As filed with the Securities and Exchange Commission on December 29, 1998
File Nos.
33-9994
811-4894
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N- 1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre- Effective Amendment No.
Post-Effective Amendment No. 19 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 20 (X)
FRANKLIN MANAGED TRUST
(Exact Name of Registrant as Specified in Charter)
777 MARINERS ISLAND BLVD., SAN MATEO, CA 94404
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (650) 312-2000
HARMON E. BURNS, 777 MARINERS ISLAND BLVD., SAN MATEO, CA 94404
(Name and Address of Agent for Service of Process)
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[x] on January 1, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on [date] pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on [date] pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment
Title of Securities Being Registered:
Shares of Beneficial Interest of:
Franklin Rising Dividends Fund - Class A
Franklin Rising Dividends Fund - Class B
Franklin Rising Dividends Fund - Class C
Franklin Investment Grade Income Fund - Class A
The Registrant's statement of additional information dated February 1,
1998, as filed with the Securities and Exchange Commission ("SEC") under Form
Type 485BPOS on January 24, 1998, and the Registrant's Class A and C
prospectus for Franklin Rising Dividends Fund dated February 1, 1998, as
amended August 3, 1998, as filed with the SEC under Form Type 497 on July 23,
1998, are hereby incorporated by reference. (File Nos. 33-9994 and 811-4894.)
SHARE CLASS REDESIGNATION
EFFECTIVE JANUARY 1, 1999
Class A - Formerly Class I
Class B - New Share Class
Class C - Formerly Class II
SUPPLEMENT DATED JANUARY 1, 1999
TO THE PROSPECTUS OF
FRANKLIN RISING DIVIDENDS FUND
DATED FEBRUARY 1, 1998, AS AMENDED AUGUST 3, 1998
The prospectus is amended as follows:
I. As of January 1, 1999, the fund offers three classes of shares: Class A,
Class B and Class C. Before January 1, 1999, Class A shares were designated
Class I and Class C shares were designated Class II. All references in the
prospectus to Class I shares are replaced with Class A, and all references
to Class II shares are replaced with Class C.
II. The section "Expense Summary" is replaced with the following:
EXPENSE SUMMARY
This table is designed to help you understand the costs of investing in the
fund. It is based on the fund's historical expenses for the fiscal year
ended September 30, 1997. The fund's actual expenses may vary.
CLASS A1 CLASS B2 CLASS C1
-------------------------------------------------------------------------
A. SHAREHOLDER TRANSACTION EXPENSES3
Maximum Sales Charge
(as a percentage of Offering Price) 5.75% 4.00% 1.99%
Paid at time of purchase4 5.75% None 1.00%
Paid at redemption5 None 4.00% 0.99%
Exchange Fee (per transaction)6 None None None
B. ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET
ASSETS)
Management Fees 0.75% 0.75% 0.75%
Rule 12b-1 Fees7 0.46% 1.00% 1.00%
Other Expenses 0.20% 0.20% 0.20%
-------------------------------
Total Fund Operating Expenses 1.41% 1.95% 1.95%
-------------------------------
C. EXAMPLE
Assume the annual return for each class is 5%, operating expenses are
as described above, and you sell your shares after the number of years
shown. These are the projected expenses for each $10,000 that you
invest in the fund.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------------------------------------
CLASS A $7108 $996 $1,302 $2,169
CLASS B
Assuming you sold your
shares at the end of the
period $598 $912 $1,252 $2,135 9
Assuming you stayed in the
fund $198 $612 $1,052 $2,135 9
CLASS C $394 10 $706 $1,142 $2,352
THIS IS JUST AN EXAMPLE. IT DOES NOT REPRESENT PAST OR FUTURE EXPENSES OR
RETURNS. ACTUAL EXPENSES AND RETURNS MAY BE MORE OR LESS THAN THOSE shown.
The fund pays its operating expenses. The effects of these expenses are
reflected in the Net Asset Value or dividends of each class and are not
directly charged to your account.
1. Before January 1, 1999, Class A shares were designated Class I and Class
C shares were designated Class II.
2. The fund began offering Class B shares on January 1, 1999. Annual
fund operating expenses are based on the expenses for Class A and C for
the fiscal year ended September 30, 1997. The Rule 12b-1 fees are based
on the maximum fees allowed under Class B's Rule 12b-1 plan.
3. If your transaction is processed through your Securities Dealer,
you may be charged a fee by your Securities Dealer for this service.
4. There is no front-end sales charge if you invest $1 million or
more in Class A shares. Although Class B and C have a lower front-end
sales charge than Class A, their Rule 12b-1 fees are higher. Over time you
may pay more for Class B and C shares. Please see "How Do I Buy
Shares? - Choosing a Share Class."
5. A Contingent Deferred Sales Charge of 1% may apply to Class A purchases
of $1 million or more if you sell the shares within one year and to any
Class C purchase if you sell the shares within 18 months. A Contingent
Deferred Sales Charge of up to 4% may apply to any Class B purchase if
you sell the shares within six years. A Contingent Deferred Sales
Charge may also apply to purchases by certain retirement plans that
qualify to buy Class A shares without a front-end sales charge. The
charge is based on the value of the shares sold or the Net Asset Value at
the time of purchase, whichever is less. The number in the table shows
the charge as a percentage of Offering Price. While the percentage for
Class C is different depending on whether the charge is shown based on
the Net Asset Value or the Offering Price, the dollar amount you would pay
is the same. See "How Do I Sell Shares? - Contingent Deferred Sales
Charge" for details.
6. There is a $5 fee for exchanges by Market Timers.
7. These fees may not exceed 0.50% for Class A and 1.00% for Class B and C.
The combination of front-end sales charges and Rule 12b-1 fees could
cause long-term shareholders to pay more than the economic equivalent
of the maximum front-end sales charge permitted under the NASD's rules.
8. Assumes a Contingent Deferred Sales Charge will not apply.
9. Assumes conversion of Class B shares to Class A shares after eight
years, lowering your annual expenses from that time on.
10. For the same Class C investment, you would pay projected
expenses of $296 if you did not sell your shares at the end of the first
year. Your projected expenses for the remaining periods would be the same.
III. The following information is added to the section "Financial Highlights":
YEAR ENDED
SEPTEMBER 30, 1998*
----------------------------
CLASS A CLASS C
----------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year $26.93 $26.85
----------------------------
Income from investment operations:
Net investment income .13 ---
Net realized and unrealized gains (losses) (2.22) (2.20)
----------------------------
Total from investment operations (2.09) (2.20)
----------------------------
Less distributions from:
Net investment income (loss) (.11) ---
Net realized gains (3.20) (3.20)
----------------------------
Total distributions (3.31) (3.20)
============================
Net asset value, end of year $21.53 $21.45
============================
Total return** (9.05)% (9.48)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) $407,336 $43,790
Ratios to average net assets:
Expenses 1.39% 1.94%
Net investment income .51% (.05)%
Portfolio turnover rate 23.99% 23.99%
* This information has been audited by Tait, Weller and Baker, the fund's
independent auditor. The audit report appears in the Annual Report to
Shareholders for the fiscal year ended September 30, 1998.
** Total return does not reflect sales commissions or the Contingent
Deferred Sales Charge, and is not annualized.
IV. The following paragraph is added under "What Are the Risks of Investing
in the Fund?":
YEAR 2000. When evaluating current and potential portfolio positions,
Year 2000 is one of the factors Advisory Services considers.
Advisory Services will rely upon public filings and other
statements made by companies about their Year 2000 readiness.
Issuers in countries outside the U.S. may not be required to make the same
level of disclosure about Year 2000 readiness as is required in the U.S.
Advisory Services, of course, cannot audit each company and its major
suppliers to verify their Year 2000 readiness.
If a company in which the fund is invested is adversely affected by Year
2000 problems, it is likely that the price of its security will also be
adversely affected. A decrease in the value of one or more of the fund's
portfolio holdings will have a similar impact on the price of the fund's
shares. Please see "Year 2000 Problem" under "Who Manages the Fund?" for
more information.
V. In the section "Who Manages the Fund?",
(a) the following is added after the "Administrative Services" section:
YEAR 2000 PROBLEM. The fund's business operations depend on a
worldwide network of computer systems that contain date fields,
including securities trading systems, securities transfer agent
operations and stock market links. Many of the systems currently
use a two digit date field to represent the date, and unless
these systems are changed or modified, they may not be able to
distinguish the Year 1900 from the Year 2000 (commonly referred
to as the Year 2000 problem). In addition, the fact that the Year
2000 is a non-standard leap year may create difficulties for some
systems.
When the Year 2000 arrives, the fund's operations could be adversely
affected if the computer systems used by Advisory Services, its service
providers and other third parties it does business with are not Year 2000
ready. For example, the fund's portfolio and operational areas could be
impacted, including securities trade processing, interest and dividend
payments, securities pricing, shareholder account services, reporting,
custody functions and others. The fund could experience difficulties in
effecting transactions if any of its foreign subcustodians, or if foreign
broker-dealers or foreign markets are not ready for Year 2000.
Advisory Services and its affiliated service providers are making
a concerted effort to take steps they believe are reasonably
designed to address their Year 2000 problems. Of course, the
fund's ability to reduce the effects of the Year 2000 problem is
also very much dependent upon the efforts of third parties over
which the fund and Advisory Services may have no control.
(b) the first sentence under "The Rule 12b-1 Plans" is replaced with the
following:
Each class has a separate distribution or "Rule 12b-1" plan under
which the fund shall pay or may reimburse Distributors or others for the
expenses of activities that are primarily intended to sell shares of the
class.
(c) and the following paragraphs are added to the section "The Rule 12b-1
Plans":
Under the Class B plan, the fund pays Distributors up to 0.75%
per year of Class B's average daily net assets to pay
Distributors for providing distribution and related services and
bearing certain Class B expenses. All distribution expenses over
this amount will be borne by those who have incurred them.
Securities Dealers are not eligible to receive this portion of
the Rule 12b-1 fees associated with the purchase.
