PROSPECTUS
INVESTMENT STRATEGY TEMPLETON GROWTH
GLOBAL GROWTH AND INCOME FUND
AND INCOME
August 1, 1998
as amended January 1, 1999
[Graphic omitted]
Please read this prospectus before investing, and keep it for future reference.
It contains important information, including how the fund invests and the
services available to shareholders.
The fund is a diversified series of Templeton Global Investment Trust (the
"Trust"). To learn more about the fund and its policies, you may request a copy
of the Trust's Statement of Additional Information ("SAI") dated August 1, 1998,
which we may amend from time to time. We have filed the SAI with the SEC and
have incorporated it by reference into this prospectus.
For a free copy of the SAI or a larger print version of this prospectus, contact
your investment representative or call 1-800/DIAL BEN.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY OF THE U.S.
GOVERNMENT. MUTUAL FUND SHARES INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
LIKE ALL MUTUAL FUND SHARES, THE SEC HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
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
GROWTH
AND INCOME
FUND
- --------------------------------------------
August 1, 1998
as amended
January 1, 1999
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 Summay .............................................. 2
Financial Highlights ........................................ 4
How Does the Fund Invest Its Assets? ........................ 6
What Are the Risks of Investing in the Fund? ................ 9
Who Manages the Fund? ....................................... 12
How Taxation Affects the Fund and Its Shareholders .......... 16
How Is the Trust Organized? ................................. 19
ABOUT YOUR ACCOUNT
How Do I Buy Shares? ........................................ 21
May I Exchange Shares for Shares of Another Fund? ........... 30
How Do I Sell Shares? ....................................... 33
What Distributions Might I Receive From the Fund? ......... 36
Transaction Procedures and Special Requirements ............. 38
Services to Help You Manage Your Account .................... 42
What If I Have Questions About My Account? .................. 44
GLOSSARY
Useful Terms and Definitions ................................ 45
</TABLE>
100 Fountain Parkway
P.O. Box 33030
St. Petersburg FL 33733-8030
1-800/DIAL BEN/registered trademark/
Templeton Growth and Income Fund [GRAPHIC OMITTED] 1
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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 fund's historical expenses for the fiscal year ended
March 31, 1998. The fund's actual expenses may vary.
<TABLE>
<CAPTION>
CLASS A1 CLASS C1
---------- ---------
<S> <C> <C>
A. SHAREHOLDER TRANSACTION EXPENSES2
Maximum Sales Charge
(as a percentage of Offering Price) .................................. 5.75% 1.99%
Paid at time of purchase3 ........................................... 5.75% 1.00%
Paid at redemption4 ................................................. None 0.99%
Exchange Fee (per transaction)5 ...................................... None None
B. ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after fee waiver)6 .................................. 0.24% 0.24%
Rule 12b-1 Fees7 ..................................................... 0.35% 1.00%
Other Expenses ....................................................... 0.66% 0.66%
---- ----
Total Fund Operating Expenses (after fee waiver)6 .................... 1.25% 1.90%
==== ====
</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>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
CLASS A .......... $708 $95 $122 $200
CLASS C .......... $ 39 $69 $112 $230
</TABLE>
For the same Class C investment, you would pay projected expenses of $29 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
2 [GRAPHIC OMITTED] Templeton Growth and Income Fund
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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.
1. Before January 1, 1999, Class A shares were designated Class I and Class C
shares were designated Class II.
2. If your transaction is processed through your Securities Dealer, you may be
charged a fee by your Securities Dealer for this service.
3. There is no front-end sales charge if you invest $1 million or more in Class
A shares. Although Class C has a lower front-end sales charge than Class A, its
Rule 12b-1 fees are higher. Over time you may pay more for Class C shares.
Please see "How Do I Buy Shares? - Choosing a Share Class."
4. A Contingent Deferred Sales Charge of 1% may apply to Class A purchases of
$1 million or more if you sell the shares within one year and to any Class C
purchase if you sell the shares within 18 months. A Contingent Deferred Sales
Charge may also apply to purchases by certain retirement plans that qualify to
buy Class A shares without a front-end sales charge. The charge is based on 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 for Class C is different depending on
whether the charge is shown based on the Net Asset Value or the Offering Price,
the dollar amount you would pay is the same. See "How Do I Sell Shares? -
Contingent Deferred Sales Charge" for details.
5. There is a $5 fee for exchanges by Market Timers.
6. For the period shown, Global Advisors and FT Services had agreed in advance
to limit their respective management and administration fees to reduce the
fund's expenses. Without this reduction, management fees would have been 0.75%
and total operating expenses would have been 1.76% for Class A and 2.41% for
Class C. After July 31, 1999, this arrangement may end at any time upon notice
to the Board.
7. 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 rules of the National
Association of Securities Dealers, Inc.
8. Assumes a Contingent Deferred Sales Charge will not apply.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 3
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FINANCIAL HIGHLIGHTS
This table summarizes the fund's financial history. The information has been
audited by McGladrey & Pullen, LLP, the fund's independent auditor. The audit
report covering the periods shown below appears in the fund's Annual Report to
Shareholders for the fiscal year ended March 31, 1998. The Annual Report to
Shareholders also includes more information about the fund's performance. For a
free copy, please call Fund Information.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------------
1998 1997 1996 1995 1994/dagger/
----------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OUTSTANDING THROUGHOUT THE YEAR)
NET ASSET VALUE, BEGINNING OF YEAR ............................ $ 12.95 $ 11.39 $ 10.05 $ 10.01 $ 10.00
------- ------- ------- ------- --------
INCOME FROM INVESTMENT OPERATIONS:
NET INVESTMENT INCOME ........................................ .35 .22 .29 .16 .009
NET REALIZED AND UNREALIZED GAINS (LOSSES) ................... 2.17 1.60 1.54 (.02) .001
------- ------- ------- ------- --------
TOTAL FROM INVESTMENT OPERATIONS .............................. 2.52 1.82 1.83 .14 .01
------- ------- ------- ------- --------
LESS DISTRIBUTIONS FROM:
NET INVESTMENT INCOME ........................................ (.28) (.22) (.29) (.10) --
NET REALIZED GAINS ........................................... (.60) (.04) (.20) -- --
------- ------- ------- ------- --------
TOTAL DISTRIBUTIONS ........................................... (.88) (.26) (.49) (.10) --
------- ------- ------- ------- --------
NET ASSET VALUE, END OF YEAR .................................. $ 14.59 $ 12.95 $ 11.39 $ 10.05 $ 10.01
======= ======= ======= ======= ========
TOTAL RETURN* ................................................. 20.23% 16.19% 18.78% 1.43% .10%
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF YEAR (000'S) ............................... $46,262 $25,020 $11,732 $ 5,953 $ 100
RATIOS TO AVERAGE NET ASSETS:
EXPENSES ..................................................... 1.25% 1.25% 1.25% 1.25% 1.25%**
EXPENSES, EXCLUDING WAIVER AND PAYMENTS BY AFFILIATE ......... 1.76% 2.24% 2.71% 6.11% 32.15%**
NET INVESTMENT INCOME ........................................ 2.91% 2.21% 2.98% 2.51% 1.89%**
PORTFOLIO TURNOVER RATE ....................................... 18.62% 20.72% 10.21% 19.33% --
AVERAGE COMMISSION RATE PAID*** ............................... $ .0015 $ .0050 $ .0250 -- --
</TABLE>
*TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS AND IS NOT ANNUALIZED.
**ANNUALIZED.
***RELATES TO PURCHASES AND SALES OF EQUITY SECURITIES. PRIOR TO FISCAL YEAR
1996 DISCLOSURE OF AVERAGE COMMISSION RATE WAS NOT REQUIRED.
/DAGGER/FOR THE PERIOD MARCH 14, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31,
1994.
4 [GRAPHIC OMITTED] Templeton Growth and Income Fund
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<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------
1998 1997 1996/DAGGER/
----------- ---------- -------------
<S> <C> <C> <C>
CLASS C
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OUTSTANDING THROUGHOUT THE YEAR)
NET ASSET VALUE, BEGINNING OF YEAR ............................ $ 12.84 $ 11.33 $ 10.19
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
NET INVESTMENT INCOME ........................................ .29 .21 .22
NET REALIZED AND UNREALIZED GAINS ............................ 2.11 1.52 1.41
------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS .............................. 2.40 1.73 1.63
------- ------- -------
LESS DISTRIBUTIONS FROM:
NET INVESTMENT INCOME ........................................ (.21) (.18) (.29)
NET REALIZED GAINS ........................................... (.60) (.04) (.20)
------- ------- -------
TOTAL DISTRIBUTIONS ........................................... (.81) (.22) (.49)
------- ------- -------
NET ASSET VALUE, END OF YEAR .................................. $ 14.43 $ 12.84 $ 11.33
======= ======= =======
TOTAL RETURN* ................................................. 19.40% 15.35% 16.51%
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF YEAR (000'S) ............................... $13,293 $ 6,017 $ 2,205
RATIOS TO AVERAGE NET ASSETS:
EXPENSES ..................................................... 1.90% 1.90% 1.90%**
EXPENSES, EXCLUDING WAIVER AND PAYMENTS BY AFFILIATE ......... 2.41% 2.89% 3.31%**
NET INVESTMENT INCOME ........................................ 2.25% 1.51% 1.59%**
PORTFOLIO TURNOVER RATE ....................................... 18.62% 20.72% 10.21%
AVERAGE COMMISSION RATE PAID*** ............................... $ .0015 $ .0050 $ .0250
</TABLE>
*TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS OR THE CONTINGENT DEFERRED
SALES CHARGE AND IS NOT ANNUALIZED.
