Prospectus & Application
Templeton
American Trust, Inc.
May 1, 1997
INVESTMENT STRATEGY: GROWTH AND INCOME
[FRANKLIN TEMPLETON LOGO APPEARS HERE]
This prospectus describes Templeton American Trust, Inc. (the "Fund"). It
contains information you should know before investing in the Fund. Please keep
it for future reference.
THE FUND MAY INVEST UP TO 35% OF ITS ASSETS IN SECURITIES IN ANY FOREIGN
COUNTRY, DEVELOPED OR DEVELOPING. THE FUND MAY BORROW MONEY FOR INVESTMENT
PURPOSES (LEVERAGING), WHICH MAY INVOLVE GREATER RISK AND ADDITIONAL COSTS TO
THE FUND. SEE "HOW DOES THE FUND INVEST ITS ASSETS?--BORROWING." IN ADDITION,
THE FUND MAY INVEST UP TO 10% OF ITS ASSETS IN RESTRICTED SECURITIES, WHICH MAY
INVOLVE GREATER RISK AND INCREASED FUND EXPENSES.
The Fund has a Statement of Additional Information ("SAI"), dated May 1, 1997,
which may be amended from time to time. It includes more information about the
Fund's procedures and policies. It has been filed with the SEC and is
incorporated by reference into this prospectus. For a free copy or a larger
print version of this prospectus, call 1-800/DIAL BEN or write the Fund at the
address shown.
SHARES OF THE FUND 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. SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SEC OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Templeton
American Trust, Inc.
This prospectus is not an offering of the securities herein described in any
state, jurisdiction or country in which the offering is not authorized. No sales
representative, dealer, or other person is authorized to give any information or
make any representations other than those contained in this prospectus. Further
information may be obtained from Distributors.
<PAGE>
TEMPLETON
AMERICAN
TRUST, INC.
- -------------------------------------------------------------------------------
May 1, 1997
When reading this prospectus, you will see certain terms beginning with
capital letters. This means the term is explained in our glossary section.
TABLE OF CONTENTS
<TABLE>
<S> <C>
ABOUT THE FUND
Expense Summary............................................................. 2
Financial Highlights........................................................ 4
How does the Fund Invest its Assets?........................................ 6
What are the Fund's Potential Risks?........................................ 10
Who Manages the Fund?....................................................... 13
How does the Fund Measure Performance?...................................... 16
How Taxation Affects the Fund and its Shareholders.......................... 16
How is the Fund Organized?.................................................. 17
ABOUT YOUR ACCOUNT
How Do I Buy Shares?........................................................ 18
May I Exchange Shares for Shares of Another Fund?........................... 24
How Do I Sell Shares?....................................................... 27
What Distributions Might I Receive from the Fund?........................... 31
Transaction Procedures and Special Requirements............................. 32
Services to Help You Manage Your Account.................................... 36
What If I Have Questions About My Account?.................................. 38
GLOSSARY
Useful Terms and Definitions................................................ 39
</TABLE>
700 Central Avenue
P.O. Box 33030
St. Petersburg, FL 33733-8030
1-800/DIAL BEN
. Templeton American Trust, Inc.
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ABOUT THE FUND
EXPENSE SUMMARY
This table is designed to help you understand the costs of investing in the
Fund. It is based on the historical expenses of each class for the fiscal year
ended December 31, 1996. The Fund's actual expenses may vary.
<TABLE>
<CAPTION>
A.SHAREHOLDER TRANSACTION EXPENSES+ CLASS I CLASS II
<S> <C> <C>
Maximum Sales Charge (as a percentage of Offering Price) 5.75% 1.99%
Paid at time of purchase 5.75%++ 1.00%+++
Paid at redemption++++ None 0.99%
Exchange Fee (per transaction) $5.00* $5.00*
B. ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees 0.70% 0.70%
Rule 12b-1 Fees 0.31%** 1.00%**
Other Expenses 0.56% 0.56%
------- -------
Total Fund Operating Expenses 1.57% 2.26%
------- -------
</TABLE>
C.EXAMPLE
Assume the annual return for each class is 5%, operating expenses are as
described above, and you sell your shares after the number of years shown.
These are the projected expenses for each $1,000 that you invest in the
Fund.
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
--------------------------------------------------
<S> <C> <C> <C> <C>
CLASS I $73*** $104 $138 $233
CLASS II $43 $ 80 $130 $267
</TABLE>
For the same Class II investment, you would pay projected expenses of $33
if you did not sell your shares at the end of the first year. Your
projected expenses for the remaining periods would be the same.
THIS IS JUST AN EXAMPLE. IT DOES NOT REPRESENT PAST OR FUTURE EXPENSES OR
RETURNS. ACTUAL EXPENSES AND RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN.
The Fund pays its operating expenses. The effects of these expenses are
reflected in the Net Asset Value or dividends of each class and are not
directly charged to your account.
+If your transaction is processed through your Securities Dealer, you may be
charged a fee by your Securities Dealer for this service.
++There is no front-end sales charge if you invest $1 million or more in Class
I shares.
Templeton American Trust, Inc. .
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<PAGE>
+++Although Class II has a lower front-end sales charge than Class I, its Rule
12b-1 fees are higher. Over time you may pay more for Class II shares. Please
see "How Do I Buy Shares? - Deciding Which Class to Buy."
++++A Contingent Deferred Sales Charge may apply to any Class II purchase if
you sell the shares within 18 months and to Class I purchases of $1 million or
more if you sell the shares within one year. A Contingent Deferred Sales Charge
may also apply to purchases by certain retirement plans that qualify to buy
Class I shares without a front-end sales charge. The charge is 1% of the value
of the shares sold or the Net Asset Value at the time of purchase, whichever is
less. The number in the table shows the charge as a percentage of Offering
Price. While the percentage is different depending on whether the charge is
shown based on the Net Asset Value or the Offering Price, the dollar amount
paid by you would be the same. See "How Do I Sell Shares? - Contingent Deferred
Sales Charge" for details.
*$5.00 fee is only for Market Timers. We process all other exchanges without a
fee.
**The combination of front-end sales charges and Rule 12b-1 fees could cause
long-term shareholders to pay more than the economic equivalent of the maximum
front-end sales charge permitted under the NASD's rules.
***Assumes a Contingent Deferred Sales Charge will not apply.
Templeton American Trust, Inc.
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<PAGE>
FINANCIAL HIGHLIGHTS
This table summarizes the Fund's financial history. The information has been
audited by McGladrey & Pullen, LLP, the Fund's independent auditors. Their
audit report covering each of the most recent five years appears in the
financial statements in the Fund's Annual Report to Shareholders for the fiscal
year ended December 31, 1996. The Annual Report to Shareholders also includes
more information about the Fund's performance. For a free copy, please call
Fund Information.
CLASS I SHARES
<TABLE>
<CAPTION>
Year Ended December 31 1996 1995/1/
- ------------------------------------------------------------------------
<S> <C> <C>
Per Share Operating Performance
(For a share outstanding throughout the period)
Net asset value, beginning of period $14.23 $13.37
------ ------
Income from investment operations:
Net investment income .20 .11
Net realized and unrealized gain 2.60 1.21
------ ------
Total from investment operations 2.80 1.32
------ ------
Distributions:
Dividends from net investment income (.26) (.20)
Distributions from net realized gains (.75) (.26)
------ ------
Total distributions (1.01) (.46)
------ ------
Change in net asset value 1.79 .86
------ ------
Net asset value, end of period $16.02 $14.23
====== ======
Total Return/2/ 19.90% 9.94%
Ratios/supplemental data
Net assets, end of period (000) $2,053 $ 881
Ratio of expenses to average net assets 1.57% 1.81%/3/
Ratio of net investment income to average net assets 1.53% 1.31%/3/
Portfolio turnover rate 15.93% 4.44%
Average commission rate paid (per share) $.0410
</TABLE>
/1/For the period May 1, 1995 (commencement of sales) through December 31,
1995.
/2/Total Return does not reflect sales commissions. Not annualized for periods
less than one year.
/3/Annualized.
Templeton American Trust, Inc. .
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CLASS II SHARES
<TABLE>
<CAPTION>
Year Ended December 31 1996 1995 1994 1993 1992 1991/1/
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
(For a share outstanding
throughout the period)
Net asset value,
beginning of period $ 14.25 $ 12.49 $ 13.39 $ 11.77 $ 11.20 $ 10.00
------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income .14 .14 .04 .04 .10 .08
Net realized and
unrealized gain 2.54 2.04 .17 1.82 .83 1.22
------- ------- ------- ------- ------- -------
Total from investment
operations 2.68 2.18 .21 1.86 .93 1.30
------- ------- ------- ------- ------- -------
Distributions:
Dividends from net
investment income (.14) (.14) (.05) (.03) (.11) (.08)
Distributions from net
realized gains (.75) (.28) (1.06) (.21) (.09) (.02)
Distributions in excess
of realized gains -- -- -- -- (.16) --
------- ------- ------- ------- ------- -------
Total distributions (.89) (.42) (1.11) (.24) (.36) (.10)
------- ------- ------- ------- ------- -------
Change in net asset value 1.79 1.76 (.90) 1.62 .57 1.20
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 16.04 $ 14.25 $ 12.49 $ 13.39 $ 11.77 $ 11.20
======= ======= ======= ======= ======= =======
Total Return/2/ 18.91% 17.55% 1.63% 15.82% 8.33% 13.05%
Ratios/supplemental data
Net assets, end of period
(000) $44,648 $44,183 $37,959 $34,418 $27,485 $13,019
Ratio of expenses to
average net assets 2.26% 2.40% 2.47% 2.53% 3.17% 3.94%/3/
Ratio of expenses, net of
reimbursement, to
average net assets 2.26% 2.40% 2.47% 2.53% 2.25% 2.25%/3/
Ratio of net investment
income to average net
assets .85% .95% .34% .31% 1.13% 1.64%/3/
Portfolio turnover rate 15.93 4.44% 31.92% 14.10% 27.91% 9.86%
Average commission rate
paid
(per share) $ .0410
</TABLE>
/1/For the period February 7, 1991 (commencement of operations) to December 31,
1991.
/2/Total return does not reflect sales commissions or the contingent deferred
sales charge. Not annualized for periods of less than one year.
/3/Annualized.
. Templeton American Trust, Inc.
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<PAGE>
HOW DOES THE FUND INVEST ITS ASSETS?
THE FUND'S INVESTMENT OBJECTIVE
The Fund's investment objective is long-term total return (capital growth and
income), which it seeks to achieve through a flexible policy of investing
primarily in stocks and debt obligations of U.S. companies. The objective is a
fundamental policy of the Fund and may not be changed without shareholder
approval. Of course, there is no assurance that the Fund's objective will be
achieved.
As a fundamental policy, the Fund will invest at least 65% of its total assets
in stocks and debt obligations of U.S. companies (including the U.S. government
and its agencies). The Fund will invest in common stock, preferred stock and
debt obligations (defined as debt securities, rated or unrated, convertible
bonds and bonds selling at a discount, and which may include structured
investments). TICI will select equity investments for the Fund on the basis of
fundamental company-by-company analysis (rather than broader analyses of
specific industries or sectors of the economy). Although TICI will consider
historical value measures, such as price/earnings ratios, operating profit
margins and liquidation values, the primary factor in selecting equity
securities will be the company's current price relative to its long-term
earnings potential, as determined by TICI. The percentage of the Fund's assets
to be invested in equity and debt securities will vary from time to time, based
on TICI's assessment of the relative total return potential of various
investment vehicles.
Whenever, in the judgment of TICI, market or economic conditions warrant, the
Fund may, for temporary defensive purposes, invest without limit in money
market securities, denominated in U.S. dollars or in the currency of any
foreign country, issued by entities organized in the U.S. or any foreign
country, consisting of: short-term (less than 12 months to maturity) and
medium-term (not greater than five years to maturity) obligations issued or
guaranteed by the U.S. government or the government of a foreign country, their
agencies or instrumentalities; finance company and corporate commercial paper,
and other short-term corporate obligations, in each case rated Prime-1 by
Moody's or A-1 by S&P or, if unrated, of comparable quality as determined by
TICI; and repurchase agreements with U.S. banks and broker-dealers with respect
to such securities. In addition, the Fund may invest up to 25% of its total
assets in obligations (including certificates of deposit, time deposits and
bankers' acceptances) of U.S. and foreign banks; provided that the Fund will
limit its investment in time deposits for which there is a penalty for early
withdrawal to 10% of its total assets. In the event the Fund adopts a temporary
defensive position, the investment practices described above may not be
consistent with the Fund's stated investment objective.