The fund may also pay a servicing fee of up to 0.25% per year of
Class B's average daily net assets under the Class B plan. This
fee may be used to pay Securities Dealers or others for, among
other things, helping to establish and maintain customer accounts
and records, helping with requests to buy and sell shares,
receiving and answering correspondence, monitoring dividend
payments from the fund on behalf of customers, and similar
servicing and account maintenance activities. Securities Dealers
may be eligible to receive this portion of the Rule 12b-1 fees
from the date of purchase. After 8 years, Class B shares convert
to Class A shares and Securities Dealers may then receive the
Rule 12b-1 fees applicable to Class A.
The expenses relating to the Class B plan are also used to pay
Distributors for advancing the commission costs to Securities
Dealers with respect to the initial sale of Class B shares.
Further, the expenses relating to the Class B plan may be used by
Distributors to pay third party financing entities that have
provided financing to Distributors in connection with advancing
commission costs to Securities Dealers.
VI. The first paragraph under "How Is the Trust Organized?" is
replaced with the following:
The fund is a diversified series of Franklin Managed Trust (the
"Trust"), an open-end management investment company, commonly
called a mutual fund. It was organized as a Massachusetts
business trust on July 15, 1986, and is registered with the SEC.
The fund offers three classes of shares: Franklin Rising
Dividends Fund - Class A, Franklin Rising Dividends Fund - Class
B and Franklin Rising Dividends Fund - Class C. Additional series
and classes of shares may be offered in the future.
VII. The sections "Choosing a Share Class" and "Purchase Price of Fund Shares,"
found under "How Do I Buy Shares?", are replaced with the following:
CHOOSING A SHARE CLASS
Each class has its own sales charge and expense structure, allowing you to
choose the class that best meets your situation. Your investment
representative can help you decide.
CLASS A* CLASS B* CLASS C*
---------------------------------------------------------------------------
o Front-end sales o No front-end sales o Front-end sales
charge of 5.75% charge charge of 1%
or less
o Contingent o Contingent Deferred o Contingent Deferred
Deferred Sales Sales Charge of 4% or Sales Charge of 1% on
Charge of 1% on less on shares you shares you sell within
purchases of $1 sell within six years 18 months
million or more
sold within one
year
o Lower annual o Higher annual o Higher annual
expenses than expenses than Class A expenses than Class A
Class B or C due (same as Class C) due (same as Class B) due
to lower Rule to higher Rule 12b-1 to higher Rule 12b-1
12b-1 fees fees. Automatic fees. No conversion to
conversion to Class A Class A shares, so
shares after eight annual expenses do not
years, reducing future decrease.
annual expenses.
o No maximum o Maximum purchase o Maximum purchase
purchase amount amount of $249,999. We amount of $999,999. We
invest any investment invest any investment
of $250,000 or more in of $1 million or more
Class A shares, since in Class A shares,
a reduced front-end since there is no
sales charge is front-end sales charge
available and Class and Class A's annual
A's annual expenses expenses are lower.
are lower.
*Before January 1, 1999, Class A shares were designated Class I
and Class C shares were designated Class II. The fund began
offering Class B shares on January 1, 1999. Class B shares are
not available to all retirement plans. Class B shares are only
available to IRAs (of any type), Trust Company 403(b) plans, and
Trust Company qualified plans with participant or earmarked
accounts.
PURCHASE PRICE OF FUND SHARES
For Class A shares, the sales charge you pay depends on the
dollar amount you invest, as shown in the table below. The sales
charge for Class C shares is 1% and, unlike Class A, does not
vary based on the size of your purchase. There is no front-end
sales charge for Class B shares.
TOTAL SALES CHARGE AMOUNT PAID TO
AS A PERCENTAGE OF DEALER AS A
AMOUNT OF PURCHASE OFFERING NET AMOUNT PERCENTAGE OF
AT OFFERING PRICE PRICE INVESTED OFFERING PRICE
CLASS A
Under $50,000 5.75% 6.10% 5.00%
$50,000 but less than
$100,000 4.50% 4.71% 3.75%
$100,000 but less than 3.50% 3.63% 2.80%
$250,000
$250,000 but less than 2.50% 2.56% 2.00%
$500,000
$500,000 but less than 2.00% 2.04% 1.60%
$1,000,000
$1,000,000 or more* None None None
CLASS B* None None None
CLASS C
Under $1,000,000* 1.00% 1.01% 1.00%
*A Contingent Deferred Sales Charge of 1% may apply to Class A
purchases of $1 million or more and any Class C purchase. A
Contingent Deferred Sales Charge of up to 4% may apply to any
Class B purchase. Please see "How Do I Sell Shares? - Contingent
Deferred Sales Charge." Please also see "Other Payments to
Securities Dealers" below for a discussion of payments
Distributors may make out of its own resources to Securities
Dealers for certain purchases.
VIII. In the section "Sales Charge Waivers," found under "How Do I Buy Shares?
- Sales Charge Reductions and Waivers,"
(a) the first paragraph is replaced with the following:
SALES CHARGE WAIVERS. If one of the following sales charge
waivers applies to you or your purchase of fund shares, you may
buy shares of the fund without a front-end sales charge or a
Contingent Deferred Sales Charge. All of the sales charge waivers
listed below apply to purchases of Class A shares only, except
for items 1 and 2 which also apply to Class B and C purchases.
(b) and the second waiver category is replaced with the following:
2. Redemption proceeds from the sale of shares of any Franklin
Templeton Fund. The proceeds must be reinvested in the same class
of shares, except proceeds from the sale of Class B shares will
be reinvested in Class A shares.
If you paid a Contingent Deferred Sales Charge when you sold your
Class A or C shares, we will credit your account with the amount
of the Contingent Deferred Sales Charge paid but a new Contingent
Deferred Sales Charge will apply. For Class B shares reinvested
in Class A, a new Contingent Deferred Sales Charge will not
apply, although your account will not be credited with the amount
of any Contingent Deferred Sales Charge paid when you sold your
Class B shares. If you own both Class A and B shares and you
later sell your shares, we will sell your Class A shares first,
unless otherwise instructed.
Proceeds immediately placed in a Franklin Bank CD also may be
reinvested without a front-end sales charge if you reinvest them
within 365 days from the date the CD matures, including any
rollover.
This waiver does not apply to shares you buy and sell under our
exchange program. Shares purchased with proceeds from a money fund may
be subject to a sales charge.
IX. The section "How Do I Buy Shares in Connection with Retirement Plans?",
found under "How Do I Buy Shares?", is replaced with the following:
HOW DO I BUY SHARES IN CONNECTION WITH RETIREMENT PLANS?
Your individual or employer-sponsored retirement plan may invest
in the fund. Plan documents are required for all retirement
plans. Trust Company can provide the plan documents for you and
serve as custodian or trustee.
Trust Company can provide you with brochures containing important
information about its plans. These plans require separate
applications and their policies and procedures may be different
than those described in this prospectus. For more information,
including a free retirement plan brochure or application, please
call Retirement Plan Services.
Please consult your legal, tax or retirement plan specialist
before choosing a retirement plan. Your investment representative
or advisor can help you make investment decisions within your
plan.
X. The section "How Do I Buy Shares? - Other Payments to Securities
Dealers" is replaced with the following:
OTHER PAYMENTS TO SECURITIES DEALERS
The payments described below may be made to Securities Dealers
who initiate and are responsible for Class B and C purchases and
certain Class A purchases made without a sales charge. The
payments are subject to the sole discretion of Distributors, and
are paid by Distributors or one of its affiliates and not by the
fund or its shareholders.
1. Class A purchases of $1 million or more - up to 1% of the amount
invested.
2. Class B purchases - up to 4% of the amount invested.
3. Class C purchases - up to 1% of the purchase price.
4. Class A purchases made without a front-end sales charge by
certain retirement plans described under "Sales Charge Reductions
and Waivers - Retirement Plans" above - up to 1% of the amount
invested.
5. Class A purchases by trust companies and bank trust
departments, Eligible Governmental Authorities, and
broker-dealers or others on behalf of clients participating in
comprehensive fee programs - up to 0.25% of the amount invested.
6. Class A purchases by Chilean retirement plans - up to 1% of
the amount invested.
A Securities Dealer may receive only one of these payments for each
qualifying purchase. Securities Dealers who receive payments in connection
with investments described in paragraphs 1,3 or 6 above or a payment of up
to 1% for investments described in paragraph 4 will be eligible to receive
the Rule 12b-1 fee associated with the purchase starting in the thirteenth
calendar month after the purchase.
FOR BREAKPOINTS THAT MAY APPLY AND INFORMATION ON ADDITIONAL COMPENSATION
PAYABLE TO SECURITIES DEALERS IN CONNECTION WITH THE SALE OF FUND SHARES,
PLEASE SEE "HOW DO I BUY, SELL AND EXCHANGE SHARES? - OTHER PAYMENTS TO
SECURITIES DEALERS" IN THE SAI.
XI. The second and third paragraphs under "May I Exchange Shares for Shares of
Another Fund?" are replaced with the following:
If you own Class A shares, you may exchange into any of our money
funds except Franklin Templeton Money Fund. Franklin Templeton
Money Fund is the only money fund exchange option available to
Class B and C shareholders. Unlike our other money funds, shares
of Franklin Templeton Money Fund may not be purchased directly
and no drafts (checks) may be written on Franklin Templeton Money
Fund accounts.
Before making an exchange, please read the prospectus of the fund
you are interested in. This will help you learn about the fund,
its investment goal and policies, and its rules and requirements
for exchanges. For example, some Franklin Templeton Funds do not
accept exchanges and others may have different investment
minimums. Some Franklin Templeton Funds do not offer Class B or C
shares.
XII. In the section "Contingent Deferred Sales Charge," found
under "May I Exchange Shares for Shares of Another Fund? - Will
Sales Charges Apply to My Exchange?",
(a) the following sentence is added to the end of the first paragraph:
The purchase price for determining a Contingent Deferred Sales Charge on
exchanged shares will be the price you paid for the original shares.
(b) and the third paragraph is replaced with the following:
If you exchange Class A shares into one of our money funds, the time your
shares are held in that fund will not count towards the completion of any
Contingency Period. If you exchange your Class B or C shares for the same
class of shares of Franklin Templeton Money Fund, however, the time your
shares are held in that fund will count towards the completion of any
Contingency Period.
XIII. The second and third items in the section "Exchange
Restrictions," found under "May I Exchange Shares for Shares of
Another Fund?", are replaced with the following:
You may only exchange shares within the same class, except as noted
below. If you exchange your Class B shares for the same class of shares of
another Franklin Templeton Fund, the time your shares are held in that
fund will count towards the eight year period for automatic conversion to
Class A shares.
