FRANKLIN TAX EXEMPT MONEY FUND, 497, 1995-02-21

FRANKLIN TAX EXEMPT MONEY FUND
497, 1995-02-21

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SUPPLEMENT DATED FEBRUARY 1, 1995
TO THE PROSPECTUS OF
FRANKLIN TAX-EXEMPT MONEY FUND
DATED DECEMBER 1, 1994

1. Add the following language under "How to Buy Shares of the Fund - General":

The Fund may impose a $10 charge for each returned item against any
shareholder account which, in connection with the purchase of Fund shares,
submits a check or a draft which is returned unpaid to the Fund.

2. The "How to Sell" section of the prospectus is amended to reflect a change to
the operational policies of the Fund:

CONTINGENT DEFERRED SALES CHARGE

The Fund does not impose either a front-end sales charge or a contingent
deferred sales charge. If, however, the shares redeemed were shares
acquired by exchange from another of the Franklin Templeton Funds which
would have assessed a contingent deferred sales charge upon redemption, such
charge will be made by the Fund, as described below. The 12-month
contingency period will be tolled (or stopped) for the period such shares
are exchanged into and held in the Fund.

In certain Franklin Templeton Funds, in order to recover commissions paid to
securities dealers on investments of $1 million or more, a contingent
deferred sales charge of 1% applies to certain redemptions made by those
investors within 12 months of the calendar month after such investments.
The charge is 1% of the lesser of the value of the shares redeemed
(exclusive of reinvested dividends and capital gain distributions) or the
total cost of such shares, and is retained by Distributors. In determining
if a charge applies, shares not subject to a contingent deferred sales
charge are deemed to be redeemed first, in the following order: (i) shares
representing amounts attributable to capital appreciation; (ii) shares
purchased with reinvested dividends and capital gain distributions; and
(iii) other shares held longer than 12 months; and followed by any shares
held less than 12 months, on a "first in, first out" basis.

Requests for redemptions for a specified dollar amount will result in
additional shares being redeemed to cover any applicable contingent deferred
sales charge, while requests for redemption of a specific number of shares
will result in the applicable contingent deferred sales charge being
deducted from the total dollar amount redeemed.

<PAGE>
FRANKLIN
TAX-EXEMPT
MONEY FUND

PROSPECTUS DECEMBER 1, 1994

[FRANKLIN LOGO]

777 Mariners Island Blvd., P.O. Box 7777
San Mateo, CA 94403-7777 1-800/DIAL BEN

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Franklin Tax-Exempt Money Fund (the "Fund") is a no-load, open-end, diversified
management investment company offering banks, corporations, other institutions
and individual investors a convenient way to invest in a diversified,
professionally managed portfolio of high quality short-term municipal
obligations. The Fund's investment goals are:

High Current Income Exempt From
Federal Income Taxes
Liquidity
Capital Preservation

This Prospectus is intended to set forth in a clear and concise manner
information about the Fund that a prospective investor should know before
investing. After reading the Prospectus, it should be retained for future
reference; it contains information about the purchase and sale of shares and
other items which a prospective investor will find useful to have.

AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE CAN BE NO ASSURANCE THAT IT WILL BE ABLE TO MAINTAIN A STABLE
NET ASSET VALUE OF $1.00.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.

A Statement of Additional Information ("SAI") concerning the Fund, dated
December 1, 1994, as may be amended from time to time, provides a further
discussion of certain areas in this Prospectus and other matters which may be of
interest to some investors. It has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated herein by reference. A copy is available
without charge from the Fund or the Fund's principal underwriter,
Franklin/Templeton Distributors, Inc. ("Distributors") at the address or
telephone number shown above.

This Prospectus is not an offering of the securities herein described in any
state in which the offering is not authorized. No sales representative, dealer,
or other person is authorized to give any information or make any
representations other than those contained in this Prospectus. Further
information may be obtained from the underwriter.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<PAGE>

CONTENTS PAGE
<S> <C>
Expense Table.................................... 2
Financial Highlights............................. 4
Information About the Fund....................... 4
Investment Objective and
Policies Followed by the Fund................... 5
Management of the Fund........................... 8
Distributions to Shareholders.................... 8
Taxation of the Fund and
Its Shareholders................................ 9
How to Buy Shares of the Fund.................... 10
How to Redeem Shares of the Fund................. 12
Other Programs and Privileges
Available to Fund Shareholders.................. 15
Exchange Privilege............................... 17
Telephone Transactions........................... 19
Valuation of Fund Shares......................... 19
How to Get Information Regarding
an Investment in the Fund....................... 20
Performance...................................... 20
General Information.............................. 21
Account Registrations............................ 22
Important Notice Regarding
Taxpayer IRS Certifications..................... 23
</TABLE>

EXPENSE TABLE
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The purpose of this table is to assist an investor in understanding the various
costs and expenses that a shareholder will bear directly or indirectly in
connection with an investment in the Fund. These figures are based on aggregate
operating expenses of the Fund, including fees set by contract, for the fiscal
year ended July 31, 1994.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases ....................... NONE
Maximum Sales Charge Imposed on Reinvested Dividends ............ NONE
Deferred Sales Charge ........................................... NONE
Redemption Fees ................................................. NONE
Exchange Fee (per transaction) .................................. $5.00*

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees ................................................. 0.55%**
12b-1 Fees ...................................................... 0.00%
Other Expenses
Shareholder Servicing Costs ............................ 0.10%
Reports to Shareholders ................................ 0.08%
*Other .................................................. 0.08%
Total Other Expenses ............................................ 0.26%
Total Fund Operating Expenses ................................... 0.81%**
</TABLE>

*$5.00 fee is imposed only on Timing Accounts as described under "Exchange
Privilege." All other exchanges are processed without a fee.

**Represents the amount that would have been payable to the investment manager
absent a fee reduction by the investment manager. The investment manager,
however, limited its management fees. With this reduction, management fees and
total operating expenses represented .39% and .65%, respectively, of the average
net assets of the Fund. This arrangement may be terminated by the investment
manager at any time.

<PAGE>

Investors should be aware that the above table is not intended to reflect in
precise detail the fees and expenses associated with an individual's own
investment in the Fund. Rather the table has been provided only to assist
investors in gaining a more complete understanding of fees, charges and
expenses. For a more detailed discussion of these matters, investors should
refer to the appropriate sections of this Prospectus.

EXAMPLE

As required by SEC regulations, the following example illustrates the expenses
that apply to a $1,000 investment in the Fund over various time periods assuming
(1) a 5% annual rate of return and (2) redemption at the end of each time
period. As noted in the table above, the Fund charges no redemption fees:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
$8 $26 $45 $100

THIS EXAMPLE IS BASED ON THE AGGREGATE ANNUAL OPERATING EXPENSES, INCLUDING FEES
SET BY CONTRACT, SHOWN ABOVE AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF
FUTURE EXPENSES, WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. The operating
expenses are borne by the Fund and only indirectly by shareholders as a result
of their investment in the Fund. In addition, federal regulations require the
example to assume an annual return of 5%, but the Fund's actual return may be
more or less than 5%.

<PAGE>
FINANCIAL HIGHLIGHTS
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Set forth below is a table containing the financial highlights for a share of
capital stock of the Fund throughout the ten fiscal years in the period ended
July 31, 1994. The information for each of the five fiscal years in the period
ended July 31, 1994 has been audited by Coopers and Lybrand, independent
auditors, whose audit report appears in the Fund's SAI. The remaining figures,
which are also audited, are not covered by the auditors' current report.

1994 1993 1992 1991 1990 1989
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE*
Net asset value at
beginning of year .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------------------------------
Net investment income ....... 0.020 0.021 0.031 0.045 0.056 0.056
Distributions from net
investment income........... (.020) (.021) (.031) (.045) (.056) (.056)
--------------------------------------------------------------------------
Net asset value at
end of year ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------------------------------

Total return** .............. 1.85% 2.08% 3.14% 4.65% 5.81% 5.77%
RATIOS/SUPPLEMENTAL DATA
NET ASSET VALUE AT END
of year (in 000's) ......... $202,883 $193,565 $207,374 $249,214 $228,001 $188,727
Ratio of expenses to
average net assets ......... 0.65%+ 0.69%+ 0.70%+ 0.70%+ 0.74% 0.74%
Ratio of net investment in-
come to average net assets.. 1.84% 2.10% 3.15% 4.53% 5.60% 5.67%

</TABLE>
<TABLE>
<CAPTION>

1988 1987 1986 1985
----------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE*
Net asset value at
beginning of year .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------------------------------------
Net investment income ....... 0.047 0.041 0.049 0.051
Distributions from net
investment income........... (.047) (.041) (.049) (.051)
----------------------------------------------
Net asset value at
end of year ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------------------------------------

Total return** .............. 4.80% 4.20% 4.97% 5.14%
RATIOS/SUPPLEMENTAL DATA
NET ASSET VALUE AT END
of year (in 000's) ......... $214,090 $182,018 $130,125 $ 89,193
Ratio of expenses to
average net assets ......... 0.71% 0.74% 0.80% 0.82%
Ratio of net investment in-
come to average net assets.. 4.66% 4.22% 4.79% 5.05%
</TABLE>

*Selected data for a share of capital stock outstanding throughout the year.

**Total return measures the change in value of an investment over the periods
indicated. It assumes reinvestment of dividends at net asset value.

+Without a fee reduction by the investment manager, the ratio of operating
expenses to average net assets for fiscal years ended 1991, 1992, 1993 and 1994,
would have been .71%, .75%, .80% and .81%, respectively.

INFORMATION ABOUT THE FUND
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The Fund, incorporated under the laws of the state of California on March 18,
1980, is an open-end, diversified management investment company, commonly called
a "mutual fund," and has been registered as such with the SEC under the
Investment Company Act of 1940 (the "1940 Act"). The Fund has only one class of
capital shares. The Fund attempts to maintain a stable net asset value of $1.00
per share (although there is no assurance that this will be achieved). Although
a shareholder may write redemption drafts (similar to checks) against the
account, the purchase of shares of the Fund does not create a checking or other
bank account.

The Fund is managed by Franklin Advisers, Inc. ("Manager" or "Advisers"), a
registered investment adviser which serves as investment manager or
administrator for most of the investment companies in the Franklin Group of
Funds. See "Management of the Fund".

Shares of the Fund may be purchased at net asset value (without a sales charge)
with an initial investment of at least $500 and subsequent investments of $25 or
more. (See "How to Buy Shares of the Fund.")

<PAGE>

INVESTMENT OBJECTIVE AND POLICIES OF THE FUND
- -------------------------------------------------------------------------------

The investment objective of the Fund is to attain the highest level of current
income that is exempt from federal income taxes, consistent with liquidity and
the preservation of capital. The investment objective is a fundamental policy of
the Fund and may not be changed without shareholder approval.

In accordance with procedures adopted pursuant to Rule 2a-7 under the 1940
Act, the Fund limits its investments to those U.S. dollar denominated
instruments which the Board of Directors of the Fund determines present minimal
credit risks and which are, as required by the federal securities laws, rated
in one of the two highest rating categories as determined by nationally
recognized securities rating agencies ("NRSROs"), or which are unrated by any
NRSRO but are of comparable quality, with remaining maturities of 397 calendar
days or less ("Eligible Securities"). The Fund maintains a dollar weighted
average maturity of the securities in its portfolio of 90 days or less. These
procedures are not fundamental policies of the Fund.

See the SAI for a description of ratings by three NRSROs, Standard and
Poor's Corporation, Moody's Investors Service and Fitch Investor Services, Inc.

The Fund seeks to achieve its objective by investing in a diversified portfolio
of municipal securities which the Manager, under supervision of the Board of
Directors of the Fund, has determined present minimal credit risks. These
securities will be high-quality, short-term debt obligations which are issued by
states, territories and possessions of the U.S., the District of Columbia, and
by their political subdivisions, agencies and instrumentalities, the interest on
which is exempt from federal income tax. An opinion as to the tax-exempt status
of a municipal security is generally rendered to the issuer by the issuer's bond
counsel at the time of issuance of the security. As with any other investment,
there is no assurance that the Fund's objective will be attained.

Because the Fund limits its investments to high quality securities, the Fund's
portfolio will generally earn lower yields than if the Fund purchased securities
with a lower rating and correspondingly greater risk and the yield to
shareholders in the Fund is accordingly likely to be lower.

Where market conditions would cause a serious erosion of portfolio value due to
rapidly rising interest rates or other adverse factors, the Fund may take a
defensive position to preserve net asset value by temporarily investing a
substantial portion of its assets in short-term taxable obligations of the same
quality referred to above.

