PROSPECTUS
TEMPLETON CAPITAL
ACCUMULATOR
FUND, INC.
INVESTMENT STRATEGY
GROWTH
January 1, 2000
[LOGO (R)
FRANKLIN(R) TEMPLETON (R)
You may not purchase fund shares directly. You may acquire fund shares only by
investing in Templeton Capital Accumulation Plans (the Plans or Plan). Depending
upon your monthly investment amount, the sales charges on the first 12
investments made in the first year of a Plan can be 50% of the total amount you
invest during that year. The Plans are not suitable for short-term investment.
Details of the Plans, including all charges, are in the attached prospectus for
the Plans. Please read the Plan prospectus before investing and keep it for
future reference.
The SEC has not approved or disapproved these securities or passed upon the
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
CONTENTS
THE FUND
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INFORMATION ABOUT THE FUND YOU SHOULD KNOW BEFORE INVESTING
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2 Goal and Strategies
2 Main Risks
5 Performance
5 Fees and Expenses
6 Management
6 Distributions and Taxes
7 Financial Highlights
YOUR ACCOUNT
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INFORMATION ABOUT SALES CHARGES, ACCOUNT TRANSACTIONS AND SERVICES
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8 Buying Shares
8 Investor Services
9 Selling Shares
10 Account Policies
11 Questions
FOR MORE INFORMATION
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WHERE TO LEARN MORE ABOUT THE FUND
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Back Cover
THE FUND
GOAL AND STRATEGIES
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[INSERT GRAPHIC OF BULLEYES AND ARROW]
GOAL The fund's investment goal is long-term capital growth.
PRINCIPAL INVESTMENTS Under normal market conditions, the fund normally invests
in equity securities and debt obligations of companies and governments of any
nation.
Equity securities generally entitle the holder to participate in a company's
general operating results. Equity securities include common stock, preferred
stock, convertible securities, warrants or rights. The fund's primary
investments are in common stock. In selecting equity securities, the manager
does a company-by-company analysis, rather than focusing on a specific industry
or economic sector. The manager concentrates primarily on the market price of a
company's securities relative to its view regarding the company's long-term
earnings potential. A company's historical value measures, including
price/earnings ratios, profit margins and liquidation value, also will be
considered.
Debt securities represent an obligation of the issuer to repay a loan of money
to it, and generally provides for the payment of interest. These include bonds,
notes and debentures, commercial paper, time deposits, bankers' acceptances, and
structured investments. The fund may buy both rated and unrated debt securities.
The fund may invest in American, European and Global Depositary Receipts.
Depositary receipts are certificates typically issued by a bank or trust company
that give their holders the right to receive securities issued by a foreign or
domestic corporation.
TEMPORARY INVESTMENTS The manager may take a temporary defensive position when
it believes the securities trading markets or the economies of countries where
the fund invests are experiencing excessive volatility or a prolonged general
decline, or other adverse conditions exist. Under these circumstances, the fund
may be unable to pursue its investment goal because it may not invest or may
invest substantially less in equity securities and debt obligations of companies
and governments of any nations.
MAIN RISKS
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[INSERT GRAPHIC OF CHART WITH LINE GOING UP AND DOWN]
STOCKS While this may not be the case in foreign markets, in the U.S., stocks
historically have outperformed other asset classes over the long term (over the
short term they tend to go up and down more dramatically). These price movements
may result from factors affecting individual companies, industries or the
securities market as a whole.
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Because the securities the fund holds fluctuate in price, the value of your
investment in the fund will go up and down. This means you could lose money over
short or even extended periods.
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The Templeton investment philosophy is "bottom-up," value-oriented, and
long-term. In choosing equity investments, the fund's manager will focus on the
market price of a company's securities relative to its evaluation of the
company's long-term earnings, asset value and cash flow potential. A company's
historical value measures, including price/earnings ratio, profit margins and
liquidation value, will also be considered.
FOREIGN SECURITIES Securities of companies and governments located outside the
U.S. may involve risks that can increase the potential for losses in the fund.
Investments in depositary receipts also involve some or all of the following
risks.
COUNTRY. General securities market movements in any country where the fund has
investments are likely to affect the value of the securities the fund owns that
trade in that country. These movements will affect the fund's share price and
fund performance.
