EXHIBIT 10.3
FORM OF CLASS R DISTRIBUTION
PLAN
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I.
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Investment Company:
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[NAME OF CORPORATION OR
TRUST]
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II.
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Fund:
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[NAME OF AFFECTED FUND OR
SERIES - -
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MAY BE SAME AS
ABOVE]
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III.
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Maximum Per Annum Rule 12b-1 Fees for Class R
Shares
(as a percentage of average daily
net assets of the class): [0.50%]
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Preamble to Class R Distribution
Plan
The following Distribution Plan (the
“Plan”) has been adopted pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended (the
“Act”) by the Investment Company named above
(“Investment Company”) for the Class R shares (the
“Class”) of each Fund named above (“Fund”),
which Plan shall take effect as of the date shares of the Class are
first offered (the “Effective Date of the Plan”). The
Plan has been approved by a majority of the Board of Trustees of
the Investment Company (the “Board”), including a
majority of the Board members who are not interested persons of the
Investment Company and who have no direct, or indirect financial
interest in the operation of the Plan (the “independent Board
members”), cast in person at a meeting called for the purpose
of voting on such Plan.
In reviewing the Plan, the Board
considered the schedule and nature of payments and terms of the
Investment Management Agreement between the Investment Company and
[NAME OF ADVISER] (“Advisers”) and the terms of the
Distribution Agreement between the Investment Company and
Franklin/Templeton Distributors, Inc. (“Distributors”).
The Board concluded that the compensation of Advisers, under the
Investment Management Agreement, and of Distributors, under the
Distribution 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. The Fund shall pay to
Distributors as compensation for its services or for payment by
Distributors to dealers or others, or the Fund shall pay directly
to others, a quarterly fee not to exceed the above-stated maximum
fee per annum of the Class’ average daily net assets
represented by shares of the Class, as may be determined by the
Investment Company’s Board from time to time, as distribution
and/or service fees pursuant to distribution and servicing
agreements which have been approved from time to time by the Board,
including the independent Board members.
2. (a) The monies paid to
Distributors pursuant to Paragraph 1 above may be treated as
compensation for Distributors’ distribution-related services
including compensation for amounts advanced to securities dealers
or their firms or others (including retirement plan
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Class R 12b-1
Distribution Plan
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1
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recordkeepers) selling shares of the Class who
have executed an agreement with the Investment Company,
Distributors or its affiliates, which form of agreement has been
approved from time to time by the Board, including the independent
Board members, with respect to the sale of Class shares. In
addition, Distributors may use such monies paid to it pursuant to
Paragraph 1 above to assist in the distribution and promotion of
shares of the Class. Such payments made to Distributors under the
Plan may be used for, among other things, the printing of
prospectuses and reports used for sales purposes, expenses of
preparing and distributing sales literature and related expenses,
advertisements, and other distribution-related expenses, including
a pro-rated portion of Distributors’ overhead expenses
attributable to the distribution of Class shares, as well as for
additional distribution fees paid to securities dealers or their
firms or others (including retirement plan recordkeepers) who have
executed agreements
