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SUPPLEMENT DATED JANUARY 1, 1998
TO THE PROSPECTUS OF
FRANKLIN MUTUAL SERIES FUND INC. - CLASS Z
DATED MAY 1, 1997, AS AMENDED AUGUST 19, 1997
The prospectus is amended to replace the sections "Opening Your Account" and
"Telephone Purchases," found under "How Do I Buy Shares?", with the following:
Opening Your Account
Shares of the Fund may be purchased without a sales charge. Please note that as
of January 1, 1998, shares of the Fund are not available to retirement plans
through Franklin Templeton's ValuSelect(R) program. Retirement plans in Franklin
Templeton's ValuSelect program before January 1, 1998, however, may continue to
invest in the Fund. To open your account, please follow the steps below. This
will help avoid any delays in processing your request. Please keep in mind that
the Fund does not currently allow investments by Market Timers.
1. Read this prospectus carefully.
2. Determine how much you would like to invest. The Fund's minimum investments
are: o To open your account: $5,000,000* o To add to your account: $25*
*We may waive or lower these minimums for certain investors. Please see "Minimum
Investments" below. We also reserve the right to refuse any order to buy shares.
3. Carefully complete and sign the enclosed shareholder application, including
the optional shareholder privileges section. By applying for privileges now, you
can avoid the delay and inconvenience of having to send an additional
application to add privileges later. It is important that we receive a signed
application since we will not be able to process any redemptions from your
account until we receive your signed application.
4. Make your investment using the table below.
Method Steps to Follow
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By Mail For an initial investment:
o Return the application to the Fund with your check made
payable to the Fund.
For additional investments:
o Send a check made payable to the Fund. Please include
your account number on the check.
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(For additional purchases only
By Phone Call the Fund at 1-800/448-FUND before 4:00 p.m. Eastern
time or the close of the NYSE, whichever is earlier.
This privilege is only available to current Fund
shareholders for purchases of at least $1,000. The purchase
also must be for an account with an existing balance of at
least one-half of the telephone purchase. Please see
section 7 of the shareholder application.
Through Your Dealer Call your investment representative
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Minimum Investments
To determine if you meet the minimum initial investment requirement of $5
million, the amount of your current purchase is added to the cost or current
value, whichever is higher, of your existing shares in the Franklin Templeton
Funds. At least $1 million of this amount, however, must be invested in Advisor
Class or Class Z shares of any of the Franklin Templeton Funds.
The Fund may waive or lower its minimum investment requirement for certain
purchases. A lower minimum initial investment requirement applies to purchases
by:
1. Existing shareholders of any series as of October 31, 1996, and their
immediate family members residing at the same address, subject to the other
terms and conditions in this prospectus and a $1,000 minimum initial investment
requirement
2. Partnership shareholders who had an account on October 31, 1996, whether or
not they are listed on the registration, subject to a $1,000 minimum initial
investment requirement
3. Corporate shareholders invested in the Fund as of October 31, 1996, using the
same registration, or new companies of such corporate shareholders that have
been reorganized into smaller, independent companies, subject to a $1,000
minimum initial investment requirement
4. Shareholders who owned shares of the Fund through a broker-dealer or service
agent omnibus account on October 31, 1996, subject to a $1,000 minimum initial
investment requirement
5. Employees who owned Fund shares through an employer-sponsored retirement plan
as of October 31, 1996, and who wish to open new individual Class Z accounts in
their own names, subject to a $1,000 minimum initial investment requirement. The
minimum initial investment requirement does not apply, however, to employees who
wish to open new retirement accounts, including IRAs.
6. Broker-dealers, registered investment advisors or certified financial
planners who have entered into an agreement with Distributors for clients
participating in comprehensive fee programs, subject to a $250,000 minimum
initial investment requirement or a $100,000 minimum initial investment
requirement for an individual client
7. Qualified registered investment advisors or certified financial planners who
have clients invested in Mutual Series on October 31, 1996, or who buy through a
broker-dealer or service agent who has entered into an agreement with
Distributors, subject to a $1,000 minimum initial investment requirement
8. Officers, trustees, directors and full-time employees of the Franklin
Templeton Funds or the Franklin Templeton Group and their immediate family
members, subject to a $100 minimum initial investment requirement
9. Each series of the Franklin Templeton Fund Allocator Series investing in
Mutual Shares or Discovery, subject to a $1,000 minimum initial and subsequent
investment requirement
10. Governments, municipalities, and tax-exempt entities that meet the
requirements for qualification under Section 501 of the Code, subject to a $1
million initial investment in Class Z shares No minimum initial investment
requirement applies to purchases by:
1. Investors buying shares with redemption proceeds from a sale of Class Z
shares of the Fund if reinvested in the same class of shares of any series
within 365 days of the redemption date
2. A direct rollover to an IRA by employees of a company with a non-custodial
pension plan set up as an omnibus account on October 31, 1996
3. Investment companies exchanging shares or selling assets pursuant to a
merger, acquisition, or exchange offer or other business combination transaction
4. New participants and accounts of employer-sponsored retirement plans invested
in the Fund as of October 31, 1996
5. Accounts managed by the Franklin Templeton Group
6. The Franklin Templeton Profit Sharing 401(k) Plan
7. Defined contribution plans such as employer stock, bonus, pension or profit
sharing plans that meet the requirements for qualification under Section 401 of
the Code, including salary reduction plans qualified under Section 401(k) of the
Code, and that (i) are sponsored by an employer with at least 10,000 employees,
or (ii) have plan assets of $100 million or more
8. Trust companies and bank trust departments initially investing in the
Franklin Templeton Funds at least $1 million of assets held in a fiduciary,
agency, advisory, custodial or similar capacity and over which the trust
companies and bank trust departments or other plan fiduciaries or participants,
in the case of certain retirement plans, have full or shared investment
discretion
9. Shareholders of the Fund as of October 31, 1996, who wish to open new
retirement accounts, including IRAs 10. Any other investor, including a private
investment vehicle such as a family trust or foundation, who is a member of a
qualified group, if the group as a whole meets the $5 million minimum investment
requirement. A qualified group is one that:
o Was formed at least six months ago,
o Has a purpose other than buying Fund shares at a discount, o Has more
than 10 members,
o Can arrange for meetings between our representatives and group
members,
o Agrees to include Franklin Templeton Fund sales and other materials in
publications and mailings to its member at reduced or no cost to
Distributors,
o Agrees to arrange for payroll deduction or other bulk transmission of
investments to the Fund, and
o Meets other uniform criteria that allow Distributors to achieve cost
savings in distributing shares.