With respect to 75% of its total assets, the Fund may invest no more than 5% of
its total assets in securities issued by any one company or government,
6
<PAGE>
Templeton American Trust, Inc. .
exclusive of U.S. government securities. In furtherance of its objective of
long-term total return, the Fund may invest up to 5% of its assets in warrants
(excluding warrants acquired in units or attached to securities). The Fund may
not invest more than 15% of its total assets in securities of foreign issuers
which are not listed on a recognized U.S. or foreign securities exchange, and
may not invest more than 10% of its total assets in securities which are not
publicly traded or which cannot be readily resold because of legal or
contractual restrictions, or which are not otherwise readily marketable
(including repurchase agreements having more than seven days remaining to
maturity), and over-the-counter options purchased by the Fund. Assets used as
cover for over-the-counter options written by the Fund will be considered not
readily marketable.
The Fund may also lend its portfolio securities and borrow money for investment
purposes (i.e., "leverage" its portfolio). In addition, the Fund may enter into
transactions in options on securities, securities indices and foreign
currencies, forward foreign currency exchange contracts, and futures contracts
and related options, all of which may be classified as derivatives. When deemed
appropriate by TICI, the Fund may invest cash balances in repurchase agreements
and other money market investments to maintain liquidity in an amount to meet
expenses or for day-to-day operating purposes. These investment techniques are
described below and under the heading "How does the Fund Invest its Assets?" in
the SAI.
The Fund does not intend to emphasize short-term trading profits and usually
expects to have a portfolio turnover rate not exceeding 50%.
The Fund's investment objective, as well as certain investment restrictions
described in the SAI, cannot be changed without shareholder approval. All other
investment policies may be modified by the Fund's Board.
TYPES OF SECURITIES IN WHICH THE FUND MAY INVEST
The Fund is authorized to use the various securities and investment techniques
described below. Although these strategies are regularly used by some
investment companies and other institutional investors in various markets, some
of these strategies cannot at the present time be used to a significant extent
by the Fund in some of the markets in which the Fund may invest and may not be
available for extensive use in the future.
BORROWING. The Fund may borrow up to one-third of the value of its total assets
from banks to increase its holdings of portfolio securities. Under the 1940
Act, the Fund is required to maintain continuous asset coverage of 300% with
respect to such borrowings and to sell (within three days) sufficient portfolio
holdings to restore such coverage if it should decline to less than 300% due to
market fluctuations or otherwise, even if such liquidations of the Fund's
holdings may be disadvantageous from an investment standpoint.
. Templeton American Trust, Inc.
7
<PAGE>
Leveraging by means of borrowing may exaggerate the effect of any increase or
decrease in the value of portfolio securities on the Fund's Net Asset Value,
and money borrowed will be subject to interest and other costs (which may
include commitment fees and/or the cost of maintaining minimum average
balances), which may or may not exceed the income or gains received from the
securities purchased with borrowed funds.
LOANS OF PORTFOLIO SECURITIES. The Fund may lend to broker-dealers portfolio
securities with an aggregate market value of up to one-third of its total
assets to generate income. Such loans must be secured by collateral (consisting
of any combination of cash, U.S. government securities or irrevocable letters
of credit) in an amount at least equal (on a daily marked-to-market basis) to
the current market value of the securities loaned. The Fund may terminate the
loans at any time and obtain the return of the securities loaned within five
business days. The Fund will continue to receive any interest or dividends paid
on the loaned securities and will continue to retain any voting rights with
respect to the securities.
OPTIONS ON SECURITIES OR INDICES. The Fund may write (i.e., sell) covered put
and call options and purchase put and call options on securities or securities
indices that are traded on U.S. and foreign exchanges or in the over-the-
counter markets. An option on a security is a contract that permits the
purchaser of the option, in return for the premium paid, the right to buy a
specified security (in the case of a call option) or to sell a specified
security (in the case of a put option) from or to the writer of the option at a
designated price during the term of the option. An option on a securities index
permits the purchaser of the option, in return for the premium paid, the right
to receive from the seller cash equal to the difference between the closing
price of the index and the exercise price of the option. The Fund may write a
call or put option only if the option is "covered." This means that so long as
the Fund is obligated as the writer of a call option, it will own the
underlying securities subject to the call, or hold a call at the same or lower
exercise price, for the same exercise period, and on the same securities as the
written call. A put is covered if the Fund maintains liquid assets with a value
equal to the exercise price in a segregated account, or holds a put on the same
underlying securities at an equal or greater exercise price. The value of the
underlying securities on which options may be written at any one time will not
exceed 15% of the total assets of the Fund. The Fund will not purchase put or
call options if the aggregate premium paid for such options would exceed 5% of
its total assets at the time of purchase.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS AND OPTIONS ON FOREIGN CURRENCIES.
The Fund may enter into forward foreign currency exchange contracts
("forward contracts") to attempt to minimize the risk to the Fund from adverse
changes in the relationship between the U.S. dollar and foreign currencies. A
forward contract is an obligation to purchase or sell a specific
Templeton American Trust, Inc. .
8
<PAGE>
currency for an agreed price at a future date which is individually negotiated
and privately traded by currency traders and their customers. The Fund may
enter into a forward contract, for example, when it enters into a contract for
the purchase or sale of a security denominated in a foreign currency in order
to "lock in" the U.S. dollar price of the security. The Fund will not enter
into forward contracts if, as a result, the Fund will have more than 20% of its
total assets committed to the consummation of such contracts. The Fund may also
purchase and write put and call options on foreign currencies for the purpose
of protecting against declines in the dollar value of foreign portfolio
securities and against increases in the U.S. dollar cost of foreign securities
to be acquired.
FUTURES CONTRACTS. For hedging purposes only, the Fund may buy and sell
financial futures contracts, stock index futures contracts, foreign currency
futures contracts and options on any of the foregoing. A financial futures
contract is an agreement between two parties to buy or sell a specified debt
security at a set price on a future date. An index futures contract is an
agreement to take or make delivery of an amount of cash based on the difference
between the value of the index at the beginning and at the end of the contract
period. A futures contract on a foreign currency is an agreement to buy or sell
a specified amount of a currency for a set price on a future date. When the
Fund enters into a futures contract, it must make an initial deposit, known as
"initial margin," as a partial guarantee of its performance under the contract.
As the value of the security, index or currency fluctuates, either party to the
contract is required to make additional margin payments, known as "variation
margin," to cover any additional obligation it may have under the contract. In
addition, when the Fund enters into a futures contract, it will segregate
assets or "cover" its position in accordance with the 1940 Act. See "How does
the Fund Invest its Assets? - Futures Contracts" in the SAI. The Fund may not
commit more than 5% of its total assets to initial deposits on futures
contracts and related options. The value of the underlying securities on which
futures contracts will be written at any one time will not exceed 25% of the
total assets of the Fund.
REPURCHASE AGREEMENTS. For temporary defensive purposes and for cash management
purposes, the Fund may enter into repurchase agreements with U.S. banks and
broker-dealers. Under a repurchase agreement the Fund acquires a security from
a U.S. bank or a registered broker-dealer who simultaneously agrees to
repurchase the security at a specified time and price. The repurchase price is
in excess of the purchase price by an amount which reflects an agreed-upon rate
of return, which is not tied to the coupon rate on the underlying security.
Under the 1940 Act, repurchase agreements are considered to be loans
collateralized by the underlying security and therefore will be fully
collateralized. However, if the seller should default on its obligation to
repurchase the underlying security, the Fund may experience delay or difficulty
in its ability to dispose of the underlying security and might incur a
. Templeton American Trust, Inc.
9
<PAGE>
loss if the value of the security declines, as well as incur disposition costs
in liquidating the security.
OTHER POLICIES AND RESTRICTIONS. The Fund has a number of additional investment
restrictions that limit its activities to some extent. Some of these
restrictions may only be changed with shareholder approval. For a list of these
restrictions and more information about the Fund's investment policies, please
see "How does the Fund Invest its Assets?" and "Investment Restrictions" in the
SAI.
Each of the Fund's policies and restrictions discussed in this prospectus and
in the SAI is considered at the time the Fund makes an investment. The Fund is
generally not required to sell a security because of a change in circumstances.
WHAT ARE THE FUND'S POTENTIAL RISKS?
You should understand that all investments involve risk and there can be no
guarantee against loss resulting from an investment in the Fund, nor can there
be any assurance that the Fund's investment objective will be attained. As with
any investment in securities, the value of, and income from, an investment in
the Fund can decrease as well as increase, depending on a variety of factors
which may affect the values and income generated by the Fund's portfolio
securities, including general economic conditions and market factors. In
addition to the factors which affect the value of individual securities, a
shareholder may anticipate that the value of the shares of the Fund will
fluctuate with movements in the broader equity and bond markets. A decline in
the stock market of any country in which the Fund is invested in equity
securities may also be reflected in declines in the price of the shares of the
Fund. Changes in the prevailing rates of interest in any of the countries in
which the Fund is invested in fixed income securities will likely affect the
value of such holdings and thus the value of Fund shares. Increased rates of
interest, which frequently accompany inflation and/or a growing economy, are
likely to have a negative effect on the value of Fund shares. In addition,
changes in currency valuations will affect the price of the shares of the Fund.
History reflects both decreases and increases in stock markets and interest
rates in individual countries and throughout the world, and in currency
valuations, and these may occur unpredictably in the future. Additionally,
investment decisions made by TICI will not always be profitable or prove to
have been correct. The Fund is not intended as a complete investment program.
The Fund may invest up to 35% of its total assets in securities in any foreign
country, developed or developing, if they are listed on a stock exchange, and
has a limited right to purchase such securities if they are unlisted. Investors
should consider carefully the risks associated with investing in foreign
securities, which are in addition to the usual risks inherent in domestic
investments. There is the possibility of expropriation, nationalization or
Templeton American Trust, Inc. .
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<PAGE>
confiscatory taxation, taxation of income earned in the foreign nation or other
taxes imposed with respect to investments in the foreign nation, foreign
exchange controls (which may include suspension of the ability to transfer
currency from a given country), foreign investment controls on daily stock
market movements, default in foreign government securities, political or social
instability, or diplomatic developments which could affect investments in
securities of issuers in foreign nations. Also, some countries may withhold
portions of interest and dividends at the source. In addition, in many
countries there is less publicly available information about issuers than is
available in reports about companies in the U.S. Foreign companies are not
generally subject to uniform accounting, auditing and financial reporting
standards, and auditing practices and requirements may not be comparable to
those applicable to U.S. companies. The Fund may encounter difficulties or be
unable to vote proxies, exercise shareholder rights, pursue legal remedies, and
obtain judgments in foreign courts.
Brokerage commissions, custodial services, and other costs relating to
investment in foreign countries are generally more expensive than in the U.S.
Foreign securities markets also have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when assets of the Fund are uninvested and no return is
earned thereon. The inability of the Fund to make intended security purchases
due to settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems could result either in losses to the Fund due to subsequent declines
in value of the portfolio security or, if the Fund has entered into a contract
to sell the security, could result in possible liability to the purchaser.
In many foreign countries there is less government supervision and regulation
of business and industry practices, stock exchanges, brokers and listed
companies than in the U.S. There is an increased risk, therefore, of uninsured
loss due to lost, stolen, or counterfeit stock certificates. In addition, the
foreign securities markets of any of the countries in which the Fund may invest
may also be smaller, less liquid, and subject to greater price volatility than
those in the U.S. As an operating policy, the Fund may invest no more than 5%
of its assets in Eastern European countries, which involve special risks that
are described under "What are the Fund's Potential Risks?" in the SAI.
Prior governmental approval of non-domestic investments may be required under
certain circumstances in some developing countries, and the extent of foreign
investment in domestic companies may be subject to limitation in other
developing countries. Foreign ownership limitations also may be imposed by the
charters of individual companies in developing countries to prevent, among
other concerns, violation of foreign investment limitations.
Templeton American Trust, Inc.
11
<PAGE>
.
Repatriation of investment income, capital and proceeds of sales by foreign
investors may require governmental registration and/or approval in some
developing countries. The Fund could be adversely affected by delays in or a
refusal to grant any required governmental registration or approval for such
repatriation.
Further, the economies of developing countries generally are heavily dependent
upon international trade and, accordingly, have been and may continue to be
adversely affected by trade barriers, exchange controls, managed adjustments in
relative currency values and other protectionist measures imposed or negotiated
by the countries with which they trade. These economies also have been and may
continue to be adversely affected by economic conditions in the countries with
which they trade.
