5 P
SUPPLEMENT DATED MAY 1, 1995
TO THE PROSPECTUS FOR
FRANKLIN GLOBAL GOVERNMENT INCOME FUND
dated March 1, 1995
INTRODUCTION. As of May 1, 1995, the Franklin Global
Government Income Fund (the "Fund") offers two classes to its
investors: Franklin Global Government Income Fund - Class I
("Class I") and Franklin Global Government Income Fund -
Class II ("Class II"). Investors can choose between Class I
shares, which generally bear a higher front-end sales charge
and lower ongoing Rule 12b-1 distribution fees ("Rule 12b-1
fees"), and Class II shares, which generally have a lower
front-end sales charge and higher ongoing Rule 12b-1 fees.
Investors should consider the differences between the two
classes, including the impact of sales charges and
distribution fees, in choosing the more suitable class given
their anticipated investment amount and time horizon.
This Supplement must be read in conjunction with the
Prospectus for this Fund. All investment objectives and
policies described in the Prospectus apply equally to both
classes of shares in the new multiclass structure. Further,
all operational procedures apply equally to both classes,
unless otherwise specified in the following discussion.
THE NEW APPLICATION FORM INCLUDED WITH THIS SUPPLEMENT MUST
BE USED FOR ALL PURCHASES. DO NOT USE THE APPLICATION FORM
INCLUDED IN THE PROSPECTUS.
MULTICLASS FUND STRUCTURE. The Fund has two classes of shares
available for investment: Class I and Class II. ALL FUND
SHARES OUTSTANDING BEFORE THE IMPLEMENTATION OF THE
MULTICLASS STRUCTURE HAVE BEEN REDESIGNATED AS CLASS I
SHARES, AND WILL RETAIN THEIR PREVIOUS RIGHTS AND PRIVILEGES.
VOTING RIGHTS ATTRIBUTABLE TO EACH CLASS WILL, HOWEVER, BE
DIFFERENT. See the Prospectus for more details about Class I
shares. Class II shares are explained in detail in the
following discussion. Except as described below, shares of
both classes represent identical interests in the Fund's
investment portfolio.
EXPENSE TABLE
The purpose of this table is to assist an investor in
understanding the various costs and expenses that a
shareholder will bear directly or indirectly in connection
with an investment in the Fund. The figures for both classes
of shares are based on aggregate operating expenses of the
Class I shares for the fiscal year ended October 31, 1994.
CLASS I CLASS II
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on
Purchases
(as a percentage of offering 4.25% 1.00%^
price)
Deffered Sales Charge NONE^^ 1.00%+
Exchange Fee (per transaction) $5.00++ $5.00++
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net
assets)
Management Fees 0.56% 0.56%
Rule 12b-1 Fees 0.07%* 0.65%*
Other Expenses:
Custodian Fees 0.15% 0.15%
Reports to Shareholders 0.06% 0.06%
Other 0.09% 0.09%
Total Other Expenses 0.30% 0.30%
Total Fund Operating Expenses 0.93% 1.51%
^Although Class II has a lower front-end sales charge than
Class I, over time the higher Rule 12b-1 fee for Class II may
cause shareholders to pay more for Class II shares than for
Class I shares. Given the maximum front-end sales charge and
the rate of Rule 12b-1 fees of each class, it is estimated
that this will take less than six years for shareholders who
maintain total shares valued at less than $100,000 in the
Franklin Templeton Funds. Shareholders with larger investments
in the Franklin Templeton Funds will reach the break-even
point more quickly. ^^Class I investments of $1 million or
more are not subject to a front-end sales charge; however, a
contingent deferred sales charge of 1%, which has not been
reflected in the Example below, is generally imposed on
certain redemptions within a "contingency period" of 12 months
of the calendar month following such investments. See "How to
Sell Shares of the Fund -Contingent Deferred Sales Charge."
+Class II shares redeemed within a "contingency period" of 18
months of the calendar month following such investments are
subject to a 1% contingent deferred sales charge. See "How to
Sell Shares of the Fund - Contingent Deferred Sales Charge."
++$5.00 fee imposed only on Timing Accounts as described under
"Exchange Privilege" in the Prospectus. All other exchanges
are processed without a fee.
*Consistent with National Association of Securities Dealers,
Inc.'s rules, it is possible that 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 charges permitted under those same
rules. The Class I Rule 12b-1 fee rate is based on the initial
rate of Class I Rule 12b-1 fees as discussed in the prospectus
under "Plans of Distribution" under "Management of the Fund."
Actual Rule 12b-1 fees incurred by Class I shares for the six
months ended October 31, 1994 were 0.03%, which represents an
annualized rate of 0.06%. The Class II Rule 12b-1 fee rate is
based on the maximum annual Class II Rule 12b-1 rate, as
discussed below.
Investors should be aware that the above table is not intended
to reflect in precise detail the fees and expenses associated
with an individual's own investment in the Fund. Rather the
table has been provided only to assist investors in gaining a
more complete understanding of fees, charges and expenses that
an investor in the classes will bear directly or indirectly.
For amore detailed discussion of these matters, investors
should refer to the appropriate sections of the Prospectus and this
Supplement.
EXAMPLE
As required by SEC regulations, the following example
illustrates the expenses, including the maximum front-end
sales charge and applicable contingent deferred sales charge,
that apply to a $1,000 investment in the Fund over various
time periods assuming (1) a 5% annual rate of return and (2)
redemption at the end of each time period.
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
<S> <C> <C> <C> <C>
CLASS I $52 $71 $92 $152
CLASS II $35 $57 $92 $188
</TABLE>
THIS EXAMPLE IS BASED ON THE AGGREGATE ANNUAL OPERATING
EXPENSES SHOWN ABOVE AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES, WHICH MAY BE MORE
OR LESS THAN THOSE SHOWN. The operating expenses are borne by
the Fund and only indirectly by shareholders as a result of
their investment in the Fund. (See "Management of the Fund" in
the Prospectus for a description of the Fund's expenses.) In
addition, federal securities regulations require the example
to assume an annual return of 5%, but the Fund's actual return
may be more or less than 5%.
DECIDING WHICH CLASS TO PURCHASE. Investors should carefully
evaluate their anticipated investment amount and time horizon
prior to determining which class of shares to purchase.
Generally, an investor who expects to invest less than
$100,000 in the Franklin Templeton Funds and who expects to
make substantial redemptions within approximately six years or
less of investment should consider purchasing Class II shares.
Over time, however, the higher annual Rule 12b-1 fees on Class
II shares will accumulate to outweigh the difference in
initial sales charges. For this reason, Class I shares may be
more attractive to long-term investors even if no sales charge
reductions are available to them. Investors should also
consider that the higher Rule 12b-1 fees for Class II shares
will generally result in lower dividends and consequently
lower yields for Class II shares. See "General Information" in
the Statement of Additional Information ("SAI") for more
information regarding the calculation of dividends and yields.
Investors who qualify to purchase Class I shares at reduced
sales charges definitely should consider purchasing Class I
shares, especially if they intend to hold their shares for
approximately six years or more. Investors who qualify to
purchase Class I shares at reduced sales charges but who
intend to hold their shares less than seven years should
evaluate whether it is more economical to purchase Class I
shares through a Letter of Intent or under Rights of
Accumulation or other means rather than purchasing Class II
shares. INVESTORS INVESTING $1 MILLION OR MORE IN A SINGLE
PAYMENT AND OTHER INVESTORS WHO QUALIFY TO PURCHASE CLASS I
SHARES AT NET ASSET VALUE WILL BE PRECLUDED FROM PURCHASING
CLASS II SHARES. See "How to Buy Shares of the Fund" in the
Prospectus.