The Fund has adopted a fundamental policy which requires that, under normal
conditions, at least 80% of its assets will be invested in obligations, the
income on which will be both exempt from regular federal income tax and not
specifically treated as a tax preference item under the federal alternative
minimum tax.

The interest on bonds issued to finance public purpose state and local
government operations is generally tax-exempt for regular federal income tax
purposes. Interest on certain private activity bonds (including those for
housing and student loans) issued after August 7, 1986, while still tax-exempt,
constitutes a preference item for taxpayers in determining the federal
alternative minimum tax under the Internal Revenue Code of 1986, as amended (the
"Code"), and under the income tax provisions of some states. This interest could
subject a shareholder to, or increase liability under, the federal and state
alternative minimum taxes, depending on the shareholder's tax situation. In
addition, all distributions derived from interest exempt from

<PAGE>

regular federal income tax may subject a corporate shareholder to, or increase
liability under, the federal alternative minimum tax, because such distributions
are included in the corporation's "adjusted current earnings." In states with a
corporate franchise tax, distributions of the Fund may also be fully taxable to
a corporate shareholder under the state franchise tax system.

Consistent with the Fund's investment objectives, the Fund may acquire private
activity bonds if, in the Manager's opinion, such bonds represent the most
attractive investment opportunity then available to the Fund. As of July 31,
1994, the Fund derived 6.62% of its income from bonds, the interest on which
constitutes a preference item subject to the federal alternative minimum tax
for certain investors.

The Fund may purchase floating rate and variable rate obligations. These
obligations bear interest at prevailing market rates. The Fund may also purchase
variable or floating rate demand notes ("VRDNs"). VRDNs are tax-exempt
obligations which contain a floating or variable interest rate and a right of
demand, which may be unconditional, to receive payment of the unpaid principal
balance plus accrued interest according to its terms upon a short notice period
(generally up to 30 days) prior to specified dates, either from the issuer or by
drawing on a bank letter of credit, a guarantee or insurance issued with respect
to such instrument. Although it is not a put option in the usual sense, such a
demand feature is sometimes known as a "put". With respect to 75% of the total
value of the Fund's assets, no more than 5% of such value may be in securities
underlying puts from the same institution.

The Fund may invest in floating rate and variable rate obligations carrying
stated maturities in excess of one year at the date of purchase by the Fund if
such obligations carry demand features that comply with the conditions of rules
adopted by the SEC. The Fund will limit its purchase of municipal securities
that are floating rate and variable rate obligations to those meeting the
quality standards set forth above. Frequently such obligations are secured by
letters of credit or other credit support arrangements provided by banks. The
quality of the underlying creditor or of the bank, as the case may be, must, as
determined by the Manager under the supervision of the Board of Directors, also
be equivalent to the quality standards set forth above. In addition, the Manager
monitors the earning power, cash flow and other liquidity ratios of the issuers
of such obligations, as well as the creditworthiness of the institution
responsible for paying the principal amount of the obligations under the demand
feature.

The Fund may also invest in municipal lease obligations primarily through
Certificates of Participation ("COPs"). COPs, which are widely used by state and
local governments to finance the purchase of property, function much like
installment purchase agreements. For example, a COP may be created when
long-term lease revenue bonds are issued by a governmental corporation to pay
for the acquisition of property or facilities which are then leased to a
municipality. The payments made by the municipality under the lease are used to
repay interest and principal on the bonds issued to purchase the property. Once
these lease payments are completed, the municipality gains ownership of the
property for a nominal sum. The lessor is, in effect, a lender secured by the
property being leased. This lease format is generally not subject to
constitutional limitations on the issuance of state debt, and COPs enable a
governmental issuer to increase government liabilities beyond constitutional
debt limits.

<PAGE>

A feature which distinguishes COPs from municipal debt is that the lease which
is the subject of the transaction must contain a "nonappropriation" or
"abatement" clause. A nonappropriation clause provides that, while the
municipality will use its best efforts to make lease payments, the municipality
may terminate the lease without penalty if the municipality's appropriating body
does not allocate the necessary funds. Local administrations, being faced with
increasingly tight budgets, therefore have more discretion to curtail payments
under COPs than they do to curtail payments on traditionally funded debt
obligations. If the government lessee does not appropriate sufficient monies to
make lease payments, the lessor or its agent is typically entitled to repossess
the property. In most cases, however, the private sector value of the property
will be less than the amount the government lessee was paying.

While the risk of nonappropriation is inherent to COP financing, the Fund
believes that this risk is mitigated by its policy of investing only in COPs
rated within the two highest rating categories of the NRSROs or in COPs unrated
by any NRSRO but believed to be of comparable quality. Criteria considered by
the rating agencies and the Manager in assessing such risk include the issuing
municipality's credit rating, evaluation of how essential the leased property is
to the municipality and the term of the lease compared to the useful life of the
leased property. Such factors include (a) the credit quality of such securities
and the extent to which they are rated or, if unrated, comply with existing
criteria and procedures followed to ensure that they are of quality comparable
to the ratings required for the Fund's investment, including an assessment of
the likelihood that the leases will not be canceled; (b) the size of the
municipal securities market, both in general and with respect to COPs; and (c)
the extent to which the type of COPs held by the Fund trade on the same basis
and with the same degree of dealer participation as other municipal bonds of
comparable credit rating or quality.

The Fund may purchase and sell municipal securities on a "when-issued" and "
delayed delivery" basis. These transactions are subject to market fluctuation
and the value at delivery may be more or less than the purchase price. Although
the Fund will generally purchase municipal securities on a when-issued basis
with the intention of acquiring such securities, it may sell such securities
before the settlement date if it is deemed advisable. When the Fund is the
buyer in such a transaction, it will maintain, in a segregated account with its
custodian, cash or high-grade marketable securities having an aggregate value
equal to the amount of such purchase commitments until payment is made. To the
extent the Fund engages in "when-issued" and "delayed delivery" transactions,
it will do so for the purpose of acquiring securities for the Fund's portfolio
consistent with its investment objective and policies and not for the purpose
of investment leverage.

The Fund may borrow from banks for temporary or emergency purposes only and
pledge its assets for such loans, up to 10% of the Fund's total assets. No new
investments will be made by the Fund while any outstanding loans exceed 5% of
its total assets. The Fund may also make loans of its portfolio securities not
in excess of 10% of the value of its total assets. The Fund may enter into
repurchase agreements with government securities dealers recognized by the
Federal Reserve Board or with member banks of the Federal Reserve System;
however, it has no present intention of doing so. For further information on
this investment technique, please see the SAI.

<PAGE>

MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------

The Board of Directors has the primary responsibility for the overall management
of the Fund and for electing its officers who are responsible for administering
its day-to-day operations.

Advisers is a wholly-owned subsidiary of Franklin Resources, Inc. ("Resources"),
a publicly owned holding company, the principal shareholders of which are
Charles B. Johnson, Rupert H. Johnson, Jr. and R. Martin Wiskemann, who own
approximately 20%, 16% and 10%, respectively, of Resources' outstanding shares.
Through its subsidiaries, Resources is engaged in various aspects of the
financial services industry. Advisers acts as investment adviser or
administrator for most of the 33 U.S. registered investment companies (over 111
separate series) in the Franklin Group of Funds, with aggregate assets of over
$75 billion, approximately $42 billion of which are in the municipal securities
market.

Pursuant to a management agreement with the Fund, the Manager supervises and
implements the Fund's investment activities and provides certain administrative
services and facilities which are necessary to conduct the Fund's business.

During the fiscal year ended July 31, 1994, fees totaling 0.55% of the average
daily net assets of the Fund would have been accrued by Advisers. Total
operating expenses, including management fees, would have represented 0.81% of
the average daily net assets of the Fund. Pursuant to a fee reduction by
Advisers, the Fund paid management fees totaling 0.39% of the average daily net
assets of the Fund and operating expenses totaling 0.65%. This fee reduction
arrangement may be terminated by the Manager at any time.

The Fund does not ordinarily incur a significant amount of brokerage expenses
because municipal securities are generally traded on a "net" basis, that is, in
principal transactions without the addition or deduction of brokerage
commissions or transfer taxes. To the extent that the Fund does participate in
transactions involving brokerage commissions, it is the Manager's responsibility
to select brokers through which such transactions will be effected. The Manager
tries to obtain the best execution on all such transactions. If it is felt that
more than one broker is able to provide the best execution, the Manager will
consider the furnishing of quotations and of other market services, research,
statistical and other data for the Manager and its affiliates, as well as the
sale of shares of the Fund, as factors in selecting a broker. Further
information is included under "The Fund's Policies Regarding Brokers Used on
Portfolio Transactions" in the SAI.

Shareholder accounting and many of the clerical functions for the Fund are
performed by Franklin/Templeton Investor Services, Inc. ("Investor Services" or
"Shareholder Services Agent"), in its capacity as transfer agent and
dividend-paying agent. Investor Services is a wholly-owned subsidiary of
Resources.

DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------

The Fund declares dividends for each day that the Fund's net asset value is
calculated, payable to shareholders of record as of the close of business the
preceding day. The amount of dividends may fluctuate from day to day and
dividends may be omitted on some days, depending on changes in the factors that
comprise the Fund's net investment income. THE FUND DOES NOT PAY "INTEREST" TO
ITS SHAREHOLDERS, NOR IS ANY AMOUNT OF DIVIDENDS OR RETURN GUARANTEED IN ANY
WAY.

Dividends are automatically reinvested daily in the form of additional
shares of the Fund at the net asset value per share at the close of business
each day.

<PAGE>

The daily dividend includes accrued interest and any original issue and market
discount, plus or minus any gain or loss on the sale of portfolio se-curities
and changes in unrealized appreciation or depreciation in portfolio securities
(to the extent required to maintain a stable net asset value per share) less
amortization of any premium paid on the purchase of portfolio securities and the
estimated expenses of the Fund.

DIVIDENDS IN CASH

Shareholders may request to have their dividends paid out monthly in cash by
notifying Investor Services. For such shareholders, the shares reinvested and
credited to their account during the month will be redeemed as of the close of
business on the last business day of the month and the proceeds will be paid to
them in cash. By completing the "Special Payment Instructions for Dividends"
section of the Shareholder Application included with this Prospectus, a
shareholder may direct the selected distributions to another fund in the
Franklin Group of Funds(R) or the Templeton Group, to another person, or
directly to a checking account. If the bank at which the account is maintained
is a member of the Automated Clearing House, the payments may be made
automatically by electronic funds transfer. If this last option is requested,
the shareholder should allow at least 15 days for initial processing. Dividends
which may be paid in the interim will be sent to the address of record.
Additional information regarding automated fund transfers may be obtained from
Franklin's Shareholder Services Department.

TAXATION OF THE FUND AND ITS SHAREHOLDERS
- --------------------------------------------------------------------------------

The following discussion reflects some of the tax considerations that affect
mutual funds and their shareholders. Additional information on tax matters
relating to the Fund and its shareholders is included in the section entitled
"Additional Information Regarding Distributions and Taxes" in the SAI.

The Fund intends to continue to qualify for treatment as a regulated investment
company under Subchapter M of the Code. By distributing all of its income and
meeting certain other requirements relating to the sources of its income and
diversification of its assets, the Fund will not be liable for federal income or
excise taxes.

By meeting certain requirements of the Code, the Fund will continue to qualify
to pay exempt-interest dividends to its shareholders. Such exempt-interest
dividends are derived from interest income exempt from regular federal income
tax and are not subject to regular federal income tax for Fund shareholders.

To the extent dividends are derived from taxable income from temporary
investments (including the discount from certain stripped obligations or their
coupons or income from securities loans or other taxable transactions), from the
excess of net short-term capital gain over net long-term capital loss, or from
income derived from the sale or disposition of bonds purchased with market
discount after April 30, 1993, they are treated as ordinary income whether the
shareholder has elected to receive them in cash or in additional shares.

Since the Fund's income is derived from interest and gain on the sale of
portfolio securities rather than dividend income, no portion of the Fund's
distributions will generally be eligible for the corporate dividends-received
deduction. None of the distributions paid by the Fund for the fiscal year ended
July 31, 1994 qualified for this deduction and it is not anticipated that any of
the current year's dividends will so qualify.

The Fund will inform shareholders of the source of their dividends and
distributions at the time they are paid, and will promptly after the close of

<PAGE>

each calendar year advise them of the tax status for federal income tax purposes
of such dividends and distributions, including the portion of the dividends on
an average basis which constitutes taxable income or a tax preference item under
the federal alternative minimum tax. Shareholders who have not held shares of
the Fund for a full calendar year may have designated as tax-exempt or as tax
preference income a percentage of income which is not equal to the actual amount
of tax-exempt or tax preference income earned during the period of their
investment in the Fund.