As a non-fundamental policy, the Fund will limit its investments in Russian
securities to 5% of its total assets. Russian securities involve additional
significant risks, including political and social uncertainty (for example,
regional conflicts and risk of war), currency exchange rate volatility,
pervasiveness of corruption and crime in the Russian economic system, delays in
settling portfolio transactions and risk of loss arising out of Russia's system
of share registration and custody. For more information on these risks and
other risks associated with Russian securities, please see "What are the Fund's
Potential Risks?" in the SAI.
The Fund usually effects currency exchange transactions on a spot (i.e., cash)
basis at the spot rate prevailing in the foreign exchange market. However, some
price spread on currency exchange transactions (to cover service charges) will
be incurred when the Fund converts assets from one currency to another.
The Fund is authorized to invest in medium quality or high-risk, lower quality
debt securities that are rated between BBB and C by S&P, and between Baa and C
by Moody's or, if unrated, are of equivalent investment quality as determined
by TICI. As an operating policy, which may be changed by the Board without
shareholder approval, the Fund will not invest more than 5% of its total assets
in debt securities rated lower than BBB by S&P or Baa by Moody's. The Board may
consider a change in this operating policy if, in its judgment, economic
conditions change such that a higher level of investment in high-risk, lower
quality debt securities would be consistent with the interests of the Fund and
its shareholders. See "How does the Fund Invest its Assets? - Debt Securities"
in the SAI for descriptions of debt securities rated BBB by S&P and Baa by
Moody's. High-risk, lower quality debt securities, commonly known as junk
bonds, are regarded, on balance, as predominantly speculative with respect to
the issuer's capacity to pay interest and repay principal in accordance with
the terms of the obligation and may be in default. Unrated debt securities are
not necessarily of lower quality than rated securities but they may not be
attractive to as many buyers. Regardless of rating levels, all debt securities
considered for
Templeton American Trust, Inc.
12
<PAGE>
purchase (whether rated or unrated) will be carefully analyzed by TICI to
insure, to the extent possible, that the planned investment is sound. The Fund
may, from time to time, purchase defaulted debt securities if, in the opinion
of TICI, the issuer may resume interest payments in the near future. As a
fundamental policy, the Fund will not invest more than 10% of its total assets
(at the time of purchase) in defaulted debt securities, which may be illiquid.
Leveraging by means of borrowing may exaggerate the effect of any increase or
decrease in the value of portfolio securities on the Fund's Net Asset Value,
and money borrowed will be subject to interest and other costs (which may
include commitment fees and/or the cost of maintaining minimum average
balances) which may or may not exceed the income or gains received from the
securities purchased with borrowed funds.
Successful use of futures contracts and related options is subject to special
risk considerations. A liquid secondary market for any futures or options
contract may not be available when a futures or options position is sought to
be closed. In addition, there may be an imperfect correlation between movements
in the securities or foreign currency on which the futures or options contract
is based and movements in the securities or currency in the Fund's portfolio.
Successful use of futures or options contracts is further dependent on TICI's
ability to correctly predict movements in the securities or foreign currency
markets and no assurance can be given that its judgment will be correct.
Successful use of options on securities or securities indices is subject to
similar risk considerations.
There are further risk factors, including possible losses through the holding
of securities in domestic and foreign custodian banks and depositories,
described elsewhere in the prospectus and in the SAI.
WHO MANAGES THE FUND?
THE BOARD. The Board oversees the management of the Fund and elects its
officers. The officers are responsible for the Fund's day-to-day operations.
The Board also monitors the Fund to ensure no material conflicts exist between
the Fund's classes of shares. While none is expected, the Board will act
appropriately to resolve any material conflict that may arise.
INVESTMENT MANAGER. TICI manages the Fund's assets and makes its investment
decisions. TICI also performs similar services for other funds. It is wholly
owned by Resources, a publicly owned company engaged in the financial services
industry through its subsidiaries. Charles B. Johnson and Rupert H. Johnson,
Jr. are the principal shareholders of Resources. Together, TICI and its
affiliates manage over $188 billion in assets. The Templeton organization has
been investing globally since 1940. TICI and its affiliates have offices in
Argentina, Australia, Bahamas, Canada, France, Germany, Hong Kong, India,
Italy, Korea, Luxembourg, Poland, Russia, Singapore, South Africa,
Templeton American Trust, Inc.
13
<PAGE>
.
Taiwan, United Kingdom, U.S., and Vietnam. Please see "Investment Management
and Other Services" and "Miscellaneous Information" in the SAI for information
on securities transactions and a summary of the Fund's Code of Ethics.
PORTFOLIO MANAGEMENT. The lead portfolio manager of the Fund since 1996 is
Peter A. Nori. Mr. Nori is a vice president of TICI. He holds a BS in finance
and an MBA with an emphasis in finance from the University of San Francisco. He
is a Chartered Financial Analyst and a member of the Association for Investment
Management and Research. Mr. Nori completed Franklin's management training
program before moving into portfolio research in 1990 as an equity analyst and
co-portfolio manager of the Franklin Convertible Securities Fund before joining
the Templeton organization in 1994. As a portfolio manager and research
analyst, Mr. Nori currently manages several separate accounts and a variable
annuity product. He has global research responsibilities for the steel and data
processing industries, and country coverage of Austria.
Gary R. Clemons and William T. Howard, Jr. exercise secondary portfolio
management responsibilities for the Fund. Mr. Clemons is a senior vice
president of TICI. He holds a BS from the University of Nevada - Reno and an
MBA with emphases in finance and investment banking from the University of
Wisconsin - Madison. He joined TICI in 1993. Prior to that time he was a
research analyst at Templeton Quantitative Advisors, Inc. in New York, where he
was also responsible for management of a small capitalization fund. As a
research analyst with Templeton, Mr. Clemons has responsibility for the
telecommunications industry and country coverage of Columbia, Peru, Norway, and
Sweden. Mr. Howard is a senior vice president of TICI. He holds a BA in
international studies from Rhodes College and an MBA in finance from Emory
University. He is a Chartered Financial Analyst and a member of the Financial
Analysts Society. Before joining the Templeton organization in 1993, Mr. Howard
was a portfolio manager and analyst with the Tennessee Consolidated Retirement
System in Nashville, Tennessee, where he was responsible for research and
management of the international equity portfolio, and specialized in the
Japanese equity market. As a portfolio manager and research analyst with
Templeton, Mr. Howard's research responsibilities include the shipping,
machinery and engineering industries worldwide. He is also responsible for
country coverage of Japan and New Zealand.
MANAGEMENT FEES. During the fiscal year ended December 31, 1996, management
fees totaling 0.70% of the average daily net assets of the Fund were paid to
TICI. Total expenses, including fees paid to TICI, were 1.57% for Class I and
2.26% for Class II.
PORTFOLIO TRANSACTIONS. TICI tries to obtain the best execution on all
transactions. If TICI believes more than one broker or dealer can provide the
Templeton American Trust, Inc. .
14
<PAGE>
best execution, it may consider research and related services and the sale of
Fund shares, as well as shares of other funds in the Franklin Templeton Group
of Funds, when selecting a broker or dealer. Please see "How does the Fund Buy
Securities for its Portfolio?" in the SAI for more information.
ADMINISTRATIVE SERVICES. FT Services provides certain administrative services
and facilities for the Fund. Prior to October 1, 1996, the Fund's Administrator
was Templeton Global Investors, Inc. During the fiscal year ended December 31,
1996, administration fees totaling 0.15% of the average daily net assets of the
Fund were paid. These fees are included in the amount of total expenses shown
above. Please see "Investment Management and Other Services" in the SAI for
more information.
THE RULE 12B-1 PLANS
Class I and Class II have separate distribution plans or "Rule 12b-1 Plans"
under which they may reimburse Distributors for activities primarily intended
to sell shares of the class. These expenses may include, among others,
distribution or service fees paid to Securities Dealers or others who have
executed a servicing agreement with the Fund, Distributors or its affiliates,
printing prospectuses and reports used for sales purposes, preparing and
distributing sales literature and advertisements, and a prorated portion of
Distributors' overhead expenses.
Payments by the Fund under the Class I plan may not exceed 0.35% per year of
Class I's average daily net assets. Expenses not reimbursed in any quarter may
be reimbursed in future quarters or years. This includes expenses not
reimbursed because they exceeded the applicable limit under the plan. As of
December 31, 1996, there were no unreimbursed expenses under the Class I plan.
During the first year after certain Class I purchases made without a sales
charge, Distributors may keep the Rule 12b-1 fees associated with the purchase.
Payments by the Fund under the Class II plan may not exceed 1.0% per year of
Class II's average daily net assets. This amount includes a maximum of 0.25% of
Class II's average daily net assets which may be paid to Securities Dealers or
others for personal service and the maintenance of shareholder accounts and a
maximum of 0.75% which may be paid to Securities Dealers who sell Class II
shares. The Class II plan, as a technical matter, permits expenses not
reimbursed in any year to be reimbursed in future years. This includes expenses
not reimbursed because they exceeded the applicable limit under the plan.
Distributors has indicated that it does not intend to seek such reimbursement.
During the first year after a purchase of Class II shares, Distributors may
keep a portion of the Rule 12b-1 fees to reimburse costs associated with the
purchase.
. Templeton American Trust, Inc.
15
<PAGE>
The Rule 12b-1 fees charged to each class are based only on the fees
attributable to that particular class. For more information, please see "The
Fund's Underwriter" in the SAI.
HOW DOES THE FUND MEASURE PERFORMANCE?
From time to time, each class of the Fund advertises its performance. The more
commonly used measure of performance is total return. Performance figures are
usually calculated using the maximum sales charges, but certain figures may not
include sales charges.
Total return is the change in value of an investment over a given period. It
assumes any dividends and capital gains are reinvested.
The investment results of each class will vary. Performance figures are always
based on past performance and do not guarantee future results. For a more
detailed description of how the Fund calculates its performance figures, please
see "How does the Fund Measure Performance?" in the SAI.
HOW TAXATION AFFECTS THE FUND AND ITS SHAREHOLDERS
The following discussion reflects some of the tax considerations that affect
mutual funds and their shareholders. For more information on tax matters
relating to the Fund and its shareholders, see "Additional Information on
Distributions and Taxes" in the SAI.
The Fund has elected and intends to continue to qualify as a regulated
investment company under Subchapter M of the Code. A regulated investment
company generally is not subject to federal income tax on income and gains
distributed in a timely manner to its shareholders. The Fund intends to
distribute to shareholders substantially all of its net investment income and
realized capital gains, which generally will be taxable income or capital gains
in their hands. Distributions declared in October, November or December to
shareholders of record on a date in such month and paid during the following
January will be treated as having been received by shareholders on December 31
in the year such distributions were declared. The Fund will inform shareholders
each year of the amount and nature of such income or gains. Sales or other
dispositions of Fund shares generally will give rise to taxable gain or loss.
Templeton American Trust, Inc. .
16
<PAGE>
HOW IS THE FUND ORGANIZED?
The Fund is a diversified, open-end management investment company, commonly
called a mutual fund. It was organized as a Maryland corporation on October 31,
1990, and is registered with the SEC under the 1940 Act. The Fund offers two
classes of shares: Templeton American Trust, Inc. - Class I and Templeton
American Trust, Inc. - Class II. All shares purchased before May 1, 1995 are
considered Class II shares. Additional classes of shares may be offered in the
future.
Shares of each class represent proportionate interests in the assets of the
Fund and have the same voting and other rights and preferences as any other
class of the Fund for matters that affect the Fund as a whole. For matters that
only affect one class, however, only shareholders of that class may vote. Each
class will vote separately on matters (1) affecting only that class, (2)
expressly required to be voted on separately by state law, or (3) required to
be voted on separately by the 1940 Act.
The Fund has noncumulative voting rights. This gives holders of more than 50%
of the shares voting the ability to elect all of the members of the Board. If
this happens, holders of the remaining shares voting will not be able to elect
anyone to the Board.
The Fund does not intend to hold annual shareholder meetings. It may hold
special meetings, however, for matters requiring shareholder approval under the
1940 Act. A meeting may also be called by the Board in its discretion or for
the purpose of considering the removal of a Board member if requested in
writing to do so by shareholders holding at least 10% of the outstanding
shares. The 1940 Act requires that we help you communicate with other
shareholders in connection with removing members of the Board.
. Templeton American Trust, Inc.
17
<PAGE>
ABOUT YOUR ACCOUNT
HOW DO I BUY SHARES?
