paragraph (b)
[ ]on (date) pursuant to paragraph (b)
[ ]60 days after filing pursuant to paragraph (a)(i)
[X]on November 1, 1995 pursuant to paragraph (a)(i)
[ ]75 days after filing pursuant to paragraph (a)(ii)
[ ]on (date), pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Money Market Portfolios (the master fund) has executed this registration
statement.
DECLARATION PURSUANT TO RULE 24F-2. The Registrant has registered an indefinite
number or amount of securities under the Securities Act of 1933 pursuant to Rule
24(f)(2) under the Investment Company Act of 1940. The Rule 24f-2 Notice for the
issuer's most recent fiscal year was filed on August 30, 1995.
FRANKLIN TEMPLETON MONEY FUND II
Franklin Templeton Money Fund Trust
CROSS REFERENCE SHEET
FORM N-1A
PART A: INFORMATION REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
N- 1A Location in
ITEM NO. REGISTRATION STATEMENT
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis "Expense Table"
3. Condensed Financial Information "Financial Highlights";
"Performance"
4. General Description of Registrant "About the Fund"; "Investment
Objective and Policies of the
Fund"; "General Information"
5. Management of the Fund "Administration of the Fund";
"Portfolio Operations"
6. Capital Stock and Other Securities "Distributions to Shareholders";
"Taxation of the Fund and Its
Shareholders"; "General
Information"
7. Purchase of Securities Being "How to Buy Shares of the Fund";
Offered "Other Programs and Privileges
Available to Fund Shareholders";
"Exchange Privilege"; "Valuation
of Fund Shares"
8. Redemption or Repurchase "How to Sell Shares of the Fund";
"Valuation of Fund Shares"; "How
to Get Information Regarding an
Investment in the Fund"; "General
Information"
9. Pending Legal Proceedings Not Applicable
FRANKLIN TEMPLETON MONEY FUND II
Franklin Templeton Money Fund Trust
CROSS REFERENCE SHEET
FORM N-1A
Part B: Information Required in
STATEMENT OF ADDITIONAL INFORMATION
10. Cover Page Cover Page
11. Table of Contents Contents
12. General Information and History "The Fund" (See also Prospectus
"About the Fund"), "Miscellaneous
Information"
13. Investment Objectives and Policies "Additional Information Regarding
the Fund's Investment Objective
and Policies" (See also
Prospectus "Investment Objective
and Policies by the Fund")
14. Management of the Fund "Officers and Trustees"
15. Control Persons and Principal "Officers and Trustees",
Holders of Securities "Miscellaneous Information"
16. Investment Advisory and Other "Administration and Other
Services Services" (See also Prospectus
"Administration of the Fund")
17. Brokerage Allocation "Policies Regarding Brokers Used
on Portfolio Transactions"
18. Capital Stock and Other Securities "The Fund" (See also Prospectus
"About the Fund")
19. Purchase, Redemption and Pricing "Additional Information Regarding
of Securities Being Offered Purchases and Redemptions of Fund
Shares"; "Determination of Net
Asset Value" (See also the
Prospectus "Valuation of Fund
Shares")
20. Tax Status "Additional Information Regarding
Distributions and Taxes"
21. Underwriters "The Fund's Underwriter"
22. Performance Data "General Information"
23. Financial Statements Financial Statements
</TABLE>
FRANKLIN
TEMPLETON
MONEY FUND II
FRANKLIN TEMPLETON
MONEY FUND TRUST
PROSPECTUS NOVEMBER 1, 1995
777 MARINERS ISLAND BLVD., P.O. BOX 7777
SAN MATEO, CA 94403-7777 1-800/DIAL BEN
Franklin Templeton Money Fund II (the "Fund") is an open-end, diversified series
of the Franklin Templeton Money Fund Trust (the "Trust"), a management
investment company. The Fund seeks to achieve:
* HIGH CURRENT INCOME * LIQUIDITY
* CAPITAL PRESERVATION
THE FUND, UNLIKE MOST FUNDS WHICH INVEST DIRECTLY IN SECURITIES, SEEKS TO
ACHIEVE ITS OBJECTIVE BY INVESTING ALL OF ITS ASSETS IN THE SHARES OF THE MONEY
MARKET PORTFOLIO (THE "PORTFOLIO"), A SEPARATE SERIES OF THE MONEY MARKET
PORTFOLIOS ("MONEY MARKET"), WHOSE INVESTMENT OBJECTIVE IS THE SAME AS THAT OF
THE FUND.
This Prospectus is intended to set forth in a clear and concise manner
information about the Fund and the Trust that a prospective investor should know
before investing. After reading the Prospectus, it should be retained for future
reference; it contains information about the purchase and sale of shares and
other items which a prospective investor will find useful to have.
The Portfolio in turn invests primarily in various money market instruments
which the Board of Trustees of Money Market has determined present minimal
credit risks and which are, as required by federal securities laws, rated in one
of the two highest rating categories as determined by nationally recognized
statistical rating organizations ("NRSRO"), or which are unrated and of
comparable quality, with remaining maturities of 397 calendar days or less. Such
instruments may include United States ("U.S.") government and federal agency
obligations, certificates of deposit, bankers' acceptances, time deposits of
major financial institutions, high grade commercial paper, high grade short-term
corporate obligations, taxable municipal securities, repurchase agreements
secured by U.S. government securities and U.S. dollar-denominated foreign
securities as described under "Investment Objective and Policies of the Fund."
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
A Statement of Additional Information ("SAI") concerning the Fund and the Trust,
dated November 1, 1995, as may be amended from time to time, provides a further
discussion of certain areas in this Prospectus and other matters which may be of
interest to some investors. It has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated herein by reference. A copy is available
without charge from the Fund or the Fund's principal underwriter,
Franklin/Templeton Distributors, Inc. ("Distributors"), at the address or
telephone number shown above.
THIS PROSPECTUS IS NOT AN OFFERING OF THE SECURITIES HEREIN DESCRIBED IN ANY
STATE IN WHICH THE OFFERING IS NOT AUTHORIZED. NO SALES REPRESENTATIVE, DEALER,
OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. FURTHER
INFORMATION MAY BE OBTAINED FROM THE UNDERWRITER.
CONTENTS PAGE
Expense Table
Financial Highlights
About the Fund
Investment Objective and
Policies of the Fund
Investment Risk Considerations
Administration of the Fund
Distributions to Shareholders
Taxation of the Fund
and Its Shareholders
How to Buy Shares of the Fund
How to Sell Shares of the Fund
Other Programs and Privileges
Available to Fund Shareholders
Purchasing Shares of the Fund in
Connection with Retirement Plans
Involving Tax-Deferred Investments
Exchange Privilege
Telephone Transactions
Valuation of Fund Shares
How to Get Information
Regarding an Investment in the Fund
Performance
General Information
Account Registrations
Important Notice Regarding
Taxpayer IRS Certifications
EXPENSE TABLE
The purpose of this table is to assist an investor in understanding the various
costs and expenses that a shareholder will bear directly or indirectly in
connection with an investment in the Fund, including the expenses of the
Portfolio in which the Fund invests. These figures are based on aggregate
operating expenses of the Fund, which may be based on contractual amounts,
except for "Other Expenses of the Fund," which are based on estimated amounts
for the Fund's current fiscal period. Such expenses for the Portfolio reflect
aggregate operating expenses, before fee waivers and expense reductions, for the
Portfolio's fiscal year ended June 30, 1995.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases NONE+
Deferred Sales Charge 1.00%+
Exchange Fee (per transaction) $5.00*
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management and Administration Fees 0.61%**
12b-1 Fees 0.65%++
Other Expenses of the Fund and Portfolio 0.41%
Total Operating Expenses 1.67%**
=======
+ Shares redeemed within a "contingency period" of 18 months of the calendar
month following such investments are subject to a 1% contingent deferred sales
charge. See "How to Sell Shares of the Fund - Contingent Deferred Sales Charge"
for more information.
* A $5.00 fee is imposed only on Timing Accounts, as described under "Exchange
Privilege." All other exchanges are processed without a fee.
** Includes management fees of the Portfolio of 0.15% and administration fees
for the Fund of 0.46%. However, the investment manager of the Portfolio agreed
in advance to waive a portion of its management fees. With this reduction,
management fees were 0.14% of the average net assets of the Portfolio. Total
operating expenses of the Fund, including expenses of the Portfolio, with this
reduction equal 1.66% of the Fund's average net assets.
++ Consistent with National Association of Securities Dealers, Inc.'s rules, it
is possible that the combination of front-end sales charges and Rule 12b-1 fees
could cause long-term shareholders to pay more than the economic equivalent of
the maximum front-end sales charges permitted under those same rules. No 12b-1
fees were collected by the Fund for the fiscal year ended June 30, 1995. The
above table reflects the contractual amount of Rule 12b-1 fees that the Fund may
collect. The Fund expects to incur the full 12b-1 fees in the next fiscal year.
Investors should be aware that the above table is not intended to reflect in
precise detail the fees and expenses associated with an individual's own
investment in the Fund. Rather the table has been provided only to assist
investors in gaining a more complete understanding of fees, charges and
expenses. For a more detailed discussion of these matters, investors should
refer to the appropriate sections of this Prospectus.
EXAMPLE
As required by SEC regulations of the, the following example illustrates the
expenses that apply to a $1,000 investment in the Fund over various time periods
assuming (1) a 5% annual rate of return and (2) redemption at the end of each
time period.
ONE YEAR THREE YEARS
$ 27 $ 53
$*17
* A shareholder would pay these expenses on the same investment, assuming no
redemption.
THIS EXAMPLE IS BASED ON THE ESTIMATED AGGREGATE ANNUAL OPERATING EXPENSES OF
THE FUND AND THE PORTFOLIO, BEFORE FEE WAIVERS AND EXPENSE REDUCTIONS, INCLUDING
FEES SET BY CONTRACT, SHOWN ABOVE AND SHOULD NOT BE CONSIDERED A REPRESENTATION
OF FUTURE EXPENSES, WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. The operating
expenses are borne by the Fund and Portfolio and only indirectly by shareholders
as a result of their investment in the Fund. (See "Administration of the Fund"
in the Prospectus for a description of the Fund's and Portfolio's expenses.) In
addition, federal securities regulations require the example to assume an annual
return of 5%, but the Fund's actual return may be more or less than 5%.
The Board of Trustees of the Fund considered the aggregate fees and expenses to
be paid by both the Fund and the Portfolio under the Fund's policy of investing
all of its assets in shares of the Portfolio, and such fees and expenses the
Fund would pay if it continued to invest directly in various types of money
market instruments. This arrangement, whereby the Fund invests all of its assets
in shares of the Portfolio, enables various institutional investors, including
the Fund and other investment companies, to pool their assets, which may be
expected to result in the achievement of a variety of operating economies.
Accordingly, the Board of Trustees concluded that the aggregate expenses of the
Fund and the Portfolio were expected to be lower than the expenses that would be
incurred by the Fund if it continued to invest directly in various types of
money market instruments. Of course, there is no guarantee or assurance that
asset growth and lower expenses will be recognized. Franklin Advisers, Inc.
("Advisers"), however, has agreed in advance to limit expenses so that in no
event will shareholders of the Fund incur higher expenses than if the Fund
continued to invest directly in various types of money market instruments.
Further information regarding the Fund's and the Portfolio's fees and expenses
is included under "Administration of the Fund."
FINANCIAL HIGHLIGHTS
Set forth below is a table containing financial highlights for a share
outstanding throughout the period beginning April 13, 1995 and ending June 30,
1995. The information for this period ending June 30, 1995 has been audited by
Coopers & Lybrand L.L.P., independent auditors, whose audit report appears in
the financial statements in the Fund's Annual Report to Shareholders dated June
30, 1995.
Selected data for each share of beneficial interest outstanding throughout
the period are as follows:
PER SHARE OPERATING PERFORMANCE 1995+
Net asset value at beginning of period $1.00
Net investment income 0.007
Distributions from net investment income (0.007)
-------
Net asset value at end of period $1.00
=====
TOTAL RETURN**+ 0.73%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (in 000's) $152
Ratio of expenses to average net assets1,2 1.83%*
Ratio of expenses to average net assets1
(excluding Advisers' waiver of Portfolio's expenses) 1.84%*
Ratio of net investment income to average net assets 4.42%*
* Annualized
** Total Return measures the change in value of an investment over the period
indicated. It assumes reinvestment of dividends and capital gains at net asset
value and is not annualized.
+ For the period April 13, 1995 to June 30, 1995
1 Includes the Fund's share of the Portfolio's allocated expenses.
2 During the period indicated, Advisers agreed to waive a portion of its
management fees incurred by the Portfolio.
ABOUT THE FUND
Franklin Templeton Money Fund II is a diversified series of the Franklin
Templeton Money Fund Trust, an open-end management investment company, commonly
called a "mutual fund", which has registered with the SEC under the Investment
Company Act of 1940 (the "1940 Act"). The Fund is the Trust's only series. The
Trust is a Delaware business trust organized on January 30, 1995 and
administered by Advisers.
The Fund attempts to maintain a stable net asset value of $1.00 per share
(although there is no assurance that this will be achieved).
Shares of the Fund may not be purchased directly. Shares may be acquired only in
exchange for Class II shares of other funds that are members of the Franklin
Templeton Funds, and as a result of the reinvestment of income dividends and
capital gains distributions in additional shares of the Fund. All shares of the
Fund are acquired at the net asset value next determined after receipt of an
exchange request in proper form. Shares of the Fund redeemed within 18 months of
purchase of the Class II shares which were exchanged for shares of the Fund are
subject to a 1.00% contingent deferred sales charge. (See "How to Sell Shares of
the Fund" and "Exchange Privilege.")
GENERAL
In order to offer more purchase options to investors, many funds in the Franklin
Templeton Group have established a multiple class fund structure, offering Class
I and Class II shares. This structure allows investors to consider which
schedule of sales charges, asset-based sales charges, and certain other features
best meet their investment needs. Generally, Class II shares have lower initial
sales charges than Class I shares and higher yearly Rule 12b-1 fees. Also,
contingent deferred sales charges will generally be assessed on Class II shares
redeemed within eighteen months of purchase.
The Fund is intended to be a short-term or cash management investment option for
investors in Class II shares of other funds in the Franklin Templeton Group. The
Fund is designed to be similar and complementary to Class II shares in certain
respects, such as in its method of distribution, the imposition of contingent
deferred sales charge ("CDSC") in certain circumstances and a Rule 12b-1
distribution plan.
INVESTMENT OBJECTIVE AND
POLICIES OF THE FUND
The investment objective of the Fund is to obtain as high a level of current
income (in the context of the type of investments available to the Fund) as is
consistent with capital preservation and liquidity. The Fund pursues its
investment objective by investing all of its assets in the Portfolio, which has
the same investment objective and substantially similar policies and
restrictions as the Fund. The Portfolio is a separate diversified series of
Money Market, an open-end management investment company, managed by Advisers.
Shares of the Portfolio are acquired by the Fund at net asset value with no
sales charge. Accordingly, an investment in the Fund is an indirect investment
in the Portfolio. As with any other investment, there is no assurance that the
Fund's objective will be attained.
SPECIAL INFORMATION REGARDING THE
FUND'S MASTER/FEEDER FUND STRUCTURE
The investment objective of both the Fund and the Portfolio is fundamental and
may not be changed without shareholder approval. The investment policies of the
Fund, fundamental and non-fundamental, are identical to those described herein
with respect to the Portfolio, except that in all cases, the Fund is permitted
to pursue such policies by investing in an open-end management investment
company with the same investment objective and substantially similar policies
and limitations as the Fund. Any additional exceptions are noted below.
Information on administration and expenses is included under "Administration of
the Fund." See the SAI for further information regarding the Fund's and the
Portfolio's investment restrictions.
An investment in the Fund may be subject to certain risks due to the Fund's
structure, such as the potential that upon redemption by other future
shareholders in the Portfolio, the Fund's expenses may increase or the economies
of scale which have been achieved as a result of the structure may be
diminished. Institutional investors in the Portfolio that have a greater pro
rata ownership interest in the Portfolio than the Fund could have effective
voting control over the operation of the Portfolio. Further, in the event that
the shareholders of the Fund do not approve a proposed future change in the
Fund's objective or fundamental policies, which has been approved for the
Portfolio, the Fund may be forced to withdraw its investment from the Portfolio
and seek another investment company with the same objective and policies. If the
Board of Trustees of the Fund considers that it is in the best interest of the
Fund to do so, the Fund may withdraw its investment in the Portfolio at any
time. In that event, the Board of Trustees of the Fund would consider what
action to take, including the investment of all of the assets of the Fund in
another pooled investment entity having a substantially similar investment
objective and policies as the Fund or the hiring of an investment advisor to
manage the Fund's investments. Either circumstances may cause an increase in
Fund expenses. Further, the Fund's structure is a relatively new format which
often results in certain operational and other complexities. The Franklin
organization, however, was one of the first mutual fund complexes in the country
to implement such a structure, and the trustees do not believe that the
additional complexities outweigh the potential benefits to be gained by
shareholders.
The Franklin Group of Funds(R) has three other funds which may invest in the
Portfolio, two of which are designed for institutional investors only. It is
possible that in the future other funds may be created which may likewise invest
in the Portfolio or existing funds may be restructured so that they may invest
in the Portfolio. Any such fund may be offered at the same or a different public
offering price; thus, an investor in such fund may experience a different return
from an investor in another investment company which invests exclusively in the
Portfolio. The Fund or the Fund's administrator will forward to any interested
shareholder additional information, including a prospectus and SAI, if
requested, regarding such other institutions through which they may make
investments in the Portfolio. Investors interested in obtaining information
about such funds may contact the departments listed under "How to Get
Information Regarding an Investment in the Fund." The Portfolio is a series of
Money Market, a management investment company registered under the 1940 Act.
Money Market is a Delaware business trust organized on June 16, 1992 and is
authorized to issue an unlimited number of shares of beneficial interest with a
par value of $.01 per share. All shares have one vote and, when issued, are
fully paid, non-assessable, and redeemable. Money Market currently issues shares
in two separate series; however, additional series may be added in the future by
the Board of Trustees of Money Market, the assets and liabilities of which will
be separate and distinct from any other series.
Whenever the Fund, as an investor in the Portfolio, is asked to vote on a matter
relating to the Portfolio, the Fund, will hold a meeting of Fund shareholders
and will cast its votes in the same proportion as the Fund's shareholders have
voted.
QUALITY, DIVERSIFICATION AND MATURITY STANDARDS
In accordance with procedures adopted pursuant to Rule 2a-7 under the 1940 Act,
the Portfolio limits its investments to those U.S. dollar denominated
instruments which the Board of Trustees of Money Market determines present
minimal credit risks and which are, as required by the federal securities laws,
rated in one of the two highest rating categories as determined by nationally
recognized statistical rating agencies, or which are unrated by any NRSRO but of
comparable quality, with remaining maturities of 397 calendar days or less
("Eligible Securities"). The Portfolio maintains a dollar weighted average
maturity of the securities in its portfolio of 90 days or less. The Portfolio
will not invest more than 5% of its total assets in Eligible Securities of a
single issuer, other than U.S. government securities, rated in the highest
category by the requisite number of rating agencies, except that the Portfolio
may exceed that limit as permitted by Rule 2a-7 for a period of up to three
business days; and the Portfolio will not invest (a) the greater of 1% of the
Portfolio's total assets or $1 million in Eligible Securities issued by a single
issuer rated in the second highest category and (b) more than 5% of its total
assets in Eligible Securities of all issuers rated in the second highest
category. These procedures are a fundamental policy of the Portfolio and the
Fund, except to the extent that the Fund invests all of its assets in another
registered investment company with a substantially similar investment objective
and policies as the Fund. See the SAI for a description of ratings.
Because the Portfolio limits its investments to high quality securities, its
portfolio will generally earn lower yields than if the Portfolio purchased
securities with a lower rating and correspondingly greater risk and the yield to
shareholders in the Portfolio, and thus the Fund, is accordingly likely to be
lower.
As a matter of fundamental policy (which may not be changed without shareholder
approval), the Portfolio may not purchase any securities other than obligations
of the U.S. government, its agencies or instrumentalities, if, immediately after
such purchase, more than 5% of the value of the Portfolio's total assets would
be invested in securities of any one issuer with respect to 75% of the
Portfolio's total assets, or more than 10% of the outstanding voting securities
of any one issuer would be owned by the Portfolio, except to the extent that the
Fund invests all of its assets in another registered investment company having a
substantially similar investment objective and policies as the Fund. As stated
above in accordance with procedures adopted pursuant to Rule 2a-7, the Portfolio
will not invest more than 5% of the Portfolio's total assets in Eligible
Securities of a single issuer, other than U.S. government securities. In
addition, the Portfolio may not invest more than 5% of its total assets in the
securities of companies (including predecessors) which have been in continuous
operation for less than three years, nor invest more than 25% of its total
assets in any particular industry, except to the extent that all or
substantially all of the Fund's assets may be invested in another registered
investment company having substantially similar investment objectives and
policies as the Fund. The Portfolio may, however, invest more than 25% of its
assets in certain domestic bank obligations. The foregoing limitations do not
apply to U.S. government securities and federal agency obligations, or to
repurchase agreements fully collateralized by such government securities or
obligations, although certain tax diversification requirements apply to
investments in repurchase agreements and other securities that are not treated
as U.S. government obligations under the Internal Revenue Code of 1986, as
amended (the "Code").
TYPES OF SECURITIES THE FUND (OR THE PORTFOLIO) MAY PURCHASE
U.S. Government Securities. The Portfolio may invest without limit in U.S.
government securities, which consist of marketable fixed, floating and variable
rate securities issued or guaranteed by the U.S. government, its agencies, or by
various instrumentalities which have been established or sponsored by the U.S.
government ("U.S. government securities"). Certain of these obligations,
including U.S. Treasury bills, notes and bonds and securities of the Government
National Mortgage Association (popularly called "GNMAs" or "Ginnie Maes") and
the Federal Housing Administration, are issued or guaranteed by the U.S.
government or carry a guarantee that is supported by the full faith and credit
of the U.S. government. Other U.S. government securities are issued or
guaranteed by federal agencies or government-sponsored enterprises and are not
direct obligations of the U.S. government, but involve sponsorship or guarantees
by government agencies or enterprises. These obligations include securities that
are supported by the right of the issuer to borrow from the U.S. Treasury, such
as obligations of the Federal Home Loan Bank, and securities that are supported
by the credit of the instrumentality, such as Federal National Mortgage
Association ("FNMA") bonds. In this connection, the Portfolio may use any
portion of its assets invested in U.S. government securities to concurrently
enter into repurchase agreements with respect to such securities.
Bank Obligations. The Portfolio may also invest without limit, except as noted
below, in bank obligations consisting of fixed, floating or variable rate
certificates of deposit, time deposits, bankers' acceptances issued by banks and
savings institutions with assets of at least one billion dollars and bank notes.
Bank obligations may be obligations of U.S. banks, foreign branches of U.S.
banks (referred to as "Eurodollar Investments"), U.S. branches of foreign banks
(referred to as "Yankee Dollar Investments") and foreign branches of foreign
banks ("Foreign Bank Investments"). When investing in a bank obligation issued
by a branch, the parent bank must have assets of at least five billion dollars.
The Portfolio may invest only up to 25% of its assets in obligations of foreign
branches of U.S. or foreign banks. The Portfolio may, however, invest more than
25% of its assets in certain domestic bank obligations. Investments in
obligations of U.S. branches of foreign banks, which are considered domestic
banks, may only be made if such branches have a federal or state charter to do
business in the U.S. and are subject to U.S. regulatory authorities. See
"Investment Objective and Policies of the Fund - Investment Risk Considerations"
for more information regarding these investments.
Time deposits are non-negotiable deposits maintained in a foreign branch of a
U.S. or foreign banking institution for a specified period of time at a stated
interest rate. The Portfolio may not invest more than 10% of its assets in Time
deposits with maturities in excess of seven calendar days.
Commercial Paper. The Portfolio may also invest without limit in commercial
paper of domestic or foreign issuers subject to the quality and other criteria
described under "Quality, Diversification, and Maturity Standards" above.
Commercial paper obligations may include variable amount master demand notes
that are obligations which permit the investment of fluctuating amounts by the
Portfolio at varying rates of interest pursuant to direct arrangements between
the Portfolio, as lender, and the borrower. These notes permit daily changes in
the amounts borrowed. The Portfolio has the right to increase the amount
provided by the note agreement, or to decrease the amount, and the borrower may
repay up to the full amount of the note without penalty. The borrower is often a
large industrial or finance company which also issues commercial paper.
Typically, these notes provide that the interest rate is set daily by the
borrower; the rate is usually the same or similar to the interest on commercial
paper being issued by the borrower. Because variable amount master demand notes
are direct lending arrangements between the lender and the borrower, it is not
generally contemplated that such instruments will be traded, and there is no
secondary market for these notes, although they are redeemable (and thus
immediately repayable by the borrower) at face value plus accrued interest at
any time. Accordingly, the Portfolio's right to redeem is dependent on the
ability of the borrower to pay principal and interest on demand. In connection
with master demand note arrangements, the Portfolio's investment manager will
consider earning power, cash flow and other liquidity ratios of the issuer. The
Portfolio, which has no specific limits on aggregate investments in master
demand notes, will invest in notes of only U.S. issuers. While master demand
notes, as such, are not typically rated by credit rating agencies, if not so
rated, the Portfolio may invest in them only if, at the time of an investment,
the issuer meets the criteria set forth above for all other commercial paper
issuers.
Corporate Obligations. The corporate obligations which the Portfolio may
purchase are fixed, floating and variable rate bonds, debentures or notes which
are considered by the Portfolio to be Eligible Securities. The Portfolio is not
restricted in the aggregate amount of its assets that may be invested in such
securities. Such obligations must mature in 397 calendar days or less. Generally
speaking, the higher an instrument is rated, the greater its safety and the
lower its yield.
Municipal Securities. The Portfolio may invest up to 10% of its assets in
taxable municipal securities, issued by or on behalf of states, territories and
possessions of the U.S. and the District of Columbia and their political
subdivisions, agencies, and instrumentalities, the interest on which is not
exempt from federal income tax. Municipal securities in which the Portfolio
invests are subject to the quality and other criteria described under "Quality,
Diversification and Maturity Standards" above. Generally, municipal securities
are used to raise money for various public purposes such as constructing public
facilities and making loans to public institutions. Taxable municipal bonds are
generally issued to provide funding for privately operated facilities.
OTHER STRATEGIES
When-Issued and Delayed Delivery Transactions. The Portfolio may also purchase
and sell securities on a "when-issued" and "delayed delivery" basis. These
transactions are subject to market fluctuation and the value at delivery may be
more or less than the purchase price. When the Portfolio is the buyer in such a
transaction, it will maintain, in a segregated account with its custodian, cash
or high-grade marketable securities having an aggregate value equal to the
amount of such purchase commitments until payment is made. To the extent the
Portfolio engages in when-issued and delayed delivery transactions, it will do
so for the purpose of acquiring securities for its portfolio consistent with its
investment objective and policies and not for the purpose of investment
leverage. In when-issued and delayed delivery transactions, the Portfolio relies
on the seller to complete the transaction. The seller's failure to complete the
transaction may cause the Portfolio to miss a price or yield considered to be
advantageous. Securities purchased on a when-issued or delayed delivery basis do
not generally earn interest until their scheduled delivery.
Repurchase Agreements. The Portfolio may engage in repurchase transactions, in
which the Portfolio purchases a U.S. government security subject to resale to a
bank or dealer at an agreed-upon price and date. The transaction requires the
collateralization of the seller's obligation by the transfer of securities with
an initial market value, including accrued interest, equal to at least 102% of
the dollar amount invested by the Portfolio in each agreement, with the value of
the underlying security marked-to-market daily to maintain coverage of at least
100%. A default by the seller might cause the Portfolio to experience a loss or
delay in the liquidation of the collateral securing the repurchase agreement.
The Portfolio might also incur disposition costs in liquidating the collateral.
The Portfolio, however, intends to enter into repurchase agreements only with
financial institutions such as broker-dealers and banks which are deemed
creditworthy by the Portfolio's investment manager. A repurchase agreement is
deemed to be a loan by the Portfolio under the 1940 Act. The U.S. government
security subject to resale (the collateral) will be held on behalf of the
Portfolio by a custodian approved by the Portfolio's Board of Trustees and will
be held pursuant to a written agreement.
Loans of Portfolio Securities. As approved by the Board of Trustees of Money
Market and subject to the following conditions, the Portfolio may lend its
portfolio securities to qualified securities dealers or other institutional
investors, provided that such loans do not exceed 25% of the value of the
Portfolio's total assets at the time of the most recent loan. The borrower must
deposit with the Portfolio's custodian collateral with an initial market value
at least 102% of the initial market value of the securities loaned, including
any accrued interest, with the value of the collateral and loaned securities
marked-to-market daily to maintain such collateral coverage. Such collateral
shall consist of cash, securities issued by the U.S. Government, its agencies or
instrumentalities, or irrevocable letters of credit. The lending of securities
is a common practice in the securities industry. The Portfolio engages in
security loan arrangements with the primary objective of increasing the
Portfolio's income either through investing the cash collateral in short-term
interest bearing obligations or by receiving a loan premium from the borrower.
Under the securities loan agreement, the Portfolio continues to be entitled to
all dividends or interest on any loaned securities. As with any extension of
credit, there are risks of delay in recovery and loss of rights in the
collateral should the borrower of the security fail financially.
Illiquid Investments. As a matter of fundamental policy, the Portfolio may not
acquire securities subject to legal or contractual restrictions on resale,
securities which are not readily marketable, or enter into repurchase agreements
or master demand notes with more than seven days to maturity if, as a result,
more than 10% of the value of the Portfolio's total assets, at the time of
purchase, would be invested in such repurchase agreements or securities.
Other Policies. The Portfolio may borrow from banks for extraordinary or
emergency purposes only and pledge its assets for such loans in amounts up to 5%
of the Portfolio's total assets. No new investments will be made by the
Portfolio while any outstanding loans exceed 5% of its total assets.
Depending on its view of market conditions and cash requirements, the Portfolio
may or may not hold securities purchased until maturity. The yield on certain
instruments held by the Portfolio may decline if sold prior to maturity.
Whenever the Portfolio's investment manager believes market conditions are such
that yields could be increased by actively trading the portfolio securities to
take advantage of short-term market variations, the Portfolio may do so without
restriction or limitation. The Portfolio may not invest in securities other than
the types of securities listed above and is subject to other specific investment
restrictions, some of which may be changed only with approval of a majority of
the Portfolio's outstanding voting securities. For more information on these
restrictions please see the SAI.
The Fund may not purchase securities of any issuer having a record, together
with predecessors, of less than three years' continuous operation, if,
immediately after such purchase, more than 5% of the Fund's total assets taken
at market value would be invested in such securities, except to the extent that
all or substantially all of the Fund's assets may be invested in another
registered investment company having a substantially similar investment
objective and policies as the Fund.
INVESTMENT RISK CONSIDERATIONS
Any of the Portfolio's Eurodollar Investments, Yankee Dollar Investments,
Foreign Bank Investments or investments in commercial paper of foreign issuers
will involve risks that are different from investments in obligations of
domestic entities. These risks may include future unfavorable political and
economic developments, possible withholding taxes, seizure of foreign deposits,
currency controls, interest limitations, or other governmental restrictions
which might affect the payment of principal or interest on securities the
Portfolio holds. In addition, there may be less publicly available information
regarding such foreign banks or foreign issuers of commercial paper.
ADMINISTRATION OF THE FUND
The Fund's Board of Trustees has the primary responsibility for the overall
management of the Fund and for electing the officers of the Trust who are
responsible for administering its day-to-day operations. For information
concerning the officers and Trustees of the Fund and the officers and trustees
of Money Market, see "Officers and Trustees" in the SAI. The Board, with all
disinterested trustees as well as the interested trustees voting in favor, has
adopted written procedures designed to deal with potential conflicts of interest
which may arise from the Fund and Money Market having substantially the same
boards. The procedures call for an annual review of the Fund's relationship with
the Portfolio, and in the event a conflict is deemed to exist, the boards may
take action, up to and including the establishment of a new board of trustees.
The Board of Trustees has determined that there are no conflicts of interest
presented by this arrangement at the present time. See "Summary of Procedures To
Monitor Conflicts of Interest" in the Fund's SAI for a summary of the conflict
of interest procedures and "Officers and Directors" for information concerning
the officers and directors of the Fund and the officers and trustees of Money
Market.
Franklin Advisers, Inc. ("Advisers") serves as the Fund's administrator and as
the Portfolio's investment manager. Advisers is a wholly-owned subsidiary of
Franklin Resources, Inc. ("Resources"), a publicly owned holding company, the
principal shareholders of which are Charles B. Johnson and Rupert H. Johnson,
Jr., who own approximately 20% and 16%, respectively, of Resources' outstanding
shares. Resources is engaged in various aspects of the financial services
industry through its various subsidiaries (the "Franklin Templeton Group").
Advisers acts as investment manager or administrator to 34 U.S. registered
investment companies (114 separate series) with aggregate assets of over $75
billion.
Advisers serves as the Fund's administrator pursuant to an administration
agreement, effective May 1, 1995. Pursuant to the administration agreement,
Advisers provides various administrative, statistical, and other services to the
Fund in return for a monthly administration fee at the annual rate of 91/200 of
1% for the first $100 million of the Fund's average daily net assets; 33/100 of
1% of the Fund's net assets over $100 million up to and including $250 million;
and 7/25 of 1% of the Fund's net assets in excess of $250 million.
The Fund is responsible for its own operating expenses including, but not
limited to, Advisers' administration fee; taxes, if any; custodian, legal and
auditing fees; fees and expenses of trustees who are not members of, affiliated
with or interested persons of Advisers; salaries of any personnel not affiliated
with Advisers; insurance premiums; trade association dues; expenses of obtaining
quotations for calculating the value of the Fund's net assets; printing and
other expenses relating to the Fund's operations; filing fees; brokerage fees
and commissions, if any; costs of registering and maintaining registration of
the Fund's shares under federal and state securities laws; plus any
extraordinary and non-recurring expenses which are not expressly assumed by
Advisers.
Advisers has voluntarily agreed in advance to waive a portion of its
administrative fee and make certain payments, if necessary, to ensure that total
aggregate operating expenses of the Fund are not higher than if the Fund were
not to invest all of its assets in the Portfolio. This action by Advisers may be
terminated at any time.
The Portfolio has a management agreement with Advisers which provides for the
supervision and implementation of the Portfolio's investment activities and
certain administrative services and facilities which are necessary to conduct
the Portfolio's business.
Under the management agreement with Advisers, the Portfolio is obligated to pay
Advisers a fee equal to an annual rate of 15/100 of 1% of the Portfolio's
average net assets. The fee is computed and paid monthly based on the average
daily net assets of the Portfolio during the month. The Portfolio is responsible
for its own operating expenses, including, but not limited to: Advisers' fee;
taxes, if any; legal and auditing fees; fees and costs of its custodian; the
fees and expenses of trustees who are not members of, affiliated with or
interested persons of Advisers; salaries of any personnel not affiliated with
Advisers; insurance premiums, trade association dues, and expenses of obtaining
quotations for calculating the value of the Portfolio's net assets; printing and
other expenses relating to the Portfolio's operations; filing fees; brokerage
fees and commissions, if any; costs of registering and maintaining registration
of the Portfolio's shares under federal and state securities laws; plus any
extraordinary and non-recurring expenses.
Advisers has agreed in advance to waive a portion of its management fees and
made other payments to reduce expenses. This action by Advisers may be
terminated by Advisers at any time upon written notice to the Portfolio's Board
of Trustees. For the fiscal years ended June 30, 1993, 1994 and 1995, Advisers
has agreed to waive management fees of $42,713, $47,631, and $93,609
respectively. The actual management fees charged to the Portfolio for the fiscal
years ended June 30, 1993, 1994 and 1995 were $229,483, $415,665 and $1,730,028
respectively.
Fund shareholders will bear a portion of the Portfolio's operating expenses,
including its management fee, to the extent that the Fund, as a shareholder of
the Portfolio, bears such expenses. The portion of the Portfolio's expenses
borne by the Fund is dependent upon the number of other shareholders of the
Portfolio, if any. Advisers may, but is not obligated to, waive all or any
portion of the management fee due from the Portfolio or the administration fee
due from the Fund. This arrangement may be terminated by Advisers at any time.
It is not anticipated that the Portfolio will incur a significant amount of
brokerage expenses because short-term money market instruments are generally
traded on a "net" basis, that is, in principal transactions without the addition
or deduction of brokerage commissions or transfer taxes. To the extent that the
Portfolio does participate in transactions involving brokerage commissions, it
is Advisers' responsibility to select brokers through which such transactions
will be effected. Advisers tries to obtain the best execution on all such
transactions. If it is felt that more than one broker is able to provide the
best execution, Advisers will consider the furnishing of quotations and of other
market services, research, statistical and other data for Advisers and its
affiliates, as well as the sale of shares of the Fund, as factors in selecting a
broker. Further information is included under "Policies Regarding Brokers Used
on Portfolio Transactions" in the SAI.
Shareholder accounting and many of the clerical functions for the Fund are
performed by Franklin/Templeton Investor Services, Inc. ("Investor Services" or
"Shareholder Services Agent"), in its capacity as transfer agent and
dividend-paying agent. Investor Services is a wholly-owned subsidiary of
Resources.
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares dividends for each day that the Fund's net asset value is
calculated, payable to shareholders of record as of the close of business the
preceding day. The amount of dividends may fluctuate from day to day and
dividends may be omitted on some days, depending on changes in the factors that
comprise the Fund's net investment income.
The Fund does not pay "interest" to its shareholders, nor is any amount of
dividends or return guaranteed in any way.
Dividends are automatically reinvested daily in the form of additional shares of
the Fund at the net asset value per share at the close of business each day.
The Fund's daily dividend consists of the income dividends paid by the
Portfolio. The Portfolio's daily dividend includes accrued interest and any
original issue and market discount, plus or minus any gain or loss on the sale
of portfolio securities and changes in unrealized appreciation or depreciation
in portfolio securities (to the extent required to maintain a stable net asset
value per share), less amortization of any premium paid on the purchase of
portfolio securities and the estimated expenses of the Fund.
The federal income tax treatment of dividends and distributions is the same
whether received in cash or reinvested in Fund shares. The SAI includes a
further discussion of distributions.
DIVIDENDS IN CASH
Shareholders may request to have their dividends paid out monthly in cash by
notifying Investor Services. For such shareholders, the shares reinvested and
credited to their account during the month will be redeemed as of the close of
business on the last business day of the month and the proceeds will be paid to
them in cash. By completing the "Special Payment Instructions for Dividends"
section of the Shareholder Application included with this Prospectus, a
shareholder may direct the selected distributions to the same class of another
fund in the Franklin Templeton Funds, to a Class I Franklin Templeton money
market fund, to another person, or directly to a checking account. If the bank
at which the account is maintained is a member of the Automated Clearing House,
the payments may be made automatically by electronic funds transfer. If this
last option is requested, the shareholder should allow at least 15 days for
initial processing. Dividends which may be paid in the interim will be sent to
the address of record. Additional information regarding automated fund transfers
may be obtained from Franklin's Shareholder Services Department.
TAXATION OF THE FUND AND ITS SHAREHOLDERS
The following discussion reflects some of the tax considerations that affect
mutual funds and their shareholders. Additional regarding taxation is included
in the SAI.
Fund and Portfolio intend to continue to qualify as regulated investment
companies under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). By distributing all of their incomes and meeting certain other
requirements relating to the sources of their incomes and diversification of
their assets, the Fund and the Portfolio will not be liable for federal income
or excise taxes.
For federal income tax purposes, any income dividends which the shareholder
receives from the Fund, as well as any distributions derived from the excess of
net short-term capital gain over net long-term capital loss, are treated as
ordinary income whether the shareholder has elected to receive them in cash or
in additional shares.
Since the Fund seeks to maintain a stable $1.00 share price for both purchases
and redemptions, shareholders are not expected to realize a capital gain or loss
upon or exchange of Fund shares.
The Fund will inform shareholders of the source of their dividends and
distributions at the time they are paid and will, promptly after the close of
each calendar year, advise them of the tax status for federal income tax
purposes of such dividends and distributions.
Shareholders should consult their tax advisors with respect to the applicability
of state and local intangible property or income taxes to their shares in the
Fund and to distributions and redemption proceeds received from the Fund.
Shareholders who are not U.S. persons for purposes of federal income taxation
should consult with their financial or tax advisors regarding the applicability
of U.S. withholding or other taxes to distributions received by them from the
Fund and the application of foreign tax laws to these distributions.
HOW TO BUY SHARES OF THE FUND
Shares of the Fund may not be purchased directly from the Fund or Distributors.
Shares may be acquired only in exchange for Class II shares of other funds that
are members of the Franklin Templeton Funds sold subject to a contingent
deferred sales charge. Shares may also be acquired as result of the reinvestment
of income dividends and capital gains distributions in additional shares of the
Fund. All shares of the Fund are acquired at the net asset value next determined
after receipt of an exchange request in proper form and are subject to a 1.00%
contingent deferred sales charge if they are redeemed within 18 months of
purchase of the Class II shares which were exchanged for shares of the Fund. See
"Contingent Deferred Sales Charge," under "How to Sell Shares of the Fund." The
minimum initial investment is $100 and subsequent investments must be $25 or
more.
No drafts (checks) may be written on Fund accounts. No other money market funds
are available for Class II shareholders for exchange purposes. The Fund and
Distributors reserve the right to reject any order for the acquisition of shares
of the Fund. In addition, the offering of shares of the Fund may be suspended by
the Fund at any time and resumed at any time thereafter. No share certificates
will be issued.
Securities laws of states in which the Fund's shares are offered for sale may
differ from the interpretations of federal law, and banks and financial
institutions selling Fund shares may be required to register as dealers pursuant
to state law.
If transactions in Fund shares with the assistance of certain banks were deemed
to be an impermissible activity for such bank under the Glass-Steagall Act, or
other federal laws, such activities would likely be discontinued by such bank.
Investors utilizing such bank assistance would then be able to seek other
avenues to invest in Fund shares, such as securities dealers registered with the
SEC or from the Fund directly.
PLAN OF DISTRIBUTION
The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. Any portion of fees remaining after
distribution to securities dealers up to the maximum amount permitted under the
Plan may be used by the Fund to pay Distributors for routine ongoing promotion
and distribution expenses. Such expenses may 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 Distributors' overhead expenses attributable to the distribution of
Fund shares, as well as any distribution or service fees paid to securities
dealers or their firms or others who have executed a servicing agreement with
the Fund, Distributors or its affiliates.
Under the Plan, the Fund is permitted to pay to Distributors or others, annual
distribution fees, payable quarterly, of .50% of the Fund's daily net assets, in
order to compensate Distributors or others for providing distribution and
related services and bearing certain expenses of the Fund. All expenses of
distribution and marketing and related services over that amount will be borne
by Distributors, or others who have incurred them, without reimbursement by the
Fund. In addition to this amount, quarterly under the Plan, the Fund shall pay
an amount equal to .15% per annum of the Fund's average daily net assets as a
servicing fee. This fee will be used to pay dealers or others for, among other
things, assisting in establishing and maintaining customer accounts and records;
assisting with purchase and redemption requests; receiving and answering
correspondence; monitoring dividend payments from the Fund on behalf of
customers, and similar activities related to furnishing personal services and
maintaining shareholder accounts.
During the first year after the purchase of the Class II shares which are
exchanged for shares of the Fund, Distributors will keep a portion of the Plan
fees assessed on Fund shares to partially recoup fees Distributors pays to
securities dealers.
The Plan also covers any payments to or by the Fund, Advisers, Distributors, or
other parties on behalf of the Fund, Advisers or Distributors, to the extent
such payments are deemed to be for the financing of any activity primarily
intended to result in the sale of shares issued by the Fund within the context
of Rule 12b-1. The payments under the Plan are included in the maximum operating
expenses which may be borne by the Fund. For more information, including a
discussion of the board's policies with regard to the amount of fees, please see
the SAI.
