497 1 gofsa-50204.txt GOF SA-5 GOF SAA-1 SUPPLEMENT DATED FEBRUARY 23, 2004 TO THE CURRENTLY EFFECTIVE STATEMENT OF ADDITIONAL INFORMATION OF EACH OF THE LISTED FUNDS FRANKLIN CALIFORNIA TAX-FREE INCOME FUND, INC. FRANKLIN CALIFORNIA TAX-FREE TRUST Franklin California Insured Tax-Free Income Fund Franklin California Intermediate-Term Tax-Free Income Fund Franklin California Limited-Term Tax-Free Income Fund Franklin California Tax-Exempt Money Fund FRANKLIN CAPITAL GROWTH FUND FRANKLIN CUSTODIAN FUNDS, INC. Franklin DynaTech Fund Franklin Growth Fund Franklin Income Fund Franklin U.S. Government Securities Fund Franklin Utilities Fund. FRANKLIN FEDERAL TAX-FREE INCOME FUND FRANKLIN FLOATING RATE TRUST FRANKLIN GOLD AND PRECIOUS METALS FUND FRANKLIN GLOBAL TRUST Fiduciary European Smaller Companies Fund Fiduciary Large Capitalization Growth and Income Fund Fiduciary Small Capitalization Equity Fund Fiduciary Core Fixed Income Fund Fiduciary Core Plus Fixed Income Fund Fiduciary High Income Fund Franklin Global Aggressive Growth Fund Franklin Global Growth Fund Franklin International Smaller Companies Growth Fund FRANKLIN HIGH INCOME TRUST AGE High Income Fund FRANKLIN MANAGED TRUST Franklin Rising Dividends Fund FRANKLIN MUNICIPAL SECURITIES TRUST Franklin California High Yield Municipal Fund Franklin Tennessee Municipal Bond Fund FRANKLIN MUTUAL SERIES FUND INC. Mutual Beacon Fund Mutual Discovery Fund Mutual European Fund Mutual Financial Services Fund Mutual Qualified Fund Mutual Shares Fund FRANKLIN MUTUAL RECOVERY FUND FRANKLIN NEW YORK TAX-FREE INCOME FUND FRANKLIN NEW YORK TAX-FREE TRUST Franklin New York Insured Tax-Free Income Fund Franklin New York Intermediate-Term Tax-Free Income Fund Franklin New York Limited-Term Tax-Free Income Fund Franklin New York Tax-Exempt Money Fund FRANKLIN REAL ESTATE SECURITIES TRUST Franklin Real Estate Securities Fund FRANKLIN STRATEGIC MORTGAGE PORTFOLIO FRANKLIN STRATEGIC SERIES Franklin Aggressive Growth Fund Franklin Biotechnology Discovery Fund Franklin Blue Chip Fund Franklin Flex Cap Growth Fund Franklin Global Communications Fund Franklin Global Health Care Fund Franklin Natural Resources Fund Franklin Small-Mid Cap Growth Fund Franklin Small Cap Growth Fund II Franklin Strategic Income Fund Franklin Technology Fund Franklin U.S. Long-Short Fund FRANKLIN TAX-FREE TRUST Franklin Alabama Tax-Free Income Fund Franklin Arizona Tax-Free Income Fund Franklin Colorado Tax-Free Income Fund Franklin Connecticut Tax-Free Income Fund Franklin Double Tax-Free Income Fund Franklin Federal Intermediate-Term Tax-Free Income Fund Franklin Federal Limited-Term Tax-Free Income Fund Franklin Florida Insured Tax-Free Income Fund Franklin Florida Tax-Free Income Fund Franklin Georgia Tax-Free Income Fund Franklin High Yield Tax-Free Income Fund Franklin Insured Tax-Free Income Fund Franklin Kentucky Tax-Free Income Fund Franklin Louisiana Tax-Free Income Fund Franklin Maryland Tax-Free Income Fund Franklin Massachusetts Insured Tax-Free Income Fund Franklin Michigan Insured Tax-Free Income Fund Franklin Minnesota Insured Tax-Free Income Fund Franklin Missouri Tax-Free Income Fund Franklin New Jersey Tax-Free Income Fund Franklin North Carolina Tax-Free Income Fund Franklin Ohio Insured Tax-Free Income Fund Franklin Oregon Tax-Free Income Fund Franklin Pennsylvania Tax-Free Income Fund Franklin Virginia Tax-Free Income Fund FRANKLIN TEMPLETON FUND ALLOCATOR SERIES Franklin Templeton Conservative Target Fund Franklin Templeton Corefolio Allocation Fund Franklin Templeton Founding Funds Allocation Fund Franklin Templeton Growth Target Fund Franklin Templeton Moderate Target Fund INSTITUTIONAL FIDUCIARY TRUST Franklin Structured Large Cap Core Equity Fund Franklin Structured Large Cap Growth Equity Fund TEMPLETON CHINA WORLD FUND TEMPLETON DEVELOPING MARKETS TRUST TEMPLETON