OPENING YOUR ACCOUNT
To open your account, contact your investment representative or complete and
sign the enclosed shareholder application and return it to the Fund with your
check. PLEASE INDICATE WHICH CLASS OF SHARES YOU WANT TO BUY. IF YOU DO NOT
SPECIFY A CLASS, YOUR PURCHASE WILL BE AUTOMATICALLY INVESTED IN CLASS I
SHARES.
<TABLE>
<CAPTION>
MINIMUM
INVESTMENTS*
- -----------------------------------
<S> <C>
To Open Your Account. $100
To Add to Your
Account............ $ 25
</TABLE>
*We may waive these minimums for retirement plans. We may also refuse any order
to buy shares.
Deciding Which Class to Buy
You should consider a number of factors when deciding which class of shares to
buy. IF YOU PLAN TO BUY $1 MILLION OR MORE IN A SINGLE PAYMENT OR YOU QUALIFY
TO BUY CLASS I SHARES WITHOUT A SALES CHARGE, YOU MAY NOT BUY CLASS II SHARES.
Generally, you should consider buying Class I shares if:
.you expect to invest in the Fund over the long term;
.you qualify to buy Class I shares at a reduced sales charge; or
.you plan to buy $1 million or more over time.
You should consider Class II shares if:
.you expect to invest less than $50,000 in the Franklin Templeton Funds; and
. you plan to sell a substantial number of your shares within approximately six
years or less of your investment.
Class I shares are generally more attractive for long-term investors because of
Class II's higher Rule 12b-1 fees. These may accumulate over time to outweigh
the lower Class II front-end sales charge and result in lower income dividends
for Class II shareholders. If you qualify to buy Class I shares at a reduced
sales charge based upon the size of your purchase or through our Letter of
Intent or cumulative quantity discount programs, but plan to hold your shares
less than approximately six years, you should evaluate whether it is more
economical for you to buy Class I or Class II shares.
For purchases of $1 million or more, it is considered more beneficial for you
to buy Class I shares since there is no front-end sales charge, even though
these purchases may be subject to a Contingent Deferred Sales Charge. Any
purchase of $1 million or more is therefore automatically invested in Class I
shares. You may accumulate more than $1 million in Class II shares through
purchases over time, but if you plan to do this you should determine whether it
would be more beneficial for you to buy Class I shares through a Letter of
Intent.
Templeton American Trust, Inc. .
18
<PAGE>
Please consider all of these factors before deciding which class of shares to
buy. There are no conversion features attached to either class of shares.
PURCHASE PRICE OF FUND SHARES
For Class I shares, the sales charge you pay depends on the dollar amount you
invest, as shown in the table below. The sales charge for Class II shares is 1%
and, unlike Class I, does not vary based on the size of your purchase.
<TABLE>
<CAPTION>
TOTAL SALES CHARGE
AS A PERCENTAGE OF
-------------------
AMOUNT PAID
TO DEALER AS A
AMOUNT OF PURCHASE OFFERING NET AMOUNT PERCENTAGE OF
AT OFFERING PRICE PRICE INVESTED OFFERING PRICE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Class I
Under $50,000................................ 5.75% 6.10% 5.00%
$50,000 but less than $100,000............... 4.50% 4.71% 3.75%
$100,000 but less than $250,000.............. 3.50% 3.63% 2.80%
$250,000 but less than $500,000.............. 2.50% 2.56% 2.00%
$500,000 but less than $1,000,000............ 2.00% 2.04% 1.60%
$1,000,000 or more*.......................... None None None
Class II
Under $1,000,000*............................ 1.00% 1.01% 1.00%
</TABLE>
*A Contingent Deferred Sales Charge of 1% may apply to Class I purchases of $1
million or more and any Class II purchase. Please see "How Do I Sell Shares? -
Contingent Deferred Sales Charge." Please also see "Other Payments to
Securities Dealers" below for a discussion of payments Distributors may make
out of its own resources to Securities Dealers for certain purchases. Purchases
of Class II shares are limited to purchases below $1 million. Please see
"Deciding Which Class to Buy."
SALES CHARGE REDUCTIONS AND WAIVERS
z IF YOU QUALIFY TO BUY SHARES UNDER ONE OF THE SALES CHARGE REDUCTION OR
WAIVER CATEGORIES DESCRIBED BELOW, PLEASE INCLUDE A WRITTEN STATEMENT WITH
EACH PURCHASE ORDER EXPLAINING WHICH PRIVILEGE APPLIES. If you don't include
this statement, we cannot guarantee that you will receive the sales charge
reduction or waiver.
CUMULATIVE QUANTITY DISCOUNTS - CLASS I ONLY. To determine if you may pay a
reduced sales charge, the amount of your current Class I purchase is added to
the cost or current value, whichever is higher, of your existing shares in the
Franklin Templeton Funds, as well as those of your spouse, children under the
age of 21 and grandchildren under the age of 21. If you are the sole owner of a
company, you may also add any company accounts, including retirement plan
accounts. Companies with one or more retirement plans may add together the
total plan assets invested in the Franklin Templeton Funds to determine the
sales charge that applies.
. Templeton American Trust, Inc.
19
<PAGE>
LETTER OF INTENT - CLASS I ONLY. You may buy Class I shares at a reduced sales
charge by completing the Letter of Intent section of the shareholder
application. A Letter of Intent is a commitment by you to invest a specified
dollar amount during a 13 month period. The amount you agree to invest
determines the sales charge you pay on Class I shares.
BY COMPLETING THE LETTER OF INTENT SECTION OF THE SHAREHOLDER APPLICATION, YOU
ACKNOWLEDGE AND AGREE TO THE FOLLOWING:
. You authorize Distributors to reserve 5% of your total intended purchase in
Class I shares registered in your name until you fulfill your Letter.
. You give Distributors a security interest in the reserved shares and appoint
Distributors as attorney-in-fact.
. Distributors may sell any or all of the reserved shares to cover any
additional sales charge if you do not fulfill the terms of the Letter.
. Although you may exchange your shares, you may not sell reserved shares until
you complete the Letter or pay the higher sales charge.
Your periodic statements will include the reserved shares in the total shares
you own. We will pay or reinvest dividend and capital gain distributions on the
reserved shares as you direct. Our policy of reserving shares does not apply to
certain retirement plans.
If you would like more information about the Letter of Intent privilege, please
see "How Do I Buy, Sell and Exchange Shares? - Letter of Intent" in the SAI or
call Shareholder Services.
GROUP PURCHASES - CLASS I ONLY. If you are a member of a qualified group, you
may buy Class I shares at a reduced sales charge that applies to the group as a
whole. The sales charge is based on the combined dollar value of the group
members' existing investments, plus the amount of the current purchase.
A qualified group is one that:
.Was formed at least six months ago,
.Has a purpose other than buying Fund shares at a discount,
.Has more than 10 members,
.Can arrange for meetings between our representatives and group members,
. Agrees to include Franklin Templeton Fund sales and other materials in
publications and mailings to its members at reduced or no cost to
Distributors,
. Agrees to arrange for payroll deduction or other bulk transmission of
investments to the Fund, and
. Meets other uniform criteria that allow Distributors to achieve cost savings
in distributing shares.
Templeton American Trust, Inc. .
20
<PAGE>
SALES CHARGE WAIVERS. The Fund's sales charges (front-end and contingent
deferred) will not apply to certain purchases. For waiver categories 1, 2 or 3
below: (i) the distributions or payments must be reinvested within 365 days of
their payment date, and (ii) Class II distributions may be reinvested in either
Class I or Class II shares. Class I distributions may only be reinvested in
Class I shares.
The Fund's sales charges will not apply if you are buying Class I shares with
money from the following sources or Class II shares with money from the sources
in waiver categories 1 or 4:
1. Dividend and capital gain distributions from any Franklin Templeton Fund or
a REIT sponsored or advised by Franklin Properties, Inc.
2. Distributions from an existing retirement plan invested in the Franklin
Templeton Funds.
3. Annuity payments received under either an annuity option or from death
benefit proceeds, only if the annuity contract offers as an investment
option the Franklin Valuemark Funds, the Templeton Variable Annuity Fund,
the Templeton Variable Products Series Fund, or the Franklin Government
Securities Trust. You should contact your tax advisor for information on
any tax consequences that may apply.
4. Redemptions from any Franklin Templeton Fund if you:
.Originally paid a sales charge on the shares,
.Reinvest the money within 365 days of the redemption date, and
.Reinvest the money in the same class of shares.
An exchange is not considered a redemption for this privilege. The
Contingent Deferred Sales Charge will not be waived if the shares were
subject to a Contingent Deferred Sales Charge when sold. We will credit
your account in shares, at the current value, in proportion to the amount
reinvested for any Contingent Deferred Sales Charge paid in connection
with the earlier redemption, but a new Contingency Period will begin.
If you immediately placed your redemption proceeds in a Franklin Bank CD,
you may reinvest them as described above. The proceeds must be reinvested
within 365 days from the date the CD matures, including any rollover.
5. Redemptions from other mutual funds. This waiver category is only effective
with respect to purchases of Fund shares made prior to June 1, 1997.
If you sold shares of a fund that is not a Franklin Templeton Fund within
the past 60 days, you may invest the proceeds without any sales charge if
(a) the investment objectives were similar to the Fund's, and (b) your
shares in that fund were subject to any front-end or contingent deferred
sales charges at the time of purchase. You must provide a copy of the
. Templeton American Trust, Inc.
21
<PAGE>
statement showing your redemption, and purchase of the Fund's shares prior
to June 1, 1997.
The Fund's sales charges will also not apply to Class I purchases by:
6. Trust companies and bank trust departments agreeing to invest in Franklin
Templeton Funds over a 13 month period at least $1 million of assets held
in a fiduciary, agency, advisory, custodial or similar capacity and over
which the trust companies and bank trust departments or other plan
fiduciaries or participants, in the case of certain retirement plans, have
full or shared investment discretion. We will accept orders for these
accounts by mail accompanied by a check or by telephone or other means of
electronic data transfer directly from the bank or trust company, with
payment by federal funds received by the close of business on the next
business day following the order.
7. Group annuity separate accounts offered to retirement plans.
8. Chilean retirement plans that meet the requirements described under
"Retirement Plans" below.
9. An Eligible Governmental Authority. Please consult your legal and
investment advisors to determine if an investment in the Fund is
permissible and suitable for you and the effect, if any, of payments by the
Fund on arbitrage rebate calculations.
10. Broker-dealers, registered investment advisors or certified financial
planners who have entered into an agreement with Distributors for clients
participating in comprehensive fee programs.
11. Registered Securities Dealers and their affiliates, for their investment
accounts only.
12. Current employees of Securities Dealers and their affiliates and their
family members, as allowed by the internal policies of their employer.
13. Officers, trustees, directors and full-time employees of the Franklin
Templeton Funds or the Franklin Templeton Group, and their family members,
consistent with our then-current policies.
14. Investment companies exchanging shares or selling assets pursuant to a
merger, acquisition or exchange offer.
15. Accounts managed by the Franklin Templeton Group.
16. Certain unit investment trusts and their holders reinvesting distributions
from the trusts.
RETIREMENT PLANS. Retirement plans that (i) are sponsored by an employer with
at least 100 employees, or (ii) have plan assets of $1 million or more, or
(iii) agree to invest at least $500,000 in the Franklin Templeton Funds over a
13 month period may buy Class I shares without a front-end sales charge.
Retirement plans that are not Qualified Retirement Plans or SEPS, such as
Templeton American Trust, Inc. .
22
<PAGE>
403(b) or 457 plans, must also meet the requirements described under "Group
Purchases--Class I Only" above. For retirement plan accounts opened on or
after May 1, 1997, a Contingent Deferred Sales Charge may apply if the account
is closed within 365 days of the retirement plan account's initial purchase in
the Franklin Templeton Funds. Please see "How Do I Sell Shares?--Contingent
Deferred Sales Charge" for details.
Any retirement plan that does not meet the requirements to buy Class I shares
without a front-end sales charge and that was a shareholder of the Fund on or
before February 1, 1995, may buy shares of the Fund subject to a maximum sales
charge of 4% of the Offering Price, 3.2% of which will be retained by
Securities Dealers.
HOW DO I BUY SHARES IN CONNECTION WITH RETIREMENT PLANS?
Your individual or employer-sponsored retirement plan may invest in the Fund.
Plan documents are required for all retirement plans. Trust Company can
provide the plan documents for you and serve as custodian or trustee.