The political, economic and social structures of some countries the fund invests
in may be less stable and more volatile than those in the U.S. The risks of
investing in these countries include the possibility of the imposition of
exchange controls, currency devaluations, foreign ownership limitations,
expropriation, restrictions on removal of currency and other assets,
nationalization of assets, punitive taxes and certain custody and settlement
risks.
The fund's investments in developing or emerging markets are subject to all of
the risks of foreign investing generally, and have additional heightened risks
due to a lack of established legal, political, business and social frameworks to
support securities markets. Foreign securities markets, including emerging
markets, may have substantially lower trading volumes than U.S. markets,
resulting in less liquidity and more volatility than in the U.S. While
short-term volatility in these markets can be disconcerting, declines of more
than 50% are not unusual. The definition of developing or emerging markets or
countries as used by the fund's manager may differ from the definition of the
same terms as used in managing other Franklin Templeton funds.
COMPANY. Foreign companies are not subject to the same disclosure, accounting,
auditing and financial reporting standards and practices as U.S. companies and
their securities may not be as liquid as securities of similar U.S. companies.
Foreign stock exchanges, trading systems, brokers and companies generally have
less government supervision and regulation than in the U.S. The fund may have
greater difficulty voting proxies, exercising shareholder rights, pursuing legal
remedies and obtaining judgments with respect to foreign investments in foreign
courts than with respect to U.S. companies in U.S. courts. Foreign markets and
their participants generally have less government supervision and regulation
than in the U.S.
CURRENCY To the extent the fund's investments are denominated in foreign
currencies, changes in foreign currency exchange rates will affect the value of
what the fund owns and the fund's share price. Generally, when the U.S. dollar
rises in value against a foreign currency, an investment in that country loses
value because that currency is worth fewer U.S. dollars. Devaluation of a
currency by a country's government or banking authority also will have a
significant impact on the value of any securities denominated in that currency.
Currency markets generally are not as regulated as securities markets.
EURO. On January 1, 1999, the European Monetary Union (EMU) introduced a new
single currency, the euro, which will replace the national currency for
participating member countries.
Because this change to a single currency is new and untested, it is not possible
to predict the impact of the euro on the business or financial condition of
European issuers which the fund may hold in its portfolio, and their impact on
fund performance. To the extent the fund holds non-U.S. dollar (euro or other)
denominated securities, it will still be exposed to currency risk due to
fluctuations in those currencies versus the U.S. dollar.
INCOME Since the fund can only distribute what it earns, the fund's
distributions to shareholders may decline when interest rates fall.
CREDIT There is the possibility that an issuer will be unable to make interest
payments and repay principal. Changes in an issuer's financial strength or in a
security's credit rating may affect a security's value and, thus, impact fund
performance.
INTEREST RATE When interest rates rise, debt security prices fall. The opposite
is also true: debt security prices rise when interest rates fall. In general,
securities with longer maturities are more sensitive to these price changes.
LIQUIDITY The fund will not invest more than 10% of its net assets in illiquid
securities. Illiquid securities generally are securities that cannot be sold
within seven days in the normal course of business at approximately the amount
at which the fund has valued them. Reduced liquidity may have an adverse impact
on market price and the fund's ability to sell particular securities when
necessary to meet the fund's liquidity needs or in response to a specific
economic event. Reduced liquidity in the secondary market for certain securities
also may make it more difficult for the fund to obtain market quotations based
on actual trades for the purpose of valuing the fund's portfolio.
MARKET A security's value may be reduced by market activity or the results of
supply and demand. This is a basic risk associated with all securities. When
there are more sellers than buyers, prices tend to fall. Likewise, when there
are more buyers than sellers, prices tend to rise.
YEAR 2000 When evaluating current and potential portfolio positions, Year 2000
is one of the factors the manager considers.
The manager will rely upon public filings and other statements made by companies
about their Year 2000 readiness. Companies in countries outside the U.S.,
particularly in emerging markets, may be more susceptible to Year 2000 risks and
may not be required to make the same level of disclosure about Year 2000
readiness as is required in the U.S. The manager, of course, cannot audit each
company and its major suppliers to verify their Year 2000 readiness.
If a company in which the fund is invested is adversely affected by Year 2000
problems, it is likely that the price of its securities also will be adversely
affected. A decrease in the value of one or more of the fund's portfolio
holdings will have a similar impact on the fund's performance. Please see page 5
for more information.