Each class represents the same interest in the investment
portfolio of the Fund and has the same rights, except that
each class has a different sales charge, bears the separate
expenses of its Rule 12b-1 distribution plan, and has
exclusive voting rights with respect to such plan. The two
classes also have separate exchange privileges.
Each class also has a separate schedule for compensating
securities dealers for selling Fund shares. Investors should
take all of the factors regarding an investment in each class
into account before deciding which class of shares to
purchase.
ALTERNATIVE PURCHASE ARRANGEMENTS. The difference between
Class I and Class II shares lies primarily in their front-end
and contingent deferred sales charges and Rule 12b-1 fees as
described below.
A separate Plan of Distribution has been approved and adopted
for each class ("Class I Plan" and "Class II Plan,"
respectively) pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended ("1940 Act"). The Rule 12b-1
fees charged to each class will be based solely on the
distribution and servicing fees attributable to that
particular class. Any portion of fees remaining from either
plan distribution to securities dealers up to the maximum
amount permitted under each Plan may be used by the class to
reimburse Franklin Templeton Distributors, Inc.
("Distributors") for routine ongoing promotion and
distribution expenses incurred with respect to such class. See
"Plan of Distribution" in the Prospectus for a description of
such expenses.
CLASS I. Class I shares are generally subject to a variable
sales charge upon purchase and not subject to any sales charge
upon redemption. Class I shares are subject to Rule 12b-1 fees
of up to an annual maximum of .15% of average daily net assets
of such shares. With this structure, Class I shares have
higher front-end sales charges than Class II shares and
comparatively lower Rule 12b-1 fees.
Plan of Distribution. Under the Class I Plan, the Fund will
reimburse Distributors or other securities dealers for
expenses incurred in the promotion, servicing, and
distribution of Class I Fund shares. (See "Plan of
Distribution" in the Prospectus and "Distribution Plan" in the
Statement of Additional Information ("SAI")).
Quantity Discounts and Purchases At Net Asset Value. Class I
shares may be purchased at a reduced front-end sales charge or
at net asset value if certain conditions are met. See "How to
Buy Shares of the Fund."
Contingent Deferred Sales Charge. In most circumstances, a
contingent deferred sales charge will not be assessed against
redemptions of Class I shares. A contingent deferred sales
charge will be imposed on Class I shares only if shares valued
at $1 million or more are purchased after February 1, 1995
without a sales charge and are subsequently redeemed within 12
months of the calendar month following their purchase. See
"Contingent Deferred Sales Charge" under "How to Sell Shares
of the Fund" in this Supplement.
CLASS II. The current public offering price of Class II shares
is equal to the net asset value, plus a sales charge of 1% of
the amount invested. Class II shares are also subject to a
contingent deferred sales charge of 1.0% if shares are
redeemed within 18 months of the calendar month following
purchase. In addition, Class II shares are subject to Rule 12b-
1 fees of up to a maximum of 0.65% of average daily net assets
of such shares. Class II shares have lower front-end sales
charges than Class I shares and comparatively higher Rule 12b-
1 fees.
Purchases of Class II shares are limited to amounts below $1
million. Any purchases of $1 million or more will
automatically be invested in Class I shares, since that is
more beneficial to investors. Such purchases, however, may be
subject to a contingent deferred sales charge. Investors may
exceed $1 million in Class II shares by cumulative purchases over a
period of time. Investors who intend to make investments
exceeding $1 million, however, should consider purchasing
Class I shares through a Letter of Intent instead of purchasing
Class II shares. See "How to Buy Shares of the Fund"
in the Prospectus for more information.
Plan of Distribution. Class II's operating expenses will
generally be higher under the Class II Plan. During the first
year following a purchase of Class II shares, Distributors
will keep a portion of the Plan fees attributable to those
shares to partially recoup fees Distributors pays to
securities dealers. Distributors, or its affiliates, may pay,
from its own resources, a commission of up to 1% of the amount
invested to securities dealers who initiate and are
responsible for purchases of Class II shares.
Contingent Deferred Sales Charge. Unless a waiver applies, a
contingent deferred sales charge of 1% will be imposed on
Class II shares redeemed within 18 months of their purchase.
See "Contingent Deferred Sales Charges" under "How to Sell
Shares of the Fund" in this Supplement.
MANAGEMENT OF THE FUND
The subsidiaries of Resources are described as the "Franklin
Templeton Group."
The Board of Trustees has carefully reviewed the multiclass
structure to ensure that no material conflict exists between
the two classes of shares. Although the Board does not expect
to encounter material conflicts in the future, the Board will
continue to monitor the Fund and will take appropriate action
to resolve such conflicts if any should later arise.
In developing the multiclass structure, the Fund has retained
the authority to establish additional classes of shares. It is
the Fund's present intention to offer only two classes of
shares, but new classes may be offered in the future.
For more information regarding the responsibilities of the
Board and the management of the Fund, please see "Management
of the Fund" in the Prospectus.
CLASS II PLAN OF DISTRIBUTION
Under the Class II Plan, the maximum amount which the Fund is
permitted to pay to Distributors or others for distribution
and related expenses is 0.50% per annum of Class II shares'
daily net assets, payable quarterly. All expenses of
distribution, marketing and related services over that amount
will be borne by Distributors or others who have incurred
them, without reimbursement by the Fund. In addition, the
Class II Plan provides for an additional payment by the Fund
of up to 0.15% per annum of the class' average daily net
assets as a servicing fee, payable quarterly. This fee will be
used to pay securities dealers or others for, among other
things, assisting in establishing and maintaining customer
accounts and records; assisting with purchase and redemption
requests; receiving and answering correspondence; monitoring
dividend payments from the Fund on behalf of the customers, or
similar activities related to furnishing personal services
and/or maintaining shareholder accounts.
The Class II Plan also covers any payments to or by the Fund,
Advisers, Distributors, or other parties on behalf of the
Fund, Advisers or Distributors, to the extent such payments
are deemed to be for the financing of any activity primarily
intended to result in the sale of Class II shares issued by
the Fund within the context of Rule 12b-1. The payments under
the Plan are included in the maximum operating expenses which
may be borne by Class II of the Fund.
During the first year after the purchase of Class II shares,
Distributors will keep a portion of the Plan fees assessed on
Class II shares to partially recoup fees Distributors pays to
securities dealers.
See the "Plan of Distribution" discussion in the "Management
of the Fund" section in the Prospectus and in the SAI for more
information about both Class I and Class II Plans.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and capital gains will be calculated and distributed
in the same manner for Class I and Class II shares. The per
share amount of any income dividends will generally differ
only to the extent that each class is subject to different
Rule 12b-1 fees. Because ongoing Rule 12b-1 expenses will be
lower for Class I than Class II, the per share dividends
distributed to Class I shares will generally be higher than
those distributed to Class II shares.
Unless otherwise requested in writing or on the Shareholder
Application, income dividends and capital gain distributions,
if any, will be automatically reinvested in the shareholder's
account in the form of additional shares, valued at the
closing net asset value (without a front-end sales charge) on
the dividend reinvestment date. Dividend and capital gain
distributions are only eligible for investment at net asset
value in the same class of shares of the Fund or the same
class of another of the Franklin Templeton Funds. See
"Distributions to Shareholders" in the Prospectus and the SAI
for more information.
