As filed with the Securities and Exchange Commission on December 29, 1995
Registration No. 33-37442
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 6 TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
TEMPLETON CAPITAL ACCUMULATION PLANS
(Exact Name of Registrant)
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
(Name of Depositor)
700 Central Avenue
ST. PETERSBURG, FLORIDA 33701
(Address of Depositor's Principal
Executive Office)
- ------------------------------------------------------------------------
Thomas M. Mistele
700 Central Avenue
St. Petersburg, Florida 33701
(Name and Address of Agent for
Service of Process)
- -------------------------------------------------------------------------
It is proposed that this filing will become effective (check appropriate box)
[ ] Immediately upon filing pursuant to paragraph (b), or
[X ] on January 1, 1996 pursuant to paragraph (b), or
[ ] 60 days after filing pursuant to paragraph (a), or
[ ] on ( ) pursuant to paragraph (a), of Rule 485
Title of securities being registered: Templeton Capital Accumulation Plans.
- -------------------------------------------------------------------------
The Registrant has elected to register an indefinite number of periodic
payment plans under the Securities Act of 1933 pursuant to Rule 24f-2
under the Investment Company Act of 1940. Registrant filed the notice
required by Rule 24f-2 with respect to its fiscal year ending August
31, 1995 on October 30, 1995.
<PAGE>
Templeton Capital Accumulation Plans
CROSS-REFERENCE SHEET
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items required by Instruction as
to the Prospectus in Form S-6)
Form N-8B-2 Form S-6
ITEM NUMBER HEADING IN PROSPECTUS
1. (a) Name of trust....................... Prospectus Cover
(b) Title of securities
issued............................... Prospectus Cover
2. Name and address of each
depositor................................ Prospectus Cover;
...................................... Investment Objective
-- What You Seek From
Your Plan; The
Sponsor
3. Name and address of trustee................... Your Rights and
..................................... Privileges Under the
Plan; The Custodian
..................................... --- Templeton Funds
Trust Company
4. Name and address of each
principal underwriter......................... Prospectus Cover
5. State of organization
of trust .................................The Custodian --
..................................... Templeton Funds Trust
Company
6. Execution and termination of
trust agreement............................... Introductory Statement;
..................................... How to Start Your
Templeton Capital
Accumulation Plan;
You May Terminate
Your Plan and
Withdraw Your Shares
7. Changes of name........................................... N/A
8. Fiscal year............................................N/A
<PAGE>
9. Litigation.............................................N/A
II. General Description of the Trust and
Securities of the Trust
10. (a) Registered or bearer
securities......................... Introductory Statement
(b) Cumulative or distributive
securities......................Introductory Statement
(c) Withdrawal or
Redemption........................... Your Rights and
..................................... Privileges Under the
Plan
(d) Conversion, transfer, etc............ Your Rights and
..................................... Privileges Under the
Plan
(e) Periodic payment plan Termination of Your
Plan;
..................................... Your Rights and
Privileges Under the
Plan
(f) Voting Rights........................ Your Rights and
..................................... Privileges Under the
Plan
(g) Notice to security
holders.............................. Substitution of the
..................................... Underlying Investment
(h) Consents required.................... The Custodian --
..................................... Templeton Funds Trust
Company; Substitution
of Underlying
Investment
(i) Other provisions................................. N/A
11. Type of securities comprising
units ...........................Introductory Statement
<PAGE>
12. Certain information regarding
periodic payment plan
certificates Prospectus Cover;
..................................... Introductory
Statement; The
Sponsor -- Franklin
Templeton
Distributors, Inc.;
Templeton Capital
Accumulator Fund,
Inc. Prospectus
13. (a) Load, fees, expenses, etc............Introductory Statement;
..................................... Allocation of
Investments and
Deductions: 15-Year
Plans; Total 25-Year
Allocations and
Deductions When
Extended Option is
Used; The Custodian;
The Sponsor
(b) Certain information regardingIntroductory Statement;
periodic payment plan ..... Allocation of
certificates..................... Investments and
Deductions: 15-Year
Plans; Total 25-Year
Allocations and
Deductions When
Extended Investment
Options is Used; A
Typical $100 Monthly
Investment Plan
(c) Certain percentages................ Allocations of
................................... Investments and
Deductions: 15-Year
Plans
(d) Certain other fees, etc............ Tax Sheltered
................................... Retirement Plans
(e) Certain other profits or
benefits...................................... N/A
(f) Ratio of annual charges
to income........................................ N/A
<PAGE>
14. Issuance of trust's
securities............................... How to Start Your
.................................. Templeton Capital
Accumulation Plan
15. Receipt and handling of payments
from purchasers.......................... How to Start Your
.................................. Templeton Capital
Accumulation Plan;
The Custodian --
Templeton Funds Trust
Company
16. Acquisition and disposition of
underlying securities.................... The Custodian --
.................................. Templeton Funds Trust
Company; Substitution
of Underlying
Investment
17. (a) Withdrawal......................... Your Rights and
................................... Privileges Under the
Plan
(b) Redemption......................... Your Rights and
................................... Privileges Under the
Plan
(c) Cancellation....................... Your Rights and
................................... Privileges Under the
Plan; Termination of
Your Plan
18. (a) Receipt, custody and dis-
position of income................... Your Rights and
................................... Privileges Under the
Plan
(b) Reinvestment of
distributions.................... Your Rights and
................................... Privileges Under the
Plan
(c) Reserves or special
funds.............................. N/A
(d) Schedule of distributions........................ N/A
<PAGE>
19. Records, accounts and reports.................. The Custodian --
...................................... Templeton Funds Trust
Company
20. Certain miscellaneous provisions
of trust agreement:
(a) Amendment............................... The Custodian --
.........................................Templeton Funds Trust
Company
(b) Termination.............................The Custodian --
........................................Templeton Funds Trust
Company
(c) and (d) Trustee, removal
and successor........................ The Custodian --
....................................... Templeton Funds Trust
Company
(e) and (f) Depositors,
removal and successor.......................... N/A
21. Loans to security holders................................. N/A
22. Limitations on liability.................................. N/A
23. Bonding arrangements............................ The Sponsor --
....................................... Franklin Templeton
Distributors, Inc.
24. Other material provisions of
trust agreement......................................... N/A
III. Organizations, Personnel and
Affiliated Persons of Depositor
25. Organization of depositor....................... The Sponsor --
....................................... Franklin Templeton
Distributors, Inc.
26. Fees received by depositor...................... Financial Statements:
....................................... Templeton Capital
Accumulation Plans
<PAGE>
27. Business of depositor........................... The Sponsor --
....................................... Franklin Templeton
Distributors, Inc.
28. Certain information as
to officials and affiliated
persons of depositor.......................... The Sponsor --
........................................Franklin Templeton
Distributors, Inc.
29. Voting securities of depositor................ The Sponsor --
..................................... Franklin Templeton
Distributors, Inc.
30. Persons controlling depositor................. The Sponsor --
..................................... Franklin Templeton
Distributors, Inc.
31. Payments by depositor for
certain services rendered
to trust.............................................N/A
32. Payments by depositor for
certain other services
rendered to trust...................................... N/A
33. Remuneration of employees
of depositor for certain
services rendered to trust.............................. N/A
34. Remuneration of other persons
for certain services rendered
to trust.............................................N/A
IV. Distribution and Redemption of Securities
35. Distribution of trust's
securities in states............................... General
36. Suspension of sales of trust's
securities...........................................N/A
37. Revocation of authority to
distribute...........................................N/A
<PAGE>
38. (a) Method of distribution............... The Sponsor --
..................................... Franklin Templeton
Distributors, Inc.;
General
(b) Underwriting agreements.............. General; Introductory
..................................... Statement; How To
Start Your Templeton
Capital Accumulation
Plan; You May
Terminate Your Plan
and Withdraw Your
Shares
(c) Selling agreements............................ General
39. (a) Organization of principal
underwriters....................... The Sponsor --
..................................... Franklin Templeton
Distributors, Inc.
(b) N.A.S.D. membership of
principal underwriters............ The Sponsor --
.................................... Franklin Templeton
Distributors, Inc.
40. Certain fees received by
principal underwriters................... Financial Statements:
.................................... Templeton Capital
Accumulation Plans
41. (a) Business of each principal
underwriter....................... The Sponsor --
...................................... Franklin Templeton
Distributors, Inc.
(b) Branch offices of each
principal underwriter.......................... N/A
(c) Salesmen of each principal
underwriter.................................... N/A
42. Officials of Principal
Underwriter................................ The Sponsor --
.................................... Franklin Templeton
Distributors, Inc.