**ANNUALIZED.
***RELATES TO PURCHASES AND SALES OF EQUITY SECURITIES.
/DAGGER/FOR THE PERIOD MAY 1, 1995 (COMMENCEMENT OF SALES) TO MARCH 31, 1996.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 5
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HOW DOES THE FUND INVEST ITS ASSETS?
WHAT IS THE FUND'S GOAL?
The investment goal of the fund is high total return (a combination of capital
growth and income). This goal is fundamental, which means that it may not be
changed without shareholder approval.
WHAT KINDS OF SECURITIES DOES THE FUND BUY?
The fund tries to achieve its investment goal by a flexible policy of investing
primarily in the equity and debt securities of U.S. and foreign companies.
Under normal market conditions, the fund will invest at least 65% of its total
assets in issuers located in at least three countries (including the U.S.).
EQUITY SECURITIES generally entitle the holder to participate in a company's
general operating results. These include common stock; preferred stock;
convertible securities; warrants or rights. Currently the fund invests
primarily in common stock.
In selecting these equity securities, Global Advisors does a company-by-company
analysis, rather than focusing on a specific industry or economic sector.
Global Advisors concentrates primarily on the market price of a company's
securities relative to its view regarding the company's long-term earnings
potential. A company's historical value measures, including price/earnings
ratios, profit margins and liquidation value, will also be considered.
DEBT SECURITIES represent an obligation of the issuer to repay a loan of money
to it, and generally, provide for the payment of interest. These include bonds,
notes and debentures; commercial paper; time deposits; bankers' acceptances;
and structured investments which are described more fully in the SAI.
In search of high current income, the fund may buy both rated and unrated debt
securities of any maturity. Independent rating organizations rate debt
securities based upon their assessment of the financial soundness of the
issuer. Generally, a lower rating indicates higher risk. At present, the fund
does not intend to invest more than 5% of its total assets in non-investment
grade securities (rated lower than BBB by S&P or Baa by Moody's or, if unrated,
determined by the fund to be of comparable quality). Please see the SAI for
more details on the risks associated with lower-rated securities.
6 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
DEPOSITARY RECEIPTS. The fund may also invest in American, European and Global
Depositary Receipts. Depositary Receipts are certificates typically issued by a
bank or trust company that give their holders the right to receive securities
issued by a foreign or domestic corporation.
GENERAL. The fund may invest without percentage limitation in listed or
unlisted securities of foreign or domestic companies of any size (market
capitalization). The fund may invest in any industry although it will not
concentrate (invest more than 25% of its total assets) in any one industry. The
fund may invest up to 15% of its total assets in illiquid securities, including
up to 10% of its total assets in restricted securities. Illiquid securities are
generally securities that cannot be sold within seven days in the normal course
of business at approximately the amount at which the fund has valued them.
Restricted securities are generally securities that are subject to restrictions
on their transfer.
Please see the SAI for more details on the types of securities in which the
fund invests.
WHAT ARE SOME OF THE FUND'S OTHER INVESTMENT STRATEGIES AND PRACTICES?
TEMPORARY INVESTMENTS. When Global Advisors believes that the securities
trading markets or the economy are experiencing excessive volatility or a
prolonged general decline, or other adverse conditions exist, for example, it
may invest the fund's portfolio in a temporary defensive manner.
Under such circumstances, the fund may invest up to 100% of its assets in money
market securities denominated in the currency of any nation. These may include:
/bullet/short-term (maturities of less than 12 months) and medium-term
(maturities up to 5 years) securities issued or guaranteed by the U.S. or a
foreign government, their agencies or instrumentalities;
/bullet/finance company and corporate commercial paper, and other short-term
corporate obligations, rated A by S&P or Prime-1 by Moody's or, if unrated,
determined by the fund to be of comparable quality;
/bullet/bank obligations (including CDs, time deposits and bankers'
acceptances); and
/bullet/repurchase agreements with banks and broker-dealers.
REPURCHASE AGREEMENTS. The fund will generally have a portion of its assets in
cash or cash equivalents for a variety of reasons including waiting for a
special investment opportunity or taking a defensive position. To earn income
on this portion of its assets, the fund may enter into repurchase agreements
with certain banks and broker-dealers.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 7
<PAGE>
Under a repurchase agreement, the fund agrees to buy a U.S. government security
from one of these issuers and then to sell the security back to the issuer
after a short period of time (generally, less than seven days) at a higher
price. The bank or broker-dealer must transfer to the fund's custodian
securities with an initial value of at least 102% of the dollar amount invested
by the fund in each repurchase agreement.
OPTIONS ON SECURITIES AND SECURITIES INDICES. The fund may buy and sell options
on securities and securities indices to earn additional income and/or to help
protect its portfolio against market and/or exchange rate movements, although
it presently has no intention of doing so. An option on a security is a
contract that allows the buyer of the option the right to buy or sell a
specific security at a stated price during the option's term. An option on a
securities index is a contract that allows the buyer of the option the right to
receive from the seller cash, in an amount equal to the difference between the
index's closing price and the option's exercise price. The fund will limit the
sale of options on its securities to 15% or less of its total assets. The fund
may only buy options if the total premiums it paid for such options is 5% or
less of its total assets.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS. Because the fund may buy securities
which are valued in currencies other than the U.S. dollar, it may take steps to
help protect its portfolio against adverse changes in foreign currency exchange
rates. To do this, the fund may (1) buy and sell foreign currency at the
prevailing rate in the foreign currency exchange market; (2) enter into forward
foreign currency contracts which are agreements to buy or sell a specific
currency at a set price on a future date (generally within one year); and (3)
buy and sell put and call options on foreign currencies.
FUTURES CONTRACTS. Changes in interest rates, securities prices or foreign
currency valuations may affect the value of the fund's investments. To reduce
its exposure to these factors, the fund may buy and sell financial futures
contracts, stock and bond index futures contracts, foreign currency futures
contracts and options on any of these contracts. A financial futures contract
is an agreement to buy or sell a specific security or commodity at a specified
future date and price. 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 end of the contract period. A foreign currency
futures contract is an agreement to buy or sell a specific amount of a currency
for a set price on a future date. The fund may not commit more than 5% of its
total assets to initial margin deposits on futures contracts and related
options.
SECURITIES LENDING. To generate additional income, the fund may lend its
portfolio securities to qualified securities dealers or other institutional
investors. Such loans may not exceed 33 1/3% of the value of the fund's total
assets measured at the time of the
8 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
most recent loan. For each loan the fund must receive in return collateral with
a value at least equal to 100% of the current market value of the loaned
securities.
SHORT-TERM TRADING AND PORTFOLIO TURNOVER. In search of growth opportunities,
Global Advisors invests for the long-term and does not intend to emphasize
short-term trading profits. It is anticipated, therefore, that the fund's
annual portfolio turnover rate generally will be below 50% for the equity
portion of its portfolio; although this rate may be higher or lower, in
relation to market conditions. A portfolio turnover rate of less than 50% means
that in a one year period, less than one-half of the fund's portfolio is
changed. When consistent with its investment goal, the fund may engage in
short-term trading in the debt portion of its portfolio. An example would be
when a temporary disparity occurs in the normal yield relationship between two
comparable securities. As a result, under certain market conditions, the fund's
annual portfolio turnover rate on the debt portion of its portfolio may be
high.
OTHER POLICIES AND RESTRICTIONS. The fund has a number of additional investment
policies and restrictions that govern its activities. Those that are identified
as "fundamental" may only be changed with shareholder approval. The others may
be changed by the Board alone. For a list of these restrictions and more
information about the fund's investment policies, including those described
above, please see "How Do the Funds Invest Their Assets?" and "Investment
Restrictions" in the SAI.
Generally, the policies and restrictions discussed in this prospectus and in
the SAI apply when the fund makes an investment. In most cases, the fund is not
required to sell a security because circumstances change and the security no
longer meets one or more of the fund's policies or restrictions.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
GENERAL RISK. There is no assurance that the fund's investment goal will be
met. The fund will seek to spread investment risk by diversifying its
investments but the possibility of losses remains. Generally, if the securities
owned by the fund increase in value, the value of the shares of the fund which
you own will increase. Similarly, if the securities owned by the fund decrease
in value, the value of your shares will also decline.
FOREIGN SECURITIES RISK. The value of foreign (and U.S.) securities is affected
by general economic conditions and individual company and industry earnings
prospects. While foreign securities may offer significant opportunities for
gain, they also involve additional risks that can increase the potential for
losses in the fund. These risks can be significantly greater for investments in
emerging markets. Investments in Depositary Receipts also involve some or all
of the risks described below.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 9
<PAGE>
The political, economic and social structures of some countries in which the
fund invests may be less stable and more volatile than those in the U.S. The
risks of investing in these countries include the possibility of the imposition
of exchange controls, expropriation, restrictions on removal of currency or
other assets, nationalization of assets, and punitive taxes.