Trust Company can provide you with brochures containing important information
about its plans. To establish a Trust Company retirement plan, you will need
an application other than the one included in this prospectus. For a
retirement plan brochure or application, please call our Retirement Plans
Department.
Please consult your legal, tax or retirement plan specialist before choosing a
retirement plan. Your investment representative or advisor can help you make
investment decisions within your plan.
OTHER PAYMENTS TO SECURITIES DEALERS
The payments described below may be made to Securities Dealers who initiate
and are responsible for Class II purchases and certain Class I purchases made
without a sales charge. The payments are subject to the sole discretion of
Distributors, and are paid by Distributors or one of its affiliates and not by
the Fund or its shareholders.
1. Class II purchases - up to 1% of the purchase price.
2. Class I purchases of $1 million or more - up to 1% of the amount invested.
3. Class I purchases made without a front-end sales charge by certain
retirement plans described under "Sales Charge Reductions and Waivers--
Retirement Plans" above - up to 1% of the amount invested. For retirement
plan accounts opened on or after May 1, 1997, a Contingent Deferred Sales
Charge will not apply to the account if the Securities Dealer chooses to
receive a payment of 0.25% or less or if no payment is made.
4. Class I purchases by trust companies and bank trust departments, Eligible
Governmental Authorities, and broker-dealers or others on behalf of clients
participating in comprehensive fee programs - up to 0.25% of the amount
invested.
. Templeton American Trust, Inc.
23
<PAGE>
5. Class I purchases by Chilean retirement plans - up to 1% of the amount
invested.
A Securities Dealer may receive only one of these payments for each qualifying
purchase. Securities Dealers who receive payments in connection with
investments described in paragraphs 1, 2 or 5 above or a payment of up to 1%
for investments described in paragraph 3 will be eligible to receive the Rule
12b-1 fee associated with the purchase starting in the thirteenth calendar
month after the purchase.
FOR BREAKPOINTS THAT MAY APPLY AND INFORMATION ON ADDITIONAL COMPENSATION
PAYABLE TO SECURITIES DEALERS IN CONNECTION WITH THE SALE OF FUND SHARES,
PLEASE SEE "HOW DO I BUY, SELL AND EXCHANGE SHARES? - OTHER PAYMENTS TO
SECURITIES DEALERS" IN THE SAI.
MAY I EXCHANGE SHARES FOR SHARES OF ANOTHER FUND?
We offer a wide variety of funds. If you would like, you can move your
investment from your Fund account to an existing or new account in another
Franklin Templeton Fund (an "exchange"). Because it is technically a sale and
a purchase of shares, an exchange is a taxable transaction.
If you own Class I shares, you may exchange into any of our money funds except
Franklin Templeton Money Fund II ("Money Fund II"). Money Fund II is the only
money fund exchange option available to Class II shareholders. Unlike our
other money funds, shares of Money Fund II may not be purchased directly and
no drafts (checks) may be written on Money Fund II accounts.
Before making an exchange, please read the prospectus of the fund you are
interested in. This will help you learn about the fund, its investment
objective and policies, and its rules and requirements for exchanges. For
example, some Franklin Templeton Funds do not accept exchanges and others may
have different investment minimums. Some Franklin Templeton Funds do not offer
Class II shares.
<TABLE>
<CAPTION>
METHOD STEPS TO FOLLOW
- -----------------------------------------------------------------------------
<C> <S>
BY MAIL 1. Send us written instructions signed by all account
owners
2. Include any outstanding share certificates for the
shares you're exchanging
- -----------------------------------------------------------------------------
BY PHONE Call Shareholder Services or TeleFACTS(R)
z IF YOU DO NOT WANT THE ABILITY TO EXCHANGE BY PHONE TO
APPLY TO YOUR ACCOUNT, PLEASE LET US KNOW.
- -----------------------------------------------------------------------------
THROUGH YOUR DEALER Call your investment representative
- -----------------------------------------------------------------------------
</TABLE>
Please refer to "Transaction Procedures and Special Requirements" for other
important information on how to exchange shares.
Templeton American Trust, Inc. .
24
<PAGE>
WILL SALES CHARGES APPLY TO MY EXCHANGE?
You generally will not pay a front-end sales charge on exchanges. If you have
held your shares less than six months, however, you will pay the percentage
difference between the sales charge you previously paid and the applicable
sales charge of the new fund. If you have never paid a sales charge on your
shares because, for example, they have always been held in a money fund, you
will pay the Fund's applicable sales charge no matter how long you have held
your shares. These charges may not apply if you qualify to buy shares without a
sales charge.
We will not impose a Contingent Deferred Sales Charge when you exchange shares.
Any shares subject to a Contingent Deferred Sales Charge at the time of
exchange, however, will remain so in the new fund. See the discussion on
Contingent Deferred Sales Charges below and under "How Do I Sell Shares?"
CONTINGENT DEFERRED SALES CHARGE - CLASS I. For accounts with Class I shares
subject to a Contingent Deferred Sales Charge, shares are exchanged into the
new fund in the order they were purchased. If you exchange Class I shares into
one of our money funds, the time your shares are held in that fund will not
count towards the completion of any Contingency Period.
CONTINGENT DEFERRED SALES CHARGE - CLASS II. For accounts with Class II shares
subject to a Contingent Deferred Sales Charge, shares are exchanged into the
new fund proportionately based on the amount of shares subject to a Contingent
Deferred Sales Charge and the length of time the shares have been held. For
example, suppose you own $1,000 in shares that have never been subject to a
Contingent Deferred Sales Charge, such as shares from the reinvestment of
dividends and capital gains ("free shares"), $2,000 in shares that are no
longer subject to a Contingent Deferred Sales Charge because you have held them
for longer than 18 months ("matured shares"), and $3,000 in shares that are
still subject to a Contingent Deferred Sales Charge ("CDSC liable shares"). If
you exchange $3,000 into a new fund, $500 will be exchanged from free shares,
$1,000 from matured shares, and $1,500 from CDSC liable shares.
Likewise, CDSC liable shares purchased at different times will be exchanged
into a new fund proportionately. For example, assume you purchased $1,000 in
shares 3 months ago, 6 months ago, and 9 months ago. If you exchange $1,500
into a new fund, $500 will be exchanged from shares purchased at each of these
three different times.
While Class II shares are exchanged proportionately, they are redeemed in the
order purchased. In some cases, this means exchanged shares may be CDSC liable
even though they would not be subject to a Contingent Deferred Sales Charge if
they were sold. We believe the proportional method of exchanging Class II
shares more closely reflects the expectations of Class II shareholders if
Templeton American Trust, Inc.
25
<PAGE>
shares are sold during the Contingency Period. The tax consequences of a sale
or exchange are determined by the Code and not by the method used by the Fund
to transfer shares.
If you exchange your Class II shares for shares of Money Fund II, the time your
shares are held in that fund will count towards the completion of any
Contingency Period.
EXCHANGE RESTRICTIONS
Please be aware that the following restrictions apply to exchanges:
.You may only exchange shares within the same class, except as noted below.
. The accounts must be identically registered. You may, however, exchange
shares from a Fund account requiring two or more signatures into an
identically registered money fund account requiring only one signature for
all transactions. Please notify us in writing if you do not want this option
to be available on your account. Additional procedures may apply. Please see
"Transaction Procedures and Special Requirements."
. Trust Company IRA or 403(b) retirement plan accounts may exchange shares as
described above. Restrictions may apply to other types of retirement plans.
Please contact our Retirement Plans Department for information on exchanges
within these plans.
. The fund you are exchanging into must be eligible for sale in your state.
. We may modify or discontinue our exchange policy if we give you 60 days'
written notice.
. Your exchange may be restricted or refused if you: (i) request an exchange
out of the Fund within two weeks of an earlier exchange request,
(ii) exchange shares out of the Fund more than twice in a calendar quarter,
or (iii) exchange shares equal to at least $5 million, or more than 1% of the
Fund's net assets. Shares under common ownership or control are combined for
these limits. If you exchange shares as described in this paragraph, you will
be considered a Market Timer. Each exchange by a Market Timer, if accepted,
will be charged $5.00. Some of our funds do not allow investments by Market
Timers.
Because excessive trading can hurt Fund performance and shareholders, we may
refuse any exchange purchase if (i) we believe 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.
LIMITED EXCHANGES BETWEEN DIFFERENT CLASSES OF SHARES
Certain funds in the Franklin Templeton Funds offer classes of shares not
offered by the Fund, such as "Advisor Class" or "Class Z" shares. Because the
Templeton American Trust, Inc. .
26
<PAGE>
Fund does not currently offer an Advisor Class, you may exchange Advisor Class
shares of any Franklin Templeton Fund for Class I shares of the Fund at Net
Asset Value. If you do so and you later decide you would like to exchange into
a fund that offers an Advisor Class, you may exchange your Class I shares for
Advisor Class shares of that fund. Beginning on or about May 27, 1997, certain
shareholders of Class Z shares of Franklin Mutual Series Fund Inc. may also
exchange their Class Z shares for Class I shares of the Fund at Net Asset
Value.
HOW DO I SELL SHARES?
You may sell (redeem) your shares at any time.
<TABLE>
<CAPTION>
METHOD STEPS TO FOLLOW
- -------------------------------------------------------------------------------
<C> <S>
BY MAIL 1. Send us written instructions signed by
all account owners
2. Include any outstanding share
certificates for the shares you are
selling
3. Provide a signature guarantee if
required
4. Corporate, partnership and trust
accounts may need to send additional
documents. Accounts under court
jurisdiction may have other
requirements.
- -------------------------------------------------------------------------------
BY WIRE 1. You must sign up for the wire feature
(Available for requests of $1,000, before using it. To sign up, send us
up to $50,000) written instructions, with a signature
guarantee. To avoid any delay in
processing, the instructions should
include:
. The name, address and telephone number of
the bank where you want the proceeds sent
. Your bank account number
. The Federal Reserve ABA routing number
. If you are using a savings and loan or
credit union, the name of the
corresponding bank and the account number
2. Call Shareholder Services for wire
instructions
</TABLE>
27
<PAGE>
. Templeton American Trust, Inc.
<TABLE>
<CAPTION>
METHOD STEPS TO FOLLOW
- -------------------------------------------------------------------------------
<C> <S>
3. If we receive your request in proper form before 1:00
p.m. Pacific time, your wire payment will be sent the
next business day. For requests received in proper form
after 1:00 p.m. Pacific time, the payment will be sent
the second business day.
You may have redemption proceeds wired to an escrow
account without preauthorized instructions.
- -------------------------------------------------------------------------------
BY PHONE Call Shareholder Services
Telephone requests will be accepted:
. If the request is $50,000 or less. Institutional
accounts may exceed $50,000 by completing a separate
agreement. Call Institutional Services to receive a
copy.
. If there are no share certificates issued for the shares
you want to sell or you have already returned them to
the Fund
. Unless you are selling shares in a Trust Company
retirement plan account
. Unless the address on your account was changed by phone
within the last 15 days
z If you do not want the ability to redeem by phone to
apply to your account, please let us know. If you later
decide you would like this option, send us written
instructions, with a signature guarantee.
- -------------------------------------------------------------------------------
THROUGH YOUR DEALER Call your investment representative
- -------------------------------------------------------------------------------
</TABLE>
If you redeem your shares by mail or phone, we will send your redemption check
within seven days after we receive your request in proper form. If you would
like the check to be sent to an address other than the address of record or to
be made payable to someone other than the registered owners on the
Templeton American Trust, Inc. .
28
<PAGE>
account, send us written instructions signed by all account owners, with a
signature guarantee. We are not able to receive or pay out cash in the form of
currency.
The wiring of redemption proceeds is a special service that we make available
whenever possible. By offering this service to you, however, the Fund is not
bound to meet any redemption request in less than the seven day period
prescribed by law. Neither the Fund nor its agents shall be liable to you or
any other person if, for any reason, a redemption request by wire is not
processed as described in this section.
If you sell shares you recently purchased with a check or draft, we may delay
sending you the proceeds for up to 15 days or more to allow the check or draft
to clear. A certified or cashier's check may clear in less time.
Under unusual circumstances, we may suspend redemptions or postpone payment for
more than seven days as permitted by federal securities law.
Please refer to "Transaction Procedures and Special Requirements" for other
important information on how to sell shares.
TRUST COMPANY RETIREMENT PLAN ACCOUNTS
To comply with IRS regulations, you need to complete additional forms before
selling shares in a Trust Company retirement plan account. Tax penalties
generally apply to any distribution from these plans to a participant under age
59 1/2, unless the distribution meets an exception stated in the Code. To
obtain the necessary forms, please call our Retirement Plans Department.
