Amendment Effective February 1, 2018

To the By-Laws of

Franklin California Tax-Free Income Fund

(the “Trust”)

 

WHEREAS, Article VIII, Section 2 of the By-Laws provides that the By-Laws may be amended by the Board of Trustees; and

 

WHEREAS, by resolutions adopted October 24, 2017 at a meeting of the Board of Trustees of the Trust, the Board of Trustees unanimously authorized the By-Laws to be amended as set forth below.

 

NOW THEREFORE, the By-Laws are hereby amended as follows:

 

1.         ARTICLE VII, Sections 3, 4  and 6 are replaced in their entirety with the following:

 

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Section 3.        CERTIFICATES FOR SHARES .  No certificate or certificates for Shares shall be issued to Shareholders and no Shareholder shall have the right to demand or require that a certificate for Shares be issued to it.  The Trust shall adopt and use a system of issuance, recordation and transfer of its shares by electronic or other means. 

Section 4.        LOST CERTIFICATES .  No new certificate for Shares shall be issued to replace an old certificate that is surrendered to the Trust for cancellation.  In case any Share certificate or certificate for any other security is lost, stolen, or destroyed, such certificate shall be cancelled and the ownership of an uncertificated Share shall be recorded upon the books of the Trust , on such terms and conditions as the Board may require, including a provision for indemnification of the Board and the Trust secured by a bond or other adequate security sufficient to protect the Trust and the Board against any claim that may be made against either, including any expense or liability on account of the alleged loss, theft, or destruction of the certificate.

*  *  *  *  *  *

 

Section 6.        TRANSFERS OF SHARES .  Shares are transferable, if authorized by the Declaration of Trust, only on the record books of the Trust by the Person in whose name such Shares are registered, or by his or her duly authorized attorney-in-fact or representative.  Upon receipt of proper transfer instructions from the registered owner of certificated Shares, and upon the surrender for cancellation of such certificates representing the number of Shares to be transferred with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Trust or its agents may reasonably require, the Trust shall cancel the old certificate and record the transaction and ownership of uncertificated Shares upon the books of the Trust.  Upon receipt of proper transfer instructions from the registered owner of uncertificated Shares, such uncertificated Shares shall be transferred on the record books to the Person entitled thereto.  The Trust, its transfer agent or other duly authorized agents may refuse any requested transfer of Shares, or request additional evidence of authority to safeguard the assets or interests of the Trust or of its Shareholders, in their sole discretion.   In all cases of transfer by an attorney-in-fact, the original power of attorney, or an official copy thereof duly certified, shall be deposited and remain with the Trust, its transfer agent or other duly authorized agent.  In case of transfers by executors, administrators, guardians or other legal representatives, duly authenticated evidence of their authority shall be presented to the Trust, its transfer agent or other duly authorized agent, and may be required to be deposited and remain with the Trust, its transfer agent or other duly authorized agent. 

 

 

 

Adopted and approved as of October 24, 2017 by the Board of Trustees.

 

 

_/s/Steven J. Gray _________

(Signature)

 

Steven J. Gray                        

(Name)

 

Assistant Secretary                

(Title)

FRANKLIN TEMPLETON INVESTOR SERVICES, LLC

 

AMENDED AND RESTATED

TRANSFER AGENT AND SHAREHOLDER SERVICES AGREEMENT

 

 

Investment Company:           FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

Date:                                      November 1 , 2017

 

 

The parties to this Agreement are the Investment Company named above ("Investment Company"), an open-end investment company registered as such under the Investment Company Act of 1940 ("1940 Act"), on behalf of each class of shares of each series, if any, of the Investment Company which now exists or may hereafter be created (individually, a "Fund" and collectively, the "Funds") and FRANKLIN TEMPLETON INVESTOR SERVICES, LLC ("FTIS"), a registered transfer agent. This Agreement supersedes prior Shareholder Services Agreements between the parties, as stated below in section 16(d).

WITNESSETH :

That, for and in consideration of the mutual promises hereinafter set forth, the Investment Company and FTIS agree as follows:

             1.         Definitions . Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

                        (a)        "Articles" shall mean the Articles of Incorporation or Agreement and Declaration of Trust, as appropriate, of the Investment Company as the same may be amended from time to time;

                        (b)        "Authorized Person" shall be deemed to include any person, whether or not such person is an officer or employee of the Investment Company, duly authorized to give Oral Instructions or Written Instructions on behalf of the Investment Company, as indicated in a resolution of the Investment Company's Board which was valid at the time of this Agreement, or as indicated in a certificate furnished to FTIS pursuant to Section 4(c) hereof;

                        (c)        "Board" shall mean the Investment Company's Board of Directors, Board of Trustees or Managing General Partners, as appropriate;

                        (d)        "Custodian" shall mean a custodian and any sub-custodian of securities and other property which the Investment Company may from time to time deposit, or cause to be deposited or held under the name or account of such custodian pursuant to the Custody Agreement;

                        (e)        "Oral Instructions" shall mean instructions (including without limitation instructions received by telephone, facsimile, electronic mail or other electronic mail), other than written instructions, actually received by FTIS from a person reasonably believed by FTIS to be an Authorized Person;

 

                          (f)        "Shares" shall mean shares of each class of capital stock, beneficial interest or limited partnership interest, as appropriate, of each series of the Investment Company; and

                         (g)        "Written Instructions" shall mean a written communication signed by a person reasonably believed by FTIS to be an Authorized Person and actually received by FTIS.

             2.         Appointment of FTIS . The Investment Company hereby appoints FTIS as transfer agent for Shares of the Investment Company, as service agent in connection with dividend and distribution functions, and as shareholder servicing agent for the Investment Company, and FTIS accepts such appointment and agrees to perform the following duties.