HOW TO SELL SHARES OF THE FUND
All or any part of a shareholder's investment may be converted into cash by
redeeming shares in any one or more of the methods discussed below on any day
the New York Stock Exchange (the "Exchange") is open for trading. All shares are
subject to a 1.00% contingent deferred sales charge if they are redeemed within
18 months of purchase of the Class II shares which were exchanged for shares of
the Fund. See "Contingent Deferred Sales Charge", herein. Regardless of the
method of redemption, payment for the shareholder's redeemed shares will be sent
within seven days after receipt of the redemption request in proper form.
Shareholders are requested to provide a telephone number(s) where they may be
reached during business hours, or in the evening if preferred. Investor
Services' ability to contact a shareholder promptly when necessary will speed
the processing of the redemption.
Retirement plan account liquidations require the completion of certain
additional forms to ensure compliance with IRS regulations. To liquidate a
retirement plan account, a shareholder or the shareholder's securities dealer
may call Franklin's Retirement Plans Department to obtain the necessary forms.
Tax penalties will generally apply to any distribution from such plans to a
participant under age 59 1/2, unless the distribution meets one of the
exceptions set forth in the Internal Revenue Code.
Shares may be redeemed in any of the following ways:
1. BY TELEPHONE
A shareholder may redeem shares by telephoning the Fund at 1-800/632-2301.
Payment of redemption requests of $1,000 or less (once per business day) will be
sent by mail to the shareholder's address as reflected on the Fund's records.
For payments over $1,000, the shareholder must complete the "Wire Redemptions
Privilege" section of the Shareholder Application. Proceeds will then be wired
directly to the commercial bank or brokerage firm designated by the shareholder.
Wires will not be sent for redemption requests of $1,000 or less. Shareholders
may have redemption proceeds of over $1,000, up to $50,000 per day per Fund
account, subject to the Restricted Account exception noted under "Telephone
Transactions -- Restricted Accounts," sent directly to their address of record
by filing a completed Franklin Templeton Telephone Redemption Authorization
Agreement (the "Agreement") included with this Prospectus. INFORMATION MAY ALSO
BE OBTAINED BY WRITING TO THE FUND OR INVESTOR SERVICES AT THE ADDRESS SHOWN ON
THE COVER OR BY CALLING THE NUMBER ABOVE. THE FUND AND INVESTOR SERVICES WILL
EMPLOY REASONABLE PROCEDURES TO CONFIRM THAT INSTRUCTIONS GIVEN BY TELEPHONE ARE
GENUINE. THE FUND AND INVESTOR SERVICES MAY BE LIABLE FOR ANY LOSSES DUE TO
UNAUTHORIZED OR FRAUDULENT INSTRUCTIONS ONLY IF SUCH REASONABLE PROCEDURES ARE
NOT FOLLOWED. SHAREHOLDERS, HOWEVER, BEAR THE RISK OF LOSS IN CERTAIN CASES AS
DESCRIBED UNDER "TELEPHONE TRANSACTIONS -- VERIFICATION PROCEDURES."
Telephone redemption requests received before 3:00 p.m. Pacific time on any
business day will be processed that same day. The redemption check will be sent
within seven days, made payable to all the registered owners on the account, and
will be sent only to the address of record. Wire payments will be transmitted
the next business day following receipt prior to 3:00 p.m. Pacific time of a
request for redemption in proper form. Shareholders may wish to allow for longer
processing time if they want to assure that redemption proceeds will be
available at a specific time for a specific transaction. Shareholders may be
able to have redemption proceeds wired to an escrow account the same day,
provided that the request is received prior to 9:00 a.m. Pacific time.
Redemption instructions must include the shareholder's name and account number
and be called to the Fund. Redemption requests by telephone will not be accepted
within 30 days following an address change by telephone. In that case, a
shareholder should follow the other redemption procedures set forth in this
Prospectus. Institutional accounts which wish to execute redemptions in excess
of $50,000 must complete an Institutional Telephone Privileges Agreement which
is available from Franklin Templeton Institutional Services Department by
telephoning 1-800/321-8563.
During periods of drastic economic or market changes, it is possible that the
telephone redemption privilege may be difficult to implement. In this event,
shareholders should follow the other redemption procedures discussed in this
Prospectus. The telephone redemption privilege may be modified or discontinued
by the Fund at any time upon 60 days' notice to shareholders.
2. BY MAIL
A shareholder may redeem all or a portion of the shares owned by sending a
letter to Investor Services, at the address shown on the back cover of this
Prospectus, requesting redemption.
3. THROUGH SECURITIES DEALERS
The Fund will accept redemption orders from securities dealers who have entered
into an agreement with Distributors. This is known as a repurchase. The
documents described under "Important Things to Remember When Selling Shares"
below, as well as a signed letter of instruction, are required regardless of
whether the shareholder redeems shares directly or submits such shares to a
securities dealer for repurchase. A shareholder's letter should reference the
Fund, the account number, the fact that the repurchase was ordered by a dealer
and the dealer's name. Details of the dealer-ordered trade, such as trade date,
confirmation number, and the amount of shares or dollars, will help speed
processing of the redemption. The seven-day period within which the proceeds of
the shareholder's redemption will be sent will begin when the Fund receives all
documents required to complete ("settle") the repurchase in proper form. The
redemption proceeds will not earn dividends or interest during the time between
receipt of the dealer's repurchase order and the date the redemption is
processed upon receipt of all documents necessary to settle the repurchase.
Thus, it is in a shareholder's best interest to have the required documentation
completed and forwarded to the Fund as soon as possible. The shareholder's
dealer may charge a fee for handling the order. The SAI contains more
information on the redemption of shares.
IMPORTANT THINGS TO REMEMBER
WHEN SELLING SHARES
When selling Fund shares, the terms of the redemption request will determine how
the contingent deferred sales charge, if any, is deducted. Redemption orders for
a specific dollar amount will result in the redemption of enough shares to cover
the contingent deferred sales charge, if any, and the requested dollar amount.
If, however, a specific share amount is requested, the contingent deferred sales
charge will be deducted from the amount of shares requested to be redeemed. See
the discussion of Contingent Deferred Sales Charges which follows for more
information.
Written requests for redemption must be signed by all registered owners.
TO BE CONSIDERED IN PROPER FORM, SIGNATURE(S) MUST BE GUARANTEED IF THE
REDEMPTION REQUEST INVOLVES ANY OF THE FOLLOWING:
(1) the proceeds of the redemption are over $50,000;
(2) the proceeds (in any amount) are to be paid to someone other than the
registered owner(s) of the account;
(3) the proceeds (in any amount) are to be sent to any address other than
the shareholder's address of record, preauthorized bank account or
brokerage firm account;
(4) the Fund or Investor Services believes that a signature guarantee would
protect against potential claims based on the transfer instructions, including,
for example, when (a) the current address of one or more joint owners of an
account cannot be confirmed, (b) multiple owners have a dispute or give
inconsistent instructions to the Fund, (c) the Fund has been notified of an
adverse claim, (d) the instructions received by the Fund are given by an agent,
not the actual registered owner, (e) the Fund determines that joint owners who
are married to each other are separated or may be the subject of divorce
proceedings, or (f) the authority of a representative of a corporation,
partnership, association, or other entity has not been established to the
satisfaction of the Fund.
Signature(s) must be guaranteed by an "eligible guarantor institution" as
defined under Rule 17Ad-15 under the Securities Exchange Act of 1934. Generally,
eligible guarantor institutions include (1) national or state banks, savings
associations, savings and loan associations, trust companies, savings banks,
industrial loan companies and credit unions; (2) national securities exchanges,
registered securities associations and clearing agencies; (3) securities dealers
which are members of a national securities exchange or a clearing agency or
which have minimum net capital of $100,000; or (4) institutions that participate
in the Securities Transfer Agent Medallion Program ("STAMP") or other recognized
signature guarantee medallion program. A notarized signature will not be
sufficient for the request to be in proper form.
Liquidation requests of corporate, partnership, trust and custodianship
accounts, and accounts under court jurisdiction, require the following
documentation to be in proper form:
Corporation - (1) Signature guaranteed letter of instruction from the authorized
officer(s) of the corporation and (2) a corporate resolution.
Partnership - (1) Signature guaranteed letter of instruction from a general
partner and (2) pertinent pages from the partnership agreement identifying the
general partners or a certification for a partnership agreement.
Trust - (1) Signature guaranteed letter of instruction from the trustee(s) and
(2) a copy of the pertinent pages of the trust document listing the trustee(s)
or a Certification for Trust if the trustee(s) are not listed on the account
registration.
Custodial (other than a retirement account) - Signature guaranteed letter of
instruction from the custodian.
Accounts under court jurisdiction - Check court documents and the applicable
state law since these accounts have varying requirements, depending upon the
state of residence.
CONTINGENT DEFERRED SALES CHARGE
Class II investments redeemed within the contingency period of the class will be
assessed a contingent deferred sales charge, unless one of the exceptions
described below applies. The charge is 1% of the lesser of the value of the
shares redeemed (exclusive of reinvested dividends and capital gain
distributions) or the net asset value at the time of purchase of such shares,
and is retained by Distributors. The contingent deferred sales charge is waived
in certain instances.
In determining whether a contingent deferred sales charge applies, shares not
subject to a contingent deferred sales charge are deemed to be redeemed first,
in the following order: (i) A calculated number of shares representing amounts
attributable to capital appreciation of those shares held less than the
contingency period of the class; (ii) shares purchased with reinvested dividends
and capital gain distributions; and (iii) other shares held longer than the
contingency period; and followed by any shares held less than the contingency
period, on a "first in, first out" basis. For tax purposes, a contingent
deferred sales charge is treated as either a reduction in redemption proceeds or
an adjustment to the cost basis of the shares redeemed.
The contingent deferred sales charge on each class of shares is waived, as
applicable, for: exchanges; any account fees; distributions to participants or
their beneficiaries in Trust Company individual retirement plan accounts due to
death, disability or attainment of age 59 1/2; tax-free returns of excess
contributions from employee benefit plans; distributions from employee benefit
plans, including those due to termination or plan transfer; redemptions through
a Systematic Withdrawal Plan set up for shares prior to February 1, 1995, and
for Systematic Withdrawal Plans set up thereafter, redemptions of up to 1%
monthly of an account's net asset value (3% quarterly, 6% semiannually or 12%
annually); redemptions initiated by the Fund due to a shareholder's account
falling below the minimum specified account size; and redemptions following the
death of the shareholder or the beneficial owner.
All investments made during a calendar month, regardless of when during the
month the investment occurred, will age one month on the last day of that month
and each subsequent month.
Requests for redemptions of a SPECIFIED DOLLAR amount, unless otherwise
specified, will result in additional shares being redeemed to cover any
applicable contingent deferred sales charge, while requests for redemption of a
SPECIFIC NUMBER of shares will result in the applicable contingent deferred
sales charge being deducted from the total dollar amount redeemed.
ADDITIONAL INFORMATION REGARDING REDEMPTIONS
For any information required about a proposed liquidation, a shareholder may
call Franklin's Shareholder Services Department or the securities dealer may
call Franklin's Dealer Services Department.
Written requests for redemption should be sent to the Fund or Investor Services
at the address shown on the back cover of this Prospectus.
Payment for written requests for redemption will be sent within seven days after
receipt of the request in proper form. Redemptions will be made in cash at the
net asset value per share next determined after receipt by the Fund of a
redemption request in proper form, signature guarantees, and other documentation
as may be required by Investor Services. The amount received upon redemption may
be more or less than the shareholder's original investment. Redemptions may be
suspended under certain limited circumstances pursuant to rules adopted by the
SEC.
Wiring of redemption proceeds is a special service made available to
shareholders whenever possible. The offer of this service, however, does not
bind the Fund to meet any redemption request by wire or in less than the
seven-day period prescribed by law. Neither the Fund nor its agents shall be
liable to any shareholder or other person for a redemption payment by wire which
for any reason may not be processed as described in this section.
OTHER PROGRAMS AND PRIVILEGES
AVAILABLE TO FUND SHAREHOLDERS
CERTAIN OF THE PROGRAMS AND PRIVILEGES DESCRIBED IN THIS SECTION MAY NOT BE
AVAILABLE DIRECTLY FROM THE FUND TO SHAREHOLDERS WHOSE SHARES ARE HELD, OF
RECORD, BY A FINANCIAL INSTITUTION OR IN A "STREET NAME" ACCOUNT, OR NETWORKED
ACCOUNT THROUGH NATIONAL SECURITIES CLEARING CORPORATION ("NSCC") (SEE THE
SECTION CAPTIONED "ACCOUNT REGISTRATIONS" IN THIS PROSPECTUS).
CONFIRMATIONS
A confirmation statement will be sent to each shareholder monthly to reflect the
daily dividends reinvested, as well as after each transaction which affects the
shareholder's account. This statement will also show the total number of Fund
shares owned by the shareholder, including the number of shares in "plan
balance" for the account of the shareholder.
SYSTEMATIC WITHDRAWAL PLAN
A shareholder may establish a Systematic Withdrawal Plan and receive regular
periodic payments from the shareholder's account, provided that the net asset
value of the shares held by the shareholder is at least $5,000. There are no
service charges for establishing or maintaining a Systematic Withdrawal Plan.
The minimum amount which the shareholder may withdraw is $50 per transaction,
although this is merely the minimum amount allowed under the plan and should not
be mistaken for recommended amounts. Retirement plan accounts subject to
mandatory distribution requirements are not subject to the $50 minimum. The plan
may be established on a monthly, quarterly, semiannual or annual basis. If the
shareholder establishes a plan, any capital gain distributions and income
dividends paid by the Fund will be reinvested for the shareholder's account in
additional shares at net asset value. Sufficient shares of the Fund will be
liquidated (generally on the first business day of the month in which the
distribution is scheduled) at net asset value to meet the specified withdrawals
with payment generally received by the shareholder three to five days after the
date of liquidation. By completing the "Special Payment Instructions for
Dividends" section of the Shareholder Application included with this Prospectus,
a shareholder may direct the selected withdrawals to another fund in the
Franklin Group of Funds(R) or the Templeton Group, to another person, or
directly to a checking account. If the bank at which the account is maintained
is a member of the Automated Clearing House, the payments may be made
automatically by electronic funds transfer. If this last option is requested,
the shareholder should allow at least 15 days for initial processing.
Withdrawals which may be paid in the interim will be sent to the address of
record. Liquidation of shares may deplete the investment and withdrawal payments
cannot be considered as actual yield or income since part of such payments may
be return of capital. If the withdrawal amount exceeds the total plan balance,
the account will be closed and the remaining balance will be sent to the
shareholder. As with other redemptions, a liquidation to make a withdrawal
payment is a sale for federal income tax purposes.
The maintenance of a Systematic Withdrawal Plan concurrently with purchases of
additional shares of the Fund would be disadvantageous because of the sales
charge on the additional purchases. Also, redemptions of shares may be subject
to a contingent deferred sales charge if the shares are redeemed within 18
months of the calendar month after purchase. The shareholder should ordinarily
not make additional investments of less than $5,000 or three times the annual
withdrawals under the plan during the time such a plan is in effect.
The contingent deferred sales charge is waived for share redemptions of up to 1%
monthly of an account's net asset value (12% annually, 6% semiannually, 3%
quarterly). For example, if the account maintained an annual balance of $10,000,
only $1,200 could be withdrawn through a once-yearly Systematic Withdrawal Plan
free of charge; and amounts over that $1,200 would be assessed a 1% (or
applicable) contingent deferred sales charge.
A Systematic Withdrawal Plan may be terminated on written notice by the
shareholder or the Fund, and it will terminate automatically if all shares are
liquidated or withdrawn from the account, or upon the Fund's receipt of
notification of the death or incapacity of the shareholder. Shareholders may
change the amount (but not below the specified minimum) and schedule of
withdrawal payments, or suspend one such payment by giving written notice to
Investor Services at least seven business days prior to the end of the month
preceding a scheduled payment. Share certificates may not be issued while a
Systematic Withdrawal Plan is in effect.
MULTIPLE ACCOUNTS FOR FIDUCIARIES
Special procedures have been designed for banks and other institutions wishing
to open multiple accounts in the Fund. Further information is included in the
Fund's SAI.
RIGHTS OF ACCUMULATION
The cost or current value (whichever is higher) of the shares in the Fund will
be included in determining the sales charge discount to which an investor may be
entitled when purchasing Class I shares in one or more of the funds in the
Franklin Group of Funds(R) and the Templeton Group of Funds, which are sold with
a sales charge. This feature does not apply to purchases of Class II shares,
which are subject to a 1% sales charge and a 1% contingent deferred sales charge
if redeemed within 18 months of purchase. Included for these aggregation
purposes are (a) the mutual funds in the Franklin Group of Funds(R), except
Franklin Valuemark Funds and Franklin Government Securities Trust (the "Franklin
Funds"), (b) other investment products underwritten by Distributors or its
affiliates (although certain investments may not have the same schedule of sales
charges and/or may not be subject to reduction) and (c) the U.S. mutual funds in
the Templeton Group of Funds except Templeton Capital Accumulator Fund, Inc.,
Templeton Variable Annuity Fund, and Templeton Variable Products Series Fund
(the "Templeton Funds"). (Franklin Funds and Templeton Funds are collectively
referred to as the "Franklin Templeton Funds.")
Purchases of Fund shares will also be included toward the completion of a Letter
of Intent with respect to any of the Class I shares offered by any of the
Franklin Templeton Funds which are sold with a sales charge.
To assist shareholders in obtaining additional information regarding these
programs, a list of telephone numbers is included under "How to Get Information
Regarding an Investment in the Fund."
PURCHASING SHARES OF THE FUND IN
CONNECTION WITH RETIREMENT PLANS
INVOLVING TAX-DEFERRED INVESTMENTS
Shares of the Fund may be used for individual or employer-sponsored retirement
plans involving tax-deferred investments. The Fund may be used as an investment
vehicle for an existing retirement plan, or Franklin Templeton Trust Company (
the "Trust Company") may provide the plan documents and serve as custodian or
trustee. A plan document must be adopted for a retirement plan to be in
existence.
The Trust Company, an affiliate of Distributors, can serve as custodian or
trustee for retirement plans. Brochures for the Trust Company plans contain
important information regarding eligibility, contribution and deferral limits
and distribution requirements. Please note that an application other than the
one contained in this Prospectus must be used to establish a retirement plan
account with the Trust Company. To obtain a retirement plan brochure or
application, call toll free 1-800/DIAL BEN (1-800/342-5236).
Please see "How to Sell Shares of the Fund" for specific information regarding
redemptions from retirement plan accounts. Specific forms are required to be
completed for distributions from the Trust Company retirement plans.
Individuals and plan sponsors should consult with legal, tax or benefits and
pension plan consultants before choosing a retirement plan. In addition,
retirement plan investors should consider consulting their investment
representatives or advisers concerning investment decisions within their plans.
INSTITUTIONAL ACCOUNTS
There may be additional methods of purchasing, redeeming or exchanging shares of
the Fund available to institutional accounts. For further information, contact
the Franklin Templeton Institutional Services Department at 1-800/321-8563.
EXCHANGE PRIVILEGE
The Franklin Templeton Funds consist of a number of mutual funds with various
investment objectives and policies. The shares of most of these mutual funds are
generally offered to the public with a sales charge (which may differ in timing
and/or amount). If a shareholder's investment objective or outlook for the
securities markets changes, the Fund shares may be exchanged for Class II shares
of Franklin Templeton Funds (as defined in "Rights of Accumulation") which are
eligible for sale in the shareholder's state of residence and in conformity with
such fund's stated eligibility requirements and investment minimums.
Shareholders are entitled to exchange their shares at net asset value for shares
of the same class of another fund in the Franklin Templeton Funds. Exchanges of
shares of other funds in the Franklin Templeton Funds for shares of the Fund are
generally taxable and shareholders will generally recognize gains and losses on
such exchanges. All exchanges are subject to the minimum investment amount. No
exchanges between different classes of shares will be allowed. For this purpose
the Fund's shares are treated as Class II shares.
A contingent deferred sales charge will not be imposed on exchanges of Fund
shares for Class II shares of other Franklin Templeton funds or on exchanges of
Class II shares of other funds for Fund shares. If the exchanged shares were
subject to a contingent deferred sales charge in the original fund, and the
acquired shares are subsequently redeemed within eighteen months of the purchase
date of the original shares, a contingent deferred sales charge will be imposed.
When an account has some shares subject to the contingent deferred sales load,
and some that are not, the shares will be transferred proportionately from each
type of shares into the new fund. Shares free from a contingent deferred sales
charge are referred to as "free shares," shares which were originally subject to
a contingent deferred sales charge but to which the contingent deferred sales
charge no longer applies are called "matured shares," and shares still subject
to the contingent deferred sales charge are referred to as "CDSC liable shares",
and each represents a different type of share for purposes of exchanging into a
new fund. CDSC liable shares held for different periods of time are considered
different types of CDSC liable shares. For instance, if a shareholder has $1,000
in free shares, $2,000 in matured shares, and $3,000 in CDSC liable shares, and
the shareholder exchanges $3,000 into a new fund, $500 will be exchanged from
free shares, $1000 from matured shares, and $1500 from CDSC liable shares.
Similarly, if CDSC liable shares have been purchased at different periods, a
proportionate amount will be taken from shares held for each period. If, for
example, this shareholder holds $1000 in shares bought 3 months ago, $1000
bought 6 months ago, and $1000 bought 9 months ago, $500 in each of these shares
will be exchanged into the new fund.
To the extent shares are exchanged proportionately, as opposed to another
method, such as first-in first-out, or free-shares followed by CDSC liable
shares, the exchanged shares may, in some instances, be CDSC liable even though
a redemption of such shares, as discussed elsewhere herein, may no longer be
subject to a CDSC. The proportional method is believed by management to more
closely meet and reflect the expectations of Class II shareholders in the event
shares are redeemed during the contingency period. For federal income tax
purposes, the cost basis of shares redeemed or exchanged is determined under the
Code without regard to the method of transferring shares chosen by the Fund.
Transfers between identically registered accounts in the same Fund are treated
as non-monetary and non-taxable events, and are not subject to a contingent
deferred sales charge. The transferred shares will continue to age from the date
of original purchase. Like exchanges, shares will be moved proportionately from
each type of shares in the original account.
Exchanges may be made in any of the following ways:
EXCHANGES BY MAIL
Send written instructions signed by all account owners. The transaction will be
effective upon receipt of the written instructions.
EXCHANGES BY TELEPHONE
SHAREHOLDERS, OR THEIR INVESTMENT REPRESENTATIVE OF RECORD, IF ANY, MAY EXCHANGE
SHARES OF THE FUND BY TELEPHONE BY CALLING INVESTOR SERVICES AT 1-800/632-2301
OR THE AUTOMATED FRANKLIN TELEFACTS(R) SYSTEM (DAY OR NIGHT) AT 1-800/247-1753.
IF THE SHAREHOLDER DOES NOT WISH THIS PRIVILEGE EXTENDED TO A PARTICULAR
ACCOUNT, THE FUND OR INVESTOR SERVICES SHOULD BE NOTIFIED.
The Telephone Exchange Privilege allows a shareholder to effect exchanges from
the Class of Fund shares currently held into the same class of an identically
registered account in one of the other available Franklin Templeton Funds. The
Fund and Investor Services will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. Please refer to "Telephone
Transactions - Verification Procedures."
During periods of drastic economic or market changes, it is possible that the
telephone exchange privilege may be difficult to implement and the TeleFACTS
option may not be available. In this event, shareholders should follow the other
exchange procedures discussed in this section, including the procedures for
processing exchanges through securities dealers.
EXCHANGES THROUGH SECURITIES DEALERS
As is the case with all purchases and redemptions of the Fund's shares, Investor
Services will accept exchange orders by telephone or by other means of
electronic transmission from securities dealers who execute a dealer or similar
agreement with Distributors. The use of the term "securities dealer" shall
include other financial institutions which, pursuant to an agreement with
Distributors (directly or through affiliates), handle customer orders and
accounts with the Fund. Such reference, however, is for convenience only and
does not indicate a legal conclusion of capacity. See also "Exchanges By
Telephone" above. A securities dealer may charge a fee for handling an exchange.
ADDITIONAL INFORMATION REGARDING EXCHANGES
Shares of the Fund acquired other than pursuant to the exchange privilege or the
reinvestment of dividends with respect to such shares, may be exchanged at the
offering price of one of the other Franklin Templeton Funds. Such offering price
includes the applicable sales charge of the fund into which the shares are being
exchanged. Exchanges will be effected at the respective net asset values or
offering prices of the funds involved at the close of business on the day on
which the request is received in proper form.
There are differences among Franklin Templeton Funds. Before making an exchange,
a shareholder should obtain and review a current prospectus of the fund into
which the shareholder wishes to transfer.
The Exchange Privilege may be modified or discontinued by the Fund at any time
upon 60 days' written notice to shareholders.
RETIREMENT PLAN ACCOUNTS
Franklin Templeton IRA and 403(b) retirement plan accounts may accomplish
exchanges directly. Certain restrictions may apply, however, to other types of
retirement plans. See "Restricted Accounts" under "Telephone Transactions."
TIMING ACCOUNTS
Accounts which are administered by allocation or market timing services to
purchase or redeem shares based on predetermined market indicators ("Timing
Accounts") will be charged a $5.00 administrative service fee per each such
exchange. All other exchanges are without charge.
RESTRICTIONS ON EXCHANGES
In accordance with the terms of their respective prospectuses, certain funds do
not accept or may place differing limitations than those below on exchanges by
Timing Accounts.
The Fund reserves the right to temporarily or permanently terminate the exchange
privilege or reject any specific purchase order for any Timing Account or any
person whose transactions seem to follow a timing pattern who: (i) makes an
exchange request out of the Fund within two weeks of an earlier exchange request
out of the Fund, or (ii) makes more than two exchanges out of the Fund per
calendar quarter, or (iii) exchanges shares equal in value to at least $5
million, or more than 1% of the Fund's net assets. Accounts under common
ownership or control, including accounts administered so as to redeem or
purchase shares based upon certain predetermined market indicators, will be
aggregated for purposes of the exchange limits.
The Fund reserves the right to refuse the purchase side of exchange requests by
any Timing Account, person, or group if, in Advisers' judgment, the Fund would
be unable to invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected. A shareholder's
purchase exchanges may be restricted or refused if the Fund receives or
anticipates simultaneous orders affecting significant portions of the Fund's
assets. In particular, a pattern of exchanges that coincide with a "market
timing" strategy may be disruptive to the Fund and therefore may be refused.
The Fund and Distributors also, as indicated in "How to Buy Shares of the Fund,"
reserve the right to refuse any order for the purchase of shares.
TELEPHONE TRANSACTIONS
Shareholders of the Fund and their investment representative of record, if any,
may be able to execute various transactions by calling Investor Services at
1-800/632-2301.
All shareholders will be able to execute various telephone transactions,
including: (i) effect a change in address, (ii) change a dividend option (see
"Restricted Accounts" below), (iii) transfer Fund shares in one account to
another identically registered account in the Fund, and (iv) exchange Fund
shares as described in this Prospectus by telephone. In addition, shareholders
who complete and file an Agreement as described under "How to Sell Shares of the
Fund - By Telephone" will be able to redeem shares of the Fund.
VERIFICATION PROCEDURES
The Fund and Investor Services will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. These will include:
recording all telephone calls requesting account activity by telephone,
requiring that the caller provide certain personal and/or account information
requested by the telephone service agent at the time of the call for the purpose
of establishing the caller's identification, and sending a confirmation
statement on redemptions to the address of record each time account activity is
initiated by telephone. So long as the Fund and Investor Services follow
instructions communicated by telephone which were reasonably believed to be
genuine at the time of their receipt, neither they nor their affiliates will be
liable for any loss to the shareholder caused by an unauthorized transaction.
The Fund and Investor Services may be liable for any losses due to unauthorized
or fraudulent instructions only if such reasonable procedures are not followed.
Shareholders are, of course, under no obligation to apply for or accept
telephone transaction privileges. In any instance where the Fund or Investor
Services is not reasonably satisfied that instructions received by telephone are
genuine, the requested transaction will not be executed, and neither the Fund
nor Investor Services will be liable for any losses which may occur because of a
delay in implementing a transaction.
RESTRICTED ACCOUNTS
Telephone redemptions and dividend option changes may not be accepted on
Franklin Templeton Trust Company retirement accounts. To assure compliance with
all applicable regulations, special forms are required for any distribution,
redemption, or dividend payment. While the telephone exchange privilege is
extended to Franklin Templeton IRA and 403(b) retirement accounts, certain
restrictions may apply to other types of retirement plans.
Changes to dividend options must also be made in writing.
To obtain further information regarding distribution or transfer procedures,
including any required forms, retirement account shareholders may call to speak
to a Retirement Plan Specialist at 1-800/527-2020.
GENERAL
During periods of drastic economic or market changes, it is possible that the
telephone transaction privileges will be difficult to execute because of heavy
telephone volume. In such situations, shareholders may wish to contact their
investment representative for assistance, or to send written instructions to the
Fund as detailed elsewhere in this Prospectus.
Neither the Fund nor Investor Services will be liable for any losses resulting
from the inability of a shareholder to execute a telephone transaction.
The telephone transaction privilege may be modified or discontinued by the Fund
at any time upon 60 days' written notice to shareholders.
VALUATION OF FUND SHARES
The net asset value of the shares of the Fund is determined by the Fund at 3:00
p.m. Pacific time each day that the Exchange is open for business. The net asset
value per share is calculated by adding the value of all portfolio holdings and
other assets, deducting the Fund's liabilities, and dividing the result by the
number of Fund shares outstanding.
The valuation of the Fund's portfolio securities is based upon their amortized
cost value, which does not take into account unrealized capital gain or loss.
This involves valuing an instrument at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument. The
Portfolio's use of amortized cost, which facilitates the maintenance of the
Portfolio's per share net asset value of $1.00, is permitted by Rule 2a-7.
Further information is included under "Determination of Net Asset Value" in the
SAI.
HOW TO GET INFORMATION
REGARDING AN INVESTMENT IN THE FUND
Any questions or communications regarding a shareholder's account should be
directed to Investor Services at the address shown on the back cover of this
Prospectus.
From a touch-tone phone, Franklin and Templeton shareholders may access an
automated system (day or night) which offers the following features:
By calling the Franklin TeleFACTS(R) system at 1-800/247-1753, shareholders may
obtain Class I and Class II account information, current price and, if
available, yield or other performance information specific to the Fund or any
Franklin Templeton Fund. In addition, Franklin Class I shareholders may process
an exchange, within the same class, into an identically registered Franklin
account and request duplicate confirmation or year-end statements, money fund
checks, if applicable, and deposit slips.
Fund and account information may be accessed by entering Fund Code 511 followed
by the # sign. The system's automated operator will prompt the caller with easy
to follow step-by-step instructions from the main menu. Other features may be
added in the future.
To assist shareholders and securities dealers wishing to speak directly with a
representative, the following is a list of the various Franklin departments,
telephone numbers and hours of operation to call. The same numbers may be used
when calling from a rotary phone:
<TABLE>
<CAPTION>
HOURS OF OPERATION
(PACIFIC TIME)
<S> <C> <C>
DEPARTMENT NAME TELEPHONE NO. (MONDAY THROUGH FRIDAY)
Shareholder Services 1-800/632-2301 5:30 a.m. to 5:00 p.m.
Dealer Services 1-800/524-4040 5:30 a.m. to 5:00 p.m.
Fund Information 1-800/DIAL BEN 5:30 a.m. to 8:00 p.m.
8:30 a.m. to 5:00 p.m.
(Saturday)
Retirement Plans 1-800/527-2020 5:30 a.m. to 5:00 p.m.
TDD (hearing impaired) 1-800/851-0637 5:30 a.m. to 5:00 p.m.
</TABLE>
In order to ensure that the highest quality of service is being provided,
telephone calls placed to or by representatives in Franklin's service
departments may be accessed, recorded and monitored. These calls can be
determined by the presence of a regular beeping tone.
PERFORMANCE
Advertisements, sales literature and communications to shareholders may contain
various measures of the Fund's performance, including quotations of its current
and effective yield.
Current yield as prescribed by the SEC is an annualized percentage rate which
reflects the change in value of a hypothetical account based on the income
received from the Fund during a seven-day period. It is computed by determining
the net change, excluding capital changes, in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of the
period. A hypothetical charge reflecting deductions from shareholder accounts
for administrative fees or shareholder services fees, for example, is subtracted
from the value of the account at the end of the period, and the difference is
divided by the value of the account at the beginning of the base period to
obtain the base period return. The result is then annualized. Effective yield is
computed in the same manner except that the annualization of the return for the
seven-day period reflects the results of compounding (that is, the effect of
reinvesting dividends paid on both the original share and those acquired from
the reinvestment of such dividends).
In each case, performance figures are based upon past performance and will
reflect all recurring charges against Fund income. Such quotations will reflect
the value of any additional shares purchased with dividends from the original
share and any dividends declared on both the original share and such additional
shares. The investment results of the Fund, like all other investment companies,
will fluctuate over time; thus, performance figures should not be considered to
represent what an investment may earn in the future or what the Fund's
performance may be in any future period.
GENERAL INFORMATION
REPORTS TO SHAREHOLDERS
The Fund's fiscal year ends June 30. Annual Reports containing audited financial
statements of the Fund, including the auditors' report, and Semi-Annual Reports
containing unaudited financial statements are automatically sent to
shareholders. To reduce the volume of mail sent to one household as well as to
reduce Fund expenses, Investor Services, when legally permissible, will attempt
to identify related shareholders within a household, and send only one copy of
the report. Additional copies may be obtained, without charge, upon request to
the Fund at the telephone number or address set forth on the cover page of this
Prospectus.
Additional information on Fund performance is included in the Fund's Annual
Report to Shareholders and the SAI.
ORGANIZATION AND VOTING RIGHTS
The Fund is currently the only series of the Trust, which was organized as a
Delaware business trust on January 30, 1995. The Trust is authorized to issue an
unlimited number of shares of beneficial interest, with a par value of $.01 per
share in various series, or classes thereof. All shares have one vote, and, when
issued, are fully paid, non-assessable, and redeemable. Currently, the Trust
issues shares in one series with one class. Additional series or classes may be
added in the future by the Board of Trustees. All shares of the fund have equal
voting, dividend and liquidation rights. Shares of the Fund have non-cumulative
voting rights which means that in all elections of trustees, the holders of more
than 50% of the shares voting can elect 100% of the trustees if they choose to
do so, and in such event, the holders of the remaining shares voting will not be
able to elect any person or persons to the Board.
The Trust does not intend to hold annual shareholders' meetings. The trust may,
however, hold a special meeting for such purposes as changing fundamental
investment restrictions, approving a new management or administration agreement
or any other matters which are required to be acted on by shareholders under the
1940 Act. A meeting may also be called by a majority of the Board of Trustees or
by shareholders holding at least ten percent of the shares entitled to vote at
the meeting. Shareholders may receive assistance in communicating with other
shareholders in connection with the election or removal of trustees such as that
provided in Section 16(c) of the 1940 Act. Whenever the Fund is requested to
vote on a matter relating to the Portfolio, the Fund will hold a meeting of Fund
shareholders and will cast its vote in the same proportion as the Fund's
shareholders have voted.
REDEMPTIONS BY THE FUND
The Fund reserves the right to redeem, at net asset value, shares of any
shareholder whose account has a value of less than one-half of the required
minimum investment, but only where the value of such account has been reduced by
the shareholder's prior voluntary redemption of shares and has been inactive
(except for the reinvestment of distributions) for a period of at least six
months, provided advance notice is given to the shareholder. More information is
included in the SAI.
OTHER INFORMATION
Distribution or redemption checks sent to shareholders do not earn interest or
any other income during the time such checks remain uncashed, and neither the
Fund nor its affiliates will be liable for any loss to the shareholder caused by
the shareholder's failure to cash such check(s).
"Cash" payments from the Fund may be made by check, draft or wire. The Fund has
no facility to receive, or pay out, cash in the form of currency.
Shares of the Fund may or may not constitute a legal investment for investors
whose investment authority is restricted by applicable law or regulation. SUCH
INVESTORS SHOULD CONSULT THEIR OWN LEGAL ADVISORS TO DETERMINE WHETHER AND TO
WHAT EXTENT THE SHARES OF THE FUND CONSTITUTE LEGAL INVESTMENTS FOR THEM.
Municipal investors considering investment of proceeds of bond offerings into
the Fund should consult with expert counsel to determine the effect, if any, of
various payments made by the Fund or its investment manager on arbitrage rebate
calculations.
ACCOUNT REGISTRATIONS
An account registration should reflect the investor's intentions as to
ownership.
Accounts should not be registered in the name of a minor, either as sole or
co-owner of the account. Transfer or redemption for such an account may require
court action to obtain release of the funds until the minor reaches the legal
age of majority. The account should be registered in the name of one "Adult" as
custodian for the benefit of the "Minor" under the Uniform Transfer or Gifts to
Minors Act.
A trust designation such as "trustee" or "in trust for" should only be used if
the account is being established pursuant to a legal, valid trust document. Use
of such a designation in the absence of a legal trust document may cause
difficulties and require court action for transfer or redemption of the funds.
Shares registered as joint tenants or "Jt Ten" shall mean "as joint tenants with
rights of survivorship" and not "as tenants in common."
Except as indicated, a shareholder may transfer an account in the Fund carried
in "street" or "nominee" name by the shareholder's securities dealer to a
comparably registered Fund account maintained by another securities dealer. Both
the delivering and receiving securities dealers must have executed dealer or
similar agreements on file with Distributors. Unless such agreement has been
executed and is on file with Distributors, the Fund will not process the
transfer and will so inform the shareholder's delivering securities dealer. To
effect the transfer, a shareholder should instruct the securities dealer to
transfer the account to a receiving securities dealer and sign any documents
required by the securities dealer(s) to evidence consent to the transfer. Under
current procedures, the account transfer may be processed by the delivering
securities dealer and the Fund after the Fund receives authorization in proper
form from the shareholder's delivering securities dealer. In the future it may
be possible to effect such transfers electronically through the services of the
NSCC.
The Fund may conclusively accept instructions from an owner or the owner's
nominee listed in publicly available nominee lists, regardless of whether the
account was initially registered in the name of or by the owner, the nominee, or
both. If a securities dealer or other representative is of record on an
investor's account, the investor will be deemed to have authorized the use of
electronic instructions on the account, including, without limitation, those
initiated through the services of the NSCC, to have adopted as instruction and
signature any such electronic instructions received by the Fund and the
Shareholder Services Agent and to have authorized them to execute the
instructions without further inquiry. At the present time, such services which
are available include the NSCC's "Networking," "Fund/SERV," and "ACATS" systems.
Any questions regarding an intended registration should be answered by the
securities dealer handling the investment, or by calling Franklin's Fund
Information Department.
IMPORTANT NOTICE
REGARDING TAXPAYER IRS CERTIFICATIONS
Pursuant to the Code and U.S. Treasury regulations, the Fund may be required to
report to the IRS any taxable dividend, capital gain distribution, or other
reportable payment and withhold 31% of any such payments made to individuals and
other non-exempt shareholders who have not provided a correct taxpayer
identification number ("TIN") and made certain required certifications that
appear in the Shareholder Application. A shareholder may also be subject to
backup withholding if the IRS or a securities dealer notifies the Fund that the
TIN furnished by the shareholder is incorrect or that the shareholder is subject
to backup withholding for previous under-reporting of interest or dividend
income.
The Fund reserves the right to (1) refuse to open an account for any person
failing to provide a TIN along with the required certifications and (2) close an
account by redeeming its shares in full at the then-current net asset value upon
receipt of notice from the IRS that the TIN certified as correct by the
shareholder is in fact incorrect or upon the failure of a shareholder who has
completed an "awaiting TIN" certification to provide the Fund with a certified
TIN within 60 days after opening the account.
FRANKLIN TEMPLETON MONEY FUND II
FRANKLIN TEMPLETON MONEY FUND TRUST
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, California 94403-7777
ADMINISTRATOR
Franklin Advisers, Inc.
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, California 94403-7777
PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, California 94403-7777
CUSTODIAN
Bank of America NT & SA
555 California Street, 4th Floor
San Francisco, California 94104
SHAREHOLDER SERVICES AGENT
Franklin/Templeton Investor Services, Inc.
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, California 94403-7777
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
333 Market Street
San Francisco, California 94105
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
2600 One Commerce Square
Philadelphia, Pennsylvania 19103
For an enlarged version of this prospectus please call 1-800/DIAL BEN.
Your Representative Is:
511 p 11/95
FRANKLIN
TEMPLETON
MONEY FUND II
FRANKLIN TEMPLETON
MONEY FUND TRUST
STATEMENT OF
ADDITIONAL INFORMATION
777 MARINERS ISLAND BLVD., P.O. BOX 7777
SAN MATEO, CA 94403-7777 1-800/DIAL BEN
NOVEMBER 1, 1995
CONTENTS PAGE
The Fund (See also Prospectus
"About the Fund")
Additional Information Regarding
the Fund's Investment Objective
and Policies (See also the Prospectus
"Investment Objective and Policies
of the Fund")
Officers and Trustees
Administration and Other Services
(See also the Prospectus "Administration
of the Fund")
Policies Regarding Brokers Used on Portfolio Transactions
Determination of Net Asset Value
(See also the Prospectus "Valuation
of Fund Shares")
Additional Information Regarding
Purchases and Redemptions of
Fund Shares
Additional Information Regarding
Distributions and Taxes
The Fund's Underwriter
General Information
Appendices
Financial Statements
A Prospectus for Franklin Templeton Money Fund II (the "Fund"), an open-end,
diversified series of the Franklin Templeton Money Fund Trust (the "Trust"), a
management investment company, dated November 1, 1995, as may be amended from
time to time, provide the basic information an investor should know before
investing in the Fund and may be obtained without charge from the Fund or from
its principal underwriter, Franklin/Templeton Distributors, Inc.
("Distributors"), at the address shown above or by calling 1-800/DIAL BEN.
The Fund offers only one class of shares. The Fund is intended to be made
available as a short-term or cash management investment option for investors in
Class II shares of other funds in the Franklin Templeton Group. The distribution
structure of the Fund and such Funds offering Class II shares is similar and
complementary in several respects, including provisions regarding contingent
deferred sales charges and Rule 12b-1 fees.
THIS STATEMENT OF ADDITIONAL INFORMATION ("SAI") IS NOT A PROSPECTUS. IT
CONTAINS INFORMATION IN ADDITION TO AND IN MORE DETAIL THAN THAT SET FORTH IN
THE PROSPECTUS. THIS SAI IS INTENDED TO PROVIDE INVESTORS WITH ADDITIONAL
INFORMATION REGARDING THE ACTIVITIES AND OPERATIONS OF THE FUND, AND SHOULD BE
READ IN CONJUNCTION WITH THE FUND'S CURRENT PROSPECTUS.
THE FUND
Franklin Templeton Money Fund II is the only series of the Trust, an open-end,
diversified management investment company. The Trust is a Delaware business
trust organized on January 30, 1995. Shares of the Fund may not be purchased
directly. Shares may be acquired only in exchange for Class II shares of other
Franklin Templeton Funds, and as result of the reinvestment of income dividends
and capital gains distributions in additional shares of the Fund. The investment
objective of the Fund is to obtain as high a level of current income (in context
of the type of investments available to the Fund) as is consistent with capital
preservation and liquidity. The Fund invests all of its assets in The Money
Market Portfolio (the "Portfolio"). The Portfolio is a series of Money Market, a
separate open-end management investment company, and is not part of the Fund.
The Portfolio's assets will generally be invested in money market instruments of
various types.
ADDITIONAL INFORMATION REGARDING THE
FUND'S INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT OBJECTIVE AND POLICIES
As stated in the Prospectus, the investment objective of the Fund is to obtain
for its investors as high a level of current income as is consistent with
liquidity and the preservation of capital. The Fund seeks to achieve this
objective by investing all of its assets in the Portfolio. The Portfolio in turn
invests primarily in various types of money market instruments, such as U.S.
government and federal agency and instrumentality obligations, certificates of
deposit, bankers' acceptances, time deposits of major financial institutions,
high grade commercial paper, high grade short-term corporate obligations,
taxable municipal securities, and repurchase agreements (secured by U.S.
government securities). The achievement of the Portfolio's objective will depend
on market conditions generally and on its investment manager's analytical and
portfolio management skills. It should also be noted that because the Portfolio
is limiting its investments to high quality securities, there will be a
generally lower yield than if the Portfolio purchased securities with a lower
rating and correspondingly greater risk. The value of the securities held will
fluctuate inversely with interest rates, and therefore there is no assurance
that the Portfolio's, and thus the Fund's objective will be achieved. The
investment policies of the Fund, fundamental and nonfundamental, are identical
to those described herein with respect to the Portfolio except that, in all
cases, the Fund is permitted to pursue such policies by investing in an open-end
management investment company with the same investment objective and
substantially similar policies and limitations as the Fund. The investment
objective and policies set forth herein are fundamental, and may not be changed
without the approval of a majority of the Fund's outstanding shares.