More detailed information about the fund, its policies (including temporary
investments), risks and bond ratings can be found in the fund's Statement of
Additional Information (SAI).
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Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. Mutual fund shares involve investment risks, including the possible
loss of principal.
[End callout]
PERFORMANCE
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[INSER GRAPHIC OF A BEAR AND A BULL]
This bar chart and table show the volatility of the fund's returns, which is one
indicator of the risks of investing in the fund. The bar chart shows changes in
the fund's returns from year to year over the past seven calendar years. The
table shows how the fund's average annual total returns compare to those of a
broad-based securities market index. Of course, past performance cannot predict
or guarantee future results.
ANNUAL TOTAL RETURNS/1/
[INSERT BAR GRAPH]
6.64% 39.52% 2.68% 14.80% 22.98% 11.16% 8.58%
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92 93 94 95 96 97 98
YEAR
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BEST
QUARTER:
Q4 `98
17.42%
WORST
QUARTER:
Q3 `98
- -17.04%
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AVERAGE ANNUAL TOTAL RETURNS
For the periods ended December 31, 1998
NO SALES CHARGES
SINCE
INCEPTION
1 YEAR 5 YEARS (3/1/91)
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Templeton Capital Accumulator Fund/2/ 8.58% 11.84% 13.97%
MSCI All Country World Free Index/3/ 21.97% 14.78% 12.51%
1. Figures do not reflect sales charges. If they did, returns would be lower. As
of September 30, 1999, the fund's year-to-date return was 10.04%.
2. Figures reflect NAV returns.
All fund performance assumes reinvestment of dividends and capital gains.
3. Source: Standard & Poor's(R) Micropal. The unmanaged MSCI All Country World
Free Index measures the performance of securities located in 48 countries,
including emerging markets in Latin America, Asia and Eastern Europe. It
includes reinvested dividends. One cannot invest directly in an index, nor is an
index representative of the fund's portfolio.
FEES AND EXPENSES
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This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum sales charge (load) as a percentage of offering price None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
Management fees 0.75%
Other expenses 0.36%
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Total annual fund operating expenses 1.11%
=======
EXAMPLE
This example can help you compare the cost of investing in the fund with the
cost of investing in other mutual funds. It assumes:
o You invest $10,000 for the periods shown;
o Your investment has a 5% return each year;
o The fund's operating expenses remain the same; and
o You sell your shares at the end of the periods shown.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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$113 $353 $612 $1,352
The expense summary shows only the expenses of the fund. THE PLANS CHARGE YOU A
SEPARATE SALES CHARGE TO COMPENSATE DISTRIBUTORS FOR CREATING THE PLANS AND TO
PAY SELLING EXPENSES AND COMMISSIONS TO SECURITIES DEALERS. We deduct this
charge from each monthly investment that you make. The charge will vary
according to the size of your monthly investment. For example, on a $100 per
month Plan, $50 is deducted from each of the first 12 monthly investments. After
that, the charge drops to $6.07 on each subsequent monthly investment. For
details concerning sales charges, see the accompanying prospectus for the Plans.
MANAGEMENT
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[INSERT GRAPHIC OF BRIEFCASE]
Templeton Investment Counsel, Inc. (Investment Counsel), is the fund's
investment manager. Together, Investment Counsel and its affiliates manage over
$218 billion in assets.
The fund's lead portfolio manager is:
GARY P. MOTYL CFA, DIRECTOR AND EXECUTIVE VICE PRESIDENT OF INVESTMENT COUNSEL
Mr. Motyl has been a manager of the fund since 1993. He joined the Franklin
Templeton Group in 1981.
The following individuals have secondary portfolio management responsibilities:
MARK R. BEVERIDGE CFA, SENIOR VICE PRESIDENT OF INVESTMENT COUNSEL
Mr. Beveridge has been a manager of the fund since 1993. He joined the Franklin
Templeton Group in 1985.
GUANG YANG CFA, VICE PRESIDENT OF INVESTMENT COUNSEL
Mr. Yang has been a manager of the fund since 1999. He joined the Franklin
Templeton Group in 1995.
The fund pays Investment Counsel a fee for managing the fund's assets and making
its investment decisions. For the fiscal year ended August 31, 1999, the fund
paid 0.75% of its average daily net assets to the manager.