HOW TO BUY SHARES OF THE FUND
The following discussion supplements the one included in the
Prospectus under "How to Buy Shares of the Fund." THE
APPLICATION FORM INCLUDED WITH THIS SUPPLEMENT MUST ACCOMPANY
ANY PURCHASE OF SHARES. DO NOT USE THE APPLICATION INCLUDED IN
THE PROSPECTUS.
PURCHASE PRICE OF FUND SHARES
Shares of both classes of the Fund are offered at the public
offering price, which is the net asset value per share plus a
front-end sales charge, next computed (1) after the
shareholder's securities dealer receives the order which is
promptly transmitted to the Fund, or (2) after receipt of an
order by mail from the shareholder directly in proper form
(which generally means a completed Shareholder Application
accompanied by a negotiable check).
CLASS I. The sales charge for Class I shares is a variable
percentage of the offering price depending upon the amount of
the sale. On orders for 100,000 shares or more, the offering
price will be calculated to four decimal places. On orders for
less than 100,000 shares, the offering price will be
calculated to two decimal places using standard rounding
criteria. A description of the method of calculating net asset
value per share is included under the caption "Valuation of Fund Shares"
in the Prospectus.
Set forth below is a table of total front-end sales charges or
underwriting commissions and dealer concessions for Class I
shares:
<TABLE>
<CAPTION>
TOTAL SALES CHARGE
SIZE OF AS A PERCENTAGE AS A PERCENTAGE DEALER
TRANSACTION AT OF OFFERING OF NET AMOUNT CONCESSION AS A
OFFERING PRICE PRICE INVESTED PERCENTAGE OF
OFFERING
PRICE*, ***
<S> <C> <C> <C>
Less than 4.25% 4.44% 4.00%
$100,000
$100,000 but 3.50% 3.63% 3.25%
less than
$250,000
$250,000 but 2.75% 2.83% 2.50%
less than
$500,000
$500,000 but 2.15% 2.20% 2.00%
less than
$1,000,000
$1,000,000 or none none (see below)**
</TABLE>
*Financial institutions or their affiliated brokers may
receive an agency transaction fee in the percentages set forth
above.
**The following commissions will be paid by Distributors, out
of its own resources, to securities dealers who initiate and
are responsible for purchases of $1 million or more: 0.75% on
sales of $1 million but less than $2 million, plus 0.60% on
sales of $2 million but less than $3 million, plus 0.50% on
sales of $3 million but less than $50 million, plus 0.25% on
sales of $50 million but less than $100 million, plus 0.15% on
sales of $100 million or more. Dealer concession breakpoints
are reset every 12 months for purposes of additional
purchases.
***At the discretion of Distributors, all sales charges may at
times be allowed to the securities dealer. If 90% or more of
the sales commission is allowed, such securities dealer may be
deemed to be an underwriter as that term is defined in the
Securities Act of 1933, as amended.
No front-end sales charge applies on investments of $1 million
or more, but a contingent deferred sales charge of 1% is
imposed on certain redemptions of all or a portion of
investments of $1 million or more within the contingency
period. See "How to Sell Shares of the Fund - Contingent
Deferred Sales Charge" in this Supplement.
The size of a transaction which determines the applicable
sales charge on the purchase of Class I shares is determined
by adding the amount of the shareholder's current purchase
plus the cost or current value (whichever is higher) of a
shareholder's existing investment in one or more of the funds
in the Franklin Group of Funds(Registered Trademark) and the
Templeton Group of Funds. Included for these aggregation
purposes are (a) the mutual funds in the Franklin Group of Funds
except Franklin Valuemark Funds and Franklin Government Securities
Trust (the "Franklin Funds"), (b) other investment products underwritten
by Distributors or its affiliates (although certain investments may not
have the same schedule of sales charges and/or may not be subject to
reduction) and (c) the U.S. registered mutual funds in the
Templeton Group of Funds except Templeton Capital Accumulator
Fund, Inc., Templeton Variable Annuity Fund, and Templeton
Variable Products Series Fund (the "Templeton Funds").
(Franklin Funds and Templeton Funds are collectively referred
to as the "Franklin Templeton Funds.") Sales charge reductions
based upon aggregate holdings of (a), (b) and (c) above
("Franklin Templeton Investments") may be effective only after
notification to Distributors that the investment qualifies for
a discount. Distributors, or one of its affiliates, may make
payments, out of its own resources, of up to 1% of the amount
purchased to securities dealers who initiate and are
responsible for purchases made at net asset value by certain
designated retirement plans (excluding IRA and IRA rollovers),
certain nondesignated plans, certain trust companies and trust
departments of banks and certain retirement plans of
organizations with collective retirement plan assets of $10
million or more. See definitions under "Description of Special
Net Asset Value Purchases" and as set forth in the SAI.
CLASS II. Unlike Class I shares, the front-end sales charges
and dealer concessions for Class II shares do not vary
depending on the amount of purchase. See table below:
<TABLE>
<CAPTION>
TOTAL SALES CHARGE
AS A DEALER
SIZE OF TRANSACTION AS A PERCENTAGE PERCENTAGE CONCESSION AS
AT OFFERING PRICE OF NET OFFERING OF NET A PERCENTAGE
PRICE AMOUNT OF OFFERING
INVESTED PRICE*
<S> <C> <C> <C>
Any amount (less
than $1 million) 1.00% 1.01% 1.00%
</TABLE>
* During the first year following a purchase of Class II
shares, Distributors will keep a portion of the Plan fees
attributable to those shares to partially recoup fees
Distributors pays to securities dealers. Distributors, or one
of its affiliates, may make an additional payment to the
securities dealer, from its own resources, of up to 1% of the
amount invested.
Class II shares redeemed within eighteen months of their
purchase will be assessed a contingent deferred sales charge
of 1.0% on the lesser of the then-current net asset value or
the net asset value of such shares at the time of purchase,
unless such charge is waived as described below.
The following section, which supersedes that included in the
Prospectus, describes the categories of investors who may
purchase Class I shares of the Fund at net asset value and
when Class I and Class II shares may be purchased at net asset
value. The sections in the Prospectus titled "Quantity
Discounts in Sales Charges" and "Group Purchases" only apply
to Class I shares. Although sales charges on Class II shares
may not be reduced by through a Letter of Intent or Rights of
Accumulation as described under "Quantity Discounts in Sales
Charges," the value of Class II shares owned by an investor may be included
in determining the appropriate sales charges for Class I
shares.
PURCHASES AT NET ASSET VALUE
Class I shares may be purchased without the imposition of
either a front-end sales charge ("net asset value") or a
contingent deferred sales charge by (1) officers, trustees,
directors and full-time employees of the Fund, any of the
Franklin Templeton Funds, or of the Franklin Templeton Group,
and by their spouses and family members, including any
subsequent payments by such parties after cessation of
employment; (2) companies exchanging shares with or selling
assets pursuant to a merger, acquisition or exchange offer;
(3) insurance company separate accounts for pension plan
contracts; (4) accounts managed by the Franklin Templeton
Group; (5) shareholders of Templeton Institutional Funds, Inc.
reinvesting redemption proceeds from that fund under an
employee benefit plan qualified under Section 401 of the
Internal Revenue Code of 1986, as amended, in shares of the
Fund; (6) certain unit investment trusts and unit holders of
such trusts reinvesting their distributions from the trusts in
the Fund; (7) registered securities dealers and their
affiliates, for their investment account only, and (8)
registered personnel and employees of securities dealers and
by their spouses and family members, in accordance with the
internal policies and procedures of the employing securities
dealer.
