TL104STKP
TL103STKP
TL102STKP
SUPPLEMENT DATED MAY 1, 1997
TO THE PROSPECTUSES OF
Templeton Foreign Fund
dated January 1, 1997, as amended April 4, 1997
Templeton Global Smaller Companies Fund
dated January 1, 1997, as amended March 17, 1997
Templeton World Fund
dated January 1, 1997, as amended March 19, 1997
The prospectus is amended as follows:
I. The section "Sales Charge Waivers" under "How Do I Buy Shares? - Sales
Charge Reductions and Waivers" is amended as follows:
A. Category 8 is replaced with:
8. Chilean retirement plans that meet the requirements described under
"Retirement Plans" below. B. Effective June 1, 1997, category 5 is deleted in
its entirety. II. The following paragraph is added after the list of "Sales
Charge Waivers" under "How Do I Buy Shares?": RETIREMENT PLANS. Retirement
plans that (I) are sponsored by an employer with at least 100 employees, or
(ii) have plan assets of $1 million or more, or (iii) agree to invest at least
$500,000 in the Franklin Templeton Funds over a 13 month period may buy Class
I shares without a front-end sales charge. Retirement plans that are not
Qualified Retirement Plans or SEPs, such as 403(b) or 457 plans, must also
meet the requirements described under "Group Purchases - Class I Only" above.
For retirement plan accounts opened on or after May 1, 1997, a Contingent
Deferred Sales Charge may apply if the account is closed within 365 days of
the retirement plan account's initial purchase in the Franklin Templeton
Funds. Please see "How Do I Sell Shares? - Contingent Deferred Sales Charge"
for details. Any retirement plan that does not meet the requirements to buy
shares without a front-end sales charge and that was a shareholder of the Fund
on or before February 1, 1995, may buy shares of the Fund subject to a maximum
sales charge of 4% of the Offering Price, 3.2% of which will be retained by
Securities Dealers.
III. The section "How Do I Buy Shares? - Other Payments to Securities Dealers"
is replaced in its entirety with the following:
OTHER PAYMENTS TO SECURITIES DEALERS
The payments described below may be made to Securities Dealers who initiate
and are responsible for Class II purchases and certain Class I purchases made
without a sales charge. The payments are subject to the sole discretion of
Distributors, and are paid by Distributors or one of its affiliates and not by
the Fund or its shareholders.
1. Class II purchases - up to 1% of the purchase price.
2. Class I purchases of $1 million or more - up to 1% of the amount invested.
3. Class I purchases made without a front-end sales charge by certain
retirement plans described under "Sales Charge Reductions and Waivers -
Retirement Plans" above - up to 1% of the amount invested. For retirement plan
accounts opened on or after May 1, 1997, a Contingent Deferred Sales Charge
will not apply to the account if the Securities Dealer chooses to receive a
payment of 0.25% or less or if no payment is made. 4. Class I purchases by
trust companies and bank trust departments, Eligible Governmental Authorities,
and broker-dealers or others on behalf of clients participating in
comprehensive fee programs - up to 0.25% of the amount invested.
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5. Class I purchases by Chilean retirement plans - up to 1% of the amount
invested. A Securities Dealer may receive only one of these payments for each
qualifying purchase. Securities Dealers who receive payments in connection
with investments described in paragraphs 1, 2 or 5 above or a payment of up
to 1% for investments described in paragraph 3 will be eligible to receive
the Rule 12b-1 fee associated with the purchase starting in the thirteenth
calendar month after the purchase.
FOR BREAKPOINTS THAT MAY APPLY AND INFORMATION ON ADDITIONAL COMPENSATION
PAYABLE TO SECURITIES DEALERS IN CONNECTION WITH THE SALE OF FUND SHARES,
PLEASE SEE "HOW DO I BUY, SELL AND EXCHANGE SHARES? - OTHER PAYMENTS TO
SECURITIES DEALERS" IN THE SAI.
IV. The following is added under "How Do I Sell Shares? - Contingent Deferred
Sales Charge":
Certain retirement plan accounts opened on or after May 1, 1997, and that
qualify to buy Class I shares without a front-end sales charge may also be
subject to a Contingent Deferred Sales Charge if the retirement plan account
is closed within 365 days of the account's initial purchase in the Franklin
Templeton Funds.
V. The section "Contingent Deferred Sales Charge - Waivers" under "How Do I Sell
Shares?" is replaced in its entirety with the following:
WAIVERS. We waive the Contingent Deferred Sales Charge for:
o Exchanges
o Account fees
o Sales of shares purchased pursuant to a sales charge waiver
o Sales of shares purchased without a front-end sales charge by certain
retirement plan accounts if (i) the account was opened before May 1, 1997, or
(ii) the Securities Dealer of record received a payment from Distributors of
0.25% or less, or (iii) Distributors did not make any payment in connection
with the purchase, as described under "How Do I Buy Shares? - Other Payments
to Securities Dealers"
o Redemptions by the Fund when an account falls below the minimum required
account size
o Redemptions following the death of the shareholder or beneficial owner
o Redemptions through a systematic withdrawal plan set up before February 1,
1995
o Redemptions through a systematic withdrawal plan set up on or after
February 1, 1995, at a rate of up to 1% a month of an account's Net Asset
Value. For example, if you maintain an annual balance of $1 million in
Class I shares, you can redeem up to $120,000 annually through a
systematic withdrawal plan free of charge. Likewise, if you maintain an
annual balance of $10,000 in Class II shares, $1,200 may be redeemed annually
free of charge.
o Distributions from individual retirement plan accounts due to death or
disability or upon periodic distributions based on life expectancy
o Tax-free returns of excess contributions from employee benefit plans
o Redemptions by Trust Company employee benefit plans or employee benefit
plans serviced by ValuSelect
o Participant initiated distributions from employee benefit plans or
participant initiated exchanges among investment choices in employee benefit
plans
VI. The discussion under "What Are the Funds Potential Risks?" is hereby
supplemented by adding the following paragraph:
Hong Kong is scheduled to revert to the sovereignty of
China on July 1, 1997. As with any major political transfer of power, this
could result in political, social, economic, market or other developments in
Hong Kong, China or other countries that could affect the value of Fund
investments.