Exempt-interest dividends of the Fund, although exempt from regular federal
income tax in the hands of a shareholder, are includable in the tax base for
determining the extent to which a shareholder's social security or railroad
retirement benefits will be subject to regular federal income tax. Shareholders
are required to disclose their receipt of tax-exempt interest dividends on their
federal income tax returns.

Interest on indebtedness incurred (directly or indirectly) by shareholders to
purchase or carry Fund shares may not be fully deductible for federal income tax
purposes.

Shareholders should consult their tax advisors with respect to the applicability
of state and local intangible property or income taxes to their shares in the
Fund and to distributions and redemption proceeds received from the Fund. For
example, distributions attributable to interest received from, or capital gain
derived from the disposition of, obligations of a given state or its political
subdivisions may be exempt from income taxes in that state.

Shareholders who are not U.S. persons for purposes of federal income taxation
should consult with their financial or tax advisors regarding the applicability
of U.S. withholding or other taxes on distributions received by them from the
Fund and the application of foreign tax laws to these distributions.

HOW TO BUY SHARES OF THE FUND
- --------------------------------------------------------------------------------
Shares of the Fund are continuously offered through securities dealers which
execute an agreement with Distributors, the principal underwriter of the Fund's
shares, and by the Fund directly. The use of the term "securities dealer" shall
include other financial institutions which, pursuant to an agreement with
Distributors (directly or through affiliates), handle customer orders and
accounts with the Fund. Such reference, however, is for convenience only and
does not indicate a legal conclusion of capacity. All shares of the Fund are
purchased at the net asset value, without a sales charge, next determined after
receipt of a purchase order in proper form. The minimum initial investment is
$500 and subsequent investments must be $25 or more. These minimums may be
waived when the shares are purchased through plans established at Franklin.
Purchases in proper form received by the Fund prior to 3:00 p.m. Pacific time
will be credited to the shareholder's account on that business day. If received
after 3:00 p.m., the purchase will be credited the following business day.

Many of the types of instruments in which the Fund invests must be paid for in
federal funds which are monies held by its custodian bank on deposit at the
Federal Reserve Bank of San Francisco and elsewhere. Therefore, the monies paid
by an investor for shares of the Fund generally cannot be invested by the Fund
until they are converted into and are available to the Fund in federal funds,
which may take up to two days. In such cases, purchases by investors may not be
considered in proper form and effective until such conversion and availability.
In the event the Fund is able to make investments immediately (within one

<PAGE>

business day), it may accept a purchase order with payment other than in federal
funds; in such event shares of the Fund will be purchased at the net asset value
next determined after receipt of the order and payments.

Shares may be purchased in any of the following ways:

BY MAIL

(1) For an initial investment, include the completed Shareholder Application
contained in this Prospectus. For subsequent investments, the deposit slips
which are included with the shareholder's monthly statement or checkbook
(if one has been requested) may be used, or the shareholder should
reference the account number on the check.

(2) Make the check, Federal Reserve draft or negotiable bank draft payable to
Franklin Tax-Exempt Money Fund. Instruments drawn on other investment
companies may not be accepted.

(3) Send the check, Federal Reserve draft or negotiable bank draft to Franklin
Tax-Exempt Money Fund, 777 Mariners Island Blvd., P.O. Box 7777, San Mateo,
California 94403-7777.

BY WIRE

(1) Call Franklin's Shareholder Services Department at 1-800/632-2301. If that
line is busy, call 415/312-2000 collect, to advise that funds will be wired
for investment. The Fund will supply a wire control number for the
investment. It is necessary to obtain a new wire control number every time
money is wired into an account in the Fund. Wire control numbers are
effective for one transaction only and may not be used more than once.
Shareholders should contact Franklin's Shareholder Services Department at
the above telephone number to obtain a wire control number each time funds
are to be wired for investment to the Fund. Wired money which is not
properly identified with a currently effective wire control number will be
returned to the bank from which it was wired and will not be credited to
the shareholder's account.

(2) Wire funds to Bank of America, ABA routing number 121000358, for credit to
Franklin Tax-Exempt Money Fund, A/C 1493-3-04779. The wire control number
and shareholder's name must be included. Wired funds received by the Bank
and reported by the Bank to the Fund by 3:00 p.m. Pacific time are normally
credited on that day. Later wires are credited the following business day.

(3) If the purchase is not to an existing account, a completed Shareholder
Application must be sent to Franklin Tax-Exempt Money Fund at 777 Mariners
Island Blvd., P.O. Box 7777, San Mateo, California 94403-7777, to assure
proper credit for the wire.

THROUGH SECURITIES DEALERS

Investors may, if they wish, invest in the Fund by purchasing shares through a
securities dealer as noted above. Securities dealers which process orders on
behalf of their customers may charge a reasonable fee for their services.
Investments made directly, without the assistance of a securities dealer, are
without charge. In certain states, shares of the Fund may be purchased only
through registered securities dealers.

AUTOMATIC INVESTMENT PLAN

Under the Automatic Investment Plan, a shareholder may be able to arrange to
make additional purchases of shares automatically on a monthly basis by
electronic funds transfer from a checking account if the bank which maintains
the account is a member of the Automated Clearing House, or by

<PAGE>

preauthorized checks drawn on the shareholder's bank account. A shareholder may,
of course, terminate the program at any time. The Shareholder Application
included with this Prospectus contains the requirements applicable to this
program.

GENERAL

The Fund and Distributors reserve the right to reject any order for the purchase
of shares of the Fund or to waive the minimum investment requirements when the
shares are being purchased through plans established at Franklin. In addition,
the offering of shares of the Fund may be suspended by the Fund at any time and
resumed at any time thereafter.

Securities laws of states in which the Fund's shares are offered for sale may
differ from the interpretations of federal law, and banks and financial
institutions selling Fund shares may be required to register as dealers pursuant
to state law.

If the purchase or sale of Fund shares with the assistance of certain banks were
deemed to be an impermissible activity for such bank under the Glass Steagall
Act or other federal laws, such activities would likely be discontinued by such
bank. Investors utilizing such bank assistance would then be able to seek other
avenues to invest in Fund shares, such as securities dealers registered with the
SEC or from the Fund directly.

HOW TO REDEEM SHARES OF THE FUND
- --------------------------------------------------------------------------------

All or any part of a shareholder's investment may be converted into cash,
without penalty or charge, by redeeming shares in any one or more of the methods
discussed below on any day the New York Stock Exchange (the "Exchange") is open
for trading. Regardless of the method of redemption, payment for the
shareholder's redeemed shares will be sent within seven days after receipt of
the redemption request in proper form, except that the Fund may delay the
mailing of the redemption check, or a portion thereof, until the clearance of
the check used to purchase fund shares, which may take up to 15 days or more.
Although the use of a certified or cashier's check will generally reduce this
delay, shares purchased with such instruments will also be held pending
clearance. Shares purchased by federal funds wire are available for immediate
redemption. Shareholders are requested to provide a telephone number(s) where
they may be reached during business hours, or in the evening if preferred.
Investor Services' ability to contact a shareholder promptly when necessary will
speed the processing of the redemption.

Shares may be redeemed in any of the following ways:

1. BY CHECK

The Fund will supply redemption drafts (which are similar to checks and are
referred to as checks throughout this Prospectus) to shareholders who have
requested them on the Shareholder Application. The election of the check
redemption procedure does not create a checking account or other bank account
relationship between a shareholder and the Fund or any bank. These checks are
drawn through the Fund's custodian, Bank of America NT & SA (the "Custodian" or
"Bank"). Shareholders will generally not be able to convert a check drawn on the
Fund account into a certified or cashier's check by presentation at the Fund's
Custodian. The shareholder may make checks payable to the order of any person in
any amount not less than $100. There is no charge to the shareholder for this
check redemption procedure.

When such a check is presented for payment, the Fund will redeem a sufficient
number of full and fractional shares in the shareholder's account to cover the
amount of the check. This enables the shareholder to continue earning daily
income divi-

<PAGE>

dends until the check has cleared. Shares will be redeemed at their net asset
value next determined after receipt of a check which does not exceed the
collected balance of the account. Only shareholders having accounts in which no
share certificates have been issued will be permitted to redeem shares by check.

Because the Fund is not a bank, no assurance can be given that stop payment
orders on checks written by shareholders may be effective. The Fund, however,
will use its best efforts to see that such orders are carried out.

Shareholders will be subject to the right of the Bank to return unpaid checks in
amounts exceeding the collected balance of their account at the time the check
is presented for payment. Checks should not be used to close a Fund account
because when the check is written the shareholder will not know the exact total
value of the account on the day the check clears. The Bank reserves the right to
terminate this service at any time upon notice to shareholders.

2. BY TELEPHONE

A shareholder may redeem shares by telephoning the Fund at 1-800/632-2301.
Payment of redemption requests of $1,000 or less (once per business day) will be
sent by mail to the shareholder's address as reflected on the Fund's records.
For payments over $1,000, the shareholder must complete the "Wire Redemptions
Privilege" section of the Shareholder Application. Proceeds will then be wired
directly to the commercial bank or brokerage firm designated by the shareholder.
Wires will not be sent for redemption requests of $1,000 or less. Shareholders
may have redemption proceeds of over $1,000, up to $50,000 per day per Fund
account, sent directly to their address of record by filing a completed
Franklin/Templeton Telephone Redemption Authorization Agreement (the
"Agreement") included with this Prospectus. Information may also be obtained by
writing to the Fund or Investor Services at the address shown on the cover or by
calling the number above. The Fund and Investor Services will employ reasonable
procedures to confirm that instructions given by telephone are genuine.
Shareholders, however, bear the risk of loss in certain cases as described under
"Telephone Transactions - Verification Procedures."

Telephone redemption requests received before 3:00 p.m. Pacific time on any
business day will be processed that same day. The redemption check will be sent
within seven days, made payable to all the registered owners on the account, and
will be sent only to the address of record. Wire payments will be transmitted
the next business day following receipt prior to 3:00 p.m. Pacific time of a
request for redemption in proper form. Shareholders may wish to allow for longer
processing time if they want to assure that redemption proceeds will be
available at a specific time for a specific transaction. Shareholders may be
able to have redemption proceeds wired to an escrow account the same day,
provided that the request is received prior to 9:00 a.m. Pacific time.

During periods of drastic economic or market changes, it is possible that the
telephone redemption privilege may be difficult to implement. In this event,
shareholders should follow the other redemption procedures discussed in this
section.

Redemption instructions must include the shareholder's name and account number
and be called to the Fund. No shares for which share certificates have been
issued may be redeemed by telephone instructions. Redemption requests by
telephone will not be accepted within 30 days following an address change by
telephone. In that case, a shareholder should follow the other redemption
procedures set forth in this Prospectus. Institutional

<PAGE>

accounts which wish to execute redemptions in excess of $50,000 must complete an
Institutional Telephone Privileges Agreement which is available from Franklin's
Institutional Services Department by telephoning 1-800/321-8563. The telephone
redemption privilege may be modified or discontinued by the Fund at any time
upon 60 days' notice to shareholders.

3. BY MAIL

A shareholder may redeem all or a portion of shares owned by sending a letter to
Investor Services, at the address shown on the back cover of this Prospectus,
requesting redemption and surrendering share certificates if any have been
issued.

IMPORTANT THINGS TO REMEMBER WHEN REDEEMING SHARES

Written requests for redemption must be signed by all registered owners.

Where shares to be redeemed are represented by share certificates, the request
for redemption must be accompanied by the share certificate and a share
assignment form signed by the registered shareholders exactly as the account is
registered, with the signature(s) guaranteed as referenced below. Shareholders
are advised, for their own protection, to send the share certificate and
assignment form in separate envelopes if they are being mailed in for
redemption.

