BUSINESS MANAGEMENT AGREEMENT BETWEEN
FRANKLIN VALUEMARK FUNDS
(XXXXXXXXX INTERNATIONAL SMALLER COMPANIES FUND)
AND
FRANKLIN XXXXXXXXX SERVICES, INC.
AGREEMENT dated as of October 1, 1996, between Franklin
Valuemark Funds, a Massachusetts business trust (the "Trust"), on behalf of
the
Xxxxxxxxx International Smaller Companies Fund (the "Fund"), a separate series
of the Trust, and Franklin Xxxxxxxxx Services, Inc. ("FTS" or
"Administrator").
In consideration of the mutual promises herein made, the
parties hereby agree as follows:
(1) FTS agrees, during the life of this Agreement, to be responsible for:
(a) providing office space, telephone, office equipment and supplies for
the Fund;
(b) paying compensation of the Fund's officers for services rendered as
such;
(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;
(e) daily pricing of the Fund's investment portfolio and preparing and
supervising publication of daily quotations of the bid and asked prices of
the Fund's Shares, earnings reports and other financial data;
(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) providing trading desk facilities for the Fund;
(h) supervising compliance by the Fund with recordkeeping
requirements under the Investment Company Act of 1940 (the "1940 Act") and
the rules and regulations thereunder, supervising compliance with
recordkeeping requirements imposed by state laws or regulations, and
maintaining books and records for the Fund (other than those maintained by
the custodian and transfer agent);
(i) 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, provisions of the Code applicable to insurance
company separate accounts, and other applicable tax laws and regulations;
(j) monitoring the Fund's compliance with: the 1940 Act and rules and
regulations thereunder; state and foreign laws and regulations applicable
to the operation of investment companies funding variable insurance
products; the Fund's investment objectives, policies and restrictions; and
the Code of Ethics and other policies adopted by the Fund's Board of
Trustees or by the Adviser and applicable to the Fund;
(k) providing executive, clerical and secretarial personnel needed to carry
out the above responsibilities; and
(l) preparing regulatory reports, including without limitation NSARs,
proxy statements and U.S. and foreign ownership reports.
(2) The Trust agrees, during the life of this Agreement, to pay to FTS
as compensation for the foregoing a monthly fee equal on an annual basis to
0.15% of the first $200 million of the average daily net assets of the 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 0.10%; and on
such net assets in excess of $1.2 billion, a monthly fee equal on an annual
basis to 0.075%.
(3) This Agreement shall remain in full force and effect through April
30, 1997 and thereafter from year to year to the extent continuance is
approved annually by the Board of Trustees of the Trust.
(4) This Agreement may be terminated by the Trust at any time on sixty
(60) days' written notice without payment of penalty, provided that such
termination by the Trust shall be directed or approved by the vote of a
majority of the Trustees of the Trust in office at the time or by the vote
of a majority of the outstanding voting securities of the Trust (as defined
by the 1940 Act); and shall automatically and immediately terminate in the
event of its assignment (as defined by the 1940 Act).
(5) In the absence of willful misfeasance, bad faith or gross
negligence on the part of FTS, or of reckless disregard of its duties and
obligations hereunder, FTS 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 Agreement to be
duly executed by their duly authorized officers and their respective
corporate seals to be hereunto duly affixed and attested.
FRANKLIN VALUEMARK FUNDS
By: /s/Xxxxxxx X. Xxxxxx
Vice President & Secretary
FRANKLIN XXXXXXXXX SERVICES, INC.
By: /s/Xxxxxx X. Xxxxx
Executive Vice President
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Termination of Agreement
Franklin Valuemark Funds and Templeton Global Investors, Inc., hereby agree
that the Business Management Agreement between them dated January 18, 1996,
regarding the Xxxxxxxxx International Smaller Companies Fund, is terminated
effective as of the date of the Business Management Agreement above.
FRANKLIN VALUEMARK FUNDS
By: /s/Xxxxxxx X. Xxxxxx
Vice President & Secretary
TEMPLETON GLOBAL INVESTORS, INC.
By: /s/Xxxxxx X. Xxxxxxxx
President & CEO