Generally exchanges may only be made between identically
registered accounts, unless you send written instructions with a
signature guarantee. You may, however, exchange shares from a
fund account requiring two or more signatures into an identically
registered money fund account requiring only one signature for
all transactions. PLEASE NOTIFY US IN WRITING IF YOU DO NOT WANT
THIS OPTION TO BE AVAILABLE ON YOUR ACCOUNT. Additional
procedures may apply. Please see "Transaction Procedures and
Special Requirements."
XIV. In the "By Phone" section of the chart under "How Do I Sell Shares?",
(a) the first bulleted item is replaced with the following:
o If the request is $100,000 or less. Institutional accounts may exceed
$100,000 by completing a separate agreement. Call Institutional
Services to receive a copy.
(b) and the third bulleted item is deleted.
XV. In the section "Contingent Deferred Sales Charge," found under "How Do I
Sell Shares?",
(a) the following is added after the second paragraph:
For Class B shares, there is a Contingent Deferred Sales Charge
if you sell your shares within six years, as described in the
table below. The charge is based on the value of the shares sold
or the Net Asset Value at the time of purchase, whichever is
less.
THIS % IS DEDUCTED FROM YOUR
IF YOU SELL YOUR CLASS B SHARES PROCEEDS AS A CONTINGENT
WITHIN THIS MANY YEARS AFTER BUYING THEM DEFERRED SALES CHARGE
------------------------------------------------------------------------
1 Year 4
2 Years 4
3 Years 3
4 Years 3
5 Years 2
6 Years 1
7 Years 0
(b) and the section "Waivers" is replaced with the following:
WAIVERS. We waive the Contingent Deferred Sales Charge for:
o Account fees
o Sales of Class A shares purchased without a front-end sales
charge by certain retirement plan accounts if (i) the account was
opened before May 1, 1997, or (ii) the Securities Dealer of record
received a payment from Distributors of 0.25% or less, or (iii)
Distributors did not make any payment in connection with the purchase,
or (iv) the Securities Dealer of record has entered into a
supplemental agreement with Distributors
o Redemptions by the fund when an account falls below the minimum
required account size
o Redemptions following the death of the shareholder or beneficial owner
o Redemptions through a systematic withdrawal plan set up before
February 1, 1995
o Redemptions through a systematic withdrawal plan set up on or after
February 1, 1995, up to 1% monthly, 3% quarterly, 6% semiannually or
12% annually of your account's Net Asset Value depending on the
frequency of your plan
o Redemptions by Trust Company employee benefit plans or employee
benefit plans serviced by ValuSelect(R) (not applicable to Class B)
Distributions from IRAs due to death or disability or upon periodic
distributions based on life expectancy (for Class B, this applies to
all retirement plan accounts, not only IRAs)
o Returns of excess contributions (and earnings, if applicable) from
retirement plan accounts
o Participant initiated distributions from employee benefit plans or
participant initiated exchanges among investment choices in employee
benefit plans (not applicable to Class B)
XVI. The second paragraph under "What Distributions Might I Receive From the
Fund?" is replaced with the following:
Dividends and capital gains are calculated and distributed the
same way for each class. The amount of any income dividends per
share will differ, however, generally due to the difference in
the Rule 12b-1 fees of each class.
XVII. Distribution option 3 and the paragraph following it in the section "What
Distributions Might I Receive From the Fund? - Distribution Options" are
replaced with the following:
3. RECEIVE DISTRIBUTIONS IN CASH - You may receive dividends, or both
dividend and capital gain distributions 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."
Distributions may be reinvested only in the same class of shares, except
as follows: (i) Class C shareholders who chose to reinvest their
distributions in Class A shares of the fund or another Franklin Templeton
Fund before November 17, 1997, may continue to do so; and (ii) Class B and
C shareholders may reinvest their distributions in shares of any Franklin
Templeton money fund.
XVIII. Under "Transaction Procedures and Special Requirements,"
(a) the section "Joint Accounts" is replaced with the following:
JOINT ACCOUNTS. For accounts with more than one registered owner, the fund
accepts 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.
Please keep in mind that if you have previously told us that you do not
want telephone exchange or redemption privileges on your account, then we
can only accept written instructions to exchange or redeem shares if they
are signed by all registered owners on the account.
(b) the reference to $50,000 in the section "Signature Guarantees" is
replaced with $100,000.
(c) and the section "Trust Company Retirement Plan Accounts," found under
"Telephone Transactions," is deleted.
XIX. Under "Services to Help You Manage Your Account,"
(a) the second sentence in the section "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.
(b) the second paragraph under "Systematic Withdrawal Plan" is replaced
with the following:
If you would like to establish a systematic withdrawal plan,
please complete the systematic withdrawal plan section of the
account application included with this prospectus and indicate
how you would like to receive your payments. 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. Once your plan is
established, any distributions paid by the fund will be
automatically reinvested in your account.
(c) the section "Electronic Fund Transfers - Class I Only" is replaced
with the following:
ELECTRONIC FUND TRANSFERS
You may choose to have dividend and capital gain 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.
(d) the third bulleted item in the section "TeleFACTS(R)" is replaced with
the following:
o exchange shares (within the same class) between identically
registered Franklin Templeton Class A, B or C accounts; and
(e) and the last sentence is replaced with the following:
The code number is 158 for Class A, 358 for Class B and 258 for Class C.
XX. In the "Useful Terms and Definitions" section,
(a) the definition of "Class I and Class II" is replaced with the
following:
CLASS A, CLASS B AND CLASS C - The fund offers three classes of shares,
designated "Class A," "Class B" and "Class C." The three classes have
proportionate interests in the fund's portfolio. They differ, however,
primarily in their sales charge structures and Rule 12b-1 plans.
(b) and the following definitions are revised:
CONTINGENCY PERIOD - For Class A shares, the 12 month period
during which a Contingent Deferred Sales Charge may apply. The
contingency period is six years for Class B shares and 18 months
for Class C shares. 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.
CONTINGENT DEFERRED SALES CHARGE (CDSC) - A sales charge of 1%
that may apply if you sell your Class A or C shares within the
Contingency Period. For Class B, the maximum CDSC is 4% and
declines to 0% after six years.
OFFERING PRICE - The public offering price is based on the Net
Asset Value per share of the class and includes the front-end
sales charge. The maximum front-end sales charge is 5.75% for
Class A and 1% for Class C. There is no front-end sales charge
for Class B. We calculate the offering price to two decimal
places using standard rounding criteria.
Please keep this supplement for future reference.
SHARE CLASS REDESIGNATION
EFFECTIVE JANUARY 1, 1999
Class A - Formerly Considered Class I
SUPPLEMENT DATED JANUARY 1, 1999
TO THE PROSPECTUS OF
FRANKLIN INVESTMENT GRADE INCOME FUND
DATED FEBRUARY 1, 1998
The prospectus is amended as follows:
I. As of January 1, 1999, the Fund's shares are considered Class A shares
for redemption, exchange and other purposes. Before January 1, 1999,
the Fund's shares were considered Class I shares. All references in the
prospectus to Class I shares are replaced with Class A, and all
references to Class II shares are replaced with Class C.
II. The following information is added to the section "Financial
Highlights":
YEAR ENDED
SEPTEMBER
30, 1998*
--------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year $9.08
--------------
Income from investment operations:
Net investment income .43
Net realized and unrealized gains .14
--------------
Total from investment operations .57
--------------
Less distributions from:
Net investment income (.43)
==============
Net asset value, end of year $9.22
==============
Total return** 6.50%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) $54,958
Ratios to average net assets:
Expenses 1.10%
Net investment income 4.74%
Portfolio turnover rate 20.80%
* This information has been audited by Tait, Weller and Baker, the
Fund's independent auditor. The audit report appears in the Annual
Report to Shareholders for the fiscal year ended September 30, 1998.
** Total return does not reflect sales commissions or the Contingent
Deferred Sales Charge, and is not annualized.
III. The following paragraph is added under "What Are the Risks of
Investing in the Fund?":
YEAR 2000. When evaluating current and potential portfolio positions,
Year 2000 is one of the factors Advisory Services considers.
Advisory Services will rely upon public filings and other statements
made by companies about their Year 2000 readiness. Issuers in countries
outside the U.S. may not be required to make the same level of
disclosure about Year 2000 readiness as is required in the U.S.
Advisory Services, of course, cannot audit each company and its major
suppliers to verify their Year 2000 readiness.
If a company in which the Fund is invested is adversely affected by
Year 2000 problems, it is likely that the price of its security will
also be adversely affected. A decrease in the value of one or more of
the Fund's portfolio holdings will have a similar impact on the price
of the Fund's shares. Please see "Year 2000 Problem" under "Who Manages
the Fund?" for more information.
IV. The following is added after the "Administrative Services" section
under "Who Manages the Fund?":
YEAR 2000 PROBLEM. The Fund's business operations depend on a worldwide
network of computer systems that contain date fields, including
securities trading systems, securities transfer agent operations and
stock market links. Many of the systems currently use a two digit date
field to represent the date, and unless these systems are changed or
modified, they may not be able to distinguish the Year 1900 from the
Year 2000 (commonly referred to as the Year 2000 problem). In addition,
the fact that the Year 2000 is a non-standard leap year may create
difficulties for some systems.
When the Year 2000 arrives, the Fund's operations could be adversely
affected if the computer systems used by Advisory Services, its service
providers and other third parties it does business with are not Year
2000 ready. For example, the Fund's portfolio and operational areas
could be impacted, including securities trade processing, interest and
dividend payments, securities pricing, shareholder account services,
reporting, custody functions and others. The Fund could experience
difficulties in effecting transactions if any of its foreign
subcustodians, or if foreign broker-dealers or foreign markets are not
ready for Year 2000.
Advisory Services and its affiliated service providers are making a
concerted effort to take steps they believe are reasonably designed to
address their Year 2000 problems. Of course, the Fund's ability to
reduce the effects of the Year 2000 problem is also very much dependent
upon the efforts of third parties over which the Fund and Advisory
Services may have no control.
V. Under "How Is the Trust Organized?", the following is added:
As of December 7, 1998, the Franklin Templeton Conservative Target Fund
owned of record and beneficially more than 25% of the outstanding
shares of Advisor Class.
