10/20/98
o 100 *P5
SUPPLEMENT DATED OCTOBER 20, 1998
TO THE PROSPECTUS OF
TEMPLETON AMERICAN TRUST, INC.
dated May 1, 1998
On October 17, 1998, Templeton American Trust's Board of Directors approved a
proposal to merge the fund into Franklin Equity Fund, subject to shareholder
approval. Franklin Equity Fund's Board also has approved this proposal. Franklin
Equity Fund's principal investment objective is capital appreciation with a
secondary objective of current income. We believe this proposed merger will
benefit shareholders.
It is anticipated that in early 1999, you will receive a proxy and proxy
statement requesting your vote on the proposed merger. These proxy materials
will include Franklin Equity Fund's current prospectus, which we urge you to
read carefully.
The fund was closed to new investors after the close of business on July 22,
1998. If you were a shareholder of record as of the close of business on July
22, 1998, you may continue to add to your account subject to your applicable
minimum additional investment amount or buy additional shares through the
reinvestment of dividend or capital gain distributions. The fund will waive its
front-end sales charge and Contingent Deferred Sales Charge for these additional
investments.
In addition, if you were a shareholder of record as of the close of business on
July 22, 1998, you may exchange your shares of the fund for shares of most
Franklin Templeton Funds within the same class at net asset value, no matter how
long you have held your shares. Although you may also redeem your shares, please
keep in mind that if you sell all the shares in your account, your account will
be closed and you will not be allowed to buy additional shares of the fund or to
reopen your account. However, redemption proceeds from the sale of fund shares
may be reinvested in the same class of shares of most of the Franklin Templeton
Funds without a sales charge if the reinvestment is made within 365 days of the
redemption or payment date.
The prospectus is amended as follows:
I. The second step in the section "How Do I Buy Shares? - Opening Your Account"
is replaced with the following:
2. Determine how much you would like to invest. The fund's minimum
investment is:
/bullet/ To add to an account $50*
* For all retirement accounts except IRAs, IRA Rollovers, Roth IRAs, or
Education IRAs, there is no minimum to add to an account.
We reserve the right to change the amount of this minimum from time to time
or to waive or lower this minimum for certain purchases. We also reserve
the right to refuse any order to buy shares.
II. The following new item is added under "May I Exchange Shares for Shares of
Another Fund? - Exchange Restrictions":
/bullet/ You must meet the applicable minimum investment amount of the
fund you are exchanging into, or exchange 100% of your fund shares.
III. Distribution option 3 in the section "What Distributions Might I Receive
From the Fund? - Distribution Options" is replaced with the following:
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 or savings account, you
may need a signature guarantee. If you send the money to a checking or
savings account, please see "Electronic Fund Transfers" under "Services
to Help You Manage Your Account."
PAGE
IV. The section "Keeping Your Account Open," found under "Transaction Procedures
and Special Requirements," is replaced in its entirety with the following:
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 $250, or less than $50
for employee accounts and custodial accounts for minors. 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 $1,000, or $100 for employee accounts and custodial accounts
for minors. These minimums do not apply to IRAs and other retirement plan
accounts or to accounts managed by the Franklin Templeton Group.
V. The second sentence in the section "Services to Help You Manage Your Account
- - Automatic Investment Plan" is replaced with the following:
Under the plan, you can have money transferred automatically from your
checking or savings account to the fund each month to buy additional shares.
VI. The second paragraph under "Services to Help You Manage Your Account -
Systematic Withdrawal Plan" is replaced with the following:
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 or savings account. If you choose to
have the money sent to a checking or savings account, please see "Electronic
Fund Transfers" below. Once your plan is established, any distributions paid
by the fund will be automatically reinvested in your account.
VII. The following new section is added after the section "Services to Help You
Manage Your Account - Systematic Withdrawal Plan":
ELECTRONIC FUND TRANSFERS
You may choose to have dividend and capital gain distributions or payments
under a systematic withdrawal plan sent directly to a checking or savings
account. If the account is with a bank that is a member of the Automated
Clearing House, the payments may be made automatically by electronic funds
transfer. If you choose this option, please allow at least fifteen days for
initial processing. We will send any payments made during that time to the
address of record on your account.
VIII. The following paragraphs are added to the end of the section "What Are the
Risks of Investing in the Fund?":
EURO. On January 1, 1999, the European Monetary Union (EMU) plans to
introduce a new single currency, the Euro, which will replace the national
currency for participating member countries. If the fund holds investments
in countries with currencies replaced by the Euro, the investment process,
including trading, foreign exchange, payments, settlements, cash accounts,
custody and accounting will be impacted. The process to establish the Euro
may result in market volatility. It is not possible to predict the impact
of the Euro on the business or financial condition of European issuers or
on the fund. The transition and the elimination of currency risk among EMU
countries may change the economic environment and behavior of investors,
particularly in European markets. To the extent the fund holds non-U.S.
dollar (Euro or other) denominated securities, it will still be exposed to
currency risk due to fluctuations in those currencies versus the U.S.
dollar.
Resources has created an interdepartmental team to handle all Euro-related
changes to enable the Franklin Templeton Funds to process transactions
accurately and completely with minimal disruption to business activities.
While there can be no assurance that the fund will not be adversely
affected, Investment Counsel and its affiliated service providers are
taking steps that they believe are reasonably designed to address the Euro
issue.
Please keep this supplement for future reference.