CONTINGENT DEFERRED SALES CHARGE
For Class I purchases, if you did not pay a front-end sales charge because you
invested $1 million or more or agreed to invest $1 million or more under a
Letter of Intent, a Contingent Deferred Sales Charge may apply if you sell all
or a part of your investment within the Contingency Period. Once you have
invested $1 million or more, any additional Class I investments you make
without a sales charge may also be subject to a Contingent Deferred Sales
Charge if they are sold within the Contingency Period. For any Class II
purchase, a Contingent Deferred Sales Charge may apply if you sell the shares
within the Contingency Period. The charge is 1% of the value of the shares sold
or the Net Asset Value at the time of purchase, whichever is less.
Certain retirement plan accounts opened on or after May 1, 1997, and that
qualify to buy Class I shares without a front-end sales charge may also be
subject to a Contingent Deferred Sales Charge if the retirement plan account is
closed within 365 days of the account's initial purchase in the Franklin
Templeton Funds.
. Templeton American Trust, Inc.
29
<PAGE>
We will first redeem any shares in your account that are not subject to the
charge. If there are not enough of these to meet your request, we will redeem
shares subject to the charge in the order they were purchased.
Unless otherwise specified, when you request to sell a stated DOLLAR AMOUNT, we
will redeem additional shares to cover any Contingent Deferred Sales Charge.
For requests to sell a stated NUMBER OF SHARES, we will deduct the amount of
the Contingent Deferred Sales Charge, if any, from the sale proceeds.
WAIVERS. We waive the Contingent Deferred Sales Charge for:
.Exchanges
.Account fees
.Sales of shares purchased pursuant to a sales charge waiver
.Sales of shares purchased without a front-end sales charge by certain
retirement plan accounts if (i) the account was opened before May 1, 1997, or
(ii) the Securities Dealer of record received a payment from Distributors of
0.25% or less, or (iii) Distributors did not make any payment in connection
with the purchase, as described under "How Do I Buy Shares?--Other Payments
to Securities Dealers"
. Redemptions by the Fund when an account falls below the minimum required
account size
.Redemptions following the death of the shareholder or beneficial owner
. Redemptions through a systematic withdrawal plan set up before February 1,
1995
. Redemptions through a systematic withdrawal plan set up on or after February
1, 1995, at a rate of up to 1% a month of an account's Net Asset Value. For
example, if you maintain an annual balance of $1 million in Class I shares,
you can redeem up to $120,000 annually through a systematic withdrawal plan
free of charge. Likewise, if you maintain an annual balance of $10,000 in
Class II shares, $1,200 may be redeemed annually free of charge.
. Distributions from individual retirement plan accounts due to death or
disability or upon periodic distributions based on life expectancy
.Tax-free returns of excess contributions from employee benefit plans
. Distributions from employee benefit plans, including those due to termination
or plan transfer
. Redemptions by Trust Company employee benefit plans or employee benefit plans
serviced by ValuSelect
. Participant initiated distributions from employee benefit plans or
participant initiated exchanges among investment choices in employee benefit
plans
. Templeton American Trust, Inc.
30
<PAGE>
WHAT DISTRIBUTIONS MIGHT I RECEIVE FROM THE FUND?
The Fund intends to pay a dividend at least annually representing substantially
all of its net investment income and any net realized capital gains.
Dividends and capital gains are calculated and distributed the same way for
each class. The amount of any income dividends per share will differ, however,
generally due to the difference in the Rule 12b-1 fees of Class I and Class II.
Dividend payments are not guaranteed, are subject to the Board's discretion and
may vary with each payment. THE FUND DOES NOT PAY "INTEREST" OR GUARANTEE ANY
FIXED RATE OF RETURN ON AN INVESTMENT IN ITS SHARES.
If you buy shares shortly before the record date, please keep in mind that any
distribution will lower the value of the Fund's shares by the amount of the
distribution and you will then receive a portion of the price you paid back in
the form of a taxable distribution.
DISTRIBUTION OPTIONS
You may receive your distributions from the Fund in any of these ways:
1. BUY ADDITIONAL SHARES OF THE FUND - You may buy additional shares of the
same class of the Fund (without a sales charge or imposition of a Contingent
Deferred Sales Charge) by reinvesting capital gain distributions, dividend
distributions, or both. If you own Class II shares, you may also reinvest your
distributions in Class I shares of the Fund. This is a convenient way to
accumulate additional shares and maintain or increase your earnings base.
2. BUY SHARES OF OTHER FRANKLIN TEMPLETON FUNDS - You may direct your
distributions to buy the same class of shares of another Franklin Templeton
Fund (without a sales charge or imposition of a Contingent Deferred Sales
Charge). If you own Class II shares, you may also direct your distributions to
buy Class I shares of another Franklin Templeton Fund. Many shareholders find
this a convenient way to diversify their investments.
3. RECEIVE DISTRIBUTIONS IN CASH - You may receive capital gain distributions,
dividend distributions, or both in cash. If you have the money sent to another
person or to a checking account, you may need a signature guarantee.
TO SELECT ONE OF THESE OPTIONS, PLEASE COMPLETE SECTIONS 6 AND 7 OF THE
SHAREHOLDER APPLICATION INCLUDED WITH THIS PROSPECTUS OR TELL YOUR INVESTMENT
REPRESENTATIVE WHICH OPTION YOU PREFER. IF YOU DO NOT SELECT AN OPTION, WE WILL
AUTOMATICALLY REINVEST DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS IN THE SAME
CLASS OF THE FUND. For Trust Company retirement plans, special forms are
required to receive distributions in cash. You may change your distribution
option at any time by notifying us by mail or phone. Please allow at least
seven days before the record date for us to process the new option.
. Templeton American Trust, Inc.
31
<PAGE>
TRANSACTION PROCEDURES AND SPECIAL REQUIREMENTS
HOW AND WHEN SHARES ARE PRICED
The Fund is open for business each day the NYSE is open. We determine the Net
Asset Value per share of each class as of the scheduled close of the NYSE,
generally 4:00 p.m. Eastern time. You can find the prior day's closing Net
Asset Value and Offering Price for each class in many newspapers.
The Net Asset Value of all outstanding shares of each class is calculated on a
pro rata basis. It is based on each class' proportionate participation in the
Fund, determined by the value of the shares of each class. Each class, however,
bears the Rule 12b-1 fees payable under its Rule 12b-1 plan. To calculate Net
Asset Value per share of each class, the assets of each class are valued and
totaled, liabilities are subtracted, and the balance, called net assets, is
divided by the number of shares of the class outstanding. The Fund's assets are
valued as described under "How are Fund Shares Valued?" in the SAI.
THE PRICE WE USE WHEN YOU BUY OR SELL SHARES
You buy shares at the Offering Price of the class you wish to purchase, unless
you qualify to buy shares at a reduced sales charge or with no sales charge.
The Offering Price of each class is based on the Net Asset Value per share of
the class and includes the maximum sales charge. We calculate it to two decimal
places using standard rounding criteria. You sell shares at Net Asset Value.
The Net Asset Value we use when you buy or sell shares is the one next
calculated after we receive your transaction request in proper form. If you buy
or sell shares through your Securities Dealer, however, we will use the Net
Asset Value next calculated after your Securities Dealer receives your request,
which is promptly transmitted to the Fund. Your redemption proceeds will not
earn interest between the time we receive the order from your dealer and the
time we receive any required documents.
PROPER FORM
An order to buy shares is in proper form when we receive your signed
shareholder application and check. Written requests to sell or exchange shares
are in proper form when we receive written instructions signed by all
registered owners, with a signature guarantee if necessary. We must also
receive any outstanding share certificates for those shares.
WRITTEN INSTRUCTIONS
Written instructions must be signed by all registered owners. To avoid any
delay in processing your transaction, they should include:
.Your name,
.The Fund's name,
Templeton American Trust, Inc. .
32
<PAGE>
.The class of shares,
.A description of the request,
.For exchanges, the name of the fund you're exchanging into,
.Your account number,
.The dollar amount or number of shares, and
. A telephone number where we may reach you during the day, or in the evening
if preferred.
SIGNATURE GUARANTEES
For our mutual protection, we require a signature guarantee in the following
situations:
1) You wish to sell over $50,000 worth of shares,
2) You want the proceeds to be paid to someone other than the registered
owners,
3) The proceeds are not being sent to the address of record, preauthorized bank
account, or preauthorized brokerage firm account,
4) We receive instructions from an agent, not the registered owners,
5) We believe a signature guarantee would protect us against potential claims
based on the instructions received.
A signature guarantee verifies the authenticity of your signature. YOU SHOULD
BE ABLE TO OBTAIN A SIGNATURE GUARANTEE FROM A BANK, BROKER, CREDIT UNION,
SAVINGS ASSOCIATION, CLEARING AGENCY, OR SECURITIES EXCHANGE OR ASSOCIATION. A
NOTARIZED SIGNATURE IS NOT SUFFICIENT.
SHARE CERTIFICATES
We will credit your shares to your Fund account. We do not issue share
certificates unless you specifically request them. This eliminates the costly
problem of replacing lost, stolen or destroyed certificates. If a certificate
is lost, stolen or destroyed, you may have to pay an insurance premium of up to
2% of the value of the certificate to replace it.
Any outstanding share certificates must be returned to the Fund if you want to
sell or exchange those shares or if you would like to start a systematic
withdrawal plan. The certificates should be properly endorsed. You can do this
either by signing the back of the certificate or by completing a share
assignment form. For your protection, you may prefer to complete a share
assignment form. In this case, you should send the certificate and assignment
form in separate envelopes.
. Templeton American Trust, Inc.
33
<PAGE>
TELEPHONE TRANSACTIONS
You may initiate many transactions by phone. Please refer to the sections of
this prospectus that discuss the transaction you would like to make or call
Shareholder Services.
When you call, we will request personal or other identifying information to
confirm that instructions are genuine. We will also record calls. We will not
be liable for following instructions communicated by telephone if we reasonably
believe they are genuine. For your protection, we may delay a transaction or
not implement one if we are not reasonably satisfied that the instructions are
genuine. If this occurs, we will not be liable for any loss.
If our lines are busy or you are otherwise unable to reach us by phone, you may
wish to ask your investment representative for assistance or send us written
instructions, as described elsewhere in this prospectus. If you are unable to
execute a transaction by telephone, we will not be liable for any loss.
TRUST COMPANY RETIREMENT PLAN ACCOUNTS. We cannot accept instructions to sell
shares or change distribution options on Trust Company retirement plans by
phone. While you may exchange shares of Trust Company IRA and 403(b) retirement
accounts by phone, certain restrictions may be imposed on other retirement
plans.
To obtain any required forms or more information about distribution or transfer
procedures, please call our Retirement Plans Department.
ACCOUNT REGISTRATIONS AND REQUIRED DOCUMENTS
When you open an account, we need you to tell us how you want your shares
registered. How you register your account will affect your ownership rights and
ability to make certain transactions. If you have questions about how to
register your account, you should consult your investment representative or
legal advisor. Please keep the following information in mind when registering
your account.
JOINT OWNERSHIP. If you open an account with two or more owners, we register
the account as "joint tenants with rights of survivorship" unless you tell us
otherwise. An account registered as "joint tenants with rights of survivorship"
is shown as "Jt Ten" on your account statement. For any account with two or
more owners, ALL owners must sign instructions to process transactions and
changes to the account. Even if the law in your state says otherwise, we cannot
accept instructions to change owners on the account unless all owners agree in
writing. If you would like another person or owner to sign for you, please send
us a current power of attorney.
GIFTS AND TRANSFERS TO MINORS. You may set up a custodial account for a minor
under your state's Uniform Gifts/Transfers to Minors Act. Other than this form
of registration, a minor may not be named as an account owner.
Templeton American Trust, Inc. .
34
<PAGE>
TRUSTS. You should register your account as a trust only if you have a valid
written trust document. This avoids future disputes or possible court action
over who owns the account.
REQUIRED DOCUMENTS. For corporate, partnership and trust accounts, please send
us the following documents when you open your account. This will help avoid
delays in processing your transactions while we verify who may sign on the
account.