TO BE CONSIDERED IN PROPER FORM, SIGNATURE(S) MUST BE GUARANTEED IF THE
REDEMPTION REQUEST INVOLVES ANY OF THE FOLLOWING:

(1) the proceeds of the redemption are over $50,000;

(2) the proceeds (in any amount) are to be paid to someone other than the
registered owner(s) of the account;

(3) the proceeds (in any amount) are to be sent to any address other than the
shareholder's address of record, preauthorized bank account or brokerage
firm account;

(4) share certificates, if the redemption proceeds are in excess of $50,000; or

(5) the Fund or Investor Services believes that a signature guarantee would
protect against potential claims based on the transfer instructions,
including, for example, when (a) the current address of one or more joint
owners of an account cannot be confirmed, (b) multiple owners have a
dispute or give inconsistent instructions to the Fund, (c) the Fund has
been notified of an adverse claim, (d) the instructions received by the
Fund are given by an agent, not the actual registered owner, (e) the Fund
determines that joint owners who are married to each other are separated or
may be the subject of divorce proceedings, or (f) the authority of a
representative of a corporation, partnership, association, or other entity
has not been established to the satisfaction of the Fund.

Signature(s) must be guaranteed by an "eligible guarantor institution" as
defined under Rule 17Ad-15 under the Securities Exchange Act of 1934. Generally,
eligible guarantor institutions include (1) national or state banks, savings
associations, savings and loan associations, trust companies, savings banks,
industrial loan companies and credit unions; (2) national securities exchanges,
registered securities associations and clearing agencies; (3) securities dealers
which are members of a national securities exchange or a clearing agency or
which have minimum net capital of $100,000; or (4) institutions that participate
in the Securities Transfer Agent Medallion Program ("STAMP") or other recognized
signature guarantee medallion program. A nota-

<PAGE>
6. OPTIONAL SHAREHOLDER PRIVILEGES

A. CHECK WRITING PRIVILEGES/SINGLE NAME ACCESS TO JOINTLY REGISTERED
ACCOUNTS/VOTING OF PROXIES

/ / Yes, I want the convenience of check writing access to my account. (Please
allow two weeks for check delivery.)

FOR ACCOUNTS REGISTERED WITH MORE THAN ONE OWNER, YOU MUST CHECK THE
FOLLOWING TO PERMIT CHECKS TO BE SIGNED BY A SINGLE OWNER:

/ / Yes, I want this registered as an "either/or" account. Complete and sign
only if this is a joint ownership or co-trustee trust account and you want
single name access to the account (signature of every joint owner/co-trustee
identified in Section 1 required below). By signing below, I authorize the
Fund and its transfer agent to register this account in an "either/or"
capacity and to honor any proxy in respect of matters submitted to a vote of
shareholders or any redemption, transfer or registration instruction
(including redemptions by use of the check writing privilege) pertaining to
the shares in this account given, as applicable, by any one joint owner or
any one co-trustee. I understand that this means that instructions can be
issued by only one joint owner/co-trustee and that any dividend and/or
redemption check(s) issued or the request of any one of us will be issued
payable to the order of any one joint owner alone and can be negotiated by
any one of us alone without the endorsement of any other joint
owner/co-trustee.

I hereby appoint the other joint owner(s)/co-trustee(s) as my
attorney(s)-in-fact with full power and authority to individually to execute
and submit proxies in respect of matters to be voted upon by shareholders,
or to issue redemption, transfer and/or registration instructions on my
behalf with respect to the shares in this account. This authorization and
appointment shall not be affected by my subsequent disability or
incompetency and shall remain in effect until it is either: (1) revoked upon
receipt by the Fund of written notice from any one of us delivered by
registered mail, return receipt requested; or (2) revoked by the Fund upon
receipt of any information that causes it to believe in good faith that
there is or that there may be a dispute among the joint owners and/or the
co-trustees with respect to ownership rights. Each of us agrees to notify
the Fund immediately of the death of any other joint owner/co-trustee.

Date
-----------------------------

X X
--------------------------------- -----------------------------------------
Signature Signature

================================================================================

B. WIRE REDEMPTION PRIVILEGE

/ / Yes / / No (Attach a void check imprinted with your name and address.)

I authorize you to honor my instructions to wire redemption proceeds of
$1000 or more to my bank account identified below.

----------------------------------------------------------------------------
Name of bank Branch Bank account number

----------------------------------------------------------------------------
Address of bank Branch telephone number ABA routing number

----------------------------------------------------------------------------
Corresponding bank if using Account number
savings and loan or credit
union

================================================================================

C. SPECIAL PAYMENT INSTRUCTIONS FOR DIVIDENDS

/ / Pay dividends to another Franklin or Templeton Fund.

Fund Name Existing Account Number
--------------------- ---------------------
OR

/ / Send my dividends to the person, or to the checking account at the bank,
named below, instead of as registered in Section 1.

Name Street Address
-------------------------- ------------------------------

City State, Zip Code
-------------------------- -----------------------------

<PAGE>
THE FRANKLIN TEMPLETON GROUP
777 MARINERS ISLAND BLVD., P.O. BOX 7777, SAN MATEO, CA 94403-7777
1-800/632-2301

[FRANKLIN TEMPLETON LOGO]

Please do not use this form for Franklin Templeton retirement plans.
Request separate applications.

SHAREHOLDER APPLICATION OR REVISION / / PLEASE CHECK BOX IF REVISION AND SEE
SECTION 8

DATE / / Franklin Tax-Exempt Money Fund 0114
------------------------
/ / Franklin Money Fund 0111 / / Franklin California Tax-Exempt Money Fund
0125
/ / Franklin Federal Money / / Franklin New York Tax-Exempt Money Fund 0131
Fund 0113

1. ACCOUNT REGISTRATION - PLEASE PRINT

/ / INDIVIDUAL OR JOINT ACCOUNT

---------------------------------------------------------------------------
First name Middle initial Last name

| | | |-| | |-| | | | |
-----------------------
Social security number (SSN)

----------------------- ------------------------ ------------------------
Joint owner(s) (Joint ownership means "joint tenants with rights of
survivorship" unless otherwise specified)

ALL OWNERS MUST SIGN SECTION 4.

===============================================================================

/ / GIFT TRANSFER TO A MINOR

---------------------------------------------------------------------------
Name of custodian (one only)

As Custodian For
----------------------------------------------------------
Minor's name (one only)

Uniform Gift/Transfer to Minors Act
---------------------------------------
State (minor's or custodian's state
of residence)

| | | |-| | |-| | | | |
-----------------------
Minor's social security number

Please Note: Custodian's signature, not minor's, is required in Section 4.

===============================================================================

/ / TRUST, CORPORATION, PARTNERSHIP, OR OTHER ENTITY

---------------------------------------------------------------------------
If corporation, resolution required from Board of Directors

| | | | | | | | | | | |
-----------------------
Taxpayer identification number (TIN)

---------------------------------------------------------------------------
Name of each trustee (if any)

---------------------------------------------------------------------------
Date of trust document (must be completed for trust registration)

2. ADDRESS

---------------------------------------------------------------------------
Street address (P.O. Box acceptable if street address is given)

| | | | | | |-| | | |
---------------------------------------------------------------------------
City State Zip code

Daytime Phone ( )
----------------------------------
Area code

Evening Phone ( )
----------------------------------
Area code

I am a citizen of: / / U.S. / /
-------------------------------------------

<PAGE>

3. INITIAL INVESTMENT - $500 MINIMUM INITIAL INVESTMENT

Enclosed is a check payable to the Fund indicated above
for $ .
---------------

4. SIGNATURE AND TAX CERTIFICATIONS - ALL REGISTERED OWNERS MUST SIGN
APPLICATION

See "Important Notice Regarding Taxpayer IRS Certifications" in back of
prospectus. The Fund reserves the right to refuse to open an account without
either a certified taxpayer identification number ("TIN") or a certification of
foreign status. Failure to provide the tax certifications in this section may
result in backup withholding on payments relating to your account and/or in
your inability to qualify for treaty withholding rates.

I am not subject to backup withholding because I have not been notified by the
IRS that I am subject to backup withholding as a result of a failure to report
all interest or dividends or because the IRS has notified me that I am no longer
subject to backup withholding. (If you are currently subject to backup
withholding as a result of a failure to report all interest or dividends,
please cross out the preceding statement.)

/ / The number shown above is my correct TIN, or that of the minor named in
section 1.

/ / AWAITING TIN. I am waiting for a number to be issued to me. I understand
that if I do not provide a TIN to the Fund within 60 days, the Fund is
required to commence 31% backup withholding until I provide a certified
TIN.

/ / EXEMPT RECIPIENT. Individuals cannot be exempt. Check this box only after
reading the instructions to see whether you qualify as an exempt recipient.
(You should still provide a TIN.)

/ / EXEMPT FOREIGN PERSON. Check this box only if the following statement
applies: "I am neither a citizen nor a resident of the United States. I
certify to the best of my knowledge and belief, I qualify as an exempt
foreign person and/or entity as described in the instructions."

Permanent address for tax purposes
----------------------------------------
Street address

---------------------------------------------------------------------------
City State Country Postal code

PLEASE NOTE: The IRS only allows one TIN to be listed on an account. On joint
accounts, it is preferable for the primary account owner (or person listed first
on the account) to list his/her number as requested above.

CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I/WE CERTIFY THAT (1) THE
INFORMATION PROVIDED ON THIS APPLICATION IS TRUE, CORRECT AND COMPLETE, (2) I/WE
HAVE READ THE PROSPECTUS(ES) FOR THE FUND(S) IN WHICH I/WE AM/ARE INVESTING AND
AGREE TO THE TERMS THEREOF, AND (3) I/WE AM/ARE OF LEGAL AGE OR AN EMANCIPATED
MINOR.

THE UNDERSIGNED ACKNOWLEDGE(S) THAT SHARES OF THE FUND ARE NOT INSURED OR
GUARANTEED BY ANY AGENCY OR INSTITUTION AND THAT AN INVESTMENT IN FUND SHARES
INVOLVES RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

X X
- -------------------------------------- --------------------------------------
Signature Signature

Please make a photocopy of this application for your records.

5. BROKER/DEALER USE ONLY - PLEASE PRINT

Franklin Dealer #
---------------------

Securities Dealer Name
--------------------------------------------------------

Main Office Address
-----------------------------------------------------------

- -------------------------------------------------------------------------------

Branch # Rep #
------------------------------ ---------------------------------

Representative Name
-----------------------------------------------------------

Branch Address
----------------------------------------------------------------

Telephone Number ( )
----------------------

See reverse for shareholder account options.

<PAGE>
IMPORTANT! Please indicate account number and ATTACH A VOID CHECK IMPRINTED
WITH YOUR NAME AND ADDRESS if payable to your bank account.

Bank Account #
--------------------------------

If I have listed a bank account, by signing the Application I give my
authorization to the Fund, its bank(s) and my bank (if it is a member of an
Automated Clearing House [ACH]) to make and receive dividend payments by ACH
electronic funds transfers, and to initiate and make, if necessary, debit
entries and any adjustments to my bank account of any amounts credited to it
in error. I agree that this authorization will remain in full force and
effect until the Fund has received written notification from me of its
termination. Please allow at least 15 days for initial processing.
Dividends which may be paid in the interim period will be sent to the
address of record.

===============================================================================

D. STATEMENT SUPPRESSION

/ / Please check this box if you wish to suppress your deposit/redemption
confirmation statements and receive only a monthly statement.

===============================================================================

E. TELEPHONE TRANSACTIONS

Telephone Exchange Privilege: If the Fund does not receive specific
instructions from the shareholder, either in writing or by telephone, the
Telephone Exchange Privilege (see the prospectus) is automatically extended
to each account. The shareholder should understand, however, that the Fund
and Franklin Templeton Investor Services, Inc. and their agents will not be
liable for any loss, injury, damage or expense as a result of acting upon
instructions communicated by telephone reasonably believed to be genuine.
The shareholder agrees to hold the Fund and its agents harmless from any
loss, claims, or liability arising from its or their compliance with such
instructions. The shareholder understands that this option is subject to
the terms and conditions set forth in the prospectus of the fund to be
acquired.

/ / No, I do NOT wish to participate in the Telephone Exchange Privilege or
authorize the Fund or its agents, including Franklin Templeton Investor
Services, Inc., to act upon instructions received by telephone to exchange
shares for shares of any other account(s) within the Franklin Templeton
Group of Funds.

Telephone Redemption Privilege: This is available to shareholders who
specifically request it and who complete the Franklin Templeton Telephone
Redemption Authorization Agreement in the back of the Fund's prospectus.

F. AUTOMATIC INVESTMENT PROGRAMS

Automatic Payroll Deduction: If you would like to invest directly from your
paycheck, you may direct money automatically to your Franklin fund account
via electronic funds transfer.

/ / Please send me an application for the Automatic Payroll Deduction program.

Direct Deposit Program: If you receive a monthly Social Security check or
other regularly occurring federal payments, you may direct money
automatically to your Franklin fund account via electronic funds transfer.

/ / Please send me an application for the Direct Deposit Program for Federal
Payments.