<PAGE>
43. Certain brokerage commissions
received by principal
underwriters............................................ N/A
44. (a) Method of Valuation................. Templeton Capital
.................................... Accumulator Fund,
Inc. Prospectus (How
to Buy Shares of the
Fund)
(b) Schedule as to offering
price.......................................... N/A
(c) Variation in offering
price to certain
persons........................................ N/A
45. Suspension of redemption
rights ..............................................N/A
46. (a) Redemption Valuation................... Your Rights and
....................................... Privileges Under the
Plan; Templeton
Capital Accumulator
Fund, Inc. Prospectus
(How to Buy Shares of
the Fund) and
Statement of
Additional
Information
(Purchase, Redemption
and Pricing of
Shares)
(b) Schedule as to redemption
price.......................................... N/A
47. Maintenance of position in
underlying securities....................... Your Rights and
..................................... Privileges Under the
Plan; The Custodian
..................................... -- Templeton Funds
Trust Company;
Substitution of the
Underlying Investment
<PAGE>
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of
trustee................................. The Custodian --
..................................... Templeton Funds Trust
Company
49. Fees and expenses of trustees............................. N/A
50. Trustee's lien............................................ N/A
VI. Information Concerning Insurance of
Holders of Securities
51. Insurance of holders of
trust's securities...................................... N/A
52. (a) Provisions of trust agreement
with respect to selection or
elimination of underlying
securities........................... Substitution of
the Underlying
Investment
(b) Transactions involving
elimination of underlying
securities..................................... N/A
(c) Policy regarding
substitution or
elimination of
underlying securities.................... Substitution of
the Underlying
Investment
(d) Fundamental policy not other-
wise covered................................... N/A
53. Tax status of trust....................................... Taxes
VIII. Financial and Statistical Information
54. Trust's securities during last
ten years............................................N/A
<PAGE>
55. Transcript of Hypothetical
Plan ........................................ Illustration of a
........................................ Hypothetical $93.75
Monthly Templeton
Capital Accumulation
Plan
<PAGE>
TEMPLETON
CAPITAL ACCUMULATION
PLANS
[LOGO OF MAP APPEARS HERE]
PROSPECTUS
-------------------------------------------
JANUARY 1, 1996
<PAGE>
PROSPECTUS
TEMPLETON CAPITAL ACCUMULATION PLANS
Templeton Capital Accumulation Plans (the "Plans") for the accumulation of
shares of Templeton Capital Accumulator Fund, Inc. (the "Fund") are offered by
Franklin Templeton Distributors, Inc., the Sponsor and Principal Underwriter
("FTD" or "Sponsor"). A Plan calls for fixed monthly investments for 15 years
(180 investments), with the Planholder having the option to make additional
monthly investments for up to a total of 25 years (300 investments). The ratio
of Sales and Creation Charges to total investments on 15-year Plans ranges
from 9.00% on $16,875 Plans ($93.75 per month) to .75% on $1,800,000 Plans
($10,000 per month) and the ratio of Sales and Creation Charges to net
investments on 15-year Plans ranges from 9.89% to .76%. On Plans extended to
25 years, the Sales and Creation Charges range from 8.49% (on $16,875 Plans)
to .56% (on $1,800,000 Plans) of the net amount invested.
Investments under a Plan are applied, after authorized deductions, to the
purchase of Fund shares at net asset value. These shares should be considered
a long term investment and are not suitable for investors seeking quick
profits or who might be unable to complete a Plan. The Sales and Creation
Charges for the first year of a Plan can amount to 50% of the total amount
paid during that year. Since a major portion of the entire Sales and Creation
Charge is deducted from the first year's investments, withdrawal or
termination of an investment in the early years of a Plan will probably result
in a loss. For example, on a $16,875 Plan ($93.75 per month), deductions
amount to 9.00% of the investments made if the Plan is completed. However,
even after the application of the refund privilege described on page 8, total
deductions would amount to 15% of total investments if the Plan were
terminated at any time between two months and 18 months. Moreover, if the Plan
were continued for 19 months, total deductions would amount to 33.82% of the
total invested; deductions would amount to 28.04% if the Plan were continued
for two years and then redeemed. A detailed description of all deductions
appears on page 11.
The value of a Plan is subject to fluctuations in the value of the
securities in the Fund's portfolio. A Plan calls for monthly investments at
regular intervals regardless of the price level of the Fund's shares.
Investors should therefore consider their financial ability to continue a
Plan. A Plan offers no assurance against loss in a declining market.
Terminating a Plan at a time when the value of the shares then held is less
than their cost will result in a loss.
SHARES OF THE FUND ARE OFFERED TO THE GENERAL PUBLIC ONLY THROUGH TEMPLETON
CAPITAL ACCUMULATION PLANS. The Fund seeks long-term capital growth through a
flexible policy of investing in stocks and debt obligations of companies and
governments of any nation, developed or underdeveloped. As an operating
policy, which may be changed without shareholder approval, the Fund may not
invest more than 5% of its assets in lower rated debt securities. As a
fundamental policy, which may not be changed without shareholder approval, the
Fund may not invest more than 10% of its assets in illiquid securities,
including defaulted debt securities.
Shares of certain other mutual funds managed or advised by the Fund's
investment manager, Templeton Investment Counsel, Inc. ("TICI" or "Investment
Manager") and its affiliates, which have investment objectives similar in many
respects to those of the Fund, may be acquired with a sales charge for the
minimum initial investment of $100, and subsequent investments of a minimum of
$25 (which may be made automatically by means of pre-authorized bank debits),
and, compared to the earlier years of a Plan, would involve a lesser sales
charge, thereby decreasing the possibility of loss in the event of early
termination.
AN INVESTOR HAS THE RIGHT TO A 45 DAY REFUND OF HIS OR HER INVESTMENT, AS
WELL AS CERTAIN OTHER LIMITED REFUND RIGHTS FOR CERTAIN PERIODS OF TIME AND
UNDER THE CONDITIONS DESCRIBED IN MORE DETAIL UNDER THE HEADING "CANCELLATION
AND REFUND RIGHTS" ON PAGE 8.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT
PROSPECTUS OF TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
INVESTORS SHOULD READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE.
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Introductory Statement..................................................... 3
Allocation of Investments and Deductions................................... 3
15-Year Plans -- Allocation of Investments and Deductions.................. 4
Total 25-Year Allocations and Deductions When Extended Investment Option is
Used...................................................................... 4
A Typical $100 Monthly Investment Plan..................................... 5
Investment Objective -- What You Seek From Your Plan....................... 5
How a Templeton Capital Accumulation Plan Can Help You Meet Your Objective. 5
How to Start Your Templeton Capital Accumulation Plan...................... 6
Automatic Investment Plan.............................................. 6
Your Rights and Privileges Under the Plan.................................. 6
Dividends and Distributions............................................ 6
How You Can Withdraw or Redeem Some of Your Shares Without Terminating
Your Plan............................................................. 6
You May Transfer or Assign Your Rights in the Plan..................... 8
Cancellation and Refund Rights......................................... 8
You May Terminate Your Plan and Withdraw Your Shares................... 8
Replacement Privilege on Termination................................... 9
You Retain Full Voting Rights in Your Fund Shares...................... 9
You May Make Investments Ahead of Schedule to Complete Your Plan Early. 9
You May Withdraw a Fixed Amount Monthly or Quarterly -- When You Have
Completed Your Plan................................................... 9
You May Continue Investments After Completing a 15-Year Plan --
Extended Investment Option........................................... 10
Individual Retirement Accounts (IRAs)...................................... 10
Sales and Creation Charges................................................. 11
The Custodian -- Templeton Funds Trust Company............................. 12
The Sponsor -- Franklin Templeton Distributors, Inc. ...................... 13
Taxes...................................................................... 14
Substitution of the Underlying Investment.................................. 14
Termination of Your Plan................................................... 14
General.................................................................... 15
Illustration of a Hypothetical $93.75 Monthly Templeton Capital
Accumulation Plan......................................................... 15
Financial Statements:
Templeton Capital Accumulation Plans................................... 17
Franklin Templeton Distributors, Inc. ................................. 22
Templeton Capital Accumulator Fund, Inc. Prospectus........................ P-1
</TABLE>
No salesman, dealer or other person is authorized by the Sponsor, the Plans,
or the Fund, to give any information or make any representation other than
those contained in this Prospectus or in the prospectus and Statement of
Additional Information of Templeton Capital Accumulator Fund, Inc., or in any
other printed or written material issued under the name of Franklin Templeton
Distributors, Inc. or Templeton Capital Accumulator Fund, Inc. No person
should rely upon any information not contained in these materials.
2
<PAGE>
INTRODUCTORY STATEMENT
You should consider the following aspects of the Plans before making an
investment:
1. A Plan represents an agreement between you, the Sponsor, and Templeton
Funds Trust Company ("TFTC" or "Custodian") under which investments (after
deduction of "Sales and Creation Charges") are used to purchase shares of the
Fund. It is not required that the Sponsor notify you or seek your approval
prior to replacing the Custodian. However, the terms of the Custodian
Agreement cannot be amended to adversely affect your rights and privileges
without obtaining your written consent.
2. Investments made through the Plans will not constitute direct ownership
of Fund shares, but rather an interest in a trust which will have direct
ownership of Fund shares. You will have only a beneficial interest in the
underlying Fund shares. This beneficial interest is expressed in the Plan as
"Plan shares"; one Plan share always equals one share of the underlying Fund.
You will, however, retain full voting rights in the underlying Fund shares.
The Custodian will vote the shares held for your account in accordance with
your instructions.
3. Unlike most other plans of this type, the primary issuer--Templeton
Capital Accumulator Fund, Inc.--does not sell its shares directly to the
public. Investments in the Fund may be made only through the arrangements
provided by the Plans.
4. The Plans are available for purchase in conjunction with certain
Individual Retirement Accounts (IRAs) and there is an annual service fee
(currently $10) for maintenance of an individual's IRA.
5. The Plans contain a Sales and Creation Charge which is sometimes called a
"front-end load." The effect of a "front-end load" is that if you terminate
your Plan between the second and eighteenth month, total deductions may amount
to as much as 15% of your total payments made up to that date. Accordingly,
the Plans are not suited for short-term investment. See the tables on page 4,
and the description thereof.
6. A Plan may be terminated by the Custodian or Sponsor if you fail to make
investments under your Plan for a period of 12 months or if Fund shares are
not available and a substitution is not made. See "Termination of Your Plan"
on page 14. Planholders must be notified and approve any substitution of the
Plan's underlying investment. See "Substitution of the Underlying Investment"
on page 14.
7. The dealer firm of record has proprietary rights to all commissions
earned during the duration of your Plan. It is also under no obligation to
transfer your Plan to another dealer firm as long as its dealer agreement with
the Plan Sponsor, Franklin Templeton Distributors, Inc., remains active. If
the dealer firm of record chooses to release your Plan to a new dealer firm,
it must first complete, sign, and signature guarantee a release form that can
be obtained from the Plan Sponsor. This form must be returned to and accepted
by the Custodian, Templeton Funds Trust Company, before any dealer change can
be effected.
ALLOCATION OF INVESTMENTS AND DEDUCTIONS
The following tables show the range of available Plans, the Monthly
Investment Units to be made, total investments to be made and the Sales and
Creation Charges that will be charged as to each Monthly Investment Unit. The
total charges as a percentage of the total amount invested and as a percentage
of the net amount invested are also shown. This information is based solely on
investments made under a Plan and does not reflect any investment experience,
dividend or income of the Fund over the 15-year period of a Plan.