There may be less publicly available information about a foreign company or
government than about a U.S. company or public entity. Certain countries'
financial markets and services are less developed than those in the U.S. or
other major economies. As a result, they may not have uniform accounting,
auditing and financial reporting standards and may have less government
supervision of financial markets. Foreign securities markets may have
substantially lower trading volumes than U.S. markets, resulting in less
liquidity and more volatility than experienced in the U.S. Transaction costs on
foreign securities markets are generally higher than in the U.S. The settlement
practices may be cumbersome and result in delays that may affect portfolio
liquidity. The fund may have greater difficulty voting proxies, exercising
shareholder rights, pursuing legal remedies and obtaining judgments with
respect to foreign investments in foreign courts than with respect to domestic
issuers in U.S. courts.
Some of the countries in which the fund may invest such as Russia and certain
Asian and Eastern European countries are considered developing or emerging
markets. Investments in these markets are subject to all of the risks of
foreign investing generally, and have additional and heightened risks due to a
lack of legal, business and social frameworks to support securities markets.
Emerging markets 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, delays in
settling portfolio transactions and risk of loss arising out of the system of
share registration and custody. The fund may invest up to 100% of its total
assets in emerging markets, including up to 5% of its total assets in Russian
securities. For more information on the risks associated with emerging markets
securities, please see the SAI.
MARKET, CURRENCY, AND INTEREST RATE RISK. General market movements in any
country where the fund has investments are likely to affect the value of the
securities which the fund owns in that country and the fund's share price may
also be affected. The fund's investments may be denominated in foreign
currencies so that changes in foreign currency exchange rates will also affect
the value of what the fund owns, and thus the price of its shares. To the
extent the fund invests in debt securities, changes in interest
10 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
rates in any country where the fund is invested will affect the value of the
fund's portfolio and, consequently, its share price. Rising interest rates,
which often occur during times of inflation or a growing economy, are likely to
cause the value of a debt security to decrease, having a negative effect on the
value of the fund's shares. Of course, individual and worldwide stock markets,
interest rates and currency valuations have both increased and decreased,
sometimes very dramatically, in the past. These changes are likely to occur
again in the future at unpredictable times.
EURO RISK. 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.
Because this change to a single currency is new and untested, the establishment
of the euro may result in market volatility. For the same reason, it is not
possible to predict the impact of the euro on the business or financial
condition of European issuers which the fund may hold in its portfolio, and
their impact on the value of fund shares. 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.
CREDIT AND ISSUER RISK. The fund's investments in debt securities involve
credit risk. This is the risk that the issuer of a debt security will be unable
to make principal and interest payments in a timely manner and the debt
security will go into default. The fund may invest up to 5% of its total assets
in defaulted debt securities. The purchase of defaulted debt securities
involves significant additional risks, such as the possibility of complete loss
of the investment in the event the issuer does not restructure or
reorganize to enable it to resume paying interest and principal to holders.
DERIVATIVE SECURITIES RISK. Derivative investments are those whose values are
dependent upon the performance of one or more other securities or investments
or indices; in contrast to common stock, for example, whose value is dependent
upon the operations of the issuer. Option transactions, foreign currency
exchange transactions and futures contracts are considered derivative
investments. To the extent the fund enters into these transactions, their
success will depend upon Global Advisors' ability to predict pertinent market
movements. These securities are subject to the risk that the other party to the
transaction may fail to perform, resulting in losses to the fund.
YEAR 2000. When evaluating current and potential portfolio positions, Year 2000
is one of the factors the fund's manager considers.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 11
<PAGE>
The manager will rely upon public filings and other statements made by
companies about their Year 2000 readiness. Issuers in countries outside the
U.S., particularly in emerging markets, may not be required to make the same
level of disclosure about Year 2000 readiness as is required in the U.S. The
manager, of course, cannot audit each company and its major suppliers to verify
their Year 2000 readiness.
If a company in which the fund is invested is adversely affected by Year 2000
problems, it is likely that the price of its security will also be adversely
affected. A decrease in the value of one or more of the fund's portfolio
holdings will have a similar impact on the price of the fund's shares. Please
see "Year 2000 Problem" under "Who Manages the Fund?" for more information.
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 among
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. Global Advisors manages the fund's assets and makes its
investment decisions. Global Advisors 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,
Global Advisors and its affiliates manage over $208 billion in assets. The
Templeton organization has been investing globally since 1940. Global Advisors
and its affiliates have offices in Argentina, Australia, Bahamas, Bermuda,
Brazil, the British Virgin Islands, Canada, China, Cyprus, France, Germany,
Hong Kong, India, Italy, Japan, Korea, Luxembourg, Mauritius, the Netherlands,
Poland, Russia, Singapore, South Africa, Switzerland, 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 fund's lead portfolio manager since 1996 is Richard
Sean Farrington. Mr. Farrington is a Vice President of Global Advisors. He
holds a BA in economics from Harvard University. Mr. Farrington is a Chartered
Financial Analyst. He has served as the president of the Bahamas Society of
Financial Analysts and is currently on the board of the International Society
of Financial Analysts. He joined the Templeton organization in 1991 and is a
research analyst and portfolio manager.
12 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
Mr. Farrington's research responsibilities include industry coverage of
non-U.S. electric utilities. He is also responsible for country coverage of
Hong Kong and China.
Mark G. Holowesko and Jeffrey A. Everett have secondary portfolio management
responsibilities for the fund. Mr. Holowesko is President of Global Advisors.
He holds a BA in economics from Holy Cross College and an MBA from Babson
College. He is a Chartered Financial Analyst, Chartered Investment Counselor,
and a founding member of the International Society of Financial Analysts. Prior
to joining the Templeton organization in 1985, Mr. Holowesko worked with
RoyWest Trust Corporation (Bahamas) Limited as an investment analyst. His
duties at RoyWest included managing trust and individual accounts, as well as
equity market research worldwide. Mr. Holowesko is responsible for coordinating
equity research and portfolio management activities worldwide for the Templeton
Global Equity Group. He also manages several mutual funds. Mr. Everett is an
Executive Vice President of Global Advisors. He holds a BS in finance from
Pennsylvania State University. He is a Chartered Financial Analyst and a member
of the International Society of Financial Analysts and the Association of
Investment Management and Research. Prior to joining the Templeton organization
in 1989, Mr. Everett was an investment officer at First Pennsylvania Investment
Research, a division of First Pennsylvania Corporation, where he analyzed
equity and convertible securities. He also coordinated research for Centre
Square Investment Group, the pension management subsidiary of First
Pennsylvania Corporation. Mr. Everett is responsible for managing several
offshore accounts at Templeton, as well as several mutual funds. His global
research responsibilities encompass industry coverage for real estate and
country responsibilities for Italy and Australia.
MANAGEMENT FEES. During the fiscal year ended March 31, 1998, management fees,
before any advance waiver, totaled 0.75% of the average daily net assets of the
fund. Total operating expenses were 1.76% for Class A and 2.41% for Class C.
Under an agreement by Global Advisors to limit its fees, the fund paid
management fees totaling 0.24% and operating expenses totaling 1.25% for Class
A and 1.90% for Class C. After July 31, 1999, Global Advisors may end this
arrangement at any time upon notice to the Board.
PORTFOLIO TRANSACTIONS. Global Advisors tries to obtain the best execution on
all transactions. If Global Advisors believes more than one broker or dealer
can provide the 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 Do
the Funds Buy Securities for Their Portfolios?" in the SAI for more information.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 13
<PAGE>
ADMINISTRATIVE SERVICES. FT Services provides certain administrative services
and facilities for the fund. During the fiscal year ended March 31, 1998,
administration fees totaling 0.15% of the average daily net assets of the fund
were paid to FT Services. 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.
YEAR 2000 PROBLEM. The fund's business operations depend on a worldwide network
of computer systems that contain date fields, including securities trading
systems, securities transfer agent operations and stock market links. Many of
the systems currently use a two digit date field to represent the date, and
unless these systems are changed or modified, they may not be able to
distinguish the Year 1900 from the Year 2000 (commonly referred to as the Year
2000 problem). In addition, the fact that the Year 2000 is a non-standard leap
year may create difficulties for some systems.
When the Year 2000 arrives, the fund's operations could be adversely affected
if the computer systems used by the manager, its service providers and other
third parties it does business with are not Year 2000 ready. For example, the
fund's portfolio and operational areas could be impacted, including securities
trade processing, interest and dividend payments, securities pricing,
shareholder account services, reporting, custody functions and others. The fund
could experience difficulties in effecting transactions if any of its foreign
subcustodians, or if foreign broker-dealers or foreign markets are not ready
for Year 2000.
The fund's manager and its affiliated service providers are making a concerted
effort to take steps they believe are reasonably designed to address their Year
2000 problems. Of course, the fund's ability to reduce the effects of the Year
2000 problem is also very much dependent upon the efforts of third parties over
which the fund and its manager may have no control.
THE RULE 12B-1 PLANS
Each class has a separate distribution or "Rule 12b-1" plan under which the
fund shall pay or may reimburse Distributors or others for the expenses of
activities that are 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; a prorated portion of Distributors'
overhead expenses; and the expenses of printing prospectuses and reports used
for sales purposes, and preparing and distributing sales literature and
advertisements.