             3.         Payments to FTIS .

                         (a)        Compensation for Servicing : The Investment Company, on behalf of each Fund, agrees to pay FTIS for its services an annual base service fee and certain transaction charges, to be calculated daily and paid monthly, as follows: (i) for all classes of shares, other than Class R6 shares, if any, (A) a base service fee, based on the value of the Fund's average daily net assets for such classes, at the annual rate of 0.02% and (B) a charge of $1.50 for each transaction recorded on the shareholder accounting system, including, but not limited to, the transactions set forth in Schedule A hereto; and (ii) for Class R6 shares, if any, (A) a base service fee, based on the value of the Fund's average daily net assets for such Class R6 shares, at the annual rate of 0.02% and (B) a charge of $1.50 for each transaction recorded on the shareholder accounting system, including, but not limited to, the transactions set forth in Schedule A hereto. FTIS will bill the Investment Company as soon as practicable after the end of each calendar month for such compensation. The Investment Company will promptly pay to FTIS the amount of such billing.

                          (b)        Reimbursement of FTIS

                          (i) Out-of-Pocket Expenses : With respect to all classes of shares other than Class R6 shares, if any, the Investment Company, on behalf of each Fund, will reimburse FTIS for out-of-pocket disbursements paid to third parties by FTIS on behalf of such classes in the performance of its obligations hereunder including, but not limited to, the items specified in the written schedule of out-of-pocket expenses paid to third parties annexed hereto as Schedule B and incorporated herein. With respect to the Investment Company's Class R6 shares, if any, the Investment Company will reimburse FTIS out of such class's assets, for out-of-pocket disbursements paid to third parties by FTIS on behalf of such class in the performance of its obligations hereunder including, but not limited to, the items specified in the written schedule of out-of-pocket expenses paid to third parties annexed hereto as Schedule B and incorporated herein.  Unspecified out-of-pocket expenses shall be limited to those out-of-pocket expenses reasonably incurred by FTIS in the performance of its obligations hereunder, subject to approval by the Board.  Reimbursement by the Investment Company for out-of-pocket disbursements paid by FTIS in any month shall be made as soon as practicable after the receipt of an itemized bill from FTIS.

                         (ii) Beneficial Owner Servicing Fees to Third Parties : Subject to the limitation set forth in paragraph (c) below, the Investment Company, on behalf of each Fund, will reimburse FTIS for servicing fee payments ("Beneficial Owner Servicing Fees") made by FTIS on the Investment Company's behalf to:

 

 

                                   (A)   institutions that purchase and hold the Fund's shares (other than Class R6 shares, if any) in the institution's name, or in the name of an affiliate, nominee or other designated entity, through a master fund level account ("Omnibus Account") on behalf of numerous "Beneficial Owners ," or

                                   (B)  in the case of shares issued to a 529 Plan Portfolio, institutions that hold units of the 529 Plan Portfolio in the institution's name on behalf of numerous 529 Plan accounts for whom the institution provides Individual 529 Investor Servicing.

Each account maintained in the name of a financial intermediary by a Fund under (i) or by a 529 Plan Portfolio under (ii) is referred to as an "Omnibus Account."  For purposes of this Agreement, (i) "Beneficial Owner" means each person with an indirect interest in fund shares issued and recorded in an Omnibus Account; and (ii) a person will be deemed to have an "indirect interest" in a Fund's shares if the value of the person's interest changes directly in relation to changes in the net asset value of the Fund's shares.

                        (iii) Networked Account Servicing Fees to Third Parties: Subject to the limitation set forth in paragraph (c) below, the Investment Company, on behalf of each Fund, will reimburse FTIS for servicing fee payments ("Networked Account Servicing Fees") made by FTIS on the Investment Company's behalf to an institution for each Fund account (a "Networked Account"), other than accounts holding R6 shares, maintained by FTIS in which servicing is shared with that institution by the exchange of account data through the National Securities Clearing Corporation (NSCC) networking system.

                        (c)        Negotiation of Beneficial Owner Servicing Fees and Networked Account Servicing Fees . The Investment Company authorizes FTIS to negotiate Beneficial Owner Servicing Fees and Networked Account Servicing Fees (other than with respect to Class R6 shares, if any) on the Investment Company's behalf and shall reimburse FTIS for those fees negotiated as set forth above.  For all classes of shares of a Fund, other than Class R6 shares, FTIS will in no event negotiate and agree, on behalf of any Fund, after the date of this Agreement,  nor will the Investment Company, on behalf of a Fund, reimburse FTIS for, Beneficial Owner Servicing Fees and Networked Account Servicing Fees for each fiscal year of the Fund that exceed the amounts set forth in Schedule C hereto, unless otherwise agreed to in advance by the Investment Company’s Board of Trustees/Directors.

            4.         Documents . In connection with the appointment of FTIS, the Investment Company shall, within a reasonable period of time for FTIS to prepare to perform its duties hereunder, deliver to FTIS the following documents:

                        (a)        If applicable, specimens of the certificates for the Shares;

                        (b)        All account application forms and other documents relating to Shareholder accounts or to any plan, program or service offered by the Investment Company;

                        (c)        A certificate identifying the Authorized Persons and specimen signatures of Authorized Persons who will sign Written Instructions; and

                        (d)       All documents and papers necessary under the laws of the Investment Company's state of domicile, under the Investment Company's Articles, and as may be required for the due performance of FTIS's duties under this Agreement or for the due performance of additional duties as may from time to time be agreed upon between the Investment Company and FTIS.

 

 

             5.         Duties of FTIS . FTIS shall be responsible for administering and/or performing transfer agent functions; for acting as service agent in connection with dividend and distribution functions; and for performing shareholder account and administrative agent functions in connection with the issuance, transfer, exchange, redemption or repurchase (including coordination with the Custodian) of Shares. FTIS shall be bound to follow its usual and customary operating standards and procedures, as they may be amended from time to time, and each current prospectus and Statement of Additional Information (hereafter, collectively, the "prospectus") of the Investment Company. Without limiting the generality of the foregoing, FTIS agrees to perform the specific duties listed on Schedule D.