3
<PAGE>
15-YEAR PLANS
ALLOCATION OF INVESTMENTS AND DEDUCTIONS
<TABLE>
<CAPTION>
SALES AND CREATION CHARGES
-------------------------------------------------------
% OF % OF
MONTHLY PER PER CHARGES CHARGES MONTHLY
INVESTMENT TOTAL INVESTMENT INVESTMENT TOTAL TO TOTAL TO NET INVESTMENT
UNIT INVESTMENT 1 THRU 12 13 THRU 180 CHARGES INVESTMENT INVESTMENT UNIT
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 93.75 $ 16,875.00 $ 46.87 $ 5.69 $ 1,518.36 9.00% 9.89% $ 93.75
100.00 18,000.00 50.00 6.07 1,619.76 9.00 9.89 100.00
125.00 22,500.00 62.50 7.58 2,023.44 8.99 9.88 125.00
150.00 27,000.00 75.00 7.50 2,160.00 8.00 8.70 150.00
166.66 29,998.80 83.33 8.15 2,369.16 7.90 8.57 166.66
200.00 36,000.00 100.00 9.46 2,789.28 7.75 8.40 200.00
250.00 45,000.00 125.00 11.42 3,418.56 7.60 8.22 250.00
300.00 54,000.00 150.00 6.96 2,969.28 5.50 5.82 300.00
350.00 63,000.00 175.00 6.92 3,262.56 5.18 5.46 350.00
400.00 72,000.00 200.00 6.62 3,512.16 4.88 5.13 400.00
500.00 90,000.00 225.00 6.96 3,869.28 4.30 4.49 500.00
750.00 135,000.00 300.00 10.31 5,332.08 3.95 4.11 750.00
1,000.00 180,000.00 350.00 13.57 6,479.76 3.60 3.73 1,000.00
1,500.00 270,000.00 375.00 19.82 7,829.76 2.90 2.99 1,500.00
2,000.00 360,000.00 440.00 20.00 8,640.00 2.40 2.46 2,000.00
3,000.00 540,000.00 450.00 28.92 10,258.56 1.90 1.94 3,000.00
5,000.00 900,000.00 500.00 20.53 9,449.04 1.05 1.06 5,000.00
10,000.00 1,800,000.00 750.00 26.78 13,499.04 .75 .76 10,000.00
</TABLE>
TOTAL 25-YEAR ALLOCATIONS AND DEDUCTIONS WHEN
EXTENDED INVESTMENT OPTION IS USED
<TABLE>
<CAPTION>
SALES AND CREATION CHARGES
-------------------------------------------------------
% OF % OF
MONTHLY PER PER CHARGES CHARGES MONTHLY
INVESTMENT TOTAL INVESTMENT INVESTMENT TOTAL TO TOTAL TO NET INVESTMENT
UNIT INVESTMENT 1 THRU 12 13 THRU 300 CHARGES INVESTMENT INVESTMENT UNIT
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 93.75 $ 28,125.00 $ 46.87 $ 5.69 $ 2,201.16 7.83% 8.49% $ 93.75
100.00 30,000.00 50.00 6.07 2,348.16 7.83 8.49 100.00
125.00 37,500.00 62.50 7.58 2,933.04 7.82 8.49 125.00
150.00 45,000.00 75.00 7.50 3,060.00 6.80 7.30 150.00
166.66 49,998.00 83.33 8.15 3,347.16 6.69 7.17 166.66
200.00 60,000.00 100.00 9.46 3,924.48 6.54 7.00 200.00
250.00 75,000.00 125.00 11.42 4,788.96 6.39 6.83 250.00
300.00 90,000.00 150.00 6.96 3,804.48 4.23 4.41 300.00
350.00 105,000.00 175.00 6.92 4,092.96 3.90 4.06 350.00
400.00 120,000.00 200.00 6.62 4,306.56 3.59 3.72 400.00
500.00 150,000.00 225.00 6.96 4,704.48 3.14 3.24 500.00
750.00 225,000.00 300.00 10.31 6,569.28 2.92 3.01 750.00
1,000.00 300,000.00 350.00 13.57 8,108.16 2.70 2.78 1,000.00
1,500.00 450,000.00 375.00 19.82 10,208.16 2.27 2.32 1,500.00
2,000.00 600,000.00 440.00 20.00 11,040.00 1.84 1.87 2,000.00
3,000.00 900,000.00 450.00 28.92 13,728.96 1.53 1.55 3,000.00
5,000.00 1,500,000.00 500.00 20.53 11,912.64 .79 .80 5,000.00
10,000.00 3,000,000.00 750.00 26.78 16,712.64 .56 .56 10,000.00
</TABLE>
4
<PAGE>
A TYPICAL $100 MONTHLY INVESTMENT PLAN
(Assuming that all investments are made in accordance with the terms of the
Plan)
<TABLE>
<CAPTION>
AT THE END OF AT THE END OF AT THE END OF
6 MONTHS 1 YEAR 2 YEARS
AGGREGATE AMOUNT (6 INVESTMENTS) (12 INVESTMENTS) (24 INVESTMENTS)
--------------------- ----------------- ----------------- --------------------
% OF TOTAL % OF TOTAL % OF TOTAL % OF TOTAL
INVEST- INVEST- INVEST- INVEST-
AMOUNT MENTS AMOUNT MENTS AMOUNT MENTS AMOUNT MENTS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
15 YEARS (180 INVEST-
MENTS)
Total Investments....... $18,000 100% $600 100% $1,200 100% $2,400 100%
Deduct:
Creation and Sales
Charge................ $ 1,619.76 9% $300 50% $ 600 50% $ 672.84 28%
Net Amount Invested Un-
der Plan............... $16,380.24 91% $300 50% $ 600 50% $1,727.16 72%
25 YEARS (300 INVEST-
MENTS)
Total Investments....... $30,000 100% $600 100% $1,200 100% $2,400 100%
Deduct:
Creation and Sales
Charge................ $ 2,348.16 7.8% $300 50% $ 600 50% $ 672.84 28%
Net Amount Invested Un-
der Plan............... $27,651.84 92.2% $300 50% $ 600 50% $1,727.16 72%
</TABLE>
NOTES:
(1) Dividends and distributions received on Fund shares, during the periods
shown, have not been included or reflected in any way in the foregoing
figures.
(2) The 25-year investment schedule reflects the charges applicable to a 15-
year Plan which is continued under the Extended Investment Option.
After the first 12 monthly investments have been made, the Creation and
Sales Charge deducted from any subsequent monthly investment will not exceed
6.1% of the net investment in Fund shares.
INVESTMENT OBJECTIVE--WHAT YOU SEEK FROM YOUR PLAN
As you will see in the attached prospectus, the objective of Templeton
Capital Accumulator Fund, Inc. (the "Fund") is long-term capital growth. The
Fund is an open-end, diversified investment company (usually referred to as
"mutual fund"). The Fund seeks to meet its objective through investment in
common stocks and other classes of securities which management believes will
contribute to the attainment of such investment objective. Accordingly,
selection of securities for the portfolio of the Fund is based almost entirely
of their potential capital growth possibilities. Most of the portfolio
securities will pay little, if any, income. Whatever income may be received
will be entirely incidental to the objective of capital growth. The Fund's
investments are selected and supervised by TICI. Reference is made to the
attached Templeton Capital Accumulator Fund, Inc. prospectus for a description
of the Fund's investment policies and operating expenses, and the business
experience of its management. A Statement of Additional Information about
Templeton Capital Accumulator Fund, Inc., which is incorporated by reference
in the prospectus for the Fund, is available at no charge by writing Franklin
Templeton Distributors, Inc., Dealer Main Office Services, 700 Central Avenue,
St. Petersburg, Florida 33701-3628 or by calling the Shareholder Services
Department at 1-800-632-2301.
HOW A TEMPLETON CAPITAL ACCUMULATION PLAN
CAN HELP YOU MEET YOUR OBJECTIVE
Many people who want to build an investment portfolio find it difficult to
save the money necessary to make periodic stock purchases. Templeton Capital
Accumulation Plans are designed to help such people.
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These Plans make it possible to build equity over a period of years by
investing a modest sum each month in mutual fund shares. The mutual fund
principle is an attempt to reduce the risk inherent in any investment by
diversification and professional management.
The value of Plan shares is subject to the fluctuations in the value of the
securities in the Fund's portfolio. A Plan calls for monthly investments at
regular intervals regardless of the price level of the shares. You should
therefore consider your financial ability to continue a Plan. A Plan offers no
assurance against loss in a declining market and does not eliminate the risk
inherent in the ownership of any security. Terminating your Plan at a time
when the value of Plan shares you acquired is less than their cost will result
in a loss.
Other features of a Plan are the services rendered by the Custodian, which
performs certain bookkeeping and administrative services for the Plans. Acting
as your agent, the Custodian assumes the responsibility for many details of
the Plan. A description of the Custodian's services appears on page 12.
HOW TO START YOUR TEMPLETON CAPITAL ACCUMULATION PLAN
To start your Plan, complete the attached application and have your
investment dealer mail it to the Sponsor, together with a check made out to
Templeton Funds Trust Company. After your application is accepted by the
Sponsor, you will receive a confirmation statement showing the number of whole
and fractional shares purchased for your account.
You should then send investments in one or more multiples of the monthly
amount of your Plan directly to the Custodian. Investments, after applicable
deductions, will be applied toward the purchase of the Plan shares at the net
asset value. Investments in partial monthly amounts cannot be accepted, except
as identified in the discussion on Individual Retirement Accounts (page 10).
You may terminate your participation in the Plan, either completely or
partially, as provided on pages 6-8 ("How You Can Withdraw or Redeem Some of
Your Shares Without Terminating Your Plan") and page 8 ("You May Terminate
Your Plan and Withdraw Your Shares"). Any correspondence regarding the Plans
should be addressed to Franklin Templeton Distributors, Inc., Dealer Main
Office Services, 700 Central Avenue, St. Petersburg, Florida 33701-3628.
AUTOMATIC INVESTMENT PLAN
You may accumulate shares regularly each month by means of automatic debits
to your checking account. Forms for this purpose are in the attached
application. Such a plan is voluntary and may be discontinued by written
notice to the Sponsor, which must be received at least 10 days prior to the
collection date, or by the Sponsor upon written notice to you at least 30 days
prior to the collection date.