YEAR 2000 PROBLEM The fund's business operations depend on a worldwide network
of computer systems that contain date fields, including securities trading
systems, securities transfer agent operations and stock market links. Many of
the systems currently use a two digit date field to represent the date, and
unless these systems are changed or modified, they may not be able to
distinguish the Year 1900 from the Year 2000 (commonly referred to as the Year
2000 problem). In addition, the fact that the Year 2000 is a leap year may
create difficulties for some systems.
When the Year 2000 arrives, the fund's operations could be adversely affected if
the computer systems used by the manager, its service providers and other third
parties it does business with are not Year 2000 ready. For example, the fund's
portfolio and operational areas could be impacted, including securities trade
processing, interest and dividend payments, securities pricing, shareholder
account services, reporting, custody functions and others. The fund could
experience difficulties in effecting transactions if any of its foreign
subcustodians, or if foreign broker-dealers or foreign markets are not ready for
Year 2000.
The fund's manager and its affiliated service providers are making a concerted
effort to take steps they believe are reasonably designed to address their Year
2000 problems. Of course, the fund's ability to reduce the effects of the Year
2000 problem is also very much dependent upon the efforts of third parties over
which the fund and its manager may have no control.
DISTRIBUTIONS AND TAXES
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INCOME AND CAPITAL GAINS DISTRIBUTIONS The fund intends to pay a dividend at
least annually representing substantially all of its net investment income and
any net realized capital gains. The amount of this distribution will vary and
there is no guarantee the fund will pay dividends.
To receive a distribution, you must be a shareholder on the record date. The
record date for the fund's distributions will vary. Please keep in mind that if
you invest in the fund shortly before the record date of a distribution, any
distribution will lower the value of the fund's shares by the amount of the
distribution and you will receive some of your investment back in the form of a
taxable distribution. If you would like information on upcoming record dates for
the fund's distributions, please call 1-800/DIAL BEN(R)
TAX CONSIDERATIONS In general, fund distributions are taxable to you as either
ordinary income or capital gains. This is true whether you reinvest your
distributions in additional fund shares or receive them in cash. Any capital
gains the fund distributes are taxable to you as long-term capital gains no
matter how long you have owned your shares.
[Begin callout]
BACKUP WITHHOLDING
By law, the fund must withhold 31% of your taxable distributions and proceeds if
you do not provide your correct social security or taxpayer identification
number, or if the IRS instructs the fund to do so.
[End callout]
Every January, you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared in
December but paid in January are taxable as if they were paid in December.
When you sell your shares of the fund, you may have a capital gain or loss. For
tax purposes, an exchange of your fund shares for shares of a different Franklin
Templeton Fund is the same as a sale.
Fund distributions and gains from the sale or exchange of your shares generally
will be subject to state and local income tax. Any foreign taxes the fund pays
on its investments may be passed through to you as a foreign tax credit.
Non-U.S. investors may be subject to U.S. withholding and estate tax. You should
consult your tax advisor about the federal, state, local or foreign tax
consequences of your investment in the fund.
FINANCIAL HIGHLIGHTS
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[INSERT GRAPHIC OF DOLLAR SIGN]
This table presents the fund's financial performance for the past five years.
This information has been audited by PricewaterhouseCoopers LLP for the fiscal
year ended August 31, 1999, and by other auditors for the fiscal years before
August 31, 1999.
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
---------------------------------------------------------------
1999/2/ 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($)/1/
Net asset value, beginning of year 9.69 10.97 9.08 7.97 8.10
---------------------------------------------------------------
Net investment income .18 .18 .18 .19 .14
Net realized and unrealized gains (losses) 2.78 (1.00) 2.03 1.10 .12
---------------------------------------------------------------
Total from investment operations 2.96 (.82) 2.21 1.29 .26
Distributions from net investment income (.18) (.18) (.18) (.15) (.10)
Distributions from net realized gains (.36) (.28) (.14) (.03) (.29)
---------------------------------------------------------------
Total distributions (.54) (.46) (.32) (.18) (.39)
---------------------------------------------------------------
Net asset value, end of year 12.11 9.69 10.97 9.08 7.97
===============================================================
Total return (%) 32.01 (7.87) 25.06 16.50 3.40
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year ($ x 1,000) 291,136 191,913 172,683 108,019 65,538
Ratios to average net assets: (%)
Expenses 1.11 1.00 1.00 1.00 1.00
Expenses excluding waiver and payments by affiliate 1.11 1.09 1.13 1.16 1.34
Net investment income 1.60 1.77 2.00 2.56 2.37
Portfolio turnover rate (%) 13.96 11.92 7.43 11.08 12.91
</TABLE>
1. Per share amounts for all periods prior to August 31, 1996 have been restated
to reflect a 2-for-1 stock split effective March 27, 1996.