 

The duties to be performed by FTIS shall not include the engagement, supervision or compensation of any service providers, or any registrations or fees of any kind, which are required by the laws of any foreign country in which the Fund may choose to invest portfolio assets or sell Shares.

            6.         (a)        Distributions Payable in Shares . In the event that the Board of the Investment Company shall declare a distribution payable in Shares, the Investment Company shall deliver to FTIS written notice of such declaration signed on behalf of the Investment Company by an officer thereof, upon which FTIS shall be entitled to rely for all purposes, certifying (i) the number of Shares involved, and (ii) that all appropriate action has been taken to effect such distribution.

                        (b)        Distributions Payable in Cash; Redemption Payments . In the event that the Board of the Investment Company shall declare a distribution payable in cash, the Investment Company shall deliver to FTIS written notice of such declaration signed on behalf of the Investment Company by an officer thereof, upon which FTIS shall be entitled to rely for all purposes, certifying (i) the amount per share to be distributed, (ii) the record and payment dates for the distribution, and (iii) that all appropriate action has been taken to effect such distribution. Once the amount and validity of any dividend or redemption payments to shareholders have been determined, the Investment Company shall transfer the payment amounts from the Investment Company's accounts to an account or accounts held in the name of FTIS, as paying agent for the shareholders, in accordance with any applicable laws or regulations, and FTIS shall promptly cause payments to be made to the shareholders.

            7.         Recordkeeping and Other Information . FTIS shall create, maintain and preserve all necessary records in accordance with all applicable laws, rules and regulations. Such records are the property of the Investment Company, and FTIS will promptly surrender them to the Investment Company upon request or upon termination of this Agreement. In the event of such a request or termination, FTIS shall be entitled to make and retain copies of all records surrendered, and to be reimbursed by the Investment Company for reasonable expenses actually incurred in making such copies. FTIS will take reasonable actions to maintain the confidentiality of the Investment Company's records, which may nevertheless be disclosed to the extent required by law or by this Agreement, or to the extent permitted by the Investment Company.

            8.         Other Duties . In addition, FTIS shall perform such other duties and functions,

and shall be paid such amounts therefor, as may from time to time be agreed upon in writing between the Investment Company and FTIS. Such other duties and functions shall be reflected in a written amendment to Schedule C, and the compensation for such other duties and functions shall be reflected in a written amendment to Schedule A.

 

            9.         Reliance by FTIS; Instructions .

                        (a)        FTIS will be protected in acting upon Written or Oral Instructions reasonably believed to have been executed or orally communicated by an Authorized Person and will not be held to have any notice of any change of authority of any person until receipt of a Written Instruction thereof from an officer of the Investment Company. FTIS will also be protected in processing Share certificates which it reasonably believes to bear the proper manual or facsimile signatures of the officers of the Investment Company and the proper countersignature of FTIS.

                        (b)        At any time FTIS may apply to any Authorized Person of the Investment Company for Written Instructions, or may seek advice at the Investment Company's expense from legal counsel for the Investment Company, with respect to any matter arising in connection with this Agreement. FTIS shall not be liable for any action taken or not taken or suffered by it in good faith in accordance with such Written Instructions or in accordance with the opinion of counsel for the Investment Company. Written Instructions requested by FTIS will be provided by the Investment Company within a reasonable period of time.

            10.       Acts of God, etc . FTIS will not be liable or responsible for delays or errors by reason of circumstances beyond its control, including acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdown beyond its control, earthquake, flood or catastrophe, acts of God, insurrection, war, riots or failure beyond its control of transportation, communication or power supply.

            11.       Duty of Care and Indemnification . FTIS will indemnify the Investment Company against and hold it harmless from any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action or suit resulting from willful misfeasance, bad faith or gross negligence on the part of FTIS, and arising out of, or in connection with, its duties hereunder. However, FTIS shall have no liability for or obligation to indemnify the Investment Company against any losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) incurred by the Investment Company as a result of: (i) any action taken in accordance with Written or Oral Instructions; (ii) any action taken in accordance with written or oral advice reasonably believed by FTIS to have been given by counsel for the Investment Company; (iii) any action taken as a result of any error or omission in any record (including but not limited to magnetic tapes, computer printouts, hard copies and microfilm copies) delivered, or caused to be delivered, by the Investment Company to FTIS in connection with this Agreement; or (iv) any action taken in accordance with shareholder instructions which meet the standards described in the Investment Company's current prospectus, including without limitation oral instructions which meet the standards described in the section of the prospectus dealing with telephone transactions, so long as FTIS believes such instructions to be genuine. The obligations of the parties hereto under this Section shall survive the termination of this Agreement.

             12.      Term and Termination .

                        (a)        This Agreement shall be effective as of the date first written above, shall continue through June 30, 2018, and thereafter shall continue automatically for successive annual periods ending on June 30 of each year, provided such continuance is specifically approved at least annually by the Investment Company's Board.

 

                        (b)        Either party hereto may terminate this Agreement by giving to the other party a notice in writing specifying the date of such termination, which shall be not less than 60 days after the date of receipt of such notice. Upon such termination, FTIS will (i) deliver to such successor a certified list of shareholders of the Investment Company (with names and addresses) and an historical record of the account of each Shareholder and the status thereof; (ii) surrender all other relevant records in accordance with section 7 of this Agreement, above, and (iii) cooperate in the transfer of such duties and responsibilities, including provisions for assistance from FTIS's personnel in the establishment of books, records and other data by such successor or successors. FTIS shall be entitled to charge the Investment Company a reasonable fee for services rendered and expenses actually incurred in performing its duties under this paragraph.

             13.       Amendment . This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties.

             14.       Subcontracting . The Investment Company agrees that FTIS may, in its discretion, subcontract for all or any portion of the services described under this Agreement or the Schedules hereto; provided that the appointment of any such agent shall not relieve FTIS of its responsibilities hereunder.