14 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
Payments by the fund under the Class A plan may not exceed 0.35% per year of
Class A'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
March 31, 1998, expenses under the Class A plan that may be reimbursable in
future quarters or years totaled $993,733, or 2.15% of Class A's net assets.
During the first year after certain Class A purchases made without a sales
charge, Securities Dealers may not be eligible to receive the Rule 12b-1 fees
associated with the purchase.
Under the Class C plan, the fund may pay Distributors up to 0.75% per year of
Class C's average daily net assets to pay Distributors or others for providing
distribution and related services and bearing certain Class C expenses. All
distribution expenses over this amount will be borne by those who have incurred
them. During the first year after a purchase of Class C shares, Securities
Dealers may not be eligible to receive this portion of the Rule 12b-1 fees
associated with the purchase.
The fund may also pay a servicing fee of up to 0.25% per year of Class C's
average daily net assets under the Class C plan. This fee may be used to pay
Securities Dealers or others for, among other things, helping to establish and
maintain customer accounts and records, helping with requests to buy and sell
shares, receiving and answering correspondence, monitoring dividend payments
from the fund on behalf of customers, and similar servicing and account
maintenance activities.
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.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 15
<PAGE>
HOW TAXATION AFFECTS THE FUND AND ITS SHAREHOLDERS
TAXATION OF THE FUND'S INVESTMENTS. The fund invests your money in the stocks,
bonds and other securities that are described in the section "How Does the Fund
Invest Its Assets?" Special tax rules may apply in determining the income and
gains that the fund earns on its investments. These rules may, in turn, affect
the amount of distributions that the fund pays to you. These special tax rules
are discussed in the SAI.
TAXATION OF THE FUNDS. As a series of a regulated investment company, the fund
generally pays no federal income tax on the income and gains that it distributes
to you.
HOW DOES THE FUND EARN INCOME AND GAINS?
THE FUND EARNS DIVIDENDS AND INTEREST (THE FUND'S "INCOME") ON ITS INVESTMENTS.
WHEN THE FUND SELLS A SECURITY FOR A PRICE THAT IS HIGHER THAN IT PAID, IT HAS A
GAIN. WHEN THE FUND SELLS A SECURITY FOR A PRICE THAT IS LOWER THAN IT PAID, IT
HAS A LOSS. IF THE FUND HAS HELD THE SECURITY FOR MORE THAN ONE YEAR, THE GAIN
OR LOSS WILL BE A LONG-TERM CAPITAL GAIN OR LOSS. IF THE FUND HAS HELD THE
SECURITY FOR ONE YEAR OR LESS, THE GAIN OR LOSS WILL BE A SHORT-TERM CAPITAL
GAIN OR LOSS. THE FUND'S GAINS AND LOSSES ARE NETTED TOGETHER, AND, IF THE FUND
HAS A NET GAIN (THE FUND'S "GAINS"), THAT GAIN WILL GENERALLY BE DISTRIBUTED TO
YOU.
FOREIGN TAXES. Foreign governments may impose taxes on the income and gains from
the fund's investments in foreign stocks and bonds. These taxes will reduce the
amount of the fund's distributions to you, but, depending upon the amount of the
fund's assets that are invested in foreign securities and foreign taxes paid,
may be passed through to you as a foreign tax credit on your income tax return.
The fund may also invest in the securities of foreign companies that are
"passive foreign investment companies" ("PFICs"). These investments in PFICs may
cause the fund to pay income taxes and interest charges. If possible, the fund
will adopt strategies to avoid PFIC taxes and interest charges.
TAXATION OF SHAREHOLDERS
DISTRIBUTIONS. Distributions from the fund, whether you receive them in cash or
in additional shares, are generally subject to income tax. The fund will send
you a statement in January that reflects the amount of ordinary dividends,
capital gain distributions and non-taxable distributions you received from the
fund in the prior year. This statement will include distributions declared in
December and paid to you in January of the current year, but which are taxable
as if paid on December 31 of the prior year. The IRS requires you to report
these amounts on your income tax return for the prior year. The fund's statement
for the prior year will tell you how much of your capital gain distribution
represents 28% rate gain. The remainder of the capital gain distribution
represents 20% rate gain.
WHAT IS A DISTRIBUTION? AS A SHAREHOLDER, YOU WILL RECEIVE YOUR SHARE OF THE
FUND'S INCOME AND GAINS ON ITS INVESTMENTS IN STOCKS, BONDS AND OTHER
SECURITIES. THE FUND'S INCOME AND SHORT-TERM CAPITAL GAINS ARE PAID TO YOU AS
ORDINARY DIVIDENDS. THE FUND'S LONG-TERM CAPITAL GAINS ARE PAID TO YOU AS
CAPITAL GAIN DISTRIBUTIONS. IF THE FUND PAYS YOU AN AMOUNT IN EXCESS OF ITS
INCOME AND GAINS, THIS EXCESS WILL GENERALLY BE TREATED AS A NON-TAXABLE
DISTRIBUTION. THESE AMOUNTS, TAKEN TOGETHER, ARE WHAT WE CALL THE FUND'S
DISTRIBUTIONS TO YOU.
16 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
DISTRIBUTIONS TO RETIREMENT PLANS. Fund distributions received by your
qualified retirement plan, such as a section 401(k) plan or IRA, are generally
tax-deferred; this means that you are not required to report fund distributions
on your income tax return when paid to your plan, but, rather, when your plan
makes payments to you. Special rules apply to payouts from Roth and Education
IRAs.
DIVIDENDS-RECEIVED DEDUCTION. Corporate investors may be entitled to a
dividends-received deduction on a portion of the ordinary dividends they receive
from the fund.
REDEMPTIONS AND EXCHANGES. If you redeem your shares or if you exchange your
shares in the fund for shares in another Franklin Templeton Fund, you will
generally have a gain or loss that the IRS requires you to report on your income
tax return. If you exchange fund shares held for 90 days or less and pay no
sales charge, or a reduced sales charge, for the new shares, all or a portion of
the sales charge you paid on the purchase of the shares you exchanged is not
included in their cost for purposes of computing gain or loss on the exchange.
If you hold your shares for six months or less, any loss you have will be
treated as a long-term capital loss to the extent of any capital gain
distributions received by you from the fund. All or a portion of any loss on the
redemption or exchange of your shares will be disallowed by the IRS if you
purchase other shares in the fund within 30 days before or after your redemption
or exchange.
WHAT IS A REDEMPTION?
A REDEMPTION IS A SALE BY YOU TO THE FUND OF SOME OR ALL OF YOUR SHARES IN THE
FUND. THE PRICE PER SHARE YOU RECEIVE WHEN YOU REDEEM FUND SHARES MAY BE MORE OR
LESS THAN THE PRICE AT WHICH YOU PURCHASED THOSE SHARES. AN EXCHANGE OF SHARES
IN THE FUND FOR SHARES OF ANOTHER FRANKLIN TEMPLETON FUND IS TREATED AS A
REDEMPTION OF FUND SHARES AND THEN A PURCHASE OF SHARES OF THE OTHER FUND. WHEN
YOU REDEEM OR EXCHANGE YOUR SHARES, YOU WILL GENERALLY HAVE A GAIN OR LOSS,
DEPENDING UPON WHETHER THE AMOUNT YOU RECEIVE FOR YOUR SHARES IS MORE OR LESS
THAN YOUR COST OR OTHER BASIS IN THE SHARES. CALL FUND INFORMATION FOR A FREE
FRANKLIN TEMPLETON TAX INFORMATION HANDBOOK IF YOU NEED MORE INFORMATION ON
CALCULATING THE GAIN OR LOSS ON THE REDEMPTION OR EXCHANGE OF YOUR SHARES.
U.S. GOVERNMENT OBLIGATION INTEREST. Many states grant tax-free status to
dividends paid from interest earned on direct obligations of the U.S.
government, subject to certain restrictions. The fund will provide you with
information at the end of each calendar year on the amount of such dividends
that may qualify for exemption from reporting on your individual income tax
return.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 17
<PAGE>
FOREIGN TAXES. If more than 50% of the value of the fund's assets consists of
foreign securities, the fund may elect to pass-through to you the amount of
foreign taxes it paid. If the fund makes this election, your year-end statement
will show more taxable income than was actually distributed to you. However, you
will be entitled to either deduct your share of such taxes in computing your
taxable income or claim a foreign tax credit for such taxes against your U.S.
federal income tax. Your year-end statement, showing the amount of deduction or
credit available to you, will be distributed to you in January along with other
shareholder information records including your fund's IRS Form 1099-DIV.
WHAT IS A FOREIGN TAX CREDIT?
A FOREIGN TAX CREDIT IS A TAX CREDIT FOR THE AMOUNT OF TAXES IMPOSED BY A
FOREIGN COUNTRY ON EARNINGS OF THE FUND. WHEN A FOREIGN COMPANY IN WHICH THE
FUND INVESTS PAYS A DIVIDEND TO THE FUND, THE DIVIDEND WILL GENERALLY BE SUBJECT
TO A WITHHOLDING TAX. THE TAXES WITHHELD IN FOREIGN COUNTRIES CREATE CREDITS
THAT YOU MAY USE TO OFFSET YOUR U.S. FEDERAL INCOME TAX.