2. Based on average weighted shares outstanding.
YOUR ACCOUNT
BUYING SHARES
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[INSERT GRAPHIC OF PAPER WITH LINES AND SOMEONE WRITING]
You may purchase shares of the fund only by investing in the Plans. Details of
the Plans, including the terms of the offering, are in the attached Plan
prospectus. Except where Planholders have received fund shares in a Plan
liquidation or partial withdrawal from a Plan we do not expect that any person,
other than the Plan custodian, will directly hold any fund shares.
No securities dealer, salesman, or other person is authorized to give any
information or to make any representations, other than those contained in this
prospectus and in the SAI, in connection with the offer contained in this
prospectus, and, if given or made, such other information or representations
must not be relied upon as having been authorized by the fund, Investment
Counsel, or Franklin Templeton Distributors, Inc.
[Begin callout]
The FRANKLIN TEMPLETON FUNDS include all of the Franklin Templeton U.S.
registered mutual funds, except Franklin Templeton Variable Insurance Products
Trust, Templeton Capital Accumulator Fund, Inc., and Templeton Variable Products
Series Fund.
[End callout]
Except for the fact that the fund's shares are available only through the Plans,
the fund does not represent an investment concept that is new or different from
other investment companies for which Investment Counsel or its affiliates acts
as an investment manager. The fund's investment goal of long-term capital growth
is similar to the goal of certain other Franklin Templeton Funds.
INVESTOR SERVICES
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[INSERT GRAPHIC OF PERSON WITH A HEADSET]
DISTRIBUTION OPTIONS Distributions you receive from the fund are automatically
reinvested in your account. You can also have your distributions deposited in a
bank account, or mailed by check. Deposits to a bank account may be made by
electronic funds transfer.
[Begin callout]
For Franklin Templeton Trust Company retirement plans, special forms may be
needed to receive distributions in cash. Please call 1-800/527-2020 for
information.
[End callout]
TELEFACTS(R) Our TeleFACTS system offers around-the-clock access to information
about your account or any Franklin Templeton Fund. This service is available
from touch-tone phones at 1-800/247-1753. For a free TeleFACTS brochure, call
1-800/DIAL BEN.
TELEPHONE PRIVILEGES You will automatically receive telephone privileges when
you open your account, allowing you and your investment representative to sell
or exchange your shares and make certain other changes to your account by phone.
For accounts with more than one registered owner, telephone privileges also
allow the fund to accept written instructions signed by only one owner for
transactions and account changes that could otherwise be made by phone. For all
other transactions and changes, all registered owners must sign the
instructions.
As long as we take certain measures to verify telephone requests, we will not be
responsible for any losses that may occur from unauthorized requests. Of course,
you can decline telephone exchange or redemption privileges on your account
application.
EXCHANGE PRIVILEGE If you liquidate a Plan or withdraw Plan shares, you can move
your investment to an existing Franklin Templeton Fund, generally without paying
any additional sales charges. In the case of an exchange into a Franklin
Templeton Fund that offers multiclasses of shares, you would receive Class A
shares, which generally have lower Rule 12b-1 distribution fees than Class B and
Class C shares of the same fund.
NO EXCHANGES INTO THE FUND FROM OTHER FRANKLIN TEMPLETON FUNDS WILL BE ACCEPTED.
Generally exchanges may only be made between identically registered accounts,
unless you send written instructions with a signature guarantee.
[Begin callout]
An EXCHANGE is really two transactions: a sale of one fund and the purchase of
another. In general, the same policies that apply to purchases and sales apply
to exchanges, including minimum investment amounts. Exchanges also have the same
tax consequences as ordinary sales and purchases.
[End callout]
Frequent exchanges can interfere with fund management or operations and drive up
costs for all shareholders. To protect the fund, there are limits on the number
and amount of exchanges you may make if we believe (i) the fund would be harmed
or unable to invest effectively, or (ii) the fund receives or anticipates
simultaneous orders that may significantly affect the fund.
