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SUPPLEMENT DATED MAY 1, 1997
TO THE PROSPECTUS OF
Templeton Growth and Income Fund
dated August 1, 1996
The prospectus is amended as follows:
I. The section "Sales Charge Waivers" under "How Do I Buy Shares? - Sales
Charge Reductions and Waivers" is amended as follows:
A. Category 8 is replaced with:
8. Chilean retirement plans that meet the requirements described under
"Retirement Plans" below. B. Effective June 1, 1997, category 5 is deleted in
its entirety.
II. The following paragraph is added after the list of "Sales Charge Waivers"
under "How Do I Buy Shares?": 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 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 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.
III. The section "How Do I Buy Shares? - Other Payments to Securities
Dealers" is replaced in its entirety with the following:
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.
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.
OR BREAKPOINTS THAT MAY APPLY, PLEASE SEE "HOW DO I BUY, SELL AND EXCHANGE
SHARES? - OTHER PAYMENTS TO SECURITIES DEALERS" IN THE SAI.
Distributors and/or its affiliates provide financial support to various
Securities Dealers that sell shares of the Franklin Templeton Group of Funds.
This support is based primarily on the amount of sales of fund shares. The
amount of support may be affected by: total sales; net sales; levels of
redemptions; the proportion of a Securities Dealer's sales and marketing efforts
in the Franklin Templeton Group of Funds; a Securities Dealer's support of, and
participation in, Distributors' marketing programs; a Securities Dealer's
compensation programs for its registered representatives; and the extent of a
Securities Dealer's marketing programs relating to the Franklin Templeton Group
of Funds. Financial support to Securities Dealers may be made by payments from
Distributors' resources, from Distributors' retention of underwriting
concessions and, in the case of funds that have Rule 12b-1 plans, from payments
to Distributors under such plans. In addition, certain Securities Dealers may
receive brokerage commissions generated by fund portfolio transactions in
accordance with the NASD's rules.
IV. The following paragraph is added under "How Do I Sell Shares?":
Beginning on or about May 1, 1997, you will automatically be able to redeem
shares by telephone without completing a telephone redemption agreement. Please
notify us in writing if you do not want this option to be available on your
account. If you later decide you would like this option, send us written
instructions signed by all account owners, with a signature guarantee.
V. The following is added under "How Do I Sell Shares? - Contingent Deferred
Sales Charge":
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. VI. The section "Contingent Deferred
Sales Charge - Waivers" under "How Do I Sell Shares?" is replaced in its
entirety with the following:
WAIVERS. We waive the Contingent Deferred Sales Charge for:
o Exchanges
o Account fees o Sales of shares purchased pursuant to a sales charge waiver
o 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"
o Redemptions by the Fund when an account falls below the minimum required
account size
o Redemptions following the death of the shareholder or beneficial owner
o Redemptions through a systematic withdrawal plan set up before
February 1, 1995
o 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.
o Distributions from individual retirement plan accounts due to death or
disability or upon periodic distributions based on life expectancy
o Tax-free returns of excess contributions from employee benefit plans
o Redemptions by Trust Company employeebenefit plans or employee benefit plans
serviced by ValuSelect
o Participant initiated distributions from employee benefit plans or
participant initiated exchanges among investment choices in employee
benefit plans
VII. The discussion under "What Are the Funds Potential Risks?" is hereby
supplemented by adding the following paragraph:
Hong Kong is scheduled to revert to the sovereignty of China on July 1, 1997. As
with any major political transfer of power, this could result in political,
social, economic, market or other developments in Hong Kong, China or other
countries that could affect the value of Fund investments.