The Taxpayer Relief Act of 1997 includes a provision that allows you to claim
these credits directly on your income tax return (IRS Form 1040) and eliminates
the previous requirement that you complete a detailed supporting form. To
qualify, you must have $600 or less in joint return foreign taxes ($300 or less
on a single return), all of which are reported to you on IRS Form 1099-DIV or
qualifies as passive investment-type income if received from other sources.
NON-U.S. INVESTORS. Ordinary dividends generally will be subject to U.S. income
tax withholding. Your home country may also tax ordinary dividends, capital
gain distributions and gains arising from redemptions or exchanges of your fund
shares. Fund shares held by the estate of a non-U.S. investor may be subject to
U.S. estate tax. You may wish to contact your tax advisor to determine the U.S.
and non-U.S. tax consequences of your investment in the fund.
STATE TAXES. Ordinary dividends and capital gain distributions that you receive
from the fund, and gains arising from redemptions or exchanges of your fund
shares, will generally be subject to state and local income tax. The holding of
fund shares may also be subject to state and local intangibles taxes. You may
wish to contact your tax advisor to determine the state and local tax
consequences of your investment in the fund.
18 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
BACKUP WITHHOLDING. When you open an account, IRS regulations require that you
provide your taxpayer identification number ("TIN"), certify that it is correct,
and certify that you are not subject to backup withholding under IRS rules. If
you fail to provide a correct TIN or the proper tax certifications, the fund is
required to withhold 31% of all the distributions (including ordinary dividends
and capital gain distributions), and redemption proceeds paid to you. The fund
is also required to begin backup withholding on your account if the IRS
instructs the fund to do so. The fund reserves the right not to open your
account, or, alternatively, to redeem your shares at the current Net Asset
Value, less any taxes withheld, if you fail to provide a correct TIN, fail to
provide the proper tax certifications, or the IRS instructs the fund to begin
backup withholding on your account.
WHAT IS A BACKUP
WITHHOLDING?
BACKUP WITHHOLDING OCCURS WHEN THE FUND IS REQUIRED TO WITHHOLD AND PAY OVER TO
THE IRS 31% OF YOUR DISTRIBUTIONS AND REDEMPTION PROCEEDS. YOU CAN AVOID BACKUP
WITHHOLDING BY PROVIDING THE FUND WITH YOUR TIN, AND BY COMPLETING THE TAX
CERTIFICATIONS ON YOUR SHAREHOLDER APPLICATION THAT YOU WERE ASKED TO SIGN WHEN
YOU OPENED YOUR ACCOUNT. HOWEVER, IF THE IRS INSTRUCTS THE FUND TO BEGIN BACKUP
WITHHOLDING, IT IS REQUIRED TO DO SO EVEN IF YOU PROVIDED THE FUND WITH YOUR TIN
AND THESE TAX CERTIFICATIONS, AND BACKUP WITHHOLDING WILL REMAIN IN PLACE UNTIL
THE FUND IS INSTRUCTED BY THE IRS THAT IT IS NO LONGER REQUIRED.
THIS TAX DISCUSSION IS FOR GENERAL INFORMATION ONLY. PROSPECTIVE INVESTORS
SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE FEDERAL, STATE, LOCAL OR
FOREIGN TAX CONSEQUENCES OF AN INVESTMENT IN THE FUND. A MORE COMPLETE
DISCUSSION OF THESE RULES AND RELATED MATTERS IS CONTAINED IN THE SECTION
ENTITLED "ADDITIONAL INFORMATION ON DISTRIBUTIONS AND TAXES" IN THE SAI.
HOW IS THE TRUST ORGANIZED?
The fund is a diversified series of the Trust, an open-end management
investment company, commonly called a mutual fund. It was organized as a
Delaware business trust on December 21, 1993, and is registered with the SEC.
The fund offers two classes of shares: Templeton Growth and Income Fund - Class
A and Templeton Growth and Income Fund - Class C. All shares outstanding before
the offering of Class C shares are considered Class A shares. Additional series
and 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,
Templeton Growth and Income Fund [GRAPHIC OMITTED] 19
<PAGE>
only shareholders of that class may vote. Each class will vote separately on
matters affecting only that class, or expressly required to be voted on
separately by state or federal law. Shares of each class of a series have the
same voting and other rights and preferences as the other classes and series of
the Trust for matters that affect the Trust as a whole.
The Trust 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 Trust does not intend to hold annual shareholder meetings. The Trust or a
series of the Trust may hold special meetings, however, for matters requiring
shareholder approval. A meeting may be called by the Board to consider the
removal of a Board member if requested in writing by shareholders holding at
least 10% of the outstanding shares. In certain circumstances, we are required
to help you communicate with other shareholders about the removal of a Board
member.
20 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
ABOUT YOUR ACCOUNT
HOW DO I BUY SHARES?
OPENING YOUR ACCOUNT
To open your account, please follow the steps below. This will help avoid any
delays in processing your request.
1. Read this prospectus carefully.
2. Determine how much you would like to invest. The fund's minimum investments
are:
<TABLE>
<S> <C> <C>
/bullet/ To open a regular, non-retirement account ......................... $1,000
/bullet/ To open an IRA, IRA Rollover, Roth IRA, or Education IRA .......... $ 250*
/bullet/ To open a custodial account for a minor (an UGMA/UTMA
account) .......................................................... $ 100
/bullet/ To open an account with an automatic investment plan .............. $ 50**
/bullet/ To add to an account .............................................. $ 50***
</TABLE>
*For all other retirement accounts, there is no minimum investment
requirement.
**$25 for an Education IRA.
***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 these minimums from time to
time or to waive or lower these minimums for certain purchases. We also
reserve the right to refuse any order to buy shares.
3. Carefully complete and sign the enclosed account application, including the
optional shareholder privileges section. By applying for privileges now,
you can avoid the delay and inconvenience of having to send an additional
application to add privileges later. PLEASE ALSO INDICATE WHICH CLASS OF
SHARES YOU WANT TO BUY. IF YOU DO NOT SPECIFY A CLASS, WE WILL INVEST
YOUR PURCHASE IN CLASS A SHARES. It is important that we receive a signed
application since we will not be able to process any redemptions from your
account until we receive your signed application.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 21
<PAGE>
4. Make your investment using the table below.
<TABLE>
<CAPTION>
METHOD STEPS TO FOLLOW
- --------------------- -------------------------------------------------------
<S> <C>
BY MAIL For an initial investment:
Return the application to the fund with your check
made payable to the fund.
For additional investments:
Send a check made payable to the fund. Please include
your account number on the check.
- -------------------------------------------------------------------------------
BY WIRE 1. Call Shareholder Services or, if that number is busy,
call 1-650/312-2000 collect, to receive a wire control
number and wire instructions. You need a new wire
control number every time you wire money into your
account. If you do not have a currently effective wire
control number, we will return the money to the bank,
and we will not credit the purchase to your account.
2. For an initial investment you must also return your
signed account application to the fund.
IMPORTANT DEADLINES: If we receive your call before 1:00
p.m. Pacific time and the bank receives the wired funds
and reports the receipt of wired funds to the fund by 3:00
p.m. Pacific time, we will credit the purchase to your
account that day. If we receive your call after 1:00 p.m. or
the bank receives the wire after 3:00 p.m., we will credit
the purchase to your account the following business day.
- -------------------------------------------------------------------------------
THROUGH YOUR DEALER Call your investment representative
- -------------------------------------------------------------------------------
</TABLE>
22 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
CHOOSING A SHARE CLASS
Each class has its own sales charge and expense structure, allowing you to
choose the class that best meets your situation. Your financial representative
can help you decide.
<TABLE>
<CAPTION>
CLASS A* CLASS C*
- -------------------------------------------------- ---------------------------------------------
<S> <C>
/bullet/ Front-end sales charge of 5.75% or less /bullet/ Front-end sales charge of 1%
/bullet/ Contingent Deferred Sales Charge of /bullet/ Contingent Deferred Sales Charge of
1% on purchases of $1 million or more 1% on shares you sell within
sold within one year 18 months
/bullet/ Lower annual expenses than Class C /bullet/ Higher annual expenses than
due to lower Rule 12b-1 fees Class A shares
/bullet/ No maximum purchase amount /bullet/ Maximum purchase amount of
$999,999. We invest any investment
of $1 million or more in Class A
shares, since there is no front-end
sales charge and Class A's annual
expenses are lower.
</TABLE>
*Before January 1, 1999, Class A shares were designated Class I and Class C
shares were designated Class II.
PURCHASE PRICE OF FUND SHARES
For Class A shares, the sales charge you pay depends on the dollar amount you
invest, as shown in the table below. The sales charge for Class C shares is 1%
and, unlike Class A, 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 A
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 C
Under $1,000,000*......................... 1.00% 1.01% 1.00%
</TABLE>
*A Contingent Deferred Sales Charge of 1% may apply to Class A purchases of $1
million or more and any Class C 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.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 23
<PAGE>
SALES CHARGE REDUCTIONS AND WAIVERS
- - 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 do not
include this statement, we cannot guarantee that you will receive the sales
charge reduction or waiver.
CUMULATIVE QUANTITY DISCOUNTS - CLASS A ONLY. To determine if you may pay a
reduced sales charge, the amount of your current Class A 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.
LETTER OF INTENT - CLASS A ONLY. You may buy Class A shares at a reduced sales
charge by completing the Letter of Intent section of the account 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 A shares.