FUNDS, INC. Templeton Foreign Fund Templeton World Fund TEMPLETON GLOBAL INVESTMENT TRUST Franklin Templeton Non-U.S. Dynamic Core Equity Fund Templeton International (Ex EM) Fund TEMPLETON GLOBAL OPPORTUNITIES TRUST TEMPLETON GLOBAL SMALLER COMPANIES FUND TEMPLETON GROWTH FUND, INC. TEMPLETON INSTITUTIONAL FUNDS, INC. Emerging Fixed Income Markets Series Emerging Markets Series Foreign Equity Series - Primary Shares Foreign Smaller Companies Series Franklin Templeton Non-U.S. Core Equity Series TEMPLETON INCOME TRUST Templeton Global Bond Fund The Statement of Additional Information is amended as follows: I. FOR ALL FUNDS: THE "GENERAL INFORMATION" SECTION IS EXPANDED TO ADD, OR THE PARAGRAPH BEGINNING WITH "FOR INSTITUTIONAL ACCOUNTS, THERE MAY BE ADDITIONAL METHODS..." IS REPLACED WITH THE FOLLOWING: For institutional accounts, there may be additional methods of buying or selling Fund shares than those described in this SAI or in the prospectus. Institutional accounts include accounts opened by or in the name of a person (includes a legal entity or an individual) that has signed an Institutional Account Application accepted by Franklin Templeton Institutional, LLC or entered into a selling agreement and/or servicing agreement with Distributors or Investor Services. For example, the Fund permits the owner of an institutional account to make a same day wire purchase if a good order purchase request is received (a) before the close of the New York Stock Exchange (NYSE) or (b) through the National Securities Clearing Corporation's automated system for processing purchase orders (Fund/SERV), even though funds are delivered by wire after the close of the NYSE. If funds to be wired are not received as scheduled, the purchase order may be cancelled or reversed and the institutional account owner could be liable for any losses or fees the Fund, Distributors and/or Investor Services may incur. II. FOR ALL FUNDS, EXCEPT FOR FUNDS THAT DO NOT HAVE AN INITIAL SALES CHARGE: Replace the first paragraph under the section "Pricing Shares" with the following: When you buy shares, you pay the "offering price" for the shares. The "offering price" is determined by dividing the net asset value per share (NAV) by an amount equal to 1 minus the sales charge applicable to the purchase (expressed in decimals), calculated to two decimal places using standard rounding criteria. The number of Fund shares you will be issued will equal the amount invested divided by the applicable offering price for those shares, calculated to three decimal places using standard rounding criteria. For example, if the NAV per share is $10.25 and the applicable sales charge for the purchase is 5.75%, the offering price would be calculated as follows: 10.25 divided by 1.00 minus 0.0575 [10.25/0.9425] equals 10.87533, which, when rounded to two decimal points, equals 10.88. The offering price per share would be $10.88. When you sell shares, you receive the NAV minus any applicable CDSC. III. IN THE APPLICABLE STATEMENT OF ADDITIONAL INFORMATION, FOR FRANKLIN STRATEGIC SERIES (FRANKLIN AGGRESSIVE GROWTH FUND, FRANKLIN FLEX CAP GROWTH FUND, FRANKLIN SMALL CAP GROWTH FUND II AND FRANKLIN SMALL-MID CAP GROWTH FUND) ONLY: (A) THE EIGHTH PARAGRAPH IN THE "DISTRIBUTION AND SERVICE (12B-1) FEES" SECTION BEGINNING ON PAGE 41 IS REPLACED WITH THE FOLLOWING: The Small Cap Fund II pays Distributors up to 1% per year of Class B and Class C's average daily net assets, out of which 0.25% may be paid for service fees. For Class R shares, the Small Cap Fund II pays Distributors up to 0.50% per year of the class's average daily net assets. The Class B, C and R plans also may be used to pay Distributors for advancing commissions to securities dealers with respect to the initial sale of Class B, C and R shares. Class B plan fees payable to Distributors are