VI. The second step in the section "How Do I Buy Shares? - Opening Your
Account" is replaced with the following:
2. Determine how much you would like to invest. The Fund's minimum
investments are:
o To open a regular, non-retirement account $1,000
o To open an IRA, IRA Rollover, Roth IRA,
or Education IRA $ 250*
o To open a custodial account for a minor
(an UGMA/UTMA account) $ 100
o To open an account with an automatic
investment plan $ 50**
o To add to an account $ 50***
*For all other retirement accounts, there is no minimum investment requirement.
**$25 for an Education IRA.
***For all retirement accounts except IRAs, IRA Rollovers, Roth IRAs, or
Education IRAs, there is no minimum to add to an account.
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.
VII. The section "Quantity Discounts," found under "How Do I Buy Shares? -
Sales Charge Reductions and Waivers," is replaced with the following:
QUANTITY DISCOUNTS. The sales charge you pay depends on the dollar
amount you invest, as shown in the table below.
TOTAL SALES CHARGE AMOUNT PAID TO
AS A PERCENTAGE OF DEALER AS A
AMOUNT OF PURCHASE OFFERING NET AMOUNT PERCENTAGE OF
AT OFFERING PRICE PRICE INVESTED OFFERING PRICE
------------------------------------------------------------------------
Under $100,000 4.25% 4.44% 4.00%
$100,000 but less than 3.50% 3.63% 3.25%
$250,000
$250,000 but less than 2.50% 2.56% 2.25%
$500,000
$500,000 but less than 2.00% 2.04% 1.85%
$1,000,000
$1,000,000 or more* None None None
*A Contingent Deferred Sales Charge of 1% may apply to purchases of $1
million or more. Please see "How Do I Sell Shares? - Contingent
Deferred Sales Charge." Please also see "Other Payments to Securities
Dealers" below for a discussion of payments Distributors may make out
of its own resources to Securities Dealers for certain purchases.
VIII. In the section "Sales Charge Waivers," found under "How Do I Buy
Shares? - Sales Charge Reductions and Waivers,"
(a) the second waiver category is replaced with the following:
2. Redemption proceeds from the sale of shares of any Franklin
Templeton Fund. The proceeds must be reinvested in the same class of
shares, except proceeds from the sale of Class B shares will be
reinvested in Class A shares.
If you paid a Contingent Deferred Sales Charge when you sold your
Class A shares, we will credit your account with the amount of the
Contingent Deferred Sales Charge paid but a new Contingent Deferred
Sales Charge will apply. For Class B shares reinvested in Class A, a
new Contingent Deferred Sales Charge will not apply, although your
account will not be credited with the amount of any Contingent
Deferred Sales Charge paid when you sold your Class B shares.
Proceeds immediately placed in a Franklin Bank CD also may be
reinvested without a front-end sales charge if you reinvest them
within 365 days from the date the CD matures, including any rollover.
This waiver does not apply to shares you buy and sell under our
exchange program. Shares purchased with the proceeds from a money
fund may be subject to a sales charge.
(b) the following new category 7 is added to the end of the first list
of sales charge waiver categories:
7. Redemption proceeds from a repurchase of shares of Franklin
Floating Rate Trust, if the shares were continuously held for at
least 12 months.
If you immediately placed your redemption proceeds in a Franklin
Bank CD or a Franklin Templeton money fund, you may reinvest them
as described above. The proceeds must be reinvested within 365 days
from the date the CD matures, including any rollover, or the date
you redeem your money fund shares.
(c) and the following new category 12 is added to the end of the second
list of sales charge waiver categories:
12. Qualified registered investment advisors who buy through a
broker-dealer or service agent who has entered into an agreement
with Distributors
IX. The section "How Do I Buy Shares in Connection with Retirement
Plans?", found under "How Do I Buy Shares?", is replaced with the
following:
HOW DO I BUY SHARES IN CONNECTION WITH RETIREMENT PLANS?
Your individual or employer-sponsored retirement plan may invest in the
Fund. Plan documents are required for all retirement plans. Trust
Company can provide the plan documents for you and serve as custodian
or trustee.
Trust Company can provide you with brochures containing important
information about its plans. These plans require separate applications
and their policies and procedures may be different than those described
in this prospectus. For more information, including a free retirement
plan brochure or application, please call Retirement Plan Services.
Please consult your legal, tax or retirement plan specialist before
choosing a retirement plan. Your investment representative or advisor
can help you make investment decisions within your plan.
X. The first paragraph under "May I Exchange Shares for Shares of Another
Fund? - Will Sales Charges Apply to My Exchange?" is replaced with the
following:
You generally will not pay a front-end sales charge on exchanges. If
you have held your shares less than six months, however, you will pay
the percentage difference between the sales charge you previously paid
and the applicable sales charge of the new fund, if the difference is
more than 0.25%. If you have never paid a sales charge on your shares
because, for example, they have always been held in a money fund, you
will pay the Fund's applicable sales charge no matter how long you
have held your shares. These charges may not apply if you qualify to
buy shares without a sales charge.
XI. Under "May I Exchange Shares for Shares of Another Fund? - Exchange
Restrictions":
(a) the second item is replaced with the following:
o Generally exchanges may only be made between identically registered
accounts, unless you send written instructions with a signature
guarantee. You may, however, exchange shares from a Fund account
requiring two or more signatures into an identically registered
money fund account requiring only one signature for all
transactions. PLEASE NOTIFY US IN WRITING IF YOU DO NOT WANT THIS
OPTION TO BE AVAILABLE ON YOUR ACCOUNT. Additional procedures may
apply. Please see "Transaction Procedures and Special Requirements."
(b) and the following new item is added:
o You must meet the applicable minimum investment amount of the fund
you are exchanging into, or exchange 100% of your Fund shares.
XII. In the "By Phone" section of the chart under "How Do I Sell Shares?",
(a) the first bulleted item is replaced with the following:
o If the request is $100,000 or less. Institutional accounts may
exceed $100,000 by completing a separate agreement. Call
Institutional Services to receive a copy.
(b) and the third bulleted item is deleted.
XIII. Distribution option 3 in the section "What Distributions Might I
Receive From the Fund? - Distribution Options" is replaced with the
following:
3. RECEIVE DISTRIBUTIONS IN CASH - You may receive dividends, or both
dividend and capital gain distributions 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."
XIV. Under "Transaction Procedures and Special Requirements,"
(a) the section "Joint Accounts" is replaced with the following:
JOINT ACCOUNTS. For accounts with more than one registered owner, the
Fund accepts 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.
Please keep in mind that if you have previously told us that you do not
want telephone exchange or redemption privileges on your account, then
we can only accept written instructions to exchange or redeem shares if
they are signed by all registered owners on the account.
(b) the reference to $50,000 in the section "Signature Guarantees" is
replaced with $100,000.
(c) the section "Trust Company Retirement Plan Accounts," found under
"Telephone Transactions," is deleted.
(d) and the section "Keeping Your Account Open" is replaced 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 IRAs and other retirement plan accounts or to
accounts managed by the Franklin Templeton Group.
XV. Under "Services to Help You Manage Your Account,"
(a) the second sentence in the section "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.
(b) the second paragraph under "Systematic Withdrawal Plan" is replaced
with the following:
If you would like to establish a systematic withdrawal plan, please
complete the systematic withdrawal plan section of the account
application included with this prospectus and indicate how you would
like to receive your payments. 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. Once your plan is established, any distributions paid by the
Fund will be automatically reinvested in your account.
(c) the section "Electronic Fund Transfers" is replaced with the
following:
ELECTRONIC FUND TRANSFERS
You may choose to have dividend and capital gain 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.
(d) and the third bulleted item in the section "TeleFACTS(R)" is replaced
with the following:
o exchange shares (within the same class) between identically
registered Franklin Templeton Class A, B or C accounts; and
XVI. In the "Useful Terms and Definitions" section,
(a) the definition of "Class I, Class II and Advisor Class" is replaced
with the following:
CLASS A, CLASS B, CLASS C AND ADVISOR CLASS - The Fund offers two
classes of shares, designated "Class A" and "Advisor Class." The two
classes have proportionate interests in the Fund's portfolio. They
differ, however, primarily in their sales charge and expense
structures. Certain funds in the Franklin Templeton Funds also offer
share classes designated "Class B" and "Class C."
(b) and the following definition is revised:
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.
SHARE CLASS REDESIGNATION
EFFECTIVE JANUARY 1, 1999
Class A - Formerly Class I
Class B - New Share Class
(Rising Dividends
Fund Only)
Class C - Formerly Class II
SUPPLEMENT DATED JANUARY 1, 1999
TO THE STATEMENT OF ADDITIONAL INFORMATION OF
FRANKLIN MANAGED TRUST
DATED FEBRUARY 1, 1998
The Statement of Additional Information is amended as follows:
I. As of January 1, 1999, the Rising Dividends Fund offers three classes
of shares: Class A, Class B and Class C. The Investment Grade Fund
offers two classes of shares: Class A and Advisor Class. Before January
1, 1999, Class A shares were designated Class I and Class C shares were
designated Class II. All references in the Statement of Additional
Information to Class I shares are replaced with Class A, and all
references to Class II shares are replaced with Class C.
II. On June 23, 1998, the Board approved a proposal to dissolve the
Corporate Qualified Fund. On July 15, 1998, the Corporate Qualified
Fund liquidated its assets and distributed its net assets to Fund
shareholders.
III. The second paragraph on page 2 is replaced with the following:
This SAI describes Class A shares of the Investment Grade Fund and
Class A, B and C shares of the Rising Dividends Fund. The Investment
Grade Fund currently offers another share class with a different sales
charge and expense structure, which affects performance. To receive
more information about the Fund's other share class, contact your
investment representative or call 1-800/DIAL BEN.
IV. The following is added to the "Officers and Trustees" section:
As of December 7, 1998, the officers and Board members, as a group,
owned of record and beneficially the following shares of the Fund:
approximately 14,595 Class A shares of the Rising Dividends Fund, or
less than 1% of the total outstanding Class A shares of the Rising
Dividends Fund, and 2,179 Advisor Class shares of the Investment Grade
Fund, or 1.3% of the total outstanding Advisor Class shares of the
Investment Grade Fund.