             15.       Data Processing System, Program and Information

                        (a)        The Investment Company shall not, solely by virtue of this Agreement, obtain any rights, title and interest in and to the computer systems and programs, including all related documentation, employed by FTIS in connection with rendering services hereunder; provided however, that the records prepared, maintained and preserved by FTIS pursuant to this Agreement shall be the property of the Investment Company.

                        (b)       Any modifications, changes and improvements in the automatic data processing system (the "System") or in the manner in which the services are rendered shall be made or provided as follows, and provided further that modifications for which the Investment Company will be required to bear any expenses shall be made only as set forth herein.

 

                                    (i)         FTIS shall, at no expense to the Investment Company, make any revisions in the System necessary to (1) perform the services which it has contracted to perform, (2) create and maintain the records which it has contracted to create and maintain hereunder or (3) enhance or update the System to the extent and in the manner necessary to maintain said System. However, if specific reprogramming, coding or other changes are necessary in the records of the Investment Company or in its shareholder accounts in order to complete a system revision, the costs for completing work specific to the Investment Company shall be subject to a subsequent agreement between the parties. The System is at all times to be competitive with that which is generally available to the mutual fund industry from transfer agents.

                                    (ii)        To the extent that the System is modified to comply with changes in the accounting or record-keeping rules applicable to mutual funds, the Investment Company agrees to pay a reasonable pro rata portion of the costs of the design, revision and programming of the System; provided, however, that if the Investment Company's pro rata portion exceeds $1,000 per 12 month period, the Investment Company's obligation to pay a reasonable pro rata portion shall be conditioned upon FTIS's having obtained prior Written Instructions from the Investment Company for any charge. The determination that such modifications or revisions are necessary, and that the System as so modified produces records which comply with the record-keeping requirements, as amended, shall be by mutual agreement; provided, however, that upon written request by the Investment Company, FTIS will provide the Investment Company with a written opinion of counsel to FTIS to the effect that the modifications were required by changes in the applicable laws or regulations and that the System, as modified, complies with the laws or regulations as amended. Upon completion of the changes FTIS shall render a statement to the Investment Company, in reasonably detailed form, identifying the nature of the revisions, the services, expenses and costs, and the basis for determining the Investment Company's reasonable pro rata portion. Any determination by FTIS of the Investment Company's pro rata portion based upon the ratio of the number of shareholder accounts of the Investment Company to the total number of shareholder accounts of all clients for which FTIS provides comparable services shall conclusively be presumed to be reasonable unless the nature of the change to the System relates to certain types of shareholder accounts, in which case the pro rata portion will be determined on a mutually agreeable basis.

 

                                    (iii)       If system improvements are requested by the Investment Company and are not otherwise required under this subsection 15(b), FTIS shall be entitled to request a reasonable fee before agreeing to make the improvements and shall be entitled to refuse to make any requested improvements which FTIS reasonably believes to be incompatible with its systems providing services to other funds.

             16.       Miscellaneous .

                        (a)        Any notice or other instrument authorized or required by this Agreement to be given in writing to the Investment Company or FTIS shall be sufficiently given if addressed to that party and received by it at its office at the place described in the Investment Company's most recent registration statement or at such other place as it may from time to time designate in writing.

 

                         (b)        This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by either party without the written consent of the other party.

 

                         (c)        This Agreement shall be construed in accordance with the laws of the State of California applicable to contracts between California residents which are to be performed primarily within California.

 

                         (d)       This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but such counterparts shall, together, constitute only one instrument. This Agreement supersedes all prior Shareholder Services Agreements between the parties, and supersedes all prior agreements between the parties relating to the subject matters of this Agreement to the extent they are inconsistent with this Agreement.

 

                         (e)        The captions of this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

 

 

 

                         (f)        It is understood and expressly stipulated that neither the holders of Shares of the Investment Company nor any member of the Board, officer, agent or employee of the Investment Company shall be personally liable hereunder, nor shall any resort be had to other private property for the satisfaction of any claim or obligation hereunder, but the Investment Company only shall be liable.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective corporate officers thereunder duly authorized as of the day and year first above written.

 

 

 

By: _/s/Steven J. Gray __________                         By: _/s/Basil K. Fox, Jr.________

Name: Steven J. Gray                                                 Name: Basil K. Fox, Jr.

Title:   Vice President and Assistant Secretary           Title:   President

 

 

SCHEDULE A

 

TRANSACTION CHARGES:

 

A charge of $1.50 will be charged for each transaction recorded on the shareholder accounting system, including, but not limited to, the following transactions:

 

·          Share purchases;

·          Share redemptions;

·          Fund liquidations;

·          Dividends;

·          Wire order purchases and redemptions (placement and confirmations);

·          Exchanges;

·          Account maintenance such as address changes;

·          Transfers; and

·          Account opening.

 

For transactions within the 529 portfolios, FTIS will allocate the transaction fee on a pro-rata basis to the underlying Funds based on the 529 portfolio's holdings in such Funds.