YOUR RIGHTS AND PRIVILEGES UNDER THE PLAN
DIVIDENDS AND DISTRIBUTIONS
All dividends and distributions will be automatically reinvested on the
payment date in additional Plan shares at net asset value on the ex-dividend
date of the dividend or distribution, unless you elect to receive cash. Net
asset value will be calculated according to the method described in the Fund's
prospectus under the heading "How to Buy Shares of the Fund".
Dividends or distributions received shortly after an investment is made may
be considered a partial return of such an investment. Dividends and capital
gains, if any, will normally be paid by the Fund at least annually and
generally will be taxable to Planholders for income tax purposes. See "Taxes"
on page 14.
The net asset value per share will decrease by the amount of the dividend
payment and capital gains distributions on the ex-dividend date of the
distributions.
HOW YOU CAN WITHDRAW OR REDEEM SOME OF YOUR SHARES WITHOUT TERMINATING YOUR
PLAN
While a redemption of all of your Plan shares will normally terminate your
Plan, you may redeem less than all of your shares without terminating the
Plan.
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If you have owned your Plan for at least 45 days, you may withdraw up to 90%
of your shares from your account or you may direct the Custodian, as your
agent, to redeem up to 90% of your shares and pay the proceeds to you. Any
partial redemption must involve at least $100 and cannot exceed 90% of the
value of the shares. Redemption requests that exceed 90% of the net asset
value of the shares and which leave less than $100 in the Plan will
automatically result in a full redemption of the entire balance in the Plan.
After a partial cash withdrawal, you may reinvest an amount equal to or less
than the amount withdrawn. Upon timely exercise of this reinvestment
privilege, your investment will be restored at the then current net asset
value, at no sales charge, as is prescribed by the National Association of
Securities Dealers ("NASD"). Any repayment of a partial redemption cannot be
made before 90 days from the date of redemption except for IRAs, which can be
restored after 45 days. (This allows the return of IRA assets before the 60-
day Internal Revenue Service ("IRS") deadline.) There is no limit to the
number of redemptions that can be made, each of which must be for a minimum of
$100. Full reinstatement of a partial redemption need not be made in one
transaction if the amount redeemed exceeds $500. However, any reinvestment
must be made in increments equal to the amount redeemed or $500, whichever is
less.
Redemption or withdrawal of Plan shares held in an IRA must conform to the
requirements of the IRA and the Plan's withdrawal and redemption requirements.
Distributions from such IRAs are subject to additional requirements under the
Internal Revenue Code of 1986, as amended (the "Code"), and certain documents
(available from the Custodian) must be completed before the distribution may
be made. Distributions from IRAs are subject to withholding requirements under
the Code, and the IRS Form W-4P (available from the Custodian) may be required
to be submitted to the Custodian with the distribution request, or the
distribution will be delayed. The Custodian and the Sponsor assume no
responsibility to determine whether a distribution satisfies the conditions of
applicable tax laws and will not be responsible for any penalties assessed.
All requests for withdrawal must be made in writing and signed by all
registered Planholders. Proceeds of redemptions will be mailed to the address
of record unless instructions to the contrary are received with Planholders'
signatures guaranteed. In the case of a cash withdrawal, the Custodian or the
Sponsor may require additional documentation. Reinvested redemptions will be
applied to the purchase of Plan shares at the next determined net asset value.
No partial withdrawal or redemption shall affect the total number of monthly
investments to be made or the unpaid balance of monthly investments. No charge
will be made for each partial withdrawal, redemption or restoration, but you
will be liable for any transfer taxes that may be required. Replacements of
partial withdrawals must be clearly identified as such in order to distinguish
them from regular monthly investments. A gain or loss for tax purposes may be
realized by the Planholder upon any cash withdrawal. Depending on your
circumstances, the deduction for a loss may be limited.
If the cash withdrawal is more than $50,000, is made payable to an
individual other than the Planholder of record, or is to be sent to an address
other than the address of record, a letter of instruction will be required,
signed by all Planholders with signatures guaranteed by an "eligible
guarantor," including (1) national or state banks, savings associations,
savings and loan associations, trust companies, savings banks, industrial loan
companies and credit unions; (2) national securities exchanges, registered
securities associations and clearing agencies; (3) securities broker-dealers
which are members of a national securities exchange or a clearing agency or
which have minimum net capital of $100,000; or (4) institutions that
participate in the Securities Transfer Agent Medallion Program ("STAMP") or
other recognized signature medallion program. A notarized signature will not
be sufficient for the request to be in proper order. A signature guarantee is
not required for cash withdrawals of $50,000 or less, requested by and payable
to all Planholders of record, to be sent to the address of record for that
account. However, the Sponsor reserves the right to require signature
guarantees on all cash withdrawals. A signature guarantee is required in
connection with any request for transfer of Plan shares. Also, a signature
guarantee is required if the Sponsor or the Custodian believes that a
signature guarantee would protect against potential claims based on the
withdrawal instructions, including, for example, when (a) the current address
of one or more joint owners of an account cannot be confirmed, (b) multiple
owners have a dispute or give inconsistent instructions to the Custodian, (c)
the Custodian has been notified of an adverse claim, (d) the instructions
received by the Custodian are given by an agent, not the actual registered
owner, (e) the Custodian determines that joint owners who are married to each
other are separated or may be the subject of divorce proceedings, or (f) the
authority of a representative of a corporation, partnership, association, or
other entity has not been established to the satisfaction of the Custodian.
All documents must be in proper order before any withdrawals or redemptions
can be executed. The redemption price will be the net asset value next
determined after such documents have been received in good order. Your request
should be sent to Templeton Funds Trust Company, P.O. Box 33030, St.
Petersburg, Florida 33733-8030.
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Ordinarily you will receive cash as a result of redeeming your shares under
this or any of the options described below within seven days after your
request is received by the Custodian. However, the Custodian will not mail
redemption proceeds until checks received for the shares purchased have
cleared. The payment period may be extended if the Custodian's right to redeem
shares of the Fund has been suspended or restricted. This will only happen if
the New York Stock Exchange is closed, other than for customary weekends or
holidays, if trading is restricted on the Exchange, or if any emergency is
deemed to exist by the Securities and Exchange Commission.
YOU MAY TRANSFER OR ASSIGN YOUR RIGHTS IN THE PLAN
You may transfer your rights to another person; for example, a relative,
charitable institution, or trust. You can do this in several ways:
(1) You can transfer your right, title and interest to another person whose
only right shall be the privilege of complete and prompt withdrawal from the
Plan.
(2) You can transfer your entire right, title and interest to another
person, trustee or custodian acceptable to the Sponsor, who has made
application to the Sponsor for a similar Plan.
The Custodian will provide you with the appropriate assignment form.
Transfers may be subject to income and other taxes.
CANCELLATION AND REFUND RIGHTS
You have certain rights of cancellation. Within 60 days after you purchase a
Plan (which, for this purpose, is the date appearing on the confirmation
statement you will receive following your initial payment), the Custodian will
send a notice to you regarding your cancellation rights. If you elect to
cancel within 45 days of the mailing date of that notice, you will receive a
cash refund equal to the sum of (1) the total net asset value of the Plan
shares credited to your account on the date that your cancellation request is
received by the Custodian and (2) an amount equal to the difference between
the gross amount invested and the net amount invested in Plan shares.
In addition, you may surrender your Plan at any time within an eighteen-
month period beginning on the purchase date of your Plan and receive from the
Custodian a cash payment equal to the sum of (1) the total net asset value of
the Plan shares credited to your account on the date of the surrender plus (2)
a refund of all sales charges paid to the date of surrender minus 15% of the
gross amount you have invested as of that date. Planholders who execute their
Plans in certain states may have up to twenty-eight months to exercise this
refund right. In order to receive the above payment, your request should be
sent in writing to Templeton Funds Trust Company, P.O. Box 33030, St.
Petersburg, Florida 33733-8030. In addition, a cancellation request involving
more than $50,000 will require a signature guarantee for all registered owners
as described above.
If you surrender your Plan under this cancellation and refund privilege, you
may not reinstate your Plan at net asset value. In addition, under the so-
called "wash sale rule," Federal tax laws presently do not permit the
recognition of a loss when an individual sells and re-acquires the same
securities within a 30-day time period before or after the loss is incurred.
Gains, however, are recognized for tax purposes at the time of redemption.
The Custodian will send you a written notice of your eighteen-month rights
of cancellation if one or the other of the following occur:
(1) If, after fifteen months from the date of establishment, you have missed
three investments or more, or
(2) If you miss one investment or more after the expiration of the fifteen-
month period but prior to the expiration of the eighteen-month period. (If the
Custodian has already sent a notice at 15 months, a second notice will not be
required even if additional investments are missed.)
These notices will inform you of your rights of cancellation as set forth in
the preceding paragraph, of the value of your account at the time the notice
is sent, and of the amount to which you are entitled pursuant to the
provisions of the preceding paragraph.
YOU MAY TERMINATE YOUR PLAN AND WITHDRAW YOUR SHARES
A Plan may be terminated at any time by a written request to the Custodian.
In terminating your Plan, you may request the Custodian to withdraw your
shares, redeem them and send you the proceeds. If the amount of the redemption
is more than $50,000, is made payable to an individual other than the
Planholder of record, or is to be sent to an address other than the address of
record, your request, signed by all registered owners, must be signature
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<PAGE>
guaranteed as described above. All documents must be in good order before a
redemption can be executed. The redemption price will be the net asset value
next determined after such documents have been received.
If you choose to receive Fund shares instead of cash, the Plan shares may be
exchanged for shares of the Fund and then further exchanged for shares of
certain other funds for which TICI or an affiliate is the investment manager.
The Exchange Privilege is more fully described in the Fund prospectus under
the caption "Exchange Privilege." You should note that if you elect to
exchange your shares of the Fund for shares of other funds in the Franklin
Group of Funds (R) or the Templeton Funds, the shares of such other funds
cannot thereafter be exchanged back into shares of the Fund.
