MULTIPLE CLASS PLAN
ON BEHALF OF
FRANKLIN DYNATECH FUND
This Multiple Class Plan (the "Plan") has been adopted
unanimously by the Board of members of FRANKLIN CUSTODIAN FUNDS
(the "Investment Company") for its series, Franklin Dynatech Fund
(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, the Fund and the Investment
Company as a whole. The Plan sets forth the provisions relating
to the establishment of multiple classes of shares of the Fund.
1. The Fund shall publicly offer four classes of shares,
to be known as Class A Shares, Class C Shares, Class R Shares and
Advisor Class Shares. The sale to new investors of a fifth class
of shares, known as Class B Shares, has been discontinued. Class
B Shares continue to be available only for reinvestment of
dividends by existing Class B shareholders of the Fund, or in
connection with an exchange into the Fund by existing Class B
shareholders of other funds within Franklin Templeton Investments.
2. Class A Shares shall carry a front-end sales charge
ranging from 0 % - 5.75 %, and Class B Shares, Class C Shares,
Class R Shares and the Advisor Class Shares shall not be subject
to any front-end sales charges.
3. Class A Shares shall not be subject to a contingent
deferred sales charge ("CDSC"), except in the following limited
circumstances. On investments of $1 million or more, a
contingent deferred sales charge of 1.00% 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 B Shares shall be subject to a CDSC with the following
CDSC schedule: (a) Class B Shares redeemed within 2 years of
their purchase shall be assessed a CDSC of 4% on the lesser of
the then-current net asset value or the original net asset value
at the time of purchase; (b) Class B Shares redeemed within the
third and fourth years of their purchase shall be assessed a CDSC
of 3% on the lesser of the then-current net asset value or the
original net asset value at the time of purchase; (c) Class B
Shares redeemed within 5 years of their purchase shall be
assessed a CDSC of 2% on the lesser of the then-current net asset
value or the original net asset value at the time of purchase;
and (d) Class B Shares redeemed within 6 years of their purchase
shall be assessed a CDSC of 1% 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 described
in the Fund's prospectus and SAI.
Class C Shares redeemed within 12 months of their purchase
shall be 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 R Shares redeemed within 18 months of their purchase
shall be 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.
Advisor Class Shares shall not be subject to any CDSC.
4. The distribution plan adopted by the Investment Company
pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as amended, (the "Rule 12b-1 Plan") associated with the Class A
Shares may be used to compensate Franklin/Templeton Distributors,
Inc. (the "Distributor") or others for expenses incurred in the
promotion and distribution of the Class A Shares. Such expenses
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, any
distribution or shareholder servicing fees paid to securities
firms or others who provide personal assistance to shareholders
in servicing their accounts and have executed a servicing
agreement with the Investment Company for the Class A Shares, the
Distributor or its affiliates.
The Rule 12b-1 Plan associated with the Class B Shares has
two components. The first component is an asset-based sales
charge to be retained by the Distributor to compensate
Distributor for amounts advanced to securities dealers or their
firms or others with respect to the sale of Class B Shares. In
addition, such payments may be retained by the Distributor to be
used in the promotion and distribution of Class B Shares in a
manner similar to that described above for Class A Shares. The
second component is a shareholder servicing fee to be paid to
securities firms or others who provide personal assistance to
shareholders in servicing their accounts and have executed a
servicing agreement with the Investment Company for the Class B
Shares, the Distributor or its affiliates.
The Rule 12b-1 Plan associated with the Class C has two
components. The first component is a shareholder servicing fee,
to be paid to securities firms or others who provide personal
assistance to shareholders in servicing their accounts and have
executed a servicing agreement with the Investment Company for
the Class C, the Distributor or its affiliates. The second
component is an asset-based sales charge to be retained by the
Distributor during the first year after the sale of shares and,
in subsequent years, to be paid to dealers or retained by the
Distributor to be used in the promotion and distribution of Class
C, in a manner similar to that described above for Class A Shares.