 

 

 

 

SCHEDULE B

OUT-OF-POCKET EXPENSES

In addition to Beneficial Owner Servicing Fees and Networked Account Servicing Fees paid in accordance with Section 3 of this Agreement, the Investment Company shall reimburse FTIS monthly for the following out-of-pocket expenses paid to third parties in connection with the servicing of Accounts as required under the terms of this Agreement:

o                      Expenses in connection with the preparation and physical or electronic delivery of shareholder communications required under the terms of this Agreement, such as prospectuses, shareholder reports, tax information, proxy statements, and shareholder statements. Such amounts paid to third parties include, but are not limited to, costs of printing, mailing, stationary, forms, postage, and electronic delivery. In the case of out-of-pocket expenses incurred by FTIS or an affiliate associated with the printing of new account confirming prospectuses (which prospectuses the Investment Company is obligated to deliver under its Underwriting Agreement and that FTIS agrees to deliver, on behalf of the Fund, in connection with the confirmation process), FTIS and the Investment Company each will pay one-half (50%) of the costs of printing the new account confirming prospectus (including, but not limited to, print on demand prospectuses used for that purpose);

o                      telephone costs associated with servicing shareholders in accordance with this agreement;

o                      ACH, Federal Reserve and bank charges for check clearance, electronic funds transfers and wire transfers;

o                      Data Storage: Retention of electronic and paper account records; and other costs associated with data storage of account records and transactions records (e.g., magnetic tape, microfilm and microfiche, and digital images);

o                      insurance against loss of Share certificates when in transit;

o                      terminals, transmitting lines and any expenses incurred in connection with such terminals and lines established and/or maintained by FTIS to perform its obligations under this agreement;

o                      Amounts paid to independent accounting firms to perform independent audits of FTIS and the issuance of reports such as a SOC-1;

o                      Amounts paid in connection with use of national data bases to comply with requirements for locating lost shareholders;

o                      Proxy solicitation and tabulation expenses;

o                      NSCC expenses. Costs associated with NSCC system use, including networking services, hardware and circuits to send customer cost basis information, commission and 12b-1 fees to brokerage firms

o                      all other miscellaneous expenses reasonably incurred by FTIS in the performance of its obligations under the Agreement.

 

 

This Schedule B may be amended by FTIS upon not less than 30 days' written notice to the Investment Company, subject to approval by the Board.

 

SCHEDULE C

(as of November 1, 2017)

 

Beneficial Owner Servicing Fees and Networked Account Servicing Fees for each fiscal year of the Fund may not exceed (i), for each contract with an institution based on Fund assets, 15 basis points (0.15%) of such Fund's net assets attributable to the appropriate class of shares for which such institution provides services as contemplated by Section 3(b)(ii) and (iii) of this Agreement (“Services”) or (ii) for each contract with an institution based upon a flat per account fee, $16 per account for accounts that are not subject to a contingent deferred sales charge for which the institution provides Services and $19 per account for accounts that are subject to a contingent deferred sales charge for which the institution provides Services.

 

This Schedule C may be amended only upon agreement in advance of FTIS, the Investment Company and its Board of Trustees/Directors.

 

 

 

 

SCHEDULE D

As the registered transfer agent and shareholder servicing agent for the Funds, FTIS is responsible for providing overall support for the customers of each Fund, including shareholders, financial advisors, distribution intermediaries, and other authorized representatives. FTIS controls the flow of the customer interactions, processes transactions, and handles inquiries while ensuring mitigation of operational, financial, regulatory, and reputational risk. FTIS is responsible for affecting activity in accordance with fund policies, (e.g. Rule 12b-1 payments, fund openings, reorganizations, closings), as well as required trade confirmations, statements, and tax reporting. FTIS maintains relationships with the back offices of intermediaries and ensures appropriate payments to intermediaries and other service vendors in accordance with this Agreement.

Specific functions FTIS performs in accordance with securities laws, IRS laws or other regulations include:

AS TRANSFER AGENT FOR THE INVESTMENT COMPANY, FTIS WILL:

o                     Upon receipt of proper authorization, record the transfer of Fund shares ("Shares") in its transfer records in the name(s) of the appropriate legal shareholder(s) of record;

o                     Upon receipt of proper authorization, redeem Shares, debit shareholder accounts and provide for payment to Shareholders; and

o                     If the Fund issues certificated Shares, and so long as applicable, upon receipt of proper authorization, countersign as transfer agent and deliver certificates upon issuance, countersign certificates to reflect ownership transfers, and cancel certificates when redeemed.

AS SHAREHOLDER SERVICE AGENT FOR THE INVESTMENT COMPANY, FTIS WILL:

o                     Receive from the Investment Company, from the Investment Company's Principal Underwriter or from a Fund shareholder, in a manner acceptable to FTIS, information necessary to record Share sales and redemptions and to generate sale and/or redemption confirmations;

o          Mail, or electronically transmit, sale and/or redemption confirmations;

o                     Coordinate the delivery of an account opening prospectus with delivery of initial purchase confirmations;

o                     Accept and process payments from investors and their broker-dealers or other agents, for the purchase of Shares;

o                     Support the use of automated systems for payment and other share transactions, such as NSCC Fund/Serv and Networking and other systems which may be reasonably requested by FTIS customers;

 

o                     Keep records as necessary to implement any deferred sales charges, exchange restrictions or other policies of the Investment Company affecting Share transactions, including without limitation any restrictions or policies applicable to certain classes of shares, as stated in the applicable prospectus;

o          Requisition Shares in accordance with instructions of the Principal Underwriter, if applicable;

 

o          Open, maintain and close shareholder accounts;

o                     Establish registration of ownership of Shares in accordance with generally accepted form;

o                     Maintain records of (i) issued Shares and (ii) number of Shareholders and their aggregate Shareholdings classified according to their residence in each State of the United States or foreign country;

o                     Accept and process telephone exchanges and redemptions for Shares in accordance with a Fund's Telephone Exchange and Redemption Privileges as described in the Fund's current prospectus.

o                     Maintain and safeguard records for each Shareholder showing name(s), address, number of any certificates issued, and number of Shares registered in such name(s), together with continuous proof of the outstanding Shares, and dealer identification, and reflecting all current changes. On request, provide information as to an investor's qualification for Cumulative Quantity Discount. Provide all accounts with, at minimum, quarterly and year-end historical statements;

o                     Provide on request a duplicate set of records for file maintenance in the Investment Company's office;

o                     Provide for the proper allocation of proceeds of share sales to the Investment Company and to the Principal Underwriter, in accordance with the applicable prospectus;

o                     Redeem Shares and provide for the preparation and delivery of liquidation proceeds, including the processing of redemption checks and maintain checking account records;

o                     Exercise reasonable and good-faith business judgment in the registration of Share transfers, pledges and releases from pledges in accordance with the California Uniform Commercial Code - - Investment Securities;

