SUBCONTRACT FOR FUND ADMINISTRATIVE SERVICES
This Subcontract for Fund Administrative Services
("Subcontract") is made as of January 1, 2001 between FRANKLIN
ADVISORY SERVICES, LLC, a Delaware limited liability company,
hereinafter called the "Investment Manager," and FRANKLIN
XXXXXXXXX SERVICES, LLC (the "Administrator").
In consideration of the mutual agreements herein made,
the Administrator and the Investment Manager understand and agree
as follows:
I. Prime Contract.
This Subcontract is made in order to assist the Investment
Manager in fulfilling certain of the Investment Manager's
obligations under each investment management and investment
advisory agreement ("Agreement") between the Investment Manager
and each Investment Company listed on Exhibit A, ("Investment
Company") for itself or on behalf of each of its series listed on
Exhibit A (each, a "Fund"). This Subcontract is subject to the
terms of each Agreement, which is incorporated herein by
reference.
II. Subcontractual Provisions.
(1) The Administrator agrees, during the life of this
Agreement, to provide the following services to each Fund:
(a) providing office space, telephone, office
equipment and supplies for the Fund;
(b) providing trading desk facilities for the Fund,
unless these facilities are provided by the Fund's investment
adviser;
(c) authorizing expenditures and approving bills for
payment on behalf of the Fund;
(d) supervising preparation of periodic reports to
shareholders, notices of dividends, capital gains distributions
and tax credits; and attending to routine correspondence and
other communications with individual shareholders when asked to
do so by the Fund's shareholder servicing agent or other agents
of the Fund;
(e) coordinating the daily pricing of the Fund's
investment portfolio, including collecting quotations from
pricing services engaged by the Fund; providing fund accounting
services, including preparing and supervising publication of
daily net asset value quotations, periodic earnings reports and
other financial data; and coordinating trade settlements;
(f) monitoring relationships with organizations
serving the Fund, including custodians, transfer agents, public
accounting firms, law firms, printers and other third party
service providers;
(g) supervising compliance by the Fund with
recordkeeping requirements under the federal securities laws,
including the 1940 Act and the rules and regulations thereunder,
and under other applicable state and federal laws; and
maintaining books and records for the Fund (other than those
maintained by the custodian and transfer agent);
(h) preparing and filing of tax reports including the
Fund's income tax returns, and monitoring the Fund's compliance
with subchapter M of the Internal Revenue Code, as amended, and
other applicable tax laws and regulations;
(i) monitoring the Fund's compliance with: 1940 Act
and other federal securities laws, and rules and regulations
thereunder; state and foreign laws and regulations applicable to
the operation of investment companies; the Fund's investment
objectives, policies and restrictions; and the Code of Ethics and
other policies adopted by the Investment Company's Board of
Trustees or Directors ("Board") or by the Fund's investment
adviser and applicable to the Fund;
(j) providing executive, clerical and secretarial
personnel needed to carry out the above responsibilities;
(k) preparing and filing regulatory reports, including
without limitation Forms N-1A and NSAR, proxy statements,
information statements and U.S. and foreign ownership reports; and
(l) providing support services incidental to carrying
out these duties.
Nothing in this Agreement shall obligate the Investment Company
or any Fund to pay any compensation to the officers of the
Investment Company. Nothing in this Agreement shall obligate the
Administrator to pay for the services of third parties, including
attorneys, auditors, printers, pricing services or others,
engaged directly by the Fund to perform services on behalf of the
Fund.
(2) The Investment Manager agrees to pay to the
Administrator as compensation for such services a monthly fee
equal on an annual basis to 0.15% of the first $200 million of
the average daily net assets of each Fund during the month
preceding each payment, reduced as follows: on such net assets in
excess of $200 million up to $700 million, a monthly fee equal on
an annual basis to 0.135%; on such net assets in excess of $700
million up to $1.2 billion, a monthly fee equal on an annual
basis to 0.1%; and on such net assets in excess of $1.2 billion,
a monthly fee equal on an annual basis to 0.075%.
From time to time, the Administrator may waive all or a portion
of its fees provided for hereunder and such waiver shall be
treated as a reduction in the purchase price of its services.
The Administrator shall be contractually bound hereunder by the
terms of any publicly announced waiver of its fee, or any
limitation of each affected Fund's expenses, as if such waiver or
limitation were fully set forth herein.
(3) This Subcontract shall become effective on the date
written above and shall continue in effect as to each Investment
Company and each Fund so long as (1) the Agreement applicable to
the Investment Company or Fund is in effect and (2) this
Subcontract is not terminated. This Subcontract will terminate
as to any Investment Company or Fund immediately upon the
termination of the Agreement applicable to the Investment Company
or Fund, and may in addition be terminated by either party at any
time, without the payment of any penalty, on sixty (60) days'
written notice to the other party.
(4) In the absence of willful misfeasance, bad faith or
gross negligence on the part of the Administrator, or of reckless
disregard of its duties and obligations hereunder, the
Administrator shall not be subject to liability for any act or
omission in the course of, or connected with, rendering services
hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Subcontract to be executed by their duly authorized officers.
FRANKLIN ADVISORY SERVICES, LLC
By: /s/Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
Title: President
FRANKLIN XXXXXXXXX SERVICES, LLC
By: /s/Xxxxxx X. Xxxxxxx
--------------------
Xxxxxx X. Xxxxxxx
Title: Senior Vice President
SUBCONTRACT FOR FUND ADMINISTRATIVE SERVICES
BETWEEN
FRANKLIN ADVISORY SERVICES, LLC
AND
FRANKLIN XXXXXXXXX SERVICES, LLC
EXHIBIT A
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INVESTMENT COMPANY SERIES ---(IF APPLICABLE)
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Franklin Managed Trust Franklin Rising Dividends Fund
Franklin Value Investors Trust Franklin Balance Sheet Investment Fund
Franklin MicroCap Value Fund
Franklin Value Fund
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