Automatic Investment Plan: For the convenience of investing on a regular
basis, we can process automatic monthly deposits from your bank account into
any one of our Funds. An application form is in the back of the Fund's
prospectus.

7. ACCOUNT REVISION (IF APPLICABLE)

If you are using this application to REVISE YOUR ACCOUNT REGISTRATION
(SECTION 1), HAVE REDEMPTION PROCEEDS WIRED TO YOUR BANK (SECTION 6B), or wish
to HAVE DISTRIBUTION INCOME SENT TO AN ADDRESS OTHER THAN THE ADDRESS ON YOUR
EXISTING ACCOUNT'S REGISTRATION (SECTION 6C), a signature guarantee is
required. Signatures of all registered owners must be guaranteed by an
"eligible guarantor institution" as defined under the federal securities laws.
See the discussion of "How to Sell Shares of the Fund" in the prospectus for
more information on signature guarantees. A notary public is not an acceptable
guarantor.

X
- ---------------------------------------- ------------------------------------
Signature of registered account owners Account number

X
- ---------------------------------------- ------------------------------------

X
- ----------------------------------------

X
- ---------------------------------------- ------------------------------------
Signature guarantee stamp

NOTE: For any change in registration, please send us any outstanding
cerificates by registered mail.

<PAGE>

rized signature will not be sufficient for the request to be in proper form.

Liquidation requests of corporate, partnership, trust and custodianship
accounts, and accounts under court jurisdiction require the following
documentation to be in proper form:

Corporation - (1) Signature guaranteed letter of instruction from the authorized
officer(s) of the corporation and (2) a corporate resolution.

Partnership - (1) Signature guaranteed letter of instruction from a general
partner and (2) pertinent pages from the partnership agreement identifying the
general partners or a certification for a partnership agreement.

Trust - (1) Signature guaranteed letter of instruction from the trustee(s) and
(2) copy of the pertinent pages of the trust document listing the trustee(s) or
a Certification for Trust if the trustee(s) are not listed on the account
registration.

Custodial - Signature guaranteed letter of instruction from the custodian.

Accounts under court jurisdiction - Check court documents and the applicable
state law since these accounts have varying requirements, depending upon the
state of residence.

For any information required about a proposed liquidation, a shareholder may
call Franklin's Shareholder Services Department or the securities dealer may
call Franklin's Dealer Services Department.

Written requests for redemption, all share certificates, and all certificate
assignment forms should be sent to the Fund or Investor Services at the address
shown on the back cover of this Prospectus.

Payment for written requests for redemption will be sent within seven days after
receipt of the request in proper form. Redemptions will be made in cash at the
net asset value per share next determined after receipt by the Fund of a
redemption request in proper form, including all share certificates,
assignments, signature guarantees and other documentation as may be required by
Investor Services. The amount received upon redemption may be more or less than
the shareholder's original investment. Redemptions may be suspended under
certain limited circumstances pursuant to rules adopted by the SEC.

Wiring of redemption proceeds is a special service made available to
shareholders whenever possible. The offer of this service, however, does not
bind the Fund to meet any redemption request by wire or in less than the
seven-day period prescribed by law. Neither the Fund nor its agents shall be
liable to any shareholder or other person for a redemption payment by wire which
for any reason may not be processed as described in this section.

OTHER PROGRAMS AND PRIVILEGES AVAILABLE TO FUND SHAREHOLDERS
- --------------------------------------------------------------------------------

CERTAIN OF THE PROGRAMS AND PRIVILEGES DESCRIBED IN THIS SECTION MAY NOT BE
AVAILABLE DIRECTLY FROM THE FUND TO SHAREHOLDERS WHOSE SHARES ARE HELD, OF
RECORD, BY A FINANCIAL INSTITUTION OR IN A "STREET NAME" ACCOUNT, OR NETWORKED
ACCOUNT THROUGH NATIONAL SECURITIES CLEARING CORPORATION ("NSCC") (SEE THE
SECTION CAPTIONED "ACCOUNT REGISTRATIONS" IN THIS PROSPECTUS).

SHARE CERTIFICATES

Shares for an initial investment, as well as subsequent investments, including
the reinvestment of dividends and any capital gain distributions, are generally
credited to an account in the name of an investor on the books of the Fund,
without the issuance of a share certificate. Maintaining shares in
uncertificated form (also known as "plan balance") minimizes the risk of loss or
theft of a share

<PAGE>

certificate. A lost, stolen or destroyed certificate cannot be replaced without
obtaining a sufficient indemnity bond. The cost of such a bond, which is
generally borne by the shareholder, can be 2% or more of the value of the lost,
stolen or destroyed certificate. A certificate will be issued if requested in
writing by the shareholder or by his securities dealer.

CONFIRMATIONS

A confirmation statement will be sent to each shareholder monthly to reflect the
daily dividends reinvested, as well as after each transaction which affects the
shareholder's account, except a redemption effected by check. This statement
will also show the total number of Fund shares owned by the shareholder,
including the number of shares in "plan balance" for the account of the
shareholder.

SYSTEMATIC WITHDRAWAL PLAN

A shareholder may establish a Systematic Withdrawal Plan and receive regular
periodic payments from the shareholder's account, provided that the net asset
value of the shares held by the shareholder is at least $5,000. There are no
service charges for establishing or maintaining a Systematic Withdrawal Plan.
The minimum amount which the shareholder may withdraw is $50 per transaction,
although this is merely the minimum amount allowed under the plan and should not
be mistaken for a recommended amount. The plan may be established on a monthly,
quarterly, semiannual or annual basis.

Sufficient shares of the Fund will be liquidated (generally on the first
business day of the month in which the distribution is scheduled) at net asset
value to meet the specified withdrawals, with payment generally received by the
shareholder three to five days after the date of liquidation. By completing the
"Special Payment Instructions for Dividends" section of the Shareholder
Application included with this Prospectus, a shareholder may direct the selected
withdrawals to another fund in the Franklin Group of Funds or the Templeton
Group, to another person, or directly to a checking account. If the bank at
which the account is maintained is a member of the Automated Clearing House, the
payments may be made automatically by electronic funds transfer. If this last
option is requested, the shareholder should allow at least 15 days for initial
processing. Withdrawals which may be paid in the interim will be sent to the
address of record. Liquidation of shares may deplete the investment and
withdrawal payments cannot be considered as actual yield or income since part of
such payments may be a return of capital. If the withdrawal amount exceeds the
total plan balance, the account will be closed and the remaining balance will be
sent to the shareholder. A Systematic Withdrawal Plan may be terminated on
written notice by the shareholder or the Fund, and it will terminate
automatically if all shares are liquidated or withdrawn from the account, or
upon the Fund's receipt of notification of the death or incapacity of the
shareholder. Shareholders may change the amount (but not below the specified
minimum) and schedule of withdrawal payments, or suspend one such payment, by
giving written notice to Investor Services at least seven business days prior to
the end of the month preceding a scheduled payment. Share certificates may not
be issued while a Systematic Withdrawal Plan is in effect.

MULTIPLE ACCOUNTS FOR FIDUCIARIES

Special procedures have been designed for banks and other institutions wishing
to open multiple accounts in the Fund. Further information is included in the
Fund's SAI.

RIGHTS OF ACCUMULATION

The cost or current value (whichever is higher) of the shares in the Fund will
be included in deter-

<PAGE>

mining the sales charge discount to which an investor may be entitled when
purchasing shares of one of the many funds in the Franklin Group of Funds and in
the Templeton Group of Funds which are sold with a sales charge. Included for
these purposes are (a) the open-end investment companies in the Franklin Group
(except Franklin Valuemark Funds and Franklin Government Securities Trust) (the
"Franklin Group of Funds"), (b) other investment products in the Franklin Group
underwritten by Distributors or its affiliates (although certain investments may
not have the same schedule of sales charges and/or may not be subject to
reduction) (the products in subparagraphs (a) and (b) are referred to as the
"Franklin Group"), and (c) the open-end U.S. registered investment companies in
the Templeton Group of Funds except Templeton American Trust, Inc., Templeton
Capital Accumulator Fund, Inc., Templeton Variable Annuity Fund, and Templeton
Variable Products Series Fund (the "Templeton Group").

Purchases of Fund shares will also be included toward the completion of a Letter
of Intent with respect to any of the funds in the Franklin Group of Funds and
the Templeton Group which are sold with a sales charge.

To assist shareholders in obtaining additional information regarding these
programs, a list of telephone numbers is included under "How to Get Information
Regarding an Investment in the Fund."

EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------

The Franklin Group of Funds(R) and the Templeton Group consist of a number of
investment companies with various investment objectives and policies. The shares
of most of these investment companies are offered to the public with a sales
charge. If a shareholder's investment objective or outlook for the securities
markets changes, Fund shares may be exchanged for shares of any of the other
investment companies in the Franklin Group of Funds or the Templeton Group (as
defined in "Rights of Accumulation" above) which are eligible for sale in the
shareholder's state of residence and in conformity with such fund's stated
eligibility requirements and investment minimums. Investors should review the
prospectus of the fund they wish to exchange from and the fund they wish to
exchange into for all specific requirements or limitations on exercising the
exchange privilege, for example, minimum holding periods or applicable sales
charges. Exchanges may be made in any of the following ways:

EXCHANGES BY MAIL

Send written instructions signed by all account owners and accompanied by any
outstanding share certificates properly endorsed. The transaction will be
effective upon receipt of the written instructions together with any outstanding
share certificates.

EXCHANGES BY TELEPHONE

SHAREHOLDERS, OR THEIR INVESTMENT REPRESENTATIVE OF RECORD, IF ANY, MAY EXCHANGE
SHARES OF THE FUND BY TELEPHONE BY CALLING INVESTOR SERVICES AT 1-800/632-2301
OR THE AUTOMATED FRANKLIN TELEFACTS(R) SYSTEM (DAY OR NIGHT) AT 1-800/247-1753.
IF THE SHAREHOLDER DOES NOT WISH THIS PRIVILEGE EXTENDED TO A PARTICULAR
ACCOUNT, THE FUND OR INVESTOR SERVICES SHOULD BE NOTIFIED.

The Telephone Exchange Privilege allows a shareholder to effect exchanges from
the Fund into an identically registered account in one of the other available
funds in the Franklin Group of Funds or the Templeton Group. The Telephone
Exchange Privilege is available only for uncertificated shares or those which
have previously been deposited in the shareholder's account. The Fund and
Investor Services will employ reasonable procedures to confirm that instructions
communicated by tele-

<PAGE>

phone are genuine. Please refer to "Telephone Transactions - Verification
Procedures."

During periods of drastic economic or market changes, it is possible that the
Telephone Exchange Privilege may be difficult to implement and the TeleFACTS
option may not be available. In this event, shareholders should follow the other
exchange procedures discussed in this section, including the procedures for
processing exchanges through securities dealers.

EXCHANGES THROUGH SECURITIES DEALERS

As is the case with all purchases of the Fund's shares, Investor Services will
accept exchange orders by telephone or by other means of electronic transmission
from securities dealers who execute a dealer or similar agreement with
Distributors. See also "Exchanges by Telephone" above. Such a dealer-ordered
exchange will be effective only for uncertificated shares on deposit in the
shareholder's account or for which certificates have previously been deposited.
A securities dealer may charge a fee for handling an exchange.

ADDITIONAL INFORMATION REGARDING EXCHANGES

Shares of the Fund acquired other than pursuant to the Exchange Privilege or the
reinvestment of dividends with respect to such shares, may be exchanged at the
offering price of one of the other funds in the Franklin Group of Funds or the
Templeton Group. Such offering price includes the applicable sales charge of the
fund into which the shares are being exchanged. Exchanges will be effected at
the respective net asset values or offering prices of the funds involved at the
close of business on the day on which the request is received in proper form.

There are differences among the many funds in the Franklin Group of Funds and
the Templeton Group. Before making an exchange, a shareholder should obtain and
review a current prospectus of the fund into which the shareholder wishes to
transfer.

The Exchange Privilege may be modified or discontinued by the Fund at any time
upon 60 days' written notice to shareholders.

TIMING ACCOUNTS

Accounts which are administered by allocation or market timing services to
purchase or redeem shares based on predetermined market indicators ("Timing
Accounts") will be charged a $5.00 administrative service fee per each such
exchange. All other exchanges are without charge.

RESTRICTIONS ON EXCHANGES

In accordance with the terms of their respective prospectuses, certain funds do
not accept or may place differing limitations than those below on exchanges by
Timing Accounts.