As stated in the Prospectus, the Portfolio may make loans of its portfolio
securities in accordance with guidelines adopted by the Portfolio's Board of
Trustees. The lending of securities is a common practice in the securities
industry. The Portfolio will engage in security loan arrangements with the
primary objective of increasing the Portfolio's income either through investing
the cash collateral in short-term, interest bearing obligations or by receiving
loan a premium from the borrower. The Portfolio will continue to be entitled to
all dividends or interest on any loaned securities. As with any extension of
credit, there are risks of delay in recovery and loss of rights in the
collateral should the borrower of the security fail financially. The Portfolio
will not lend its portfolio securities if such loans are not permitted by the
laws or regulations of any state in which its shares are qualified for sale.
Loans will be subject to termination by the Portfolio in the normal settlement
time, currently five business days after notice, or by the borrower on one day's
notice. Borrowed securities must be returned when the loan is terminated. Any
gain or loss in the market price of the borrowed securities which occurs during
the term of the loan inures to the Portfolio and its shareholders. The Portfolio
may pay reasonable finders', borrowers', administrative and custodial fees in
connection with a loan of its securities.
Because the Portfolio will not purchase any instrument with a remaining maturity
of greater than 397 calendar days, it is not expected that there will be any
reportable annual portfolio turnover rate.
In addition, because of short-term variations in market or business conditions,
management's revised evaluation of a portfolio security, or the need to obtain
cash to meet redemptions, the Portfolio may sell portfolio securities prior to
maturity. The Portfolio may also invest in deposits fully insured by the U.S.
government or its agencies or instrumentalities. Such deposits may include
deposits in banking and savings institutions up to the limit (currently $100,000
per depository) of the insurance on principal provided by the Federal Deposit
Insurance Corporation. Such deposits are frequently combined in larger units by
an intermediate bank or other institution.
The Fund has adopted the following restrictions as additional fundamental
policies of the Fund, which means that they may not be changed without the
approval of a majority of the outstanding voting securities of the Fund. Under
the Investment Company Act of 1940 (the "1940 Act"), a "vote of a majority of
the outstanding voting securities" of the Fund means the affirmative vote of the
lesser of (1) more than 50% of the outstanding shares of the Fund, or (2) 67% or
more of the shares of the Fund present at a shareholders' meeting if more than
50% of the outstanding shares of the Fund are represented at the meeting in
person or by proxy. These restrictions provide that the Fund MAY NOT:
1. Borrow money or mortgage or pledge any of its assets, except that borrowings
(and a pledge of assets therefor) for extraordinary or emergency purposes may be
made from banks in any amount up to 5% of the total asset value.
2. Make loans, except (a) through the purchase of debt securities in accordance
with the investment objective and policies of the Portfolio, (b) to the extent
the entry into a repurchase agreement is deemed to be a loan, or (c) by the loan
of its portfolio securities in accordance with the policies described above.
3. Acquire, lease or hold real estate, including real estate limited
partnerships, provided that this limitation shall not prohibit the purchase of
municipal and other debt securities secured by real estate or interests therein.
4. Buy any securities "on margin" or sell any securities "short," except that
it may use such short-term credits as are necessary for the clearance of
transactions.
5. Invest in commodities and commodity contracts, puts, calls, straddles,
spreads, or any combination thereof, except that it may purchase, hold and
dispose of "obligations with puts attached," or interests in oil, gas, or other
mineral leases or exploration or development programs.
6. Purchase securities in private placements or in other transactions, for
which there are legal or contractual restrictions on resale and which are not
readily marketable, or enter into a repurchase agreement with more than seven
days to maturity if, as a result, more than 10% of the total assets of the Fund
would be invested in such securities or repurchase agreements, except that, to
the extent this restriction is applicable, the Fund may purchase, in private
placements, shares of another registered investment company having the same
investment objective and policies as the Fund.
7. Act as underwriter of securities issued by other persons except insofar as
the Fund may technically be deemed an underwriter under the federal securities
laws in connection with the disposition of portfolio securities, except that all
or substantially all of the assets of the Fund may be invested in another
registered investment company having the same investment objective and policies
as the Fund.
8. Purchase the securities of other investment companies, except in connection
with a merger, consolidation, acquisition, or reorganization; provided that all
or substantially all of the assets of the Fund may be invested in another
registered investment company having the same investment objective and policies
as the Fund.
9. Invest in any issuer for purposes of exercising control or management,
except that, to the extent this restriction is applicable, all or substantially
all of the assets of the Fund may be invested in another registered investment
company having the same investment objective and policies as the Fund.
10. Purchase securities from or sell to the Fund's officers and trustees, or any
firm of which any officer or trustee is a member, as principal, or retain
securities of any issuer if, to the knowledge of the Fund, one or more of the
Fund's officers, trustees, or investment adviser own beneficially more than 1/2
of 1% of the securities of such issuer and all such officers and trustees
together own beneficially more than 5% of such securities.
11. Invest more than 25% of its assets in securities of any industry, although
for purposes of this limitation, U.S. government obligations are not considered
to be part of any industry. This prohibition does not apply where the Fund's
policies, as described in its current prospectus, state otherwise, and further
does not apply to the extent that the Fund invests all of its assets in another
registered investment company having the same investment objective and policies.
If a percentage restriction contained herein is adhered to at the time of
investment, a later increase or decrease in the percentage resulting from a
change in the value of portfolio securities or the amount of net assets will not
be considered a violation of any of the foregoing restrictions.
As noted in the Prospectus, the Money Market's trustees have elected to value
the Portfolio's assets in accordance with Rule 2a-7 under the 1940 Act. This
rule also imposes various restrictions on the Portfolio which are, in some
cases, more restrictive than the Portfolio's other stated fundamental policies
and investment restrictions. The rule provides that any fund which holds itself
out as a money market fund must follow certain portfolio provisions of the rule
regarding the maturity and quality of each portfolio investment, and the
diversity of such investments. The restrictions imposed by Rule 2a-7 are
fundamental policies of the Portfolio and the Portfolio must comply with these
provisions unless its shareholders vote to change its policy of being a money
market fund.
OFFICERS AND TRUSTEES
The Board of Trustees has the responsibility for the overall management of the
Fund, including general supervision and review of its investment activities. The
trustees, in turn, elect the officers of the Fund who are responsible for
administering the day-to-day operations of the Fund. The affiliations of the
officers and trustees and their principal occupations for the past five years
are listed below. Trustees who are deemed to be "interested persons" of the
Fund, as defined in the 1940 Act, are indicated by an asterisk (*).
Frank H. Abbott, III (74)
1045 Sansome St.
San Francisco, CA 94111
Trustee
President and Director, Abbott Corporation (an investment company); and
director, trustee or managing general partner, as the case may be, of 31 of the
investment companies in the Franklin Group of Funds.
Harris J. Ashton (63)
General Host Corporation
Metro Center, 1 Station Place
Stamford, CT 06904-2045
Trustee
President, Chief Executive Officer and Chairman of the Board, General Host
Corporation (nursery and craft centers); Director, RBC Holdings, Inc. (a bank
holding company) and Bar-S Foods; and director, trustee or managing general
partner, as the case may be, of 56 of the investment companies in the Franklin
Templeton Group of Funds.
S. Joseph Fortunato (63)
Park Avenue at Morris County
P. O. Box 1945
Morristown, NJ 07962-1945
Trustee
Member of the law firm of Pitney, Hardin, Kipp & Szuch; Director of General Host
Corporation; director, trustee or managing general partner, as the case may be,
of 58 of the investment companies in the Franklin Templeton Group of Funds.
David W. Garbellano (80)
111 New Montgomery St., #402
San Francisco, CA 94105
Trustee
Private Investor; Assistant Secretary/Treasurer and Director, Berkeley Science
Corporation (a venture capital company); and director, trustee or managing
general partner, as the case may be, of 30 of the investment companies in the
Franklin Group of Funds.
*Charles B. Johnson (62)
777 Mariners Island Blvd.
San Mateo, CA 94404
Chairman of the Board and Trustee
President and Director, Franklin Resources, Inc.; Chairman of the Board
and Director, Franklin Advisers, Inc. and Franklin Templeton Distributors, Inc.;
Director, Franklin/Templeton Investor Services, Inc. and General Host
Corporation; and officer and/or director, trustee or managing general partner,
as the case may be, of most other subsidiaries of Franklin Resources, Inc. and
of 57 of the investment companies in the Franklin Templeton Group of Funds.
*Rupert H. Johnson, Jr. (55)
777 Mariners Island Blvd.
San Mateo, CA 94404
President and Trustee
Executive Vice President and Director, Franklin Resources, Inc. and Franklin
Templeton Distributors, Inc.; President and Director, Franklin Advisers, Inc.;
Director, Franklin/Templeton Investor Services, Inc.; and officer and/or
director, trustee or managing general partner, as the case may be, of most other
subsidiaries of Franklin Resources, Inc. and of 43 of the investment companies
in the Franklin Templeton Group of Funds.
Frank W. T. LaHaye (66)
20833 Stevens Creek Blvd.
Suite 102
Cupertino, CA 95014
Trustee
General Partner, Peregrine Associates and Miller & LaHaye, which are General
Partners of Peregrine Ventures and Peregrine Ventures II (venture capital
firms); Chairman of the Board and Director, Quarterdeck Office Systems, Inc.;
Director, Fischer Imaging Corporation; and director or trustee, as the case may
be, of 26 of the investment companies in the Franklin Group of Funds.
Gordon S. Macklin (67)
8212 Burning Tree Road
Bethesda, MD 20817
Trustee
Chairman, White River Corporation (information services); Director, Fund
American Enterprises Holdings, Inc., Lockheed Martin Corporation, MCI
Communications Corporation, MedImmune, Inc. (biotechnology), InfoVest
Corporation (information services), and Fusion Systems Corporation (industrial
technology); and director, trustee or managing general partner, as the case may
be, of 53 of the investment companies in the Franklin Templeton Group of Funds;
and formerly held the following positions: Chairman, Hambrecht and Quist Group,
Director, H & Q Healthcare Investors, and President, National Association of
Securities Dealers, Inc.
Harmon E. Burns (50)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Executive Vice President, Secretary and Director, Franklin Resources, Inc.;
Executive Vice President and Director, Franklin Templeton Distributors, Inc.;
Executive Vice President, Franklin Advisers, Inc.; Director, Franklin/Templeton
Investor Services, Inc.; officer and/or director, as the case may be, of other
subsidiaries of Franklin Resources, Inc.; and officer and/or director or trustee
of 43 of the investment companies in the Franklin Templeton Group of Funds.
Kenneth V. Domingues (63)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President - Financial Reporting and Accounting Standards
Senior Vice President, Franklin Resources, Inc., Franklin Advisers, Inc., and
Franklin Templeton Distributors, Inc.; officer and/or director, as the case may
be, of other subsidiaries of Franklin Resources, Inc.; and officer and/or
managing general partner, as the case may be, of 37 of the investment companies
in the Franklin Group of Funds.
Martin L. Flanagan (35)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President and Chief Financial Officer
Senior Vice President, Chief Financial Officer and Treasurer, Franklin
Resources, Inc.; Executive Vice President, Templeton Worldwide, Inc.; Senior
Vice President and Treasurer, Franklin Advisers, Inc. and Franklin Templeton
Distributors, Inc.; Senior Vice President, Franklin/Templeton Investor Services,
Inc.; officer of most other subsidiaries of Franklin Resources, Inc.; and
officer of 61 of the investment companies in the Franklin Templeton Group of
Funds.
Deborah R. Gatzek (46)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President and Secretary
Senior Vice President - Legal, Franklin Resources, Inc. and Franklin
Templeton Distributors, Inc.; Vice President, Franklin Advisers, Inc. and
officer of 37 of the investment companies in the Franklin Group of Funds.
Diomedes Loo-Tam (56)
777 Mariners Island Blvd.
San Mateo, CA 94404
Treasurer and Principal Accounting Officer
Employee of Franklin Advisers, Inc.; and officer of 37 of the investment
companies in the Franklin Group of Funds.
Edward V. McVey (58)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Senior Vice President/National Sales Manager, Franklin Templeton Distributors,
Inc.; and officer of 32 of the investment companies in the Franklin Group of
Funds.
Thomas J. Runkel (37)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Employee of Franklin Advisers, Inc. and officer of four of the funds in the
Franklin Group of Funds.
Richard C. Stoker (58)
11615 Spring Ridge Rd.
Potomac, Maryland 20854
Vice President
Senior Vice President, Franklin Templeton Distributors, Inc.; Vice President,
Franklin Management, Inc.; and officer of five of the funds in the Franklin
Group of Funds.
R. Martin Wiskemann (63)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Senior Vice President, Portfolio Manager and Director, Franklin Advisers, Inc.;
Senior Vice President, Franklin Management, Inc.; Vice President, Treasurer and
Director, ILA Financial Services, Inc. and Arizona Life Insurance Company of
America; and officer and/or director, as the case may be, of 20 of the
investment companies in the Franklin Group of Funds.
The officers and trustees of the Fund are also officers and trustees of The
Money Market Portfolios, except as follows: Charles E. Johnson, President and
Trustee of The Money Market Portfolios is not an officer or trustee of the Fund;
Rupert H. Johnson, Jr. is President and Trustee of the Fund and Vice President
and Trustee of The Money Market Portfolios; and Richard C. Stoker and Thomas J.
Runkel, Vice Presidents of the Fund are not officers or trustees of Money
Market.
Charles E. Johnson (39)
777 Mariners Island Blvd.
San Mateo, CA 94404
President and Trustee
Senior Vice President and Director, Franklin Resources, Inc.; Senior Vice
President, Franklin Templeton Distributors, Inc.; President and Director,
Templeton Worldwide, Inc. and Franklin Institutional Services Corporation;
officer and/or director, as the case may be, of some of the subsidiaries of
Franklin Resources, Inc. and officer and/or director or trustee, as the case may
be, of 24 of the investment companies in the Franklin Templeton Group of Funds.
Trustees not affiliated with the Fund's administrator are not now, but may be,
paid fees and reimbursed for expenses incurred in connection with attending such
meetings. As indicated above, certain of the trustees and officers hold
positions with other companies in the Franklin Templeton Group. The following
table shows, among other things, the total fees paid to the Fund's
non-interested trustees by other Franklin Templeton Funds for which they serve
as director, trustee or managing general partner.
<TABLE>
<CAPTION>
NUMBER OF FRANKLIN TOTAL COMPENSATION
TEMPLETON FUNDS ON FROM FRANKLIN
NAME WHICH EACH SERVED TEMPLETON FUNDS*
<S> <C> <C>
Frank H. Abbott, III 31 $176,870
Harris J. Ashton 56 $319,925
S. Joseph Fortunato 58 $336,065
David W. Garbellano 30 $153,300
Frank W.T. LaHaye 26 $150,817
Gordon S. Macklin 53 $303,685
*For the calendar year ended December 31, 1994. The Fund commenced operations on
May 1, 1995. Accordingly, the trustees received no compensation from the Fund
for the indicated period.
</TABLE>
Non-affiliated trustees are also reimbursed for expenses incurred in connection
with attending Board meetings, paid pro rata by each Franklin Templeton Fund for
which they serve. No officer or trustee received any other compensation directly
from the Fund.
Certain officers or trustees who are shareholders of Franklin Resources,
Inc. may be deemed to receive indirect remuneration by virtue of their
participation, if any, in the fees paid to its subsidiaries. Charles B. Johnson
and Rupert H. Johnson, Jr. are brothers and the father and uncle, respectively,
of Charles E. Johnson.
ADMINISTRATION AND OTHER SERVICES
The administrator of the Fund is Franklin Advisers, Inc. ("Advisers"). Advisers
is a wholly-owned subsidiary of Franklin Resources, Inc. ("Resources"), a
publicly owned holding company whose shares are listed on the New York Stock
Exchange ("Exchange"). Resources owns several other subsidiaries which are
involved in investment management and shareholder services. Advisers and other
subsidiary companies of Resources currently manage over $125 billion in assets
for more than 3.8 million shareholders. The preceding table indicates those
officers and trustees who are also affiliated persons of Distributors and
Advisers.
The Board of Trustees, with all disinterested trustees as well as the interested
trustees voting in favor, has adopted written procedures designed to deal with
potential conflicts of interest which may arise from the fact of having
substantially the same persons serving on the Fund's Board of Trustees and The
Money Market Portfolios' Board of Trustees. The Board of Trustees has determined
that there are no conflicts of interest presented by this arrangement at the
present time. See Appendix A for a summary of these procedures.
The administration agreement with Advisers, effective May 1, 1995, which
provides for various administrative, statistical, and other services for the
Fund. Pursuant to the administration agreement, the Fund is obligated to pay
Advisers (as administrator) a monthly fee equal to an annual rate of 91/200 of
1% for the first $100 million of the Fund's average daily net assets; 33/100 of
1% of the Fund's average daily net assets over $100 million up to and including
$250 million; and 7/25 of 1% of the Fund's average daily net assets in excess of
$250 million. See the Statement of Operations in the financial statements
included in the Annual Report to Shareholders for details of these expenses.
Pursuant to a separate management agreement with The Money Market Portfolios on
behalf of the Portfolio, Advisers provides investment research and portfolio
management services, including the selection of securities for the Portfolio to
purchase, hold or sell, and the selection of brokers or dealers through whom the
Portfolio's security transactions are executed. Advisers' activities are subject
to the review and supervision of the Board of Trustees of The Money Market
Portfolios to whom Advisers renders periodic reports of the investment
activities of the Portfolio. Under the terms of the management agreement,
Advisers, at its own expense, furnishes the Portfolio with office space and
office furnishings, facilities and equipment required for managing the business
affairs of the Portfolio; maintains all internal bookkeeping, clerical,
secretarial and administrative personnel and services; and provides certain
telephone and other mechanical services. Advisers is covered by fidelity
insurance on its officers, directors and employees for the protection of the
Portfolio and the Fund. The Portfolio bears all expenses related to its
operation not borne by Advisers. The Portfolio, in which the Fund invests all of
its assets, is obligated to pay Advisers a monthly fee equal to an annual rate
of 15/100 of 1% of the Portfolio's average net assets.
The management agreement specifies that the management fee will be reduced to
the extent necessary to comply with the most stringent limits on the expenses
which may be borne by the Portfolio as prescribed by any state in which the
Portfolio's shares are offered for sale. The most stringent current state
restriction limits a fund's allowable aggregate operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses such as
litigation costs) in any fiscal year to 2.5% of the first $30 million of average
net assets of the fund, 2% of the next $70 million of average net assets of the
fund and 1.5% of average net assets of each fund in excess of $100 million. The
Fund bears all expenses related to its operation not borne by Advisers, as
discussed in the Prospectus. Expense reductions have not been necessary based on
state requirements. There is no management agreement for the Fund.
As noted in the Prospectus, Advisers has agreed in advance to limit its
management fees from the Portfolio and/or its administration fee from the Fund
to ensure that the total aggregate operating expenses of the Fund and the
Portfolio are not higher than what the Fund's total operating expenses would
have been under the terms of the prior management agreement with the Fund.
The management agreement for the Portfolio is in effect until February 28, 1996.
Thereafter, it may continue in effect for successive annual periods, providing
such continuance is specifically approved at least annually by a vote of The
Money Market Portfolios' Board of Trustees or by a vote of the holders of a
majority of the outstanding voting securities of the Portfolio, and in either
event by a majority vote of the trustees of The Money Market Portfolios who are
not parties to the management agreement or interested persons of any such party
(other than as trustees of The Money Market Portfolios), cast in person at a
meeting called for that purpose. The management agreement may be terminated
without penalty at any time by the Portfolio or by Advisers on 60 days' written
notice and will automatically terminate in the event of its assignment as
defined in the 1940 Act.
The contractual management fees which would have been incurred by the Portfolio
absent a fee reduction by Advisers for the Portfolio's fiscal years ended June
30, 1993, 1994 and 1995 were $272,196, $463,296 and $1,823,637 respectively. The
management fees actually paid by the Portfolio to Advisers for the Portfolio's
fiscal year ended June 30, 1993, 1994 and 1995 were $229,483, $415,665 and
$1,730,028 respectively.
Franklin/Templeton Investor Services, Inc. ("Investor Services" or "Shareholder
Services Agent"), a wholly-owned subsidiary of Resources, is the shareholder
servicing agent for the Fund and acts as the Fund's transfer agent and
dividend-paying agent. Investor Services is compensated on the basis of a fixed
fee per account.
Bank of America NT & SA, 555 California Street, 4th Floor, San Francisco,
California 94104, acts as custodian of the securities and other assets of the
Portfolio and the cash and certain securities of the Fund. With respect to its
other assets and securities, the Fund acts as its own custodian. Citibank
Delaware, One Penn's Way, New Castle, Delaware 19720 acts as custodian in
connection with transfer services through bank automated clearing houses. The
custodians do not participate in decisions relating to the purchase and sale of
portfolio securities.
Coopers & Lybrand L.L.P., 333 Market Street, San Francisco, California 94105,
are the Fund's independent auditors. During the fiscal year ended June 30, 1994,
their auditing services consisted of rendering an opinion on the financial
statements of the Fund included in the Fund's Annual Report and this SAI.
POLICIES REGARDING BROKERS USED
ON PORTFOLIO TRANSACTIONS
The Fund will not incur any brokerage or other costs in connection with its
purchase or redemption of shares of the Portfolio. Under the Portfolio's
management agreement with Advisers, the selection of brokers and dealers to
execute transactions in the Portfolio's securities is made by Advisers in
accordance with criteria set forth in the management agreement and any
directions which the Board of Trustees of Money Market may give. It is not
anticipated, however, that the Portfolio will incur a significant amount of
brokerage expense because brokerage commissions are not normally incurred on
investments in short-term debt securities, which are generally traded on a "net"
basis, that is, in principal amounts without the addition or deduction of
brokerage commissions or transfer taxes.
Advisers makes the investment decisions and arranges for the placement of buy
and sell orders and the execution of portfolio transactions for the Portfolio.
In executing portfolio transactions, Advisers seeks the most favorable prices
consistent with the best execution of the orders. So long as Advisers believes
it is obtaining the best execution, it will give consideration in placing
portfolio transactions to broker-dealers furnishing research, statistical or
factual information or wire or other services to the Portfolio or Advisers,
including appraisals or valuations of portfolio securities of the Portfolio.
While the information and services provided by broker-dealers are useful in
varying degrees and would generally reduce the amount of research or services
otherwise performed by Advisers and thus reduce its expenses, they are of
indeterminable value and will not reduce the management fee payable to Advisers
by the Portfolio.
Depending on Advisers' view of market conditions, the Portfolio may or may not
purchase securities with the expectation of holding them to maturity, although
its general policy is to hold securities to maturity. The Portfolio may,
however, sell securities prior to maturity to meet redemptions or as a result of
a revised management evaluation of the issuer. During the fiscal years ended
June 30, 1993, 1994, and 1995 the Portfolio paid no brokerage commissions. As of
June 30, 1995, the Portfolio did not own securities of its regular
broker-dealers.
Purchases of portfolio securities may be made directly from issuers or from
underwriters. Where possible, purchase and sale transactions will be effected
through dealers (including banks) which specialize in the types of securities
which the Portfolio will be holding, unless better executions are available
elsewhere. Dealers and underwriters usually act as principal for their own
account. Purchases from underwriters will include a concession paid by the
issuer to the underwriter and purchases from dealers will include the spread
between the bid and the ask price. If the execution and price offered by more
than one dealer or underwriter are comparable, the order may be allocated to a
dealer or underwriter which has provided such research or other services as
mentioned above. No broker or dealer affiliated with the Fund, the Portfolio, or
with Advisers may purchase securities from, or sell securities to, the Fund or
the Portfolio.
If purchases or sales of securities of the Portfolio and one or more other
investment companies or clients supervised by Advisers are considered at or
about the same time, transactions in such securities will be allocated among the
several investment companies and clients in a manner deemed equitable to all by
Advisers, taking into account the respective sizes of the funds and the amount
of securities to be purchased or sold. It is recognized that in some cases this
procedure could possibly have a detrimental effect on the price or volume of the
security so far as the Portfolio is concerned. In other cases it is possible
that the ability to participate in volume transactions and to negotiate lower
brokerage commissions will be beneficial to the Portfolio.
DETERMINATION OF NET ASSET VALUE
As noted in the Prospectus, the net asset value per share for purposes of both
the purchase and redemption of shares is determined by the Fund on each day that
the Exchange is open for business. Valuation is currently made as of 3:00 p.m.
Pacific time. As of the date hereof, the Fund is informed that the Exchange
intends to close in observance of the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Net asset value per share of the Fund is
calculated by adding the value of all securities and other assets in the Fund's
portfolio (i.e., shares of the Portfolio), deducting the Fund's liabilities, and
dividing by the number of shares outstanding.
The valuation of the portfolio securities of the Portfolio (including any
securities held in the separate account maintained for when-issued securities)
is based upon their amortized cost, which does not take into account unrealized
capital gains or losses. This involves valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in calculation, it
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price the Portfolio would receive if it sold the
instrument. During periods of declining interest rates, the daily yield on
shares of the Portfolio computed as described above may tend to be higher than a
like computation made by a fund with identical investments utilizing a method of
valuation based upon market prices and estimates of market prices for all of its
portfolio instruments. Thus, if the use of amortized cost by the Portfolio
resulted in a lower aggregate portfolio value on a particular day, a prospective
investor in the Portfolio would be able to obtain a somewhat higher yield than
would result from investment in a fund utilizing solely market values, and
existing investors in the Portfolio would receive less investment income. The
converse would apply in a period of rising interest rates.
The Portfolio's use of amortized cost, which facilitates the maintenance of the
Portfolio's and the Fund's per share net asset value of $1.00, is permitted by a
rule adopted by the Securities and Exchange Commission ("SEC"). Pursuant to this
rule, the Portfolio must adhere to certain conditions. The Portfolio must
maintain a dollar-weighted average portfolio maturity of 90 days or less, only
purchase instruments having remaining maturities of 397 calendar days or less,
and invest only in those United States dollar-denominated instruments that the
Board of Trustees of Money Market determines present minimal credit risks and
which are, as required by the federal securities laws, rated in one of the two
highest rating categories as determined by nationally recognized statistical
rating agencies, instruments deemed comparable in quality to such rated
instruments, or instruments, the issuers of which, with respect to an
outstanding issue of short-term debt that is comparable in priority and
protection, have received a rating within the two highest categories of
nationally recognized statistical rating agencies. As discussed in the
Prospectus, securities subject to floating or variable interest rates with
demand features in compliance with applicable rules of the SEC may have stated
maturities in excess of one year.
The trustees of Money Market have agreed to establish procedures designed to
stabilize, to the extent reasonably possible, the Portfolio's price per share as
computed for the purpose of sales and redemptions at $1.00. Such procedures will
include review of the Portfolio's holdings by the trustees, at such intervals as
they may deem appropriate, to determine whether the Portfolio's net asset value
calculated by using available market quotations deviates from $1.00 per share
based on amortized cost. The extent of any deviation will be examined by the
trustees. If such deviation exceeds 1/2 of 1%, the trustees will promptly
consider what action, if any, will be initiated. In the event the trustees
determine that a deviation exists which may result in material dilution or other
unfair results to investors or existing shareholders, they will take such
corrective action as they regard as necessary and appropriate, which may include
the sale of portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity, withholding dividends,
redemptions of shares in kind, or establishing a net asset value per share by
using available market quotations.
ADDITIONAL INFORMATION
REGARDING PURCHASES AND
REDEMPTIONS OF FUND SHARES
EFFECTIVENESS OF PURCHASE ORDERS
The purchase price for shares of the Fund is the net asset value of such shares
next determined after receipt and acceptance of a an exchange request in proper
form. Once shares of the Fund are purchased, they begin earning income
immediately, and income dividends will start being credited to the investor's
account on the day following the effective date of acquisition and continue
through the day all shares in the account are redeemed.
Request received by the Fund prior to 3:00 p.m. Pacific time on any business day
are normally effective on the same day. Request received by the Fund after that
time will normally be effective on the next business day.
SHAREHOLDER ACCOUNTING
All purchases of Fund shares will be credited to the shareholder in full and
fractional shares of the Fund (rounded to the nearest 1/1000 of a share) in an
account maintained for the shareholder by the Fund's transfer agent. Share
certificates will not be issued. To open an account in the name of a
corporation, a resolution of the corporation's Board of Directors will be
required.
The Fund reserves the right to reject any order for the purchase of shares of
the Fund and to waive minimum investment requirements. In addition, the offering
of shares of the Fund may be suspended at any time and resumed at any time
thereafter.
SHAREHOLDER REDEMPTIONS
All requests for redemption should be sent to the Fund, c/o Franklin/Templeton
Investor Services, Inc.("Investor Services" or "Shareholder Services Agent"),
777 Mariners Island Blvd., P.O. Box 7777, San Mateo, California 94403-7777.
Redemptions will be made in cash at the net asset value per share next
determined after receipt by the Fund of a redemption request in proper form,
including all signature guarantees, and other documentation as may be required
by the transfer agent. The amount received upon redemption may be more or less
than the shareholder's original investment.
The Fund will make payment for all redemptions within seven days after receipt
of such redemption request in proper form. The Fund reserves the right, however,
to suspend redemptions or postpone the date of payment (1) for any periods
during which the Exchange is closed (other than for the customary weekend and
holiday closings), (2) when trading in the markets the Fund usually utilizes is
restricted or an emergency exists, as determined by the SEC, so that disposal of
the Fund's investments or the determination of the Fund's net asset value is not
reasonably practicable, or (3) for such other periods as the SEC, by order, may
permit for the protection of the Fund's shareholders.
In connection with exchanges (see "Exchange Privilege" in Prospectus), it should
be noted that since the proceeds from the sale of shares of an investment
company generally are not available until the fifth business day following the
redemption, the funds into which the Fund shareholders are seeking to exchange
reserve the right to delay issuing shares pursuant to an exchange until said
fifth business day. The redemption of shares of the Fund to complete an exchange
for shares of any of the investment companies will be effected at the close of
business on the day the request for exchange is received in proper form at the
net asset value then effective.
Use of the exchange privilege in conjunction with market timing services offered
through numerous securities dealers has become increasingly popular as a means
of capital management. In the event that a substantial portion of the Fund's
shareholders should, within a short period, elect to redeem their shares of the
Fund pursuant to the exchange privilege, the Fund might have to liquidate
portfolio securities it might otherwise hold and incur the additional costs
related to such transactions.
REDEMPTIONS IN KIND
The Fund has committed itself to pay in cash (by check) all requests for
redemption by any shareholder of record, limited in amount, however, during any
90-day period to the lesser of $250,000 or 1% of the value of the Fund's net
assets at the beginning of such period. Such commitment is irrevocable without
the prior approval of the SEC. In the case of requests for redemption in excess
of such amounts, the trustees reserve the right to make payments in whole or in
part in securities or other assets of the Fund from which the shareholder is
redeeming in case of an emergency, or if the payment of such a redemption in
cash would be detrimental to the existing shareholders of the Fund. In such
circumstances, the securities distributed would be valued at the price used to
compute the Fund's net assets. Should the Fund do so, a shareholder may incur
brokerage fees in converting the securities to cash.
As a condition of qualifying its securities for sale in the state of Texas, the
Fund has undertaken that, consistent with its by-laws and applicable law,
whenever the trustees of the Fund determine that it is advisable to make a
redemption in whole or in part in securities of the Fund, such securities will
be in readily marketable securities, to the extent available.
REDEMPTIONS BY THE FUND
Due to the relatively high cost of handling small investments, the Fund reserves
the right to redeem, involuntarily, at net asset value, the shares of any
shareholder whose account has a value of less than one-half of the initial
minimum investment required for that shareholder, but only where the value of
such account has been reduced by prior voluntary redemption of shares. Until
further notice, it is the present policy of the Fund not to exercise this right
with respect to any shareholder whose account has a value of $50 or more. In any
event, before the Fund redeems such shares and sends the proceeds to the
shareholder, it will notify the shareholder that the value of the shares in the
account is less than the minimum amount and allow the shareholder 30 days to
make an additional investment in an amount which will increase the value of the
account to at least $100.
SPECIAL SERVICES
The Fund's Shareholder Services Agent may charge separate fees to shareholders,
to be negotiated directly with such shareholders, for providing special services
in connection with their accounts. Such fees for special services to such
shareholders will not increase the expenses borne by the Fund.
As noted in the Prospectus, special procedures have been designed for banks and
other institutions wishing to open multiple accounts in the Fund. The
institution may open a single master account by filing one application form with
the Fund, signed by personnel authorized to act for the institution. Individual
sub-accounts may be opened at the time the master account is filed by listing
them or they may be added at a later date by written advice or by filing forms
supplied by the Fund. These sub-accounts may be established by the institution
with registration either by name or number. The investment minimums applicable
to the Fund are applicable to each sub-account. The Fund will provide each
institution with a written confirmation for each transaction in a sub-account
and arrangements may be made at no additional charge for the transmittal of
duplicate confirmations to the beneficial owner of the sub-account.
The Franklin/Templeton Investor Services, Inc. may pay certain financial
institutions which maintain omnibus accounts with the Fund on behalf of numerous
beneficial owners for recordkeeping operations performed with respect to such
beneficial owners. For each beneficial owner in the omnibus account, the Fund
may reimburse Investor Services an amount not to exceed the per account fee
which the Fund normally pays Investor Services. Such financial institutions may
also charge a fee for their services directly to their clients.
ADDITIONAL INFORMATION
REGARDING DISTRIBUTIONS AND TAXES
DISTRIBUTIONS
Distributions and distribution adjustments resulting from realized gains and
losses on the sale of portfolio securities or from unrealized appreciation or
depreciation in the value of portfolio securities are required by the Portfolio
to maintain a stable net asset value of $1.00 and may result in under or over
distributions of investment company taxable income by the Portfolio to the Fund.
The Fund's daily dividend is derived from the income dividends paid by the
Portfolio. The Portfolio may also derive capital gains and losses in connection
with sales or other dispositions of its portfolio securities, which are then
taken into account in determining distributions to the Fund, which may then be
distributed to Fund shareholders. Because the Portfolio, however, under normal
circumstances is composed of short-term securities, it does not expect to
realize any long-term capital gains or losses. Any net short-term or long-term
capital gains which are realized by the Portfolio (adjusted for any daily
amounts of unrealized appreciation or depreciation reported above and taking
into account any capital loss carryovers) will generally be distributed once
each year and may be distributed more frequently if necessary in order to avoid
federal excise taxes. Any distributions of capital gain to the Fund will be
reinvested in the form of additional shares of the Fund at net asset value,
unless the shareholder has previously elected on the Shareholder Application or
filed written instructions with the Fund's transfer agent to have them paid in
cash.
As noted in the Prospectus, the Fund declares dividends for each day that the
Fund's net asset value is calculated equal to all of its daily income dividends
from the Portfolio, payable to shareholders of record as of the close of
business the preceding day.
Shareholders who so request may have their dividends paid out monthly in cash.
The shares reinvested and credited to their account during the month will be
redeemed as of the close of business on the last bank business day of the month
and the proceeds will be paid to them in cash. If a shareholder withdrew the
entire amount in the shareholder's account at any time during the month, all
dividends accrued with respect to such account during the month to the time of
withdrawal would be paid in the same manner and at the same time as the proceeds
of withdrawal. Each Fund shareholder will receive a monthly summary of the
shareholder's account, including information as to dividends reinvested or paid.
The Board of Trustees reserves the right to revise the above dividend policy or
postpone the payment of dividends, if warranted in its judgment, due to unusual
circumstances, such as a large expense, loss or unexpected fluctuation in net
assets.
Dividend checks which are returned to the Fund marked "unable to forward" by the
postal service will be deemed to be a request to change the dividend option and
the proceeds will be reinvested in additional shares until new instructions are
received.
The Fund may deduct from a shareholder's account the costs of its efforts to
locate a shareholder if the shareholder's mail is returned as undeliverable or
the Fund is otherwise unable to locate the shareholder or verify the current
mailing address. These costs may include a percentage of the account when a
search company charges a percentage fee in exchange for its location services.
TAXATION
As stated in the Prospectus, the Fund and the Portfolio intend to qualify for
treatment as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, (the "Code"), as amended. The trustees reserve the right
not to maintain the qualification of the Fund as a regulated investment company
if they determine such course of action to be beneficial to the shareholders. In
such case, the Fund will be subject to federal and possibly state corporate
taxes on its taxable income and gains derived from the Portfolio, and
distributions to shareholders will be ordinary dividend income to the extent of
the Fund's available earnings and profits.
The Code requires all funds to distribute at least 98% of their taxable ordinary
income earned during the calendar year and at least 98% of their capital gain
net income earned during the twelve-month period ending October 31 of each year
(in addition to amounts from the prior year that were neither distributed nor
taxed to the Fund) to shareholders by December 31 of each year in order to avoid
the imposition of a federal excise tax. Under these rules, certain distributions
which are declared in December but which, for operational reasons, may not be
paid to the shareholder until the following January, will be treated for tax
purposes as if paid by the Fund and received by the shareholder on December 31
of the calendar year in which they are declared. The Fund intends as a matter of
policy to declare and pay these dividends in December to avoid the imposition of
this tax, but does not guarantee that its distributions will be sufficient to
avoid any or all federal excise taxes.
Distributions to Fund shareholders, which are derived from the Portfolio from
the excess of net long-term capital gain over net short-term capital loss, are
treated as long-term capital gain regardless of the length of time the
shareholder has owned Fund shares and regardless of whether such distributions
are received in cash or in additional shares.
Many states grant tax-free status to dividends paid to shareholders of mutual
funds from interest income earned by the fund from direct obligations of the
U.S. government, subject in some states to minimum investment requirements that
must be met by the fund. Investments in GNMA/FNMA securities, bankers'
acceptances, commercial paper and repurchase agreements collateralized by U.S.
government securities do not generally qualify for tax-free treatment. At the
end of each calendar year, the Fund will provide shareholders with the
percentage of any dividends paid which may qualify for such tax-free treatment.
Shareholders should then consult with their own tax advisors with respect to the
application of their state and local laws to these distributions.
Since the Fund's income is derived from income dividends of the Portfolio,
rather than qualifying dividend income derived from certain domestic
corporations, no portion of the Fund's distributions will generally be eligible
for
None of the distributions paid by the Fund for the fiscal year ended June 30,
1995, qualified for this deduction and it is not anticipated that any of the
current year's dividend will so qualify.
Redemptions and exchanges of Fund shares are taxable events on which a
shareholder may realize a capital gain or loss. Any loss incurred on the sale or
exchange of the Fund's shares, held for six months or less, will be treated as a
long-term capital loss to the extent of capital gain dividends received with
respect to such shares.
THE FUND'S UNDERWRITER
Pursuant to an underwriting agreement in effect until April 30, 1997,
Distributors acts as principal underwriter The underwriting agreement will
continue in effect for successive annual periods provided that its continuance
is specifically approved at least annually by a vote of the Fund's Board of
Trustees or by a vote of the holders of a majority of the Fund's outstanding
voting securities, and in either event by a majority vote of the Fund's trustees
who are not parties to the underwriting agreement or interested persons of any
such party (other than as trustees of the Fund), cast in person at a meeting
called for that purpose. The underwriting agreement terminates automatically in
the event of its assignment and may be terminated by either party on 90 days'
written notice.
Distributors pays the expenses of distribution of Fund shares, including
advertising expenses and the costs of printing sales material and prospectuses
used to offer shares to the public. The Fund pays the expenses of preparing and
printing amendments to its registration statements and prospectuses (other than
those necessitated by the activities of Distributors) and of sending
prospectuses to existing shareholders.
DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the 1940 Act whereby the Fund pays up to a maximum of 0.65% per annum of
its average daily net assets for expenses incurred in the promotion and
distribution of its shares.
Pursuant to the Plan, the Fund pays to Distributors annual distribution fees,
payable quarterly, of 0.50% of the Fund's average daily net assets. Such fees
may be used in order to compensate Distributors or others for providing
distribution and related services and bearing certain expenses of the Fund. All
expenses of distribution and marketing over that amount will be borne by
Distributors, or others who have incurred them, without reimbursement by the
Fund. In addition to this amount, under the Class II Plan, the Fund shall pay
0.15% per annum, payable quarterly, of the Fund's average daily net assets as a
servicing fee. This fee will be used to pay dealers or others for, among other
things, assisting in establishing and maintaining customer accounts and records;
assisting with purchase and redemption requests; receiving and answering
correspondence; monitoring dividend payments from the Fund on behalf of
customers, and similar activities related to furnishing personal services and
maintaining shareholder accounts. Distributors may pay the securities dealer,
from its own resources, a commission of up to 1% of the amount invested at the
time of investment.
In addition to the payments to which Distributors or others are entitled under
the Plan, the Plan also provides that to the extent the Fund, Advisers or
Distributors or other parties on behalf of the Fund, Advisers or Distributors,
make payments that are deemed to be payments for the financing of any activity
primarily intended to result in the sale of shares of the Fund within the
context of Rule 12b-1 under the 1940 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
made under the Plan, plus any other payments deemed to be made pursuant to the
Plan, exceed the amount permitted to be paid pursuant to the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., Article III,
Section 26(d)4.
The terms and provisions of the Plan relating to required reports, term, and
approval are consistent with Rule 12b-1. The Plan does not permit unreimbursed
expenses incurred in a particular year to be carried over to or reimbursed in
subsequent years.
To the extent fees are for distribution or marketing functions, as distinguished
from administrative servicing or agency transactions, certain banks will not be
entitled to participate in the Plan as a result of applicable federal law
prohibiting certain banks from engaging in the distribution of mutual fund
shares. Such banking institutions, however, are permitted to receive fees under
the Plan for administrative servicing or for agency transactions. If a bank were
prohibited from providing such services, its customers who are shareholders
would be permitted to remain shareholders of the Fund, and alternate means for
continuing the servicing of such shareholders would be sought. In such an event,
changes in the services provided might occur and such shareholders might no
longer be able to avail themselves of any automatic investment or other services
then being provided by the bank. It is not expected that shareholders would
suffer any adverse financial consequences as a result of any of these changes.
Securities laws of states in which the Fund's shares are offered for sale may
differ from the interpretations of federal law expressed herein, and banks and
financial institutions selling shares of the Fund may be required to register as
dealers pursuant to state law.
The Plan has been approved in accordance with the provisions of the Rule 12b-1
plan. The Plan is effective for an initial period through April 30, 1996 and is
renewable annually by a vote of the Fund's Board of Trustees, including a
majority vote of the trustees who are non-interested persons of the Fund and who
have no direct or indirect financial interest in the operation of the Plan, cast
in person at a meeting called for that purpose. It is also required that the
selection and nomination of such trustees be done by the non-interested
trustees. The Plan and any related agreement may be terminated at any time,
without any penalty, by vote of a majority of the non-interested trustees on not
more than 60 days' written notice, by Distributors on not more than 60 days'
written notice, by any act that constitutes an assignment of the Administration
agreement with the Advisers or by vote of a majority of the Fund's outstanding
shares. Distributors or any dealer or other firm may also terminate their
respective distribution or service agreement at any time upon written notice.
The Plan and any related agreements may not be amended to increase materially
the amount to be spent for distribution expenses without approval by a majority
of the Fund's outstanding shares, and all material amendments to the Plan or any
related agreements shall be approved by a vote of the non-interested trustees,
cast in person at a meeting called for the purpose of voting on any such
amendment.