BY COMPLETING THE LETTER OF INTENT SECTION OF THE ACCOUNT APPLICATION, YOU
ACKNOWLEDGE AND AGREE TO THE FOLLOWING:
/bullet/You authorize Distributors to reserve 5% of your total intended
purchase in Class A shares registered in your name until you fulfill your
Letter.
/bullet/You give Distributors a security interest in the reserved shares and
appoint Distributors as attorney-in-fact.
/bullet/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.
/bullet/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.
24 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
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 A ONLY. If you are a member of a qualified group, you
may buy Class A 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:
/bullet/Was formed at least six months ago,
/bullet/Has a purpose other than buying fund shares at a discount,
/bullet/Has more than 10 members,
/bullet/Can arrange for meetings between our representatives and group members,
/bullet/Agrees to include Franklin Templeton Fund sales and other materials in
publications and mailings to its members at reduced or no cost to
Distributors,
/bullet/Agrees to arrange for payroll deduction or other bulk transmission of
investments to the fund, and
/bullet/Meets other uniform criteria that allow Distributors to achieve cost
savings in distributing shares.
A qualified group does not include a 403(b) plan that only allows salary
deferral contributions. 403(b) plans that only allow salary deferral
contributions and that purchased Class A shares of the fund at a reduced sales
charge under the group purchase privilege before February 1, 1998, however, may
continue to do so.
SALES CHARGE WAIVERS. If one of the following sales charge waivers applies to
you or your purchase of fund shares, you may buy shares of the fund without a
front-end sales charge or a Contingent Deferred Sales Charge. All of the sales
charge waivers listed below apply to purchases of Class A shares only, except
for items 1 and 2 which also apply to Class C purchases.
Certain distributions, payments or redemption proceeds that you receive may be
used to buy shares of the fund without a sales charge if you reinvest them
within 365 days of their payment or redemption date. They include:
Templeton Growth and Income Fund [GRAPHIC OMITTED] 25
<PAGE>
1. Dividend and capital gain distributions from any Franklin Templeton Fund.
The distributions generally must be reinvested in the same class of
shares. Certain exceptions apply, however, to Class C shareholders who
chose to reinvest their distributions in Class A shares of the fund
before November 17, 1997, and to Advisor Class or Class Z shareholders of
a Franklin Templeton Fund who may reinvest their distributions in Class A
shares of the fund.
2. Redemption proceeds from the sale of shares of any Franklin Templeton Fund.
The proceeds must be reinvested in the same class of shares, except
proceeds from the sale of Class B shares will be reinvested in Class A
shares.
If you paid a Contingent Deferred Sales Charge when you sold your Class A
or C shares, we will credit your account with the amount of the
Contingent Deferred Sales Charge paid but a new Contingent Deferred
Sales Charge will apply. For Class B shares reinvested in Class A, a
new Contingent Deferred Sales Charge will not apply, although your
account will not be credited with the amount of any Contingent Deferred
Sales Charge paid when you sold your Class B shares.
Proceeds immediately placed in a Franklin Bank CD also may be reinvested
without a front-end sales charge if you reinvest them within 365 days
from the date the CD matures, including any rollover.
This waiver does not apply to shares you buy and sell under our exchange
program. Shares purchased with the proceeds from a money fund may be
subject to a sales charge.
3. Dividend or capital gain distributions from a real estate investment trust
(REIT) sponsored or advised by Franklin Properties, Inc.
4. 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 or the Templeton Variable Products
Series Fund. You should contact your tax advisor for information on any
tax consequences that may apply.
5. Redemption proceeds from a repurchase of shares of Franklin Floating Rate
Trust, if the shares were continuously held for at least 12 months.
If you immediately placed your redemption proceeds in a Franklin Bank CD or
a Franklin Templeton money fund, you may reinvest them as described
above. The proceeds must be reinvested within 365 days from the date
the CD matures, including any rollover, or the date you redeem your money
fund shares.
26 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
6. Redemption proceeds from the sale of Class A shares of any of the Templeton
Global Strategy Funds if you are a qualified investor.
If you paid a contingent deferred sales charge when you sold your Class A
shares from a Templeton Global Strategy Fund, we will credit your
account with the amount of the contingent deferred sales charge paid
but a new Contingent Deferred Sales Charge will apply.
If you immediately placed your redemption proceeds in a Franklin Templeton
money fund, you may reinvest them as described above. The proceeds must be
reinvested within 365 days from the date they are redeemed from the money
fund.
7. Distributions from an existing retirement plan invested in the Franklin
Templeton Funds
Various individuals and institutions also may buy Class A shares without a
front-end sales charge or Contingent Deferred Sales Charge, including:
1. 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.
2. 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.
3. Broker-dealers, registered investment advisors or certified financial
planners who have entered into an agreement with Distributors for clients
participating in comprehensive fee programs. The minimum initial investment
is $250.
4. Qualified registered investment advisors who buy through a broker-dealer or
service agent who has entered into an agreement with Distributors
5. Registered Securities Dealers and their affiliates, for their investment
accounts only
6. Current employees of Securities Dealers and their affiliates and their
family members, as allowed by the internal policies of their employer
Templeton Growth and Income Fund [GRAPHIC OMITTED] 27
<PAGE>
7. 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. The minimum initial
investment is $100.
8. Investment companies exchanging shares or selling assets pursuant to a
merger, acquisition or exchange offer
9. Accounts managed by the Franklin Templeton Group
10. Certain unit investment trusts and their holders reinvesting distributions
from the trusts
11. Group annuity separate accounts offered to retirement plans
12. Chilean retirement plans that meet the requirements described under
"Retirement Plans" below
RETIREMENT PLANS. Retirement plans sponsored by an employer (i) with at least
100 employees, or (ii) with retirement plan assets of $1 million or more, or
(iii) that agrees to invest at least $500,000 in the Franklin Templeton Funds
over a 13 month period may buy Class A shares without a front-end sales charge.
Retirement plans that are not Qualified Retirement Plans, SIMPLEs or SEPs must
also meet the requirements described under "Group Purchases - Class A Only"
above to be able to buy Class A shares without a front-end sales charge. We may
enter into a special arrangement with a Securities Dealer, based on criteria
established by the fund, to add together certain small Qualified Retirement
Plan accounts for the purpose of meeting these requirements.
For retirement plan accounts opened on or after May 1, 1997, a Contingent
Deferred Sales Charge may apply if the retirement plan is transferred out of
the Franklin Templeton Funds or terminated 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 A 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.
28 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
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. Franklin Templeton Trust
Company, an affiliate of Distributors and a wholly owned subsidiary of
Resources, can provide the plan documents for you and serve as custodian or
trustee.
Franklin Templeton Trust Company can provide you with brochures containing
important information about its plans. These plans require separate
applications and their policies and procedures may be different than those
described in this prospectus. For more information, including a free retirement
plan brochure or application, please call Retirement Plan Services.
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 C purchases and certain Class A 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 A purchases of $1 million or more - up to 1% of the amount invested.
2. Class C purchases - up to 1% of the purchase price.
3. Class A 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.
4. Class A 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 A 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
Templeton Growth and Income Fund [GRAPHIC OMITTED] 29
<PAGE>
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.
FOR INVESTORS OUTSIDE THE U.S.
The distribution of this prospectus and the offering of fund shares may be
limited in many jurisdictions. An investor who wishes to buy shares of the fund
should determine, or have a broker-dealer determine, the applicable laws and
regulations of the relevant jurisdiction. Investors are responsible for
compliance with tax, currency exchange or other regulations applicable to
redemption and purchase transactions in any jurisdiction to which they may be
subject. Investors should consult appropriate tax and legal advisors to obtain
information on the rules applicable to these transactions.
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 A shares, you may exchange into any of our money funds except
Franklin Templeton Money Fund. Franklin Templeton Money Fund is the only money
fund exchange option available to Class C shareholders. Unlike our other money
funds, shares of Franklin Templeton Money Fund may not be purchased directly
and no drafts (checks) may be written on Franklin Templeton Money Fund
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 goal 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 C shares.
30 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
<TABLE>
<CAPTION>
METHOD STEPS TO FOLLOW
- -------------------------------------------------------------------------------------
<S> <C>
BY MAIL 1. Send us signed written instructions
2. Include any outstanding share certificates for the shares
you want to exchange
- --------------------------------------------------------------------------------------
BY PHONE Call Shareholder Services or TeleFACTS/registered trademark/
- 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.
WILL SALES CHARGES APPLY TO MY EXCHANGE?
You can exchange shares between most Franklin Templeton Funds, generally
without paying any additional sales charges. If you exchange shares held for
less than six months, however, you may be charged the difference between the
front-end sales charge of the two funds if the difference is more than 0.25%.
If you exchange shares from a money fund, a sales charge may apply no matter
how long you have held the shares.
CONTINGENT DEFERRED 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. The purchase price for determining a Contingent Deferred Sales Charge
on exchanged shares will be the price you paid for the original shares.
For accounts with shares subject to a Contingent Deferred Sales Charge, we will
first exchange any shares in your account that are not subject to the charge.
If there are not enough of these to meet your exchange request, we will
exchange shares subject to the charge in the order they were purchased.
If you exchange Class A 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. If you exchange your Class C shares for the same class of
shares of Franklin Templeton Money Fund, however, the time your shares are held
in that fund will count towards the completion of any Contingency Period.