<TABLE>
<CAPTION>
TYPE OF ACCOUNT DOCUMENTS REQUIRED
- ------------------------------------------------------------------------------
<C> <S>
CORPORATION Corporation Resolution
- ------------------------------------------------------------------------------
PARTNERSHIP 1. The pages from the partnership agreement that identify the
general partners, or
2. A certification for a partnership agreement
- ------------------------------------------------------------------------------
TRUST 1. The pages from the trust document that identify the
trustees, or
2. A certification for trust
- ------------------------------------------------------------------------------
</TABLE>
STREET OR NOMINEE ACCOUNTS. If you have Fund shares held in a "street" or
"nominee" name account with your Securities Dealer, you may transfer the shares
to the street or nominee name account of another Securities Dealer. Both
dealers must have an agreement with Distributors or we cannot process the
transfer. Contact your Securities Dealer to initiate the transfer. We will
process the transfer after we receive authorization in proper form from your
delivering Securities Dealer. Accounts may be transferred electronically
through the NSCC. For accounts registered in street or nominee name, we may
take instructions directly from the Securities Dealer or your nominee.
ELECTRONIC INSTRUCTIONS. If there is a Securities Dealer or other
representative of record on your account, we are authorized to use and execute
electronic instructions. We will accept electronic instructions directly from
your dealer or representative without further inquiry. Electronic instructions
may be processed through the services of the NSCC, which currently include the
NSCC's "Networking," "Fund/SERV," and "ACATS" systems, or through
Franklin/Templeton's PCTrades(TM) System.
TAX IDENTIFICATION NUMBER
The IRS requires us to have your correct Social Security or tax identification
number on a signed shareholder application or applicable tax form. Federal law
requires us to withhold 31% of your taxable distributions and sale proceeds if
(i) you have not furnished a certified correct taxpayer identification number,
(ii) you have not certified that withholding does not apply, (iii) the IRS or a
. Templeton American Trust, Inc.
35
<PAGE>
Securities Dealer notifies the Fund that the number you gave us is incorrect,
or (iv) you are subject to backup withholding.
We may refuse to open an account if you fail to provide the required tax
identification number and certifications. We may also close your account if the
IRS notifies us that your tax identification number is incorrect. If you
complete an "awaiting TIN" certification, we must receive a correct tax
identification number within 60 days of your initial purchase to keep your
account open.
KEEPING YOUR ACCOUNT OPEN
Due to the relatively high cost of maintaining a small account, we may close
your account if the value of your shares is less than $50. We will only do this
if the value of your account fell below this amount because you voluntarily
sold your shares and your account has been inactive (except for the
reinvestment of distributions) for at least six months. Before we close your
account, we will notify you and give you 30 days to increase the value of your
account to $100.
SERVICES TO HELP YOU MANAGE YOUR ACCOUNT
AUTOMATIC INVESTMENT PLAN
Our automatic investment plan offers a convenient way to invest in the Fund.
Under the plan, you can have money transferred automatically from your checking
account to the Fund each month to buy additional shares. If you are interested
in this program, please refer to the shareholder application included with this
prospectus or contact your investment representative. The market value of the
Fund's shares may fluctuate and a systematic investment plan such as this will
not assure a profit or protect against a loss. You may discontinue the program
at any time by notifying Investor Services by mail or phone.
SYSTEMATIC WITHDRAWAL PLAN
Our systematic withdrawal plan allows you to sell your shares and receive
regular payments from your account on a monthly, quarterly, semiannual or
annual basis. The value of your account must be at least $5,000 and the minimum
payment amount for each withdrawal must be at least $50. For retirement plans
subject to mandatory distribution requirements, the $50 minimum will not apply.
If you would like to establish a systematic withdrawal plan, please complete
the systematic withdrawal plan section of the shareholder application included
with this prospectus and indicate how you would like to receive your payments.
You may choose to direct your payments to buy the same class of shares of
another Franklin Templeton Fund or have the money sent directly to you, to
another person, or to a checking account.
Templeton American Trust, Inc. .
36
<PAGE>
You will generally receive your payment by the end of the month in which a
payment is scheduled. When you sell your shares under a systematic withdrawal
plan, it is a taxable transaction.
To avoid paying sales charges on money you plan to withdraw within a short
period of time, you may not want to set up a systematic withdrawal plan if you
plan to buy shares on a regular basis. Shares sold under the plan may also be
subject to a Contingent Deferred Sales Charge. Please see "Contingent Deferred
Sales Charge" under "How Do I Sell Shares?"
You may discontinue a systematic withdrawal plan, change the amount and
schedule of withdrawal payments, or suspend one payment by notifying us in
writing at least seven business days before the end of the month preceding a
scheduled payment. Please see "How Do I Buy, Sell and Exchange Shares? -
Systematic Withdrawal Plan" in the SAI for more information.
TELEFACTS(R)
From a touch-tone phone, you may call our TeleFACTS system (day or night) at 1-
800/247-1753 to:
. obtain information about your account;
. obtain price and performance information about any Franklin Templeton Fund;
. exchange shares between identically registered Franklin accounts; and
. request duplicate statements and deposit slips for Franklin accounts.
You will need the code number for each class to use TeleFACTS. The code number
is 100 for Class I and 200 for Class II.
STATEMENTS AND REPORTS TO SHAREHOLDERS
We will send you the following statements and reports on a regular basis:
. Confirmation and account statements reflecting transactions in your account,
including additional purchases and dividend reinvestments. PLEASE VERIFY THE
ACCURACY OF YOUR STATEMENTS WHEN YOU RECEIVE THEM.
. Financial reports of the Fund will be sent every six months. To reduce Fund
expenses, we attempt to identify related shareholders within a household and
send only one copy of a report. Call Fund Information if you would like an
additional free copy of the Fund's financial reports or an interim quarterly
report.
INSTITUTIONAL ACCOUNTS
Additional methods of buying, selling or exchanging shares of the Fund may be
available to institutional accounts. Institutional investors may also be
required
Templeton American Trust, Inc.
37
<PAGE>
to complete an institutional account application. For more information, call
Institutional Services.
AVAILABILITY OF THESE SERVICES
The services above are available to most shareholders. If, however, your shares
are held by a financial institution, in a street name account, or networked
through the NSCC, the Fund may not be able to offer these services directly to
you. Please contact your investment representative.
WHAT IF I HAVE QUESTIONS ABOUT MY ACCOUNT?
If you have any questions about your account, you may write to Investor
Services at 700 Central Avenue, P.O. Box 33030, St. Petersburg, Florida 33733-
8030. The Fund and Distributors are also located at this address. TICI is
located at 500 East Broward Boulevard, Ft. Lauderdale, Florida 33394-3091. You
may also contact us by phone at one of the numbers listed below.
<TABLE>
<CAPTION>
HOURS OF OPERATION (EASTERN TIME)
DEPARTMENT NAME TELEPHONE NO. (MONDAY THROUGH FRIDAY)
- --------------------------------------------------------------------------
<C> <C> <S>
Shareholder Services 1-800/632-2301 8:30 a.m. to 8:00 p.m.
Dealer Services 1-800/524-4040 8:30 a.m. to 8:00 p.m.
Fund Information 1-800/DIAL BEN 8:30 a.m. to 11:00 p.m.
(1-800/342-5236) 9:30 a.m. to 5:30 p.m. (Saturday)
Retirement Plans 1-800/527-2020 8:30 a.m. to 8:00 p.m.
Institutional Services 1-800/321-8563 9:00 a.m. to 8:00 p.m.
TDD (hearing impaired) 1-800/851-0637 8:30 a.m. to 8:00 p.m.
</TABLE>
Your phone call may be monitored or recorded to ensure we provide you with high
quality service. You will hear a regular beeping tone if your call is being
recorded.
Templeton American Trust, Inc. .
38
<PAGE>
GLOSSARY
USEFUL TERMS AND DEFINITIONS
1940 ACT - Investment Company Act of 1940, as amended
BOARD - The Board of Directors of the Fund
CD - Certificate of deposit
CLASS I AND CLASS II - The Fund offers two classes of shares, designated "Class
I" and "Class II." The two classes have proportionate interests in the Fund's
portfolio. They differ, however, primarily in their sales charge structures and
Rule 12b-1 plans.
CODE - Internal Revenue Code of 1986, as amended
CONTINGENCY PERIOD - For Class I shares, the 12 month period during which a
Contingent Deferred Sales Charge may apply. For Class II shares, the
contingency period is 18 months. Regardless of when during the month you
purchased shares, they will age one month on the last day of that month and
each following month.
CONTINGENT DEFERRED SALES CHARGE (CDSC) - A sales charge of 1% that may apply
if you sell your shares within the Contingency Period.
DISTRIBUTORS - Franklin/Templeton Distributors, Inc., the Fund's principal
underwriter. The SAI lists the officers and Board members who are affiliated
with Distributors. See "Officers and Directors."
ELIGIBLE GOVERNMENTAL AUTHORITY - Any state or local government or any
instrumentality, department, authority or agency thereof that has determined
the Fund is a legally permissible investment and that can only buy shares of
the Fund without paying sales charges.
FRANKLIN TEMPLETON FUNDS - The U.S. registered mutual funds in the Franklin
Group of Funds(R) and the Templeton Group of Funds except Franklin Valuemark
Funds, Franklin Government Securities Trust, Templeton Capital Accumulator
Fund, Inc., Templeton Variable Annuity Fund, and Templeton Variable Products
Series Fund
FRANKLIN TEMPLETON GROUP - Franklin Resources, Inc., a publicly owned holding
company, and its various subsidiaries
FRANKLIN TEMPLETON GROUP OF FUNDS - All U.S. registered investment companies in
the Franklin Group of Funds(R) and the Templeton Group of Funds
FT Services - Franklin Templeton Services, Inc., the Fund's administrator
INVESTOR SERVICES - Franklin/Templeton Investor Services, Inc., the Fund's
shareholder servicing and transfer agent
39
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. Templeton American Trust, Inc.
IRS - Internal Revenue Service
LETTER - Letter of Intent
MARKET TIMERS - Market Timers generally include market timing or allocation
services, accounts administered so as to buy, sell or exchange shares based on
predetermined market indicators, or any person or group whose transactions seem
to follow a timing pattern.
MOODY'S - Moody's Investors Service, Inc.
NASD - National Association of Securities Dealers, Inc.
NET ASSET VALUE (NAV) - The value of a mutual fund is determined by deducting
the fund's liabilities from the total assets of the portfolio. The net asset
value per share is determined by dividing the net asset value of the fund by
the number of shares outstanding.
NSCC - National Securities Clearing Corporation
NYSE - New York Stock Exchange
OFFERING PRICE - The public offering price is based on the Net Asset Value per
share of the class and includes the front-end sales charge. The maximum front-
end sales charge is 5.75% for Class I and 1% for Class II.
QUALIFIED RETIREMENT PLANS - An employer sponsored pension or profit-sharing
plan that qualifies under section 401 of the Code. Examples include 401(k),
money purchase pension, profit sharing and defined benefit plans.
REIT - Real Estate Investment Trust
RESOURCES - Franklin Resources, Inc.
SAI - Statement of Additional Information
S&P - Standard & Poor's Ratings Service, a division of The McGraw-Hill
Companies, Inc.
SEC - U.S. Securities and Exchange Commission
SECURITIES DEALEr - A financial institution that, either directly or through
affiliates, has an agreement with Distributors to handle customer orders and
accounts with the Fund. This reference is for convenience only and does not
indicate a legal conclusion of capacity.
SEP - An employer sponsored simplified employee pension plan established under
section 408(k) of the Code
TELEFACTS(R) - Franklin Templeton's automated customer servicing system
TICI - Templeton Investment Counsel, Inc., the Fund's investment manager
Templeton American Trust, Inc. .
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<PAGE>
TRUST COMPANY - Franklin Templeton Trust Company. Trust Company is an affiliate
of Distributors and both are wholly owned subsidiaries of Resources.
U.S. - United States
WE/OUR/US - Unless the context indicates a different meaning, these terms refer
to the Fund and/or Investor Services, Distributors, or other wholly owned
subsidiaries of Resources.
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. Templeton American Trust, Inc.
INSTRUCTIONS AND IMPORTANT NOTICE
SUBSTITUTE W-9 INSTRUCTIONS INFORMATION
General. Backup withholding is not an additional tax. Rather, the tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.
Obtaining A Number. If you do not have a Social Security Number/Taxpayer
Identification Number or you do not know your SSN/TIN, you must obtain Form SS-
5 or Form SS-4 from your local Social Security or IRS office and apply for one.
If you have checked the "Awaiting TIN" box and signed the certification,
withholding will apply to payments relating to your account unless you provide
a certified TIN within 60 days.