V. The first sentence in the section "Additional Information on
Exchanging Shares," found under "How Do I Buy, Sell and Exchange
Shares?", is replaced with the following:
If you request the exchange of the total value of your account,
declared but unpaid income dividends and capital gain distributions
will be reinvested in the Fund and exchanged into the new fund at Net
Asset Value when paid.
VI. In the section "The Rule 12b-1 Plans," found under "The Fund's
Underwriter,"
(a) the first sentence is replaced with the following:
Class A of the Investment Grade Fund and each class of the Rising
Dividends Fund have separate distribution or "Rule 12b-1" plans that
were adopted pursuant to Rule 12b-1 of the 1940 Act.
(b) the following paragraphs are added after the section "The Class I
Plan":
THE CLASS B PLAN. Under the Class B plan, the Rising Dividends Fund
pays Distributors up to 0.75% per year of the class' average daily net
assets, payable quarterly, to pay Distributors or others for providing
distribution and related services and bearing certain expenses. All
distribution expenses over this amount will be borne by those who have
incurred them. The Fund may also pay a servicing fee of up to 0.25% per
year of the class' average daily net assets, payable quarterly. This
fee may be used to pay Securities Dealers or others for, among other
things, helping to establish and maintain customer accounts and
records, helping with requests to buy and sell shares, receiving and
answering correspondence, monitoring dividend payments from the fund on
behalf of customers, and similar servicing and account maintenance
activities.
The expenses relating to the Class B plan are also used to pay
Distributors for advancing the commission costs to Securities Dealers
with respect to the initial sale of Class B shares. Further, the
expenses relating to the Class B plan may be used by Distributors to
pay third party financing entities that have provided financing to
Distributors in connection with advancing commission costs to
Securities Dealers.
(c) and the section "The Class I and Class II Plans" is renamed "The
Class A, B and C Plans."
VII. The following information is added to the applicable sections under
"How Does the Fund Measure Performance?" (the Class A performance
figures for the Rising Dividends Fund have been restated to reflect the
Fund's current, maximum 5.75% initial sales charge):
TOTAL RETURN
The average annual total returns for the indicated periods ended
September 30, 1998, were:
1 YEAR 5 YEARS 10 YEARS
-------------------------------------------------------------------------
CLASS A
Rising Dividends Fund -14.27% 11.09% 11.32%
Investment Grade Fund 2.00% 3.78% 6.62%
1 YEAR SINCE INCEPTION
(5/1/95)
-------------------------------------------------------------
CLASS C
Rising Dividends Fund -11.17% 16.77%
The cumulative total returns for the indicated periods ended September
30, 1998, were:
1 YEAR 5 YEARS 10 YEARS
-------------------------------------------------------------------------
CLASS A
Rising Dividends Fund -14.27% 69.20% 192.17%
Investment Grade Fund 2.00% 20.36% 89.81%
1 YEAR SINCE INCEPTION
(5/1/95)
-------------------------------------------------------------
CLASS C
Rising Dividends Fund -11.17% 69.83%
YIELD
The yields for the 30-day period ended September 30, 1998, were:
-------------------------------------------
CLASS A
Rising Dividends Fund 0.80%
Investment Grade Fund 4.08%
CLASS C
Rising Dividends Fund 0.31%
CURRENT DISTRIBUTION RATE
The current distribution rates for the 30-day period ended September
30, 1998, were:
-------------------------------------------
CLASS A
Rising Dividends Fund 0.81%
Investment Grade Fund 4.11%
CLASS C
Rising Dividends Fund 0.03%
VIII. Under "Miscellaneous Information," the following is added:
The Information Services & Technology division of Resources established
a Year 2000 Project Team in 1996. This team has already begun making
necessary software changes to help the computer systems that service
the Fund and its shareholders to be Year 2000 compliant. After
completing these modifications, comprehensive tests are conducted in
one of Resources' U.S. test labs to verify their effectiveness.
Resources continues to seek reasonable assurances from all major
hardware, software or data-services suppliers that they will be Year
2000 compliant on a timely basis. Resources is also beginning to
develop a contingency plan, including identification of those mission
critical systems for which it is practical to develop a contingency
plan. However, in an operation as complex and geographically
distributed as Resources' business, the alternatives to use of normal
systems, especially mission critical systems, or supplies of
electricity or long distance voice and data lines are limited.
As of December 7, 1998, the principal shareholders of the Fund,
beneficial or of record, were as follows:
NAME AND ADDRESS SHARE AMOUNT PERCENTAGE
------------------------------------------------------------------------
INVESTMENT GRADE FUND - ADVISOR
CLASS
FT Fund Allocator 164,170.497 95.60%
Conservative Target Fund
C/O Fund Accounting Department
Attn: Kimberley Monasterio
1810 Gateway 3rd Floor
San Mateo, CA 94404-2470
IX. The following is added to the section "Financial Statements":
The audited financial statements contained in the Annual Report to
Shareholders of the Trust, for the fiscal year ended September 30,
1998, including the auditor's report, are incorporated herein by
reference.
X. In the "Useful Terms and Definitions" section, the definitions of
"Class I, Class II and Advisor Class" and "Offering Price" are replaced
with the following:
CLASS A, CLASS B, CLASS C AND ADVISOR CLASS - The Rising Dividends Fund
offers three classes of shares, designated "Class A," "Class B" and
"Class C." The Investment Grade Fund offers two classes of shares,
designated "Class A" and "Advisor Class." The classes have
proportionate interests in the Fund's portfolio. They differ, however,
primarily in their sales charge and expense structures.
OFFERING PRICE - The public offering price is based on the Net Asset
Value per share of the class and includes the front-end sales charge.
The maximum front-end sales charge is 4.25% for the Investment Grade
Fund. For the Rising Dividends Fund, the maximum front-end sales charge
is 5.75% for Class A and 1% for Class C. There is no front-end sales
charge for Class B. We calculate the offering price to two decimal
places using standard rounding criteria.
Please keep this supplement for future reference.
Franklin Managed Trust
File Nos. 33-9994
811-4894
FORM N-1A
PART C
Other Information
ITEM 24 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements incorporated herein by reference to the
Registrant's Annual Report to Shareholders dated September 30, 1998 as
filed with the SEC electronically on form type N-30D on November 19,
1998.
(i) Financial Highlights
(ii) Statement of Investments - September 30, 1998
(iii) Statement of Assets and Liabilities - September 30, 1998
(iv) Statement of Operations - for the year ended September 30, 1998
(v) Statements of Changes in Net Assets - for the years ended
September 30, 1998 and 1997
(vi) Notes to Financial Statements
(vii) Report of Independent Accountants
(2) Financial Statements incorporated herein by reference to the
Registrant's Annual Report to Shareholders dated September 30, 1997 as
filed with the SEC electronically on form type N-30D on December 10,
1997.
(i) Financial Highlights
(ii) Statement of Investments - September 30, 1997
(iii) Statement of Assets and Liabilities - September 30, 1997
(iv) Statement of Operations - for the year ended September 30, 1997
(v) Statements of Changes in Net Assets - for the years ended
September 30, 1997 and 1996
(vi) Notes to Financial Statements
(vii) Report of Independent Accountants
(b) The following exhibits, are incorporated by reference herein, except
exhibits 11(i), 15(iv), and 18(ii), which are attached.
(1) Copies of the charter as now in effect;
(i) Amended and Restated Agreement and Declaration of Trust
dated October 30, 1986
Filing: Post-Effective Amendment No. 12 to Registration
Statement of Registrant
on Form N-1A
File No. 33-9994
Filing Date: April 24, 1995
(ii) Certificate of Amendment of Agreement and Declaration of
Trust dated June 28, 1988
Filing: Post-Effective Amendment No. 12 to Registration
Statement of Registrant
on Form N-1A
File No. 33-9994
Filing Date: April 24, 1995
(iii) Certificate of Amendment of Agreement and Declaration of
Trust dated March 13, 1995
Filing: Post-Effective Amendment No. 12 to Registration
Statement of Registrant
on Form N-1A
File No. 33-9994
Filing Date: April 24, 1995
(2) Copies of the existing By-Laws or instruments corresponding
thereto;
(i) By-Laws
Filing: Post-Effective Amendment No. 12 to Registration
Statement of Registrant
on Form N-1A
File No. 33-9994
Filing Date: April 24, 1995
(3) Copies of any voting trust agreement with respect to more than
five percent of any class of equity securities of the Registrant;
Not Applicable
(4) Specimens or copies of each security issued by the Registrant,
including copies of all constituent instruments, defining the
rights of the holders of such securities, and copies of each
security being registered;
Not Applicable
(5) Copies of all investment advisory contracts relating to the
management of the assets of the Registrant;
(i) Management Agreement between Franklin Rising Dividends Fund
and Franklin Advisory Services, Inc., dated July 1, 1996
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-9994
Filing Date: November 25, 1996
(ii) Management Agreement between Franklin Investment Grade
Income Fund and Franklin Advisory Services, Inc., dated
July 1, 1996.