The Fund reserves the right to temporarily or permanently terminate the exchange
privilege or reject any specific purchase order for any Timing Account or any
person whose transactions seem to follow a timing pattern who: (i) makes an
exchange request out of the Fund within two weeks of an earlier exchange request
out of the Fund, or (ii) makes more than two exchanges out of the Fund per
calendar quarter, or (iii) exchanges shares equal in value to at least $5
million, or more than 1% of the Fund's net assets. Accounts under common
ownership or control, including accounts administered so as to redeem or
purchase shares based upon certain predetermined market indicators, will be
aggregated for purposes of the exchange limits.

The Fund reserves the right to refuse the purchase side of exchange requests by
any Timing Account, person, or group if, in Advisers' judgment, the Fund would
be unable to invest effectively in accordance with its investment objectives and
policies, or would otherwise potentially be adversely

<PAGE>

affected. A shareholder's purchase exchanges may be restricted or refused if the
Fund receives or anticipates simultaneous orders affecting significant portions
of the Fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to the Fund and therefore may be
refused.

The Fund and Distributors also, as indicated in "How to Buy Shares of the Fund,"
reserve the right to refuse any order for the purchase of shares.

TELEPHONE TRANSACTIONS
- --------------------------------------------------------------------------------

Shareholders of the Fund and their investment representative of record, if any,
may be able to execute various transactions by calling Investor Services at
1-800/632-2301.

All shareholders will be able to: (i) effect a change in address, (ii) change a
dividend option, (iii) transfer Fund shares in one account to another
identically registered account in the Fund, and (iv) exchange Fund shares as
described in this Prospectus by telephone. In addition, shareholders who
complete and file an Agreement as described under "How to Redeem Shares of the
Fund - By Telephone" will be able to redeem shares of the Fund.

VERIFICATION PROCEDURES

The Fund and Investor Services will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. These will include:
recording all telephone calls requesting account activity by telephone,
requiring that the caller provide certain personal and/or account information
requested by the telephone service agent at the time of the call for the purpose
of establishing the caller's identification, and by sending a confirmation
statement on redemptions to the address of record each time account activity is
initiated by telephone. So long as the Fund and Investor Services follow
instructions communicated by telephone which were reasonably believed to be
genuine at the time of their receipt, neither they nor their affiliates will be
liable for any loss to the shareholder caused by an unauthorized transaction.
Shareholders are, of course, under no obligation to apply for or accept
telephone transaction privileges. In any instance where the Fund or Investor
Services is not reasonably satisfied that instructions received by telephone are
genuine, the requested transaction will not be executed, and neither the Fund
nor Investor Services will be liable for any losses which may occur because of a
delay in implementing a transaction.

GENERAL

During periods of drastic economic or market changes, it is possible that the
telephone transaction privileges will be difficult to execute because of heavy
telephone volume. In such situations, shareholders may wish to contact their
investment representative for assistance, or to send written instructions to the
Fund as detailed elsewhere in this Prospectus.

Neither the Fund nor Investor Services will be liable for any losses resulting
from the inability of a shareholder to execute a telephone transaction.

The telephone transaction privilege may be modified or discontinued by the Fund
at any time upon 60 days' written notice to shareholders.

VALUATION OF FUND SHARES
- --------------------------------------------------------------------------------

The net asset value of the shares of the Fund is determined by the Fund at 3:00
p.m. Pacific time each day that the Exchange is open for business. The net asset
value per share is calculated by adding the value of all portfolio holdings and
other assets, deducting its liabilities, and dividing the result by the number
of Fund shares outstanding.

<PAGE>

The valuation of the Fund's portfolio securities is based upon their amortized
cost value, which does not take into account unrealized capital gain or loss.
This involves valuing an instrument at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument. The
Fund's use of amortized cost which facilitates the maintenance of the Fund's per
share net asset value of $1.00 is permitted by Rule 2a-7 under the 1940 Act.
Further information is included under "Determination of Net Asset Value" in the
SAI.

HOW TO GET INFORMATION REGARDING AN INVESTMENT IN THE FUND
- --------------------------------------------------------------------------------

Any questions or communications regarding a shareholder's account should be
directed to Investor Services at the address shown on the back cover of this
Prospectus.

From a touch-tone phone, shareholders may obtain current price, yield or
performance information specific to a fund in the Franklin Group of Funds(R) by
calling the automated Franklin TeleFACTS(R) system (day or night) at
1-800/247-1753. Yield information about the Fund may be accessed by entering
Fund Code 14 followed by the # sign, when requested to do so by the automated
operator. The TeleFACTS system is also available for processing exchanges. See
"Exchange Privilege."

To assist shareholders and brokers wishing to speak directly with a
representative, the following is a list of the various Franklin departments,
telephone numbers and hours of operation to call. The same numbers may be used
when calling from a rotary phone:

<TABLE>
<CAPTION>
HOURS OF OPERATION (PACIFIC TIME)
DEPARTMENT NAME TELEPHONE NO. (MONDAY THROUGH FRIDAY)
--------------------------------------------------------------------------------------
<S> <C> <C>
Shareholder Services 1-800/632-2301 6:00 a.m. to 5:00 p.m.
Dealer Services 1-800/524-4040 6:00 a.m. to 5:00 p.m.
Fund Information 1-800/DIAL BEN 6:00 a.m. to 8:00 p.m.
8:30 a.m. to 5:00 p.m. (Saturday)
Retirement Plans 1-800/527-2020 6:00 a.m. to 5:00 p.m.
TDD (hearing impaired) 1-800/851-0637 6:00 a.m. to 5:00 p.m.
</TABLE>

All Franklin departments may also be reached at 1-800/632-2350.

In order to ensure that the highest quality of service is being provided,
telephone calls placed to or by representatives in Franklin's service
departments may be accessed, recorded and monitored. These calls can be
determined by the presence of a regular beeping tone.

PERFORMANCE
- --------------------------------------------------------------------------------

Advertisements, sales literature and communications to shareholders may contain
various measures of the Fund's performance, including quotations of its current,
effective, taxable equivalent yield and taxable equivalent effective yield.

Current yield as prescribed by the SEC is an annualized percentage rate which
reflects the change in value of a hypothetical account based on the income
received from the Fund during a seven-day period. It is computed by determining
the net

<PAGE>

change, excluding capital changes, in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the period. A
hypothetical charge reflecting deductions from shareholder accounts for
management fees or shareholder services fees, for example, is subtracted from
the value of the account at the end of the period, and the difference is divided
by the value of the account at the beginning of the base period to obtain the
base period return. The result is then annualized. Effective yield is computed
in the same manner except that the annualization of the return for the seven-day
period reflects the results of compounding (that is, the effect of reinvesting
dividends paid on both the original share and those acquired from the
reinvestment of such dividends). Tax equivalent yield demonstrates the yield
from a taxable investment necessary to produce an after-tax yield equivalent to
that of a fund which invests in tax-exempt obligations. It is computed by
dividing the tax-exempt portion of a fund's yield (calculated as indicated) by
one minus a stated income tax rate and adding the product to the taxable portion
(if any) of the fund's yield.

Tax equivalent effective yield demonstrates the effective yield from a taxable
investment necessary to produce an after-tax effective yield equivalent to that
of a fund which invests in tax-exempt obligations. It is computed in the same
manner as is the fund's tax equivalent yield, except that it is based on the
tax-exempt portion of the fund's effective, rather than its current, yield. The
figure is calculated by dividing the tax-exempt portion of a fund's effective
yield by one minus a stated income tax rate and adding the product to the
taxable portion (if any) of the fund's effective yield.

In each case, performance figures are based upon past performance and will
reflect all recurring charges against Fund income. Such quotations will reflect
the value of any additional shares purchased with dividends from the original
share and any dividends declared on both the original share and such additional
shares. The investment results of the Fund, like all other investment companies,
will fluctuate over time; thus, performance figures should not be considered to
represent what an investment may earn in the future or what the Fund's
performance may be in any future period. Additional information is contained in
the Fund's annual report, which is available without charge upon request at the
telephone number or address listed on the cover of this Prospectus.

GENERAL INFORMATION
- --------------------------------------------------------------------------------

The Fund's authorized capital stock consists of 5 billion shares of no par
value. All shares are of one class, have one vote and, when issued, are fully
paid and nonassessable. All shares have equal voting, participation and
liquidation rights, but have no subscription, preemptive or conversion rights.

Shares of the Fund have cumulative voting rights, which means that in all
elections of directors each shareholder has the right to cast a number of votes
equal to the number of shares owned multiplied by the number of directors to be
elected at such election, and each shareholder may cast the whole number of
votes for one candidate or distribute such votes among two or more candidates.

The Fund does not intend to hold annual meetings of shareholders. The Fund may,
however, hold a meeting for such purposes as changing fundamental investment
restrictions, approving a new management agreement or any other matters which
are required to be acted on by shareholders under the 1940 Act. A meeting may
also be called by a majority of the Board of Directors or by shareholders
holding at least ten percent of the shares entitled to vote at the meeting.
Shareholders may

<PAGE>

receive assistance in communicating with other shareholders in connection with
the election or removal of directors such as that provided in Section 16(c) of
the 1940 Act.

The Fund reserves the right to redeem, at net asset value, shares of any
shareholder whose account has a value of less than $250 and has been inactive
(except for the reinvestment of distributions) for a period of at least six
months, provided advance notice is given to the shareholder. More information is
included in the SAI.

Distribution or redemption checks sent to shareholders do not earn interest or
any other income during the time such checks remain uncashed and neither the
Fund nor its affiliates will be liable for any loss to the shareholder caused by
the shareholder's failure to cash such check(s).

Shares of the Fund may or may not constitute a legal investment for investors
whose investment authority is restricted by applicable law or regulation. SUCH
INVESTORS SHOULD CONSULT THEIR OWN LEGAL ADVISORS TO DETERMINE WHETHER AND TO
WHAT EXTENT THE SHARES OF THE FUND CONSTITUTE LEGAL INVESTMENTS FOR THEM.
Municipal investors considering investment of proceeds of bond offerings into
the Fund should consult with expert counsel to determine the effect, if any, of
various payments made by the Fund or its investment manager on arbitrage rebate
calculations.

"Cash" payments to or from the Fund may be made by check, draft or wire. The
Fund has no facility to receive, or pay out, cash in the form of currency.

ACCOUNT REGISTRATIONS
- --------------------------------------------------------------------------------

An account registration should reflect the investor's intentions as to
ownership.

Accounts should not be registered in the name of a minor either as sole or
co-owner of the account. Transfer or redemption for such an account may require
court action to obtain release of the funds until the minor reaches the legal
age of majority. The account should be registered in the name of one "Adult" as
custodian for the benefit of the "Minor" under the Uniform Transfer or Gifts to
Minors Act.

A trust designation such as "trustee" or "in trust for" should only be used if
the account is being established pursuant to a legal, valid trust document. Use
of such a designation in the absence of a legal trust document may cause
difficulties and require court action for transfer or redemption of the funds.

Shares, whether in certificate form or not, registered as joint tenants or "Jt
Ten" shall mean "as joint tenants with rights of survivorship" and not "as
tenants in common."

Except as indicated, a shareholder may transfer an account in the Fund carried
in "street" or "nominee" name by the shareholder's securities dealer to a
comparably registered Fund account maintained by another securities dealer. Both
the delivering and receiving securities dealers must have executed dealer or
similar agreements on file with Distributors. Unless such agreement has been
executed and is on file with Distributors, the Fund will not process the
transfer and will so inform the shareholder's delivering securities dealer. To
effect the transfer, a shareholder should instruct the securities dealer to
transfer the account to a receiving securities dealer and sign any documents
required by the securities dealer(s) to evidence consent to the transfer. Under
current procedures the account transfer may be processed by the delivering
securities dealer and the Fund after the Fund receives authorization in proper
form from

<PAGE>

the shareholder's delivering securities dealer. In the future it may be possible
to effect such transfers electronically through the services of the NSCC.

The Fund may conclusively accept instructions from an owner or the owner's
nominee listed in publicly available nominee lists, regardless of whether the
account was initially registered in the name of or by the owner, the nominee, or
both. If a securities dealer or other representative is of record on an
investor's account, the investor will be deemed to have authorized the use of
electronic instructions on the account, including, without limitation, those
initiated through the services of the NSCC, to have adopted as instruction and
signature any such electronic instructions received by the Fund and the
Shareholder Services Agent and to have authorized them to execute the
instructions without further inquiry. At the present time, such services which
are available, or which are anticipated to be made available in the near future,
include the NSCC's "Networking," "Fund/SERV," and "ACATS" systems.