 

o                     From time to time make transfers of certificates for such Shares as may be surrendered for transfer properly endorsed, and countersign new certificates issued in lieu thereof, so long as applicable;

o                     Upon receipt of proper documentation, place stop transfers, obtain necessary insurance forms, and reissue replacement certificates against lost, stolen or destroyed Share certificates, so long as applicable;

o                     Check surrendered certificates for stop transfer restrictions, so long as applicable. Although FTIS cannot insure the genuineness of certificates surrendered for cancellation, it will employ all due reasonable care in deciding the genuineness of such certificates and the guarantor of the signature(s) thereon;

o          Cancel surrendered certificates and record and countersign new certificates, so long as applicable;

o          Certify outstanding Shares to auditors;

o                     In connection with any meeting of Shareholders, upon receiving appropriate detailed instructions and written materials prepared by the Investment Company and proxy proofs checked by the Investment Company, provide for: (a) the printing of proxy cards, (b) the delivery to Shareholders of all reports, prospectuses, proxy cards and related proxy materials of suitable design for enclosing, (c) the receipt and tabulation of executed proxies, (d) solicitation of Shareholders for their votes and (e) delivery of a list of Shareholders for the meeting;

o                     Answer routine written correspondence, email, and telephone inquiries about individual accounts. Prepare monthly reports for correspondence volume and correspondence data necessary for the Investment Company's Semi-Annual Report on Form N -SAR;

o                     Provide for the preparation and delivery of dealer commission statements and checks;

o                     Maintain and furnish the Investment Company and its Shareholders with such information as the Investment Company may reasonably request for the purpose of compliance by the Investment Company with the applicable tax and securities laws of applicable jurisdictions;

o          Deliver confirmations of transactions to investors and dealers in a timely fashion;

o                     Provide for the payment or reinvestment of income dividends and/or capital gains distributions to Shareholders of record, in accordance with the Investment Company's and/or Shareholder's instructions, provided that:

 

                        (a)        The Investment Company shall notify FTIS promptly upon

declaration of any such dividend and/or distribution, and in any event at least forty-eight (48) hours before the record date;

                        (b)        Such notification shall include the declaration date, the record

date, the payable date, the rate, and, if applicable, the reinvestment date and the reinvestment price to be used; and

 

                         (c)        Prior to the payable date, the Investment Company shall furnish

FTIS with sufficient fully and finally collected funds to make such distribution;

o                     Prepare and file annual U.S. information returns of dividends and capital gain distributions, gross redemption proceeds, foreign person's U.S. source income, and other U.S. federal and state information returns as required, and mail payee copies to shareholders, report and pay U.S. backup withholding on all reportable payments; report and pay U.S. federal income taxes withheld from distributions and other payments made to nonresidents of the U.S.; prepare and mail to shareholders any notice required by the Internal Revenue Code as to taxable dividends, tax-exempt interest dividends, realized net capital gains distributed and/or retained, foreign taxes paid and foreign source income distributed or deemed distributed, U.S. source income and any tax-withheld on such income, dividends received deduction information, or other applicable tax information appropriate for dissemination to shareholders of the Trust.

o                     Comply with all U.S. federal income tax requirements regarding the collection of tax identification numbers and other required shareholder certifications and information pertaining to shareholder accounts; respond to all notifications from the U.S. Internal Revenue Service regarding the application of the U.S. backup withholding requirements including tax identification number solicitation requirements;

o          Prepare transfer journals;

o          Set up wire order Share transactions on file;

o                     Provide for receipt of payment for Share transactions, and update the transaction file;

o          Sort and print shareholder information by state, social code, price break, etc.; and

o                     Mail promptly the Statement of Additional Information of the Investment Company to each Shareholder upon request.

 

 

IN CONNECTION WITH THE INVESTMENT COMPANY'S SYSTEMATIC WITHDRAWAL PLAN, FTIS WILL:

 

o                     Make payment of amounts withdrawn periodically by the Shareholder pursuant to the Program by redeeming Shares, and confirm such redemptions to the Shareholder; and

o                     Provide confirmations of all redemptions, reinvestment of dividends and distributions, and any additional investments in the Program, including a summary confirmation at the year-end.

 

 

 

 

 

FORM OF CLASS M DISTRIBUTION PLAN

 

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

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, as amended (the “Act”), by Franklin California Tax-Free Income Fund (the “Fund”) for the use of the Class M shares, which Plan shall take effect on the date the Class M shares of the Fund are first offered for sale (the “Effective Date of the Plan”).  The Plan has been approved by a majority of the Board of Trustees of the Fund (the “Board”), 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 or in any agreements related to the Plan (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on the Plan.