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-9994
Filing Date: November 25, 1996
(6) Copies of each underwriting or distribution contract between the
Registrant and a principal underwriter, and specimens or copies
of all agreements between principal underwriters and dealers;
(i) Amended and Restated Distribution Agreement between
Franklin/Templeton Distributors, Inc. and Franklin Managed
Trust dated April 23, 1995
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-9994
Filing Date: November 25, 1996
(ii) Forms of Dealer Agreements between Franklin/Templeton
Distributors, Inc. and Securities Dealers
Filing: Post-Effective Amendment No. 18 to Registration
Statement on Form N-1A
File No. 33-9994
Filing Date: November 25, 1998
(7) Copies of all bonus, profit sharing, pension or other similar
contracts or arrangements wholly or partly for the benefit of
directors or officers of the Registrant in their capacity as
such; any such plan that is not set forth in a formal document,
furnish a reasonably detailed description thereof;
Not Applicable
(8) Copies of all custodian agreements and depository contracts under
Section 17(f) of the 1940 Act, with respect to securities and
similar investments of the Registrant, including the schedule of
remuneration;
(i) Master Custody Agreement between Registrant and Bank of
New York dated February 16, 1996
Registrant: Franklin New York Tax-Free Trust
Filing: Post-Effective Amendment No. 13 to Registration
Statement on Form N-1A
File No. 33-7785
Filing Date: March 1, 1996
(ii) Terminal Link Agreement between Registrant and Bank of New
York dated February 16, 1996
Registrant: Franklin New York Tax-Free Trust
Filing: Post-Effective Amendment No. 13 to Registration
Statement on Form N-1A
File No. 33-7785
Filing Date: March 1, 1996
(iii) Amendment dated May 7, 1997 to Master Custody Agreement
between the Registrant and Bank of New York dated February
16, 1996
Filing: Post-Effective Amendment No. 17 to Registration
Statement on Form N-1A
File No. 33-9994
Filing Date: January 29, 1998
(iv) Amendment dated February 27, 1998 to Exhibit A in the
Master Custody Agreement between the Registrant and Bank of
New York dated February 16, 1996
Filing: Post-Effective Amendment No. 18 to Registration
Statement on Form N-1A
File No. 33-9994
Filing Date: November 25, 1998
(v) Foreign Custody Manager Agreement between the Registrant
and Bank of New York dated July 30, 1998, effective
February 27, 1998
Filing: Post-Effective Amendment No. 18 to Registration
Statement on Form N-1A
File No. 33-9994
Filing Date: November 25, 1998
(9) Copies of all other material contracts not made in the ordinary
course of business which are to be performed in whole or in part
at or after the date of filing the Registration Statement;
(i) Subcontract for Fund Administrative Services dated July 1,
1996 between Franklin Advisory Services, Inc. and Franklin
Templeton Services, Inc.
Filing: Post-Effective Amendment No. 18 to Registration
Statement on Form N-1A
File No. 33-9994
Filing Date: November 25, 1998
(10) An opinion and consent of counsel as to the legality of the
securities being registered, indicating whether they will when
sold be legally issued, fully paid and nonassessable;
(i) Opinion and Consent of counsel dated November 20, 1998
Filing: Post-Effective Amendment No. 18 to Registration
Statement on Form N-1A
File No. 33-9994
Filing Date: November 25, 1998
(11) Copies of any other opinions, appraisals or rulings and consents
to the use thereof relied on in the preparation of this
registration statement and required by Section 7 of the 1933 Act;
(i) Consent of Independent Accountants
(12) All financial statements omitted from Item 23;
Not Applicable
(13) Copies of any agreements or understandings made in consideration
for providing the initial capital between or among the
Registrant, the underwriter, adviser, promoter or initial
stockholders and written assurances from promoters or initial
stockholders that their purchases were made for investment
purposes without any present intention of redeeming or reselling;
(i) Letter of Understanding dated April 12, 1995
Filing: Post-Effective Amendment No. 12 to Registration
Statement of Registrant
on Form N-1A
File No. 33-9994
Filing Date: April 24, 1995
(14) Copies of the model plan used in the establishment of any
retirement plan in conjunction with which Registrant offers its
securities, any instructions thereto and any other documents
making up the model plan. Such form(s) should disclose the costs
and fees charged in connection therewith;
Not Applicable
(15) Copies of any plan entered into by Registrant pursuant to Rule
12b-1 under the 1940 Act, which describes all material aspects of
the financing of distribution of Registrant's shares, and any
agreements with any person relating to implementation of such
plan.
(i) Amended and Restated Distribution Plan between Franklin
Rising Dividends Fund and Franklin/Templeton Distributors,
Inc., dated July 1, 1993
Filing: Post-Effective Amendment No. 12 to Registration
Statement of Registrant
on Form N-1A
File No. 33-9994
Filing Date: April 24, 1995
(ii) Amended and Restated Distribution Plan between Franklin
Investment Grade Income Fund and Franklin/Templeton
Distributors, Inc., dated July 1, 1993
Filing: Post-Effective Amendment No. 12 to Registration
Statement of Registrant
on Form N-1A
File No. 33-9994
Filing Date: April 24, 1995
(iii) Class II Distribution Plan between Franklin Managed Trust on
behalf of Franklin Rising Dividends Fund - Class II, and
Franklin/Templeton Distributors, Inc., pursuant to Rule
12b-1 dated March 30, 1995
Filing: Post-Effective Amendment No. 13 to Registration
Statement on Form N-1A
File No. 33-9994
Filing Date: November 30, 1995
(iv) Form of Class B Distribution Plan pursuant to Rule 12b-1
between Franklin Managed Trust on behalf of Franklin Rising
Dividends Fund and Franklin/Templeton Distributors, Inc.
(16) Schedule for computation of each performance quotation provided in
the registration statement in response to Item 22 (which need not
be audited).
Not Applicable
(17) Power of Attorney
(i) Power of Attorney dated March 13, 1995
Filing: Post-Effective Amendment No. 12 to Registration
Statement of Registrant
on Form N-1A
File No. 33-9994
Filing Date: April 24, 1995
(ii) Certificate of Secretary dated March 13, 1995
Filing: Post-Effective Amendment No. 12 to Registration
Statement of Registrant
on Form N-1A
File No. 33-9994
Filing Date: April 24, 1995
(18) Copies of any plan entered into by Registrant pursuant to Rule
18f-3 under the 1940 Act
(i) Multiple Class Plan for Franklin Investment Grade Income
Fund dated June 12, 1996
Filing: Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A
File No. 33-9994
Filing Date: November 25, 1996
(ii) Form of Multiple Class Plan for Franklin Rising Dividends
Fund
ITEM 25 PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None
ITEM 26 NUMBER OF HOLDERS OF SECURITIES
Not Applicable
ITEM 27 INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
Please see the Declaration of Trust, By-Laws, Management and Distribution
Agreements, previously filed as exhibits and incorporated herein by reference.
Notwithstanding the provisions contained in the Registrant's By-Laws, in
the absence of authorization by the appropriate court on the merits pursuant
to said By-Laws, any indemnification under said By-Laws shall be made by the
Registrant only if authorized in the manner provided by such By-Laws.
ITEM 28 BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The officers and directors of the Registrant's manager also serve as
officers and/or directors for (1) the manager's corporate parent, Franklin
Resources, Inc., and/or (2) other investment companies in the Franklin
Templeton Group of Funds. In addition, Mr. Charles B. Johnson was formerly a
director of General Host Corporation. For additional information please see
Part B and Schedules A and D of Form ADV of the Funds' Investment Manager
(SEC File 801-51967), incorporated herein by reference, which sets forth the
officers and directors of the Investment Manager and information as to any
business, profession, vocation or employment of a substantial nature engaged
in by those officers and directors during the past two years.
ITEM 29 PRINCIPAL UNDERWRITERS
a) Franklin/Templeton Distributors, Inc., ("Distributors") also acts as
principal underwriter of shares of:
Franklin Asset Allocation Fund
Franklin California Tax-Free Income Fund, Inc.
Franklin California Tax-Free Trust
Franklin Custodian Funds, Inc.
Franklin Equity Fund
Franklin Federal Money Fund
Franklin Federal Tax-Free Income Fund
Franklin Floating Rate Trust
Franklin Gold Fund
Franklin High Income Trust
Franklin Investors Securities Trust
Franklin Money Fund
Franklin Mutual Series Fund Inc.
Franklin Municipal Securities Trust
Franklin New York Tax-Free Income Fund
Franklin New York Tax-Free Trust
Franklin Real Estate Securities Trust
Franklin Strategic Mortgage Portfolio
Franklin Strategic Series
Franklin Tax-Exempt Money Fund
Franklin Tax-Free Trust
Franklin Templeton Fund Allocator Series
Franklin Templeton Global Trust
Franklin Templeton International Trust
Franklin Templeton Money Fund Trust
Franklin Value Investors Trust
Institutional Fiduciary Trust
Franklin Templeton Japan Fund
Templeton American Trust, Inc.
Templeton Capital Accumulator Fund, Inc.
Templeton Developing Markets Trust
Templeton Funds, Inc.
Templeton Global Investment Trust
Templeton Global Opportunities Trust
Templeton Global Real Estate Fund
Templeton Global Smaller Companies Fund, Inc.
Templeton Growth Fund, Inc.
Templeton Income Trust
Templeton Institutional Funds, Inc.
Templeton Variable Annuity Fund
Templeton Variable Products Series Fund
b) The information required by this Item 29 with respect to each director
and officer of Distributors is incorporated by reference to Part B of this
N-1A and Schedule A of Form BD filed by Distributors with the Securities and
Exchange Commission pursuant to the Securities Act of 1934 (SEC File No.
8-5889).
c) Not Applicable. Registrant's principal underwriter is an affiliated
person of an affiliated person of the Registrant.
ITEM 30 LOCATION OF ACCOUNTS AND RECORDS
The accounts, books or other documents required to be maintained by
Section 31 (a) of the Investment Company Act of 1940 are kept by the Fund or
its shareholder services agent, Franklin/Templeton Investor Services, Inc.,
both of whose principal address is 777 Mariners Island Blvd., San Mateo, CA.
94404.
ITEM 31 MANAGEMENT SERVICES
There are no management-related service contracts not discussed in Part A
or Part B.
ITEM 32 UNDERTAKINGS
The Registrant hereby undertakes to comply with the information
requirement in Item 5A of the Form N-1A by including the required information
in the Fund's annual report and to furnish each person to whom a prospectus
is delivered a copy of the annual report upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of San Mateo and the State of
California, on the 28th day of December, 1998.
