o 114 P-2
SUPPLEMENT DATED SEPTEMBER 1, 2000
TO THE PROSPECTUS OF
FRANKLIN TAX-EXEMPT MONEY FUND
DATED DECEMBER 1, 1999
The prospectus is amended as follows:
I. All references to the $5.00 exchange fee applicable to market timers are
no longer applicable.
II. The section "Minimum investments" on page 11 is replaced with the
following:
MINIMUM INVESTMENTS
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INITIAL ADDITIONAL
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Regular accounts $1,000 $50
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Automatic investment plans $50 $50
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UGMA/UTMA accounts $100 $50
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Broker-dealer sponsored wrap account $250 $50
programs
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Full-time employees, officers, trustees
and directors of
Franklin Templeton entities, and their $100 $50
immediate family members
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PLEASE NOTE THAT YOU MAY ONLY BUY SHARES OF A FUND ELIGIBLE FOR SALE IN YOUR
STATE OR JURISDICTION.
III. The section "Account Application" on page 12 is replaced with the
following:
ACCOUNT APPLICATION If you are opening a new account, please complete and
sign the enclosed account application. To save time, you can sign up now for
services you may want on your account by completing the appropriate sections
of the application (see "Investor Services" on page 13). For example, if you
would like to link one of your bank accounts to your fund account so that you
may use electronic fund transfers to and from your bank account to buy and
sell shares, please complete the bank information section of the application.
We will keep your bank information on file for future purchases and
redemptions.
IV. The following is added to the section "Buying shares" on page 12:
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[Insert graphic of If you have another Before requesting a
phone] Franklin Templeton telephone purchase,
BY PHONE fund account with please make sure we
your bank account have your bank
(Up to $100,000 per information on file, account information
day) you may open a new on file. If we do not
account by phone. have this
1-800/632-2301 information, you will
To make a same day need to send written
investment, please instructions with
call us by 1:00 p.m. your bank's name and
Pacific time or the address, a voided
close of the New York check or savings
Stock Exchange, account deposit slip,
whichever is earlier. and a signature
guarantee if the bank
and fund accounts do
not have at least one
common owner.
To make a same day
investment, please
call us by 1:00 p.m.
Pacific time or the
close of the New York
Stock Exchange,
whichever is earlier.
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V. The section "Automatic Investment Plan" on page 13 is replaced with the
following:
AUTOMATIC INVESTMENT PLAN This plan offers a convenient way for you to invest
in the fund by automatically transferring money from your checking or savings
account each month to buy shares. To sign up, complete the appropriate
section of your account application and mail it to Investor Services. If you
are opening a new account, please include the minimum initial investment of
$50 with your application.
VI. The section "Telephone Privileges" on page 14 is replaced with the
following:
TELEPHONE PRIVILEGES You will automatically receive telephone privileges when
you open your account, allowing you and your investment representative to
buy, sell or exchange your shares and make certain other changes to your
account by phone.
For accounts with more than one registered owner, telephone privileges also
allow the fund to accept written instructions signed by only one owner for
transactions and account changes that could otherwise be made by phone. For
all other transactions and changes, all registered owners must sign the
instructions. In addition, our telephone exchange privilege allows you to
exchange shares by phone from a fund account requiring two or more signatures
into an identically registered money fund account requiring only one
signature for all transactions. This type of telephone exchange is available
as long as you have telephone exchange privileges on your account.
As long as we take certain measures to verify telephone requests, we will not
be responsible for any losses that may occur from unauthorized requests. Of
course, you can decline telephone purchase, exchange or redemption privileges
on your account application.
VII. The last paragraph of the "Exchange Privilege" section on page 14 is
replaced with the following:
Because excessive trading can hurt fund performance, operations and
shareholders, the fund, effective November 1, 2000, reserves the right to
revise or terminate the exchange privilege, limit the amount or number of
exchanges, reject any exchange, or restrict or refuse purchases if (i) the
fund or its manager believes the fund would be harmed or unable to invest
effectively, or (ii) the fund receives or anticipates simultaneous orders
that may significantly affect the fund (please see "Market Timers" on page
20).
VIII. In the Selling Shares table on page 18 the section "By Electronic Funds
Transfer (ACH)" is replaced with the following:
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[Insert graphic of You can call or write to have redemption
three lightning proceeds sent to a bank account. See the
bolts] policies above for selling shares by mail or
BY ELECTRONIC FUNDS phone.
TRANSFER (ACH)
Before requesting to have redemption proceeds
sent to a bank account, please make sure we
have your bank account information on file. If
we do not have this information, you will need
to send written instructions with your bank's
name and address, a voided check or savings
account deposit slip, and a signature guarantee
if the bank and fund accounts do not have at
least one common owner.
If we receive your request in proper form by
1:00 p.m. Pacific time, proceeds sent by ACH
generally will be available within two to three
business days.
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IX. The section "Statements and Reports" on page 19 is replaced with the
following:
STATEMENTS AND REPORTS You will receive monthly account statements that show
all your account transactions during the month. You also will receive written
notification after each transaction affecting your account (except for
distributions, transactions made through automatic investment or withdrawal
programs, and shares sold by check, which will be reported on your monthly
statement). You also will receive the fund's financial reports every six
months. To reduce fund expenses, we try to identify related shareholders in a
household and send only one copy of the financial reports. If you need
additional copies, please call 1-800/DIAL BEN.
If there is a dealer or other investment representative of record on your
account, he or she also will receive copies of all notifications and
statements and other information about your account directly from the fund.
X. The section "Market Timers" on page 20 is replaced with the following:
MARKET TIMERS The fund may restrict or refuse purchases or exchanges by
Market Timers. You may be considered a Market Timer if you have (i) requested
an exchange out of any of the Franklin Templeton funds within two weeks of an
earlier exchange request out of any fund, or (ii) exchanged shares out of any
of the Franklin Templeton funds more than twice within a rolling 90 day
period, or (iii) otherwise seem to follow a market timing pattern that may
adversely affect the fund. Accounts under common ownership or control with an
account that is covered by (i), (ii), or (iii) are also subject to these
limits.
Anyone, including the shareholder or the shareholder's agent, who is
considered to be a Market Timer by the fund, its manager or shareholder
services agent, will be issued a written notice of their status and the
fund's policies. Identified Market Timers will be required to register with
the market timing desk of Franklin Templeton Investor Services, Inc., and to
place all purchase and exchange trade requests through the desk. Some funds
do not allow investments by Market Timers.
XI. The first category in the section "Additional Policies" on page 20 is
revised to read:
o The fund may restrict or refuse any order to buy shares, including any
purchase under the exchange privilege.
Please keep this supplement for future reference.