What SSN/TIN to Give. Please refer to the following guidelines:
<TABLE>
<CAPTION>
Give Employer ID
Account Type Give SSN of Account Type # of
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
. Individual Individual . Trust, Es- Trust, Estate,
tate, or Pen- or Pension Plan
sion Plan Trust
Trust
- --------------------------------------------------------------------------------
. Joint Indi- Owner who will . Corporation, Corporation,
vidual be paying tax Partnership, Partnership, or
or or other other
first-named organization organization
individual
- --------------------------------------------------------------------------------
. Unif. Gift/ Minor . Broker nomi- Broker nominee
Transfer to nee
Minor
- --------------------------------------------------------------------------------
. Sole Proprie- Owner of busi-
tor ness
- --------------------------------------------------------------------------------
. Legal Guard- Ward, Minor, or
ian Incompetent
- --------------------------------------------------------------------------------
</TABLE>
Exempt Recipients. Please provide your TIN and check the "Exempt Recipient" box
if you are an exempt recipient. Exempt recipients include:
A real estate investment trust
A corporation
A common trust fund operated by
A financial institution a bank under section 584(a)
An organization exempt from tax An exempt charitable remainder
under section 501(a), or an trust or a non-exempt trust
individual retirement plan described in section 4947(a)(1)
A registered dealer in An entity registered at all
securities or commodities times under the Investment
registered in the U.S. or a Company Act of 1940
U.S. possession
42
<PAGE>
Templeton American Trust, Inc. .
IRS PENALTIES. If you do not supply us with your SSN/TIN, you will be subject
to an IRS $50 penalty unless your failure is due to reasonable cause and not
willful neglect. If you fail to report certain income on your federal income
tax return, you will be treated as negligent and subject to an IRS 20% penalty
on any underpayment of tax attributable to such negligence, unless there was
reasonable cause for the resulting underpayment and you acted in good faith. If
you falsify information on this form or make any other false statement
resulting in no backup withholding on an account which should be subject to
backup withholding, you may be subject to an IRS $500 penalty and certain
criminal penalties including fines and imprisonment.
SUBSTITUTE W-8 INSTRUCTIONS INFORMATION
EXEMPT FOREIGN PERSON. Check the "Exempt Foreign Person" box if you qualify as
a non-resident alien or foreign entity that is not subject to certain U.S.
information return reporting or to backup withholding rules. Dividends paid to
your account may be subject to withholding of up to 30%. You are an "Exempt
Foreign Person" if you are not (1) a citizen or resident of the U.S., or (2) a
U.S. corporation, partnership, estate, or trust. In the case of an individual,
an "Exempt Foreign Person" is one who has been physically present in the U.S.
for less than 31 days during the current calendar year. An individual who is
physically present in the U.S. for at least 31 days during the current calendar
year will still be treated as an "Exempt Foreign Person," provided that the
total number of days physically present in the current calendar year and the
two preceding calendar years does not exceed 183 days (counting all of the days
in the current calendar year, only one-third of the days in the first preceding
calendar year and only one-sixth of the days in the second preceding calendar
year). In addition, lawful permanent residents or green card holders may not be
treated as "Exempt Foreign Persons." If you are an individual or an entity, you
must not now be, or at this time expect to be, engaged in a U.S. trade or
business with respect to which any gain derived from transactions effected by
the Fund/Payer during the calendar year is effectively connected to the U.S.
(or your transactions are exempt from U.S. taxes under a tax treaty).
PERMANENT ADDRESS. The Shareholder Application must contain your permanent
address if you are an "Exempt Foreign Person." If you are an individual,
provide your permanent address. If you are a partnership or corporation,
provide the address of your principal office. If you are an estate or trust,
provide the address of your permanent residence or the principal office of any
fiduciary.
43
<PAGE>
. Templeton American Trust, Inc.
NOTICE OF CHANGE IN STATUS. If you become a U.S. citizen or resident after you
have provided certification of your foreign status, or if you cease to be an
"Exempt Foreign Person," you must notify the Fund/Payer within 30 days of your
change in status. Reporting will then begin on the account(s) listed, and
backup withholding may also begin unless you certify to the Fund/Payer that (1)
the tax payer identification number you have given is correct, and (2) the
Internal Revenue Service has not notified you that you are subject to backup
withholding because you failed to report certain interest or dividend income.
You may use Form W-9, "Payer's Request for Taxpayer Identification Number and
Certification," to make these certifications. If an account is no longer
active, you do not have to notify a Fund/Payer or broker of your change in
status unless you also have another account with the same Fund/Payer that is
still active. If you receive interest from more than one Fund/Payer or have
dealings with more than one broker or barter exchange, file a certificate with
each. If you have more than one account with the same Fund/Payer, the
Fund/Payer may require you to file a separate certificate for each account.
WHEN TO FILE. File these certifications with the Fund before a payment is made
to you, unless you have already done this in either of the two preceding
calendar years.
HOW OFTEN YOU MUST FILE. This certificate generally remains in effect for three
calendar years. A Fund/Payer or broker, however, may require that a new
certificate be filed each time a payment is made. On joint accounts for which
each joint owner is a foreign person, each must provide a certification of
foreign status.
Templeton American Trust, Inc. .
44
<PAGE>
RESOLUTION SUPPORTING AUTHORITY OF
CORPORATE /ASSOCIATION SHAREHOLDER
- --------------------------------------------------------------------------------
INSTRUCTION:
It will be necessary for corporate/association shareholders to provide a
certified copy of a resolution or other certificate of authority supporting the
authority of designated officers of the corporation/association to issue oral
and written instruction on behalf of the corporation/association for the
purchase, sale (redemption), transfer and/or exchange of Franklin Templeton
Fund shares. You may use the following form of resolution or you may prefer to
use your own.
CERTIFIED COPY OF RESOLUTION (Corporation or Association)
The undersigned hereby certifies and affirms that he/she is the duly elected
of a
Title Corporation Name Type of Organization
organized under the laws of the State of and that the
State
following is a true and correct copy of a resolution adopted by the Board of
Directors by unanimous written consent (a copy of which is attached) or at a
meeting duly called and held on , 19 .
"RESOLVED that ___________________________________________________________
Name of Corporation/Association
(the "Company") is authorized to invest the Company's assets in one or
more investment companies (mutual funds) whose shares are distributed by
Franklin/Templeton Distributors, Inc. ("Distributors"). Each such
investment company, or series thereof, is referred to as a "Franklin
Templeton Fund" or "Fund."
FURTHER RESOLVED, that any (enter number) of the following
officers of this Company (acting alone, if one, or acting together, if
more than one) is/are authorized to issue oral or written instructions
(including the signing of drafts in the case of draft accessed money fund
accounts) on behalf of the Company for the purchase, sale (redemption),
transfer and/or exchange of Fund shares and to execute any Fund
application(s) and agreements pertaining to Fund shares registered or to
be registered to the Company (referred to as a "Company Instruction");
and, that this authority shall continue until Franklin/ Templeton
Investor Services, Inc. ("Investor Services") receives written notice of
revocation or amendment delivered by registered mail. The
45
<PAGE>
. Templeton American Trust, Inc.
Company's officers authorized to act on behalf of the Company under this
resolution are (enter officer titles only): ______________________________
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(referred to as the "Authorized Officers").
FURTHER RESOLVED, that Investor Services may rely on the most recently
provided incumbency certificate delivered by the Company to Investor
Services to identify those individuals who are the incumbent Authorized
Officers and that Investor Services shall have no independent duty to
determine if there has been any change in the individuals serving as
incumbent Authorized Officers.
FURTHER RESOLVED, that the Company ("Indemnitor") undertakes and agrees
to indemnify and hold harmless Distributors, each affiliate of
Distributors, each Franklin Templeton Fund and their officers, employees
and agents (referred to hereafter collectively as the "Indemnitees") from
and against any and all liability, loss, suits, claims, costs, damages
and expenses of whatever amount and whatever nature (including without
limitation reasonable attorneys' fees, whether for consultation and
advice or representation in litigation at both the trial and appellate
level) any Indemnitee may sustain or incur by reason of, in consequence
of, or arising from or in connection with any action taken or not taken
by an Indemnitee in good faith reliance on a Company Instruction given as
authorized under this resolution."
The undersigned further certifies that the below named persons, whose
signatures appear opposite their names, are the incumbent Authorized Officers
(as that term is defined in the above resolution) who have been duly elected to
the office identified beside their name(s) (attach additional list if
necessary).
<TABLE>
<S> <C>
X
- -----------------------------------------------------------------------
Name/title (please print or
type) Signature
X
- -----------------------------------------------------------------------
Name/title (please print or
type) Signature
X
- -----------------------------------------------------------------------
Name/title (please print or
type) Signature
X
- -----------------------------------------------------------------------
Name/title (please print or
type) Signature
</TABLE>
Certified from minutes
X
- --------------------------------------------------------------------------------
Signature
- --------------------------------------------------------------------------------
Name/title (please print or type)
CORPORATE SEAL (if appropriate)
46
<PAGE>
Templeton American Trust, Inc. .
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47
<PAGE>
. Templeton American Trust, Inc.
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48
<PAGE>
Templeton American Trust, Inc. .
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49
<PAGE>
FRANKLIN TEMPLETON GROUP OF FUNDS
LITERATURE REQUEST p Call 1-800/DIAL BEN (1-800/342-5236) today for a free
descriptive brochure and prospectus on any of the funds listed below. The
prospectus contains more complete information, including fees, charges and
expenses, and should be read carefully before investing or sending money.
GLOBAL GROWTH
Franklin Global Health Care Fund
Franklin Templeton Japan Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton Global Infrastructure Fund
Templeton Global Opportunities Trust
Templeton Global Real Estate Fund
Templeton Global Smaller Companies Fund
Templeton Greater European Fund
Templeton Growth Fund
Templeton Latin America Fund
Templeton Pacific Growth Fund
Templeton World Fund
GLOBAL GROWTH AND INCOME
Franklin Global Utilities Fund
Franklin Templeton German Government Bond Fund
Franklin Templeton Global Currency Fund
Mutual European Fund
Templeton Global Bond Fund
Templeton Growth and Income Fund
GLOBAL INCOME
Franklin Global Government Income Fund
Franklin Templeton Hard Currency Fund
Franklin Templeton High Income Currency Fund
Templeton Americas Government Securities Fund
GROWTH
Franklin Blue Chip Fund
Franklin California Growth Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin MidCap Growth Fund
Franklin Small Cap Growth Fund
Mutual Discovery Fund
GROWTH AND INCOME
Franklin Asset Allocation Fund
Franklin Balance Sheet Investment Fund
Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Franklin MicroCap Value Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Rising Dividends Fund
Franklin Strategic Income Fund
Franklin Utilities Fund
Franklin Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Shares Fund
Templeton American Trust, Inc.
FUND ALLOCATOR SERIES
Franklin Templeton Conservative Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton Growth Target Fund
INCOME
Franklin Adjustable Rate Securities Fund
Franklin Adjustable U.S. Government Securities Fund
Franklin's AGE High Income Fund
Franklin Investment Grade Income Fund
Franklin Short- Intermediate U.S. Government Securities Fund
Franklin U.S. Government Securities Fund
Franklin Money Fund
Franklin Federal Money Fund
FOR CORPORATIONS:
Franklin Corporate Qualified Dividend Fund
FRANKLIN FUNDS SEEKING
TAX-FREE INCOME
Federal Intermediate- Term Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund
Puerto Rico Tax-Free Income Fund
Tax-Exempt Money Fund
FRANKLIN STATE-SPECIFIC FUNDS
SEEKING TAX-FREE INCOME
Alabama
Arizona*
Arkansas**
California*
Colorado
Connecticut
Florida*
Georgia
Hawaii**
Indiana
Kentucky
Louisiana
Maryland
Massachusetts***
Michigan*
Minnesota***
Missouri
New Jersey
New York*
North Carolina
Ohio***
Oregon
Pennsylvania
Tennessee**
Texas
Virginia
Washington**
VARIABLE ANNUITIES+
Franklin Valuemark*
Franklin Templeton
Valuemark Income
Plus (an immediate
annuity)
*Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and/or a high yield
portfolio (CA) and a money market portfolio (CA and NY).
**The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
***Portfolio of insured municipal securities.
+Franklin Valuemark and Franklin Templeton Valuemark Income Plus are issued by
Allianz Life Insurance Company of North America or by its wholly owned
subsidiary, Preferred Life Insurance Company of New York, and distributed by
NALAC Financial Plans, LLC.
FGF 2/97 LOGO Printed on recycled paper.__________________TL100 P 05/97