Distributors is required to report in writing to the Board of Trustees at least
quarterly on the amounts and purpose of any payment made under the Plan and any
related agreements, as well as to furnish the Board of Trustees with such other
information as may reasonably be requested in order to enable the Board of
Trustees to make an informed determination of whether the Plan should be
continued. No 12b-1 fees were collected by the Fund for the fiscal year ended
June 30, 1995. The 0.65% reflects the full contractual amount of Rule 12b-1 fees
that the Fund may collect. The Fund expects to incur the full 12b-1 fees in the
next fiscal year.
GENERAL INFORMATION
PERFORMANCE
As noted in the Prospectus, the Fund may, from time to time, quote various
performance figures to illustrate the Fund's past performance.
CURRENT YIELD
Current yield reflects the interest income per share earned by the Fund's
portfolio investments.
Current yield is computed by determining the net change, excluding capital
changes, in the value of a hypothetical pre-existing account having a balance of
one share at the beginning of the period, subtracting a hypothetical charge
reflecting deductions from shareholder accounts, and dividing the difference by
the value of the account at the beginning of the base period to obtain the base
period return, and then annualizing the result by multiplying the base period
return by (365/7).
The yield for the Fund for the seven-day period ended on June 30, 1995 was
4.32%.
EFFECTIVE YIELD
Effective yield is computed in the same manner except that the annualization of
the return for the seven-day period reflects the results of compounding by
adding one to the base period return, raising the sum to a power equal to 365
divided by seven, and subtracting one from the result.
Effective yield for the Fund for the seven-day period ended June 30, 1995 was
4.42%.
Effective yield is obtained by using the SEC formula:
365/7
Effective Yield = [(Base Period Return + 1) ]-1
COMPARISONS
To help investors better evaluate how an investment in the Fund might satisfy
their investment objective, advertisements and other materials regarding the
Fund may discuss various measures of Fund performance as reported by various
financial publications. Materials may also compare performance (as calculated
above) to performance as reported by other investments, indices, and averages.
Such comparisons may include, but are not limited to, the following examples:
a) IBC/Donoghue's Money Fund Report(R) - Industry averages for seven-day
annualized and compounded yields of taxable, tax-free, and government money
funds.
b) Bank Rate Monitor - A weekly publication which reports various bank
investments such as CD rates, average savings account rates and average loan
rates.
c) Lipper - Mutual Fund Performance Analysis, Lipper - Fixed Income Fund
Performance Analysis, and Lipper - Mutual Fund Yield Survey - measure total
return and average current yield for the mutual fund industry and rank
individual mutual fund performance over specified time periods, assuming
reinvestment of all distributions, exclusive of any applicable sales charges.
d) Salomon Brothers Bond Market Roundup - A weekly publication which reviews
yield spread changes in the major sectors of the money, government agency,
futures, options, mortgage, corporate, Yankee, Eurodollar, municipal, and
preferred stock markets and summarizes changes in banking statistics and reserve
aggregates.
e) Consumer Price Index (or Cost of Living Index), published by the U.S. Bureau
of Labor Statistics - a statistical measure of change, over time, in the price
of goods and services, in major expenditure groups.
f) Stocks, Bonds, Bills, and Inflation published by Ibbotson Associates - a
historical measure of yield, price, and total return for common and small
company stock, long term government bonds, Treasury bills, and inflation.
g) Financial publications: The Wall Street Journal and Business Week, Changing
Times, Financial World, Forbes, Fortune, and Money Magazines - provide
performance statistics over specified time periods.
Advertisements or information may also compare the Fund's performance to the
return on certificates of deposit or other investments. Investors should be
aware, however, that an investment in the Fund involves the risk of fluctuation
of principal value, a risk generally not present in an investment in a
certificate of deposit issued by a bank. For example, as the general level of
interest rates rise, the value of the Fund's fixed-income investments, as well
as the value of its shares which are based upon the value of such portfolio
investments, can be expected to decrease. Conversely, when interest rates
decrease, the value of the Fund's shares can be expected to increase.
Certificates of deposit are frequently insured by an agency of the U.S.
government. An investment in the Fund is not insured by any federal, state or
private entity.
In assessing such comparisons of performance, an investor should keep in mind
that the composition of the investments in the reported indices and averages is
not identical to the Fund's portfolio, that the indices and averages are
generally unmanaged, and that the items included in the calculations of such
averages may not be identical to the formula used by the Fund to calculate its
figures. In addition, there can be no assurance that the Fund will continue this
performance as compared to such other averages.
The Fund may include in its advertising or sales material information relating
to the investment objective and performance results of funds belonging to the
Templeton Group of Funds. Resources is the parent company of the advisers and
underwriter of both the Franklin Group of Funds(R) and Templeton Group of Funds.
OTHER FEATURES AND BENEFITS
The Fund may help investors achieve various investment goals, such as
accumulating money for retirement, saving for a down payment on a home, college
cost and/or other long-term goals. The Franklin College Costs Planner may assist
an investor in determining how much money must be invested on a monthly basis in
order to have a projected amount available in the future to fund a child's
college education. (Projected college cost estimates are based upon current
costs published by the College Board.) The Franklin Retirement Planning Guide
leads an investor through the steps to start a retirement savings program. Of
course, an investment in the Fund cannot guarantee that such goals will be met.
REPORTS TO SHAREHOLDERS
As noted in the prospectus, the Fund sends annual and semi-annual reports to its
shareholders regarding the Fund's performance and its portfolio holdings.
Shareholders who would like to receive a quarterly report on portfolio holdings
of the Portfolio may phone our Fund Information Department, at the number set
forth in the prospectus under "How to Get Information Regarding an Investment in
the Fund."
MISCELLANEOUS INFORMATION
The Fund is a member of the Franklin Templeton Group, one of the largest mutual
fund organizations in the United States and may be considered in a program for
diversification of assets. Founded in 1947, Franklin, one of the oldest mutual
fund organizations, has managed mutual funds for over 47 years and now services
more than 2.4 million shareholder accounts. In 1992, Franklin, a leader in
managing fixed-income mutual funds and an innovator in creating domestic equity
funds, joined forces with Templeton Worldwide, Inc., a pioneer in international
investing. Together, the Franklin Templeton Group has over $125 billion in
assets under management for more than 3.8 million shareholder accounts and
offers over 115 U.S.-based mutual funds. The Fund may identify itself by its
Quotron or CUSIP number.
The Dalbar Surveys, Inc. broker/dealer survey has ranked Franklin number
one in service quality for five of the past seven years.
From time to time, the number of Fund shares held in the "street name" accounts
of various securities dealers for the benefit of their clients or in centralized
securities depositories may exceed 5% of the total shares outstanding. To the
best knowledge of the Fund, the only entity holding beneficially or of record
more than 5% of the Fund's outstanding shares is Franklin Resources, Inc., 777
Mariners Island Boulevard, San Mateo, California 94404 which provided the
initial capital of the Fund.
Access persons of the Franklin Templeton Group, as defined in SEC Rule 17(j)
under the 1940 Act, who are employees of Resources or its subsidiaries, are
permitted to engage in personal securities transactions subject to the following
general restrictions and procedures: (1) the trade must receive advance
clearance from a compliance officer and must be completed within 24 hours after
this clearance; (2) copies of all brokerage confirmations must be sent to the
compliance officer and within 10 days after the end of each calendar quarter, a
report of all securities transactions must be provided to the compliance
officer; (3) in addition to items (1) and (2), access persons involved in
preparing and making investment decisions must file annual reports of their
securities holdings each January and also inform the compliance officer (or
other designated personnel) if they own a security that is being considered for
a fund or other client transaction or if they are recommending a security in
which they have an ownership interest for purchase or sale by a fund or other
client.
OWNERSHIP AND AUTHORITY DISPUTES
In the event of disputes involving multiple claims of ownership or authority to
control a shareholder's account, the Fund has the right (but has no obligation)
to: (a) freeze the account and require the written agreement of all persons
deemed by the Fund to have a potential property interest in the account, prior
to executing instructions regarding the account; (b) interplead disputed funds
or accounts with a court of competent jurisdiction; or (c) surrender ownership
of all or a portion of the account to the Internal Revenue Service in response
to a Notice of Levy.
APPENDIX A
SUMMARY OF PROCEDURES TO MONITOR
CONFLICTS OF INTEREST
The Board of Trustees of The Money Market Portfolios, on behalf of its series
("master funds"), and the Board of Trustees of the Fund ("feeder fund"), (both
of which, except in the case of one trustee, are composed of the same
individuals) recognize that there is the potential for certain conflicts of
interest to arise between the master fund and the feeder fund in this format.
Such potential conflicts of interest could include, among others: the creation
of additional feeder funds with different fee structures; the creation of
additional feeder funds which could have controlling voting interests in any
pass-through voting which could affect investment and other policies; a proposal
to increase fees at the master fund level; and any consideration of changes in
fundamental policies at the master fund level which may or may not be acceptable
to a particular feeder fund.
In recognition of the potential for conflicts of interest to develop, the Board
of Trustees of the Trust and The Money Market Portfolio have adopted certain
procedures, pursuant to which i) management of the master fund and the feeder
fund will, on a yearly basis, report to each board, including the independent
members of each board, on the operation of the master/feeder fund structure; ii)
the independent trustees will have ongoing responsibility for reviewing all
proposals at the master fund level to determine whether any proposal presents a
potential for a conflict of interest and to the extent any other potential
conflicts arise prior to the normal annual review, they will act promptly to
review the potential conflict; iii) if the independent trustees determine that a
situation or proposal presents a potential conflict, they will request a written
analysis from the master fund management describing whether such apparent
potential conflict of interest will impede the operation of the constituent
feeder fund and the interests of the feeder fund's shareholders; and iv) upon
receipt of the analysis, such trustees shall review the analysis and present
their conclusion to the full boards.
If no actual conflict is deemed to exist, the independent trustees will
recommend that no further action be taken. If the analysis is inconclusive, they
may submit the matter to and be guided by the opinion of an independent legal
counsel issued in a written opinion. If a conflict is deemed to exist, they may
recommend one or more of the following courses of action: i) suggest a course of
action designed to eliminate the potential conflict of interest; ii) if
appropriate, request that the full boards submit the potential conflict to
shareholders for resolution; iii) recommend to the full boards that the affected
feeder fund no longer invest in its designated master fund and propose either a
search for a new master fund in which to invest the feeder fund's assets or the
hiring of an investment manager to manage the feeder fund's assets in accordance
with its objective and policies; iv) recommend to the full boards that a new
group of trustees be recommended to the shareholders of the Trust and The Money
Market Portfolios for approval; or v) recommend such other action as may be
considered appropriate.
APPENDIX B
A-1, A-2 AND PRIME-1, PRIME-2
COMMERCIAL PAPER RATINGS:
Commercial paper rated by Standard & Poor's Corporation, a nationally recognized
statistical rating organizations ("NRSRO"), has the following characteristics:
Liquidity ratios are adequate to meet cash requirements. Long-term senior debt
is rated "A" or better. The issuer has access to at least two additional
channels of borrowing. Basic earnings and cash flow have an upward trend with
allowance made for unusual circumstances. Typically, the issuer's industry is
well established and the issuer has a strong position within the industry. The
reliability and quality of management are unquestioned. Relative strength or
weakness of the above factors determines whether the issuer's commercial paper
is rated A-1 or A-2.
The ratings Prime-1 and Prime-2 are the two highest commercial paper ratings
assigned by Moody's Investor Services, Inc. ("Moody's"). Among the factors
considered by Moody's in assigning ratings are the following: (1) evaluation of
the management of the issuer; (2) economic evaluation of the issuer's industry
or industries and an appraisal of speculative-type risks which may be inherent
in certain areas; (3) evaluation of the issuer's products in relation to
competition and customer acceptance; (4) liquidity; (5) amount and quality of
long-term debt; (6) trend of earnings over a period of ten years; (7) financial
strength of a parent company and the relationships which exist with the issuer;
and (8) recognition by the management of obligations, which may be present or
may arise as a result of public interest questions and preparations to meet such
obligations. Relative strength or weakness of the above factors determines
whether the issuer's commercial paper is rated Prime-1 or Prime-2.
FINANCIAL STATEMENTS
The financial statement contained in the Annual Report to Shareholders of the
Fund dated June 30, 1995 are incorporated herein by reference.
FRANKLIN TEMPLETON MONEY FUND II
Franklin Templeton Money Fund Trust
File Nos. 33-88924
811-8962
FORM N- 1A
PART C
OTHER INFORMATION
ITEM 24 FINANCIAL STATEMENTS AND EXHIBITS
a) Financial Statements incorporated herein by reference to the
Registrant's Annual Report to Shareholders dated June 30, 1995 as filed
with the SEC electronically on form type N-30D on August 29, 1995.
(i) Registrant's Report of Independent Auditors - August 4, 1995.
(ii) Registrant's Statements of Assets and Liabilities -June 30, 1995.
(iii)Registrant's Statement of Investments in Securities and Net
Assets, June 30, 1995.
(iv) Registrant's Statement of Assets and Liabilities - June 30, 1995.
(v) Registrant's Statement of Operations - for the period April 13,
1995 to June 30, 1995.
(vi) Registrant's Statement of Changes in Net Assets - for the period
April 13, 1995 to June 30, 1995.
(vii) Registrant's Notes to Financial Statements.
(viii) The Money Market Portfolios Report of Independent Auditors -
August 4, 1995.
(ix) The Money Market Portfolio Statement of Investments in Securities
and Net Assets, June 30, 1995.
(x) The Money Market Portfolios Statements of Assets and Liabilities
- June 30, 1995.
(xi) The Money Market Portfolios Statements of Operations - for the
year ended June 30, 1995.
(xii)The Money Market Portfolios Statements of Changes in Net Assets
- for the years ended June 30, 1995 and 1994.
(xiii) The Money Market Portfolios Notes to Financial Statements.
b) The following exhibits, are attached herewith, except exhibit 14(i) which is
incorporated by reference as noted.
(1) copies of the charter as now in effect;
(i) Certificate of Trust of Franklin Templeton Money Fund Trust dated
January 17, 1995
(ii) Agreement and Declaration of Trust of Franklin Templeton Money Fund
Trust dated January 17, 1995
(2) copies of the existing By-Laws or instruments corresponding thereto;
(i) By-Laws of Franklin Templeton Money Fund Trust
(3) copies of any voting trust agreement with respect to more than five
percent of any class of equity securities of the Registrant;
Not Applicable
(4) specimens or copies of each security issued by the Registrant, including
copies of all constituent instruments, defining the rights of the
holders of such securities, and copies of each security being
registered;
Not applicable
(5) copies of all investment advisory contracts relating to the management of
the assets of the Registrant;
(i) Administration Agreement between Registrant and Franklin Advisers,
Inc. dated May 1, 1995
(6) copies of each underwriting or distribution contract between the
Registrant and a principal underwriter, and specimens or copies of all
agreements between principal underwriters and dealers;
(i) Underwriting Agreement between Registrant and Franklin/Templeton
Distributors, Inc. dated May 11, 1995
(ii) Form of Dealer Agreement between Franklin/Templeton Distributors, Inc.
and dealers dated May 1, 1995.
(7) copies of all bonus, profit sharing, pension or other similar contracts
or arrangements wholly or partly for the benefit of directors or
officers of the Registrant in their capacity as such; any such plan that
is not set forth in a form
Not Applicable
(8) copies of all custodian agreements and depository contracts under Section
17(f) of the 1940 Act, with respect to securities and similar investments
of the Registrant, including the schedule of remuneration;
(i) Form of Custodian Agreement between Registrant and Bank of America NT
& SA
(9) copies of all other material contracts not made in the ordinary course of
business which are to be performed in whole or in part at or after the
date of filing the Registration Statement;
Not Applicable
(10) an opinion and consent of counsel as to the legality of the securities
being registered, indicating whether they will when sold be legally
issued, fully paid and nonassessable;
Not Applicable
(11) copies of any other opinions, appraisals or rulings and consents to the
use thereof relied on in the preparation of this registration statement
and required by Section 7 of the 1933 Act;
(i) Consent of Independent Auditors for Franklin Templeton Money Fund
Trust and The Money Market Portfolios dated August 29, 1995
(12) all financial statements omitted from Item 23;
Not Applicable
(13) copies of any agreements or understandings made in consideration for
providing the initial capital between or among the Registrant, the
underwriter, adviser, promoter or initial stockholders and written
assurances from promoters or initial stockholders that their purchases
were made for investment purposes without any present intention of
redeeming or reselling;
(i) Letter of Understanding dated April 13, 1995
(14) copies of the model plan used in the establishment of any retirement
plan in conjunction with which Registrant offers its securities, any
instructions thereto and any other documents making up the model plan.
Such form(s) should disclose the costs and fees charged in connection
therewith;
(i) Copy of model retirement plan
Registrant: AGE High Income Fund, Inc.
Filing: Post-Effective Amendment No. 26 to
Registration Statement on Form
N-1A
File No. 2-30203
Filing Date: August 1, 1989
(15) copies of any plan entered into by Registrant pursuant to Rule 12b-1
under the 1940 Act, which describes all material aspects of the
financing of distribution of Registrant's shares, and any agreements
with any person relating to implementation of such plan.
(i) Distribution Plan pursuant to Rule 12b-1 between Registrant and
Franklin Advisers, Inc. dated May 1, 1995
(16) schedule for computation of each performance quotation provided in the
registration statement in response to Item 22 (which need not be
audited).
(I) Schedule of Computation of Performance and Quotations
(17) Powers of Attorney
(i) Power of Attorney for Franklin Templeton Money Fund Trust dated
January 17, 1995
(ii) Power of Attorney for The Money Market Portfolios dated January
17, 1995
(iii)Certificate of Secretary for Franklin Templeton Money Fund Trust
dated January 17, 1995
(iv) Certificate of Secretary for The Money Market Portfolios dated
January 17, 1995
(27) Financial Data Schedule Computation
(i) Financial Data Schedule
ITEM 25 PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None
ITEM 26 NUMBER OF HOLDERS OF SECURITIES
As of June 30, 1995 the number of record holders of the only class of securities
of the Registrant are as follows:
Number of
TITLE OF CLASS RECORD HOLDERS
Beneficial Interest 17
ITEM 27 Indemnification
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court or
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Notwithstanding the provisions contained in the Registrant's By- Laws, in the
absence of authorization by the appropriate court on the merits pursuant to
Article VI of said By- Laws, any indemnification under said Article shall be
made by Registrant only if authorized in the manner provided in Article VI.
ITEM 28 BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Certain of the officers and directors of the Registrant's Administrator also
serve as officers and/or directors for (1) the administrator's corporate
parent, Franklin Resources, Inc., and/or (2) other investment companies in the
Franklin Group of Funds. In addition, Mr. Charles B. Johnson is director of
General Host Corporation. For additional information please see Part B.
ITEM 29 PRINCIPAL UNDERWRITERS
a) Franklin/Templeton Distributors, Inc., ("Distributors") also acts as
principal underwriter of shares of Franklin Gold Fund, Franklin Premier Return
Fund, Franklin Equity Fund, AGE High Income Fund, Inc., Franklin Custodian
Funds, Inc., Franklin Money Fund, Franklin California Tax-Free Income Fund,
Inc., Franklin Federal Money Fund, Franklin Tax-Exempt Money Fund, Franklin New
York Tax-Free Income Fund, Inc., Franklin Federal Tax-Free Income Fund,
Franklin Tax-Free Trust, Franklin California Tax-Free Trust, Franklin New York
Tax-Free Trust, Franklin Investors Securities Trust, Institutional Fiduciary
Trust, Franklin Balance Sheet Investment Fund, Franklin Tax-Advantaged
International Bond Fund, Franklin Tax-Advantaged U.S. Government Securities
Fund, Franklin Tax-Advantaged High Yield Securities Fund, Franklin Municipal
Securities Trust, Franklin Managed Trust, Franklin Strategic Series, Franklin
International Trust, Franklin Real Estate Securities Trust, Franklin/Templeton
Global Trust, Franklin Templeton Japan Fund, Templeton American Trust, Inc.,
Templeton Capital Accumulator Fund, Inc., Templeton Developing Markets Trust,
Templeton Funds, Inc., Templeton Global Investment Trust, Templeton Global
Opportunities Trust, Templeton Growth Fund, Inc., Templeton Income Trust,
Templeton Institutional Funds, Inc., Templeton Real Estate Securities Fund,
Templeton Smaller Companies Growth Fund, Inc., and 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 30 LOCATION OF ACCOUNTS AND RECORDS
The accounts, books or other documents required to be maintained by Section 31
(a) of the Investment Company Act of 1940 are kept by the Fund or its
shareholder services agent, Franklin/Templeton Investor Services, Inc. both of
whose address is 777 Mariners Island Boulevard, San Mateo, CA 94404-1585.
ITEM 31 MANAGEMENT SERVICES
There are no management-related service contracts not discussed in Part A or
Part B.
ITEM 32 UNDERTAKINGS
The Registrant hereby undertakes to promptly call a meeting of shareholders for
the purpose of voting upon the question of removal of any trustee or trustees
when requested in writing to do so by the record holders of not less than 10 per
cent of the Registrant's outstanding shares and to assist its shareholders in
the communicating with other shareholders in accordance with the requirements of
Section 16(c) of the Investment Company Act of 1940.
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of San Mateo and the State of California, on the
31st day of August, 1995.
FRANKLIN TEMPLETON MONEY FUND TRUST
(Registrant)
By: RUPERT H. JOHNSON, JR.*
Rupert H. Johnson, Jr., President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
its Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
RUPERT H. JOHNSON, JR.* Principal Executive Officer and Trustee
Rupert H. Johnson, Jr. Dated: August 31, 1995
MARTIN L. FLANAGAN* Principal Financial and Accounting Officer
Martin L. Flanagan Dated: August 31, 1995
DIOMEDES LOO-TAM* Principal Accounting Officer
Diomedes Loo-Tam Dated: August 31, 1995
FRANK H. ABBOTT III* Trustee
Frank H. Abbott III Dated: August 31, 1995
HARRIS J. ASHTON* Trustee
Harris J. Ashton Dated: August 31, 1995
S. JOSEPH FORTUNATO* Trustee
S. Joseph Fortunato Dated: August 31, 1995
DAVID W. GARBELLANO* Trustee
David W. Garbellano Dated: August 31, 1995
CHARLES B. JOHNSON* Trustee
Charles B. Johnson Dated: August 31, 1995
FRANK W.T. LAHAYE* Trustee
Frank W.T. LaHaye Dated: August 31, 1995
GORDON S. MACKLIN* Trustee
Gordon S. Macklin Dated: August 31, 1995
*By /s/ Larry L. Greene
Larry L. Greene
(Attorney-in-Fact
Pursuant to Power of Attorney filed herewith)
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the undersigned has duly consented to the
filing of this post-effective amendment to the Registration Statement of
Franklin Templeton Money Fund Trust to be signed by the undersigned, thereunto
duly authorized in the City of San Mateo and the State of California, on the
31st day of August 1995.
THE MONEY MARKET PORTFOLIOS
By: CHARLES E. JOHNSON*
Charles E. Johnson, 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:
CHARLES E. JOHNSON* Trustee and Principal Executive Officer
Charles E. Johnson Dated: August 31, 1995
MARTIN L. FLANAGAN* Principal Financial Officer
Martin L. Flanagan Dated: August 31, 1995
DIOMEDES LOO-TAM* Principal Accounting Officer
Diomedes Loo-Tam Dated: August 31, 1995
FRANK H. ABBOTT III* Trustee
Frank H. Abbott III Dated: August 31, 1995
HARRIS J. ASHTON* Trustee
Harris J. Ashton Dated: August 31, 1995
S. JOSEPH FORTUNATO* Trustee
S. Joseph Fortunato Dated: August 31, 1995
DAVID W. GARBELLANO* Trustee
David W. Garbellano Dated: August 31, 1995
CHARLES B. JOHNSON* Trustee
Charles B. Johnson Dated: August 31, 1995
RUPERT H. JOHNSON, JR.* Trustee
Rupert H. Johnson, Jr. Dated: August 31, 1995
FRANK W.T. LAHAYE* Trustee
Frank W.T. LaHaye Dated: August 31, 1995
GORDON S. MACKLIN* Trustee
Gordon S. Macklin Dated: August 31, 1995
*By /s/Larry L. Greene
Larry L. Greene - Attorney- in- Fact
(Pursuant to Powers of Attorney filed herewith)
FRANKLIN TEMPLETON MONEY FUND TRUST
REGISTRATION STATEMENT
EXHIBITS INDEX
EXHIBIT NO. DESCRIPTION PAGE NO. IN
SEQUENTIAL
NUMBERING
SYSTEM
EX-99.B1(i) Certificate of Trust of Attached
Franklin Templeton Money
Fund Trust January 17, 1995
EX-99.B1(ii) Agreement and Declaration Attached
of Trust of Franklin
Templeton Money Fund Trust
January 17, 1995
EX-99.B2(i) By-Laws Attached
EX-99.B5(i) Administration Attached
Agreement between
Registrant and Franklin
Advisers, Inc. dated
May 1, 1995
EX-99.B6(i) Underwriting Agreement Attached
between Registrant and
Franklin/Templeton
Distributors, Inc.
dated May 11, 1995
EX-99.B6(ii) Forms of Dealer Agreements Attached
between Franklin/Templeton
Distributors, Inc. and
dealers
EX-99.B8(i) Form of Custodian Agreement Attached
between Registrant and
Bank of America NT & SA
EX-99.B11(i) Consent of Auditors for Attached
Registrant for Franklin
Templeton Money Fund and
The Money Market Portfolios
EX-99-B13(i) Letter of Understanding Attached
dated April 13, 1995
EX-99.B14(i) Franklin IRA Form *
EX-99.B15(i) Distribution Plan pursuant Attached
to Rule 12b-1 between
Registrant and Franklin
Advisers, Inc. dated
May 1, 1995
EX-99.B16(i) Schedule of Computation Attached
of Performance Quotations
EX-99.B17(i) Powers of Attorney for Attached
Franklin Templeton Money
Fund Trust dated January
17, 1995
EX-99.B17(ii) Powers of Attorney for The Attached
Money Market Portfolios
dated January 17, 1995
EX-99.B17(iii) Certificate of Secretary Attached
for Franklin Templeton
Money Fund Trust
dated January
17, 1995
EX-99.B17(iv) Certificate of Secretary Attached
for The Money Market
Portfolios dated January
17, 1995
EX-27.B(i) Financial Data Schedule Attached
*Incorporated by Reference
CERTIFICATE OF TRUST
OF
FRANKLIN TEMPLETON MONEY FUND TRUST
a Delaware Business Trust
THIS Certificate of Trust of the FRANKLIN TEMPLETON
MONEY FUND TRUST (the "Trust"), dated as of this 17 day of
January, 1995, is being duly executed and filed, in order to form a
business trust pursuant to the Delaware Business Trust Act (the
"Act"), Del. Code Ann. tit. 12, (section)(section)3801-3819.
1. NAME. The name of the business trust formed
hereby is "FRANKLIN TEMPLETON MONEY FUND TRUST."
2. REGISTERED OFFICE AND REGISTERED AGENT. The
Trust will become, prior to the issuance of beneficial interests,
a registered investment company under the Investment Company Act
of 1940, as amended. Therefore, in accordance with section
3807(b) of the Act, the Trust has and shall maintain in the State
of Delaware a registered office and a registered agent for
service of process.
(A) REGISTERED OFFICE. The registered
office of the Trust in Delaware is The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware
19801.
(B) REGISTERED AGENT. The registered agent
for service of process on the Trust in Delaware is The
Corporation Trust Company.
3. LIMITATION ON LIABILITY. Pursuant to section
3804 of the Act, in the event that the Trust's governing
instrument, as defined in section 3801(f) of the Act, creates one
or more series as provided in section 3806(b)(2) of the Act, the
debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular series of
the Trust shall be enforceable against the assets of such series
only, and not against the assets of the Trust generally.
IN WITNESS WHEREOF, the Trustees named below do hereby
execute this Certificate of Trust as of the date first-above
written.
/s/ Frank H. Abbott, III......../s/ Rupert H. Johnson, Jr.
Frank H. Abbott, III Rupert H. Johnson, Jr.
1045 Sansome Street 777 Mariners Island Blvd.
San Francisco, CA 94111 San Mateo, CA 94404
/s/ Harris J. Ashton......../s/ Charles B. Johnson
Harris J. Ashton Charles B. Johnson
Metro Center, One Station Place 777 Mariners Island Blvd.
Stamford, CT 06904 San Mateo, CA 94404
/s/ S. Joseph Fortunato /s/ David W. Garbellano
S. Joseph Fortunato David W. Garbellano
Park Avenue at Morris County 111 New Montgomery St. #402
P.O. Box 1945 San Francisco, CA 94105
Morristown, NJ 07962-1945
/s/ Frank W. T. LaHaye /s/Gordon S. Macklin
Frank W.T. LaHaye Gordon S. Macklin
20833 Stevens Creek Blvd. 8212 Burning Tree Road
Suite 102 Bethesda, MD 20817
Cupertino, CA 95014
Effective as of
January 17, 1995
AGREEMENT AND DECLARATION OF TRUST
of
FRANKLIN TEMPLETON MONEY FUND TRUST
a Delaware Business Trust
Principal Place of Business:
777 Mariners Island Boulevard
San Mateo, California 94404
TABLE OF CONTENTS
Page
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . 1
Name and Definitions . . . . . . . . . . . . . . . . . 1
Section 1. Name. . . . . . . . . . . . . . . . . 1
Section 2. Definitions . . . . . . . . . . . . . 1
(a) Trust. . . . . . . . . . . . . . . 1
(b) Trust Property . . . . . . . . . . 1
(c) Trustees . . . . . . . . . . . . . 1
(d) Shares . . . . . . . . . . . . . . 2
(e) Shareholder. . . . . . . . . . . . 2
(f) Person . . . . . . . . . . . . . . 2
(g) 1940 Act . . . . . . . . . . . . . 2
(h) Commission and Principal
Underwriter . . . . . . . . . . . 2
(i) Declaration of Trust . . . . . . . 2
(j) By-Laws. . . . . . . . . . . . . . 2
(k) Interested Person. . . . . . . . . 2
(l) Investment Manager . . . . . . . . 2
(m) Series . . . . . . . . . . . . . . 2
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . 2
Purpose of Trust . . . . . . . . . . . . . . . . . . . 2
ARTICLE III . . . . . . . . . . . . . . . . . . .. . . . . 3
Shares . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1. Division of Beneficial Interest . . . 3
Section 2. Ownership of Shares . . . . . . . . . 3
Section 3. Investments in the Trust . . . . . . 4
Section 4. Status of Shares and Limitation of
Personal Liability . . . . . . . . . . . . 4
Section 5. Power of Board of Trustees to Change
Provisions Relating to Shares. . . . . . . . . . . . 4
Section 6. Establishment and Designation of
Shares. . . . . . . . . . . . . . . . 5
(a) Assets Held with Respect to a
Particular Series. . . . . . . . . 5
(b) Liabilities Held with Respect to a
Particular Series. . . . . . . . . 6
(c) Dividends, Distributions,
Redemptions, and Repurchases . . . 6
(d) Voting. . . . . . . . . .. . . . . 7
(e) Equality. . . . . . . .. . . . . . 7
(f) Fractions .. . . . . . . . . . . . 7
(g) Exchange Privilege. . . .. . . . . 7
(h) Combination of Series. . . . . . . 7
(i) Elimination of Series. . . . . . . 7
Section 7. Indemnification of Shareholders . . . 8
ARTICLE IV. . . . . . . . . . . . . . . . . . . . . . . . . 8
The Board of Trustees . . . . . . . . . . . . . . . 8
Page
Section 1. Number, Election and Tenure . . . . . 8
Section 2. Effect of Death, Resignation, etc. of
a Trustee . . . . . . . . . . . . . . 9
Section 3. Powers. . . . . . . . . . . . . . . . 9
Section 4. Payment of Expenses by the Trust. . . 13
Section 5. Payment of Expenses by Shareholders . 13
Section 6. Ownership of Assets of the Trust. . . 13
Section 7. Service Contracts. . .. . . . . . . . 13
ARTICLE V 15
Shareholders' Voting Powers and Meetings . . . . . . . 15
Section 1. Voting Powers . . . . . . . . . . . . 15
Section 2. Voting Power and Meetings . . . . . . 15
Section 3. Quorum and Required Vote. . . . . . . 16
Section 4. Action by Written Consent . . . . . . 16
Section 5. Record Dates. . . . . . . . . . . . . 16
Section 6. Additional Provisions. . .. . . . . . 17
ARTICLE VI 17
Net Asset Value, Distributions, and Redemptions. . . . 17
Section 1. Determination of Net Asset Value, Net
Income, and Distributions . . . . . . 17
Section 2. Redemptions and Repurchases . . . . . 17
Section 3. Redemptions at the Option of the
Trust . . . . . . . . . . . . . . . . 17
ARTICLE VII 18
Compensation and Limitation of Liability of Trustees . 18
Section 1. Compensation . . . . . . . . . . . . 18
Section 2. Indemnification and Limitation of . .
Liability . . . . . . . . . . . . . 18
Section 3. Trustee's Good Faith Action, Expert
Advice, No Bond or Surety . . . . . . 19
Section 4. Insurance . . . . . . . . . . . . . . 19
ARTICLE VIII. . . . . . . . . . . . . . . . . . . . . . . . 20
Miscellaneous. . . . . . . . . . . . . . . . . . . . . 20
Section 1. Liability of Third Persons Dealing
with Trustees . . . . . . . . . . . . 19
Section 2. Termination of Trust or Series. . . . 20
Section 3. Merger and Consolidation. . . . . . . 20
Section 4. Amendments. . . . . . . . . . . . . . 21
Section 5. Filing of Copies, References,
Headings. . . . . . . . . . . . . . . 21
Section 6. Applicable Law. . . . . . . . . . . . 21
Section 7. Provisions in Conflict with Law or
Regulations . . . . . . . . . . . . . 22
Section 8. Business Trust Only . . . . . . . . . 22
Section 9. Use of the name "Franklin". . . . . . 22
AGREEMENT AND DECLARATION OF TRUST
OF
Franklin Templeton Money Fund Trust
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is
made and entered into as of the date set forth below by the
Trustees named hereunder for the purpose of forming a Delaware
business trust in accordance with the provisions hereinafter set
forth,
NOW, THEREFORE, the Trustees hereby direct that a
Certificate of Trust be filed with the Office of the Secretary of
State of the State of Delaware and do hereby declare that the
Trustees will hold IN TRUST all cash, securities and other assets
which the Trust now possesses or may hereafter acquire from time
to time in any manner and manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the
holders of Shares in this Trust.
ARTICLE I.
Name and Definitions
Section 1. Name. This trust shall be known as
"Franklin Templeton Money Fund Trust" and the Trustees shall
conduct the business of the Trust under that name or any other
name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless
otherwise required by the context or specifically provided:
(a) The "Trust" refers to the Delaware business trust
established by this Agreement and Declaration of Trust, as
amended from time to time;
(b) The "Trust Property" means any and all property,
real or personal, tangible or intangible, which is owned or held
by or for the account of the Trust, including without limitation
the rights referenced in Article VIII, Section 9 hereof;
(c) "Trustees" refers to the persons who have signed
this Agreement and Declaration of Trust, so long as they continue
in office in accordance with the terms hereof, and all other
persons who may from time to time be duly elected or appointed to
serve on the Board of Trustees in accordance with the provisions
hereof, and reference herein to a Trustee or the Trustees shall
refer to such person or persons in their capacity as trustees
hereunder;
(d) "Shares" means the shares of beneficial interest
into which the beneficial interest in the Trust shall be divided
from time to time and includes fractions of Shares as well as
whole Shares;
(e) "Shareholder" means a record owner of outstanding
Shares;
(f) "Person" means and includes individuals,
corporations, partnerships, trusts, associations, joint ventures,
estates and other entities, whether or not legal entities, and
governments and agencies and political subdivisions thereof,
whether domestic or foreign;
(g) The "1940 Act" refers to the Investment Company
Act of 1940 and the Rules and Regulations thereunder, all as
amended from time to time;
(h) The terms "Commission" and "Principal Underwriter"
shall have the respective meanings given them in Section 2(a)(7)
and Section (2)(a)(29) of the 1940 Act;
(i) "Declaration of Trust" shall mean this Agreement
and Declaration of Trust, as amended or restated from time to
time;
(j) "By-Laws" shall mean the By-Laws of the Trust as
amended from time to time and incorporated herein by reference;
(k) The term "Interested Person" has the meaning given
it in Section 2(a)(19) of the 1940 Act;
(l) "Investment Manager" or "Manager" means a party
furnishing services to the Trust pursuant to any contract
described in Article IV, Section 7(a) hereof;
(m) "Series" refers to each Series of Shares
established and designated under or in accordance with the
provisions of Article III and shall mean an entity such as that
described in Section 18(f)(2) of the 1940 Act, and subject to
Rule 18f-2 thereunder.
ARTICLE II.
Purpose of Trust
The purpose of the Trust is to conduct, operate and
carry on the business of a management investment company
registered under the 1940 Act through one or more Series
investing primarily in securities.
ARTICLE III.
Shares
Section 1. Division of Beneficial Interest. The
beneficial interest in the Trust shall at all times be divided
into an unlimited number of Shares, with a par value of $ .01 per
Share. The Trustees may authorize the division of Shares into
separate Series and the division of Series into separate classes
of Shares. The different Series shall be established and
designated, and the variations in the relative rights and
preferences as between the different Series shall be fixed and
determined, by the Trustees. If only one or no Series (or
classes) shall be established, the Shares shall have the rights
and preferences provided for herein and in Article III, Section 6
hereof to the extent relevant and not otherwise provided for
herein, and all references to Series (and classes) shall be
construed (as the context may require) to refer to the Trust.
Subject to the provisions of Section 6 of this Article
III, each Share shall have voting rights as provided in Article V
hereof, and holders of the Shares of any Series shall be entitled
to receive dividends, when, if and as declared with respect
thereto in the manner provided in Article VI, Section 1 hereof.
No Shares shall have any priority or preference over any other
Share of the same Series with respect to dividends or
distributions upon termination of the Trust or of such Series
made pursuant to Article VIII, Section 4 hereof. All dividends
and distributions shall be made ratably among all Shareholders of
a particular (class of a) Series from the assets held with
respect to such Series according to the number of Shares of such
(class of such) Series held of record by such Shareholder on the
record date for any dividend or distribution or on the date of
termination, as the case may be. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares
or other securities issued by the Trust or any Series. The
Trustees may from time to time divide or combine the Shares of
any particular Series into a greater or lesser number of Shares
of that Series without thereby materially changing the
proportionate beneficial interest of the Shares of that Series in
the assets held with respect to that Series or materially
affecting the rights of Shares of any other Series.
Section 2. Ownership of Shares. The ownership of
Shares shall be recorded on the books of the Trust or a transfer
or similar agent for the Trust, which books shall be maintained
separately for the Shares of each Series (or class). No
certificates certifying the ownership of Shares shall be issued
except as the Board of Trustees may otherwise determine from time
to time. The Trustees may make such rules as they consider
appropriate for the transfer of Shares of each Series (or class)
and similar matters. The record books of the Trust as kept by
the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders of each Series
(or class) and as to the number of Shares of each Series (or
class) held from time to time by each.
Section 3. Investments in the Trust. Investments may
be accepted by the Trust from such Persons, at such times, on
such terms, and for such consideration as the Trustees from time
to time may authorize. Each investment shall be credited to the
individual Shareholder's account in the form of full and
fractional Shares of the Trust, in such Series (or class) as the
purchaser shall select, at the net asset value per Share next
determined for such Series (or class) after receipt of the
investment; provided, however, that the Trustees may, in their
sole discretion, impose a sales charge upon investments in the
Trust.
Section 4. Status of Shares and Limitation of Personal
Liability. Shares shall be deemed to be personal property giving
only the rights provided in this instrument. Every Shareholder
by virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the
existence of the Trust shall not operate to terminate the Trust,
nor entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere against
the Trust or the Trustees, but entitles such representative only
to the rights of said deceased Shareholder under this Trust.
Ownership of Shares shall not entitle the Shareholder to any
title in or to the whole or any part of the Trust Property or
right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the
Shareholders as partners. Neither the Trust nor the Trustees,
nor any officer, employee or agent of the Trust shall have any
power to bind personally any Shareholders, nor, except as
specifically provided herein, to call upon any Shareholder for
the payment of any sum of money or assessment whatsoever other
than such as the Shareholder may at any time personally agree to
pay.
Section 5. Power of Board of Trustees to Change
Provisions Relating to Shares. Notwithstanding any other
provisions of this Declaration of Trust and without limiting the
power of the Board of Trustees to amend the Declaration of Trust
as provided elsewhere herein, the Board of Trustees shall have
the power to amend this Declaration of Trust, at any time and
from time to time, in such manner as the Board of Trustees may
determine in their sole discretion, without the need for
Shareholder action, so as to add to, delete, replace or otherwise
modify any provisions relating to the Shares contained in this
Declaration of Trust, provided that before adopting any such
amendment without Shareholder approval the Board of Trustees
shall determine that it is consistent with the fair and equitable
treatment of all Shareholders or that Shareholder approval is not
otherwise required by the 1940 Act or other applicable law. If
Shares have been issued, Shareholder approval shall be required
to adopt any amendments to this Declaration of Trust which would
adversely affect to a material degree the rights and preferences
of the Shares of any Series (or class) or to increase or decrease
the par value of the Shares of any Series (or class).
Subject to the foregoing Paragraph, the Board of
Trustees may amend the Declaration of Trust to amend any of the
provisions set forth in paragraphs (a) through (i) of Section 6
of this Article III.
Section 6. Establishment and Designation of Shares.
The establishment and designation of any Series (or class) of
Shares shall be effective upon the resolution by a majority of
the then Trustees, adopting a resolution which sets forth such
establishment and designation and the relative rights and
preferences of such Series (or class). Each such resolution
shall be incorporated herein by reference upon adoption.
Shares of each Series (or class) established pursuant
to this Section 6, unless otherwise provided in the resolution
establishing such Series, shall have the following relative
rights and preferences:
(a) Assets Held with Respect to a Particular Series.
All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which
such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof from whatever source
derived, including, without limitation, any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds
or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably be held with
respect to that Series for all purposes, subject only to the
rights of creditors, and shall be so recorded upon the books of
account of the Trust. Such consideration, assets, income,
earnings, profits and proceeds thereof, from whatever source
derived, including, without limitation, any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds
or payments derived from any reinvestment of such proceeds, in
whatever form the same may be, are herein referred to as "assets
held with respect to" that Series. In the event that there are
any assets, income, earnings, profits and proceeds thereof, funds
or payments which are not readily identifiable as assets held
with respect to any particular Series (collectively "General
Assets"), the Trustees shall allocate such General Assets to,
between or among any one or more of the Series in such manner and
on such basis as the Trustees, in their sole discretion, deem
fair and equitable, and any General Asset so allocated to a
particular Series shall be held with respect to that Series.
Each such allocation by the Trustees shall be conclusive and
binding upon the Shareholders of all Series for all purposes.
(b) Liabilities Held with Respect to a Particular
Series. The assets of the Trust held with respect to each
particular Series shall be charged against the liabilities of the
Trust held with respect to that Series and all expenses, costs,
charges and reserves attributable to that Series, and any general
liabilities of the Trust which are not readily identifiable as
being held with respect to any particular Series shall be
allocated and charged by the Trustees to and among any one or
more of the Series in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges, and reserves so charged to
a Series are herein referred to as "liabilities held with respect
to" that Series. Each allocation of liabilities, expenses,
costs, charges and reserves by the Trustees shall be conclusive
and binding upon the holders of all Series for all purposes. All
Persons who have extended credit which has been allocated to a
particular Series, or who have a claim or contract which has been
allocated to any particular Series, shall look, and shall be
required by contract to look exclusively, to the assets of that
particular Series for payment of such credit, claim, or contract.
In the absence of an express contractual agreement so limiting
the claims of such creditors, claimants and contract providers,
each creditor, claimant and contract provider will be deemed
nevertheless to have impliedly agreed to such limitation unless
an express provision to the contrary has been incorporated in the
written contract or other document establishing the claimant
relationship.