For either Class I or Class II, the same class of shares of
the Fund may be purchased at net asset value by persons who
have redeemed, within the previous 120 days, their shares of
the Fund or another of the Franklin Templeton Funds which were
purchased with a front-end sales charge or assessed a
contingent deferred sales charge on redemption. If a different
class of shares is purchased, the full front-end sales charge
must be paid at the time of purchase of the new shares. An
investor may reinvest an amount not exceeding the redemption
proceeds. Credit will be given for any contingent deferred
sales charge paid on the shares redeemed and subsequently
repurchased, but the period for which such shares may be
subject to a contingent deferred sales charge will begin as of
the date the proceeds are reinvested. Shares of the Fund
redeemed in connection with an exchange into another fund (see
"Exchange Privilege") are not considered "redeemed" for this
privilege. In order to exercise this privilege, a written
order for the purchase of shares of the Fund must be received
by the Fund or the Fund's Shareholder Services Agent within
120 days after the redemption. The 120 days, however, do not
begin to run on redemption proceeds placed immediately after
redemption in a Franklin Bank Certificate of Deposit ("CD")
until the CD (including any rollover) matures. Reinvestment at
net asset value may also be handled by a securities dealer or
other financial institution, who may charge the shareholder a
fee for this service. The redemption is a taxable transaction
but reinvestment without a sales charge may affect the amount
of gain or loss recognized and the tax basis of the shares
reinvested. If there has been a loss on the redemption, the
loss may be disallowed if a reinvestment in the same fund is
made within a 30-day period. Information regarding the
possible tax consequences of such a reinvestment is included
in the tax section of the Prospectus and the SAI.
For either Class I or Class II, the same class of shares of
the Fund or of another of the Franklin Templeton Funds may be
purchased at net asset value and without a contingent deferred
sales charge by persons who have received dividends and
capital gain distributions in cash from investments in that
class of shares of the Fund within 120 days of the payment date of such
distribution. To exercise this privilege, a written request to
reinvest the distribution must accompany the purchase order.
Additional information may be obtained from Shareholder
Services at 1-800/632-2301. See "Distributions in Cash" under
"Distributions to Shareholders."
Class I shares may be purchased at net asset value and without
the imposition of a contingent deferred sales charge by
investors who have, within the past 60 days, redeemed an
investment in a mutual fund which is not part of the Franklin
Templeton Funds and which charged the investor a contingent
deferred sales charge upon redemption and which has investment
objectives similar to those of the Fund.
Class I shares may be purchased at net asset value and without
the imposition of a contingent deferred sales charge by broker
dealers who have entered into a supplemental agreement with
Distributors, or by registered investment advisors affiliated
with such broker-dealers, on behalf of their clients who are
participating in a comprehensive fee program (sometimes known
as a wrap fee program).
Class I shares may be purchased at net asset value and without
the imposition of a contingent deferred sales charge by anyone
who has taken a distribution from an existing retirement plan
already invested in the Franklin Templeton Funds (including
former participants of the Franklin Templeton Profit Sharing
401(k) plan), to the extent of such distribution. In order to
exercise this privilege a written order for the purchase of
shares of the Fund must be received by Franklin Templeton
Trust Company (the "Trust Company"), the Fund or Investor
Services, within 120 days after the plan distribution.
Class I shares may also be purchased at net asset value and
without the imposition of a contingent deferred sales charge
by any state, county, or city, or any instrumentality,
department, authority or agency thereof which has determined
that the Fund is a legally permissible investment and which is
prohibited by applicable investment laws from paying a sales
charge or commission in connection with the purchase of shares
of any registered management investment company ("an eligible
governmental authority"). SUCH INVESTORS SHOULD CONSULT THEIR
OWN LEGAL ADVISORS TO DETERMINE WHETHER AND TO WHAT EXTENT THE
SHARES OF THE FUND CONSTITUTE LEGAL INVESTMENTS FOR THEM.
Municipal investors considering investment of proceeds of bond
offerings into the Fund should consult with expert counsel to
determine the effect, if any, of various payments made by the
Fund or its investment manager on arbitrage rebate
calculations. If an investment by an eligible governmental
authority at net asset value is made through a securities
dealer who has executed a dealer agreement with Distributors,
Distributors or one of its affiliates may make a payment, out
of their own resources, to such securities dealer in an amount
not to exceed 0.25% of the amount invested. Contact Franklin's
Institutional Sales Department for additional information.
DESCRIPTION OF SPECIAL NET ASSET VALUE PURCHASES
Class I shares may also be purchased at net asset value and
without the imposition of a contingent deferred sales charge
by certain designated retirement plans, including profit
sharing, pension, 401(k) and simplified employee pension plans
("designated plans"), subject to minimum requirements with
respect to number of employees or amount of purchase, which
may be established by Distributors. Currently those criteria
require that the employer establishing the plan have 200 or more
employees or that the amount invested or to be invested during
the subsequent 13-month period in the Fund or in any of the
Franklin Templeton Investments totals at least $1,000,000.
Employee benefit plans not designated above or qualified under
Section 401 of the Code ("non-designated plans") may be
afforded the same privilege if they meet the above
requirements as well as the uniform criteria for qualified
groups previously described under "Group Purchases" which
enable Distributors to realize economies of scale in its sales
efforts and sales related expenses.
Class I shares may be purchased at net asset value and without
the imposition of a contingent deferred sales charge by trust
companies and bank trust departments for funds over which they
exercise exclusive discretionary investment authority and
which are held in a fiduciary, agency, advisory, custodial or
similar capacity. Such purchases are subject to minimum
requirements with respect to amount of purchase, which may be
established by Distributors. Currently, those criteria require
that the amount invested or to be invested during the
subsequent 13-month period in this Fund or any of the Franklin
Templeton Investments must total at least $1,000,000. Orders
for such accounts will be accepted by mail accompanied by a
check or by telephone or other means of electronic data
transfer directly from the bank or trust company, with payment
by federal funds received by the close of business on the next
business day following such order.
Class I shares may be purchased at net asset value and without
the imposition of a contingent deferred sales charge by
trustees or other fiduciaries purchasing securities for
certain retirement plans of organizations with collective
retirement plan assets of $10 million or more, without regard
to where such assets are currently invested.
For a complete understanding of how to buy shares of the Fund,
this Supplement must be read in conjunction with the
Prospectus. Refer to the SAI for further information regarding
net asset value purchases of Class I shares.
PURCHASING CLASS I AND CLASS II SHARES
When placing purchase orders, investors should clearly
indicate which class of shares they intend to purchase. A
purchase order that fails to specify a class will
automatically be invested in Class I shares. Initial purchases
of $1 million or more in a single payment will be invested in
Class I shares. There are no conversion features attached to
either class of shares.
Investors who qualify to purchase Class I shares at net asset
value should purchase Class I rather than Class II shares. See
the section "Purchases at Net Asset Value" and "Description of
Special Net Asset Value Purchases" above for a discussion of
when shares may be purchased at net asset value.
OTHER PROGRAMS AND PRIVILEGES AVAILABLE TO FUND SHAREHOLDERS
With the exception of Systematic Withdrawal Plans, all
programs and privileges detailed under the discussion of
"Other Programs and Privileges Available to the Fund
Shareholders" will remain in effect as described in the
Prospectus for the new multiclass structure. For a complete
discussion of these programs, see "Other Programs and
Privileges Available to Fund Shareholders" in the Prospectus.