Any questions regarding an intended registration should be answered by the
securities dealer handling the investment, or by calling Franklin's Fund
Information Department.

IMPORTANT NOTICE REGARDING TAXPAYER IRS CERTIFICATIONS
- --------------------------------------------------------------------------------

Pursuant to the Code and U.S. Treasury regulations, the Fund may be required to
report to the IRS any taxable dividend, capital gain distribution, or other
reportable payment and withhold 31% of any such payments made to individuals and
other non-exempt shareholders who have not provided a correct taxpayer
identification number ("TIN") and made certain required certifications that
appear in the Shareholder Application. A shareholder may also be subject to
backup withholding if the IRS or a broker notifies the Fund that the TIN
furnished by the shareholder is incorrect or that the shareholder is subject to
backup withholding for previous under-reporting of interest or dividend income.

The Fund reserves the right to (1) refuse to open an account for any person
failing to provide a TIN along with the required certifications and (2) close an
account by redeeming its shares in full at the then current net asset value upon
receipt of notice from the IRS that the TIN certified as correct by the
shareholder is in fact incorrect or upon the failure of a shareholder who has
completed an "awaiting TIN" certification to provide the Fund with a certified
TIN within 60 days after opening the account.

<PAGE>
THE FRANKLIN TEMPLETON
TELEPHONE REDEMPTION AUTHORIZATION AGREEMENT

You may use Franklin Templeton's telephone redemption privilege to redeem
uncertificated Franklin Templeton Fund shares for up to $50,000 (or your
shareholder account balance, whichever is less) per day, per fund account in
accordance with the terms of the Funds' prospectus.

The telephone redemption privilege is available only to shareholders who
specifically request it. If you would like to add this redemption privilege to
the other telephone transaction privileges now automatically available to
Franklin Templeton Fund shareholders, please sign and return this authorization
to Franklin Templeton Investor Services, Inc. ("Services"), transfer agent and
shareholder servicing agent for the Franklin Templeton Funds.

SHAREHOLDER AUTHORIZATION: I/We request the telephone redemption privilege
under the terms described below and in the prospectus for each investment
company in the Franklin Templeton Group (a "Franklin Templeton Fund" or a
"Fund"), now open or opened at a later date, holding shares registered as
follows:

- --------------------------------------------------------------------------------
Print name(s) as shown in registration (called "Shareholder")

- --------------------------------------------------------------------------------
Account number(s)

- --------------------------------------------------------------------------------

I/We authorize each Fund and Services to honor and act upon telephone requests,
given as provided in this agreement, to redeem shares from any Shareholder
account.

- --------------------------------------- -------------------------------------
Signature(s) of all registered owners
and the date

- --------------------------------------- -------------------------------------
Printed name (and title/capacity,
if applicable)

VERIFICATION PROCEDURES: I/We understand and agree that: (1) each Fund and
Services will employ reasonable procedures to confirm that redemption
instructions communicated by telephone are genuine and that if these
confirmation procedures are not followed, the Fund or Services may be liable for
any losses due to unauthorized or fraudulent telephone instructions; (2) the
confirmation procedures will include the recording of telephone calls requesting
redemptions, requiring that the caller provide certain personal and/or account
information requested by the telephone service agent at the time of the call
for the purpose of establishing the caller's identification, and the sending of
confirmation statements to the address of record each time a redemption is
initiated by telephone; and (3) as long as the Fund and Services follow the
confirmation procedures in acting on instructions communicated by telephone
which were reasonably believed to be genuine at the time of receipt, neither
they nor their parent or affiliates will be liable for any loss, damages or
expenses caused by an unauthorized or fraudulent redemption request.

JOINTLY OWNED/CO-TRUSTEE ACCOUNTS: Each of us signing this agreement as either
joint owners or co-trustees authorize each Fund and Services to honor telephone
redemption requests given by ANY ONE of the signers or our investment
representative of record, if any, ACTING ALONE.

APPOINTMENT OF ATTORNEY-IN-FACT: In order to issue telephone redemption
requests acting alone, each of us individually makes the following appointment:
I hereby appoint the other joint owner(s)/co-trustee(s) as my agent(s)
(attorney[s]-in-fact) with full power and authority to individually act for me
in any lawful way with respect to the issuance of instructions to a Fund or
Services in accordance with the telephone redemption privilege we have
requested by signing this agreement. This appointment shall not be affected by
my subsequent disability or incompetency and shall remain in effect until it is
revoked by either written notice from any one of us delivered to a Fund or
Services by registered mail, return receipt requested, or by a Fund or Services
upon receipt of any information that causes a Fund or Services to believe in
good faith that there is or that there may be a dispute among any of us with
respect to the Franklin Templeton Fund account(s) covered by this agreement.
Each of us agrees to notify the Fund or Services immediately upon the
death of any of the undersigned.

CORPORATE/PARTNERSHIP/TRUST/RETIREMENT ACCOUNTS: The Shareholder and each of
us signing this agreement on behalf of the Shareholder represent and warrant to
each Franklin Templeton Fund and Services that the Shareholder has the authority
to enter into this agreement and that each of us are duly authorized to execute
this agreement on behalf of the Shareholder. The Shareholder agrees that its
election of the telephone redemption privilege means that a Fund or Services may
honor a telephone redemption request given by ANY
officer/partner/member/administrator or agent of Shareholder ACTING ALONE.

RESTRICTED ACCOUNTS: Telephone redemptions and dividend option changes may not
be accepted on Franklin Templeton Trust Company ("FITC") retirement accounts.

PLEASE RETURN THIS FORM TO:

Franklin Templeton Investor Services, Inc., Attn: AUTOMATIC INVESTMENT PLAN
Dept., 777 Mariners Island Blvd., P.O. Box 7777, San Mateo, CA 94403-7777.

<PAGE>

INSTRUCTIONS AND IMPORTANT NOTICE

SUBSTITUTE W-9 INSTRUCTIONS INFORMATION

GENERAL. Backup withholding is not an additional tax. Rather, the tax
liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the IRS.

OBTAINING A NUMBER. If you do not have a Social Security Number Taxpayer
Identification Number or you do not know your SSN TIN, you must obtain Form
SS-5 or Form SS-4 from your local Social Security or IRS office and apply for
one. If you have checked the "Awaiting TIN" box and signed the certification,
withholding will apply to payments relating to your account unless you provide
a certified TIN within 60 days.

WHAT SSN TIN TO GIVE. Please refer to the following guidelines:

<TABLE>
<CAPTION>
ACCOUNT TYPE GIVE SSN OF ACCOUNT TYPE GIVE EMPLOYER ID# OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
- -Individual Individual -Trust, Estate, Trust, Estate,
or Pension or Pension
Plan Trust Plan Trust
- -------------------------------------------------------------------------------
- -Joint Individual Owner who will -Corporation, Corporation,
be paying tax or Partnership, Partnership,
first-named or other or other
individual organization organization
- -------------------------------------------------------------------------------
- -Unif. Gift/
Transfer to Minor Minor -Broker nominee Broker nominee
- -------------------------------------------------------------------------------
- -Sole Proprietor Owner of
business
- -------------------------------------------------------------------------------
- -Legal Guardian Ward, Minor,
or Incompetent
- -------------------------------------------------------------------------------
</TABLE>

EXEMPT RECIPIENTS. Please provide your TIN and check the "Exempt Recipient"
box if you are an exempt recipient. Exempt recipients include:

A corporation A real estate investment trust

A financial institution A common trust fund operated by a
bank under section 584(a)

An organization exempt from tax An exempt charitable remainder trust
under section 501(a), or an or a non-exempt trust described in
individual retirement plan section 4947(a)(1)

A registered dealer in securities An entity registered at all times
or commodities registered in the under the Investment Company Act
U.S. or a U.S. possession of 1940

IRS PENALTIES. If you do not supply us with your SSN TIN, you will be subject
to an IRS $50 penalty unless your failure is due to reasonable cause and not
willful neglect. If you fail to report certain income on your federal income
tax return, you will be treated as negligent and subject to an IRS 20% penalty
on any underpayment of tax attributable to such negligence, unless there was
reasonable cause for the resulting underpayment and you acted in good faith. If
you falsify information on this form or make any other false statement
resulting in no backup withholding on an account which should be subject to
backup withholding, you may be subject to an IRS $500 penalty and certain
criminal penalties including fines and imprisonment.

SUBSTITUTE W-8 INSTRUCTIONS INFORMATION

EXEMPT FOREIGN PERSON. Check the "Exempt Foreign Person" box if you qualify as
a non-resident alien or foreign entity that is not subject to certain U.S.
information return reporting or to backup withholding rules. Dividends paid to
your account may be subject to withholding of up to 30%. You are an "Exempt
Foreign Person" if you are not (1) a citizen or resident of the U.S., or (2) a
U.S. corporation, partnership, estate, or trust. In the case of an individual,
an "Exempt Foreign Person" is one who has been physically present in the U.S.
for less than 31 days during the current calendar year. An individual who is
physically present in the U.S. for at least 31 days during the current calendar
year will still be treated as an "Exempt Foreign Person," provided that the
total number of days physically present in the current calendar year and the
two preceding calendar years does not exceed 183 days (counting all of the days
in the current calendar year, only one-third of the days in the first preceding
calendar year and only one-sixth of the days in the second preceding calendar
year). In addition, lawful permanent residents or green card holders may not
be treated as "Exempt Foreign Persons." If you are an individual or an entity,
you must not now be, or at this time expect to be, engaged in a U.S. trade or
business with respect to which any gain derived from transactions effected by
the Fund/Payer during the calendar year is effectively connected to the U.S.
(or your transactions are exempt from U.S. taxes under a tax treaty).

PERMANENT ADDRESS. The Shareholder Application must contain your permanent
address if you are an "Exempt Foreign Person." If you are an individual,
provide your permanent address. If you are a partnership or corporation,
provide the address of your principal office. If you are an estate or trust,
provide the address of your permanent residence or the principal office of any
fiduciary.

NOTICE OF CHANGE IN STATUS. If you become a U.S. citizen or resident after you
have provided certification of your foreign status, or if you cease to be an
"Exempt Foreign Person," you must notify the Fund/Payer within 30 days of your
change in status. Reporting will then begin on the account(s) listed, and
backup withholding may also begin unless you certify to the Fund/Payer that (1)
the tax payer identification number you have given is correct, and (2) the
Internal Revenue Service has not notified you that you are subject to backup
withholding because you failed to report certain interest or dividend income.
You may use Form W-9, "Payer's Request for Taxpayer Identification Number and
Certification," to make these certifications. If an account is no longer
active, you do not have to notify a Fund/Payer or broker of your change in
status unless you also have another account with the same Fund/Payer that is
still active. If you receive interest from more than one Fund/Payer or have
dealings with more than one broker or barter exchange, file a certificate with
each. If you have more than one account with the same Fund/Payer, the
Fund/Payer may require you to file a separate certificate for each account.

WHEN TO FILE. File these certifications with the Fund before a payment is made
to you, unless you have already done this in either of the two preceding
calendar years.

HOW OFTEN YOU MUST FILE. This certificate generally remains in effect for
three calendar years. A Fund/Payer or broker, however, may require that a new
certificate be filed each time a payment is made. On joint accounts for which
each joint owner is a foreign person, each must provide a certification of
foreign status.

<PAGE>

FRANKLIN FUNDS AUTOMATIC INVESTMENT PLAN FRANKLIN TEMPLETON GROUP
777 MARINERS ISLAND BLVD., P.O. BOX 7777, SAN MATEO, CA 94403-7777

===============================================================================
[FRANKLIN LOGO]

The Franklin Automatic Investment Plan gives you the convenience of
automatically investing in a Fund on a monthly basis. Shares are purchased at
the applicable offering price, as indicated in the Prospectus, next calculated
after receipt of funds from your bank. There is no additional charge for this
service by the Fund or Franklin Templeton Investor Services, Inc.

Your monthly investments will be made by electronic funds transfer (EFT) from
your checking account if your bank is a member of an Automated Clearing House
(ACH). Otherwise, they will be made by checks prepared by our bank. Your
signature below is the authorizing signature for each transfer or check. This
service is subject to the rules for the bank account, ACH and the Fund.
Franklin may correct any transfer error by a debit or credit to your bank
account and/or Fund account.

You may sign up for the Automatic Investment Plan at the time you open a new
account or any time after you have established an account at Franklin. If the
Automatic Investment Plan is initiated at the time you open your account, the
Fund's minimum initial investment amount is reduced and the account may be
opened with an investment of $25 or more. Existing account holders may choose
any amount, starting with the $25 minimum subsequent amount, for investment in
their Fund account from their bank account. All you need to do is complete the
application below and attach a voided, unsigned check which shows your bank
account number in magnetic coding. Please allow up to six weeks for the Plan
to begin.