(c) Dividends, Distributions, Redemptions, and
Repurchases. Notwithstanding any other provisions of this
Declaration of Trust, including, without limitation, Article VI,
no dividend or distribution including, without limitation, any
distribution paid upon termination of the Trust or of any Series
(or class) with respect to, nor any redemption or repurchase of,
the Shares of any Series (or class) shall be effected by the
Trust other than from the assets held with respect to such
Series, nor, except as specifically provided in Section 7 of this
Article III, shall any Shareholder of any particular Series
otherwise have any right or claim against the assets held with
respect to any other Series except to the extent that such
Shareholder has such a right or claim hereunder as a Shareholder
of such other Series. The Trustees shall have full discretion,
to the extent not inconsistent with the 1940 Act, to determine
which items shall be treated as income and which items as
capital; and each such determination and allocation shall be
conclusive and binding upon the Shareholders.
(d) Voting. All Shares of the Trust entitled to vote
on a matter shall vote separately by Series (and, if applicable,
by class): that is, the Shareholders of each Series (or class)
shall have the right to approve or disapprove matters affecting
the Trust and each respective Series (or class) as if the Series
(or classes) were separate companies. There are, however, two
exceptions to voting by separate Series (or classes). First, if
the 1940 Act requires all Shares of the Trust to be voted in the
aggregate without differentiation between the separate Series (or
classes), then all the Trust's Shares shall be entitled to vote
on a one-vote-per-Share basis. Second, if any matter affects
only the interests of some but not all Series (or classes), then
only the Shareholders of such affected Series (or classes) shall
be entitled to vote on the matter.
(e) Equality. All the Shares of each particular
Series shall represent an equal proportionate undivided interest
in the assets held with respect to that Series (subject to the
liabilities held with respect to that Series and such rights and
preferences as may have been established and designated with
respect to classes of Shares within such Series), and each Share
of any particular Series shall be equal to each other Share of
that Series.
(f) Fractions. Any fractional Share of a Series shall
carry proportionately all the rights and obligations of a whole
share of that Series, including rights with respect to voting,
receipt of dividends and distributions, redemption of Shares and
termination of the Trust.
(g) Exchange Privilege. The Trustees shall have the
authority to provide that the holders of Shares of any Series
shall have the right to exchange said Shares for Shares of one or
more other Series of Shares in accordance with such requirements
and procedures as may be established by the Trustees.
(h) Combination of Series. The Trustees shall have
the authority, without the approval of the Shareholders of any
Series unless otherwise required by applicable law, to combine
the assets and liabilities held with respect to any two or more
Series into assets and liabilities held with respect to a single
Series.
(i) Elimination of Series. At any time that there are
no Shares outstanding of any particular Series (or class)
previously established and designated, the Trustees may by
resolution of a majority of the then Trustees abolish that Series
(or class) and rescind the establishment and designation thereof.
Section 7. Indemnification of Shareholders. If any
Shareholder or former Shareholder shall be exposed to liability
by reason of a claim or demand relating to his or her being or
having been a Shareholder, and not because of his or her acts or
omissions, the Shareholder or former Shareholder (or his or her
heirs, executors, administrators, or other legal representatives
or in the case of a corporation or other entity, its corporate or
other general successor) shall be entitled to be held harmless
from and indemnified out of the assets of the Trust against all
loss and expense arising from such claim or demand.
ARTICLE IV
The Board of Trustees
Section 1. Number, Election and Tenure. The number of
Trustees constituting the Board of Trustees shall be fixed from
time to time by a written instrument signed, or by resolution
approved at a duly constituted meeting, by a majority of the
Board of Trustees, provided, however, that the number of Trustees
shall in no event be less than one (1) nor more than fifteen
(15). The Board of Trustees, by action of a majority of the then
Trustees at a duly constituted meeting, may fill vacancies in the
Board of Trustees or remove Trustees with or without cause. Each
Trustee shall serve during the continued lifetime of the Trust
until he or she dies, resigns, is declared bankrupt or
incompetent by a court of appropriate jurisdiction, or is
removed, or, if sooner, until the next meeting of Shareholders
called for the purpose of electing Trustees and until the
election and qualification of his or her successor. Any Trustee
may resign at any time by written instrument signed by him and
delivered to any officer of the Trust or to a meeting of the
Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. Except to
the extent expressly provided in a written agreement with the
Trust, no Trustee resigning and no Trustee removed shall have any
right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of
such removal. The Shareholders may fix the number of Trustees
and elect Trustees at any meeting of Shareholders called by the
Trustees for that purpose. Any Trustee may be removed at any
meeting of Shareholders by a vote of two-thirds of the
outstanding Shares of the Trust. A meeting of Shareholders for
the purpose of electing or removing one or more Trustees may be
called (i) by the Trustees upon their own vote, or (ii) upon the
demand of Shareholders owning 10% or more of the Shares of the
Trust in the aggregate.
Section 2. Effect of Death, Resignation, etc. of a
Trustee. The death, declination, resignation, retirement,
removal, or incapacity of one or more Trustees, or all of them,
shall not operate to annul the Trust or to revoke any existing
agency created pursuant to the terms of this Declaration of
Trust. Whenever a vacancy in the Board of Trustees shall occur,
until such vacancy is filled as provided in Article IV, Section
1, the Trustees in office, regardless of their number, shall have
all the powers granted to the Trustees and shall discharge all
the duties imposed upon the Trustees by this Declaration of
Trust. As conclusive evidence of such vacancy, a written
instrument certifying the existence of such vacancy may be
executed by an officer of the Trust or by a majority of the Board
of Trustees. In the event of the death, declination,
resignation, retirement, removal, or incapacity of all the then
Trustees within a short period of time and without the
opportunity for at least one Trustee being able to appoint
additional Trustees to fill vacancies, the Trust's Investment
Manager(s) are empowered to appoint new Trustees subject to the
provisions of Section 16(a) of the 1940 Act.
Section 3. Powers. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed
by the Board of Trustees, and such Board shall have all powers
necessary or convenient to carry out that responsibility
including the power to engage in securities transactions of all
kinds on behalf of the Trust. Trustees in all instances shall
act as principals, and are and shall be free from the control of
the Shareholders. The Trustees shall have full power and
authority to do any and all acts and to make and execute any and
all contracts and instruments that they may consider necessary or
appropriate in connection with the administration of the Trust.
Without limiting the foregoing, the Trustees may: adopt By-Laws
not inconsistent with this Declaration of Trust providing for the
regulation and management of the affairs of the Trust and may
amend and repeal them to the extent that such By-Laws do not
reserve that right to the Shareholders; fill vacancies in or
remove from their number, and may elect and remove such officers
and appoint and terminate such agents as they consider
appropriate; appoint from their own number and establish and
terminate one or more committees consisting of two or more
Trustees which may exercise the powers and authority of the Board
of Trustees to the extent that the Trustees determine; employ one
or more custodians of the assets of the Trust and may authorize
such custodians to employ subcustodians and to deposit all or any
part of such assets in a system or systems for the central
handling of securities or with a Federal Reserve Bank, retain a
transfer agent or a shareholder servicing agent, or both; provide
for the issuance and distribution of Shares by the Trust directly
or through one or more Principal Underwriters or otherwise;
redeem, repurchase and transfer Shares pursuant to applicable
law; set record dates for the determination of Shareholders with
respect to various matters; declare and pay dividends and
distributions to Shareholders of each Series from the assets of
such Series; establish from time to time, in accordance with the
provisions of Article III, Section 6 hereof, any Series (or
class) of Shares, each such Series (or class) to operate as a
separate and distinct investment medium and with separately
defined investment objectives and policies and distinct
investment purpose; and in general delegate such authority as
they consider desirable to any officer of the Trust, to any
committee of the Trustees and to any agent or employee of the
Trust or to any such custodian, transfer or shareholder servicing
agent, or Principal Underwriter. Any determination as to what is
in the interests of the Trust made by the Trustees in good faith
shall be conclusive. In construing the provisions of this
Declaration of Trust, the presumption shall be in favor of a
grant of power to the Trustees. Unless otherwise specified or
required by law, any action by the Board of Trustees shall be
deemed effective if approved or taken by a majority of the
Trustees then in office. Any action required or permitted to be
taken at any meeting of the Board of Trustees, or any committee
thereof, may be taken without a meeting if all members of the
Board of Trustees or committee (as the case may be) consent
thereto in writing, and the writing or writings are filed with
the minutes of the proceedings of the Board of Trustees, or
committee.
Without limiting the foregoing, the Trust shall have
power and authority:
(a) To invest and reinvest cash, to hold cash
uninvested, and to subscribe for, invest in, reinvest in,
purchase or otherwise acquire, own, hold, pledge, sell, assign,
transfer, exchange, distribute, write options on, lend or
otherwise deal in or dispose of contracts for the future
acquisition or delivery of fixed income or other securities, and
securities of every nature and kind, including, without
limitation, all types of bonds, debentures, stocks, preferred
stocks, negotiable or non-negotiable instruments, obligations,
evidences of indebtedness, certificates of deposit or
indebtedness, commercial paper, repurchase agreements, bankers'
acceptances, and other securities of any kind, issued, created,
guaranteed, or sponsored by any and all Persons, including,
without limitation, states, territories, and possessions of the
United States and the District of Columbia and any political
subdivision, agency, or instrumentality thereof, any foreign
government or any political subdivision of the U.S. Government or
any foreign government, or any international instrumentality, or
by any bank or savings institution, or by any corporation or
organization organized under the laws of the United States or of
any state, territory, or possession thereof, or by any
corporation or organization organized under any foreign law, or
in "when issued" contracts for any such securities, to change the
investments of the assets of the Trust; and to exercise any and
all rights, powers, and privileges of ownership or interest in
respect of any and all such investments of every kind and
description, including, without limitation, the right to consent
and otherwise act with respect thereto, with power to designate
one or more Persons, to exercise any of said rights, powers, and
privileges in respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage,
hypothecate, lease, or write options with respect to or otherwise
deal in any property rights relating to any or all of the assets
of the Trust or any Series, subject to any requirements of the
1940 Act;
(c) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property;
and to execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting to
such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(d) To exercise powers and right of subscription or
otherwise which in any manner arise out of ownership of
securities;
(e) To hold any security or property in a form not
indicating that it is trust property, whether in bearer,
unregistered or other negotiable form, or in its own name or in
the name of a custodian or subcustodian or a nominee or nominees
or otherwise or to authorize the custodian or a subcustodian or a
nominee or nominees to deposit the same in a securities
depository, subject in each case to proper safeguards according
to the usual practice of investment companies or any rules or
regulations applicable thereto;
(f) To consent to, or participate in, any plan for the
reorganization, consolidation or merger of any corporation or
issuer of any security which is held in the Trust; to consent to
any contract, lease, mortgage, purchase or sale of property by
such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;
(g) To join with other security holders in acting
through a committee, depositary, voting trustee or otherwise, and
in that connection to deposit any security with, or transfer any
security to, any such committee, depositary or trustee, and to
delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper;
(h) To compromise, arbitrate or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy, including but not limited to claims for taxes;
(i) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(j) To borrow funds or other property in the name of
the Trust exclusively for Trust purposes;
(k) To endorse or guarantee the payment of any notes
or other obligations of any Person; to make contracts of guaranty
or suretyship, or otherwise assume liability for payment thereof;
(l) To purchase and pay for entirely out of Trust
Property such insurance as the Trustees may deem necessary or
appropriate for the conduct of the business, including, without
limitation, insurance policies insuring the assets of the Trust
or payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers,
principal underwriters, or independent contractors of the Trust,
individually against all claims and liabilities of every nature
arising by reason of holding Shares, holding, being or having
held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such Person as
Trustee, officer, employee, agent, investment adviser, principal
underwriter, or independent contractor, including any action
taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such
Person against liability; and
(m) To adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions,
including the purchasing of life insurance and annuity contracts
as a means of providing such retirement and other benefits, for
any or all of the Trustees, officers, employees and agents of the
Trust.
The Trust shall not be limited to investing in
obligations maturing before the possible termination of the Trust
or one or more of its Series. The Trust shall not in any way be
bound or limited by any present or future law or custom in regard
to investment by fiduciaries. The Trust shall not be required to
obtain any court order to deal with any assets of the Trust or
take any other action hereunder.
Section 4. Payment of Expenses by the Trust. The
Trustees are authorized to pay or cause to be paid out of the
principal or income of the Trust or Series (or class), or partly
out of the principal and partly out of income, and to charge or
allocate the same to, between or among such one or more of the
Series (or class) that may be established or designated pursuant
to Article III, Section 6, as they deem fair, all expenses, fees,
charges, taxes and liabilities incurred or arising in connection
with the Trust or Series (or class), or in connection with the
management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of
the Trust's officers, employees, investment adviser or manager,
principal underwriter, auditors, counsel, custodian, transfer
agent, Shareholder servicing agent, and such other agents or
independent contractors and such other expenses and charges as
the Trustees may deem necessary or proper to incur.
Section 5. Payment of Expenses by Shareholders. The
Trustees shall have the power, as frequently as they may
determine, to cause each Shareholder, or each Shareholder of any
particular Series, to pay directly, in advance or arrears, for
charges of the Trust's custodian or transfer, Shareholder
servicing or similar agent, an amount fixed from time to time by
the Trustees, by setting off such charges due from such
Shareholder from declared but unpaid dividends owed such
Shareholder and/or by reducing the number of shares in the
account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such
charges due from such Shareholder.
Section 6. Ownership of Assets of the Trust. Title to
all of the assets of the Trust shall at all times be considered
as vested in the Trust, except that the Trustees shall have power
to cause legal title to any Trust Property to be held by or in
the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such
terms as the Trustees may determine. The right, title and
interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee.
Upon the resignation, removal or death of a Trustee he or she
shall automatically cease to have any right, title or interest in
any of the Trust Property, and the right, title and interest of
such Trustee in the Trust Property shall vest automatically in
the remaining Trustees. Such vesting and cessation of title
shall be effective whether or not conveyancing documents have
been executed and delivered.
Section 7. Service Contracts.
(a) Subject to such requirements and restrictions as
may be set forth in the By-Laws, the Trustees may, at any time
and from time to time, contract for exclusive or nonexclusive
advisory, management and/or administrative services for the Trust
or for any Series with any corporation, trust, association or
other organization; and any such contract may contain such other
terms as the Trustees may determine, including without
limitation, authority for the Investment Manager or administrator
to determine from time to time without prior consultation with
the Trustees what investments shall be purchased, held, sold or
exchanged and what portion, if any, of the assets of the Trust
shall be held uninvested and to make changes in the Trust's
investments, or such other activities as may specifically be
delegated to such party.
(b) The Trustees may also, at any time and from time
to time, contract with any corporation, trust, association or
other organization, appointing it exclusive or nonexclusive
distributor or Principal Underwriter for the Shares of one or
more of the Series (or classes) or other securities to be issued
by the Trust. Every such contract shall comply with such
requirements and restrictions as may be set forth in the By-Laws;
and any such contract may contain such other terms as the
Trustees may determine.
(c) The Trustees are also empowered, at any time and
from time to time, to contract with any corporations, trusts,
associations or other organizations, appointing it or them the
custodian, transfer agent and/or shareholder servicing agent for
the Trust or one or more of its Series. Every such contract
shall comply with such requirements and restrictions as may be
set forth in the By-Laws or stipulated by resolution of the
Trustees.
(d) The Trustees are further empowered, at any time
and from time to time, to contract with any entity to provide
such other services to the Trust or one or more of the Series, as
the Trustees determine to be in the best interests of the Trust
and the applicable Series.
(e) The fact that:
(i) any of the Shareholders, Trustees, or
officers of the Trust is a shareholder, director,
officer, partner, trustee, employee, Manager, adviser,
Principal Underwriter, distributor, or affiliate or
agent of or for any corporation, trust, association, or
other organization, or for any parent or affiliate of
any organization with which an advisory, management or
administration contract, or principal underwriter's or
distributor's contract, or transfer, shareholder
servicing or other type of service contract may have
been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a
Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association or
other organization with which an advisory, management
or administration contract or principal underwriter's
or distributor's contract, or transfer, shareholder
servicing or other type of service contract may have
been or may hereafter be made also has an advisory,
management or administration contract, or principal
underwriter's or distributor's contract, or transfer,
shareholder servicing or other service contract with
one or more other corporations, trust, associations, or
other organizations, or has other business or
interests,
shall not affect the validity of any such contract or disqualify
any Shareholder, Trustee or officer of the Trust from voting upon
or executing the same, or create any liability or accountability
to the Trust or its Shareholders, provided approval of each such
contract is made pursuant to the requirements of the 1940 Act.
Section 8 Voting Powers. Subject to the provisions of
Article III, Section 6(d), the Shareholders shall have power to
vote only (i) for the election or removal of Trustees as provided
in Article IV, Section 1, and (ii) with respect to such
additional matters relating to the Trust as may be required by
this Declaration of Trust, the By-Laws or any registration of the
Trust with the Commission (or any successor agency) or any state,
or as the Trustees may consider necessary or desirable. Each
whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no
cumulative voting in the election of Trustees. Shares may be
voted in person or by proxy. A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any
one of them. A proxy purporting to be executed by or on behalf
of a Shareholder shall be deemed valid unless challenged at or
prior to its exercise and the burden of proving invalidity shall
rest on the challenger.
Section 9. Voting Power and Meetings. Meetings of the
Shareholders may be called by the Trustees for the purpose of
electing Trustees as provided in Article IV, Section 1 and for
such other purposes as may be prescribed by law, by this
Declaration of Trust or by the By-Laws. Meetings of the
Shareholders may also be called by the Trustees from time to time
for the purpose of taking action upon any other matter deemed by
the Trustees to be necessary or desirable. A meeting of
Shareholders may be held at any place designated by the Trustees.
Written notice of any meeting of Shareholders shall be given or
caused to be given by the Trustees by mailing such notice at
least seven (7) days before such meeting, postage prepaid,
stating the time and place of the meeting, to each Shareholder at
the Shareholder's address as it appears on the records of the
Trust. Whenever notice of a meeting is required to be given to a
Shareholder under this Declaration of Trust or the By-Laws, a
written waiver thereof, executed before or after the meeting by
such Shareholder or his or her attorney thereunto authorized and
filed with the records of the meeting, shall be deemed equivalent
to such notice.
Section 10. Quorum and Required Vote. Except when a
larger quorum is required by applicable law, by the By-Laws or by
this Declaration of Trust, forty percent (40%) of the Shares
entitled to vote shall constitute a quorum at a Shareholders'
meeting. When any one or more Series (or classes) is to vote as
a single class separate from any other Shares, forty percent
(40%) of the Shares of each such Series (or classes) entitled to
vote shall constitute a quorum at a Shareholder's meeting of that
Series. Any meeting of Shareholders may be adjourned from time
to time by a majority of the votes properly cast upon the
question of adjourning a meeting to another date and time,
whether or not a quorum is present, and the meeting may be held
as adjourned within a reasonable time after the date set for the
original meeting without further notice. Subject to the
provisions of Article III, Section 6(d), when a quorum is present
at any meeting, a majority of the Shares voted shall decide any
questions and a plurality shall elect a Trustee, except when a
larger vote is required by any provision of this Declaration of
Trust or the By-Laws or by applicable law.
Section 11. Action by Written Consent. Any action
taken by Shareholders may be taken without a meeting if
Shareholders holding a majority of the Shares entitled to vote on
the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or
by the By-Laws) and holding a majority (or such larger proportion
as aforesaid) of the Shares of any Series (or class) entitled to
vote separately on the matter consent to the action in writing
and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
Section 12. Record Dates. For the purpose of
determining the Shareholders of any Series (or class) who are
entitled to vote or act at any meeting or any adjournment
thereof, the Trustees may from time to time fix a time, which
shall be not more than ninety (90) days before the date of any
meeting of Shareholders, as the record date for determining the
Shareholders of such Series (or class) having the right to notice
of and to vote at such meeting and any adjournment thereof, and
in such case only Shareholders of record on such record date
shall have such right, notwithstanding any transfer of shares on
the books of the Trust after the record date. For the purpose of
determining the Shareholders of any Series (or class) who are
entitled to receive payment of any dividend or of any other
distribution, the Trustees may from time to time fix a date,
which shall be before the date for the payment of such dividend
or such other payment, as the record date for determining the
Shareholders of such Series (or class) having the right to
receive such dividend or distribution. Without fixing a record
date the Trustees may for voting and/or distribution purposes
close the register or transfer books for one or more Series for
all or any part of the period between a record date and a meeting
of Shareholders or the payment of a distribution. Nothing in
this Section shall be construed as precluding the Trustees from
setting different record dates for different Series (or classes).
Section 13. Additional Provisions. The By-Laws may
include further provisions for Shareholders' votes and meetings
and related matters.
ARTICLE V.
Net Asset Value, Distributions, and Redemptions
Section 1. Determination of Net Asset Value, Net
Income, and Distributions. Subject to Article III, Section 6
hereof, the Trustees, in their absolute discretion, may prescribe
and shall set forth in the By-laws or in a duly adopted vote of
the Trustees such bases and time for determining the per Share or
net asset value of the Shares of any Series or net income
attributable to the Shares of any Series, or the declaration and
payment of dividends and distributions on the Shares of any
Series, as they may deem necessary or desirable.
Section 2. Redemptions and Repurchases. The Trust
shall purchase such Shares as are offered by any Shareholder for
redemption, upon the presentation of a proper instrument of
transfer together with a request directed to the Trust or a
Person designated by the Trust that the Trust purchase such
Shares or in accordance with such other procedures for redemption
as the Trustees may from time to time authorize; and the Trust
will pay therefor the net asset value thereof, in accordance with
the By-Laws and applicable law. Payment for said Shares shall be
made by the Trust to the Shareholder within seven days after the
date on which the request is made in proper form. The obligation
set forth in this Section 2 is subject to the provision that in
the event that any time the New York Stock Exchange (the
"Exchange") is closed for other than weekends or holidays, or if
permitted by the Rules of the Commission during periods when
trading on the Exchange is restricted or during any emergency
which makes it impracticable for the Trust to dispose of the
investments of the applicable Series or to determine fairly the
value of the net assets held with respect to such Series or
during any other period permitted by order of the Commission for
the protection of investors, such obligations may be suspended or
postponed by the Trustees.
The redemption price may in any case or cases be paid
wholly or partly in kind if the Trustees determine that such
payment is advisable in the interest of the remaining
Shareholders of the Series for which the Shares are being
redeemed. Subject to the foregoing, the fair value, selection
and quantity of securities or other property so paid or delivered
as all or part of the redemption price may be determined by or
under authority of the Trustees. In no case shall the Trust be
liable for any delay of any corporation or other Person in
transferring securities selected for delivery as all or part of
any payment in kind.
Section 3. Redemptions at the Option of the Trust.
The Trust shall have the right at its option and at any time to
redeem Shares of any Shareholder at the net asset value thereof
as described in Section 1 of this Article VI: (i) if at such
time such Shareholder owns Shares of any Series having an
aggregate net asset value of less than an amount determined from
time to time by the Trustees prior to the acquisition of said
Shares; or (ii) to the extent that such Shareholder owns Shares
of a particular Series equal to or in excess of a percentage of
the outstanding Shares of that Series determined from time to
time by the Trustees; or (iii) to the extent that such
Shareholder owns Shares equal to or in excess of a percentage,
determined from time to time by the Trustees, of the outstanding
Shares of the Trust or of any Series.
ARTICLE VI.
Compensation and Limitation of Liability of Trustees
Section 1. Compensation. The Trustees as such shall
be entitled to reasonable compensation from the Trust, and they
may fix the amount of such compensation. Nothing herein shall in
any way prevent the employment of any Trustee for advisory,
management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Indemnification and Limitation of
Liability. The Trustees shall not be responsible or liable in
any event for any neglect or wrong-doing of any officer, agent,
employee, Manager or Principal Underwriter of the Trust, nor
shall any Trustee be responsible for the act or omission of any
other Trustee, and the Trust out of its assets shall indemnify
and hold harmless each and every Trustee from and against any and
all claims and demands whatsoever arising out of or related to
each Trustee's performance of his or her duties as a Trustee of
the Trust; provided that nothing herein contained shall
indemnify, hold harmless or protect any Trustee from or against
any liability to the Trust or any Shareholder to which he or she
would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever issued,
executed or done by or on behalf of the Trust or the Trustees or
any of them in connection with the Trust shall be conclusively
deemed to have been issued, executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee,
and such Trustees or Trustee shall not be personally liable
thereon.
Section 3. Trustee's Good Faith Action, Expert Advice,
No Bond or Surety. The exercise by the Trustees of their powers
and discretions hereunder shall be binding upon everyone
interested. A Trustee shall be liable to the Trust and to any
Shareholder solely for his or her own willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and shall not
be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect
to the meaning and operation of this Declaration of Trust, and
shall be under no liability for any act or omission in accordance
with such advice nor for failing to follow such advice. The
Trustees shall not be required to give any bond as such, nor any
surety if a bond is required.
Section 4. Insurance. The Trustees shall be entitled
and empowered to the fullest extent permitted by law to purchase
with Trust assets insurance for liability and for all expenses
reasonably incurred or paid or expected to be paid by a Trustee
or officer in connection with any claim, action, suit or
proceeding in which he or she becomes involved by virtue of his
or her capacity or former capacity with the Trust, whether or not
the Trust would have the power to indemnify him or her against
such liability under the provisions of this Article.
ARTICLE VII.
Miscellaneous
Section 1. Liability of Third Persons Dealing with
Trustees. No Person dealing with the Trustees shall be bound to
make any inquiry concerning the validity of any transaction made
or to be made by the Trustees or to see to the application of any
payments made or property transferred to the Trust or upon its
order.
Section 2. Termination of Trust or Series. Unless
terminated as provided herein, the Trust shall continue without
limitation of time. The Trust may be terminated at any time by
vote of a majority of the Shares of each Series entitled to vote,
voting separately by Series, or by the Trustees by written notice
to the Shareholders. Any Series may be terminated at any time by
vote of a majority of the Shares of that Series or by the
Trustees by written notice to the Shareholders of that Series.
Upon termination of the Trust (or any Series, as the
case may be), after paying or otherwise providing for all
charges, taxes, expenses and liabilities held, severally, with
respect to each Series (or the applicable Series, as the case may
be), whether due or accrued or anticipated as may be determined
by the Trustees, the Trust shall, in accordance with such
procedures as the Trustees consider appropriate, reduce the
remaining assets held, severally, with respect to each Series (or
the applicable Series, as the case may be), to distributable form
in cash or shares or other securities, or any combination
thereof, and distribute the proceeds held with respect to each
Series (or the applicable Series, as the case may be), to the
Shareholders of that Series, as a Series, ratably according to
the number of Shares of that Series held by the several
Shareholders on the date of termination.
Section 3. Merger and Consolidation. The Trustees may
cause (i) the Trust or one or more of its Series to the extent
consistent with applicable law to be merged into or consolidated
with another Trust or company, (ii) the Shares of the Trust or
any Series to be converted into beneficial interests in another
business trust (or series thereof) created pursuant to this
Section 3 of Article VIII, or (iii) the Shares to be exchanged
under or pursuant to any state or federal statute to the extent
permitted by law. Such merger or consolidation, Share conversion
or Share exchange must be authorized by vote of a majority of the
outstanding Shares of the Trust, as a whole, or any affected
Series, as may be applicable; provided that in all respects not
governed by statute or applicable law, the Trustees shall have
power to prescribe the procedure necessary or appropriate to
accomplish a sale of assets, merger or consolidation including
the power to create one or more separate business trusts to which
all or any part of the assets, liabilities, profits or losses of
the Trust may be transferred and to provide for the conversion of
Shares of the Trust or any Series into beneficial interests in
such separate business trust or trusts (or series thereof).
Section 4. Amendments. This Declaration of Trust may
be restated and/or amended at any time by an instrument in
writing signed by a majority of the then Trustees and, if
required, by approval of such amendment by Shareholders in
accordance with Article V, Section 3 hereof. Any such
restatement and/or amendment hereto shall be effective
immediately upon execution and approval. The Certificate of
Trust of the Trust may be restated and/or amended by a similar
procedure, and any such restatement and/or amendment shall be
effective immediately upon filing with the Office of the
Secretary of State of the State of Delaware or upon such future
date as may be stated therein.
Section 5. Filing of Copies, References, Headings.
The original or a copy of this instrument and of each restatement
and/or amendment hereto shall be kept at the office of the Trust
where it may be inspected by any Shareholder. Anyone dealing
with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such restatements and/or
amendments have been made and as to any matters in connection
with the Trust hereunder; and, with the same effect as if it were
the original, may rely on a copy certified by an officer of the
Trust to be a copy of this instrument or of any such restatements
and/or amendments. In this instrument and in any such
restatements and/or amendment, references to this instrument, and
all expressions like "herein," "hereof" and "hereunder," shall be
deemed to refer to this instrument as amended or affected by any
such restatements and/or amendments. Headings are placed herein
for convenience of reference only and shall not be taken as a
part hereof or control or affect the meaning, construction or
effect of this instrument. Whenever the singular number is used
herein, the same shall include the plural; and the neuter,
masculine and feminine genders shall include each other, as
applicable. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
Section 6. Applicable Law. This Agreement and
Declaration of Trust is created under and is to be governed by
and construed and administered according to the laws of the State
of Delaware and the Delaware Business Trust Act, as amended from
time to time (the "Act"). The Trust shall be a Delaware business
trust pursuant to such Act, and without limiting the provisions
hereof, the Trust may exercise all powers which are ordinarily
exercised by such a business trust.
Section 7. Provisions in Conflict with Law or
Regulations.
(a) The provisions of the Declaration of Trust are
severable, and if the Trustees shall determine, with the advice
of counsel, that any of such provisions is in conflict with the
1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to
have constituted a part of the Declaration of Trust; provided,
however, that such determination shall not affect any of the
remaining provisions of the Declaration of Trust or render
invalid or improper any action taken or omitted prior to such
determination.
(b) If any provision of the Declaration of Trust shall
be held invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such
provision in such jurisdiction and shall not in any manner affect
such provision in any other jurisdiction or any other provision
of the Declaration of Trust in any jurisdiction.
Section 8. Business Trust Only. It is the intention
of the Trustees to create a business trust pursuant to the
Delaware Business Trust Act, as amended from time to time (the
"Act"), and thereby to create only the relationship of trustee
and beneficial owners within the meaning of such Act between the
Trustees and each Shareholder. It is not the intention of the
Trustees to create a general partnership, limited partnership,
joint stock association, corporation, bailment, or any form of
legal relationship other than a business trust pursuant to such
Act. Nothing in this Declaration of Trust shall be construed to
make the Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
Section 9. Use of the name "Franklin". The name
"Franklin" and all rights to the use of the name "Franklin"
belongs to Franklin Resources, Inc. ("Franklin"), the sponsor of
the Trust. Franklin has consented to the use by the Trust of the
identifying word "Franklin" and has granted to the Trust a non-
exclusive license to use the name "Franklin" as part of the name
of the Trust and the name of any Series of Shares. In the event
Franklin or an affiliate of Franklin is not appointed as Manager
and/or Principal Underwriter or ceases to be the Manager and/or
Principal Underwriter of the Trust or of any Series using such
names, the non-exclusive license granted herein may be revoked by
Franklin and the Trust shall cease using the name "Franklin" as
part of its name or the name of any Series of Shares, unless
otherwise consented to by Franklin or any successor to its
interests in such names.
IN WITNESS WHEREOF, the Trustees named below do hereby
make and enter into this Declaration of Trust as of the17th day
of January, 1995
/s/ Frank H. Abbott, III /s/ Charles B. Johnson
Frank H. Abbott, III Charles B. Johnson
1045 Sansome Street 777 Mariners Island Blvd.
San Francisco, CA 94111 San Mateo, CA 94404
/s/ Harris J. Ashton /s/ Rupert H. Johnson, Jr.
Harris J. Ashton Rupert H. Johnson, Jr.
Metro Center, One Station Place 777 Mariners Island Blvd.
Stamford, CT 06904 San Mateo, CA 94404
/s/ S. Joseph Fortunato /s/ David W. Garbellano
Park Avenue at Morris County 111 New Montgomery St. #402
P.O. Box 1945 San Francisco, CA 94105
Morristown, NJ 07962-1945
/s/ Frank W. T. LaHaye /s/ Gordon S. Macklin
Frank W. T. LaHaye Gordon S. Macklin
20833 Stevens Creek Blvd. 8212 Burning Tree Road
Suite 102 Bethesda, MD 20817
Cupertino, CA 95014
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS 777 Mariners
Island Boulevard, San Mateo, California 94404
BY-LAWS
OF
FRANKLIN TEMPLETON MONEY FUND TRUST
A Delaware Business Trust
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The Board of Trustees shall
fix and, from time to time, may change the location of the
principal executive office of the Trust at any place within or
outside the State of Delaware.
Section 2. OTHER OFFICES. The Board of Trustees may at any
time establish branch or subordinate offices at any place or
places where the Trust intends to do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section I. PLACE OF MEETINGS. Meetings of shareholders
shall be held at any place within or outside the State of Delaware
designated by the Board of Trustees. In the absence of any such
designation, shareholders' meetings shall be held at the principal
executive office of the Trust.
Section 2. CALL OF MEETING. A meeting of the shareholders
may be called at any time by the Board of Trustees or by the
Chairman of the Board or by the president.
Section 3. NOTICE OF SHAREHOLDERS' MEETING. All notices of
meetings of shareholders shall be sent or otherwise given in
accordance with Section 4 of this Article II not less than seven
(7) nor more than seventy-five (75) days before the date of the
meeting. The notice shall specify (i) the place, date and hour of
the meeting, and (ii) the general nature of the business to be
transacted. The notice of any meeting at which trustees are to be
elected also shall include the name of any nominee or nominees
whom at the time of the notice are intended to be presented for
election.
If action is proposed to be taken at any meeting for approval
of (i) a contract or transaction in which a trustee has a direct
or indirect financial interest, (ii) an amendment of the
Declaration of Trust, (iii) a reorganization of the Trust, or (iv)
a voluntary dissolution of the Trust, the notice shall also state
the general nature of that proposal.
Section 4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.
Notice of any meeting of shareholders shall be given either
personally or by first-class mail or telegraphic or other written
communication, charges prepaid, addressed to the shareholder at
the address of that shareholder appearing on the books of the
Trust or its transfer agent or given by the shareholder to the
Trust for the purpose of notice. If no such address appears on
the Trust's books or is given, notice shall be deemed to have been
given if sent to that shareholder by first-class mail or
telegraphic or other written communication to the Trust's
principal executive office, or if published at least once in a
newspaper of general circulation in the county where that office
is located. Notice shall be deemed to have been given at the time
when delivered personally or deposited in the mail or sent by
telegram or other means of written communication.
If any notice addressed to a shareholder at the address of
that shareholder appearing on the books of the Trust is returned
to the Trust by the United States Postal Service marked to
indicate that the Postal Service is unable to deliver the notice
to the shareholder at that address, all future notices or reports
shall be deemed to have been duly given without further mailing if
these shall be available to the shareholder on written demand of
the shareholder at the principal executive office of the Trust for
a period of one year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any
notice of any shareholder's meeting shall be executed by the
secretary, assistant secretary or any transfer agent of the Trust
giving the notice and shall be filed and maintained in the minute
book of the Trust.
Section 5. ADJOURNED MEETING; NOTICE. Any shareholder's
meeting, whether or not a quorum is present, may be adjourned from
time to time by the vote of the majority of the shares represented
at that meeting, either in person or by proxy.
When any meeting of shareholders is adjourned to another time
or place, notice need not be given of the adjourned meeting at
which the adjournment is taken, unless a new record date of the
adjourned meeting is fixed or unless the adjournment is for more
than sixty (60) days from the date set for the original meeting,
in which case the Board of Trustees shall set a new record date.
Notice of any such adjourned meeting shall be given to each
shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Sections 3 and 4 of this Article
II. At any adjourned meeting, the Trust may transact any business
which might have been transacted at the original meeting.
Section 6. VOTING. The shareholders entitled to vote at any
meeting of shareholders shall be determined in accordance with the
provisions of the Declaration of Trust, as in effect at such time.
The shareholders' vote may be by voice vote or by ballot,
provided, however, that any election for trustees must be by
ballot if demanded by any shareholder before the voting has begun.
On any matter other than elections of trustees, any shareholder
may vote part of the shares in favor of the proposal and refrain
from voting the remaining shares or vote them against the
proposal, but if the shareholder fails to specify the number of
shares which the shareholder is voting affirmatively, it will be
conclusively presumed that the shareholder's approving vote is
with respect to the total shares that the shareholder is entitled
to vote on such proposal.
Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT
SHAREHOLDERS. The transactions of the meeting of shareholders,
however called and noticed and wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice if
a quorum be present either in person or by proxy and if either
before or after the meeting, each person entitled to vote who was
not present in person or by proxy signs a written waiver of notice
or a consent to a holding of the meeting or an approval of the
minutes. The waiver of notice or consent need not specify either
the business to be transacted or the purpose of any meeting of
shareholders.
Attendance by a person at a meeting shall also constitute a
waiver of notice of that meeting, except when the person objects
at the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened and except
that attendance at a meeting is not a waiver of any right to
object to the consideration of matters not included in the notice
of the meeting if that objection is expressly made at the
beginning of the meeting.
Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A
MEETING. Any action which may be taken at any meeting of
shareholders may be taken without a meeting and without prior
notice if a consent in writing setting forth the action so taken
is signed by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to
authorize or take that action at a meeting at which all shares
entitled to vote on that action were present and voted. All such
consents shall be filed with the Secretary of the Trust and shall
be maintained in the Trust's records. Any shareholder giving a
written consent or the shareholder's proxy holders or a transferee
of the shares or a personal representative of the shareholder or
their respective proxy holders may revoke the consent by a writing
received by the Secretary of the Trust before written consents of
the number of shares required to authorize the proposed action
have been filed with the Secretary.
If the consents of all shareholders entitled to vote have not
been solicited in writing and if the unanimous written consent of
all such shareholders shall not have been received, the Secretary
shall give prompt notice of the action approved by the
shareholders without a meeting. This notice shall be given in the
manner specified in Section 4 of this Article II. In the case of
approval of (i) contracts or transactions in which a trustee has a
direct or indirect financial interest, (ii) indemnification of
agents of the Trust, and (iii) a reorganization of the Trust, the
notice shall be given at least ten (10) days before the
consummation of any action authorized by that approval.
Section 9. RECORD DATE FOR SHAREHOLDER NOTICE; VOTING AND
GIVING CONSENTS. For purposes of determining the shareholders
entitled to notice of any meeting or to vote or entitled to give
consent to action without a meeting, the Board of Trustees may fix
in advance a record date which shall not be more than ninety (90)
days nor less than seven (7) days before the date of any such
meeting as provided in the Declaration of Trust.
If the Board of Trustees does not so fix a record date:
(a) The record date for determining shareholders entitled to
notice of or to vote at a meeting of shareholders shall be at the
close of business on the business day next preceding the day on
which notice is given or if notice is waived, at the close of
business on the business day next preceding the day on which the
meeting is held.
(b) The record date for determining shareholders entitled to
give consent to action in writing without a meeting, (i) when no
prior action by the Board of Trustees has been taken, shall be the
day on which the first written consent is given, or (ii) when
prior action of the Board of Trustees has been taken, shall be at
the close of business on the day on which the Board of Trustees
adopt the resolution relating to that action or the seventy-fifth
day before the date of such other action, whichever is later.
Section l0. PROXIES. Every person entitled to vote for
trustees or on any other matter shall have the right to do so
either in person or by one or more agents authorized by a written
proxy signed by the person and filed with the Secretary of the
Trust. A proxy shall be deemed signed if the shareholder's name
is placed on the proxy (whether by manual signature, typewriting,
telegraphic transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy which
does not state that it is irrevocable shall continue in full force
and effect unless (i) revoked by the person executing it before
the vote pursuant to that proxy by a writing delivered to the
Trust stating that the proxy is revoked or by a subsequent proxy
executed by or attendance at the meeting and voting in person by
the person executing that proxy; or (ii) written notice of the
death or incapacity of the maker of that proxy is received by the
Trust before the vote pursuant to that proxy is counted; provided
however, that no proxy shall be valid after the expiration of
eleven (11) months from the date of the proxy unless otherwise
provided in the proxy. The revocability of a proxy that states on
its face that it is irrevocable shall be governed by the
provisions of the General Corporation Law of the State of
California.
Section ll. INSPECTORS OF ELECTION. Before any meeting of
shareholders, the Board of Trustees may appoint any persons other
than nominees for office to act as inspectors of election at the
meeting or its adjournment. If no inspectors of election are so
appointed, the chairman of the meeting may and on the request of
any shareholder or a shareholder's proxy shall, appoint inspectors
of election at the meeting. The number of inspectors shall be
either one (1) or three (3). If inspectors are appointed at a
meeting on the request of one or more shareholders or proxies, the
holders of a majority of shares or their proxies present at the
meeting shall determine whether one (1) or three (3) inspectors
are to be appointed. If any person appointed as inspector fails
to appear or fails or refuses to act, the chairman of the meeting
may and on the request of any shareholder or a shareholder's
proxy, shall appoint a person to fill the vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the
existence of a quorum and the authenticity, validity and effect of
proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any
way arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the
election or vote with fairness to all shareholders.
ARTICLE III
TRUSTEES
Section 1. POWERS. Subject to the applicable provisions of
the Declaration of Trust and these By-Laws relating to action
required to be approved by the shareholders or by the outstanding
shares, the business and affairs of the Trust shall be managed and
all powers shall be exercised by or under the direction of the
Board of Trustees.
Section 2. NUMBER AND QUALIFICATION OF TRUSTEES. The exact
number of trustees shall be set forth in the Agreement and
Declaration of Trust, until changed by a duly adopted amendment to
the Declaration of Trust.
Section 3. VACANCIES. Vacancies in the Board of Trustees
may be filled by a majority of the remaining trustees, though less
than a quorum, or by a sole remaining trustee, unless the Board of
Trustees calls a meeting of shareholders for the purposes of
electing trustees. In the event that at any time less than a
majority of the trustees holding office at that time were so
elected by the holders of the outstanding voting securities of the
Trust, the Board of Trustees shall forthwith cause to be held as
promptly as possible, and in any event within sixty (60) days, a
meeting of such holders for the purpose of electing trustees to
fill any existing vacancies in the Board of Trustees, unless such
period is extended by order of the United States Securities and
Exchange Commission.
Notwithstanding the above, whenever and for so long as the
Trust is a participant in or otherwise has in effect a Plan under
which the Trust may be deemed to bear expenses of distributing its
shares as that practice is described in Rule 12b-1 under the
Investment Company Act of 1940, then the selection and nomination
of the trustees who are not interested persons of the Trust (as
that term is defined in the Investment Company Act of 1940) shall
be, and is, committed to the discretion of such disinterested
trustees.
Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. All
meetings of the Board of Trustees may be held at any place within
or outside the State of Delaware that has been designated from
time to time by resolution of the Board. In the absence of such a
designation, regular meetings shall be held at the principal
executive office of the Trust. Any meeting, regular or special,
may be held by conference telephone or similar communication
equipment, so long as all trustees participating in the meeting
can hear one another and all such trustees shall be deemed to be
present in person at the meeting.
Section 5. REGULAR MEETINGS. Regular meetings of the Board
of Trustees shall be held without call at such time as shall from
time to time be fixed by the Board of Trustees. Such regular
meetings may be held without notice.
Section 6. SPECIAL MEETINGS. Special meetings of the Board
of Trustees for any purpose or purposes may be called at any time
by the chairman of the board or the president or any vice
president or the secretary or any two (2) trustees.
Notice of the time and place of special meetings shall be
delivered personally or by telephone to each trustee or sent by
first-class mail or telegram, charges prepaid, addressed to each
trustee at that trustee's address as it is shown on the records of
the Trust. In case the notice is mailed, it shall be deposited in
the United States mail at least seven (7) days before the time of
the holding of the meeting. In case the notice is delivered
personally, by telephone, to the telegraph company, or by express
mail or similar service, it shall be given at least forty-eight
(48) hours before the time of the holding of the meeting. Any
oral notice given personally or by telephone may be communicated
either to the trustee or to a person at the office of the trustee
who the person giving the notice has reason to believe will
promptly communicate it to the trustee. The notice need not
specify the purpose of the meeting or the place if the meeting is
to be held at the principal executive office of the Trust.