SYSTEMATIC WITHDRAWAL PLANS. Subject to the requirements
outlined in the Prospectus, a shareholder may establish a
Systematic Withdrawal Plan for his or her account. With
respect to Class I shares, the contingent deferred sales
charge is waived for redemptions through a Systematic
Withdrawal Plan set up prior to February 1, 1995. With
respect to Systematic Withdrawal Plans
set up on or after February 1, 1995, the applicable contingent
deferred sales charge is waived for Class I and Class II share
redemptions of up to 1% monthly of an account's net asset
value (12% annually, 6% semi-annually, 3% quarterly). For
example, if the account maintained an annual balance of
$10,000, only $1,200 could be withdrawn through a once-yearly
Systematic Withdrawal Plan free of charge; any amount over
that $1,200 would be assessed a 1% (or applicable) contingent
deferred sales charge.
EXCHANGE PRIVILEGE
Shareholders are entitled to exchange their shares for shares
of the same class of other Franklin Templeton Funds which are
eligible for sale in the shareholder's state of residence and
in conformity with such fund's stated eligibility requirements
and investment minimums. Some funds, however, may not offer
Class II shares. Class I shares may be exchanged for Class I
shares of any Franklin Templeton Funds. Class II shares may be
exchanged for Class II shares of any Franklin Templeton Funds.
No exchanges between different classes of shares will be
allowed. A contingent deferred sales charge will not be
imposed on exchanges. If, however, the exchanged shares were
subject to a contingent deferred sales charge in the original
fund purchased and shares are subsequently redeemed within
twelve months (Class I shares) or eighteen months (Class II
shares) of the calendar month of the original purchase date, a
contingent deferred sales charge will be imposed. Investors
should review the prospectus of the fund they wish to exchange
from and the fund they wish to exchange into for all specific
requirements or limitations on exercising the exchange
privilege, for example, minimum holding periods or applicable
sales charges.
EXCHANGES OF CLASS I SHARES
The contingency period of Class I shares will be tolled (or
stopped) for the period such shares are exchanged into and
held in a Franklin or Templeton money market fund. If a Class
I account has shares subject to a contingent deferred sales
charge, Class I shares will be exchanged into the new account on a
"firstin, first-out" basis. See also "How to Sell Shares of
the Fund Contingent Deferred Sales Charge."
EXCHANGES OF CLASS II SHARES
When an account is composed of Class II shares subject to the
contingent deferred sales charge, and shares that are not, the
shares will be transferred proportionately into the new fund.
Shares received from reinvestment of dividends and capital
gains are referred to as "free shares," shares which were
originally subject to a contingent deferred sales charge but
to which the contingent deferred sales charge no longer
applies are called "matured shares," and shares still subject
to the contingent deferred sales charge are referred to as
"CDSC liable shares." CDSC liable shares held for different
periods of time are considered different types of CDSC liable
shares. For instance, if a shareholder has $1,000 in free
shares, $2,000 in matured shares, and $3,000 in CDSC liable
shares, and the shareholder exchanges $3,000 into a new fund,
$500 will be exchanged from free shares, $1,000 from matured
shares, and $1,500 from CDSC liable shares. Similarly, if CDSC liable
shares have been purchased at different periods,
a proportionate amount will be
taken from shares held for each period. If, for example, a
shareholder holds $1,000 in shares bought 3 months ago, $1,000
bought 6 months ago, and $1,000 bought 9 months ago, and the
shareholder exchanges $1,500 into a new fund, $500 from each
of these shares will be deemed exchanged into the new fund.
The only money market fund exchange option available to Class
II shareholders is the Franklin Templeton Money Fund II
("Money Fund II"), a series of the Franklin Templeton Money
Fund Trust. No drafts (checks) may be written on Money Fund II
accounts, nor may shareholders purchase shares of Money Fund
II directly. Class II shares exchanged for shares of Money
Fund II will continue to age and a contingent deferred sales
charge will be assessed if CDSC liable shares are redeemed. No
other money market funds are available for Class II
shareholders for exchange purposes. Class I shares may be
exchanged for shares of any of the money market funds in the
Franklin Templeton Funds except Money Fund II. Draft writing
privileges and direct purchases are allowed on these other
money market funds as described in their respective
prospectuses.
To the extent shares are exchanged proportionately, as opposed
to another method, such as first-in first-out, or free-shares
followed by CDSC liable shares, the exchanged shares may, in
some instances, be CDSC liable even though a redemption of
such shares, as discussed elsewhere herein, may no longer be
subject to a CDSC. The proportional method is believed by
management to more closely meet and reflect the expectations
of Class II shareholders in the event shares are redeemed
during the contingency period. For federal income tax
purposes, the cost basis of shares redeemed or exchanged is
determined under the Code without regard to the method of
transferring shares chosen by the Fund.
TRANSFERS
Transfers between identically registered accounts in the same
fund and class are treated as non-monetary and non-taxable
events, and are not subject to a contingent deferred sales
charge. The transferred shares will continue to age from the
date of original purchase. Like exchanges, shares will be
moved proportionately from each type of shares in the original
account.
CONVERSION RIGHTS
It is not presently anticipated that Class II shares will be
converted to Class I shares. A shareholder may, however, sell
his Class II shares and use the proceeds to purchase Class I
shares, subject to all applicable sales charges.
See "Exchange Privilege" in the Prospectus for more
information.
HOW TO SELL SHARES OF THE FUND
For a discussion regarding the sale of either class of Fund
shares, refer to the section in the Prospectus titled "How to
Sell Shares of the Fund." In addition, the charges described
in this Supplement will also apply to the sale of all Fund
shares.
CONTINGENT DEFERRED SALES CHARGE
CLASS I. In order to recover commissions paid to securities
dealers on investments of $1 million or more, a contingent
deferred sales charge of 1% applies to redemptions of those
investments within the contingency period of 12 months of the
calendar month following their purchase. The charge is 1% of
the lesser of the value of the shares redeemed (exclusive of
reinvested dividends and capital gain distributions) or the
total cost of such shares at the time of purchase, and is
retained by Distributors. The contingent deferred sales charge
is waived in certain instances. See below and "Purchases at
Net Asset Value" under "How To Buy Shares of the Fund."
CLASS II. Class II shares redeemed within the contingency
period of 18 months of the calendar month following their
purchase will be assessed a contingent deferred sales charge,
unless one of the exceptions described below applies. The
charge is 1% of the lesser of the value of the shares redeemed
(exclusive of reinvested dividends and capital gain
distributions) or the net asset value at the time of purchase
of such shares, and is retained by Distributors. The
contingent deferred sales charge is waived in certain
instances. See below.
CLASS I AND CLASS II. In determining if a contingent deferred
sales charge applies, shares not subject to a contingent
deferred sales charge are deemed to be redeemed first, in the
following order: (i) Shares representing amounts attributable
to capital appreciation of those shares held less than the
contingency period (12 months in the case of Class I shares
and 18 months in the case of Class II shares); (ii) shares
purchased with reinvested dividends and capital gain
distributions; and (iii) other shares held longer than the
contingency period; and followed by any shares held less than
the contingency period, on a "first in, first out" basis. For
tax purposes, a contingent deferred sales charge is treated as
either a reduction in redemption proceeds or an adjustment to
the cost basis of the shares redeemed.