FRANKLIN MANAGED TRUST
(Registrant)
By: /s/ WILLIAM J. LIPPMAN*
William J. Lippman,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Amendment has been signed below by the following persons in the
capacities and on the dates indicated:
WILLIAM J. LIPPMAN* Principal Executive Officer and Trustee
William J. Lippman Dated: December 28, 1998
MARTIN L. FLANAGAN* Principal Financial Officer
Martin L. Flanagan Dated: December 28, 1998
DIOMEDES LOO-TAM* Principal Accounting Officer
Diomedes Loo-Tam Dated: December 28, 1998
FRANK T. CROHN* Trustee
Frank T. Crohn Dated: December 28, 1998
CHARLES RUBENS, II* Trustee
Charles Rubens, II Dated: December 28, 1998
LEONARD RUBIN* Trustee
Leonard Rubin Dated: December 28, 1998
*By: /s/ Larry L. Greene, Attorney-in-Fact
(Pursuant to Powers of Attorney previously filed)
FRANKLIN MANAGED TRUST
REGISTRATION STATEMENT
EXHIBITS INDEX
EXHIBIT NO. DESCRIPTION LOCATION
EX-99.B1(i) Amended and Restated Agreement and Declaration *
of Trust dated October 30, 1986
*
EX-99.B1(ii) Certificate of Amendment of Agreement and *
Declaration of Trust dated June 28, 1988
EX-99.B1(iii) Certificate of Amendment of Agreement and *
Declaration of Trust dated March 13, 1995
EX-99.B2(i) By-Laws *
EX-99.B5(i) Management Agreement between Franklin Rising *
Dividends Fund and Franklin Advisory Services,
Inc., dated July 1, 1996
EX-99.B5(ii) Management Agreement between Franklin *
Investment Grade Income Fund and Franklin
Advisory Services, Inc., dated July 1, 1996
EX-99.B6(i) Amended and Restated Distribution Agreement *
between Franklin/Templeton Distributors, Inc.,
and Franklin Managed Trust dated April 23, 1995
EX-99.B6(ii) Forms of Dealer Agreements between *
Franklin/Templeton Distributors, Inc., and
Securities Dealers
EX-99.B8(i) Master Custody Agreement between Registrant and *
Bank of New York dated February 16, 1996
EX-99.B8(ii) Terminal Link Agreement between Registrant and *
Bank of New York dated February 16, 1996
EX-99.B8(iii) Amendment dated May 7, 1997 to Master Custody *
Agreement between the Registrant and Bank of
New York dated February 16, 1996
EX-99.B8(iv) Amendment dated February 27, 1998 to Exhibit A *
in the Master Custody Agreement between the
Registrant and Bank of New York dated February
16, 1996
EX-99.B8(v) Foreign Custody Manager Agreement between the *
Registrant and Bank of New York dated July 30,
1998, effective February 27, 1998
EX-99.B9(i) Subcontract for Fund Administrative Services *
dated July 1, 1996 between Franklin Advisory
Services, Inc. and Franklin Templeton Services,
Inc.
EX-99.B10(i) Opinion and Consent of counsel dated November *
20, 1998
EX-99.B11(i) Consent of Independent Accountants Attached
EX-99.B13(i) Letter of Understanding dated April 12, 1995 *
EX-99.B14(i) Copy of model retirement plan *
EX-99.B15(i) Amended and Restated Distribution Plan between *
Franklin Rising Dividends Fund and
Franklin/Templeton Distributors, Inc., dated
July 1, 1993
EX-99.B15(ii) Amended and Restated Distribution Plan between *
Franklin Investment Grade Income Fund and
Franklin/Templeton Distributors, Inc., dated
July 1, 1993
EX-99.B15(iii) Class II Distribution Plan between Franklin *
Managed Trust on behalf of Franklin Rising
Dividends Fund - Class II and
Franklin/Templeton Distributors, Inc., dated
March 30, 1995
EX-99.B15(iv) Form of Class B Distribution Plan pursuant to Attached
Rule 12b-1 between Franklin Managed Trust on
behalf of Franklin Rising Dividends Fund and
Franklin/Templeton Distributors, Inc.
EX-99.B17(i) Power of Attorney dated March 13, 1995 *
EX-99.B17(ii) Certificate of Secretary dated March 13, 1995 *
EX-99.B18(i) Multiple Class Plan for Franklin Investment *
Grade Income Fund
EX-99.B18(ii) Form of Multiple Class Plan for Franklin Rising Attached
Dividends Fund
* Incorporated by reference
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Post-Effective
Amendment No. 19 to the Registration Statement of Franklin Managed Trust on
Form N-1A (File Nos. 33-9994 and 811-4894) of our reports dated October 23,
1997, and November 5, 1998, on the financial statements and financial
highlights of Franklin Managed Trust which reports are included in the Annual
Reports to Shareholders for the years ended September 30, 1997, and September
30, 1998, which is incorporated by reference in the Registration Statement.
/s/ TAIT, WELLER & BAKER
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
December 22, 1998
CLASS B DISTRIBUTION PLAN
I. Investment Company: FRANKLIN MANAGED TRUST
II. Fund: FRANKLIN RISING DIVIDENDS FUND CLASS B
III. Maximum Per Annum Rule 12b-1 Fees for Class B Shares
(as a percentage of average daily net assets of the class)
A. Distribution Fee: 0.75%
B. Service Fee: 0.25%
Preamble to Class B Distribution Plan
The following Distribution Plan (the Plan) has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the Act) by the
Investment Company named above (Investment Company) for the class B shares
(the Class) of the Fund named above (Fund), which Plan shall take effect
as of the date Class B shares are first offered (the Effective Date of the
Plan). The Plan has been approved by a majority of the Board of Trustees of
the Investment Company (the Board), including a majority of the Board
members who are not interested persons of the Investment Company and who have
no direct, or indirect financial interest in the operation of the Plan (the
non-interested Board members), cast in person at a meeting called for the
purpose of voting on such Plan.
In reviewing the Plan, the Board considered the schedule and nature of
payments and terms of the Management Agreement between the Investment Company
and Franklin Advisory Services, Inc. (Advisers) and the terms of the
Underwriting Agreement between the Investment Company and Franklin/Templeton
Distributors, Inc. (Distributors). The Board concluded that the
compensation of Advisers, under the Management Agreement, and of
Distributors, under the Underwriting Agreement, was fair and not excessive.
The approval of the Plan included a determination that in the exercise of
their reasonable business judgment and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit the Fund and its
shareholders.
The Board recognizes that Distributors has entered into an arrangement
with a third party in order to finance the distribution activities of the
Class pursuant to which Distributors may assign its rights to the fees
payable hereunder to such third party. The Board further recognizes that it
has an obligation to act in good faith and in the best interests of the Fund
and its shareholders when considering the continuation or termination of the
Plan and any payments to be made thereunder.
Distribution Plan
1. (a) The Fund shall pay to Distributors a monthly fee not to
exceed the above-stated maximum distribution fee per annum of the Class
average daily net assets represented by shares of the Class, as may be
determined by the Board from time to time.
(b) In addition to the amounts described in (a) above, the Fund
shall pay (i) to Distributors for payment to dealers or others, or (ii)
directly to others, an amount not to exceed the above-stated maximum service
fee per annum of the Class average daily net assets represented by shares of
the Class, as may be determined by the Investment Companys Board from time
to time, as a service fee pursuant to servicing agreements which have been
approved from time to time by the Board, including the non-interested Board
members.
2. (a) The monies paid to Distributors pursuant to Paragraph 1(a)
above shall be treated as compensation for Distributors distribution-related
services including compensation for amounts advanced to securities dealers or
their firms or others selling shares of the Class who have executed an
agreement with the Investment Company, Distributors or its affiliates, which
form of agreement has been approved from time to time by the Board, including
the non-interested Board members, with respect to the sale of Class shares.
In addition, such monies may be used to compensate Distributors for other
expenses incurred to assist in the distribution and promotion of shares of
the Class. Payments made to Distributors under the Plan may be used for,
among other things, the printing of prospectuses and reports used for sales
purposes, expenses of preparing and distributing sales literature and related
expenses, advertisements, and other distribution-related expenses, including
a pro-rated portion of Distributors overhead expenses attributable to the
distribution of Class shares, as well as for additional distribution fees
paid to securities dealers or their firms or others who have executed
agreements with the Investment Company, Distributors or its affiliates, or
for certain promotional distribution charges paid to broker-dealer firms or
others, or for participation in certain distribution channels. None of such
payments are the legal obligation of Distributors or its designee.
(b) The monies to be paid pursuant to paragraph 1(b) above
shall be used to pay dealers or others for, among other things, furnishing
personal services and maintaining shareholder accounts, which services
include, among other things, assisting in establishing and maintaining
customer accounts and records; assisting with purchase and redemption
requests; arranging for bank wires; monitoring dividend payments from the
Fund on behalf of customers; forwarding certain shareholder communications
from the Fund to customers; receiving and answering correspondence; and
aiding in maintaining the investment of their respective customers in the
Class. Any amounts paid under this paragraph 2(b) shall be paid pursuant to
a servicing or other agreement, which form of agreement has been approved
from time to time by the Board. None of such payments are the legal
obligation of Distributors or its designee.
3. In addition to the payments which the Fund is authorized to make
pursuant to paragraphs 1 and 2 hereof, to the extent that the Fund, Advisers,
Distributors or other parties on behalf of the Fund, Advisers or Distributors
make payments that are deemed to be payments by the Fund for the financing of
any activity primarily intended to result in the sale of Class shares issued
by the Fund within the context of Rule 12b-1 under the Act, then such
payments shall be deemed to have been made pursuant to the Plan.
In no event shall the aggregate asset-based sales charges which include
payments specified in paragraphs 1 and 2, plus any other payments deemed to
be made pursuant to the Plan under this paragraph, exceed the amount
permitted to be paid pursuant to Rule 2830(d) of the Conduct Rules of the
National Association of Securities Dealers, Inc.
4. Distributors shall furnish to the Board, for its review, on a
quarterly basis, a written report of the monies paid to it and to others
under the Plan, and shall furnish the Board with such other information as
the Board may reasonably request in connection with the payments made under
the Plan in order to enable the Board to make an informed determination of
whether the Plan should be continued.
5. (a) Distributors may assign, transfer or pledge (Transfer) to
one or more designees (each an Assignee), its rights to all or a designated
portion of the fees to which it is entitled under paragraph 1 of this Plan
from time to time (but not Distributors duties and obligations pursuant
hereto or pursuant to any distribution agreement in effect from time to time,
if any, between Distributors and the Fund), free and clear of any offsets or
claims the Fund may have against Distributors. Each such Assignees
ownership interest in a Transfer of a specific designated portion of the fees
to which Distributors is entitled is hereafter referred to as an Assignees
12b-1 Portion. A Transfer pursuant to this Section 5(a) shall not reduce or
extinguish any claims of the Fund against Distributors.
(b) Distributors shall promptly notify the Fund in writing of
each such Transfer by providing the Fund with the name and address of each
such Assignee.