Section 7. QUORUM. A majority of the authorized number of
trustees shall constitute a quorum for the transaction of
business, except to adjourn as provided in Section l0 of this
Article III. Every act or decision done or made by a majority of
the trustees present at a meeting duly held at which a quorum is
present shall be regarded as the act of the Board of Trustees,
subject to the provisions of the Declaration of Trust. A meeting
at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of trustees if any action
taken is approved by a least a majority of the required quorum for
that meeting.
Section 8. WAIVER OF NOTICE. Notice of any meeting need not
be given to any trustee who either before or after the meeting
signs a written waiver of notice, a consent to holding the
meeting, or an approval of the minutes. The waiver of notice or
consent need not specify the purpose of the meeting. All such
waivers, consents, and approvals shall be filed with the records
of the Trust or made a part of the minutes of the meeting. Notice
of a meeting shall also be deemed given to any trustee who attends
the meeting without protesting before or at its commencement the
lack of notice to that trustee.
Section 9. ADJOURNMENT. A majority of the trustees present,
whether or not constituting a quorum, may adjourn any meeting to
another time and place.
Section 10. NOTICE OF ADJOURNMENT. Notice of the time and
place of holding an adjourned meeting need not be given unless the
meeting is adjourned for more than forty-eight (48) hours, in
which case notice of the time and place shall be given before the
time of the adjourned meeting in the manner specified in Section 7
of this Article III to the trustees who were present at the time
of the adjournment.
Section 11. ACTION WITHOUT A MEETING. Any action required
or permitted to be taken by the Board of Trustees may be taken
without a meeting if a majority of the members of the Board of
Trustees shall individually or collectively consent in writing to
that action. Such action by written consent shall have the same
force and effect as a majority vote of the Board of Trustees. Such
written consent or consents shall be filed with the minutes of the
proceedings of the Board of Trustees.
Section 12. FEES AND COMPENSATION OF TRUSTEES. Trustees and
members of committees may receive such compensation, if any, for
their services and such reimbursement of expenses as may be fixed
or determined by resolution of the Board of Trustees. This
Section 12 shall not be construed to preclude any trustee from
serving the Trust in any other capacity as an officer, agent,
employee, or otherwise and receiving compensation for those
services.
Section l3. DELEGATION OF POWER TO OTHER TRUSTEES. Any
Trustee may, by power of attorney, delegate his power for a period
not exceeding six (6) months at any one time to any other Trustee
or Trustees; provided that in no case shall fewer than two (2)
Trustees personally exercise the powers granted to the Trustees
under this Declaration of Trust except as otherwise expressly
provided herein or by resolution of the Board of Trustees.
ARTICLE IV
COMMITTEES
Section 1. COMMITTEES OF TRUSTEES. The Board of Trustees
may by resolution adopted by a majority of the authorized number
of trustees designate one or more committees, each consisting of
two (2) or more trustees, to serve at the pleasure of the Board.
The Board may designate one or more trustees as alternate members
of any committee who may replace any absent member at any meeting
of the committee. Any committee to the extent provided in the
resolution of the Board, shall have the authority of the Board,
except with respect to:
(a) the approval of any action which under applicable law
also requires shareholders' approval or approval of the
outstanding shares, or requires approval by a majority of the
entire Board or certain members of said Board;
(b) the filling of vacancies on the Board of Trustees or in
any committee;
(c) the fixing of compensation of the trustees for serving
on the Board of Trustees or on any committee;
(d) the amendment or repeal of the Declaration of Trust or
of the By-Laws or the adoption of new By-Laws;
(e) the amendment or repeal of any resolution of the Board
of Trustees which by its express terms is not so amendable or
repealable;
(f) a distribution to the shareholders of the Trust, except
at a rate or in a periodic amount or within a designated range
determined by the Board of Trustees; or
(g) the appointment of any other committees of the Board of
Trustees or the members of these committees.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and
action of committees shall be governed by and held and taken in
accordance with the provisions of Article III of these By-Laws,
with such changes in the context thereof as are necessary to
substitute the committee and its members for the Board of Trustees
and its members, except that the time of regular meetings of
committees may be determined either by resolution of the Board of
Trustees or by resolution of the committee. Special meetings of
committees may also be called by resolution of the Board of
Trustees, and notice of special meetings of committees shall also
be given to all alternate members who shall have the right to
attend all meetings of the committee. The Board of Trustees may
adopt rules for the government of any committee not inconsistent
with the provisions of these By-Laws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the Trust shall be a
president, a secretary, and a treasurer. The Trust may also have,
at the discretion of the Board of Trustees, a chairman of the
board, one or more vice presidents, one or more assistant
secretaries, one or more assistant treasurers, and such other
officers as may be appointed in accordance with the provisions of
Section 3 of this Article V. Any number of offices may be held by
the same person.
Section 2. ELECTION OF OFFICERS. The officers of the Trust,
except such officers as may appointed in accordance with the
provisions of Section 3 or Section 5 of this Article V, shall be
chosen by the Board of Trustees, and each shall serve at the
pleasure of the Board of Trustees, subject to the rights, if any,
of an officer under any contract of employment.
Section 3. SUBORDINATE OFFICERS. The Board of Trustees may
appoint and may empower the president to appoint such other
officers as the business of the Trust may require, each of whom
shall hold office for such period, have such authority and perform
such duties as are provided in these By-Laws or as the Board of
Trustees may from time to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to
the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without
cause, by the Board of Trustees at any regular or special meeting
of the Board of Trustees or except in the case of an officer upon
whom such power of removal may be conferred by the Board of
Trustees.
Any officer may resign at any time by giving written notice
to the Trust. Any resignation shall take effect at the date of
the receipt of that notice or at any later time specified in that
notice; and unless otherwise specified in that notice, the
acceptance of the resignation shall not be necessary to make it
effective. Any resignation is without prejudice to the rights, if
any, of the Trust under any contract to which the officer is a
party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office
because of death, resignation, removal, disqualification or other
cause shall be filled in the manner prescribed in these By-Laws
for regular appointment to that office.
Section 6. CHAIRMAN OF THE BOARD. The chairman of the
board, if such an officer is elected, shall if present preside at
meetings of the Board of Trustees and exercise and perform such
other powers and duties as may be from time to time assigned to
him by the Board of Trustees or prescribed by the By-Laws.
Section 7. PRESIDENT. Subject to such supervisory powers,
if any, as may be given by the Board of Trustees to the chairman
of the board, if there be such an officer, the president shall be
the chief executive officer of the Trust and shall, subject to the
control of the Board of Trustees, have general supervision,
direction and control of the business and the officers of the
Trust. He shall preside at all meetings of the shareholders and
in the absence of the chairman of the board or if there be none,
at all meetings of the Board of Trustees. He shall have the
general powers and duties of management usually vested in the
office of president of a corporation and shall have such other
powers and duties as may be prescribed by the Board of Trustees or
these By-Laws.
Section 8. VICE PRESIDENTS. In the absence or disability of
the president, the vice presidents, if any, in order of their rank
as fixed by the Board of Trustees or if not ranked, a vice
president designated by the Board of Trustees, shall perform all
the duties of the president and when so acting shall have all
powers of and be subject to all the restrictions upon the
president. The vice presidents shall have such other powers and
perform such other duties as from time to time may be prescribed
for them respectively by the Board of Trustees or by these By-Laws
and the president or the chairman of the board.
Section 9. SECRETARY. The secretary shall keep or cause to
be kept at the principal executive office of the Trust or such
other place as the Board of Trustees may direct a book of minutes
of all meetings and actions of trustees, committees of trustees
and shareholders with the time and place of holding, whether
regular or special, and if special, how authorized, the notice
given, the names of those present at trustees' meetings or
committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings.
The secretary shall keep or cause to be kept at the principal
executive office of the Trust or at the office of the Trust's
transfer agent or registrar, as determined by resolution of the
Board of Trustees, a share register or a duplicate share register
showing the names of all shareholders and their addresses, the
number and classes of shares held by each, the number and date of
certificates issued for the same and the number and date of
cancellation of every certificate surrendered for cancellation.
The secretary shall give or cause to be given notice of all
meetings of the shareholders and of the Board of Trustees required
by these By-Laws or by applicable law to be given and shall have
such other powers and perform such other duties as may be
prescribed by the Board of Trustees or by these By-Laws.
Section 10. TREASURER. The treasurer shall be the chief
financial officer of the Trust and shall keep and maintain or
cause to be kept and maintained adequate and correct books and
records of accounts of the properties and business transactions of
the Trust, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, retained earnings
and shares. The books of account shall at all reasonable times be
open to inspection by any trustee.
The treasurer shall deposit all monies and other valuables in
the name and to the credit of the Trust with such depositaries as
may be designated by the Board of Trustees. He shall disburse the
funds of the Trust as may be ordered by the Board of Trustees,
shall render to the president and trustees, whenever they request
it, an account of all of his transactions as chief financial
officer and of the financial condition of the Trust and shall have
other powers and perform such other duties as may be prescribed by
the Board of Trustees or these By-Laws.
ARTICLE VI
INDEMNIFICATION OF TRUSTEES, OFFICERS,
EMPLOYEES AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the
purpose of this Article, "agent" means any person who is or was a
trustee, officer, employee or other agent of this Trust or is or
was serving at the request of this Trust as a trustee, director,
officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise
or was a trustee, director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor of another
enterprise at the request of such predecessor entity; "proceeding"
means any threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative; and
"expenses" includes without limitation attorney's fees and any
expenses of establishing a right to indemnification under this
Article.
Section 2. ACTIONS OTHER THAN BY TRUST. This Trust shall
indemnify any person who was or is a party or is threatened to be
made a party to any proceeding (other than an action by or in the
right of this Trust) by reason of the fact that such person is or
was an agent of this Trust, against expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred in
connection with such proceeding if that person acted in good faith
and in a manner that person reasonably believed to be in the best
interests of this Trust and in the case of a criminal proceeding,
had no reasonable cause to believe the conduct of that person was
unlawful. The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not of itself create a presumption that the
person did not act in good faith and in a manner which the person
reasonably believed to be in the best interests of this Trust or
that the person had reasonable cause to believe that the person's
conduct was unlawful.
Section 3. ACTIONS BY THE TRUST. This Trust shall indemnify
any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action by or in the
right of this Trust to procure a judgment in its favor by reason
of the fact that the person is or was an agent of this Trust,
against expenses actually and reasonably incurred by that person
in connection with the defense or settlement of that action if
that person acted in good faith, in a manner that person believed
to be in the best interests of this Trust and with such care,
including reasonable inquiry, as an ordinarily prudent person in a
like position would use under similar circumstances.
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding
any provision to the contrary contained herein, there shall be no
right to indemnification for any liability arising by reason of
willful misfeasance, bad faith, gross negligence, or the reckless
disregard of the duties involved in the conduct of the agent's
office with this Trust.
No indemnification shall be made under Sections 2 or 3 of
this Article:
(a) In respect of any claim, issue or matter as to which
that person shall have been adjudged to be liable in the
performance of that person's duty to this Trust, unless and only
to the extent that the court in which that action was brought
shall determine upon application that in view of all the
circumstances of the case, that person was not liable by reason of
the disabling conduct set forth in the preceding paragraph and is
fairly and reasonably entitled to indemnity for the expenses which
the court shall determine; or
(b) In respect of any claim, issue, or matter as to which
that person shall have been adjudged to be liable on the basis
that personal benefit was improperly received by him, whether or
not the benefit resulted from an action taken in the person's
official capacity; or
(c) Of amounts paid in settling or otherwise disposing of a
threatened or pending action, with or without court approval, or
of expenses incurred in defending a threatened or pending action
which is settled or otherwise disposed of without court approval,
unless the required approval set forth in Section 6 of this
Article is obtained.
Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that
an agent of this Trust has been successful on the merits in
defense of any proceeding referred to in Sections 2 or 3 of this
Article or in defense of any claim, issue or matter therein,
before the court or other body before whom the proceeding was
brought, the agent shall be indemnified against expenses actually
and reasonably incurred by the agent in connection therewith,
provided that the Board of Trustees, including a majority who are
disinterested, non-party trustees, also determines that based upon
a review of the facts, the agent was not liable by reason of the
disabling conduct referred to in Section 4 of this Article.
Section 6. REQUIRED APPROVAL. Except as provided in Section
5 of this Article, any indemnification under this Article shall be
made by this Trust only if authorized in the specific case on a
determination that indemnification of the agent is proper in the
circumstances because the agent has met the applicable standard of
conduct set forth in Sections 2 or 3 of this Article and is not
prohibited from indemnification because of the disabling conduct
set forth in Section 4 of this Article, by:
(a) A majority vote of a quorum consisting of trustees who
are not parties to the proceeding and are not interested persons
of the Trust (as defined in the Investment Company Act of 1940);
or
(b) A written opinion by an independent legal counsel.
Section 7. ADVANCE OF EXPENSES. Expenses incurred in
defending any proceeding may be advanced by this Trust before the
final disposition of the proceeding on receipt of an undertaking
by or on behalf of the agent to repay the amount of the advance
unless it shall be determined ultimately that the agent is
entitled to be indemnified as authorized in this Article, provided
the agent provides a security for his undertaking, or a majority
of a quorum of the disinterested, non-party trustees, or an
independent legal counsel in a written opinion, determine that
based on a review of readily available facts, there is reason to
believe that said agent ultimately will be found entitled to
indemnification.
Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in
this Article shall affect any right to indemnification to which
persons other than trustees and officers of this Trust or any
subsidiary hereof may be entitled by contract or otherwise.
Section 9. LIMITATIONS. No indemnification or advance shall
be made under this Article, except as provided in Sections 5 or 6
in any circumstances where it appears:
(a) That it would be inconsistent with a provision of the
Agreement and Declaration of Trust, a resolution of the
shareholders, or an agreement in effect at the time of accrual of
the alleged cause of action asserted in the proceeding in which
the expenses were incurred or other amounts were paid which
prohibits or otherwise limits indemnification; or
(b) That it would be inconsistent with any condition
expressly imposed by a court in approving a settlement.
Section 10. INSURANCE. Upon and in the event of a
determination by the Board of Trustees of this Trust to purchase
such insurance, this Trust shall purchase and maintain insurance
on behalf of any agent of this Trust against any liability
asserted against or incurred by the agent in such capacity or
arising out of the agent's status as such, but only to the extent
that this Trust would have the power to indemnify the agent
against that liability under the provisions of this Article.
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This
Article does not apply to any proceeding against any trustee,
investment manager or other fiduciary of an employee benefit plan
in that person' s capacity as such, even though that person may
also be an agent of this Trust as defined in Section 1 of this
Article. Nothing contained in this Article shall limit any right
to indemnification to which such a trustee, investment manager, or
other fiduciary may be entitled by contract or otherwise which
shall be enforceable to the extent permitted by applicable law
other than this Article.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER.
This Trust shall keep at its principal executive office or at the
office of its transfer agent or registrar, if either be appointed
and as determined by resolution of the Board of Trustees, a record
of its shareholders, giving the names and addresses of all
shareholders and the number and series of shares held by each
shareholder.
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS. The Trust
shall keep at its principal executive office the original or a
copy of these By-Laws as amended to date, which shall be open to
inspection by the shareholders at all reasonable times during
office hours.
Section 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS. The
accounting books and records and minutes of proceedings of the
shareholders and the Board of Trustees and any committee or
committees of the Board of Trustees shall be kept at such place or
places designated by the Board of Trustees or in the absence of
such designation, at the principal executive office of the Trust.
The minutes shall be kept in written form and the accounting books
and records shall be kept either in written form or in any other
form capable of being converted into written form. The minutes
and accounting books and records shall be open to inspection upon
the written demand of any shareholder or holder of a voting trust
certificate at any reasonable time during usual business hours for
a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. The
inspection may be made in person or by an agent or attorney and
shall include the right to copy and make extracts.
Section 4. INSPECTION BY TRUSTEES. Every trustee shall have
the absolute right at any reasonable time to inspect all books,
records, and documents of every kind and the physical properties
of the Trust. This inspection by a trustee may be made in person
or by an agent or attorney and the right of inspection includes
the right to copy and make extracts of documents.
Section 5. FINANCIAL STATEMENTS. A copy of any financial
statements and any income statement of the Trust for each
quarterly period of each fiscal year and accompanying balance
sheet of the Trust as of the end of each such period that has been
prepared by the Trust shall be kept on file in the principal
executive office of the Trust for at least twelve (12) months and
each such statement shall be exhibited at all reasonable times to
any shareholder demanding an examination of any such statement or
a copy shall be mailed to any such shareholder.
The quarterly income statements and balance sheets referred
to in this section shall be accompanied by the report, if any, of
any independent accountants engaged by the Trust or the
certificate of an authorized officer of the Trust that the
financial statements were prepared without audit from the books
and records of the Trust.
ARTICLE VIII
GENERAL MATTERS
Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All
checks, drafts, or other orders for payment of money, notes or
other evidences of indebtedness issued in the name of or payable
to the Trust shall be signed or endorsed by such person or persons
and in such manner as from time to time shall be determined by
resolution of the Board of Trustees.
Section 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The
Board of Trustees, except as otherwise provided in these By-Laws,
may authorize any officer or officers, agent or agents, to enter
into any contract or execute any instrument in the name of and on
behalf of the Trust and this authority may be general or confined
to specific instances; and unless so authorized or ratified by the
Board of Trustees or within the agency power of an officer, no
officer, agent, or employee shall have any power or authority to
bind the Trust by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
Section 3. CERTIFICATES FOR SHARES. A certificate or
certificates for shares of beneficial interest in any series of
the Trust may be issued to a shareholder upon his request when
such shares are fully paid. All certificates shall be signed in
the name of the Trust by the chairman of the board or the
president or vice president and by the treasurer or an assistant
treasurer or the secretary or any assistant secretary, certifying
the number of shares and the series of shares owned by the
shareholders. Any or all of the signatures on the certificate may
be facsimile. In case any officer, transfer agent, or registrar
who has signed or whose facsimile signature has been placed on a
certificate shall have ceased to be that officer, transfer agent,
or registrar before that certificate is issued, it may be issued
by the Trust with the same effect as if that person were an
officer, transfer agent or registrar at the date of issue.
Notwithstanding the foregoing, the Trust may adopt and use a
system of issuance, recordation and transfer of its shares by
electronic or other means.
Section 4. LOST CERTIFICATES. Except as provided in this
Section 4, no new certificates for shares shall be issued to
replace an old certificate unless the latter is surrendered to the
Trust and cancelled at the same time. The Board of Trustees may
in case any share certificate or certificate for any other
security is lost, stolen, or destroyed, authorize the issuance of
a replacement certificate on such terms and conditions as the
Board of Trustees may require, including a provision for
indemnification of the Trust secured by a bond or other adequate
security sufficient to protect the Trust against any claim that
may be made against it, including any expense or liability on
account of the alleged loss, theft, or destruction of the
certificate or the issuance of the replacement certificate.
Section 5. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD
BY TRUST. The chairman of the board, the president or any vice
president or any other person authorized by resolution of the
Board of Trustees or by any of the foregoing designated officers,
is authorized to vote or represent on behalf of the Trust any and
all shares of any corporation, partnership, trusts, or other
entities, foreign or domestic, standing in the name of the Trust.
The authority granted may be exercised in person or by a proxy
duly executed by such designated person.
Section 6. FISCAL YEAR. The fiscal year of the Trust shall
be fixed and refixed or changed from time to time by resolution of
the Trustees. The fiscal year of the Trust shall be the taxable
year of each Series of the Trust.
ARTICLE IX
AMENDMENTS
Section 1. AMENDMENT BY SHAREHOLDERS. These By-Laws may be
amended or repealed by the affirmative vote or written consent of
a majority of the outstanding shares entitled to vote, except as
otherwise provided by applicable law or by the Declaration of
Trust or these By-Laws.
Section 2. AMENDMENT BY TRUSTEES. Subject to the right of
shareholders as provided in Section 1 of this Article to adopt,
amend or repeal By-Laws, and except as otherwise provided by law
or by the Declaration of Trust, these By-Laws may be adopted,
amended, or repealed by the Board of Trustees.
FRANKLIN TEMPLETON MONEY FUND TRUST
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made between FRANKLIN
TEMPLETON MONEY FUND TRUST, on behalf of Franklin Templeton Money
Fund II and any future series of the trust (hereinafter
collectively referred to as the "Fund"), and FRANKLIN ADVISERS,
INC., a California Corporation, hereinafter called the
"Administrator."
WHEREAS, the Fund has been organized and operates as an
investment company registered under the Investment Company Act of
1940 for the purpose of investing and reinvesting its assets in
securities, as set forth in its Articles of Incorporation, its By-
Laws and its Registration Statements under the Investment Company
Act of 1940 and the Securities Act of 1933, all as heretofore
amended and supplemented;
WHEREAS, the Fund desires to avail itself of the services,
assistance and facilities of an administrator and to have an
administrator perform various administrative and other services
for it; and,
WHEREAS, the Administrator is engaged in the business of
rendering administrative services to investment companies, and
desires to provide these services to the Fund;
NOW THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Administrator. The Fund hereby
employs the Administrator to administer its affairs, subject
to the direction of the Board of Directors and the officers
of the Fund, for the period and on the terms hereinafter set
forth. The Administrator hereby accepts such employment and
agrees during such period to render the services and to
assume the obligations herein set forth for the compensation
herein provided. The Administrator shall for all purposes
herein be deemed to be an independent contractor and shall,
except as expressly provided or authorized (whether herein
or otherwise), have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
2. Obligations of and Services to be Provided by the
Administrator. The Administrator undertakes to provide the
services hereinafter set forth and to assume the following
obligations:
A. Office Space, Furnishings, Facilities,
Equipment, and Personnel. The Administrator shall
furnish to the Fund adequate (i) office space, which
may be space within the offices of the Administrator or
in such other place as may be agreed upon from time to
time, and (ii) office furnishings, facilities and
equipment as may be reasonably required for managing
the affairs and conducting the business of the Fund,
including complying with the securities reporting
requirements of the United States and the various
states in which the Fund does business, conducting
correspondence and other communications with the
shareholders of the Fund, maintaining all internal
bookkeeping, accounting, auditing services and records
in connection with the Fund's investment and business
activities, and computing its net asset value. The
Administrator shall employ or provide and compensate
the executive, secretarial and clerical personnel
necessary to provide such services. The Administrator
shall also compensate all officers and employees of the
Fund who are officers or employees of the
Administrator.
B. Provision of Information Necessary for
Preparation of Securities Registration Statements,
Amendments and Other Materials. The Administrator, its
officers and employees will make available and provide
accounting and statistical information required by the
Fund or its Underwriter in the preparation of
registration statements, reports and other documents
required by Federal and state securities laws and with
such information as the Fund or its Underwriter may
reasonably request for use in the preparation of such
documents or of other materials necessary or helpful
for the underwriting and distribution of the Fund's
shares.
C. Other Obligations and Services. The
Administrator shall make available its officers and
employees to the Board of Directors and officers of the
Fund for consultation and discussions regarding the
administration of the Fund and its activities.
3. Expenses of the Fund. It is understood that the Fund
will pay all of its own expenses other than those expressly
assumed by the Administrator herein, which expenses payable
by the Fund shall include:
A. Fees to the Administrator as provided herein;
B. Expenses of all audits by independent public
accountants;
C. Expenses of transfer agent, registrar,
custodian, dividend disbursing agent and
shareholder record-keeping services;
D. Expenses, if any, of obtaining
quotations for calculating the value of the Fund's
net assets;
E. Salaries and other compensation of any
of its executive officers who are not officers,
directors, stockholders or employees of the
Administrator;
F. Taxes levied against the Fund;
G. Costs, including the interest expense, of
borrowing money;
H. Costs incident to meetings of the Board
of Directors, reports to the Fund's shareholders,
the filing of reports with regulatory bodies and
the maintenance of the Fund's legal existence;
I. Legal fees, including the legal fees
related to the registration and continued
qualification of the Fund's shares for sale;
J. Directors' fees and expenses to
directors who are not directors, officers,
employees or stockholders of the Administrator or
any of its affiliates;
K. Costs and expense of registering and
maintaining the registration of the Fund and its
shares under federal and any applicable state
laws, including the printing and mailing of
prospectuses to its shareholders;
L. Trade association dues; and
M. The Fund's pro rata portion of the
fidelity bond insurance premium and directors and
officers errors and omissions insurance premium.
4. Compensation of the Administrator. The Fund shall pay
a monthly administration fee in cash to the Administrator
based upon a percentage of the value of the Fund's net
assets, calculated as set forth below, on the first business
day of each month in each year as compensation for the
services rendered and obligations assumed by the
Administrator during the preceding month. The initial
administration fee under this Agreement shall be payable on
the first business day of the first month following the
effective date of this Agreement, and shall be reduced by
the amount of any advance payments made by the Fund relating
to the previous month.
A. For purposes of calculating such fee, the
value of the net assets of the Fund shall be the
average daily net assets during the month for which the
payment is being made, determined in the same manner as
the Fund uses to compute the value of its net assets in
connection with the determination of the daily net
asset value of its shares, all as set forth more fully
in the Fund's current prospectus. The annual rate of
the administration fee payable by the Fund shall be
91/200 of 1% for the first $100 million of its net
assets; and 33/100 of 1% of its net assets over $100
million up to and including $250 million; and 7/25 of
1% of its net assets in excess of $250 million.
B. If this Agreement is terminated prior to the
end of any month, the accrued administration fee for
the Fund shall be paid to the date of termination.
5. Activities of the Administrator. The services of the
Administrator to the Fund hereunder are not to be deemed
exclusive, and the Administrator and any of its affiliates
shall be free to render similar services to others. Subject
to and in accordance with the Articles of Incorporation and
By-Laws of the Fund and to Section 10(a) of the Investment
Company Act of 1940, it is understood that directors,
officers, agents and shareholders of the Fund are or may be
interested in the Administrator or its affiliates as
trustees, directors, officers, agents or stockholders and
that trustees, directors, officers, agents or stockholders
of the Administrator or its affiliates are or may be
interested in the Fund as directors, officers, agents,
shareholders or otherwise; and that the effect of any such
interests shall be governed by said Articles of
Incorporation, the By-Laws and the Investment Company Act of
1940.
6. Liabilities of the Administrator.
A. In the absence of willful misfeasance, bad
faith, gross negligence, or reckless disregard of
obligation or duties hereunder on the part of the
Administrator, the Administrator shall not be subject
to liability to the Fund or to any shareholder of the
Fund for any act or omission in the course of, or
connected with, rendering services hereunder.
B. Notwithstanding the foregoing, the
Administrator agrees to reimburse the Fund for any and
all costs, expenses, and counsel and directors' fees
reasonably incurred by the Fund in the preparation,
printing and distribution of proxy statements,
amendments to its Registration Statement, holdings of
meetings of its shareholders or directors, the conduct
of factual investigations, any legal or administrative
proceedings (including any applications for exemptions
or determinations by the Securities and Exchange
Commission) which the Fund incurs as the result of
action or inaction of the Administrator or any of its
affiliates or any of their officers, directors,
employees or shareholders where the action or inaction
necessitating such expenditures (i) is directly or
indirectly related to any transactions or proposed
transaction in the shares or control of the
Administrator or its affiliates (or litigation related
to any pending or proposed or future transaction in
such shares or control); or, (ii) is within the control
of the Administrator or any of its affiliates or any of
their officers, directors, employees or shareholders.
The Administrator shall not be obligated, pursuant to
the provisions of this Subsection 6(B), to reimburse
the Fund for any expenditures related to the
institution of an administrative proceeding or civil
litigation by the Fund or a shareholder seeking to
recover all or a portion of the proceeds derived by any
shareholder of the Administrator or any of its
affiliates from the sale of shares of the
Administrator, or similar matters. So long as this
Agreement is in effect, the Administrator shall pay to
the Fund the amount due for expenses subject to
Subsection 6(B) of this Agreement within 30 days after
a bill or statement has been received by the
Administrator therefor. This provision shall not be
deemed to be a waiver of any claim the Fund may have or
may assert against the Administrator or others for
costs, expenses or damages heretofore incurred by the
Fund or for costs, expenses or damages the Fund may
hereafter incur which are not reimbursable to it
hereunder.
C. No provision of this Agreement shall be
construed to protect any director or officer of the
Fund, or director or officer of the Administrator, from
liability in violation of Sections 17(h) and (i) of the
Investment Company Act of 1940.
7. Duration and Termination.
A. This Agreement shall become effective on the
date written below and shall continue in effect until
terminated by the Fund or the Administrator on 60 days
written notice to the other.
B. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed
post-paid, to the other party at any office of such
party.
8. Severability. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of this Agreement shall not be
affected thereby.
9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of
California.
10. Limitation of Liability. The Administrator
acknowledges that it has received notice of and accepts the
limitations of the Fund's liability as set forth in its
Articles of Incorporation. The Administrator agrees that
the Fund's obligations hereunder shall be limited to the
assets of the Fund, and that the Administrator shall not
seek satisfaction of any such obligation from any
shareholders of the Fund nor from any director, officer,
employee or agent of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and effective on the 1st day of
May, 1995.
FRANKLIN TEMPLETON MONEY FUND TRUST
By /s/ Harmon E. Burns
FRANKLIN ADVISERS, INC.
By /s/ Rupert H. Johnson
Franklin Templeton Money Fund Trust
777 Mariners Island Blvd.
San Mateo, California 94404
Franklin/Templeton Distributors, Inc.
777 Mariners Island Blvd.
San Mateo, California 94404
Re: Distribution Agreement
Gentlemen:
We are a Delaware business trust operating as an open-end
management investment company. As such, our company, Franklin
Templeton Money Fund Trust (referred to herein as the "Trust"),
is registered under the Investment Company Act of 1940 (the "1940
Act"), and its shares are registered under the Securities Act of
1933 (the "1933 Act"). We desire to issue one or more classes of
our authorized but unissued shares of beneficial interest (the
"Shares") to authorized persons in accordance with applicable
Federal and State securities laws. Shares will be made available
for each Fund currently or hereafter organized as a separate
series of the Trust (referred to herein as a "Fund" or
collectively as the "Funds").
You have informed us that your company is registered as a broker-
dealer under the provisions of the Securities Exchange Act of
1934 and that your company is a member of the National
Association of Securities Dealers, Inc. You have indicated your
desire to act as the exclusive selling agent and distributor for
the Shares. We have been authorized to execute and deliver this
Distribution Agreement ("Agreement") to you by a resolution of
our Board of Trustees passed at a meeting at which a majority of
our Trustees, including a majority who are not otherwise
interested persons of the Trust and who are not interested
persons of our investment adviser, its related organizations or
with you or your related organizations, were present and voted in
favor of the said resolution approving this Agreement.
1. Appointment of Underwriter. Upon the execution of this
Agreement and in consideration of the agreements on your part
herein expressed and upon the terms and conditions set forth
herein, we hereby appoint you as the exclusive sales agent for
our Shares and agree that we will deliver such Shares as you may
sell. You agree to use your best efforts to promote the sale of
Shares, but are not obligated to sell any specific number of
Shares.
However, the Trust and each Fund retain the right to make
direct sales of its Shares without sales charges consistent with
the terms of the then current prospectus and applicable law, and
to engage in other legally authorized transactions in its Shares
which do not involve the sale of Shares to the general public.
Such other transactions may include, without limitation,
transactions between the Trust or any Fund and its shareholders
only, transactions involving the reorganization of the Trust or
any Fund, and transactions involving the merger or combination of
the Trust or any Fund with another corporation or trust.
2. Independent Contractor. You will undertake and
discharge your obligations hereunder as an independent contractor
and shall have no authority or power to obligate or bind us by
your actions, conduct or contracts except that you are authorized
to promote the sale of Shares. You may appoint sub-agents or
distribute through dealers or otherwise as you may determine from
time to time, but this Agreement shall not be construed as
authorizing any dealer or other person to accept orders for sale
or repurchase on our behalf or otherwise act as our agent for any
purpose.
3. Offering Price. Each class of each Fund's Shares shall
be offered for sale at a price equivalent to the net asset value
per share of that class plus any applicable percentage of the
public offering price as sales commission or as otherwise set
forth in our then current prospectus. On each business day on
which the New York Stock Exchange is open for business, we will
furnish you with the net asset value of the Shares of each class
which shall be determined in accordance with our then effective
prospectus. All Shares will be sold in the manner set forth in
our then effective prospectus and statement of additional
information, and in compliance with applicable law.
4. Compensation.
A. Sales Commission. You shall be entitled to charge
a sales commission on the sale or redemption, as appropriate, of
each class of each Fund's Shares in the amount of any initial or
deferred sales charge as set forth in our then effective
prospectus. You may allow any sub-agents or dealers such
commissions or discounts from and not exceeding the total sales
commission as you shall deem advisable, so long as any such
commissions or discounts are set forth in our current prospectus
to the extent required by the applicable Federal and State
securities laws. You may also make payments to sub-agents or
dealers from your own resources, subject to the following
conditions: (a) any such payments shall not create any
obligation for or recourse against the Trust or any Fund, and (b)
the terms and conditions of any such payments are consistent with
our prospectus and applicable Federal and State securities laws
and disclosed in our prospectus or statement of additional
information to the extent such laws may require.
B. Distribution Plans. You shall also be entitled to
compensation for your services as provided in any Distribution
Plan adopted as to any class of any Fund's Shares pursuant to
Rule 12b-1 under the 1940 Act.
5. Terms and Conditions of Sales. Each Fund's Shares
shall be offered for sale only in those jurisdictions where they
have been properly registered or are exempt from registration,
and only to those groups of people which the Board of Trustees
may from time to time determine to be eligible to purchase such
shares.
6. Orders and Payment for Shares. Orders for Shares shall
be directed to the Trust's shareholder services agent, for
acceptance on behalf of the Trust. At or prior to the time of
delivery of any of our Shares you will pay or cause to be paid to
the principal custodian of the Trust's assets, for our account,
an amount in cash equal to the net asset value of such Shares.
Sales of Shares shall be deemed to be made when and where
accepted by the Trust's shareholder services agent. The Trust's
custodian and shareholder services agent shall be identified in
its prospectus.
7. Purchases for Your Own Account. You shall not purchase
our Shares for your own account for purposes of resale to the
public, but you may purchase Shares for your own investment
account upon your written assurance that the purchase is for
investment purposes and that the Shares will not be resold except
through redemption by us.
8. Sale of Shares to Affiliates. You may sell our Shares
at net asset value to certain of your and our affiliated persons
pursuant to the applicable provisions of the Federal Securities
Statutes and Rules or Regulations thereunder (the "Rules and
Regulations"), including Rule 22d-1 under the 1940 Act, as
amended from time to time.
9. Allocation of Expenses. We will pay the expenses:
(a) Of the preparation of the audited and
certified financial statements of our company to
be included in any Post-Effective Amendments
("Amendments") to our Registration Statement under
the 1933 Act or 1940 Act, including the prospectus
and statement of additional information included
therein;
(b) Of the preparation, including legal
fees, and printing of all Amendments or
supplements filed with the Securities and Exchange
Commission, including the copies of the
prospectuses included in the Amendments and the
first 10 copies of the definitive prospectuses or
supplements thereto, other than those necessitated
by your (including your "Parent's") activities or
Rules and Regulations related to your activities
where such Amendments or supplements result in
expenses which we would not otherwise have
incurred;
(c) Of the preparation, printing and
distribution of any reports or communications
which we send to our existing shareholders; and
(d) Of filing and other fees to Federal and
State securities regulatory authorities necessary
to continue offering our Shares.
You will pay the expenses:
(a) Of printing the copies of the
prospectuses and any supplements thereto and
statements of additional information which are
necessary to continue to offer our Shares;
(b) Of the preparation, excluding legal
fees, and printing of all Amendments and
supplements to our prospectuses and statements of
additional information if the Amendment or
supplement arises from your (including your
"Parent's") activities or Rules and Regulations
related to your activities and those expenses
would not otherwise have been incurred by us;
(c) Of printing additional copies, for use
by you as sales literature, of reports or other
communications which we have prepared for
distribution to our existing shareholders; and
(d) Incurred by you in advertising,
promoting and selling our Shares.
10. Furnishing of Information. We will furnish to you such
information with respect to each Fund and its Shares, in such
form and signed by such of our officers as you may reasonably
request, and we warrant that the statements therein contained,
when so signed, will be true and correct. We will also furnish
you with such information and will take such action as you may
reasonably request in order to qualify our Shares for sale to the
public under the Blue Sky Laws of jurisdictions in which you may
wish to offer them. We will furnish you with annual audited
financial statements of our books and accounts certified by
independent public accountants, with semi-annual financial
statements prepared by us, with registration statements and, from
time to time, with such additional information regarding our
financial condition as you may reasonably request.
11. Conduct of Business. Other than our currently
effective prospectus, you will not issue any sales material or
statements except literature or advertising which conforms to the
requirements of Federal and State securities laws and regulations
and which have been filed, where necessary, with the appropriate
regulatory authorities. You will furnish us with copies of all
such materials prior to their use and no such material shall be
published if we shall reasonably and promptly object.
You shall comply with the applicable Federal and State
laws and regulations where our Shares are offered for sale and
conduct your affairs with us and with dealers, brokers or
investors in accordance with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc.
12. Redemption or Repurchase Within Seven Days. If Shares
are tendered to us for redemption or repurchase by us within
seven business days after your acceptance of the original
purchase order for such Shares, you will immediately refund to us
the full sales commission (net of allowances to dealers or
brokers) allowed to you on the original sale, and will promptly,
upon receipt thereof, pay to us any refunds from dealers or
brokers of the balance of sales commissions reallowed by you. We
shall notify you of such tender for redemption within 10 days of
the day on which notice of such tender for redemption is received
by us.
13. Other Activities. Your services pursuant to this
Agreement shall not be deemed to be exclusive, and you may render
similar services and act as an underwriter, distributor or dealer
for other investment companies in the offering of their shares.
14. Term of Agreement. This Agreement shall become
effective on the date of its execution, and shall remain in
effect for a period of two (2) years. The Agreement is renewable
annually thereafter, with respect to each Fund of the Trust, for
successive periods not to exceed one year (i) by a vote of a
majority of the outstanding voting securities of each Fund of the
Trust or by a vote of the Board of Trustees of the Trust, and
(ii) by a vote of a majority of the trustees of the Trust who are
not parties to the Agreement or interested persons of any parties
to the Agreement (other than as Trustees of the Trust), cast in
person at a meeting called for the purpose of voting on the
Agreement.
This Agreement may at any time be terminated by a Fund
without the payment of any penalty, (i) either by vote of the
Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Fund on 90 days' written
notice to you; or (ii) by you on 90 days' written notice to the
Fund; and shall immediately terminate with respect to a Fund in
the event of its assignment.
15. Suspension of Sales. We reserve the right at all times
to suspend or limit the public offering of Shares upon two days'
written notice to you.
16. Miscellaneous. This Agreement shall be subject to the
laws of the State of California and shall be interpreted and
construed to further promote the operation of the Trust as an
open-end investment company. As used herein, the terms "Net
Asset Value," "Offering Price," "Investment Company," "Open-End
Investment Company," "Assignment," "Principal Underwriter,"
"Interested Person," "Parent," "Affiliated Person," and "Majority
of the Outstanding Voting Securities" shall have the meanings set
forth in the 1933 Act or the 1940 Act and the Rules and
Regulations thereunder.
Nothing herein shall be deemed to protect you against any
liability to us or to our securities holders to which you would
otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of your duties hereunder,
or by reason of your reckless disregard of your obligations and
duties hereunder.
If the foregoing meets with your approval, please acknowledge
your acceptance by signing each of the enclosed copies, whereupon
this will become a binding agreement as of the date set forth
below.
Very truly yours,
Franklin Templeton Money Fund Trust
By:/s/ Deborah R. Gatzek
Accepted:
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By:/s/ Gregory E. Johnson
DATED: May 11, 1995
DEALER AGREEMENT
Effective: May 1, 1995
Dear Securities Dealer:
Franklin/Templeton Distributors, Inc. ("we" or "us") invites you to participate
in the distribution of shares of the Franklin and Templeton mutual funds (the
"Funds") for which we now or in the future serve as principal underwriter,
subject to the terms of this Agreement. We will notify you from time to time of
the Funds which are eligible for distribution and the terms of compensation
under this Agreement. This Agreement supersedes any prior dealer agreements
between us, as stated in paragraph 18, below.
1. Licensing.
(a) You represent that you are a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD") and are presently
licensed to the extent necessary by the appropriate regulatory agency of each
state in which you will offer and sell shares of the Funds. You agree that
termination or suspension of such membership with the NASD, or of your license
to do business by any state or federal regulatory agency, at any time shall
terminate or suspend this Agreement forthwith and shall require you to notify us
in writing of such action. If you are not a member of the NASD but are a dealer
subject to the laws of a foreign country, you agree to conform to the rules of
fair practice of such association. This Agreement is in all respects subject to
Rule 26 of the Rules of Fair Practice of the NASD which shall control any
provision to the contrary in this Agreement.
(b) You agree to notify us immediately in writing if at any time you
are not a member in good standing of the Securities Investor Protection
Corporation ("SIPC").
2. Sales of Fund Shares. You may offer and sell shares of each Fund and class
only at the public offering price which shall be applicable to, and in effect at
the time of, each transaction. The procedures relating to all orders and the
handling of them shall be subject to the terms of the then current prospectus
and statement of additional information (hereafter, the "prospectus") and new
account application, including amendments, for each such Fund, and our written
instructions from time to time. This Agreement is not exclusive, and either
party may enter into similar agreements with third parties.
3. Duties of Dealer: In General. You agree:
(a) To act as principal, or as agent on behalf of your customers, in
all transactions in shares of the Funds except as provided in paragraph 4
hereof. You shall not have any authority to act as agent for the issuer (the
Funds), for the Principal Underwriter, or for any other dealer in any respect,
nor will you represent to any third party that you have such authority or are
acting in such capacity.
(b) To purchase shares only from us or from your customers.
(c) To enter orders for the purchase of shares of the Funds only from
us and only for the purpose of covering purchase orders you have already
received from your customers or for your own bona fide investment.
(d) To maintain records of all sales and redemptions of shares made
through you and to furnish us with copies of such records on request.
(e) To distribute prospectuses and reports to your customers in
compliance with applicable legal requirements, except to the extent that we
expressly undertake to do so on your behalf.
(f) That you will not withhold placing customers' orders for shares so
as to profit yourself as a result of such withholding or place orders for shares
in amounts just below the point at which sales charges are reduced so as to
benefit from a higher sales charge applicable to an amount below the breakpoint.
(g) That if any shares confirmed to you hereunder are repurchased or
redeemed by any of the Funds within seven business days after such confirmation
of your original order, you shall forthwith refund to us the full concession
allowed to you on such orders. We shall forthwith pay to the appropriate Fund
our share, if any, of the "charge" on the original sale and shall also pay to
such Fund the refund from you as herein provided. We shall notify you of such
repurchase or redemption within a reasonable time after settlement. Termination
or cancellation of this Agreement shall not relieve you or us from the
requirements of this subparagraph.
(h) That if payment for the shares purchased is not received within the
time customary or the time required by law for such payment, the sale may be
canceled forthwith without any responsibility or liability on our part or on the
part of the Funds, or at our option, we may sell the shares which you ordered
back to the Funds, in which latter case we may hold you responsible for any loss
to the Funds or loss of profit suffered by us resulting from your failure to
make payment as aforesaid. We shall have no liability for any check or other
item returned unpaid to you after you have paid us on behalf of a purchaser. We
may refuse to liquidate the investment unless we receive the purchaser's signed
authorization for the liquidation.
(i) That you shall assume responsibility for any loss to the Funds
caused by a correction made subsequent to trade date, provided such correction
was not based on any error, omission or negligence on our part, and that you
will immediately pay such loss to the Funds upon notification.
(j) That if on a redemption which you have ordered, instructions in
proper form, including outstanding certificates, are not received within the
time customary or the time required by law, the redemption may be canceled
forthwith without any responsibility or liability on our part or on the part of
any Fund, or at our option, we may buy the shares redeemed on behalf of the
Fund, in which latter case we may hold you responsible for any loss to the Fund
or loss of profit suffered by us resulting from your failure to settle the
redemption.