The contingent deferred sales charge on each class of shares
is waived, as applicable, for: exchanges; any account fees;
distributions to participants in Trust Company qualified
retirement plans due to death, disability or attainment of age
59 1/2; tax-free returns of excess contributions to employee
benefit plans; distributions from employee benefit plans,
including those due to termination or plan transfer;
redemptions through a Systematic Withdrawal Plan set up for
shares prior to February 1, 1995, and for Systematic
Withdrawal Plans set up thereafter, redemptions of up to 1%
monthly of an account's net asset value (3% quarterly, 6%
semiannually or 12% annually); and redemptions initiated by
the Fund due to a shareholder's account falling below the
minimum specified account size. In addition, shares of
participants in Trust Company retirement plan accounts will,
in the event of death, no longer be subject to the contingent
deferred sales charge.
All investments made during a calendar month, regardless of
when during the month the investment occurred, will age one
month on the last day of that month and each subsequent month.
REQUESTS FOR REDEMPTIONS FOR A SPECIFIED DOLLAR AMOUNT, UNLESS
OTHERWISE SPECIFIED, WILL RESULT IN ADDITIONAL SHARES BEING
REDEEMED TO COVER ANY APPLICABLE CONTINGENT DEFERRED SALES
CHARGE WHILE REQUESTS FOR REDEMPTION OF A SPECIFIC NUMBER OF
SHARES WILL RESULT IN THE APPLICABLE CONTINGENT DEFERRED SALES
CHARGE BEING DEDUCTED FROM THE TOTAL DOLLAR AMOUNT REDEEMED.
VALUATION OF FUND SHARES
The following sentence replaces the first sentence of the
first paragraph in this section; the subsequent paragraph is
added to the end of this section.
The net asset value per share of each class of the Fund is
determined as of the scheduled closing time of the New York
Stock Exchange ("Exchange") (generally 1:00 p.m. Pacific time)
each day that the Exchange is open for trading.
Each of the Fund's classes will bear, pro-rata, all of the
common expenses of the Fund. The net asset value of all
outstanding shares of each class of the Fund will be computed
on a pro-rata basis for each outstanding share based on the
proportionate participation in the Fund represented by the
value of shares of such classes, except that the Class I and
Class II shares will bear the Rule 12b-1 expenses payable
under their respective plans. Due to the specific distribution
expenses and other costs that will be allocable to each class,
the dividends paid to each class of the Fund may vary.
HOW TO GET INFORMATION REGARDING AN INVESTMENT IN THE FUND
The following paragraph replaces the second paragraph in this
section of the Prospectus:
From a touch tone phone, shareholders may access the automated
Franklin TeleFACTS system (day or night) at 1-800/247-1753 to
obtain current price, yield or other performance information
specific to a fund in the Franklin Funds, process an exchange
as discussed under the "Exchange Privilege" in the Prospectus,
and request duplicate confirmation or year-end statements,
money fund checks, if applicable, and deposit slips. Current
prices for the Templeton Funds are also available through
TeleFACTS. The system codes for the Fund's two classes of
shares, which will be needed to access system information, are
135 for Class I and 235 for Class II followed by the # sign.
The system's automated operator will prompt the caller with
easy to follow step-by-step instructions from the main menu.
Other features may be added in the future.
PERFORMANCE (CLASS II)
Because Class II shares were not offered prior to May 1, 1995,
no performance data is available for these shares. After a
sufficient period of time has passed, Class II performance
data as described in the "Performance" section of the
Prospectus will be available. Except as noted, it is likely
that the performance data relating to Class II shares will
reflect lower total return and yield figures than those for
Class I shares because Class II Rule 12b-1 fees are higher
than Class I Rule 12b-1 fees. During at least the first year
of operation Class II share performance will be higher than
Class I in light of the higher initial sales charge applicable
to Class I shares.
GENERAL INFORMATION
With the exception of Voting Rights, all rights and privileges
detailed under the discussion of "General Information" will
remain in effect as described in the Prospectus for the new
multiclass structure. For a complete discussion of these
rights and privileges, see "General Information" in the
Prospectus.
VOTING RIGHTS. Shares of each class represent proportionate
interests in the assets of the Fund and have the same voting
and other rights and preferences as the other class of the
Fund for matters that affect the Fund as a whole. For matters
that only affect a certain class of the Fund's shares,
however, only shareholders of that class will be entitled to
vote. Therefore, each class of shares will vote separately on
matters (1) affecting only that class, (2) expressly required
to be voted on separately by the state business trust law, or
(3) required to be voted on separately by the 1940 Act or the
rules adopted thereunder. For instance, if a change to the
Rule 12b-1 plan relating to Class I shares requires
shareholder approval, only shareholders of Class I may vote on
changes to the Rule 12b-1 plan affecting that class.
Similarly, if a change to the Rule 12b1 plan relating to Class
II shares requires shareholder approval, only shareholders of
Class II may vote on the change to such plan. On the other
hand, if there is a proposed change to the investment
objective of the Fund, this affects all
shareholders, regardless of which class of shares they hold,
and therefore, each share has the same voting rights. For more
information regarding voting rights, see the "Voting Rights"
discussion in the Prospectus under the heading "General
Information."
35 S
SUPPLEMENT DATED MAY 1, 1995
TO THE STATEMENT OF ADDITIONAL INFORMATION OF
FRANKLIN GLOBAL GOVERNMENT INCOME FUND
dated March 1, 1995
As described in the Prospectus, this Fund now offers two
classes of shares to its investors. This new structure allows
investors to consider, among other features, the impact of
sales charges and distribution fees ("Rule 12b-1 fees") on
their investments in this Fund.
ADD THE FOLLOWING AS THE LAST SENTENCE OF THE PARAGRAPH
DESCRIBING FEES PAID TO THE MANAGER UNDER "INVESTMENT ADVISORY
AND OTHER SERVICES":
Each class will pay its share of the fee as determined by the
proportion of the Fund that it represents.
EACH NEW CLASS OF SHARES HAS A SEPARATE DISTRIBUTION PLAN. FOR
THIS REASON, THE FIRST PARAGRAPH OF THE SECTION "THE FUND'S
UNDERWRITER - DISTRIBUTION PLAN" HAS BEEN REPLACED WITH THE
FOLLOWING PARAGRAPH:
PLANS OF DISTRIBUTION
Each class of the Fund has adopted a Distribution Plan ("Class
I Plan" and "Class II Plan," respectively, or "Plans")
pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the
Class I Plan, the Fund may pay up to a maximum of 0.15% per
annum (0.15 of 1%) of its average daily net assets for
expenses incurred in the promotion and distribution of its
shares.
THE NEXT THREE PARAGRAPHS OF THIS SECTION IN THE STATEMENT OF
ADDITIONAL INFORMATION ONLY CONCERN THE CLASS I PLAN. THE
FOLLOWING PARAGRAPHS HAVE BEEN ADDED TO THIS SECTION AFTER THE
DISCUSSION OF THE CLASS I PLAN TO DESCRIBE CLASS II:
THE CLASS II PLAN
Under the Class II Plan, the Fund is permitted to pay to
Distributors or others annual distribution fees, payable
quarterly, of .50% per annum of Class II's average daily net
assets, in order to compensate Distributors or others for
providing distribution and related services and bearing
certain expenses of the Class. All expenses of distribution
and marketing over that amount will be borne by Distributors,
or others who have incurred them, without reimbursement by the
Fund. In addition to this amount, under the Class II Plan, the
Fund shall pay .15% per annum, payable quarterly, of the
Class' average daily net assets as a servicing fee. This fee
will be used to pay dealers or others for, among other things,
assisting in establishing and maintaining customer accounts and records;
assisting with purchase and redemption requests; receiving and
answering correspondence; monitoring dividend payments from
the Fund on behalf of the customers, and similar activities
related to furnishing personal services and maintaining
shareholder accounts. Distributors may pay the securities
dealer, from its own resources, a commission of up to 1% of
the amount invested.