For more information about the Contingent Deferred Sales Charge, please see
"How Do I Sell Shares?"
Templeton Growth and Income Fund [GRAPHIC OMITTED] 31
<PAGE>
EXCHANGE RESTRICTIONS
Please be aware that the following restrictions apply to exchanges:
/bullet/You must meet the applicable minimum investment amount of the
fund you are exchanging into, or exchange 100% of your fund
shares.
/bullet/You may only exchange shares within the same class, except as
noted below.
/bullet/Generally exchanges may only be made between identically
registered accounts, unless you send written instructions with a
signature guarantee.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."
/bullet/Franklin Templeton 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
Retirement Plan Services for information on exchanges within
these plans.
/bullet/The fund you are exchanging into must be eligible for sale in
your state.
/bullet/We may modify or discontinue our exchange policy if we give you
60 days' written notice.
/bullet/Your exchange may be restricted or refused if you have: (i)
requested an exchange out of the fund within two weeks of an
earlier exchange request, (ii) exchanged shares out of the fund
more than twice in a calendar quarter, or (iii) exchanged 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 have exchanged 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. Some of our
funds do not allow investments by Market Timers.
Because excessive trading can hurt fund performance, operations 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.
32 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
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
fund does not currently offer an Advisor Class, you may exchange Advisor Class
shares of any Franklin Templeton Fund for Class A 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 A shares for
Advisor Class shares of that fund. Certain shareholders of Class Z shares of
Franklin Mutual Series Fund Inc. also may exchange their Class Z shares for
Class A 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
- -----------------------------------------------------------------------------
<S> <C>
BY MAIL 1. Send us signed written instructions. If you would like
your redemption proceeds wired to a bank account,
your instructions should include:
/bullet/ The name, address and telephone number of the
bank where you want the proceeds sent
/bullet/ Your bank account number
/bullet/ The Federal Reserve ABA routing number
/bullet/ If you are using a savings and loan or credit union,
the name of the corresponding bank and the account
number
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.
- -----------------------------------------------------------------------------
</TABLE>
Templeton Growth and Income Fund [GRAPHIC OMITTED] 33
<PAGE>
<TABLE>
<CAPTION>
METHOD STEPS TO FOLLOW
- --------------------------------------------------------------------------------
<S> <C>
BY PHONE Call Shareholder Services. If you would like your
redemption proceeds wired to a bank account, other than
an escrow account, you must first sign up for the wire
feature. To sign up, send us written instructions, with a
signature guarantee. To avoid any delay in processing, the
instructions should include the items listed in "By Mail"
above.
Telephone requests will be accepted:
/bullet/ If the request is $100,000 or less.
Institutional accounts may exceed $100,000 by
completing a separate agreement. Call
Institutional Services to receive a copy.
/bullet/ If there are no share certificates issued for
the shares you want to sell or you have already
returned them to the fund
/bullet/ Unless the address on your account was changed
by phone within the last 15 days
- If you do not want the ability to redeem by phone to
apply to your account, please let us know.
- --------------------------------------------------------------------------------
THROUGH
YOUR DEALER Call your investment representative
- --------------------------------------------------------------------------------
</TABLE>
We will send your redemption check within seven days after we receive your
request in proper form. If you would like the check sent to an address other
than the address of record or made payable to someone other than the registered
owners on the 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 for redemption requests of $1,000 or more. 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. By
offering this service to you, 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.
34 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
If you sell shares you recently purchased with a check or draft, we may delay
sending you the proceeds until your check or draft has cleared, which may take
seven business days or more. A certified or cashier's check may clear in less
time.
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.
FRANKLIN TEMPLETON TRUST COMPANY RETIREMENT PLAN ACCOUNTS
Before you can sell shares in a Franklin Templeton Trust Company retirement
plan, you may need to complete additional forms. For participants under age
59 1/2, tax penalties may apply. Call Retirement Plan Services at 1-800/527-2020
for details.
CONTINGENT DEFERRED SALES CHARGE
For Class A 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 A 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 C
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 A shares without a front-end sales charge may also be
subject to a Contingent Deferred Sales Charge if the retirement plan is
transferred out of the Franklin Templeton Funds or terminated within 365 days
of the account's initial purchase in the Franklin Templeton Funds.
For each class, we will first redeem any shares in your account that are not
subject to a Contingent Deferred Sales 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.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 35
<PAGE>
WAIVERS. We waive the Contingent Deferred Sales Charge for:
/bullet/Account fees
/bullet/Sales of Class A 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, or (iv) the Securities Dealer of record has entered
into a supplemental agreement with Distributors
/bullet/Redemptions by the fund when an account falls below the minimum
required account size
/bullet/Redemptions following the death of the shareholder or beneficial
owner
/bullet/Redemptions through a systematic withdrawal plan set up before
February 1, 1995
/bullet/Redemptions through a systematic withdrawal plan set up on or
after February 1, 1995, up to 1% monthly, 3% quarterly, 6%
semiannually or 12% annually of your account's Net Asset Value
depending on the frequency of your plan
/bullet/Redemptions by Franklin Templeton Trust Company employee benefit
plans or employee benefit plans serviced by ValuSelect/registered
trademark/
/bullet/Distributions from IRAs due to death or disability or upon
periodic distributions based on life expectancy
/bullet/Returns of excess contributions (and earnings, if applicable)
from retirement plan accounts
/bullet/Participant initiated distributions from employee benefit plans
or participant initiated exchanges among investment choices in
employee benefit plans
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. The amount
of these distributions will vary and there is no guarantee the fund will pay
dividends. The fund does not pay "interest" or guarantee any fixed rate of
return on an investment in its shares.
To receive a distribution, you must be a shareholder on the record date. The
record dates for the fund's distributions will vary. Please keep in mind that
if you invest in the fund shortly before the record date of a distribution, any
distribution will lower the value of the fund's shares by the amount of the
distribution and you will receive some
36 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
of your investment back in the form of a taxable distribution. If you would
like information on upcoming record dates for the fund's distributions, please
call 1-800/DIAL BEN.
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 each class.
DISTRIBUTION OPTIONS
You may receive your distributions from the fund in any of these ways:
1. BUY ADDITIONAL SHARES OF THE FUND - You may reinvest distributions you
receive from the fund in additional shares of the fund (without a sales
charge or imposition of a Contingent Deferred Sales Charge). 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 shares of another Franklin Templeton Fund (without a
sales charge or imposition of a Contingent Deferred Sales Charge). Many
shareholders find this a convenient way to diversify their investments.
Please note that distributions may only be directed to an existing
account.
3. RECEIVE DISTRIBUTIONS IN CASH - You may receive your distributions from the
fund 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."
Distributions may be reinvested only in the same class of shares, except as
follows: (i) Class C shareholders who chose to reinvest their distributions in
Class A shares of the fund or another Franklin Templeton Fund before November
17, 1997, may continue to do so; and (ii) Class C shareholders may reinvest
their distributions in shares of any Franklin Templeton money fund.
PLEASE INDICATE ON YOUR APPLICATION THE DISTRIBUTION OPTION YOU HAVE CHOSEN,
OTHERWISE WE WILL REINVEST YOUR DISTRIBUTIONS IN THE SAME SHARE CLASS OF THE
FUND. 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. For Franklin Templeton Trust Company retirement
plans, special forms are required to receive distributions in cash.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 37
<PAGE>
TRANSACTION PROCEDURES AND SPECIAL REQUIREMENTS
SHARE PRICE
When you buy shares, you pay the Offering Price. This is the Net Asset Value
per share of the class you wish to purchase, plus any applicable sales charges.
When you sell shares, you receive the Net Asset Value per share minus any
applicable Contingent Deferred Sales Charges.
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.
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 close of the NYSE, normally 1:00
p.m. Pacific 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.
WRITTEN INSTRUCTIONS
Written instructions must be signed by all registered owners. To avoid any
delay in processing your transaction, they should include:
/bullet/Your name,
/bullet/The fund's name,
/bullet/The class of shares,
/bullet/A description of the request,
38 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
/bullet/For exchanges, the name of the fund you are exchanging into,
/bullet/Your account number,
/bullet/The dollar amount or number of shares, and
/bullet/A telephone number where we may reach you during the day, or in the
evening if preferred.
JOINT ACCOUNTS. For accounts with more than one registered owner, the fund
accepts written instructions signed by only one owner for transactions and
account changes that could otherwise be made by phone. For all other
transactions and changes, all registered owners must sign the instructions.
Please keep in mind that if you have previously told us that you do not want
telephone exchange or redemption privileges on your account, then we can only
accept written instructions to exchange or redeem shares if they are signed by
all registered owners on the account.
SIGNATURE GUARANTEES
For our mutual protection, we require a signature guarantee in the following
situations:
1) You wish to sell over $100,000 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,
Templeton Growth and Income Fund [GRAPHIC OMITTED] 39
<PAGE>
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 and to send the certificate and assignment form in separate
envelopes.
TELEPHONE TRANSACTIONS
You may initiate many transactions and changes to your account 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 may also record calls. 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.
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. We also will not be liable for any loss if we
follow instructions by phone that we reasonably believe are genuine or if you
are unable to execute a transaction by phone.