The right of redemption of shares of the Templeton Capital Accumulation Plan
and the underlying Fund may be suspended at times when trading on the New York
Stock Exchange is restricted or such Exchange is closed for other than
weekends and holidays or any emergency is deemed to exist by the Securities
and Exchange Commission. As long as the right of redemption of shares of the
Fund is suspended, no shares may be redeemed, and therefore no cash withdrawal
may be made during that period.
REPLACEMENT PRIVILEGE ON TERMINATION
If you have terminated your Plan, you may exercise a replacement privilege
which allows you to reinvest an amount equal to but not less than 10% of the
net asset value of the redeemed shares without any sales charge in a re-opened
identically registered Templeton Capital Accumulation Plan. Reinvestment is
made at the net asset value per share next determined following the timely
receipt by the Custodian of a replacement order and payment. Replacement must
be made within 60 days following the date of termination of the Plan; however,
while you may be required to recognize a gain on a termination, you may not
recognize a loss for Federal tax purposes to the extent you reinvest the
proceeds in a Templeton Capital Accumulation Plan within 30 days or less.
The replacement privilege is available to you only if you have not
previously exercised the privilege as to your Plan. The replacement privilege
does not abrogate the partial withdrawal without termination privilege
described on pages 6-8. If you have redeemed your Plan shares under the
procedures described under "Cancellation and Refund Rights" on page 8, you may
not reinstate at net asset value the proceeds from such a cancellation or
refund until all refunded Sales and Creation Charges have been deducted from
the amount offered for the reinstatement.
YOU RETAIN FULL VOTING RIGHTS IN YOUR FUND SHARES
You will receive a notice at least 10 days before any matter is submitted to
a vote of the stockholders of the Fund. The Custodian will vote the shares
held for your account in accordance with your instructions. In the absence of
such instructions, the Custodian will vote your shares in the same proportion
as it votes the shares for which it has received instructions from other
Planholders.
If you wish to attend any meetings at which shares may be voted, you may
request the Custodian to furnish you with a proxy or otherwise arrange for you
to exercise your voting rights.
YOU MAY MAKE INVESTMENTS AHEAD OF SCHEDULE TO COMPLETE YOUR PLAN EARLY
You may complete your Templeton Capital Accumulation Plan ahead of schedule
by making investments in advance of their due date, but not more than 24
monthly investments may be made in one calendar year. In addition to such
advance investments, you may also prepay up to 24 monthly units at any time
during the life of your Plan. Monthly investment units may be accrued and paid
in a lump sum. There is no reduction in the Sales and Creation Charge for
advance investments. These prepayment rules shall be waived only to make a
Plan that is in arrears current (as defined in the section titled "You May
Qualify for Reduced Sales Charges" on page 11) or for the transfer or rollover
into an IRA.
In the event of death of the Planholder, these advance investment
restrictions will be waived to allow the Plan to be completed at one time by
survivors of the Planholder or representatives of the estate.
YOU MAY WITHDRAW A FIXED AMOUNT MONTHLY OR QUARTERLY--WHEN YOU HAVE COMPLETED
YOUR PLAN
When you complete all regularly scheduled investments, you may elect a
Systematic Cash Withdrawal Program. Under this Program, the Custodian, as your
agent, will redeem sufficient shares from your account to provide regular cash
withdrawal payments of $50 or more each month or quarter, as you elect.
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<PAGE>
A Systematic Cash Withdrawal Program may also be elected from an incomplete
Plan if the Plan is part of an IRA and you have reached age 70 1/2. Under this
program, the Custodian, as your agent, will redeem as of the twenty-fifth day
of each month (or the first business date after that date) sufficient shares
from your account to provide a regular cash withdrawal payment of $50 or more
each month or quarter, as you elect.
Except for the $50 minimum, there is no limitation on the size of your
withdrawals. The $50 amount is, however, only a minimum established for
administrative convenience and should not be considered as a recommendation.
You have the right to change the dollar amount of your withdrawal or
discontinue your Systematic Cash Withdrawal Program at any time.
You should realize that withdrawals in excess of dividends and distributions
will be made from principal and may eventually exhaust your account. For this
reason, these withdrawals cannot be considered as income on your investment.
Also, a gain or loss for tax purposes may be realized by you on each
withdrawal payment.
If you purchase two or more Plans, it is ordinarily disadvantageous to
participate in the Systematic Cash Withdrawal Program on a completed Plan
while still making regular payments on the uncompleted Plan. If you are
participating in a Systematic Cash Withdrawal Program, you should not start
another Templeton Capital Accumulation Plan. There are no charges made for any
regular withdrawals under a Systematic Cash Withdrawal Program.
The Plan will remain in full force and effect with all rights and privileges
until all shares have been withdrawn from your account. While the Systematic
Cash Withdrawal Program is in force, you may not elect to receive dividends
and distributions in cash.
While FTD does not contemplate doing so, it reserves the right to
discontinue offering the Systematic Cash Withdrawal Program at any time after
90 days' notification to all Planholders who have not elected to participate
in such program. Those who are already participating will be allowed to
continue.
YOU MAY CONTINUE INVESTMENTS AFTER COMPLETING A 15-YEAR PLAN--EXTENDED
INVESTMENT OPTION
Under the Extended Investment Option, you may continue making monthly
investments after completing all scheduled investments in your 15-year Plan.
Investments under this option are subject to the same sales charges as applied
to your last scheduled investment.
If under this option you fail to make regularly scheduled investments for
six consecutive months, after being credited for any advance made under the
option, you forfeit your right to make such additional investments. All
Extended Investment Options will terminate on the earlier of 25 years after
the date of establishment of the original Plan or the date the 300th monthly
investment is made under your Plan.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
Under current tax laws you may be eligible to establish an IRA. An IRA
Agreement is available through Franklin Templeton Trust Company (FTTC), an
affiliate of TFTC. The Agreement provides for investments in the Plans. It
also provides that FTTC shall furnish custodial services to the participant
for service fees chargeable to the participant. FTTC presently deducts an
annual service fee of $10.00 for maintenance of the account, unless it is paid
separately. FTTC is qualified under IRS regulations to act as an IRA
custodian.
An individual may initiate an account by executing the IRA Application and
by making the initial Plan investment. Under current law, a participant's
maximum annual contribution is limited to the lesser of 100% of compensation
or $2,000. If a second account is established with a non-working spouse the
total contribution for both accounts would be a maximum of $2,250.
Contributions to an IRA by an individual who participates, or whose spouse
participates, in a tax-qualified or government-approved retirement plan may or
may not be deductible depending on their income. Contributions in excess of
these limits, premature distributions, and/or insufficient withdrawals after
age 70 1/2 may result in substantial adverse tax consequences. "Rollover
contributions," as defined in IRS regulations, are also allowed.
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<PAGE>
In addition to the regular monthly investment schedules, you may once each
year invest an odd amount not equal to the monthly plan amount in order to
complete exact contributions totals authorized by the IRS for the IRA being
used. Such odd amounts should be specifically identified to the Custodian,
when forwarded, in order to prevent rejection. Odd amounts, not in exact
multiples of the monthly investment unit, will be accepted for all rollovers
and transfers into IRAs.
All contributions are invested on the day of receipt by the Custodian. If
revocation of the account is requested in writing within seven days after
payment of an initial contribution, the individual will receive the greater of
the net asset value of his account or the amount contributed (including the
Sales and Creation Charge).
SALES AND CREATION CHARGES
The Sponsor receives a Sales and Creation Charge to compensate it for
creating your Plan and for selling expenses and commissions to dealers, which
is deducted from each investment. For example, on a $100 a month Plan, $50 is
deducted from each of the 12 monthly investment units made during the first
year. After the 12th payment, the charge drops to $6.07 on each subsequent
monthly unit. Deductions decrease proportionately on certain larger plans. See
"Allocation of Investments and Deductions" on page 3.
PURCHASING TWO OR MORE PLANS
The face amounts of two or more Plans purchased at one time by "any person"
may be combined to take advantage of the lower Sales and Creation Charges
available on large purchases.
The term "any person" includes an individual, his or her spouse, their
children under the age of 21 and their grandchildren under age 21 who are
beneficiaries of Uniform Gifts to Minors Act or Uniform Transfers to Minors
Act accounts in which the Planholder serves as custodian, or a trustee or
other fiduciary of a single trust estate or single fiduciary account
(including a pension, profit-sharing or other employee benefit trust created
pursuant to a Plan qualified under Section 401 of the Code). To qualify for
these savings, all of the applications for the Plans involved must be
submitted simultaneously with a covering letter requesting that the face
amount of such Plans be combined for the purpose of determining the applicable
Sales and Creation Charge as shown on page 4.
In the event investments are discontinued on one or more of the Plans which
have been combined under the foregoing provisions, the remaining Sales and
Creation Charge for the Plans that are continued will be changed to reflect
the charges applicable to such Plans.
YOU MAY QUALIFY FOR REDUCED SALES CHARGES
When purchasing any new Plan(s) or increasing the face amount of any
existing Plan(s), "any person" as defined above may qualify for a reduced
sales charge on the new purchase by combining the face amount of any existing
Plan(s) on which investments are current with the face amount of the new
purchase. A new purchase includes the face amount of new Plans and the face
amount of Plans on which an increase in Plan size is requested. For rights of
accumulation, a Plan is considered to be current if: (1) it has been completed
and not redeemed; (2) it has not been completed but has at least as many
investments recorded as there are months since the establishment date or since
a plan size increase date; or (3) it is a tax qualified plan or an IRA.
Further spousal IRA Plans at $93.75 per month and individual IRA Plans at
$166.66 per month may become eligible for lower sales charges if such Plans
are included as part of the basis for reduced sales charges on new Plans or
Plan size increases on existing Plans. In addition, the Sponsor must be
notified by the dealer or the purchaser at the time of the placing of the
order that the purchaser qualifies for the reduced Sales and Creation Charge.
CHANGING THE FACE AMOUNT OF YOUR PLAN
The face amount of your Plan may be changed under the following
circumstances:
(1) The face amount of a Plan may be increased at any time, provided the new
Plan size is a denomination offered.
(2) The face amount of a new Plan may be decreased by 50% within six months
of the commencement of your original Plan or within six months following a
face change increase on an existing Plan. If a decrease is to occur on an
existing Plan, the decrease cannot retreat lower than the original Plan from
which the increase occurred.