THE SUBSEQUENT PARAGRAPHS IN THE SECTION "DISTRIBUTION PLAN"
APPLY EQUALLY TO BOTH CLASS I AND CLASS II PLANS, WITH THE
EXCEPTION THAT THE SENTENCE REGARDING UNREIMBURSED EXPENSES
REFERS TO THE CLASS I PLAN ONLY.
THE OFFICERS AND TRUSTEES SECTION IS REVISED TO READ AS
FOLLOWS:
OFFICERS AND TRUSTEES
The Board of Trustees has the responsibility for the overall
management of the Fund, including general supervision and
review of its investment activities. The trustees, in turn,
elect the officers of the Trust, who are responsible for
administering the day-to-day operations of the Fund. The
affiliations of the officers and trustees and their principal
occupations for the past five years are listed below. Trustees
who are deemed to be "interested persons" of the Trust, as
defined in the 1940 Act, are indicated by an asterisk (*).
Name, Address & Age
Positions and Offices with the Fund
Principal Occupations During Past Five
Years
Frank H. Abbott, III
1045 Sansome St.
San Francisco, CA 94111
74
Trustee
President and Director, Abbott Corporation (an investment
company); and director, trustee or managing general
partner, as the case may be, of 30 of the investment
companies in the Franklin Group of Funds.
Harris J. Ashton
General Host Corporation
Metro Center, 1 Station Place
Stamford, CT 06904-2045
62
Trustee
President, Chief Executive Officer and Chairman of the
Board, General Host Corporation (nursery and craft centers);
Director, RBC Holdings, Inc. (a bank holding company) and
BarS Foods; and director, trustee or managing general
partner, as the case may be, of 54 of the investment
companies in the Franklin Templeton Group of Funds.
S. Joseph Fortunato
Park Avenue at Morris County
P. O. Box 1945
Morristown, NJ 07962-1945
62
Trustee
Member of the law firm of Pitney, Hardin, Kipp & Szuch;
Director of General Host Corporation; director, trustee or
managing general partner, as the case may be, of 56 of the
investment companies in the Franklin Templeton Group of
Funds.
David W. Garbellano
111 New Montgomery St., #402
San Francisco, CA 94105
80
Trustee
Private Investor; Assistant Secretary/Treasurer and Director,
Berkeley Science Corporation (a venture capital company); and
director, trustee or managing general partner, as the case
may be, of 29 of the investment companies in the Franklin
Group of Funds.
*Edward B. Jamieson
777 Mariners Island Blvd.
San Mateo, CA 94404
46
President and Trustee
Senior Vice President and Portfolio Manager, Franklin
Advisers, Inc.; and officer and/or director or trustee of
five of the investment companies in the Franklin Group of
Funds.
*Charles B. Johnson
777 Mariners Island Blvd.
San Mateo, CA 94404
62
Chairman of the Board and Trustee
President and Director, Franklin Resources, Inc.; Chairman of
the Board and Director, Franklin Advisers, Inc. and Franklin
Templeton Distributors, Inc.; Director, Franklin/Templeton
Investor Services, Inc. and General Host Corporation; and
officer and/or director, trustee or managing general partner,
as the case may be, of most other subsidiaries of Franklin
Resources, Inc. and of 55 of the investment companies in the
Franklin Templeton Group of Funds.
*Rupert H. Johnson, Jr.
777 Mariners Island Blvd.
San Mateo, CA 94404
54
Vice President and Trustee
Executive Vice President and Director, Franklin Resources,
Inc. and Franklin Templeton Distributors, Inc.; President
and Director, Franklin Advisers, Inc.; Director,
Franklin/Templeton Investor Services, Inc.; and officer
and/or director, trustee or managing general partner, as the
case may be, of most other subsidiaries of Franklin
Resources, Inc. and of 42 of the investment companies in the
Franklin Templeton Group of Funds.
Frank W. T. LaHaye
20833 Stevens Creek Blvd.
Suite 102
Cupertino, CA 95014
66
Trustee
General Partner, Peregrine Associates and Miller & LaHaye,
which are General Partners of Peregrine Ventures and
Peregrine Ventures II (venture capital firms); Chairman of
the Board and Director, Quarterdeck Office Systems, Inc.;
Director, FischerImaging Corporation; and director or
trustee, as the case may be, of 25 of the investment
companies in the Franklin Group of Funds.
Gordon S. Macklin
8212 Burning Tree Road
Bethesda, MD 20817
66
Trustee
Chairman, White River Corporation (information services);
Director, Fund American Enterprises Corporation, Martin
Marietta Corporation, MCI Communications Corporation,
MedImmune, Inc. (biotechnology), Infovest Corporation
(information services), and Fusion Systems Corporation
(industrial technology); and director, trustee or managing
general partner, as the case may be, of 51 of the investment
companies in the Franklin Templeton Group of Funds; formerly,
Chairman, Hambrecht and Quist Group; Director, H & Q
Healthcare Investors; and President, National Association of
Securities Dealers, Inc.
Harmon E. Burns
777 Mariners Island Blvd.
San Mateo, CA 94404
50
Vice President
Executive Vice President, Secretary and Director, Franklin
Resources, Inc.; Executive Vice President and Director,
Franklin Templeton Distributors, Inc.; Executive Vice
President, Franklin Advisers, Inc.; Director,
Franklin/Templeton Investor Services, Inc.; officer and/or
director, as the case may be, of other subsidiaries of
Franklin Resources, Inc.; and officer and/or director or
trustee of 41 of the investment companies in the Franklin
Templeton Group of Funds.
Kenneth V. Domingues
777 Mariners Island Blvd.
San Mateo, CA 94404
62
Vice President - Financial Reporting and Accounting Standards
Senior Vice President, Franklin Resources, Inc., Franklin
Advisers, Inc., and Franklin Templeton Distributors, Inc.;
officer and/or director, as the case may be, of other
subsidiaries of Franklin Resources, Inc.; and Officer and/or
managing general partner, as the case may be, of 36 of the
investment companies in the Franklin Group of Funds.
Martin L. Flanagan
777 Mariners Island Blvd.
San Mateo, CA 94404
34
Vice President and Chief Financial Officer
Senior Vice President, Chief Financial Officer and Treasurer,
Franklin Resources, Inc.; Executive Vice President, Templeton
Worldwide, Inc.; Senior Vice President and Treasurer,
Franklin Advisers, Inc. and Franklin Templeton Distributors,
Inc.; Senior Vice President, Franklin/Templeton Investor
Services, Inc.; officer of most other subsidiaries of
Franklin Resources, Inc.; and officer of 60 of the investment
companies in the Franklin Templeton Group of Funds.
Deborah R. Gatzek
777 Mariners Island Blvd.
San Mateo, CA 94404
46
Vice President and Secretary
Senior Vice President - Legal, Franklin Resources, Inc. and
Franklin Templeton Distributors, Inc.; Vice President,
Franklin Advisers, Inc. and officer of 36 of the investment
companies in the Franklin Group of Funds.