CHANGING OR DISCONTINUING THE PLAN

When Franklin Templeton Investor Services, Inc. is advised by you to stop your
Automatic Investment Plan, no investments will be processed until written notice
is received to initiate the Plan again. Franklin will need ten days written or
verbal notice to stop an Automatic Investment Plan prior to an upcoming pay
date. Ten days written notice is required if you are changing bank information
other than the dollar amount. If a check or transfer is returned to Franklin
for any reason, including stop payment, insufficient funds or account closed,
your Automatic Investment Plan will be discontinued. Franklin may also change
or terminate the service by written notice to you.

EXCHANGES

If you exchange shares from one Franklin fund to another, the Automatic
Investment Plan does not transfer to the new account, but Franklin will
automatically send you a Plan application. Or, you may notify us by telephone
if the Plan is to be transferred and credited to a fund other than that listed
on the original application.

RETIREMENT ACCOUNTS

When using the Automatic Investment Plan for Franklin Templeton Trust Company
retirement accounts, all purchases will be credited as a contribution for the
year in which they are received. Please be sure to monitor the amount of money
credited to your retirement account to avoid making an excess contribution.

===============================================================================

AUTOMATIC INVESTMENT PLAN APPLICATION

Name(s)
-----------------------------------------------------------------------
(Please print as shown on Franklin account registration.)

------------------------------------------------------------------------

Address
------------------------------------------------------------------------

------------------------------------------------------------------------

Telephone
----------------------------------------------------------------------

Bank's Name
--------------------------------------------------------------------

Branch Address
-----------------------------------------------------------------

Names(s) on Bank Account
-------------------------------------------------------

Checking Account No.
-----------------------------------------------------------
Please attach a voided check.

Please invest my Automatic investments for $ per month in:
---------
Franklin Fund Name
-------------------------------------------------------------

Franklin Fund Account No.
------------------------------------------------------

Preferred Monthly Date of Checking Account Debit:
1st bank business day on or after the 5th / / or 20th / /

Signature(s) Date
--------------------------------- ------------------------------

- -------------------------------------------------------------------------------
All registered owners must sign

[Franklin Use Only: ABA No.
---------------------------------------------------]

If you have any questions, please call a Shareholder Services representative,
toll free, at 1-800/632-2301.

===============================================================================

AUTOMATIC INVESTMENT PLAN REVISION - Complete only if you are revising existing
Automatic Investment Plan: (and complete section above)

Bank Change Amount Change $
------------------------- ---------------------
(Attach new voided check) (Indicate new amount)

Other
-----------------------------

Note: Please give Franklin ten days written notice to change bank information
other than the dollar amount.

===============================================================================

PLEASE RETURN THIS FORM TO:

Franklin Templeton Investor Services, Inc., Attn: AUTOMATIC INVESTMENT PLAN
Dept., 777 Mariners Island Blvd., P.O.Box 7777, San Mateo, CA 94403-7777.

<PAGE>
THE FRANKLIN/TEMPLETON GROUP

To receive a free brochure and prospectus, which contain more complete
information, including charges and expenses on each of the funds listed below,
call Franklin Fund Information, toll free, at 1-800/DIAL BEN (1-800/342-5236)
or Templeton Sales Information at 1-800/292-9293. Please read this prospectus
carefully before you invest or send money.

<TABLE>
<S> <C> <C> <C>
TEMPLETON Colorado FRANKLIN FUNDS SEEKING FRANKLIN FUNDS FOR
GROUP OF FUNDS Connecticut GROWTH AND INCOME NON-U.S. INVESTORS
Americas Government Florida* Balance Sheet Tax-Advantaged
Securities Fund Georgia Investment Fund High Yield Securities Fund
Developing Markets Trust Hawaii** Convertible Tax-Advantaged
Foreign Fund Indiana Securities Fund International Bond Fund
Global Infrastructure Fund Kentucky Equity Income Fund Tax-Advantaged
Global Opportunities Trust Louisiana Global Utilities Fund U.S. Government
Global Rising Maryland Income Fund Securities Fund
Dividends Fund Massachusetts*** Premier Return Fund
Growth Fund Michigan*** Utilities Fund FRANKLIN/TEMPLETON
Income Fund Minnesota*** GLOBAL CURRENCY FUNDS
Real Estate Securities Fund Missouri FRANKLIN FUNDS SEEKING Global Currency Fund
Smaller Companies New Jersey HIGH CURRENT INCOME High Income
Growth Fund New York* AGE High Income Fund Currency Fund
World Fund North Carolina German Government Hard Currency Fund
Ohio*** Bond Fund
FRANKLIN FUNDS SEEKING Oregon Global Government FRANKLIN MONEY
TAX-FREE INCOME Pennsylvania Income Fund MARKET FUNDS
Federal Tax-Free Tennessee** Investment Grade Money Fund
Income Fund Texas Income Fund Federal Money Fund
Federal Intermediate-Term Virginia U.S. Government Tax-Exempt Money Fund
Tax-Free Income Fund Washington** Securities Fund California Tax-Exempt
High Yield Tax-Free Money Fund
Income Fund FRANKLIN FUNDS SEEKING FRANKLIN FUNDS SEEKING New York Tax-Exempt
Insured Tax-Free CAPITAL GROWTH HIGH CURRENT INCOME Money Fund
Income Fund*** California Growth Fund AND STABILITY OF PRINCIPAL IFT U.S. Treasury Money
Puerto Rico Tax-Free Dyna Tech Fund Adjustable Rate Market Portfolio
Income Fund Equity Fund Securities Fund
Global Health Care Fund Adjustable U.S. FRANKLIN FUND
FRANKLIN STATE-SPECIFIC Gold Fund Government FOR CORPORATIONS
FUNDS SEEKING Growth Fund Securities Fund Corporate Qualfied
TAX-FREE INCOME International Equity Fund Short-Intermediate Dividend Fund
Alabama Japan Fund U.S. Government
Arizona* Pacific Growth Fund Securities Fund FRANKLIN TAX-DEFERRED
Arkansas** Real Estate Securities Fund ANNUITY
California* Small Cap Growth Fund Valuemark
</TABLE>

*Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and a high yield
portfolio (CA).

**The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.

***Portfolio of insured municipal securities.

<PAGE>

FRANKLIN TAX-EMEXPT MONEY FUND FRANKLIN
TAX-EXEMPT
777 Mariners Island Blvd. MONEY FUND
P.O. Box 7777
San Mateo, California 94403-7777

INVESTMENT MANAGER

Franklin Advisers, Inc.
777 Mariners Island Blvd. PROSPECTUS
P.O. Box 7777 & APPLICATION
San Mateo, California 94403-7777

DECEMBER 1, 1994
PRINCIPAL UNDERWRITER

Franklin/Templeton Distributors, Inc.
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, California 94403-7777

CUSTODIAN

Bank of America NT & SA
555 California Street, 4th Floor
San Francisco, California 94104

SHAREHOLDER SERVICES AGENT

Franklin/Tampleton Investor Services, Inc.
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, California 94403-7777

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand
333 Market Street
San Francisco, California 94105

LEGAL COUNSEL

Stradley, Ronon, Stevens & Young
2600 One Commerce Square
Philadelphia, Pennsylvania 19103

For an enlarged version of this prospectus
please call 1-800/DIAL BEN.

- --------------------------------------------------
Your Representative Is:

- -------------------------------------------------- [FRANKLIN LOGO]

<PAGE>

FOR CORPORATE SHAREHOLDERS
FORM OF RESOLUTION

It will be necessary for corporate shareholders to provide a certified copy of
a resolution or other certificate of authority to authorize the purchase as
well as sale (redemption) of shares and withdrawals by checks or drafts. You
may use the following form of resolution or you may prefer to use your own. It
is understood that the Fund, Franklin Advisers, Inc., Franklin Administrative
Services, Inc. and the custodian bank (currently Bank of America) may rely upon
these authorizations until revoked or amended by written notice delivered by
registered or certified mail to the Fund.

CERTIFIED COPY OF RESOLUTION (Corporation or Association)

The undersigned hereby certifies and affirms that he/she is the duly
elected __________ of ________________ a ______________________ organized under
Title Corporate Name Type of Organization
the laws of the State of ____________ and that the following is a true and
State
correct copy of a resolution adopted by the Board of Directors at a meeting duly
called and held on ___________.
Date

RESOLVED, that the _________________________________________________ of this
Officers' Titles
Corporation or Association are authorized to open an account in the name of
the Corporation or Association with one or more of the Franklin Group of
Funds ("Funds") and to deposit such funds of this Corporation or Association
in this account as they deem necessary or desirable; that the persons
authorized below may endorse checks and other instruments for deposit to
said account or accounts; and

FURTHER RESOLVED, that any ________ of the following officers are authorized
number
to sign any share assignment on behalf of this Corporation or Association
and to take any other actions as may be necessary to sell or redeem its
shares in the Funds or to sign checks or drafts withdrawing funds from the
account; and

FURTHER RESOLVED, that this Corporation or Association shall hold harmless,
indemnify, and defend the Funds, its custodian bank (currently Bank of
America), Franklin Advisers, Inc., Franklin Distributors. Inc. and Franklin
Administrative Services, Inc., from any claim, loss or liability resulting
in whole or in part, directly or indirectly, from their reliance from time
to time upon any certifications by the secretary or any assistant secretary
of this Corporation or Association as to the names of the individuals
occupying such offices and their acting in reliance upon these resolutions
until actual receipt by them of a certified copy of a resolution of the
Board of Directors of the Corporation or Association modifying or revoking
any or all such resolutions.

The undersigned further certifies that the below named persons, whose signatures
appear opposite their names and office titles, are duly elected officers of the
Corporation or Association. (Attach additional list if necessary)

- --------------------------------------- -------------------------------------
name/title (please print or type) Signature

- --------------------------------------- -------------------------------------
Name of Corporation or Association Date

Certified from minutes
----------------------------------------------------------
Name and Title

CORPORATE SEAL (if appropriate)

<PAGE>
CERTIFICATION FOR A PARTNERSHIP PLAN

CERTIFICATION OF AUTHORITY (PARTNERSHIP)

We, the undersigned, being the principal partners of the
____________________________ hereby state that we are authorized
partnership's name
to invest the assets of the partnership either jointly or individually in one or
more of the Franklin Group of Funds ("Funds"). We also agree that either
__________________________ or _______________________ have individual authority
to sign checks issuable by the partnership redeeming shares of the Funds. We
further state that this individual authority shall continue to be honored until
you receive written notice by registered mail from either of us revoking
same. By signing this agreement, we agree that the Funds, its Custodian
Bank, Bank of America, Franklin Administrative Services, Inc., and Franklin
Distributors, Inc. shall be indemnified and held harmless from any loss,
damage, cost or claim that may arise from any authorized or unauthorized use of
the assets or checks of the partnership in connection with holdings of the
Funds. (Attach additional list if necessary)

X
- --------------------------------- ------------------------------------------
name/title (please print or type) signature

Date
-----------------

CERTIFICATION FOR TRUST OR RETIREMENT PLAN

CERTIFICATION OF AUTHORITY (TRUST OR RETIREMENT PLAN)

We, the undersigned, being the trustees of the _____________________________
name of trust or plan
hereby acknowledge that we are authorized to invest the assets of the
______________________ and do hereby appoint _______________________________
(trust or plan) names of authorized individuals
to execute any investment applications for one or more of the Franklin Group
of Funds ("Funds") in which assets of the ___________________________________
(trust or plan)
may be invested; and do further authorize and appoint _______________________
and ______________________ to sign checks issuable by the ___________________
(trust or plan)
redeeming shares of the Funds; and that checks or drafts withdrawing said
funds may be signed by any __________ of the persons authorized herein. We
number req.
further state that this individual authority shall continue to be honored until
revoked by written notice delivered by registered mail from either of us to the
Funds. By signing this authorization, we agree that the Funds, its Custodian
Bank, Bank of America, Franklin Administrative Services, Inc., and Franklin
Distributors, Inc. shall be indemnified and held harmless from any loss,
damage, cost or claim that may arise from any authorized or unauthorized use,
including redemption by check of the assets of the ___________________________
(trust or plan)
invested in the Funds. (Attach additional list if necessary)

X
- --------------------------------- ------------------------------------------
name/title (please print or type) signature

Date
------------------