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Both increases and decreases can be made by a written notice to the Sponsor,
accompanied by a new completed Plan application. The Sales and Creation
Charges already paid on the existing Plan will be recomputed to reflect a new
Plan denomination.
The Sales and Creation Charges already paid on the existing Plan will be
credited to the Sales and Creation Charge applicable to the new denomination.
Excess Sales and Creation Charges will be invested at net asset value on the
day the change occurs while amounts still due will be deducted as an expense
to the new Plan account.
THE CUSTODIAN--TEMPLETON FUNDS TRUST COMPANY
THE PLAN
The organization, management and investment policies of Templeton Capital
Accumulator Fund, Inc. are fully described in the attached Fund prospectus and
a Statement of Additional Information which is available on request from the
Sponsor. If practicable, shares of the Plan are credited to accounts at net
asset value after applicable deductions are made on the date the Custodian
receives Plan investments.
Dividends and distributions received on Fund shares will be reinvested by
the Custodian in additional Plan shares at the then current net asset value,
unless you elect to receive cash.
THE PLAN CUSTODIAN--THE THIRD PARTY WORKING TO RELIEVE YOU OF THE DAY-TO-DAY
DETAILS OF INVESTING
Templeton Funds Trust Company, organized as a trust company under the laws
of the State of Florida, is the Custodian for the Plans under a Custodian
Agreement with the Sponsor dated June 1, 1993 and maintains custody of the
assets of the Plans. The Plan Custodian Agreement is governed by Florida law,
except in the event, and to the extent, that such law is determined to
conflict with the Investment Company Act of 1940.
Investments under your Plan should be payable to and sent to the Custodian.
After making authorized deductions, the Custodian applies the remaining
balance to the purchase of Plan shares. The Custodian holds these shares in
its custody, receiving dividends and distributions which are automatically
reinvested in additional Plan shares at no charge, unless you elect to receive
cash.
The Custodian has assumed only those obligations specifically imposed on it
under its Custodian Agreement with the Sponsor. These obligations do not
include the duties of investment ordinarily imposed upon a trustee. The
Custodian has no responsibility for the choice of the underlying investment,
for the investment policies and practices of Templeton Capital Accumulator
Fund, Inc., or for the acts or omissions of the Sponsor or the Investment
Manager.
The Custodian Agreement cannot be amended to adversely affect the rights and
privileges of the Planholders without their written consent. Neither may the
Custodian resign unless a successor has been designated and has accepted the
Custodianship. Such successor must be a bank or trust company having capital,
surplus and undivided profits totalling at least $2,000,000. The Custodian may
be changed without notice to, or approval of, Planholders. The Custodian may
terminate its obligation to accept new Plans for custodianship if the Sponsor
fails to perform certain activities it is required to perform under the
Custodian Agreement or if the Custodian terminates the Agreement upon 90 days'
notice to the Sponsor. The Custodian Agreement provides that the Sponsor shall
indemnify and hold the Custodian harmless from all liability which may arise
from the failure of the Sponsor to comply with any law, rule, regulation, or
order of the United States, any state, or other jurisdiction relating to the
sale, registration, or qualification of securities.
THE SPONSOR--FRANKLIN TEMPLETON DISTRIBUTORS, INC.
The Sponsor, a New York corporation organized on November 19, 1947, is a
wholly owned subsidiary of Franklin Resources, Inc. It is a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the NASD.
The Sponsor is the principal underwriter of the investment companies in the
Franklin Group of Funds (R) and the Templeton Family of Funds. The following
sets forth the directors and executive officers of the Sponsor:
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Charles B. Johnson, Chairman of the Board, is Director, President and Chief
Executive Officer of Franklin Resources, Inc. ("Franklin Resources") and
Chairman of the Board of Franklin Advisers, Inc. ("Franklin Advisers").
Gregory E. Johnson, President, is Vice President of Franklin Advisers.
Rupert H. Johnson, Jr., Director and Executive Vice President, is Director
and Executive Vice President of Franklin Resources, Director and President of
Franklin Advisers, and Chairman of the Board of Franklin Management, Inc.
("Franklin Management").
Harmon E. Burns, Director and Executive Vice President, is Director,
Executive Vice President and Secretary of Franklin Resources and Executive
Vice President of Franklin Advisers.
Kenneth V. Domingues, Senior Vice President, is Senior Vice President of
Franklin Resources and Franklin Advisers.
Kenneth A. Lewis, Treasurer.
William J. Lippman, Senior Vice President, is Senior Vice President of
Franklin Resources, Franklin Advisers, and Franklin Management.
Loretta Fry, Vice President, is Vice President of Franklin Resources and
Franklin Advisers.
Deborah R. Gatzek, Senior Vice President and Assistant Secretary, is Senior
Vice President and Assistant Secretary of Franklin Resources and Vice
President and Assistant Secretary of Franklin Advisers.
Charles E. Johnson, Senior Vice President, is Senior Vice President of
Franklin Resources and Vice President of Franklin Advisers.
Leslie M. Kratter, Secretary, is Vice President and Assistant Secretary of
Franklin Resources and Secretary of Franklin Advisers and Franklin Management.
Richard C. Stoker, Senior Vice President, is Vice President of Franklin
Management.
Philip J. Kearns, Vice President, is Vice President of Franklin Agency, Inc.
Jack Lemein, Vice President, is Senior Vice President of Franklin Advisers
and Vice President of Franklin Management.
Thomas M. Mistele, Vice President, is Senior Vice President of Templeton
Global Investors, Inc. and Secretary of the Templeton Funds.
Harry G. Mumford, Jr., Vice President, is Executive Vice President of
Franklin Institutional Services Corporation.
Vivian J. Palmieri, Vice President, is Vice President of Franklin Advisers.
Other Senior Vice Presidents of the Sponsor include Edward V. McVey.
Other Vice Presidents of the Sponsor include, James K. Blinn, Richard O.
Conboy, Jimmy A. Escobedo, Robert N. Geppner, Mike Hackett, Peter Jones, Ken
Leder, John R. McGee, Kent P. Strazza.
All officers and employees of the Sponsor are covered by a blanket bond in
the amount of $130,000,000.
13
<PAGE>
TAXES
For Federal income tax purposes, Planholders are treated as directly owning
the Fund's shares. Designated capital gain distributions, which are
automatically reinvested in additional shares, are treated as long-term
capital gains. The tax cost of the shares acquired is the amount paid for
those shares, including the Sales and Creation Charge.
As more fully described under "Federal Tax Information" in the prospectus of
the Fund, dividends and distributions are taxable to you individually. Gains
realized on cash withdrawals also generally will be subject to tax; the
ability to deduct losses from such withdrawals may be limited. An appropriate
notice regarding taxes will be sent to you each year.
Any taxes payable with respect to any of the profits realized on sales or
transfers by the Custodian or the Sponsor of Plan shares or other property
credited to your account in accordance with the provisions of your Plan and
any taxes levied or assessed with respect to Plan shares or the income
therefrom shall be borne by you individually and not by the Custodian or the
Sponsor.
SUBSTITUTION OF THE UNDERLYING INVESTMENT
The Sponsor may substitute the shares of one other investment medium as the
underlying investment if it deems such action to be in the best interests of
Planholders. Such substituted shares shall be generally comparable in
character and quality to the present Fund shares, and shall be registered with
the Securities and Exchange Commission under the Securities Act of 1933.
Before any substitution can be effected, the Sponsor must:
(1) obtain an order from the Securities and Exchange Commission approving
such substitution under the provisions of Section 26(b) of the
Investment Company Act of 1940, as amended;
(2) give written notice of the proposed substitution to the Custodian;
(3) give written notice of the proposed substitution to each Planholder,
giving a reasonable description of the new Fund shares, with the advice
that, unless the Plan is surrendered within 30 days of the date of
mailing such notice, the Planholder will be considered to have
consented to the substitution and to have agreed to bear his pro rata
share of expenses and taxes in connection with it; and
(4) provide the Custodian with a signed certificate stating that such
notice has been given to Planholders.
If your Plan account is not surrendered within 30 days from the date of such
notice, the Sponsor shall purchase the new shares for your account with the
proceeds of any Plan payments and any dividends or distributions which may be
reinvested for your account. If the new shares are also to be substituted for
the shares already held, the Sponsor must arrange to have the Custodian
furnished, without payment of a sales charge or fees of any kind, with new
shares having an aggregate value equal to the value of the shares for which
they are to be exchanged. A substitution may be a taxable event for
Planholders.
If the Fund shares are not available for purchase for a period of 120 days
or longer, and the Sponsor fails to substitute other shares, the Custodian
may, but is not required to, select another underlying investment. If the
Custodian selects a substitute investment, it shall first obtain an order from
the Securities and Exchange Commission approving such substitution as
specified above and then shall notify the Planholder, and if, within 30 days
after mailing such notice, the Planholder gives his written approval of the
substitution and agrees to bear his pro rata share of actual expenses,
including tax liability sustained by the Custodian, the Custodian may
thereafter purchase such substituted shares. The Planholder's failure to give
such written approval within the 30-day period shall give the Sponsor the
authority to terminate the Plan.
If the Fund shares are not available for purchase for a period of 120 days
or longer, and neither the Sponsor nor the Custodian substitutes other shares,
the Custodian shall have authority, without further action on its part, to
terminate the Plan.
TERMINATION OF YOUR PLAN
Although your Plan may call for regular investments over a 15-year period,
neither the Sponsor nor the Custodian can elect to terminate your Plan until
300 investments have been made unless it has been in default for more than six
months or unless shares of the Plan are not obtainable and a substitution is
not made.
14
<PAGE>
The period of default will not start until you have been given full credit
for a period equal to the amount of any advance investments you have made.
Under current policies, for all Plans established subsequent to January 1,
1995, only one investment is required during each six month period to prevent
your Plan from being terminated. For Plans in existence prior to January 1,
1995, only one investment is required during each 12-month period to prevent
your Plan from being terminated.
After 300 investments, or if other events justify termination, the Sponsor
or the Custodian has the right to terminate your Plan 60 days after mailing a
written notice to you.