In reviewing the Plan, the Board considered the schedule and nature of payments and terms of the Investment Management Agreement between the Fund and Franklin Advisers, Inc. (the “Manager”) and the terms of the Distribution Agreement between the Fund and Franklin Templeton Distributors, Inc. (“Distributors”).  The Board concluded that the compensation of the Manager, under the Investment Management Agreement, and of Distributors, under the Distribution Agreement, was fair and not excessive; however, the Board also recognized that uncertainty may exist from time to time with respect to whether payments to be made by the Fund to the Manager, Distributors, or others or by the Manager or Distributors to others may be deemed to constitute distribution expenses of the Fund.  Accordingly, the Board determined that the Plan should provide for such payments and that adoption of the Plan would be prudent and in the best interests of the Fund and its shareholders.  Such approval 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 reimburse Distributors or others for all expenses (subject to the limitations described below) incurred by Distributors or others in the promotion and distribution of the Class M shares of the Fund, as well as for shareholder services provided for existing shareholders of the Fund.  Distribution expenses may include, but are not limited to, the printing of prospectuses and reports used for sales purposes, preparing and distributing sales literature (and any related expenses), advertisements, and other distribution-related expenses; certain promotional distribution charges paid to broker-dealer firms or others, or for participation in certain distribution channels (otherwise referred to as marketing support), including business planning assistance, advertising, educating dealer personnel about the Fund and shareholder financial planning needs, placement on dealers’ lists of offered funds, access to sales meetings, sales representatives and management representatives of dealers, participation in and/or presentation at conferences or seminars, sales or training programs for invited registered representatives and other employees, client and investor events and other dealer sponsored events, and ticket charges; or payment of dealer commissions and wholesaler compensation in connection with sales of the Fund’s Class M Shares exceeding $1 million (for which the Fund imposes no sales charge).  Shareholder service expenses may include, but are not limited to, the expenses of assisting in the establishment and maintenance of 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 the maintenance of investments of their respective customers in the Fund.  These expenses may also include any distribution or service fees paid to securities dealers or their firms or others.  Agreements for the payment of distribution and service fees to securities dealers or their firms or others shall be in a form which has been approved from time to time by the Board, including the Independent Trustees.

 

2.         The maximum amount which may be reimbursed by the Fund to Distributors or others pursuant to Paragraph 1 herein shall be 0.25% per annum of the average daily net assets of the Fund.  Said reimbursement shall be made quarterly by the Fund to Distributors or others. 

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, the Manager, Distributors or other parties on behalf of the Fund, the Manager 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 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 Rule 2341 of the Rules of the Financial Industry Regulatory Authority or any successor thereto.

4.         Distributors shall furnish to the Board, for its review, on a quarterly basis, a written report of the monies reimbursed to it and to others under the Plan, including the purposes thereof, and shall furnish the Board with such other information as the Board may reasonably request in connection with the payments made under the Plan in order to enable the Board to make an informed determination of whether the Plan should be continued.

5.         The Plan, and any agreements related to this 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 a vote of the Board, and of the Independent Trustees, cast in person at a meeting called for the purpose of voting on the Plan and any related agreements.

6.         The Plan may be terminated at any time by vote of a majority of the Independent Trustees or by vote a majority of the outstanding voting securities of the Fund, as and to the extent required by the Act and the rules thereunder, including Rule 18f-3(a)(3).

7.         Any agreement related to this Plan:

(a)        may be terminated at any time, without the payment of any penalty, by vote of a majority of the Independent Trustees or by vote a majority of the outstanding voting securities of the Fund on not more than sixty (60) days’ written notice to any other party to the agreement; and

 

(b)        will automatically terminate in the event of its assignment (as defined in the Act).

8.         The Plan may not be amended to increase materially the amount to be spent for distribution pursuant to Paragraph 2 hereof without approval by a majority of the Fund’s outstanding voting securities (as and to the extent required by the Act and the rules thereunder, including Rule 18f-3(a)(3)).

9.         All material amendments to the Plan shall be approved by a vote of the Board, and of the Independent Trustees, cast in person at a meeting called for the purpose of voting on the Plan.

10.       So long as the Plan is in effect, the Board shall satisfy the fund governance standards as defined in Rule 0-1(a)(7) under the Act, including that the selection and nomination of the Fund’s Independent Trustees shall be committed to the discretion of such incumbent Independent Trustees.

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 CALIFORNIA TAX-FREE INCOME FUND

 

 

 

By:     

Karen L. Skidmore

Title:    Vice President & Secretary

 

 

FRANKLIN TEMPLETON DISTRIBUTORS, INC.

 

 

By:

           

Title:   

 

 

Dated:                                    

FORM OF AMENDED MULTIPLE CLASS PLAN

on behalf of

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

This Amended Multiple Class Plan (the “Plan”) has been adopted by a majority of the Board of Trustees (the “Board”) of FRANKLIN CALIFORNIA TAX-FREE INCOME FUND (the “Fund”), including a majority of the Board members who are not “interested persons” (as defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of the Fund.  The Board has determined that the Plan, including the expense allocation methods among the classes, is in the best interests of each class of the Fund and the Fund as a whole.  The Plan sets forth the provisions relating to the establishment of multiple classes of shares of the Fund.

1.                   The Fund publicly offers five classes of shares, known as Class A Shares, Class M Shares, Class C Shares, Class R6 Shares and Advisor Class Shares.

2.                   Class A Shares and Class M Shares carry a front-end sales charge ranging from 0% - 4.25%; and Class C Shares, Class R6 Shares and Advisor Class Shares are not subject to any front-end sales charges.

3.                   Class A Shares and Class M shares are not subject to a contingent deferred sales charge (“CDSC”), except in the following limited circumstances.  On investments of $1 million or more, a CDSC of 0.75% of the lesser of the then-current net asset value or the original net asset value at the time of purchase applies to redemptions of those investments within the contingency period of 18 months from the calendar month following their purchase.  The CDSC is waived in certain circumstances, as described in the Fund’s prospectus and statement of additional information (“SAI”).

Class C Shares redeemed within 12 months of their purchase are assessed a CDSC of 1.00% on the lesser of the then-current net asset value or the original net asset value at the time of purchase.  The CDSC is waived in certain circumstances as described in the Fund’s prospectus and SAI.

Class R6 Shares and Advisor Class Shares are not subject to any CDSC.

4.                   The distribution plan adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act (the “Rule 12b-1 Plan”) associated with the Class A Shares may be used to reimburse Franklin/Templeton Distributors, Inc. (“Distributors”) or others for expenses incurred in the promotion and distribution of the Class A Shares, as well as for shareholder services provided for existing shareholders of Class A Shares of the Fund.  Such distribution expenses and shareholder services expenses (as set forth in the Fund’s Class A Shares Rule 12b-1 Plan) may be paid only pursuant to the terms of the Fund’s Class A Shares Rule 12b-1 Plan.