4. Duties of Dealer: Retirement Accounts. In connection with orders for the
purchase of shares on behalf of an Individual Retirement Account, Self-Employed
Retirement Plan or other retirement accounts, by mail, telephone, or wire, you
shall act as agent for the custodian or trustee of such plans (solely with
respect to the time of receipt of the application and payments), and you shall
not place such an order until you have received from your customer payment for
such purchase and, if such purchase represents the first contribution to such a
plan, the completed documents necessary to establish the plan. You agree to
indemnify us and Franklin Templeton Trust Company and/or Templeton Funds Trust
Company as applicable for any claim, loss, or liability resulting from incorrect
investment instructions received from you which cause a tax liability or other
tax penalty.
5. Conditional Orders; Certificates. We will not accept from you any conditional
orders for shares of any of the Funds. Delivery of certificates for shares
purchased shall be made by the Funds only against constructive receipt of the
purchase price, subject to deduction for your concession and our portion of the
sales charge, if any, on such sale. No certificates will be issued unless
specifically requested.
6. Dealer Compensation.
(a) On each purchase of shares by you from us, the total sales charges
and your dealer concessions shall be as stated in each Fund's then current
prospectus, subject to NASD rules and applicable state and federal laws. Such
sales charges and dealer concessions are subject to reductions under a variety
of circumstances as described in the Funds' prospectuses. For an investor to
obtain these reductions, we must be notified at the time of the sale that the
sale qualifies for the reduced charge. If you fail to notify us of the
applicability of a reduction in the sales charge at the time the trade is
placed, neither we nor any of the Funds will be liable for amounts necessary to
reimburse any investor for the reduction which should have been effected.
(b) In accordance with the Funds' prospectuses, we or our affiliates
may, but are not obligated to, make payments to dealers from our own resources
as compensation for certain sales which are made at net asset value and are not
subject to any contingent deferred sales charges ("Qualifying Sales"). If you
notify us of a Qualifying Sale, we may make a contingent advance payment up to
the maximum amount available for payment on the sale. If any of the shares
purchased in a Qualifying Sale are redeemed within twelve months of the end of
the month of purchase, we shall be entitled to recover any advance payment
attributable to the redeemed shares by reducing any account payable or other
monetary obligation we may owe to you or by making demand upon you for repayment
in cash. We reserve the right to withhold advances to any dealer, if for any
reason we believe that we may not be able to recover unearned advances from such
dealer. In addition, dealers will generally be required to enter into a
supplemental agreement with us with respect to such compensation and the
repayment obligation prior to receiving any payments.
7. Redemptions. Redemptions or repurchases of shares will be made at the net
asset value of such shares, less any applicable deferred sales or redemption
charges, in accordance with the applicable prospectuses. Except as permitted by
applicable law, you agree not to purchase any shares from your customers at a
price lower than the redemption or repurchase prices then computed by the Funds.
You shall, however, be permitted to sell shares for the account of the record
owner to the Funds at the repurchase price then currently in effect for such
shares and may charge the owner a fair commission for handling the transaction.
8. Exchanges. Telephone exchange orders will be effective only for shares in
plan balance (uncertificated shares) or for which share certificates have been
previously deposited and may be subject to any fees or other restrictions set
forth in the applicable prospectuses. You may charge the shareholder a fair
commission for handling an exchange transaction. Exchanges from a Fund sold with
no sales charge to a Fund which carries a sales charge, and exchanges from a
Fund sold with a sales charge to a Fund which carries a higher sales charge may
be subject to a sales charge in accordance with the terms of each Fund's
prospectus. You will be obligated to comply with any additional exchange
policies described in each Fund's prospectus, including without limitation any
policy restricting or prohibiting "Timing Accounts" as therein defined.
9. Transaction Processing. All orders are subject to acceptance by us and by the
Fund or its transfer agent, and become effective only upon confirmation by us.
If required by law, each transaction shall be confirmed in writing on a fully
disclosed basis and if confirmed by us, a copy of each confirmation shall be
sent simultaneously to you if you so request. All sales are made subject to
receipt of shares by us from the Funds. We reserve the right in our discretion,
without notice, to suspend the sale of shares or withdraw the offering of shares
entirely. Telephone orders will be effected at the price(s) next computed on the
day they are received from you if, as set forth in each Fund's current
prospectus, they are received prior to the time the price of its shares is
calculated. Orders received after that time will be effected at the price(s)
computed on the next business day. All orders must be accompanied by payment in
U.S. dollars. Orders payable by check must be drawn payable in U.S.
dollars on a U.S. bank, for the full amount of the investment.
10. Multiple Classes. We may from time to time provide to you written compliance
guidelines or standards relating to the sale or distribution of Funds offering
multiple classes of shares with different sales charges and distribution-related
operating expenses. In addition, you will be bound by any applicable rules or
regulations of government agencies or self-regulatory organizations generally
affecting the sale or distribution of mutual funds offering multiple classes of
shares.
11. Rule 12b-1 Plans. You are also invited to participate in all Plans adopted
by the Funds (the "Plan Funds") pursuant to Rule 12b-1 under the 1940 Act.
To the extent you provide administrative and other services, including, but not
limited to, furnishing personal and other services and assistance to your
customers who own shares of a Plan Fund, answering routine inquiries regarding a
Fund, assisting in changing account designations and addresses, maintaining such
accounts or such other services as a Fund may require, to the extent permitted
by applicable statutes, rules, or regulations, we shall pay you a Rule 12b-1
servicing fee. To the extent that you participate in the distribution of Fund
shares which are eligible for a Rule 12b-1 distribution fee, we shall also pay
you a Rule 12b-1 distribution fee. All Rule 12b-1 servicing and distribution
fees shall be based on the value of shares attributable to customers of your
firm and eligible for such payment, and shall be calculated on the basis and at
the rates set forth in the compensation schedule then in effect. Without prior
approval by a majority of the outstanding shares of a Fund, the aggregate annual
fees paid to you pursuant to each Plan shall not exceed the amounts stated as
the "annual maximums" in each Fund's prospectus, which amount shall be a
specified percent of the value of the Fund's net assets held in your customers'
accounts which are eligible for payment pursuant to this Agreement (determined
in the same manner as each Fund uses to compute its net assets as set forth in
its effective Prospectus).
You shall furnish us and each Fund with such information as shall reasonably be
requested by the Boards of Directors, Trustees or Managing General Partners
(hereinafter referred to as "Directors") of such Funds with respect to the fees
paid to you pursuant to the Schedule. We shall furnish to the Boards of
Directors of the Plan Funds, for their review on a quarterly basis, a written
report of the amounts expended under the Plans and the purposes for which such
expenditures were made.
The Plans and provisions of any agreement relating to such Plans must be
approved annually by a vote of the Plan Funds' Directors, including such persons
who are not interested persons of the Plan Funds and who have no financial
interest in the Plans or any related agreement ("Rule 12b-1 Directors"). The
Plans or the provisions of this Agreement relating to such Plans may be
terminated at any time by the vote of a majority of the Plan Funds' Boards of
Directors, including Rule 12b-1 Directors, or by a vote of a majority of the
outstanding shares of the Plan Funds, on sixty (60) days' written notice,
without payment of any penalty. The Plans or the provisions of this Agreement
may also be terminated by any act that terminates the Underwriting Agreement
between us and the Plan Funds, and/or the management or administration agreement
between Franklin Advisers, Inc. or Templeton Investment Counsel, Inc. or their
affiliates and the Plan Funds. In the event of the termination of the Plans for
any reason, the provisions of this Agreement relating to the Plans will also
terminate.
Continuation of the Plans and provisions of this Agreement relating to such
Plans are conditioned on Rule 12b-1 Directors being ultimately responsible for
selecting and nominating any new Rule 12b-1 Directors. Under Rule 12b-1,
Directors of any of the Plan Funds have a duty to request and evaluate, and
persons who are party to any agreement related to a Plan have a duty to furnish,
such information as may reasonably be necessary to an informed determination of
whether the Plan or any agreement should be implemented or continued. Under Rule
12b-1, Plan Funds are permitted to implement or continue Plans or the provisions
of this Agreement relating to such Plans from year-to-year only if, based on
certain legal considerations, the Boards of Directors are able to conclude that
the Plans will benefit the Plan Funds. Absent such yearly determination the
Plans and the provisions of this Agreement relating to the Plans must be
terminated as set forth above. In addition, any obligation assumed by a Fund
pursuant to this Agreement shall be limited in all cases to the assets of such
Fund and no person shall seek satisfaction thereof from shareholders of a Fund.
You agree to waive payment of any amounts payable to you by us under a Fund's
Plan of Distribution pursuant to Rule 12b-1 until such time as we are in receipt
of such fee from the Fund.
The provisions of the Rule 12b-1 Plans between the Plan Funds and us, insofar as
they relate to Plans, shall control over the provisions of this Agreement in the
event of any inconsistency.
12. Registration of Shares. Upon request, we shall notify you of the states or
other jurisdictions in which each Fund's shares are currently registered or
qualified for sale to the public. We shall have no obligation to register or
qualify, or to maintain registration or qualification of, Fund shares in any
state or other jurisdiction. We shall have no responsibility, under the laws
regulating the sale of securities in any U.S. or foreign jurisdiction, for the
qualification or status of persons selling Fund shares or for the manner of sale
of Fund shares. Except as stated in this paragraph, we shall not, in any event,
be liable or responsible for the issue, form, validity, enforceability and value
of such shares or for any matter in connection therewith, and no obligation not
expressly assumed by us in this Agreement shall be implied. Nothing in this
Agreement, however, shall be deemed to be a condition, stipulation or provision
binding any person acquiring any security to waive compliance with any provision
of the Securities Act of 1933, or of the rules and regulations of the Securities
and Exchange Commission, or to relieve the parties hereto from any liability
arising under the Securities Act of 1933.
13. Additional Registrations. If it is necessary to register or qualify the
shares in any foreign jurisdictions in which you intend to offer the shares of
any Funds, it will be your responsibility to arrange for and to pay the costs of
such registration or qualification; prior to any such registration or
qualification, you will notify us of your intent and of any limitations that
might be imposed on the Funds, and you agree not to proceed with such
registration or qualification without the written consent of the Funds and of
ourselves.
14. Fund Information. No person is authorized to give any information or make
any representations concerning shares of any Fund except those contained in the
Fund's current prospectus or in materials issued by us as information
supplemental to such prospectus. We will supply prospectuses, reasonable
quantities of supplemental sale literature, sales bulletins, and additional
information as issued. You agree not to use other advertising or sales material
relating to the Funds except that which (a) conforms to the requirements of any
applicable laws or regulations of any government or authorized agency in the
U.S. or any other country, having jurisdiction over the offering or sale of
shares of the Funds, and (b) is approved in writing by us in advance of such
use. Such approval may be withdrawn by us in whole or in part upon notice to
you, and you shall, upon receipt of such notice, immediately discontinue the use
of such sales literature, sales material and advertising. You are not authorized
to modify or translate any such materials without our prior written consent.
15. Indemnification. You further agree to indemnify, defend and hold harmless
the Principal Underwriter, the Funds, their officers, directors and employees
from any and all losses, claims, liabilities and expenses arising out of (1) any
alleged violation of any statute or regulation (including without limitation the
securities laws and regulations of the United States or any state or foreign
country) or any alleged tort or breach of contract, in or related to the offer
and sale by you of shares of the Funds pursuant to this Agreement (except to the
extent that our negligence or failure to follow correct instructions received
from you is the cause of such loss, claim, liability or expense), (2) any
redemption or exchange pursuant to telephone instructions received from you or
your agent or employees, or (3) the breach by you of any of the terms and
conditions of this Agreement.
16. Termination; Succession; Amendment. Each party to this Agreement may cancel
its participation in this Agreement by giving written notice to the other
parties. Such notice shall be deemed to have been given and to be effective on
the date on which it was either delivered personally to the other parties or any
officer or member thereof, or was mailed postpaid or delivered to a telegraph
office for transmission to the other parties' Chief Legal Officers at the
addresses shown herein or in the most recent NASD Manual. This Agreement shall
terminate immediately upon the appointment of a Trustee under the Securities
Investor Protection Act or any other act of insolvency by you. The termination
of this Agreement by any of the foregoing means shall have no effect upon
transactions entered into prior to the effective date of termination. A trade
placed by you subsequent to your voluntary termination of this Agreement will
not serve to reinstate the Agreement. Reinstatement, except in the case of a
temporary suspension of a dealer, will only be effective upon written
notification by us. Unless terminated, this Agreement shall be binding upon each
party's successors or assigns. This Agreement may be amended by us at any time
by written notice to you and your placing of an order or acceptance of payments
of any kind after the effective date and receipt of notice of any such Amendment
shall constitute your acceptance of such Amendment.
17. Setoff; Dispute Resolution. Should any of your concession accounts with us
have a debit balance, we may offset and recover the amount owed from any other
account you have with us, without notice or demand to you. In the event of a
dispute concerning any provision of this Agreement, either party may require the
dispute to be submitted to binding arbitration under the commercial arbitration
rules of the NASD or the American Arbitration Association. Judgment upon any
arbitration award may be entered by any state or federal court having
jurisdiction. This Agreement shall be construed in accordance with the laws of
the State of California, not including any provision which would require the
general application of the law of another jurisdiction.
18. Acceptance; Cumulative Effect. This Agreement is cumulative and supersedes
any agreement previously in effect. It shall be binding upon the parties hereto
when signed by us and accepted by you. If you have a current dealer agreement
with us, your first trade or acceptance of payments from us after receipt of
this Agreement, as it may be amended pursuant to paragraph 16, above, shall
constitute your acceptance of its terms. Otherwise, your signature below shall
constitute your acceptance of its terms.
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By:
Greg Johnson, President
777 Mariners Island Blvd. San Mateo, CA 94404 Attention: Chief Legal Officer
(for legal notices only) 415/312-2000
700 Central Avenue St. Petersburg, Florida 33701-3628 813/823-8712
Dealer: If you have not previously signed a Dealer Agreement with us, please
complete and sign this section and return the original to us.
DEALER NAME
By:
(Signature)
Name:
Title:
Address:
Telephone:
NASD CRD #
Franklin Templeton Dealer #
(Internal Use Only)
95.89/104 (05/95)
MUTUAL FUND PURCHASE AND SALES AGREEMENT
FOR ACCOUNTS OF BANK AND TRUST COMPANY CUSTOMERS
Effective: July 1, 1995
1. INTRODUCTION
The parties to this Agreement are a bank or trust company ("Bank") and
Franklin/Templeton Distributors, Inc. ("FTDI"). This Agreement sets forth the
terms and conditions under which FTDI will execute purchases and redemptions of
shares of the Franklin or Templeton mutual funds for which FTDI now or in the
future serves as principal underwriter ("Funds"), at the request of the Bank
upon the order and for the account of Bank's customers ("Customers"). In this
Agreement, "Customer" shall include the beneficial owners of an account and any
agent or attorney-in-fact duly authorized or appointed to act on the owners'
behalf with respect to the account. FTDI will notify Bank from time to time of
the Funds which are eligible for distribution and the terms of compensation
under this Agreement. This Agreement is not exclusive, and either party may
enter into similar agreements with third parties. This Agreement supersedes any
prior agreements between the parties, as stated in paragraph 6(j), below.
2. REPRESENTATIONS AND WARRANTIES OF BANK
Bank warrants and represents to FTDI and the Funds that:
a) Bank is a "bank" as defined in Section 3(a)(6) of the Securities and Exchange
Act of 1934, as amended (the "34 Act"):
"The term 'bank' means (A) a banking institution organized under the
laws of the United States, (B) a member bank of the Federal Reserve System, (C)
any other banking institution, whether incorporated or not, doing business under
the law of any State or of the United States, a substantial portion of the
business of which consists of receiving deposits or exercising a fiduciary power
similar to those permitted to national banks under the authority of the
Comptroller of the Currency pursuant to the first section of Public Law 87-722
(12 U.S.C. 92a), and which is supervised and examined by State or Federal
authority having supervision over banks, and which is not operated for the
purpose of evading the provisions of this title, and (D) a receiver,
conservator, or other liquidating agent of any institution or firm included in
clauses (A), (B) or (C) of this paragraph."
b) Bank is authorized to enter into this Agreement, and Bank's performance of
its obligations and receipt of consideration under this Agreement will not
violate any law, regulation, charter, agreement, or regulatory restriction to
which Bank is subject.
c) Bank has received all regulatory agency approvals and taken all legal and
other steps necessary for offering the services Bank will provide to Customers
in connection with this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL UNDERWRITER
FTDI warrants and represents to Bank that:
a) FTDI is a broker/dealer registered under the '34 Act.
b) FTDI is the principal underwriter of the Funds.
4. COVENANTS OF BANK
For each Transaction under this Agreement, Bank will:
a) be authorized to engage in the Transaction;
b) act as agent for the Customer;
c) act solely at the request of and for the account of the Customer;
d) not submit an order unless Bank has already received the order
from the Customer;
e) not submit a purchase order unless Bank has already delivered to the Customer
a copy of the then current prospectus for the Fund(s) whose shares are to be
purchased;
f) not withhold placing any Customer's order for the purpose of profiting from
the delay;
g) have no beneficial ownership of the securities in any purchase Transaction
(the Customer will have the full beneficial ownership), unless Bank is the
Customer (in which case, Bank will not engage in the Transaction unless the
Transaction is legally permissible for Bank); and
h) not accept or withhold any Fee otherwise allowed under Sections 5(d) and (e)
of this Agreement, if prohibited by the Employee Retirement Income Security Act
("ERISA") or trust or similar laws to which Bank is subject, in the case of
purchases or redemptions (hereinafter, "Transactions") of Fund shares involving
retirement plans, trusts, or similar accounts.
i) maintain records of all sales and redemptions of shares made through Bank and
to furnish FTDI with copies of such records on request.
j) distribute prospectuses, statements of additional information and reports to
Bank's customers in compliance with applicable legal requirements, except to the
extent that FTDI expressly undertakes to do so on behalf of Bank.
While this Agreement is in effect, Bank will:
k) not purchase any shares from any person at a price lower than the redemption
price then quoted by the applicable Fund;
l) repay FTDI the full Fee received by Bank under Sections 5(d) and (e) of this
Agreement, for any shares purchased under this Agreement which are repurchased
by the Fund within 7 business days after the purchase; in turn, FTDI shall pay
to the Fund the amount repaid by Bank and will notify Bank of any such
repurchase within a reasonable time;
m) in connection with orders for the purchase of shares on behalf of an
Individual Retirement Account, Self-Employed Retirement Plan or other retirement
accounts, by mail, telephone, or wire, Bank shall act as agent for the custodian
or trustee of such plans (solely with respect to the time of receipt of the
application and payments) and shall not place such an order until Bank has
received from its customer payment for such purchase and, if such purchase
represents the first contribution to such a plan, the completed documents
necessary to establish the plan. Bank agrees to indemnify FTDI and Franklin
Templeton Trust Company and/or Templeton Funds Trust Company as applicable for
any claim, loss, or liability resulting from incorrect investment instructions
received from Bank which cause a tax liability or other tax penalty.
n) be responsible for compliance with all laws and regulations, including those
of the applicable federal and state bank regulatory authorities, with regard to
Bank and Bank's Customers; and
o) immediately notify FTDI in writing at the address given below, should Bank
cease to be a bank as set forth in Section 2(a) of this Agreement.
5. TERMS AND CONDITIONS FOR TRANSACTIONS
a) Price
Transaction orders received from Bank will be accepted only at the
public offering price and in compliance with procedures applicable to each order
as set forth in the then current prospectus and statement of additional
information (hereinafter, collectively, "prospectus") for the applicable Fund.
All orders must be accompanied by payment in U.S. dollars. Orders payable by
check must be drawn payable in U.S. dollars on a U.S. bank, for the full amount
of the investment. All sales are made subject to receipt of shares by FTDI from
the Funds. FTDI reserves the right in its discretion, without notice, to suspend
the sale of shares or withdraw the offering of shares entirely.
b) Orders and Confirmations
All purchase orders are subject to acceptance or rejection by FTDI and
by the Fund or its transfer agent at their sole discretion, and become effective
only upon confirmation by FTDI. Transaction orders shall be made using the
procedures and forms required by FTDI from time to time. Orders received on any
business day after the time for calculating the price of Fund shares as set
forth in each Fund's current prospectus will be effected at the price determined
on the next business day. A written confirming statement will be sent to Bank
and to Customer upon settlement of each Transaction.
c) Multiple Class Guidelines
FTDI may from time to time provide to Bank written compliance guidelines
or standards relating to the sale or distribution of Funds offering multiple
classes of shares with different sales charges and distribution-related
operating expenses. In addition, Bank will be bound by any applicable rules or
regulations of government agencies or self-regulatory organizations generally
affecting the sale or distribution of mutual funds offering multiple classes of
shares.
d) Payments by Bank for Purchases
On the settlement date for each purchase, Bank shall either (i) remit
the full purchase price by wire transfer to an account designated by FTDI, or
(ii) following FTDI's procedures, wire the purchase price less the Fee allowed
by Section 5(e) of this Agreement. Twice monthly, FTDI will pay Bank Fees not
previously paid to or withheld by Bank. Each calendar month, FTDI, as
applicable, will prepare and mail an activity statement summarizing all
Transactions.
e) Fees and Payments
Where permitted by the prospectus for each Fund, a charge, concession,
or fee ("Fee") may be paid to Bank, related to services provided by Bank in
connection with Transactions. The amount of the Fee, if any, is set by the
relevant prospectus. Adjustments in the Fee are available for certain purchases,
and Bank is solely responsible for notifying FTDI when any purchase order is
qualified for such an adjustment. If Bank fails to notify FTDI of the
applicability of a reduction in the sales charge at the time the trade is
placed, neither FTDI nor any of the Funds will be liable for amounts necessary
to reimburse any investor for the reduction which should have been effected.
In accordance with the Funds' prospectuses, FTDI or its affiliates may,
but are not obligated to, make payments from their own resources to banks or
dealers as compensation for certain sales which are made at net asset value and
are not subject to any contingent deferred sales charges ("Qualifying Sales").
If Bank notifies FTDI of a Qualifying Sale, FTDI may make a contingent advance
payment up to the maximum amount available for payment on the sale. If any of
the shares purchased in a Qualifying Sale are redeemed within twelve months of
the end of the month of purchase, FTDI shall be entitled to recover any advance
payment attributable to the redeemed shares by reducing any account payable or
other monetary obligation FTDI may owe to Bank or by making demand upon Bank for
repayment in cash. FTDI reserves the right to withhold advances to any bank or
dealer, if for any reason it believes that it may not be able to recover
unearned advances from such bank or dealer. In addition, banks and dealers will
generally be required to enter into a supplemental agreement with FTDI with
respect to such compensation and the repayment obligation prior to receiving any
payments.
f) Rule 12b-1 Plans
Bank is also invited to participate in all Plans adopted by the Funds
(the "Plan Funds") pursuant to Rule 12b-1 under the 1940 Act.
To the extent Bank provides administrative and other services,
including, but not limited to, furnishing personal and other services and
assistance to Bank's customers who own shares of a Plan Fund, answering routine
inquiries regarding a Fund, assisting in changing account designations and
addresses, maintaining such accounts or such other services as a Fund may
require, to the extent permitted by applicable statutes, rules, or regulations,
FTDI shall pay Bank Rule 12b-1 fees. All Rule 12b-1 fees shall be based on the
value of shares attributable to customers of Bank and eligible for such payment,
and shall be calculated on the basis and at the rates set forth in the
compensation schedule then in effect. Without prior approval by a majority of
the outstanding shares of a Fund, the aggregate annual fees paid to Bank
pursuant to each Plan shall not exceed the amounts stated as the "annual
maximums" in each Fund's prospectus, which amount shall be a specified percent
of the value of the Fund's net assets held in Bank's customers' accounts which
are eligible for payment pursuant to this Agreement (determined in the same
manner as each Fund uses to compute its net assets as set forth in its effective
Prospectus).
Bank shall furnish FTDI and each Fund with such information as shall
reasonably be requested by the Board of Directors, Trustees or Managing General
Partners (hereinafter referred to as "Directors") of such Funds with respect to
the fees paid to Bank pursuant to the Schedule. FTDI shall furnish to the Boards
of Directors of the Plan Funds, for their review on a quarterly basis, a written
report of the amounts expended under the Plans and the purposes for which such
expenditures were made.
The Plans and provisions of any agreement relating to such Plans must be
approved annually by a vote of the Plan Funds' Directors, including such persons
who are not interested persons of the Plan Funds and who have no financial
interest in the Plans or any related agreement ("Rule 12b-1 Directors"). The
Plans or the provisions of this Agreement relating to such Plans may be
terminated at any time by the vote of a majority of the Plan Funds' Boards of
Directors, including Rule 12b-1 Directors, or by a vote of a majority of the
outstanding shares of the Plan Funds, on sixty (60) days' written notice,
without payment of any penalty. The Plans or the provisions of this Agreement
may also be terminated by any act that terminates the Underwriting Agreement
between FTDI and the Plan Funds, and/or the management or administration
agreement between Franklin Advisers, Inc. or Templeton Investment Counsel, Inc.
or their affiliates and the Plan Funds. In the event of the termination of the
Plans for any reason, the provisions of this Agreement relating to the Plans
will also terminate.
Continuation of the Plans and provisions of this Agreement relating to
such Plans are conditioned on Rule 12b-1 Directors being ultimately responsible
for selecting and nominating any new Rule 12b-1 Directors. Under Rule 12b-1,
Directors of any of the Plan Funds have a duty to request and evaluate, and
persons who are party to any agreement related to a Plan have a duty to furnish,
such information as may reasonably be necessary to an informed determination of
whether the Plan or any agreement should be implemented or continued. Under Rule
12b-1, Plan Funds are permitted to implement or continue Plans or the provisions
of this Agreement relating to such Plans from year-to-year only if, based on
certain legal considerations, the Boards of Directors are able to conclude that
the Plans will benefit the Plan Funds. Absent such yearly determination, the
Plans and the provisions of this Agreement relating to the Plans must be
terminated as set forth above. In addition, any obligation assumed by a Fund
pursuant to this Agreement shall be limited in all cases to the assets of such
Fund and no person shall seek satisfaction thereof from shareholders of a Fund.
Bank agrees to waive payment of any amounts payable to Bank by FTDI under a
Fund's Plan of Distribution pursuant to Rule 12b-1 until such time as FTDI is in
receipt of such fee from the Fund.
The provisions of the Rule 12b-1 Plans between the Plan Funds and FTDI,
insofar as they relate to Plans, shall control over the provisions of this
Agreement in the event of any inconsistency.
g) Other Distribution Services
From time to time, FTDI may offer telephone and other augmented services
in connection with Transactions under this Agreement. If Bank uses any such
service, Bank will be subject to the procedures applicable to the service,
whether or not Bank has executed any agreement required for the service.
h) Conditional Orders; Certificates
FTDI will not accept any conditional Transaction orders. Delivery of
certificates or confirmations for shares purchased shall be made by the Fund
conditional upon receipt of the purchase price, subject to deduction of any Fee.
No certificates will be issued unless specifically requested.
i) Cancellation of Orders
If payment for shares purchased is not received within the time
customary or the time required by law for such payment, the sale may be canceled
without notice or demand, and neither FTDI nor the Fund(s) shall have any
responsibility or liability for such a cancellation; alternatively, the unpaid
shares may be sold back to the Fund, and Bank shall be liable for any resulting
loss to FTDI or to the Fund(s). FTDI shall have no liability for any check or
other item returned unpaid to Bank after Bank has paid FTDI on behalf of a
purchaser. FTDI may refuse to liquidate the investment unless it receives the
purchaser's signed authorization for the liquidation.
j) Order Corrections
Bank shall assume responsibility for any loss to a Fund(s) caused by a
correction made subsequent to trade date, provided such correction was not based
on any error, omission or negligence on FTDI's part, and Bank will immediately
pay such loss to the Fund(s) upon notification.
k) Redemptions; Cancellation
Redemptions or repurchases of shares will be made at the net asset value
of such shares, less any applicable deferred sales or redemption charges, in
accordance with the applicable prospectuses. As agent, Bank may sell shares for
the account of the record owner to the Funds at the repurchase price then
currently in effect for such shares and may charge the owner a fair fee for
handling the transaction. If on a redemption which Bank has ordered,
instructions in proper form, including outstanding certificates, are not
received within the time customary or the time required by law, the redemption
may be canceled forthwith without any responsibility or liability on the part of
FTDI or any Fund, or at its option FTDI may buy the shares redeemed on behalf of
the Fund, in which latter case it may hold Bank responsible for any loss to the
Fund or loss of profit suffered by FTDI resulting from Bank's failure to settle
the redemption.
l) Exchanges
Telephone exchange orders will be effective only for shares in plan
balance (uncertificated shares) or for which share certificates have been
previously deposited and may be subject to any fees or other restrictions set
forth in the applicable prospectuses. Bank may charge the shareholder a fair fee
for handling an exchange transaction. Exchanges from a Fund sold with no sales
charge to a Fund which carries a sales charge, and exchanges from a Fund sold
with a sales charge to a Fund which carries a higher sales charge may be subject
to a sales charge in accordance with the terms of each Fund's prospectus. Bank
will be obligated to comply with any additional exchange policies described in
each Fund's prospectus, including without limitation any policy restricting or
prohibiting "Timing Accounts" as therein defined.
m) Qualification of Shares; Indemnification
Upon request, FTDI shall notify Bank of the states or other
jurisdictions in which each Fund's shares are currently registered or qualified
for sale to the public. FTDI shall have no obligation to register or qualify, or
to maintain registration or qualification of, Fund shares in any state or other
jurisdiction. FTDI shall have no responsibility, under the laws regulating the
sale of securities in any U.S. or foreign jurisdiction, for the qualification or
status of persons selling Fund shares or for the manner of sale of Fund shares.
Except as stated in this paragraph, FTDI shall not, in any event, be liable or
responsible for the issue, form, validity, enforceability and value of such
shares or for any matter in connection therewith, and no obligation not
expressly assumed by FTDI in this Agreement shall be implied. If it is necessary
to register or qualify shares of any Fund in any foreign jurisdictions in which
Bank intends to offer such shares, it will be Bank's responsibility to arrange
for and to pay the costs of such registration or qualification; prior to any
such registration or qualification Bank will notify FTDI of its intent and of
any limitations that might be imposed on the Funds and Bank agrees not to
proceed with such registration or qualification without the written consent of
the Funds and of FTDI.
Bank further agrees to indemnify, defend and hold harmless the Principal
Underwriter, the Funds, their officers, directors and employees from any and all
losses, claims, liabilities and expenses, arising out of (1) any alleged
violation of any statute or regulation (including without limitation the
securities laws and regulations of the United States or any state or foreign
country) or any alleged tort or breach of contract, in or related to the offer
and sale by Bank of shares of the Funds pursuant to this Agreement (except to
the extent that FTDI's negligence or failure to follow correct instructions
received from Bank is the cause of such loss, claim, liability or expense), (2)
any redemption or exchange pursuant to telephone instructions received from Bank
or its agents or employees, or (3) the breach by Bank of any of the terms and
conditions of this Agreement.
However, nothing in this Agreement shall be deemed to be a condition,
stipulation, or provision binding any person acquiring any security to waive
compliance with any provision of the Securities Act of 1933, or of the rules and
regulations of the Securities and Exchange Commission, or to relieve the parties
hereto from any liability arising under the Securities Act of 1933.
n) Prospectus and Sales Materials; Limit on Advertising
No person is authorized to give any information or make any
representations concerning shares of any Fund except those contained in the
Fund's current prospectus or in materials issued by FTDI as information
supplemental to such prospectus. FTDI will supply prospectuses, reasonable
quantities of supplemental sale literature, sales bulletins, and additional
information as issued. Bank agrees not to use other advertising or sales
material relating to the Funds except that which (a) conforms to the
requirements of any applicable laws or regulations of any government or
authorized agency in the U.S. or any other country, having jurisdiction over the
offering or sale of shares of the Funds, and (b) is approved in writing by FTDI
in advance of such use. Such approval may be withdrawn by FTDI in whole or in
part upon notice to Bank, and Bank shall, upon receipt of such notice,
immediately discontinue the use of such sales literature, sales material and
advertising. Bank is not authorized to modify or translate any such materials
without the prior written consent of FTDI.
o) Customer Information
(1) Definition. For purposes of this paragraph 5(h)(iv), 'Customer
Information' means customer names and other identifying information pertaining
to Bank's mutual fund customers which is furnished by Bank to FTDI in the
ordinary course of business under this Agreement. Customer Information shall not
include any information obtained from other sources.
(2) Permitted Uses. FTDI may use Customer Information to fulfill its
obligations under this Agreement, the Distribution Agreements between the Funds
and FTDI, the Funds' prospectuses, or other duties imposed by law. In addition,
FTDI or its affiliates may use Customer Information in communications to
shareholders to market the Funds or other investment products or services,
including without limitation variable annuities, variable life insurance, and
retirement plans and related services. FTDI may also use Customer Information if
it obtains Bank's prior written consent.
(3) Prohibited Uses. Except as stated above, FTDI shall not disclose
Customer Information to third parties, and shall not use Customer Information in
connection with any advertising, marketing or solicitation of any products or
services, provided that Bank offers or soon expect to offer comparable products
or services to mutual fund customers and have so notified FTDI.
(4) Survival; Termination. The agreements described in this paragraph
5(h)(iv) shall survive the termination of this Agreement, but shall terminate as
to any account upon FTDI's receipt of valid notification of either the
termination of that account with Bank or the transfer of that account to another
bank or dealer.
6. GENERAL
a) Successors and Assignments
This Agreement binds Bank and FTDI and their respective heirs,
successors and assigns. Bank may not assign its right and duties under this
Agreement without the advance, written authorization of FTDI.
b) Paragraph Headings
The paragraph headings of this Agreement are for convenience only, and
shall not be deemed to define, limit, or describe the scope or intent of this
Agreement.
c) Severability
Should any provision of this Agreement be determined to be invalid or
unenforceable under any law, rule, or regulation, that determination shall not
affect the validity or enforceability of any other provision of this Agreement.
d) Waivers
There shall be no waiver of any provision of this Agreement except a
written waiver signed by Bank and FTDI. No written waiver shall be deemed a
continuing waiver or a waiver of any other provision, unless the waiver
expresses such intention.
e) Sole Agreement
This Agreement is the entire agreement of Bank and FTDI and supersedes
all oral negotiations and prior writings.
f) Governing Law
This Agreement shall be construed in accordance with the laws of the
State of California, not including any provision which would require the general
application of the law of another jurisdiction, and shall be binding upon the
parties hereto when signed by FTDI and accepted by Bank, either by Bank's
signature in the space provided below or by Bank's first trade entered after
receipt of this Agreement.
g) Arbitration
Should any of Bank's concession accounts with FTDI have a debit balance,
FTDI may offset and recover the amount owed from any other account Bank has with
FTDI, without notice or demand to Bank. Either party may submit any dispute
under this Agreement to binding arbitration under the commercial arbitration
rules of the American Arbitration Association. Judgment upon any arbitration
award may be entered by any state or federal court having jurisdiction.
h) Amendments
FTDI may amend this Agreement at any time by depositing a written notice
of the amendment in the U.S. mail, first class postage pre-paid, addressed to
Bank's address given below. Bank's placement of any Transaction order or
acceptance of any payments after the effective date and receipt of notice of any
such amendment shall constitute Bank's acceptance of the amendment.
i) Term and Termination
This Agreement shall continue in effect until terminated. FTDI or Bank
may terminate this Agreement at any time by written notice to the other, but
such termination shall not affect the payment or repayment of Fees on
Transactions prior to the termination date. Termination also will not affect the
indemnities given under this Agreement.
j) Acceptance; Cumulative Effect
This Agreement is cumulative and supersedes any agreement previously in
effect. It shall be binding upon the parties hereto when signed by FTDI and
accepted by Bank. If Bank has a current agreement with FTDI, Bank's first trade
or acceptance of payments from FTDI after receipt of this Agreement, as it may
be amended pursuant to paragraph 6(h), above, shall constitute Bank's acceptance
of the terms of this Agreement. Otherwise, Bank's signature below shall
constitute Bank's acceptance of these terms.
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By:
Greg Johnson, President
777 Mariners Island Blvd. San Mateo, CA 94404 Attention: Chief Legal Officer
(for legal notices only)
415/312-2000
700 Central Avenue St. Petersburg, Florida 33701-3628
813/823-8712
To the Bank or Trust Company: If you have not previously signed an agreement
with us for the sale of mutual fund shares to your customers, please complete
and sign this section and return the original to us.
BANK or TRUST COMPANY
(Firm's name)
By:
(Signature)
Name:
Title:Address:
Telephone:
CUSTODY AGREEMENT
THIS CUSTODY AGREEMENT ("Agreement") is made and
entered into as of ______________, 1995, by and between FRANKLIN
TEMPLETON MONEY FUND TRUST, on behalf of Franklin Templeton Money
Fund II and any future series of the trust (hereinafter
collectively referred to as the "Fund"), and BANK OF AMERICA
NATIONAL FUND AND SAVINGS ASSOCIATION, a banking association
organized under the laws of the United States (the "Custodian").
RECITALS
A. The Fund is an investment company registered under
the Investment Company Act of 1940, as amended (the "Investment
Company Act") that invests and reinvests, on behalf of its
series, in Domestic Securities and Foreign Securities.
B. The Custodian is, and has represented to the Fund
that the Custodian is, a "bank" as that term is defined in
Section 2(a)(5) of the Investment Company Act of 1940, as amended
and is eligible to receive and maintain custody of investment
company assets pursuant to Section 17(f) and Rule 17f-2
thereunder.
C. The Fund and the Custodian desire to provide for
the retention of the Custodian as a custodian of the assets of
the Fund's two current series, The Money Market Portfolio and The
U.S. Government Securities Money Market Portfolio, and such
subsequent series as the parties hereto may determine from time-
to-time, on the terms and subject to the provisions set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual
covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. DEFINITIONS
For purposes of this Agreement, the following terms
shall have the respective meanings specified below:
"Agreement" shall mean this Custody Agreement.
"Board of Trustees" shall mean the Board of Trustees of
the Fund.
"Business Day" with respect to any Domestic Security
means any day, other than a Saturday or Sunday, that is not a day
on which banking institutions are authorized or required by law
to be closed in The City of New York and, with respect to Foreign
Securities, a London Business Day. "London Business Day" shall
mean any day on which dealings and deposits in U.S. dollars are
transacted in the London interbank market.
"Custodian" shall mean Bank of America National Trust
and Savings Association.
"Domestic Securities" shall have the meaning provided
in Subsection 2.1 hereof.
"Executive Committee" shall mean the executive
committee of the Board of Trustees.
"Foreign Custodian" shall have the meaning provided in
Section 4.1 hereof.
"Foreign Securities" shall have the meaning provided in
Section 2.1 hereof.
"Foreign Securities Depository" shall have the meaning
provided in Section 4.1 hereof.
"Fund" shall mean the Franklin Templeton Money Fund
Trust and any separate series of the Fund hereinafter organized.
"Investment Company Act" shall mean the Investment
Company Act of 1940, as amended.
"Securities" shall have the meaning provided in Section
2.1 hereof.
"Securities System" shall have the meaning provided in
Section 3.1 hereof.
"Securities System Account" shall have the meaning
provided in Subsection 3.8(a) hereof.
"Shares" shall mean shares of beneficial interest of
the Fund.
"Subcustodian" shall have the meaning provided in
Subsection 3.7 hereof, but shall not include any Foreign
Custodian.
"Transfer Agent" shall mean the duly appointed and
acting transfer agent for the Fund.
"Writing" shall mean a communication in writing, a
communication by telex, the Custodian's Global Custody
Instruction SystemTM, facsimile transmission, bankwire or other
teleprocess or electronic instruction system acceptable to the
Custodian.
Section 2. APPOINTMENT OF CUSTODIAN; DELIVERY OF ASSETS
2.1 Appointment of Custodian. The Fund hereby
appoints and designates the Custodian as a custodian of the
assets of the Fund including cash, securities the Fund desires to
be held within the United States ("Domestic Securities") and
securities it desires to be held outside the United States
("Foreign Securities"). Domestic Securities and Foreign
Securities are sometimes referred to herein, collectively, as
"Securities." The Custodian hereby accepts such appointment and
designation and agrees that it shall maintain custody of the
assets of the Fund delivered to it hereunder in the manner
provided for herein.
2.2 Delivery of Assets. The Fund agrees to deliver to
the Custodian Securities and cash owned by the Fund, payments of
income, principal or capital distributions received by the Fund
with respect to Securities owned by the Fund from time to time,
and the consideration received by it for such Shares or other
securities of the Fund as may be issued and sold from time to
time. The Custodian shall have no responsibility whatsoever for
any property or assets of the Fund held or received by the Fund
and not delivered to the Custodian pursuant to and in accordance
with the terms hereof. All Securities accepted by the Custodian
on behalf of the Fund under the terms of this Agreement shall be
in "street name" or other good delivery form as determined by the
Custodian.
2.3 Subcustodians. Upon receipt of Proper
Instructions and a certified copy of a resolution of the Board of
Trustees or of the Executive Committee certified by the Secretary
or an Assistant Secretary of the Fund, the Custodian may from
time to time appoint one or more Subcustodians or Foreign
Custodians to hold assets of the Fund in accordance with the
provisions of this Agreement.
2.4 No Duty to Manage. The Custodian, a Subcustodian
or a Foreign Custodian shall not have any duty or responsibility
to manage or recommend investments of the assets of the Fund held
by them or to initiate any purchase, sale or other investment
transaction in the absence of Proper Instructions or except as
otherwise specifically provided herein.
Section 3. DUTIES OF THE CUSTODIAN WITH RESPECT TO
ASSETS OF THE FUND HELD BY THE CUSTODIAN
3.1 Holding Securities. The Custodian shall hold and
physically segregate from any property owned by the Custodian,
for the account of the Fund, all non-cash property delivered by
the Fund to the Custodian hereunder other than Securities which,
pursuant to Subsection 3.8 hereof, are held through a registered
clearing agency, a registered securities depository, the Federal
Reserve's book-entry securities system (referred to herein,
individually, as a "Securities System"), or held by a
Subcustodian, Foreign Custodian or in a Foreign Securities
Depository.
3.2 Delivery of Securities. Except as otherwise
provided in Subsection 3.5 hereof, the Custodian, upon receipt of
Proper Instructions, shall release and deliver Securities owned
by the Fund and held by the Custodian in the following cases or
as otherwise directed in Proper Instructions:
(a) except as otherwise provided herein, upon
sale of such Securities for the account of the Fund and receipt
by the Custodian, a Subcustodian or a Foreign Custodian of
payment therefor;
(b) upon the receipt of payment by the Custodian,
a Subcustodian or a Foreign Custodian in connection with any
repurchase agreement related to such Securities entered into by
the Fund;
(c) in the case of a sale effected through a
Securities System, in accordance with the provisions of
Subsection 3.8 hereof;
(d) to a tender agent or other authorized agent
in connection with (i) a tender or other similar offer for
Securities owned by the Fund, or (ii) a tender offer or
repurchase by the Fund of its own Shares;
(e) to the issuer thereof or its agent when such
Securities are called, redeemed, retired or otherwise become
payable; provided, that in any such case, the cash or other
consideration is to be delivered to the Custodian, a Subcustodian
or a Foreign Custodian;
(f) to the issuer thereof, or its agent, for
transfer into the name or nominee name of the Fund, the name or
nominee name of the Custodian, the name or nominee name of any
Subcustodian or Foreign Custodian; or for exchange for a
different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
provided that, in any such case, the new Securities are to be
delivered to the Custodian, a Subcustodian or Foreign Custodian;
(g) to the broker selling the same for
examination in accordance with the "street delivery" custom;
(h) for exchange or conversion pursuant to any
plan of merger, consolidation, recapitalization, or
reorganization of the issuer of such Securities, or pursuant to a
conversion of such Securities; provided that, in any such case,
the new Securities and cash, if any, are to be delivered to the
Custodian or a Subcustodian;
(i) in the case of warrants, rights or similar
securities, the surrender thereof in connection with the exercise
of such warrants, rights or similar Securities or the surrender
of interim receipts or temporary Securities for definitive
Securities; provided that, in any such case, the new Securities
and cash, if any, are to be delivered to the Custodian, a
subcustodian or a Foreign Custodian;
(j) for delivery in connection with any loans of
Securities made by the Fund, but only against receipt by the
Custodian, a Subcustodian or a Foreign Custodian of adequate
collateral as determined by the Fund (and identified in Proper
Instructions communicated to the Custodian), which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be credited
to the account of the Custodian, a Subcustodian or a Foreign
Custodian in the Federal Reserve's book-entry securities system,
the Custodian will not be held liable or responsible for the
delivery of Securities owned by the Fund prior to the receipt of
such collateral;
(k) for delivery as security in connection with
any borrowings by the Fund requiring a pledge of assets by the
Fund, but only against receipt by the Custodian, a Subcustodian
or a Foreign Custodian of amounts borrowed;
(l) for delivery in accordance with the
provisions of any agreement among the Fund, the Custodian, a
Subcustodian or a Foreign Custodian and a broker-dealer relating
to compliance with the rules of registered clearing corporations
and of any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund;
(m) for delivery in accordance with the
provisions of any agreement among the Fund, the Custodian, a
Subcustodian or a Foreign Custodian and a futures commission
merchant, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market, or any
similar organization or organizations, regarding account deposits
in connection with transactions by the Fund;
(n) upon the receipt of instructions from the
Transfer Agent for delivery to the Transfer Agent or to the
holders of Shares in connection with distributions in kind in
satisfaction of requests by holders of Shares for repurchase or
redemption; and
(o) for any other proper purpose, but only upon
receipt of proper Instructions, and a certified copy of a
resolution of the Trustees or of the Executive Committee
certified by the Secretary or an Assistant Secretary of the Fund,
specifying the securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such
purpose to be a proper purpose, and naming the person or persons
to whom delivery of such securities shall be made.