SYSTEMATIC WITHDRAWAL PLAN This plan allows you to automatically sell your
shares and receive regular payments from your account. Certain terms and
minimums apply.
SELLING SHARES
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[INSERT GRAPHIC OF A CERTIFICATE]
If you liquidate your Plan or withdraw Plan shares, you may sell the fund shares
that you receive at any time.
SELLING SHARES IN WRITING Generally, requests to sell $100,000 or less can be
made over the phone or with a simple letter. Sometimes, however, to protect you
and the fund we will need written instructions signed by all registered owners,
with a signature guarantee for each owner, if:
o you are selling more than $100,000 worth of shares
o you want your proceeds paid to someone who is not a registered owner
o you want to send your proceeds somewhere other than the address of record, or
preauthorized bank or brokerage firm account
[Begin callout]
A SIGNATURE GUARANTEE helps protect your account against fraud. You can obtain a
signature guarantee at most banks and securities dealers.
A notary public CANNOT provide a signature guarantee.
[End callout]
We also may require a signature guarantee on instructions we receive from an
agent, not the registered owners, or when we believe it would protect the fund
against potential claims based on the instructions received.
SELLING RECENTLY PURCHASED SHARES If you sell shares recently purchased with a
check or draft, we may delay sending you the proceeds until your check or draft
has cleared, which may take seven business days or more. A certified or
cashier's check may clear in less time.
REDEMPTION PROCEEDS Your redemption check will be sent within seven days after
we receive your request in proper form. We are not able to receive or pay out
cash in the form of currency. Redemption proceeds may be delayed if we have not
yet received your signed Plan account application.
RETIREMENT PLANS You may need to complete additional forms to sell shares in a
Franklin Templeton Trust Company retirement plan. For participants under age
59 1/2, tax penalties may apply. Call Retirement Plan Services at 1-800/527-2020
for details.
<TABLE>
<CAPTION>
SELLING SHARES
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TO SELL SOME OR ALL OF YOUR SHARES
- ------------------------------------------------------------------------------------------------------
<S> <C>
[GRAPHIC OF HANDSHAKE]
THROUGH YOUR INVESTMENT Contact your investment representative
REPRESENTATIVE
- ------------------------------------------------------------------------------------------------------
[GRAPHIC OF ENVELOPE] Send written instructions to Templeton Funds Trust Company (TFTC).
Corporate, partnership or trust accounts may need to send additional
BY MAIL documents.
Specify the account number and the dollar value or number of
shares you wish to sell. Be sure to include all necessary signatures
and any additional documents, as well as signature guarantees if required.
A check will be mailed to the name(s) and address on the account, or
otherwise according to your written instructions.
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[GRAPHIC OF TELEPHONE]
BY PHONE As long as your transaction is for $100,000 or less and you have not
changed your address by phone within the last 15 days, you can sell
1-800/881-TCAP your shares by phone.
A check will be mailed to the name(s) and address on the account.
Written instructions, with a signature guarantee, are required to send
the check to another address or to make it payable to another person.
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[GRAPHIC OF THREE
LIGHTNING BOLTS]
BY ELECTRONIC FUNDS You can call or write to have redemption proceeds sent to a bank
TRANSFER (ACH) account. See the policies above for selling shares by mail or phone.
Before requesting to have redemption proceeds sent to a bank account,
please make sure we have your bank account information on file. If
we do not have this information, you will need to send written
instructions with your bank's name and address, a voided check or
savings account deposit slip, and a signature guarantee if the
ownership of the bank and fund accounts is different.
If we recevie your requests received in proper form by 1:00 p.m.
Pacific time, porceeds sent by ACH generally will be available within
two to three business days.
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[GRAPHIC OF ARROWS]
BY EXCHANGE Obtain a current prospectus for the fund you are considering.
TeleFACTS(R) Call the TCAP Dedicated Service Group at the number below or our
1-800/247-1753 automated TeleFACTS system, or send signed written instructions.
(around-the-clock access) See the policies above for selling shares by mail or phone.