(c) Distributors may direct the Fund to pay any Assignees
12b-1 Portion directly to each Assignee. In such event, Distributors shall
provide the Fund with a monthly calculation of the amount to which each
Assignee is entitled (the Monthly Calculation). In such event, the Fund
shall, upon receipt of such notice and Monthly Calculation from Distributors,
make all payments required directly to the Assignee in accordance with the
information provided in such notice and Monthly Calculation upon the same
terms and conditions as if such payments were to be paid to Distributors.
(d) Alternatively, in connection with a Transfer, Distributors
may direct the Fund to pay all or a portion of the fees to which Distributors
is entitled from time to time to a depository or collection agent designated
by any Assignee, which depository or collection agent may be delegated the
duty of dividing such fees between the Assignees 12b-1 Portion and the
balance (such balance, when distributed to Distributors by the depository or
collection agent, the Distributors 12b-1 Portion), in which case only
Distributors 12b-1 Portion may be subject to offsets or claims the Fund may
have against Distributors.
6. The Plan shall continue in effect for a period of more than one
year only so long as such continuance is specifically approved at least
annually by the Board, including the non-interested Board members, cast in
person at a meeting called for the purpose of voting on the Plan. In
determining whether there is a reasonable likelihood that the continuation of
the Plan will benefit the Fund and its shareholders, the Board may, but is
not obligated to, consider that Distributors has incurred substantial cost
and has entered into an arrangement with a third party in order to finance
the distribution activities for the Class.
7. This Plan and any agreements entered into pursuant to this Plan
may be terminated with respect to the shares of the Class, without penalty,
at any time by vote of a majority of the non-interested Board members of the
Investment Company, or by vote of a majority of outstanding Shares of such
Class. Upon termination of this Plan with respect to the Class, the
obligation of the Fund to make payments pursuant to this Plan with respect to
such Class shall terminate, and the Fund shall not be required to make
payments hereunder beyond such termination date with respect to expenses
incurred in connection with Class shares sold prior to such termination date,
provided, in each case that each of the requirements of a Complete
Termination of this Plan in respect of such Class, as defined below, are
met. For purposes of this Section 7, a Complete Termination of this Plan
in respect of the Class shall mean a termination of this Plan in respect of
such Class, provided that: (i) the non-interested Board members of the
Investment Company shall have acted in good faith and shall have determined
that such termination is in the best interest of the Investment Company and
the shareholders of the Fund and the Class; (ii) and the Investment Company
does not alter the terms of the contingent deferred sales charges applicable
to Class shares outstanding at the time of such termination; and (iii) unless
Distributors at the time of such termination was in material breach under the
distribution agreement in respect of the Fund, the Fund shall not, in respect
of such Fund, pay to any person or entity, other than Distributors or its
designee, either the payments described in paragraph 1(a) or 1(b) or in
respect of the Class shares sold by Distributors prior to such termination.
8. The Plan, and any agreements entered into pursuant to this Plan,
may not be amended to increase materially the amount to be spent for
distribution pursuant to Paragraph 1 hereof without approval by a majority of
the outstanding voting securities of the Class of the Fund.
9. All material amendments to the Plan, or any agreements entered
into pursuant to this Plan, shall be approved by the non-interested Board
members cast in person at a meeting called for the purpose of voting on any
such amendment.
10. So long as the Plan is in effect, the selection and nomination of
the Funds non-interested Board members shall be committed to the discretion
of such non-interested Board members.
This Plan and the terms and provisions thereof are hereby accepted and
agreed to by the Investment Company and Distributors as evidenced by their
execution hereof.
Date: October, 16, 1998
FRANKLIN MANAGED TRUST
By: /S/DEBORAH R. GATZEK
Deborah R. Gatzek
Vice President & Secretary
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By: /S/HARMON E. BURNS
Harmon E. Burns
Executive Vice President
MULTIPLE CLASS PLAN
ON BEHALF OF
FRANKLIN RISING DIVIDENDS FUND
This Multiple Class Plan (the "Plan") has been adopted by a majority of
the Board of Trustees of FRANKLIN MANAGED TRUST (the "Investment Company")
for its series, FRANKLIN RISING DIVIDENDS FUND (the "Fund"). The Board has
determined that the Plan, including the expense allocation, is in the best
interests of each class of the Fund and the Investment Company as a whole.
The Plan sets forth the provisions relating to the establishment of multiple
classes of shares of the Fund, and supersedes any Plan previously adopted for
the Fund.
1. The Fund shall offer three classes of shares, to be known as
Class A Shares, Class B Shares and Class C Shares.
2. Class A Shares shall carry a front-end sales charge ranging from
0% - 5.75%, and Class C Shares shall carry a front-end sales charge of
1.00%. Class B Shares shall not be subject to any front-end sales charges.
3. Class A Shares shall not be subject to a contingent deferred
sales charge ("CDSC"), except in the following limited circumstances. On
investments of $1 million or more, a contingent deferred sales charge of
1.00% of the lesser of the then-current net asset value or the original net
asset value at the time of purchase applies to redemptions of those
investments within the contingency period of 12 months from the calendar
month following their purchase. The CDSC is waived in certain circumstances,
as described in the Fund's prospectus.
Class B Shares shall be subject to a CDSC with the following CDSC
schedule: (a) Class B Shares redeemed within 2 years of their purchase shall
be assessed a CDSC of 4% on the lesser of the then-current net asset value or
the original net asset value at the time of purchase; (b) Class B Shares
redeemed within the third and fourth years of their purchase shall be
assessed a CDSC of 3% on the lesser of the then-current net asset value or
the original net asset value at the time of purchase; (c) Class B Shares
redeemed within 5 years of their purchase shall be assessed a CDSC of 2% on
the lesser of the then-current net asset value or the original net asset
value at the time of purchase; and (d) Class B Shares redeemed within 6 years
of their purchase shall be assessed a CDSC of 1% on the lesser of the
then-current net asset value or the original net asset value at the time of
purchase. The CDSC is waived in certain circumstances described in the
Fund's prospectus.
Class C Shares redeemed within 18 months of their purchase shall be
assessed a CDSC of 1.00% on the lesser of the then-current net asset value or
the original net asset value at the time of purchase. The CDSC is waived in
certain circumstances as described in the Fund's prospectus.
4. The distribution plan adopted by the Investment Company pursuant
to Rule 12b-1 under the Investment Company Act of 1940, as amended, (the
"Rule 12b-1 Plan") associated with the Class A Shares may be used to
reimburse Franklin/Templeton Distributors, Inc. (the "Distributor") or others
for expenses incurred in the promotion and distribution of the Class A
Shares. Such expenses include, but are not limited to, the printing of
prospectuses and reports used for sales purposes, expenses of preparing and
distributing sales literature and related expenses, advertisements, and other
distribution-related expenses, including a prorated portion of the
Distributor's overhead expenses attributable to the distribution of the Class
A Shares, as well as any distribution or service fees paid to securities
dealers or their firms or others who have executed a servicing agreement with
the Investment Company for the Class A Shares, the Distributor or its
affiliates.
The Rule 12b-1 Plan associated with the Class B Shares has two
components. The first component is an asset-based sales charge to be
retained by Distributor to compensate Distributor for amounts advanced to
securities dealers or their firms or others with respect to the sale of Class
B Shares. In addition, such payments may be retained by the Distributor to
be used in the promotion and distribution of Class B Shares in a manner
similar to that described above for Class A Shares. The second component is
a shareholder servicing fee to be paid to securities dealers or others who
provide personal assistance to shareholders in servicing their accounts.
The Rule 12b-1 Plan associated with the Class C Shares has two
components. The first component is a shareholder servicing fee, to be paid
to broker-dealers, banks, trust companies and others who provide personal
assistance to shareholders in servicing their accounts. The second component
is an asset-based sales charge to be retained by the Distributor during the
first year after the sale of shares, and in subsequent years, to be paid to
dealers or retained by the Distributor to be used in the promotion and
distribution of Class C Shares, in a manner similar to that described above
for Class A Shares.
The Rule 12b-1 Plans for the Class A, Class B and Class C Shares shall
operate in accordance with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., Article III, section 26(d).
5. The only difference in expenses as between Class A, Class B and
Class C Shares shall relate to differences in Rule 12b-1 plan expenses, as
described in the applicable Rule 12b-1 Plans; however, to the extent that the
Rule 12b-1 Plan expenses of one Class are the same as the Rule 12b-1 Plan
expenses of another Class, such classes shall be subject to the same expenses.
6. There shall be no conversion features associated with the Class A
and Class C Shares. Each Class B Share, however, shall be converted
automatically, and without any action or choice on the part of the holder of
the Class B Shares, into Class A Shares on the conversion date specified, and
in accordance with the terms and conditions approved by the Franklin Managed
Trust's Board of Trustees and as described, in each fund's prospectus
relating to the Class B Shares, as such prospectus may be amended from time
to time; provided, however, that the Class B Shares shall be converted
automatically into Class A Shares to the extent and on the terms permitted by
the Investment Company Act of 1940 and the rules and regulations adopted
thereunder.
7. Shares of Class A, Class B and Class C may be exchanged for
shares of another investment company within the Franklin Templeton Group of
Funds according to the terms and conditions stated in each fund's prospectus,
as it may be amended from time to time, to the extent permitted by the
Investment Company Act of 1940 and the rules and regulations adopted
thereunder.
8. Each class will vote separately with respect to any Rule 12b-1
Plan related to, or which now or in the future may affect, that class.
9. On an ongoing basis, the Board members, pursuant to their
fiduciary responsibilities under the 1940 Act and otherwise, will monitor the
Fund for the existence of any material conflicts between the Board members
interests of the various classes of shares. The Board members, including a
majority of the independent Board members, shall take such action as is
reasonably necessary to eliminate any such conflict that may develop.
Franklin Advisers, Inc. and Franklin/Templeton Distributors, Inc. shall be
responsible for alerting the Board to any material conflicts that arise.
10. All material amendments to this Plan must be approved by a
majority of the Board members, including a majority of the Board members who
are not interested persons of the Investment Company.
11. I, Deborah R. Gatzek, Secretary of the Franklin Group of Funds,
do hereby certify that this Multiple Class Plan was adopted by FRANKLIN
MANAGED TRUST, on behalf of its series FRANKLIN RISING DIVIDENDS FUND, by a
majority of the Trustees of the Trust on June 23, 1998.
/S/ DEBORAH R. GATZEK
Deborah R. Gatzek
Secretary