3.3 Registration of Securities. Securities held by
the Custodian, a Subcustodian or a Foreign Custodian (other than
bearer Securities) shall be registered in the name or nominee
name of the Fund, in the name or nominee name of the Custodian or
in the name or nominee name of any Subcustodian or Foreign
Custodian. The Fund agrees to hold the Custodian, any such
nominee, Subcustodian or Foreign Custodian harmless from any
liability as a holder of record of such Securities.
3.4 Bank Accounts. The Custodian shall open and
maintain a separate bank account or accounts for the Fund,
subject only to draft or order by the Custodian acting pursuant
to the terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by
it hereunder from or for the account of the Fund, other than cash
maintained by the Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act.
Funds held by the Custodian for the Fund may be deposited by it
to its credit as Custodian in the banking departments of the
Custodian, a Subcustodian or a Foreign Custodian. It is
understood and agreed by the Custodian and the Fund that the rate
of interest, if any, payable on such funds (including foreign
currency deposits) that are deposited with the Custodian may not
be a market rate of interest and that the rate of interest
payable by the Custodian to the Fund shall be agreed upon by the
Custodian and the Fund from time to time. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall
be withdrawable by the Custodian only in that capacity.
3.5 Collection of Income; Trade Settlement; Crediting
of Accounts. The Custodian shall collect income payable with
respect to Securities owned by the Fund, settle Securities trades
for the account of the Fund and credit and debit the Fund's
account with the Custodian in connection therewith as follows:
(a) Upon receipt of Proper Instructions, the
Custodian shall effect the purchase of a Security by charging the
account of the Fund on the contractual settlement date. The
Custodian shall have no liability of any kind to any person,
including the Fund, if the Custodian effects payment on behalf of
the Fund as provided for herein or in Proper Instructions, and
the seller or selling broker fails to deliver the Securities
purchased.
(b) Upon receipt of Proper Instructions, the
Custodian shall effect the sale of a Security by delivering a
certificate or other indicia of ownership, and shall credit the
account of the Fund with the proceeds of such sale on the
contractual settlement date. The Custodian shall have no
liability of any kind to any person, including the Fund, if the
Custodian delivers such a certificate(s) or other indicia of
ownership as provided for herein or in Proper Instructions, and
the purchaser or purchasing broker fails to effect payment to the
Fund within a reasonable time period, as determined by the
Custodian in its sole discretion. In such event, the Custodian
shall be entitled to reimbursement of the amount so credited to
the account of the Fund in connection with such sale.
(c) The Fund is responsible for ensuring that the
Custodian receives timely and accurate Proper Instructions to
enable the Custodian to effect settlement of any purchase or
sale. If the Custodian does not receive such instructions within
the required time period, the Custodian shall have no liability
of any kind to any person, including the Fund, for failing to
effect settlement on the contractual settlement date. However,
the Custodian shall use its best reasonable efforts to effect
settlement as soon as possible after receipt of Proper
Instructions.
(d) The Custodian shall credit the account of the
Fund with interest income payable on interest bearing Securities
on payable date. Interest income on cash balances will be
credited monthly to the account of the Fund on the first Business
Day (on which the Custodian is open for business) following the
end of each month. Dividends and other amounts payable with
respect to Domestic Securities and Foreign Securities shall be
credited to the account of the Fund when received by the
Custodian. The Custodian shall not be required to commence suit
or collection proceedings or resort to any extraordinary means to
collect such income and other amounts payable with respect to
Securities owned by the Fund. The collection of income due the
Fund on Domestic Securities loaned pursuant to the provisions of
Subsection 3.2(j) shall be the responsibility of the Fund. The
Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information
or data as may be necessary to assist the Fund in arranging for
the timely delivery to the Custodian of the income to which the
Fund is entitled. The Custodian shall have no liability to any
person, including the Fund, if the Custodian credits the account
of the Fund with such income or other amounts payable with
respect to Securities owned by the Fund (other than Securities
loaned by the Fund pursuant to Subsection 3.2(j) hereof) and the
Custodian subsequently is unable to collect such income or other
amounts from the payors thereof within a reasonable time period,
as determined by the Custodian in its sole discretion. In such
event, the Custodian shall be entitled to reimbursement of the
amount so credited to the account of the Fund.
3.6 Payment of Fund Monies. Upon receipt of Proper
Instructions the Custodian shall pay out monies of the Fund in
the following cases or as otherwise directed in Proper
Instructions:
(a) upon the purchase of Securities, futures
contracts or options on futures contracts for the account of the
Fund but only, except as otherwise provided herein, (i) against
the delivery of such securities, or evidence of title to futures
contracts or options on futures contracts, to the Custodian or a
Subcustodian registered pursuant to Subsection 3.3 hereof or in
proper form for transfer; (ii) in the case of a purchase effected
through a Securities System, in accordance with the conditions
set forth in Subsection 3.8 hereof; or (iii) in the case of
repurchase agreements entered into between the Fund and the
Custodian, another bank or a broker-dealer (A) against delivery
of the Securities either in certificated form to the Custodian or
a Subcustodian or through an entry crediting the Custodian's
account at the appropriate Federal Reserve Bank with such
Securities or (B) against delivery of the confirmation evidencing
purchase by the Fund of Securities owned by the Custodian or such
broker-dealer or other bank along with written evidence of the
agreement by the Custodian or such broker-dealer or other bank to
repurchase such Securities from the Fund;
(b) in connection with conversion, exchange or
surrender of Securities owned by the Fund as set forth in
Subsection 3.2 hereof;
(c) for the redemption or repurchase of Shares
issued by the Fund;
(d) for the payment of any expense or liability
incurred by the Fund, including but not limited to the following
payments for the account of the Fund: custodian fees, interest,
taxes, management, accounting, transfer agent and legal fees and
operating expenses of the Fund whether or not such expenses are
to be in whole or part capitalized or treated as deferred
expenses; and
(e) for the payment of any dividends or
distributions declared by the Board of Trustees with respect to
the Shares.
3.7 Appointment of Subcustodians. The Custodian may,
upon receipt of Proper Instructions, appoint another bank or Fund
company, which is itself qualified under the Investment Company
Act to act as a custodian (a "Subcustodian"), as the agent of the
Custodian to carry out such of the duties of the Custodian
hereunder as a Custodian may from time to time direct; provided,
however, that the appointment of any Subcustodian shall not
relieve the Custodian of its responsibilities or liabilities
hereunder.
3.8 Deposit of Securities in Securities Systems. The
Custodian may deposit and/or maintain Domestic Securities owned
by the Fund in a Securities System in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following
provisions:
(a) the Custodian may hold Domestic Securities of
the Fund in the Depository Trust Company or the Federal Reserve's
book entry system or, upon receipt of Proper Instructions, in
another Securities System provided that such securities are held
in an account of the Custodian in the Securities System
("Securities System Account") which shall not include any assets
of the Custodian other than assets held as a fiduciary, custodian
or otherwise for customers;
(b) the records of the Custodian with respect to
Domestic Securities of the Fund which are maintained in a
Securities System shall identify by book-entry those Domestic
Securities belonging to the Fund;
(c) the Custodian shall pay for Domestic
Securities purchased for the account of the Fund upon (i)
receipt of advice from the Securities System that such securities
have been transferred to the Securities System Account, and (ii)
the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the Fund.
The Custodian shall transfer Domestic Securities sold for the
account of the Fund upon (A) receipt of advice from the
Securities System that payment for such securities has been
transferred to the Securities System Account, and (B) the making
of an entry on the records of the Custodian to reflect such
transfer and payment for the account of the Fund. Copies of all
advices from the Securities System of transfers of Domestic
Securities for the account of the Fund shall be maintained for
the Fund by the Custodian and be provided to the Fund at its
request. Upon request, the Custodian shall furnish the Fund
confirmation of each transfer to or from the account of the Fund
in the form of a written advice or notice; and
(d) upon request, the Custodian shall provide the
Fund with any report obtained by the Custodian on the Securities
System's accounting system, internal accounting control and
procedures for safeguarding domestic securities deposited in the
Securities System.
3.9 Segregated Account. The Custodian shall upon
receipt of Proper Instructions establish and maintain a
segregated account or accounts for and on behalf of the Fund,
into which account or accounts may be transferred cash and/or
Securities, including Securities maintained in an account by the
Custodian pursuant to Section 3.8 hereof, (i) in accordance with
the provisions of any agreement among the Fund, the Custodian and
a broker-dealer or futures commission merchant, relating to
compliance with the rules of registered clearing corporations and
of any national securities exchange (or the Commodity Futures
Trading Commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii)
for purposes of segregating cash or securities in connection with
options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the
Fund and (iii) for other proper corporate purposes, but only, in
the case of this clause (iii), upon receipt of, in addition to
Proper Instructions, a certified copy of a resolution of the
Board of Trustees or of the Executive Committee certified by the
Secretary or an Assistant Secretary, setting forth the purpose or
purposes of such segregated account and declaring such purposes
to be proper corporate purposes.
3.10 Ownership Certificates for Tax Purposes. The
Custodian shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in connection
with receipt of income or other payments with respect to domestic
securities of the Fund held by it and in connection with
transfers of such securities.
3.11 Proxies. The Custodian shall, with respect to
the Securities held hereunder, promptly deliver to the Fund all
proxies, all proxy soliciting materials and all notices relating
to such Securities. If the Securities are registered otherwise
than in the name of the Fund or a nominee of the Fund, the
Custodian shall use its best reasonable efforts, consistent with
applicable law, to cause all proxies to be promptly executed by
the registered holder of such Securities in accordance with
Proper Instructions.
3.12 Communications Relating to Fund Portfolio
Securities. The Custodian shall transmit promptly to the Fund
all written information (including, without limitation, pendency
of calls and maturities of Securities and expirations of rights
in connection therewith and notices of exercise of put and call
options written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the Custodian from
issuers of Securities being held for the Fund. With respect to
tender or exchange offers, the Custodian shall transmit promptly
to the Fund all written information received by the Custodian
from issuers of the Securities whose tender or exchange is sought
and from the party (or its agents) making the tender or exchange
offer. If the Fund desires to take action with respect to any
tender offer, exchange offer or any other similar transaction,
the Fund shall notify the Custodian at least three Business Days
prior to the date of which the Custodian is to take such action.
3.13 Reports by Custodian. Custodian shall each
business day furnish the Fund with a statement summarizing all
transactions and entries for the account of the Fund for the
preceding day. At the end of every month Custodian shall furnish
the Fund with a list of the portfolio securities showing the
quantity of each issue owned, the cost of each issue and the
market value of each issue at the end of each month. Such
monthly report shall also contain separate listings of (a)
unsettled trades and (b) when-issued securities. Custodian shall
furnish such other reports as may be mutually agreed upon from
time-to-time.
Section 4. CERTAIN DUTIES OF THE CUSTODIAN WITH RESPECT
TO ASSETS OF THE FUND HELD OUTSIDE THE UNITED
STATES
4.1 Custody outside the United States. The Fund
authorizes the Custodian to hold Foreign Securities and cash in
custody accounts which have been established by the Custodian
with (i) its foreign branches, (ii) foreign banking institutions,
foreign branches of United States banks and subsidiaries of
United States banks or bank holding companies (each a "Foreign
Custodian") and (iii) Foreign Securities depositories or clearing
agencies (each a "Foreign Securities Depository"); provided,
however, that the Board of Trustees or the Executive Committee
has approved in advance the use of each such Foreign Custodian
and Foreign Securities Depository and the contract between the
Custodian and each Foreign Custodian and that such approval is
set forth in Proper Instructions and a certified copy of a
resolution of the Board of Trustees or of the Executive Committee
certified by the Secretary or an Assistant Secretary of the Fund.
Unless expressly provided to the contrary in this Section 4,
custody of Foreign Securities and assets held outside the United
States by the Custodian, a Foreign Custodian or through a Foreign
Securities Depository shall be governed by Section 3 hereof.
4.2 Assets to be Held. The Custodian shall limit the
securities and other assets maintained in the custody of its
foreign branches, Foreign Custodians and Foreign Securities
Depositories to: (i) "foreign securities", as defined in
paragraph (c) (1) of Rule 17f-5 under the Investment Company Act,
and (ii) cash and cash equivalents in such amounts as the
Custodian or the Fund may determine to be reasonably necessary to
effect the Fund's Foreign Securities transactions.
4.3 Foreign Securities Depositories. Except as may
otherwise be agreed upon in writing by the Custodian and the
Fund, assets of the Fund shall be maintained in Foreign
Securities Depositories only through arrangements implemented by
the Custodian or Foreign Custodians pursuant to the terms hereof.
4.4 Segregation of Securities. The Custodian shall
identify on its books and records as belonging to the Fund, the
Foreign Securities of the Fund held by each Foreign Custodian.
4.5 Agreements with Foreign Custodians. Each
agreement with a Foreign Custodian shall provide generally that:
(a) the Fund's assets will not be subject to any right, charge,
security interest, lien or claim of any kind in favor of the
Foreign Custodian or its creditors, except a claim of payment for
their safe custody or administration; (b) beneficial ownership
for the Fund's assets will be freely transferable without the
payment of money or value other than for custody or
administration; (c) adequate records will be maintained
identifying the assets as belonging to the Fund; (d) the
independent public accountants for the Fund, will be given access
to the records of the Foreign Custodian relating to the assets of
the Fund or confirmation of the contents of those records; (e)
the disposition of assets of the Fund held by the Foreign
Custodian will be subject only to the instructions of the
Custodian or its agents; (f) the Foreign Custodian shall
indemnify and hold harmless the Custodian and the Fund from and
against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the Foreign Custodian's
performance of its obligations under such agreement; (g) to the
extent practicable, the Fund's assets will be adequately insured
in the event of loss; and (h) the Custodian will receive periodic
reports with respect to the safekeeping of the Fund's assets,
including notification of any transfer to or from the Fund's
account.
4.6 Access of Independent Accountants of the Fund.
Upon request of the Fund, the Custodian will use its best
reasonable efforts to arrange for the independent accountants of
the Fund to be afforded access to the books and records of any
Foreign Custodian insofar as such books and records relate to the
custody by any such Foreign Custodian of assets of the Fund.
4.7 Transactions in Foreign Custody Accounts. Upon
receipt of Proper Instructions, the Custodian shall instruct the
appropriate Foreign Custodian to transfer, exchange or deliver
Foreign Securities owned by the Fund, but, except to the extent
explicitly provided herein, only in any of the cases specified in
Subsection 3.2. Upon receipt of Proper Instructions, the
Custodian shall pay out or instruct the appropriate Foreign
Custodian to pay out monies of the Fund in any of the cases
specified in Subsection 3.6. Notwithstanding anything herein to
the contrary, settlement and payment for Foreign Securities
received for the account of the Fund and delivery of Foreign
Securities maintained for the account of the Fund may be effected
in accordance with the customary or established securities
trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the
purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of
receiving later payment for such securities from such purchaser
or dealer. Foreign Securities maintained in the custody of a
Foreign Custodian may be maintained in the name of such entity or
its nominee name to the same extent as set forth in Section 3.3
of this Agreement and the Fund agrees to hold any Foreign
Custodian and its nominee harmless from any liability as a holder
of record of such securities.
4.8 Liability of Foreign Custodian. Each agreement
between the Custodian and a Foreign Custodian shall require the
Foreign Custodian to exercise reasonable care in the performance
of its duties and to indemnify and hold harmless the Custodian
and the Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the
Foreign Custodian's performance of such obligations. At the
election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claims against a
Foreign Custodian as a consequence of any such loss, damage,
cost, expense, liability or claim if and to the extent that the
Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
4.9 Monitoring Responsibilities.
(a) The Custodian will promptly inform the Fund
in the event that the Custodian learns of a material adverse
change in the financial condition of a Foreign Custodian or is
notified by (i) a foreign banking institution employed as a
Foreign Custodian that there appears to be a substantial
likelihood that its shareholders' equity will decline below $200
million or that its shareholders' equity has declined below $200
million (in each case computed in accordance with generally
accepted United States accounting principles) and denominated in
U.S. dollars, or (ii) a subsidiary of a United States bank or
bank holding company acting as a Foreign Custodian that there
appears to be a substantial likelihood that its shareholders'
equity will decline below $100 million or that its shareholders'
equity has declined below $100 million (in each case computed in
accordance with generally accepted United States accounting
principles) and denominated in U.S. dollars.
(b) The custodian will furnish such information
as may be reasonably necessary to assist the Fund's Board of
Trustees in its annual review and approval of the continuance of
all contracts or arrangements with Foreign Subcustodians.
Section 5. PROPER INSTRUCTIONS
As used in this Agreement, the term "Proper
Instructions" means instructions of the Fund received by the
Custodian via telephone or in Writing which the Custodian
believes in good faith to have been given by Authorized Persons
(as defined below) or which are transmitted with proper testing
or authentication pursuant to terms and conditions which the
Custodian may specify. Any Proper Instructions delivered to the
Custodian by telephone shall promptly thereafter be confirmed in
Writing by an Authorized Person, but the Fund will hold the
Custodian harmless for its failure to send such confirmation in
writing, the failure of such confirmation to conform to the
telephone instructions received or the Custodian's failure to
produce such confirmation at any subsequent time. Unless
otherwise expressly provided, all Proper Instructions shall
continue in full force and effect until cancelled or superseded.
If the Custodian requires test arrangements, authentication
methods or other security devices to be used with respect to
Proper Instructions, any Proper Instructions given by the Fund
thereafter shall be given and processed in accordance with such
terms and conditions for the use of such arrangements, methods or
devices as the Custodian may put into effect and modify from time
to time. The Fund shall safeguard any testkeys, identification
codes or other security devices which the Custodian shall make
available to it. The Custodian may electronically record any
Proper Instructions given by telephone, and any other telephone
discussions, with respect to its activities hereunder. As used
in this Agreement, the term "Authorized Persons" means such
officers or such agents of the Fund as have been designated by a
resolution of the Board of Trustees or of the Executive
Committee, a certified copy of which has been provided to the
Custodian, to act on behalf of the Fund under this Agreement.
Each of such persons shall continue to be an Authorized Person
until such time as the Custodian receives Proper Instructions
that any such officer or agent is no longer an Authorized Person.
Notwithstanding anything to the contrary contained in
this Agreement, if the Fund has executed or is otherwise bound by
a funds transfer service agreement, electronic trade payment
service agreement, license agreement for electronic access,
MicroWire (registered Trademark) service agreement or similar
agreement, and any related addenda and amendments thereto (each,
a "Service Agreement"), between the Fund and the Custodian, with
regard to the transfer of funds to and/or disbursement of funds
from an account of the Fund, then any electronic instruction on
the part of the Fund and the Custodian's obligations relating
thereto shall be governed by the applicable Service Agreement.
To the extent that anything in this Agreement relating to
electronic instructions to transfer and/or disburse funds is
inconsistent with any provision of the Service Agreement, the
Service Agreement shall control.
Section 6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express
authority from the Fund:
(a) make payments to itself or others for minor
expenses of handling Securities or other similar items relating
to its duties under this Agreement, provided that all such
payments shall be accounted for to the Fund;
(b) endorse for collection, in the name of the
Fund, checks, drafts and other negotiable instruments; and
(c) in general, attend to all non-discretionary
details in connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the Securities and
property of the Fund except as otherwise provided in Proper
Instructions.
Section 7. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any
instructions (conveyed by telephone or in Writing), notice,
request, consent, certificate or other instrument or paper
believed by it to be genuine and to have been properly given or
executed by or on behalf of the Fund. The Custodian may receive
and accept a certified copy of a resolution of the Board of
Trustees or Executive Committee as conclusive evidence (a) of the
authority of any person to act in accordance with such resolution
or (b) of any determination or of any action by the Board of
Trustees or Executive Committee as described in such resolution,
and such resolution may be considered as in full force and effect
until receipt by the Custodian of written notice by an Authorized
Person to the contrary.
Section 8. DUTY OF CUSTODIAN TO SUPPLY INFORMATION
The Custodian shall cooperate with and supply necessary
information in its possession (to the extent permissible under
applicable law) to the entity or entities appointed by the Board
of Trustees to keep the books of account of the Fund and/or
compute the net asset value per Share of the outstanding Shares
of the Fund.
Section 9. RECORDS
The Custodian shall create and maintain all records
relating to its activities under this Agreement which are
required with respect to such activities under Section 31 of the
Investment Company Act and Rules 31a-1 and 31a-2 thereunder. All
such records shall be the property of the Fund and shall at all
times during the regular business hours of the Custodian be open
for inspection by duly authorized officers, employees or agents
of the Fund and employees and agents of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request,
supply the Fund with a tabulation of Securities owned by the Fund
and held by the Custodian and shall, when requested to do so by
the Fund and for such compensation as shall be agreed upon
between the Fund and the Custodian, include certificate numbers
in such tabulations.
Section 10. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable
compensation for its services and expenses as Custodian, as
agreed upon from time to time between the Fund and the Custodian.
Section 11. RESPONSIBILITY OF CUSTODIAN
The Custodian shall be responsible for the performance
of only such duties as are set forth herein or contained in
Proper Instructions and shall use reasonable care in carrying out
such duties. The Custodian shall be liable to the Fund for any
loss which shall occur as the result of the failure of a Foreign
Custodian or a Foreign Securities Depository engaged by such
Foreign Custodian or the Custodian to exercise reasonable care
with respect to the safekeeping of securities and other assets of
the Fund to the same extent that the Custodian would be liable to
the Fund if the Custodian itself were holding such securities and
other assets. In the event of any loss to the Fund by reason of
the failure of the Custodian, a Foreign Custodian or a Foreign
Securities Depository engaged by such Foreign Custodian or the
Custodian to utilize reasonable care, the Custodian shall be
liable to the Fund to the extent of the Fund's damages, to be
determined based on the market value of the property which is the
subject of the loss at the date of discovery of such loss and
without reference to any special conditions or circumstances.
The Custodian shall be held to the exercise of reasonable care in
carrying out this Agreement. The Fund agrees to indemnify and
hold harmless the Custodian and its nominees from all taxes,
charges, expenses, assessments, claims and liabilities (including
legal fees and expenses) incurred by any of them in connection
with the performance of this Agreement, except such as may arise
from any negligent action, negligent failure to act or willful
misconduct on the part of the indemnified entity or any Foreign
Custodian or Foreign Securities Depository. The Custodian shall
be entitled to rely, and may act, on advice of counsel (who may
be counsel for the Fund) on all matters and shall be without
liability for any action reasonably taken or omitted pursuant to
such advice. The Custodian need not maintain any insurance for
the benefit of the Fund.
All collections of funds or other property paid or
distributed in respect of Securities held by the Custodian,
agent, Subcustodian or Foreign Custodian hereunder shall be made
at the risk of the Fund. The Custodian shall have no liability
for any loss occasioned by delay in the actual receipt of notice
by the Custodian, agent, Subcustodian or by a Foreign Custodian
of any payment, redemption or other transaction regarding
securities in respect of which the Custodian has agreed to take
action as provided in Section 3 hereof. The Custodian shall not
be liable for any action taken in good faith upon Proper
Instructions or upon any certified copy of any resolution of the
Board of Trustees and may rely on the genuineness of any such
documents which it may in good faith believe to be validly
executed. The Custodian shall not be liable for any loss
resulting from, or caused by, the direction of the Fund to
maintain custody of any Securities or cash in a foreign country
including, but not limited to, losses resulting from
nationalization, expropriation, currency restrictions, civil
disturbance, acts of war or terrorism, insurrection, revolution,
nuclear fusion, fission or radiation or other similar occurrences
or events beyond the control of the Custodian. Finally, the
Custodian shall not be liable for any taxes, including interest
and penalties with respect thereto, that may be levied or
assessed upon or in respect of any assets of the Fund held by the
Custodian.
Section 12. LIMITED LIABILITY OF THE FUND
The Custodian acknowledges that it has received notice
of and accepts the limitations of the Fund's liability as set
forth in its Agreement and Declaration of Fund. The Custodian
agrees that the Fund's obligation hereunder shall be limited to
the assets of the Fund, and that the Custodian shall not seek
satisfaction of any such obligation from the shareholders of the
Fund nor from any Fundee, officer, employee, or agent of the
Fund.
Section 13. EFFECTIVE PERIOD; TERMINATION
This Agreement shall become effective as of the date of
its execution and shall continue in full force and effect until
terminated as hereinafter provided. This Agreement may be
terminated by the Fund or the Custodian by 60 days notice in
Writing to the other provided that any termination by the Fund
shall be authorized by a resolution of the Board of Trustees, a
certified copy of which shall accompany such notice of
termination, and provided further, that such resolution shall
specify the names of the persons to whom the Custodian shall
deliver the assets of the Fund held by it. If notice of
termination is given by the Custodian, the Fund shall, within 60
days following the giving of such notice, deliver to the
Custodian a certified copy of a resolution of the Board of
Trustees specifying the names of the persons to whom the
Custodian shall deliver assets of the Fund held by it. In either
case the Custodian will deliver such assets to the persons so
specified, after deducting therefrom any amounts which the
Custodian determines to be owed to it hereunder (including all
costs and expenses of delivery or transfer of Fund assets to the
persons so specified). If within 60 days following the giving of
a notice of termination by the Custodian, the Custodian does not
receive from the Fund a certified copy of a resolution of the
Board of Trustees specifying the names of the persons to whom the
Custodian shall deliver the assets of the Fund held by it, the
Custodian, at its election, may deliver such assets to a bank or
Fund company doing business in the State of California to be held
and disposed of pursuant to the provisions of this Agreement or
may continue to hold such assets until a certified copy of one or
more resolutions as aforesaid is delivered to the Custodian. The
obligations of the parties hereto regarding the use of reasonable
care, indemnities and payment of fees and expenses shall survive
the termination of this Agreement.
Section 14. MISCELLANEOUS
14.1 Relationship. Nothing contained in this Agreement
shall (i) create any fiduciary, joint venture or partnership
relationship between the Custodian and the Fund or (ii) be
construed as or constitute a prohibition against the provision by
the Custodian or any of its affiliates to the Fund of investment
banking, securities dealing or brokerages services or any other
banking or financial services.
14.2 Further Assurances. Each party hereto shall
furnish to the other party hereto such instruments and other
documents as such other party may reasonably request for the
purpose of carrying out or evidencing the transactions
contemplated by this Agreement.
14.3 Attorneys' Fees. If any lawsuit or other action
or proceeding relating to this Agreement is brought by a party
hereto against the other party hereto, the prevailing party shall
be entitled to recover reasonable attorneys' fees, costs and
disbursements (including allocated costs and disbursements of in-
house counsel), in addition to any other relief to which the
prevailing party may be entitled.
14.4 Notices. Except as otherwise specified herein,
each notice or other communication hereunder shall be in Writing
and shall be delivered to the intended recipient at the following
address (or at such other address as the intended recipient shall
have specified in a written notice given to the other parties
hereto):
if to the Fund :
Franklin Templeton Money Fund Trust
c/o Franklin Resources, Inc.
777 Mariners Island Boulevard
San Mateo, CA 94404
Attention: Fund Manager
if to the Custodian:
Bank of America NT&SA
1455 Market Street
16th Floor, Department 5014
San Francisco, CA 94104
14.5 Headings. The underlined headings contained
herein are for convenience of reference only, shall not be deemed
to be a part of this Agreement and shall not be referred to in
connection with the interpretation hereof.
14.6 Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original and both
of which, when taken together, shall constitute one agreement.
14.7 Governing Law. This Agreement shall be
construed in accordance with, and governed in all respects by,
the laws of the State of California (without giving effect to
principles of conflict of laws).
14.8 Force Majeure. Subject to the provisions of
Section 11 hereof regarding the Custodian's general standard of
care, no failure, delay or default in performance of any
obligation hereunder shall constitute an event of default or a
breach of this agreement, or give rise to any liability
whatsoever on the part of one party hereto to the other, to the
extent that such failure to perform, delay or default arises out
of a cause beyond the control and without negligence of the party
otherwise chargeable with failure, delay or default; including,
but not limited to: action or inaction of governmental, civil or
military authority; fire; strike; lockout or other labor dispute;
flood; war; riot; theft; earthquake; natural disaster; breakdown
of public or common carrier communications facilities; computer
malfunction; or act, negligence or default of the other party.
This paragraph shall in no way limit the right of either party to
this Agreement to make any claim against third parties for any
damages suffered due to such causes.
14.9 Successors and Assigns. This Agreement shall be
binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and assigns, if any.
14.10 Waiver. No failure on the part of any person to
exercise any power, right, privilege or remedy hereunder, and no
delay on the part of any person in the exercise of any power,
right, privilege or remedy hereunder, shall operate as a waiver
thereof; and no single or partial exercise of any such power,
right, privilege or remedy shall preclude any other or further
exercise thereof or of any other power, right, privilege or
remedy.
14.11 Amendments. This Agreement may not be amended,
modified, altered or supplemented other than by means of an
agreement or instrument executed on behalf of each of the parties
hereto.
14.12 Severability. In the event that any provision
of this Agreement, or the application of any such provision to
any person or set of circumstances, shall be determined to be
invalid, unlawful, void or unenforceable to any extent, the
remainder of this Agreement, and the application of such
provision to persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and
shall continue to be valid and enforceable to the fullest extent
permitted by law.
14.13 Parties in Interest. None of the provisions of
this Agreement is intended to provide any rights or remedies to
any person other than the Fund and the Custodian and their
respective successors and assigns, if any.
14.14 Entire Agreement. This Agreement sets forth the
entire understanding of the parties hereto, and supersedes all
prior agreements and understandings between the parties hereto
relating to the subject matter hereof to the extent inconsistent
herewith.
14.15 Variations of Pronouns. Whenever required by
the context hereof, the singular number shall include the plural,
and vice versa; the masculine gender shall include the feminine
and neuter genders; and the neuter gender shall include the
masculine and feminine genders.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above
written.
"Custodian": BANK OF AMERICA NATIONAL
TRUST
AND SAVINGS ASSOCIATION
By _____________________________
Its_____________________________
"Fund": FRANKLIN TEMPLETON MONEY FUND TRUST
By______________________________
Its_____________________________
CONSENT OF INDEPENDENT AUDITORS
To the Board of Trustees of
Franklin Templeton Money Fund Trust
The Money Market Portfolios
We consent to the incorporation by reference in Post-Effective Amendment No. 1
to the Registration Statement of Franklin Templeton Money Fund Trust on Form
N-1A (File No. 33-88924 and 811-8962) of our report dated August 4, 1995 on our
audit of the financial statements and financial highlights of Franklin Templeton
Money Fund Trust for the period April 13, 1995 to June 30, 1995 and our report
dated August 4, 1995 on our audit of the financial statements and financial
highlights of The Money Market Portfolios (File No. 811-7038) for the year ended
June 30, 1995.
/S/COOPERS & LYBRAND L.L.P.
San Francisco, California
August 29, 1995
April 13 , 1995
Franklin Templeton Money Fund Trust
777 Mariners Island Blvd.
San Mateo, CA 94404
Gentlemen:
We propose to acquire 100,000 shares of beneficial interest
(the "Shares") of the Franklin Templeton Money Fund II (the
"Fund"), a series of Franklin Templeton Money Fund Trust (the
"Trust") at a purchase price of $1.00 per share for a total of
$100,000.00. We will purchase the Shares in a private offering
prior to the effectiveness of the Form N-1A registration
statement filed by the Fund under the Securities Act of 1933.
The Shares are being purchased pursuant to Section 14 of the
Investment Company Act of 1940 to serve as the seed money for the
Fund prior to the commencement of the public offering of its
shares.
In connection with such purchase, we understand that: (i)
we, the purchaser, intend to acquire the Shares for our own
account as the sole beneficial owner thereof and have no present
intention of redeeming or reselling the Shares so acquired; and
(ii) in the event any of the initial 100,000 Shares are redeemed
during the first five years, the Fund may charge against our
redemption proceeds our pro rata portion of any unamortized
organizational expenses.
We consent to the filing of this Investment Letter as an
exhibit to the Form N-1A registration statement of the Fund.
Sincerely,
FRANKLIN RESOURCES, INC.
By:/s/ Harmon E. Burns
Harmon E. Burns
Executive Vice President
FRANKLIN TEMPLETON MONEY FUND TRUST
PREAMBLE TO DISTRIBUTION PLAN
The following Distribution Plan (the "Plan") has been
adopted pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the "Act") by Franklin Templeton Money Fund Trust, on
behalf of Franklin Templeton Money Fund II, a newly organized
series (collectively, the "Fund"). The Plan has been approved by
a majority of the Board of Trustees of the Fund (the "Board of
Trustees"), including a majority of the trustees who are not
interested persons of the Fund and who have no direct, or
indirect financial interest in the operation of the Plan (the
"non-interested trustees"), cast in person at a meeting called
for the purpose of voting on such Plan.
In reviewing the Plan, the Board of Trustees considered the
schedule and nature of payments and terms of the Administration
Agreement between the Fund and Franklin Advisers, Inc., the terms
of the Management Agreement between The Money Market Portfolios
(the "master" fund in which the Fund expects to invest all of its
assets) and Franklin Advisers, Inc., and the terms of the
Underwriting Agreement between the Fund and Franklin/Templeton
Distributors, Inc. ("Distributors"). The Board of Trustees
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 0.50% per annum of the Fund's average daily net assets
represented by shares of the Fund, as may be determined by the
Fund's Board of Trustees 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 0.15%
per annum of the Fund's average daily net assets represented by
shares of the Fund, as may be determined by the Fund's Board of
Trustees from time to time, as a service fee pursuant to
servicing agreements which have been approved from time to time
by the Trustees, including the non-interested trustees.
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 Fund. 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 Fund shares, as well
as for additional distribution fees paid to securities dealers or
their firms or others who have executed agreements with the Fund,
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 Fund 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 Fund. 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 Trustees.
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 Fund shares issued by
the Fund within the context of Rule 12b-1 under the Act, then
such payments shall be deemed to have been made pursuant to the
Plan.
In no event shall the aggregate asset-based sales charges
which include payments specified in paragraphs 1 and 2, plus any
other payments deemed to be made pursuant to the Plan under this
paragraph, exceed the amount permitted to be paid pursuant to the
Rules of Fair Practice of the National Association of Securities
Dealers, Inc., Article III, Section 26(d).
4. Distributors shall furnish to the Board of Trustees, for
their review, on a quarterly basis, a written report of the
monies reimbursed to it and to others under the Plan, and shall
furnish the Board of Trustees with such other information as the
Board of Trustees may reasonably request in connection with the
payments made under the Plan in order to enable the Board of
Trustees 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 of Trustees, including
the non-interested trustees, 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 trustees, 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 Administration Agreement between the Fund
and Advisers, or the Management Agreement between The Money
Market Portfolios 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 trustees 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 trustees shall be
committed to the discretion of such non-interested trustees.
10. This Plan shall take effect on the 1st day of May, 1995.
This Plan and the terms and provisions thereof are hereby accepted and agreed to
by the Fund and Distributors as evidenced by their execution hereof.
FRANKLIN TEMPLETON MONEY FUND TRUST
By:/s/ Deborah R. Gatzek
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By:/s/Gregory E. Johnson
BASE PERIOD RETURN = Ending value - beginning value
------------------------------
Beginning value
= 1,000829 - 1.00
------------------------------
1.00
= 0.000829
= 0.0829%
CURRENT YIELD = Base period return x 365/7
= 0.000829 X 52.1428571
= 0.04322643
= 4.3226%
EFFECTIVE YIELD = (Base period return + 1) -1
------------------------------
365/7
= 0.000829 +1 -1
------------------------------
365/7
= 1.000829 -1
------------------------------
365/7
= 1.04415560 -1
= 0.04415560
= 4.42%
POWER OF ATTORNEY
The undersigned officers and trustees of FRANKLIN TEMPLETON
MONEY FUND TRUST (the "Registrant") hereby appoint MARK H.
PLAFKER, HARMON E. BURNS, DEBORAH R. GATZEK, KAREN L. SKIDMORE
AND LARRY L. GREENE (with full power to each of them to act
alone) his attorney-in-fact and agent, in all capacities, to
execute, and to file any of the documents referred to below
relating to Post-Effective Amendments to the Registrant's
registration statement on Form N-1A under the Investment Company
Act of 1940, as amended, and under the Securities Act of 1933
covering the sale of shares by the Registrant under prospectuses
becoming effective after this date, including any amendment or
amendments increasing or decreasing the amount of securities for
which registration is being sought, with all exhibits and any and
all documents required to be filed with respect thereto with any
regulatory authority. Each of the undersigned grants to each of
said attorneys, full authority to do every act necessary to be
done in order to effectuate the same as fully, to all intents and
purposes as he could do if personally present, thereby ratifying
all that said attorneys-in-fact and agents, may lawfully do or
cause to be done by virtue hereof.
The undersigned officers and trustees hereby execute this
Power of Attorney as of this 17th day of January, 1995.
/s/ Rupert H Johnson, Jr. /s/ Charles B. Johnson
Rupert H. Johnson, Jr. Charles B. Johnson,
President and Trustee Trustee
/s/ Frank H. Abbott III /s/Harris J. Ashton
Frank H. Abbott III, Harris J. Ashton,
Trustee Trustee
/s/ Joseph Fortunato /s/ David W. Garbellano
S. Joseph Fortunato, David W. Garbellano,
Trustee Trustee
/s/ Frank W. T. LaHaye /s/ Gordon S. Macklin
Frank W. T. LaHaye Gordon S. Macklin
Trustee Trustee
/s/ Martin L. Flanagan
Martin L. Flanagan,
Vice President, and
Chief Financial Officer
POWER OF ATTORNEY
The undersigned officers and trustees of THE MONEY MARKET PORTFOLIOS
(the "Registrant") hereby appoint HARMON E. BURNS, DEBORAH R. GATZEK, KAREN L.
SKIDMORE, LARRY L. GREENE, and MARK H. PLAFKER (with full power to each of
them to act alone) as their attorney-in-fact and agent, in all capacities,
to execute, and to file any of the documents referred to below relating to
Post-Effective Amendments to the Registrant's registration statement, or the
registration statementss of other funds investing all or substantially all of
their asets in shares issued by the Registrant, on Form N-1A under the
Investment Company Act of 1940, as amended, and, in the case of a fund
investing all or substantially all of its assets in shares issued
by the Registrant, the Securities Act of 1933, covering the sale
of shares of beneficial interest by the Registrant or such other
fund under prospectuses becoming effective after the date hereof,
including any amendment or amendments filed for the purpose of
updating the prospectus/or SAI, registering securities to be
issued in transactions permitted under the federal securities
laws or increasing or decreasing the amount of securities for
which registration is being sought, with all exhibits and any and
all documents required to be filed with respect thereto with any
regulatory authority. Each of the undersigned grants to each of
said attorneys full authority to do every act necessary to be
done in order to effectuate the same as fully, to all intents and
purposes as he could do if personally present, thereby ratifying
all that said attorneys-in-fact and agents may lawfully do or
cause to be done by virtue hereof.
The undersigned officers and trustees hereby execute this
Power of Attorney as of this 17th day of January 1995.
/s/ Charles E. Johnson /s/ Charles B. Johnson
Charles E. Johnson, Charles B. Johnson, Trustee
/s/ Rupert H. Johnson, Jr. /s/ Frank H. Abbott, III
Rupert H. Johnson, Jr., Frank H. Abbott, III, Trustee
Trustee
/s/ Harris J. Ashton /s/ S. Joseph Fortunato
Harris J. Ashto, Trustee S. Joseph Fortunato, Trustee
/s/ David W. Garbellano /s/Frank W. T. LaHaye
David W. Garbellano, Trustee Frank W. T. LaHaye, Trustee
/s/ Diomedes Loo-Tam /s/ Martin L. Flanagan
Diomedes Loo-Tam, Martin L. Flanagan, Pribncipal
Principal Accounting Officer Financial Officer
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, certify that I am Secretary of FRANKLIN
TEMPLETON MONEY FUND TRUST (the "Trust").
As 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, on January 17, 1995.
RESOLVED, that a Power of Attorney, substantially
in the form of the Power of Attorney presented to
this Board, appointing Mark H. Plafker, Harmon E.
Burns, Deborah R. Gatzek, Karen L. Skidmore and
Larry L. Greene as attorneys-in-fact for the
purpose of filing documents with the Securities
and Exchange Commission, be executed by a majority
of the Trustees and designated officers.
I declare under penalty of perjury that the matters set forth in
this certificate are true and correct of my own knowledge.
/s/ Deborah R. Gatzek
Dated: January 17, 1995 Deborah R. Gatzek
Secretary
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, certify that I am Secretary of The Money
Market Portfolios (the "Trust").
As 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, on January 17, 1995.
RESOLVED, that a Power of Attorney, substantially in
the form of the Power of Attorney presented to this
Board, appointing Harmon E. Burns, Deborah R. Gatzek,
Karen L. Skidmore, Larry L. Greene and Mark H. Plafker
as attorneys-in-fact for the purpose of filing
documents with the Securities and Exchange Commission,
be executed by each 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.
/s/Deborah R. Gatzek
Dated: January 17, 1995 Deborah R. Gatzek
Secretary
[ARTICLE] 6
[LEGEND]
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FRANKLIN TEMPLETON MONEY FUND TRUST JUNE 30, 1995 ANNUAL REPORT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
[/LEGEND]
<TABLE>
<S> <C>
[PERIOD-TYPE] 2-MOS
[FISCAL-YEAR-END] JUN-30-1995
[PERIOD-START] APR-13-1995
[PERIOD-END] JUN-30-1995
[INVESTMENTS-AT-COST] 151,237
[INVESTMENTS-AT-VALUE] 151,237
[RECEIVABLES] 0
[ASSETS-OTHER] 4,641
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 156,000
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 4,122
[TOTAL-LIABILITIES] 4,122
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 151,756
[SHARES-COMMON-STOCK] 151,756
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 151,756
[DIVIDEND-INCOME] 1,153
[INTEREST-INCOME] 0
[OTHER-INCOME] 0
[EXPENSES-NET] (318)
[NET-INVESTMENT-INCOME] 835
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 835
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (835)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 150,921
[NUMBER-OF-SHARES-REDEEMED] 0
[SHARES-REINVESTED] 835
[NET-CHANGE-IN-ASSETS] 151,756
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] (86)
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] (318)
[AVERAGE-NET-ASSETS] 113,287
[PER-SHARE-NAV-BEGIN] 0.000
[PER-SHARE-NII] 0.007
[PER-SHARE-GAIN-APPREC] 0.000
[PER-SHARE-DIVIDEND] (0.007)
[PER-SHARE-DISTRIBUTIONS] 0.000
[RETURNS-OF-CAPITAL] 0.000
[PER-SHARE-NAV-END] 1.000
[EXPENSE-RATIO] 1.830
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.000
</TABLE>