- ------------------------------------------------------------------------------------------------------
</TABLE>
TEMPLETON FUNDS TRUST COMPANY 500 EAST BROWARD BLVD.,
FORT LAUDERDALE, FL 33394-3091
CALL TOLL-FREE: 1-800/881-TCAP
(MONDAY THROUGH FRIDAY 6:00 A.M. TO 5:00 P.M., PACIFIC TIME)
ACCOUNT POLICIES
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[INSERT GRAPHIC OF PAPER AND PEN]
CALCULATING SHARE PRICE The fund calculates the net asset value per share (NAV)
each business day at the close of trading on the New York Stock Exchange
(normally 1:00 p.m. Pacific time). The fund's NAV is calculated by dividing its
net assets by the number of its shares outstanding.
[Begin callout]
You may buy fund shares only by buying shares in a Plan.
[End callout]
The fund's assets are generally valued at their market value. If market prices
are unavailable, or if an event occurs after the close of the trading market
that materially affects the values, assets may be valued at their fair value. If
the fund holds securities listed primarily on a foreign exchange that trades on
days when the fund is not open for business, the value of your shares may change
on days that you cannot buy or sell shares.
Requests to buy and sell shares are processed at the NAV next calculated after
we receive your request in proper form.
STATEMENTS AND REPORTS You will receive quarterly account statements that show
all your Plan account transactions during the quarter. You also will receive
written notification after most transactions affecting your account (except for
distributions and transactions made through automatic investment or withdrawal
programs which will be reported on your quarterly statement). You also will
receive the fund's financial reports every six months. If you need additional
copies, please call 1-800/881-TCAP.
If there is a dealer or other investment representative of record on your
account, he or she also may request confirmations, account statements and other
information about your account directly from the fund.
STREET OR NOMINEE ACCOUNTS You may transfer your shares from the street or
nominee name account of one dealer to another, as long as both dealers have an
agreement with Franklin Templeton Distributors, Inc. We will process the
transfer after we receive authorization in proper form from your delivering
securities dealer.
JOINT ACCOUNTS Unless you specify a different registration, accounts with two or
more owners are registered as "joint tenants with rights of survivorship" (shown
as "Jt Ten" on your account statement). To make any ownership changes to a joint
account, all owners must agree in writing, regardless of the law in your state.
ADDITIONAL POLICIES Please note that the fund maintains additional policies and
reserves certain rights, including:
o The fund may modify or discontinue the exchange privilege on 60 days' notice.
o In unusual circumstances, we may temporarily suspend redemptions, or postpone
the payment of proceeds, as allowed by federal securities laws.
o For redemptions over a certain amount, the fund reserves the right to make
payments in securities or other assets of the fund, in the case of an
emergency or if the payment by check, wire or electronic funds transfer would
be harmful to existing shareholders.
o To permit investors to obtain the current price, dealers are responsible for
transmitting all orders to the fund promptly.
QUESTIONS
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If you have any questions about your account, you can write to us at P.O. Box
33030, St. Petersburg, FL 33733-8030. You can also call us at the following
number. For your protection and to help ensure we provide you with quality
service, all calls may be monitored or recorded.
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DEPARTMENT NAME TELEPHONE NUMBER HOURS (PACIFIC TIME, MONDAY THROUGH FRIDAY)
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TCAP Dedicated Service Group 1-888/881-TCAP (1-888/881-8227) 6:00 a.m. to 5:00 p.m.
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FOR MORE INFORMATION
You can learn more about the Plan and fund in the following documents:
ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS
Includes a discussion of recent market conditions and fund strategies, financial
statements, detailed performance information, portfolio holdings, and the
auditor's report.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Contains more information about the Plan and fund, their investments and
policies. It is incorporated by reference (is legally a part of this
prospectus).
For a free copy of the current annual/semiannual report or the SAI, please
contact your investment representative or call us at the number below.
FRANKLIN(R)TEMPLETON(R)
1-800/DIAL BEN(R)(1-800/342-5236)
TDD (Hearing Impaired) 1-800/851-0637
www.franklintempleton.com
You can also obtain information about the Plan and fund by visiting the SEC's
Public Reference Room in Washington, D.C. (phone 1-800/SEC-0330) or by sending
your request and a duplicating fee to the SEC's Public Reference Section,
Washington, D.C. 20549-6009. You can also visit the SEC's Internet site at
http://www.sec.gov.
Investment Company Act file #811-6198 TLCAP P 01/00