The Rule 12b-1 Plan associated with the Class R Shares
may be used to compensate the Distributor or others for
distribution activities and/or for providing shareholder
services. Distribution fees paid under the Rule 12b-1 Plan may
be retained by the Distributor to compensate the Distributor for
amounts advanced to securities dealers or their firms or others
(including retirement plan recordkeepers) with respect to the
sale of Class R Shares. In addition, such distribution fee
payments may be retained by the Distributor to be used in the
promotion and distribution of Class R Shares in a manner similar
to that described above for Class A Shares, or may be paid out to
dealers or others (including retirement plan recordkeepers) that
perform similar distribution activities. Shareholder servicing
fees may be paid to the Distributor or to securities firms or
others (including retirement plan recordkeepers) who have
executed a servicing agreement for Class R Shares with the
Investment Company, the Distributor or its affiliates as
compensation for providing personal assistance to shareholders or
beneficial owners in servicing their accounts.
No Rule 12b-1 Plan has been adopted on behalf of the Advisor
Class Shares and, therefore, the Advisor Class Shares shall not
be subject to deductions relating to Rule 12b-1 fees.
The Rule 12b-1 Plans for the Class A, Class B, Class C and
Class R Shares shall operate in accordance with Rule 2830(d) of
the Conduct Rules of the Financial Industry Regulatory Authority,
Inc. ("FINRA")
5. The only difference in expenses as between Class A,
Class B, Class C, Class R and Advisor Class shall relate to
differences in Rule 12b-1 plan expenses, as described in the
applicable Rule 12b-1 Plans; however, to the extent that the Rule
12b-1 Plan expenses of one Class are the same as the Rule 12b-1
Plan expenses of another Class, such classes shall be subject to
the same expenses.
6. There shall be no conversion features associated with
the Class A, Class C, Class R and Advisor Class. Each Class B
Share, however, shall be converted automatically, and without any
action or choice on the part of the holder of the Class B Shares,
into Class A Shares on the conversion date specified, and in
accordance with the terms and conditions approved by the Franklin
Custodian Fund's Board of Trustees and as described, in the
Fund's prospectus relating to the Class B Shares, as such
prospectus may be amended from time to time; provided, however,
that the Class B Shares shall be converted automatically into
Class A Shares to the extent and on the terms permitted by the
Investment Company Act of 1940, as amended (the "Act"), and the
rules and regulations adopted thereunder.
7. Shares of Class A, Class B, Class C, Class R 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, as it
may be amended from time to time, to the extent permitted by the
Investment Company Act of 1940, as amended (the "1940 Act"), and
the rules and regulations adopted thereunder.
8. 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.
9. On an ongoing basis, the Board members of the Fund,
pursuant to their fiduciary responsibilities under the 1940 Act
and otherwise, will monitor the Fund for the existence of any
material conflicts between the interests of the various classes
of shares. The Board members, including a majority of the Board
members who are not "interested persons" (as defined in the 1940
Act) of the Fund, its investment manager or the Distributor and
who have no direct, or indirect financial interest in the
operation of the Rule 12b-1 Plan (the "independent Board
members"), shall take such action as is reasonably necessary to
eliminate any such conflict that may develop. Franklin Advisers,
Inc. and Franklin/Templeton Distributors, Inc. shall be
responsible for alerting the Board to any material conflicts that
arise.
10. All material amendments to this Plan must be approved
by a majority of the Board members, including a majority of the
independent Board members.
11. I, Karen L. Skidmore, Vice President and Secretary of
the Franklin Custodian Funds, do hereby certify that this
Multiple Class Plan was adopted on behalf of the Franklin
Dynatech Fund, by a majority of the Board members of the Fund,
including a majority of the independent Board members, on July
10, 2008.
/s/ KAREN L. SKIDMORE
Karen L. Skidmore
Vice President & Secretary