On termination, the Custodian (as your agent) may surrender for liquidation
all of the Plan shares credited to your account, or sufficient Plan shares to
pay all authorized deductions and leave no fractional shares. The shares
and/or cash, after paying all authorized deductions, will be held by the
Custodian for delivery to you against the surrender of your Plan.
No interest will be paid by the Custodian on any such cash balances. If the
Plan is not surrendered within 60 days after the notice of termination, the
Custodian, at its discretion, may at any time thereafter fully discharge its
obligations by mailing the shares or its check, drawn in accordance with the
terms of your account, to the address noted in the account. You will then have
no further rights under the Plan except that if the check or shares are
returned to the Custodian undelivered, the Custodian will continue to hold
these assets for the benefit of your account, subject only to escheat laws.
GENERAL
The Plan is considered to be a unit investment trust under the Investment
Company Act of 1940, and is so registered with the Securities and Exchange
Commission. Such registration does not imply supervision of management or
investment practices or policies by the Commission.
Commissions ranging from 75% to 95% of the total Sales and Creation Charges
will be paid to authorized investment brokers and mutual fund dealers who are
members of the NASD, and who have executed a dealer's agreement with the
Sponsor. The Sponsor, acting as Principal Underwriter, may from time to time
pay a bonus or other incentive to dealers which employ registered
representatives who sell a specified minimum dollar amount of the Plans and/or
of certain other mutual funds managed by the Investment Manager and its
affiliates during a specified period of time. Such bonus or other incentives
may take the form of payment for travel expenses, including lodging, incurred
in connection with trips taken by qualifying registered representatives and
members of their families to places within or without the United States. In no
event will the value of such bonus or incentive paid by the Sponsor to the
dealer exceed the difference between the Sales and Creation Charges and the
amount reallowed to dealers in respect of such amounts sold by the qualifying
registered representative of such dealer. A dealer receiving such bonus or
incentive may be deemed to be an "underwriter" under the Securities Act of
1933. These dealers and investment brokers are independent contractors.
Nothing herein or in other literature and confirmations issued by the Sponsor
or the Custodian, including the words "representative" or "commission," shall
constitute any broker-dealer or investment broker a partner, employee or agent
of the Sponsor or the Custodian. Neither the Sponsor nor the Custodian shall
be liable for any acts or obligations of any such dealer or investment broker.
Plans are offered in all states where it is lawful to do so.
ILLUSTRATION OF A HYPOTHETICAL $93.75 MONTHLY TEMPLETON CAPITAL ACCUMULATION
PLAN
WITH INCOME DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS REINVESTED IN ADDITIONAL
SHARES
The table below covers the period from March 29, 1991 to August 31, 1994
<TABLE>
<CAPTION>
AMOUNT OF PAYMENT AMOUNT INVESTED
FISCAL ------------------------ ------------------------
PERIOD DURING FISCAL SALES DURING FISCAL SHARES SHARES PURCHASED TOTAL SHARES TOTAL VALUE
ENDED PERIOD CUMULATIVE CHARGES(A) PERIOD CUMULATIVE PURCHASED THROUGH REINVESTMENT PURCHASED OF SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8/31/91(b) $ 562.50 $ 562.50 $281.22 $ 281.28 $ 281.28 27.662 -- 27,662 $ 288.24
8/31/92 1,125.00 1,687.50 315.36 809.64 1,090.92 74.322 0.618 102,602 1,123.49
8/31/93 1,125.00 2,812.50 68.28 1,056.72 2,147.64 89.979 3.123 195,704 2,802.89
8/31/94 1,125.00 3,937.50 68.28 1,056.72 3,204.36 70.372 4.523 270,599 4,386.41
8/31/95
</TABLE>
(a) Under the terms of this Plan, out of an investment of $93.75 made during
the first year of the Plan, $46.87 is deducted as a sales charge.
Thereafter, the sales charge on such amount is reduced to $5.69.
(b) Period from March 29, 1991 (commencement of operations) through August 31,
1991.
15
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors of
Franklin Templeton Distributors, Inc., Sponsor
and the Planholders of Templeton Capital
Accumulation Plans
We have audited the accompanying statement of assets and liabilities of
Templeton Capital Accumulation Plans as of August 31, 1995 and the related
statements of operations and changes in net assets for each of the three years
in the period then ended. These financial statements are the responsibility of
the management of the Plan's Sponsor. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation from the custodian of shares of Templeton
Capital Accumulator Fund, Inc. held for planholders as of August 31, 1995. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Templeton Capital
Accumulation Plans as of August 31, 1995, and the results of its operations
and the changes in its net assets for the periods indicated, in conformity
with generally accepted accounting principles.
/s/ McGladrey & Pullen, LLP
New York, New York
September 29, 1995
16
<PAGE>
TEMPLETON CAPITAL ACCUMULATION PLANS
FOR THE ACCUMULATION OF SHARES OF
TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1995
<TABLE>
<S> <C>
ASSETS:
Templeton Capital Accumulator Fund, Inc. shares, at value (average
cost, $30,012,846).............................................. $64,558,379
LIABILITIES: --
-----------
NET ASSETS:
Net assets (equivalent to $15.94 per share based on 4,049,832 Plan
shares held for outstanding Plans).............................. $64,558,379
===========
</TABLE>
STATEMENTS OF OPERATIONS
YEARS ENDED AUGUST 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends received on shares of Templeton
Capital Accumulator Fund, Inc.............. $2,015,029 $ 472,194 $ 249,234
Expenses.................................... -- -- --
---------- ---------- ----------
Net investment income..................... $2,015,029 472,194 249,234
---------- ---------- ----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on complete and partial
terminations, including Fund Shares
withdrawn at market value.................. $ 205,940 $ 343,272 $ 48,885
Unrealized appreciation during the period... 217,321 4,284,121 3,159,959
---------- ---------- ----------
Net gain on investments................... $ 423,261 $4,627,393 $3,208,844
---------- ---------- ----------
Net increase in net assets from operations.. $2,438,290 $5,099,587 $3,458,078
========== ========== ==========
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
TEMPLETON CAPITAL ACCUMULATION PLANS
FOR THE ACCUMULATION OF SHARES OF
TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED AUGUST 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
Operations:
Net investment income................. $ 2,015,029 $ 472,194 $ 249,234
Net realized gain on investments...... 205,940 343,272 48,885
Unrealized appreciation for the peri-
od................................... 217,321 4,284,121 3,159,959
----------- ----------- -----------
Net increase in net assets from op-
erations........................... 2,438,290 5,099,587 3,458,078
Distributions to planholders.......... (2,015,029) (472,194) (249,234)
Transactions in Fund shares (Note 2).. 26,322,220 15,029,076 6,424,111
----------- ----------- -----------
Net increase in net assets.......... 26,745,481 19,656,469 9,632,955
NET ASSETS:
Beginning of period................... 37,812,898 18,156,429 8,523,474
----------- ----------- -----------
End of period......................... $64,588,379 $37,812,898 $18,156,429
=========== =========== ===========
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF ACCOUNTING POLICIES
Templeton Capital Accumulation Plans (the "Plan") is a unit investment trust
registered under the Investment Company Act of 1940. The Plan invests only in
shares of Templeton Capital Accumulator Fund, Inc. (the "Fund"). The following
is a summary of the significant accounting policies followed in the
preparation of its financial statements.
a. VALUATION OF SECURITIES. The Plan's investments in the Fund are valued
at the net asset value of Fund shares held.
b. INCOME TAXES. No provision is made for Federal income taxes. The
Internal Revenue Code provides that the Plan is not treated as a
separate taxable entity; rather the Planholders are treated as directly
owning the Fund's shares accumulated in their accounts.
c. OTHER. Share transactions are recorded on the trade date. Dividend
income and capital gain distributions are recorded on the ex-dividend
date. The cost of the Plan's investment in Fund shares is computed using
the average cost method and gain or loss on redemption of Fund shares is
computed using this method.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOTE 2. TRANSACTIONS IN FUND SHARES
As of August 31, 1995, the Plan held 4,049,832 shares of the Fund.
Transactions in Fund shares for the years ended August 31, 1995, 1994 and 1993
were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------------------- ---------------------- --------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
----------- --------- ----------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Planholder payments..... $33,284,142 $19,886,896 $9,966,867
Less-sales charges...... 6,526,442 3,832,783 2,184,173
----------- --------- ----------- ----------
Balance invested in Fund
shares................. 26,757,700 1,748,783 16,054,113 1,072,509 7,782,694 666,832
Distributions reinvested
in Fund shares......... 2,015,029 133,499 472,194 33,224 249,234 23,430
Redemption and
withdrawals in Fund
shares................. (2,450,509) (165,571) (1,497,231) (94,041) (1,607,817) (147,232)
----------- --------- ----------- --------- ---------- --------
$26,322,220 1,716,711 $15,029,076 1,011,692 $6,424,111 543,030
=========== ========= =========== ========= ========== ========
</TABLE>
NOTE 3. SPONSOR AND CUSTODIAN
Franklin Templeton Distributors, Inc., as Sponsor of the Plan (and, prior to
October 30, 1992, Templeton Funds Distributor Inc., the previous Sponsor)
received net sales and creation charges, after commissions paid to authorized
brokers and dealers, of $575,554, $336,780, and $185,919 for the years ended
August 31, 1995, 1994 and 1993, respectively. Templeton Funds Trust Company
("TFTC") serves as Custodian. No other compensation is paid by the Plan to
either the Sponsor or the Custodian except that TFTC receives a $10 annual
service fee from each individual Retirement Account established by
planholders.
NOTE 4. SOURCE OF NET ASSETS
The Plan's net assets as of August 31, 1995 were composed of the following
amounts:
<TABLE>
<S> <C>
Amount paid in by planholders, net of sales and creation charges... $58,960,635
Distributions reinvested........................................... 2,809,514
Payment of redemption proceeds to planholders...................... (5,840,546)
Accumulated gain on sale of Fund shares............................ 611,403
Unrealized appreciation (depreciation) of investments.............. 8,017,373
-----------
Net assets applicable to planholders............................... $64,558,379
===========
</TABLE>
20
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Franklin/Templeton Distributors, Inc.:
We have audited the accompanying statement of financial condition of
Franklin/Templeton Distributors, Inc. (a wholly-owned subsidiary of Franklin
Resources, Inc.) as of September 30, 1995, and the related statements of
income, stockholder's equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Franklin/Templeton
Distributors, Inc. as of September 30, 1995, and the results of its operations
and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
Coopers & Lybrand L.L.P.
