o 105 *SA1
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SHARE CLASS REDESIGNATION
Effective January 1, 1999
Class A - Formerly Class I
Class B - New Share Class
Class C - Formerly Class II
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SUPPLEMENT DATED APRIL 1, 1999
TO THE STATEMENT OF ADDITIONAL INFORMATION OF
FRANKLIN'S AGE HIGH INCOME FUND
DATED OCTOBER 1, 1998
The Statement of Additional Information is amended as follows:
I. As of January 1, 1999, the fund offers four classes of shares: Class A,
Class B, Class C and Advisor Class. Before January 1, 1999, Class A shares
were designated Class I and Class C shares were designated Class II. All
references in the Statement of Additional Information to Class I shares are
replaced with Class A, and all references to Class II shares are replaced
with Class C.
II. The first sentence of the second paragraph on the cover is revised to read:
This SAI describes the fund's Class A, B and C shares.
III. The following is added to the "Officers and Trustees" section:
As of November 25, 1998, the officers and Board members, as a group, owned
of record and beneficially the following shares of the fund: approximately
207,719 Class A shares and 268,886 Advisor Class shares, or less than 1%
and 2.25%, respectively, of the total outstanding Class A and Advisor Class
shares of the fund.
IV. The first sentence in the section "Additional Information on Exchanging
Shares," found under "How Do I Buy, Sell and Exchange Shares?", is replaced
with the following:
If you request the exchange of the total value of your account, declared
but unpaid income dividends and capital gain distributions will be
reinvested in the fund and exchanged into the new fund at Net Asset Value
when paid.
V. The following is added to the section "Additional Information on Selling
Shares," found under "How Do I Buy, Sell and Exchange Shares?":
The contingent deferred sales charge will generally be waived for
redemptions of Class A shares by investors who purchased $1 million or more
without an initial sales charge if the Securities Dealer of record waived
its commission in connection with the purchase.
VI. In the section "The Rule 12b-1 Plans," found under "The Fund's
Underwriter,"
(a) the first sentence is replaced with the following:
Each class has a separate distribution or "Rule 12b-1" plan that was
adopted pursuant to Rule 12b-1 of the 1940 Act.
(b) the following paragraphs are added after the section "The Class I
Plan":
THE CLASS B PLAN. Under the Class B plan, the fund pays Distributors up to
0.50% per year of the class' average daily net assets, payable quarterly,
to pay Distributors or others for providing distribution and related
services and bearing certain expenses. All distribution expenses over this
amount will be borne by those who have incurred them. The fund may also pay
a servicing fee of up to 0.15% per year of the class's average daily net
assets, payable quarterly. This fee may be used to pay Securities Dealers
or others for, among other things, helping to establish and maintain
customer accounts and records, helping with requests to buy and sell
shares, receiving and answering correspondence, monitoring dividend
payments from the fund on behalf of customers, and similar servicing and
account maintenance activities.
The expenses relating to the Class B plan are also used to pay Distributors
for advancing the commission costs to Securities Dealers with respect to
the initial sale of Class B shares. Further, the expenses relating to the
Class B plan may be used by Distributors to pay third party financing
entities that have provided financing to Distributors in connection with
advancing commission costs to Securities Dealers.
(c) and the section "The Class I and Class II Plans" is renamed "The Class
A, B and C Plans."
VII. Under "Miscellaneous Information," the following is added:
The Information Services & Technology division of Resources established a
Year 2000 Project Team in 1996. This team has already begun making
necessary software changes to help the computer systems that service the
fund and its shareholders to be Year 2000 compliant. After completing these
modifications, comprehensive tests are conducted in one of Resources' U.S.
test labs to verify their effectiveness. Resources continues to seek
reasonable assurances from all major hardware, software or data-services
suppliers that they will be Year 2000 compliant on a timely basis.
Resources is also beginning to develop a contingency plan, including
identification of those mission critical systems for which it is practical
to develop a contingency plan. However, in an operation as complex and
geographically distributed as Resources' business, the alternatives to use
of normal systems, especially mission critical systems, or supplies of
electricity or long distance voice and data lines are limited.
As of November 25, 1998, the principal shareholders of the fund, beneficial
or of record, were as follows:
SHARE
NAME AND ADDRESS AMOUNT PERCENTAGE
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ADVISOR CLASS
FTTC TTEE For ValuSelect 986,243 8.25%
Franklin Resources PSP
Attn: Trading
P.O. Box 2438
Rancho Cordova, CA 95741-2438
Andrew R. Johnson 949,304 7.94%
P.O. Box 370100
3101
Las Vegas, NV 89137-0100
J C Bradford CO Cust FBO 752,276 6.29%
Patten Seed Company
330 Commerce St.
Nashville, TN 37201-1809
FTC & CO 1,563,807 13.08%
C/O Datalynx 133
P.O. Box 1737336
Denver, CO 80217-3736
VIII.In the "Useful Terms and Definitions" section, the definitions of "Class
I, Class II and Advisor Class" and "Offering Price" are replaced with the
following:
CLASS A, CLASS B, CLASS C AND ADVISOR CLASS - The fund offers four classes
of shares, designated "Class A," "Class B," "Class C" and "Advisor Class."
The four classes have proportionate interests in the fund's portfolio. They
differ, however, primarily in their sales charge and expense structures.
OFFERING PRICE - The public offering price is based on the Net Asset Value
per share of the class and includes the front-end sales charge. The maximum
front-end sales charge is 4.25% for Class A and 1% for Class C. There is no
front-end sales charge for Class B. We calculate the offering price to two
decimal places using standard rounding criteria.
Please keep this supplement for future reference.