Charles E. Johnson
777 Mariners Island Blvd.
San Mateo CA 94404
38
Vice President
Senior Vice President and Director, Franklin Resources, Inc.;
Senior Vice President, Franklin Templeton Distributors, Inc.;
President and Director, Templeton Worldwide, Inc. and
Franklin Institutional Services Corporation; officer and/or
director, as the case may be, of some of the subsidiaries of
Franklin Resources, Inc. and officer and/or director or
trustee, as the case may be, of 24 of the investment
companies in the Franklin Templeton Group of Funds.
Diomedes Loo-Tam
777 Mariners Island Blvd.
San Mateo, CA 94404
56
Treasurer and Principal Accounting Officer
Employee of Franklin Advisers, Inc.; and officer of 36 of the
investment companies in the Franklin Group of Funds.
Edward V. McVey
777 Mariners Island Blvd.
San Mateo, CA 94404
57
Vice President
Senior Vice President/National Sales Manager, Franklin
Templeton Distributors, Inc.; and officer of 31 of the
investment companies in the Franklin Group of Funds.
Trustees not affiliated with the investment manager may be
but are not currently paid fees or expenses incurred in
connection with attending meetings. As indicated above,
certain of the trustees and officers hold positions with
other companies in the Franklin Group of Funds(Registered
Trademark) and the Templeton Funds. The following table
indicates the total fees received by such trustees from other
Franklin Templeton Funds for which they serve as directors,
trustees or managing general partners.
<TABLE>
<CAPTION>
NUMBER OF
FRANKLIN
TEMPLETON
BOARDS
TOTAL AGGREGATE COMPENSATION
FRANKLIN COMPENSATION ON WHICH FROM
NAME FROM FUND* EACH SERVES TEMPLETON
FUNDS**
<S> <C> <C> <C>
Mr. Abbott $23,125 30 $176,870
Mr. Ashton $22,200 54 $319,925
Mr. Fortunato $22,200 56 $336,065
Mr. $22,200 29 $153,300
Garbellano
Mr. LaHaye $22,200 25 $150,817
Mr. Macklin $22,200 51 $303,685
</TABLE>
* For the fiscal year ended October 31, 1994.
** For the calendar year ended December 31,
1994.
No officer or trustee received any other compensation
directly from the Fund. As of March 31, 1995, the trustees
and officers, as a group, owned of record and beneficially
less than 1% of the total outstanding shares of the Fund.
Certain officers or trustees who are shareholders of Franklin
Resources, Inc. may be deemed to receive indirect
remuneration by virtue of their participation, if any, in the
fees paid to its subsidiaries. Charles E. Johnson is the son
and nephew of Charles B. Johnson and Rupert H. Johnson, Jr.,
respectively, who are brothers.
From time to time, the number of Fund shares held in the
"street name" accounts of various securities dealers for the
benefit of their clients or in centralized securities
depositories may exceed 5% of the total shares outstanding.
To the best of the Fund's knowledge, no other person holds
beneficially or of record more than 5% of the Fund's
outstanding shares.
THE FOLLOWING PARAGRAPH IS ADDED TO "ADDITIONAL INFORMATION
REGARDING FUND SHARES":
The Fund may impose a $10 charge for each returned item ,
against any shareholder account which, in connection with the
purchase of Fund shares, submits a check or a draft which is
returned unpaid to the Fund.
THE FOLLOWING REPLACES THE SUBSECTION "LETTER OF INTENT"
UNDER "ADDITIONAL INFORMATION REGARDING FUND SHARES":
LETTER OF INTENT
An investor may qualify for a reduced sales charge on the
purchase of Class I shares, as described in the Prospectus.
At any time within 90 days after the first investment which
the investor wants to qualify for the reduced sales charge, a
signed Shareholder Application, with the Letter of Intent
("Letter") section completed, may be filed with the Fund.
After the Letter is filed, each additional investment made
will be entitled to the sales charge applicable to the level
of investment indicated on the Letter. Sales charge
reductions based upon purchases in more than one company in
the Franklin Templeton Group will be effective only after
notification to Distributors that the investment qualifies
for a discount. The shareholder's holdings in the Franklin
Templeton Group, including Class II shares,
acquired more than 90 days before the Letter of Intent is
filed will be counted towards completion of the Letter of
Intent but will not be entitled to a retroactive downward
adjustment of sales charge. Any redemptions made by the
shareholder, other than by a qualifying employee benefit
plan (the "Benefit Plan"), during the 13-month period will be
subtracted from the amount of the purchases for purposes of
determining whether the terms of the Letter have been
completed. If the Letter is not completed within the 13-
month period, there will be an upward adjustment of the sales
charge, depending upon the amount actually purchased (less
redemptions) during the period. The upward adjustment does
not apply to qualifying employee benefit plans. An investor
who executes a Letter prior to a change in the sales charge
structure for the Fund will be entitled to complete the
Letter at the lower of (i) the new sales charge structure; or
(ii) the sales charge structure in effect at the time the
Letter was filed with the Fund.
As mentioned in the Prospectus, five percent (5%) of the
amount of the total intended purchase will be reserved in
shares of the Fund registered in the investor's name unless
the investor is a Benefit Plan. If the total purchases, less
redemptions, equal the amount specified under the Letter, the
reserved shares will be deposited to an account in the name
of the investor or delivered to the investor or the
investor's order. If the total purchases, less redemptions,
exceed the amount specified under the Letter and is an amount
which would qualify for a further quantity discount, a
retroactive price adjustment will be made by Distributors and
the dealer through whom purchases were made pursuant to the
Letter (to reflect such further quantity discount) on
purchases made within 90 days before and on those made after
filing the Letter. The resulting difference in offering price
will be applied to the purchase of additional shares at
the offering price applicable to a single purchase or
the dollar amount of the total purchases.
If the total purchases, less redemptions, are less than the
amount specified under the Letter, the investor will remit to
Distributors an amount equal to the difference in the dollar
amount of sales charge actually paid and the amount of sales
charge which would have applied to the aggregate purchases if
the total of such purchases had been made at a single time.
Upon such remittance the reserved shares held for the
investor's account will be deposited to an account in the
name of the investor or delivered to the investor or to the
investor's order. If within 20 days after written request
such difference in sales charge is not paid, the redemption
of an appropriate number of reserved shares to realize such
difference will be made. In the event of a total redemption
of the account prior to fulfillment of the Letter of Intent,
the additional sales charge due will be deducted from the
proceeds of the redemption, and the balance will be forwarded
to the investor.
If a Letter of Intent is executed on behalf of a benefit plan
(such plans are described under "Purchases at Net Asset
Value" in the Prospectus), the level and any reduction in
sales charge for these employee benefit plans will be based
on actual plan participation and the projected investments in
the Franklin Templeton Group under the Letter. Benefit Plans
are not subject to the requirement to reserve 5% of the total
intended purchase, or to any penalty as a result of the early
termination of a plan, nor are Benefit Plans entitled to
receive retroactive adjustments in price for investments made
before executing Letters.
THE "PURCHASES AND REDEMPTIONS THROUGH SECURITIES DEALERS"
AND "CALCULATION OF NET ASSET VALUE" SUBSECTIONS ARE MODIFIED
TO REFLECT THAT THE FUND'S NET ASSET VALUE IS CALCULATED FOR
EACH CLASS SEPARATELY AS OF THE SCHEDULED CLOSING OF THE NEW
YORK STOCK EXCHANGE (GENERALLY 1:00 P.M. PACIFIC TIME).
The current Prospectus is incorporated herein by reference to
Form Type 497 filed electronically by Registrant with the
U.S. Securities and Exchange Commission on March 21, 1995,
Accession Number 0000809707 - 95 - 000003.