The Rule 12b-1 Plan associated with the Class M Shares may be used to reimburse Distributors or others for expenses incurred in the promotion and distribution of the Class M Shares, as well as for shareholder services provided for existing shareholders of Class M Shares of the Fund.  Such distribution expenses and shareholder services expenses (as set forth in the Fund’s Class M Shares Rule 12b-1 Plan) may be paid only pursuant to the terms of the Fund’s Class M Shares Rule 12b-1 Plan.

The Rule 12b-1 Plan associated with the Class C Shares has two components.  The first component is a service fee, to be paid to Distributors for payments to dealers or others, or to be paid directly to others, for furnishing personal services and maintaining shareholder or beneficial owner accounts.  The second component is an asset-based sales charge to be paid to Distributors as compensation for Distributors’ distribution-related services including compensation for amounts advanced to securities dealers or their firms or others selling Class C Shares.  In addition, Distributors may use such monies to assist in the distribution and promotion of Class C Shares.  Such service and distribution fees and expenses (as set forth in the Fund’s Class C Shares Rule 12b-1 Plan) may be paid only pursuant to the terms of the Fund’s Class C Shares Rule 12b-1 Plan.

 

The Rule 12b-1 Plans for the Class A, Class M and Class C Shares shall operate in accordance with the Conduct Rules of the Financial Industry Regulatory Authority, or any successor thereto. 

No Rule 12b-1 Plan has been adopted on behalf of Class R6 Shares or Advisor Class Shares and, therefore, Class R6 Shares and Advisor Class Shares shall not be subject to deductions relating to Rule 12b-1 fees.

5.                   With respect to transfer agency fees and expenses, the Fund has entered into an Amended and Restated Transfer Agent and Shareholder Services Agreement (the “Agreement”) with respect to the Fund’s classes of shares for the provision of various transfer agency and shareholder services.  Under the Agreement, fees and expenses (including out of pocket expenses) for such services are incurred separately for: (i) Class A, Class M, Class C and Advisor Class Shares (the “Service Classes”) as a group (which includes beneficial owner servicing fees and networked account servicing fees); and (ii) Class R6 Shares (which does not incur beneficial ownership services and network account servicing fees).

6.                   All fees and expenses incurred by the Fund, other than Rule 12b-1 fees and transfer agency fees and expenses (including out of pocket expenses), as described above, are Fundwide Expenses (as that term is defined in Rule 18f-3 under the 1940 Act).  The transfer agency fees and expenses (including out of pocket expenses, beneficial owner servicing fees and networked account servicing fees) incurred by the Service Classes are treated as Fundwide Expenses with respect to the Service Classes only, and the transfer agency fees and expenses (including out of pocket expenses) incurred by Class R6 Shares are borne solely by the holders of Class R6 Shares.  For purposes of these expense allocations, the specific fees or expenses incurred under a particular Rule 12b-1 Plan or under the Agreement include any fees or expenses directly associated with such Rule 12b-1 Plan or Agreement, including proxy preparation and solicitation expenses or similar expenses related to any shareholder vote related thereto.

7.                   The only difference in expenses as among the Service Classes, together as a group on the one hand, and the Class R6 Shares, on the other shall relate to differences in transfer agent and shareholder services expenses, as described above, and any Rule 12b-1 Plan expenses of a Service Class, as described in the applicable Rule 12b-1 Plans.  The only difference in expenses among the Service Classes shall relate to differences in Rule 12b-1 Plan expenses, if any, as described in the applicable Rule 12b-1 Plans. 

8.                   There shall be no conversion features associated with the Class A, Class M, Class C, Class R6 and Advisor Class Shares. 

9.                   Shares of Class A, Class M, Class C, Class R6 and Advisor Class may be exchanged for shares of another investment company within the Franklin Templeton Group of Funds according to the terms and conditions stated in each fund’s prospectus and SAI, as may be amended from time to time, to the extent permitted by the 1940 Act, and the rules and regulations adopted thereunder. 

10.               Each class will vote separately with respect to any Rule 12b-1 Plan related to, or which now or in the future may affect, that class.

 

11.               All material amendments to this Plan must be approved by a majority of the Board members, including a majority of the independent Board members.

12.               I, Karen L. Skidmore, Vice President and Secretary of the Fund, do hereby certify that this Amended Multiple Class Plan was adopted on behalf of the Franklin CALIFORNIA TAX-FREE INCOME Fund, by a majority of the Board members of the Fund, including a majority of the independent Board members, on December 7, 2017.

_______________________

Karen L. Skidmore

Vice President & Secretary

 POWER OF ATTORNEY

 

The undersigned officer of FRANKLIN CALIFORNIA TAX-FREE INCOME FUND, a Delaware statutory trust (the "Registrant"), hereby appoint MARGUERITE C. BATEMAN, BRUCE G. LETO, LARRY P. STADULIS, KRISTIN H. IVES, KAREN L. SKIDMORE, CRAIG s. tyle, Alison e. baur and STEVEN J. GRAY (with full power to each of them to act alone) his attorney-in-fact and agent, in all capacities, to execute, deliver and file in the names of the undersigned, any and all instruments that said attorneys and agents may deem necessary or advisable to enable the Registrant to comply with or register any security issued by the Registrant under the Securities Act of 1933, as amended, and/or the Investment Company Act of 1940, as amended, and the rules, regulations and interpretations thereunder, including but not limited to, any registration statement, including any and all pre- and post-effective amendments thereto, any other document to be filed with the U.S. Securities and Exchange Commission and any and all documents required to be filed with respect thereto with any other regulatory authority.  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 officer hereby executes this Power of Attorney as of the  16 ^th day of December, 2017

 

                                                                                                                                                                                                                                          /s/Terrence J. Checki   

                                                  Terrence J. Checki

                                 Trustee