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, we cannot accept instructions to change owners on the account unless ALL
owners agree in writing, even
40 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
if the law in your state says otherwise. 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.
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
- ------------------------------------------------------------------------------
<S> <C>
CORPORATION Corporate 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.
IMPORTANT INFORMATION IF YOU HAVE AN INVESTMENT REPRESENTATIVE
If there is a Securities Dealer or other representative of record on your
account, we are authorized: (1) to provide confirmations, account statements
and other information about your account directly to your dealer and/or
representative; and (2) to accept telephone and electronic instructions
directly from your dealer or representative, including
Templeton Growth and Income Fund [GRAPHIC OMITTED] 41
<PAGE>
instructions to exchange or redeem your shares. Electronic instructions may be
processed through established electronic trading systems and programs used by
the fund. Telephone instructions directly from your representative will be
accepted unless you have told us that you do not want telephone privileges to
apply to your account.
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.
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
or savings account to the fund each month to buy additional shares. If you are
interested in this program, please refer to the account 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 calling Shareholder Services.
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 account application included with
this prospectus and indicate how you would like to receive your payments. You
may choose to
42 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
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.
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 by mail
or by phone 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.
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.
TELEFACTS/REGISTERED TRADEMARK/
From a touch-tone phone, you may call our TeleFACTS system (day or night) at
1-800/247-1753 to:
/bullet/obtain information about your account;
/bullet/obtain price and performance information about any Franklin Templeton
Fund;
/bullet/exchange shares (within the same class) between identically registered
Franklin Templeton Class A, B or C accounts; and
Templeton Growth and Income Fund [GRAPHIC OMITTED] 43
<PAGE>
/bullet/request duplicate statements and deposit slips for Franklin Templeton
accounts.
You will need the code number for each class to use TeleFACTS. The code number
is 414 for Class A and 514 for Class C.
STATEMENTS AND REPORTS TO SHAREHOLDERS
We will send you the following statements and reports on a regular basis:
/bullet/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.
/bullet/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.
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 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 100 Fountain Parkway, P.O. Box 33030, St. Petersburg, Florida 33733-8030. The
fund and Distributors are also located at this address. Global Advisors is
located at P.O. Box N-7759, Lyford Cay, Nassau, Bahamas. You may also contact us
by phone at one of the numbers listed below.
44 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
<TABLE>
<CAPTION>
HOURS OF OPERATION (PACIFIC TIME)
DEPARTMENT NAME TELEPHONE NO. (MONDAY THROUGH FRIDAY)
- -------------------------- -------------------- ----------------------------------
<S> <C> <C>
Shareholder Services 1-800/632-2301 5:30 a.m. to 5:00 p.m.
Dealer Services 1-800/524-4040 5:30 a.m. to 5:00 p.m.
Fund Information 1-800/DIAL BEN 5:30 a.m. to 8:00 p.m.
(1-800/342-5236) 6:30 a.m. to 2:30 p.m. (Saturday)
Retirement Plan Services 1-800/527-2020 5:30 a.m. to 5:00 p.m.
Institutional Services 1-800/321-8563 6:00 a.m. to 5:00 p.m.
TDD (hearing impaired) 1-800/851-0637 5:30 a.m. to 5:00 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.
GLOSSARY
USEFUL TERMS AND DEFINITIONS
BOARD - The Board of Trustees of the Trust
CD - Certificate of deposit
CLASS A AND CLASS C - The fund offers two classes of shares, designated "Class
A" and "Class C." 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 A shares, the 12 month period during which a
Contingent Deferred Sales Charge may apply. The contingency period is 18 months
for Class C shares. The holding period begins on the day you buy your shares.
For example, if you buy shares on the 18th of the month, they will age one
month on the 18th day of the next 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.
DEPOSITARY RECEIPTS - Certificates that give their holders the right to receive
securities (a) of a foreign issuer deposited in a U.S. bank or trust company
(American Depositary
Templeton Growth and Income Fund [GRAPHIC OMITTED] 45
<PAGE>
Receipts, "ADRs"); or (b) of a foreign or U.S. issuer deposited in a foreign
bank or trust company (Global Depositary Receipts, "GDRs" or European
Depositary Receipts, "EDRs").
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 Trustees."
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/registered trademark/ and the Templeton Group of Funds except
Franklin Valuemark Funds, Templeton Capital Accumulator Fund, Inc., 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/registered trademark/ and the Templeton Group of
Funds
FT SERVICES - Franklin Templeton Services, Inc., the fund's administrator
GLOBAL ADVISORS - Templeton Global Advisors Limited, the fund's investment
manager
INVESTOR SERVICES - Franklin/Templeton Investor Services, Inc., the fund's
shareholder servicing and transfer agent
IRA - Individual retirement account or annuity qualified under section 408 of
the Code
IRS - Internal Revenue Service
LETTER - Letter of Intent
MARKET TIMERS - Market Timers generally include market timing or asset
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 or whose transactions include
frequent or large exchanges.
MOODY'S - Moody's Investors Service, Inc.
46 [GRAPHIC OMITTED] Templeton Growth and Income Fund
<PAGE>
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 A and 1% for Class C. We calculate
the offering price to two decimal places using standard rounding criteria.
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.
RESOURCES - Franklin Resources, Inc.
SAI - Statement of Additional Information
S&P - Standard & Poor's Corporation
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
SIMPLE (SAVINGS INCENTIVE MATCH PLAN FOR EMPLOYEES) - An employer sponsored
salary deferral plan established under section 408(p) of the Code
TELEFACTS/REGISTERED TRADEMARK/ - Franklin Templeton's automated customer
servicing system
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.
Templeton Growth and Income Fund [GRAPHIC OMITTED] 47
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FRANKIN TEMPLETON GROUP OF FUNDS
LITERATURE REQUEST - 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.
<TABLE>
<CAPTION>
<S> <C> <C>
GLOBAL GROWTH Franklin MidCap Growth Fund FRANKLIN FUNDS SEEKING
Franklin Global Health Care Fund Franklin Small Cap Growth Fund TAX-FREE INCOME
Mutual Discovery Fund GROWTH AND INCOME Federal Intermediate-Term
Templeton Developing Markets Trust Franklin Asset Allocation Fund Tax-Free Income Fund
Templeton Foreign Fund Franklin Balance Sheet Federal Tax-Free Income Fund
Templeton Foreign Smaller Investment Fund* High Yield Tax-Free Income Fund
Companies Fund Franklin Convertible Securities Fund Insured Tax-Free Income Fund
Templeton Global Franklin Equity Income Fund Puerto Rico Tax-Free Income Fund
Infrastructure Fund Franklin Income Fund Tax-Exempt Money Fund
Templeton Global Franklin MicroCap Value Fund* FRANKLIN STATE-SPECIFIC FUNDS
Opportunities Trust Franklin Natural Resources Fund SEEKING TAX-FREE INCOME
Templeton Global Real Estate Fund Franklin Real Estate Securities Fund Alabama
Templeton Global Smaller Franklin Rising Dividends Fund Arizona**
Companies Fund Franklin Strategic Income Fund Arkansas***
Templeton Greater European Fund Franklin Utilities Fund California**
Templeton Growth Fund Franklin Value Fund Colorado
Templeton Latin America Fund Mutual Beacon Fund Connecticut
Templeton Pacific Growth Fund Mutual Financial Services Fund Florida**
Templeton World Fund Mutual Qualified Fund Georgia
GLOBAL GROWTH AND INCOME Mutual Shares Fund Hawaii***
Franklin Global Utilities Fund FUND ALLOCATOR SERIES Indiana
Mutual European Fund Franklin Templeton Kentucky
Templeton Global Bond Fund Conservative Target Fund Louisiana
Templeton Growth and Income Fund Franklin Templeton Maryland
GLOBAL INCOME Moderate Target Fund Massachusetts/dagger/
Franklin Global Government Franklin Templeton Michigan**
Income Fund Growth Target Fund Minnesota/dagger/
Franklin Templeton INCOME Missouri
Global Currency Fund Franklin Adjustable Rate New Jersey
Franklin Templeton Hard Securities Fund New York**
Currency Fund Franklin Adjustable U.S. North Carolina
Templeton Americas Government Securities Fund Ohio/dagger/
Government Securities Fund Franklin's AGE High Income Fund Oregon
GROWTH Franklin Bond Fund Pennsylvania
Franklin Biotechnology Franklin Floating Rate Trust Tennessee***
Discovery Fund Franklin Investment Texas
Franklin Blue Chip Fund Grade Income Fund Virginia
Franklin California Growth Fund Franklin Short-Intermediate U.S. Washington***
Franklin DynaTech Fund Government Securities Fund VARIABLE ANNUITIES/double dagger/
Franklin Equity Fund Franklin U.S.Government Franklin Valuemark/registered trademark/
Franklin Gold Fund Securities Fund Franklin Templeton
Franklin Growth Fund Franklin Money Fund Valuemark Income Plus
Franklin Federal Money Fund (an immediate annuity)
</TABLE>
*These funds are now closed to new accounts, with the exception of retirement
plan accounts.
**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.
/dagger/Portfolio of insured municipal securities.
/double dagger/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. The Franklin Valuemark Funds are managed by
Franklin Advisers, Inc. and its Templeton and Franklin affiliates.
FGF09/98 [LOGO] Printed on recycled paper 414 P01/99
