o 114 *P1
SUPPLEMENT DATED OCTOBER 1, 1998
TO THE PROSPECTUS OF
FRANKLIN TAX-EXEMPT MONEY FUND
DATED DECEMBER 1, 1997
The prospectus is amended as follows:
I. The minimum investments table in the section "How Do I Buy Shares? - Opening
Your Account" is replaced with the following:
MINIMUM
INVESTMENTS
- --------------------------------------------------------------------------------
To open a regular account...................................... $1,000
To open a custodial account for a minor (an UGMA/UTMA account). $ 100
To open an account with an automatic investment plan............ $ 50
To add to an account............................................ $ 50
For purchases by broker-dealers, registered investment advisors or certified
financial planners who have entered into an agreement with Distributors for
clients participating in comprehensive fee programs, the minimum initial
investment is $250. The minimum initial investment is $100 for officers,
trustees, directors and full-time employees of the Franklin Templeton Funds or
the Franklin Templeton Group, and their family members, consistent with our
then-current policies.
We reserve the right to change the amount of these minimums from time to time
or to waive or lower these minimums for certain purchases. We also reserve the
right to refuse any order to buy shares.
II. The following new item is added under "May I Exchange Shares for Shares of
Another Fund? - Exchange Restrictions":
o You must meet the applicable minimum investment amount of the fund you are
exchanging into, or exchange 100% of your Fund shares.
III. The third paragraph in the section "What Distributions Might I Receive from
the Fund? - Dividend Options" is replaced with the following:
You may also choose to receive dividends in cash. If you have the money sent to
another person or to a checking or savings account, you may need a signature
guarantee. If you send the money to a checking or savings account, please see
"Electronic Fund Transfers" under "Services to Help You Manage Your Account."
IV. The section "Keeping Your Account Open," found under "Transaction Procedures
and Special Requirements," is replaced in its entirety with the following:
KEEPING YOUR ACCOUNT OPEN
Due to the relatively high cost of maintaining a small account, we may close
your account if the value of your shares is less than $250, or less than $50
for employee accounts and custodial accounts for minors. We will only do this
if the value of your account fell below this amount because you voluntarily
sold your shares and your account has been inactive (except for the
reinvestment of distributions) for at least six months. Before we close your
account, we will notify you and give you 30 days to increase the value of your
account to $1,000, or $100 for employee accounts and custodial accounts for
minors. These minimums do not apply to accounts managed by the Franklin
Templeton Group.
V. The second sentence in the section "Services to Help You Manage Your Account
Automatic Investment Plan" is replaced with the following:
Under the plan, you can have money transferred automatically from your checking
or savings account to the Fund each month to buy additional shares.
VI. The second paragraph under "Services to Help You Manage Your Account
Systematic Withdrawal Plan" is replaced with the following:
If you would like to establish a systematic withdrawal plan, call Shareholder
Services. You may choose to direct your payments to buy the same class of
shares of another Franklin Templeton Fund or have the money sent directly to
you, to another person, or to a checking or savings account. If you choose to
have the money sent to a checking or savings account, please see "Electronic
Fund Transfers" below.
VII. The section "Services to Help You Manage Your Account - Electronic Fund
Transfers" is replaced with the following:
ELECTRONIC FUND TRANSFERS
You may choose to have distributions or payments under a systematic withdrawal
plan sent directly to a checking or savings account. If the account is with a
bank that is a member of the Automated Clearing House, the payments may be made
automatically by electronic funds transfer. If you choose this option, please
allow at least fifteen days for initial processing. We will send any payments
made during that time to the address of record on your account.
VIII. The following definition is revised in the "Useful Terms and Definitions"
section:
CONTINGENCY PERIOD - The 12 month period during which a Contingent Deferred
Sales Charge may apply. The holding period begins on the day you buy your
shares. For example, if you buy shares on the 18th of the month, they will age
one month on the 18th day of the next month and each following month.
Please keep this supplement for future reference.