San Francisco, California
October 27, 1995
21
<PAGE>
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
STATEMENT OF FINANCIAL CONDITION
SEPTEMBER 30, 1995
----------------
<TABLE>
<S> <C>
ASSETS
Cash and cash equivalents......................................... $30,589,578
Receivables:
Due from Franklin Templeton Group of Funds...................... 20,382,973
Parent.......................................................... 11,460,749
Prepaid expenses and other........................................ 7,995,919
Premises and equipment, at cost (net of accumulated depreciation
of $2,375,721)................................................... 2,137,216
-----------
Total assets.................................................. $72,566,435
===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Dealer commissions payable...................................... $17,518,961
Trade payables and accrued expenses............................. 2,532,059
Deferred tax liabilities........................................ 1,060,389
-----------
Total liabilities............................................. 21,111,409
-----------
Commitments (Note 3)
Stockholder's equity:
Common stock, $1.00 par value, 20,000 shares authorized; 2,355
shares issued and outstanding.................................. 2,355
Capital in excess of par value.................................. 80,564,072
Accumulated deficit............................................. (29,111,401)
-----------
Total stockholder's equity.................................... 51,455,026
-----------
$72,566,435
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
STATEMENT OF INCOME
FOR THE YEAR ENDED SEPTEMBER 30, 1995
----------------
<TABLE>
<S> <C>
OPERATING REVENUES:
Underwriting commissions, net of $365,347,758 paid to dealers... $ 47,725,149
Investment income............................................... 2,184,550
Other........................................................... 224,915
------------
Total operating revenues...................................... 50,134,614
------------
OPERATING EXPENSES:
Selling......................................................... 50,262,458
General and administrative...................................... 71,522,921
Other........................................................... 269,788
------------
Total operating expenses...................................... 122,055,167
------------
Operating loss................................................ (71,920,553)
------------
OTHER INCOME (EXPENSES):
Interest expense................................................ (39,195)
------------
Other expenses net............................................ (39,195)
------------
Loss before taxes............................................... (71,959,748)
Income tax benefit.............................................. 25,153,544
------------
Net loss.......................................................... $(46,806,204)
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE YEAR ENDED SEPTEMBER 30, 1995
----------------
<TABLE>
<CAPTION>
COMMON STOCK CAPITAL IN TOTAL
------------- EXCESS OF RETAINED STOCKHOLDER'S
SHARES AMOUNT PAR VALUE EARNINGS EQUITY
------ ------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance, October 1, 1994. 2,355 $2,355 $40,564,072 $ 17,695,025 $58,261,452
Parent capital
contribution............ -- -- 40,000,000 -- 40,000,000
Net loss................. -- -- -- (46,806,204) (46,806,204)
Other.................... (222) (222)
----- ------ ----------- ------------ -----------
Balance, September 30,
1995.................... 2,355 $2,355 $80,564,072 $(29,111,401) $51,455,026
===== ====== =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C>
NET LOSS........................................................ $(46,806,204)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in receivables..................................... (6,257,543)
Increase in prepaid expenses and other...................... (4,725,285)
Increase in dealer commissions payable...................... 8,428,461
Decrease in trade payables and accrued expenses............. (938,888)
Depreciation................................................ 337,673
------------
NET CASH USED IN OPERATING ACTIVITIES........................... (49,961,888)
------------
Purchases of premises and equipment........................... (1,331,473)
------------
NET CASH USED IN INVESTING ACTIVITIES........................... (1,331,473)
------------
Decrease in receivables, parent................................. 38,639,590
------------
NET CASH USED IN FINANCING ACTIVITIES........................... 38,639,590
------------
Decrease in cash and cash equivalents........................... (12,653,769)
Cash and cash equivalents, beginning of year.................... 43,243,347
------------
Cash and cash equivalents, end of year.......................... $ 30,589,678
============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest...................................................... $ 39,195
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING AC-
TIVITIES:
The Company received a $40,000,000 capital contribution from its
parent, through a reduction in the intercompany payable to its
parent.
</TABLE>
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS
----------------
1. NATURE OF BUSINESS:
Franklin/Templeton Distributors, Inc. (FTDI) is a wholly-owned subsidiary of
Franklin Resources, Inc. (Parent). FTDI serves as the principal underwriter
for the Franklin Templeton Group of Funds.
2. SIGNIFICANT ACCOUNTING POLICIES:
Revenue Recognition:
Commissions on mutual fund dividend reinvestments, dividend income and 12b-1
fees are recognized as earned. Commissions on mutual fund share sales are
recognized when the share sales are settled.
Cash and Cash Equivalents:
Cash and cash equivalents consist of amounts held in bank accounts and in a
money market fund for which an affiliated company acts as investment advisor.
Due to the relatively short-term nature of these instruments, the carrying
value approximates fair value.
Allocation of Intercompany Costs:
Certain management, accounting and other administrative costs amounting to
$12,614,868 were allocated to FTDI by its Parent.
Income Tax Benefit:
FTDI is included in the consolidated federal and combined California state
income tax returns of the Parent. The Parent allocates federal and California
state income tax benefits to FTDI using the separate return method.
Deferred income taxes reflect the impact of temporary differences between
amounts of assets and liabilities for financial reporting purposes and such
amounts as measured by tax laws. Deferred tax assets and liabilities are
adjusted to reflect changes in tax rates or other provisions of the tax law in
the period in which a new tax law is enacted.
Premises and Equipment:
Premises and equipment are recorded at cost and are depreciated on the
straight-line basis over their estimated useful lives. Expenditures for
repairs and maintenance are charged to expense when incurred.
3. DEFERRED TAXES:
The major components of the deferral tax liability as of September 30, 1995
are as follows:
<TABLE>
<S> <C>
Prepaid Expenses ............................................ $ 958,218
Depreciation on fixed assets ................................ 102,171
----------
Deferred tax liability .................................... $1,060,389
==========
</TABLE>
4. NET CAPITAL AND RESERVE REQUIREMENTS:
Regulatory provisions require FTDI to maintain minimum net capital. Net
capital and the related net capital ratio may fluctuate on a daily basis. On
September 30, 1995, FTDI was in compliance with Rule 15c3-1(a)(2) of the
Securities Exchange Act of 1934. The net capital requirement on that date was
$1,407,427, and FTDI had net capital of $24,081,617, and an
26
<PAGE>
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
aggregate indebtedness to net capital ratio of .68 to 1. FTDI is exempt from
Rule 15c3-3 of the Securities Exchange Act relating to the determination of
reserve requirements.
5. COMMITMENTS:
The Parent leases computer, automobile and office equipment and office space
under various agreements expiring at various dates through 1997 which are
accounted for as operating leases. FTDI is the direct beneficiary of these
leases and consequently is responsible for payment of the various lease
commitments. Total lease expense for the year amounted to $803,116. At
September 30, 1995, remaining operating lease commitments are as follows:
<TABLE>
<S> <C>
1996............................................................ $152,823
1997............................................................ 145,418
1998............................................................ 39,523
--------
$337,764
========
</TABLE>
27
<PAGE>
[LOGO OF APPLICATION APPEARS HERE]
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and
documents:
The facing sheet.
The Cross-Reference Sheet.
The Prospectus consisting of 27 pages.
Undertakings.
The list of contents of Registration Statement.
Signatures.
Written consent of McGladrey & Pullen.
Written consent of Coopers & Lybrand.
The following exhibits:
Exhibit
NUMBER DESCRIPTION
1. A (1) Custodian Agreement of Registrant - Custodian
Agreement between Franklin Templeton
Distributors, Inc. and Templeton Funds Trust
Company.***
A (2) None.
A (3)(a) None.
<PAGE>
Exhibit
NUMBER DESCRIPTION
A (3)(b) Form of Dealer's Agreement between the
Sponsor and United Services Planning
Association, Inc.*
A (3)(c) Schedules of sales commissions.*
A (4) None.
A (5) None.
A (6)(a) Articles of Incorporation of Sponsor.***
(6)(b) Bylaws of Sponsor.***
A (7) None.
A (8) None.
A (9)(a) None.
A (10) Form of Application to Plans.*
2. None.
3. Opinion of Counsel.**
4. None.
5. Not Applicable.
- --------------------
* Previously filed with Pre-Effective Amendment No. 2
to this Registration Statement on February 28, 1991.
** Previously filed with the 24f-2 Notice filed on
October 30, 1995.
*** Previously filed with Post-Effective Amendment No. 4
to this Registration Statement on December 30, 1993.
- 2 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Depositor
Franklin Templeton Distributors, Inc., on behalf of the registrant, Templeton
Capital Accumulation Plans, certifies that it meets all the requirements for
effectiveness of the Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Post-Effective Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of St. Petersburg, Florida on this 29th
day of December, 1995.
TEMPLETON CAPITAL ACCUMULATION PLANS
(Registrant)
By: FRANKLIN TEMPLETON DISTRIBUTORS, INC.
(Depositor)
By:/s/THOMAS M. MISTELE
Thomas M. Mistele
Vice President
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use of our report dated September 29, 1995 on
the financial statements of Templeton Capital Accumulation Plans referred to
therein in Post-Effective Amendment No. 6 to the Registration Statement on Form
S-6, File No. 33-37442 of Templeton Capital Accumulation Plans as filed with the
Securities and Exchange Commission.
/s/MCGLADREY & PULLEN, LLP
McGladrey & Pullen, LLP
New York, New York
December 28, 1995
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in post-effective amendment No. 6 to the
registration statement on Form S-6 (File No. 33-37442) for Templeton Capital
Accumulation Plans of our report dated October 27, 1995, on our audit of the
financial statements of Franklin/Templeton Distributors, Inc.
/s/COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
San Francisco, California
December 27, 1995
<PAGE>