used by Distributors to pay third party financing entities that have provided financing to Distributors in connection with advancing commissions to securities dealers. Resources owns a minority interest in one of the third party financing entities. (B) THE TABLES SETTING FORTH THE 12B-1 FEES PAID BY THE FUNDS PURSUANT TO THE PLANS ON PAGE 42 ARE REPLACED AS FOLLOWS: Under the Class A plans, the amounts paid by the Funds pursuant to the plans for the fiscal year ended April 30, 2003, were: AGGRESSIVE GROWTH FLEX CAP SMALL CAPSMALL-MID FUND FUND FUND II CAP FUND ($) ($) ($) ($) -------------------------------------------------------------------------------- Advertising .......................... 9,126 40,615 40,939 141,196 Printing and mailing prospectuses other than to current shareholders ................ 7,818 7,466 2,168 7,749 Payments to underwriters ............. 7,895 19,137 26,282 57,148 Payments to broker-dealers ........... 169,542 2,527,039 1,901,595 14,088,206 Other ................................ 22,230 71,346 28,626 337,461 -------------------------------------------------------------------------------- Total ................................ 216,611 2,665,603 1,999,610 14,631,760 -------------------------------------------------------------------------------- Under the Class B plans, the amounts paid by the Funds pursuant to the plans for the fiscal year ended April 30, 2003, were: AGGRESSIVE GROWTH FLEX CAPSMALL CAP SMALL-MID FUND FUND FUND II CAP FUND ($) ($) ($) ($) -------------------------------------------------------------------------------- Advertising .......................... 1,343 7,954 257 347 Printing and mailing prospectuses other than to current shareholders ................ 922 1,381 53 -- Payments to underwriters ............. 668 5,593 189 329 Payments to broker-dealers ........... 131,478 889,006 1,038,447 29,651 Other ................................ 2,187 14,718 768 434 -------------------------------------------------------------------------------- Total ................................ 136,598 918,652 1,039,714 30,761 -------------------------------------------------------------------------------- Under the Class C plans, the amounts paid by the Funds pursuant to the plans for the fiscal year ended April 30, 2003, were: AGGRESSIVE GROWTH FLEX CAP SMALL CAP SMALL-MID FUND FUND FUND II CAP FUND ($) ($) ($) ($) -------------------------------------------------------------------------------- Advertising .......................... 2,093 14,930 547 56,824 Printing and mailing prospectuses other than to current shareholders ................ 1,618 3,331 717 3,465 Payments to underwriters ............. 885 8,883 825 22,677 Payments to broker-dealers ........... 269,296 2,211,549 1,802,394 6,679,001 Other ................................ 3,488 29,638 1,384 87,868 -------------------------------------------------------------------------------- Total ................................ 277,380 2,268,331 1,805,867 6,849,835 -------------------------------------------------------------------------------- Under the Class R plans, the amounts paid by the Funds pursuant to the plans for the fiscal year ended April 30, 2003, were: AGGRESSIVE GROWTH FLEX CAPSMALL CAP SMALL-MID FUND FUND FUND II CAP FUND ($) ($) ($) ($) -------------------------------------------------------------------------------- Advertising .......................... 48 715 131 2,123 Printing and mailing prospectuses other than to current shareholders ................ 4 9 -- 1 Payments to underwriters ............. 71 1,537 200 1,663 Payments to broker-dealers ........... 1,134 22,160 7,244 27,831 Other ................................ 137 2,172 208 2,821 -------------------------------------------------------------------------------- Total ................................ 1,394 26,593 7,783 34,439 -------------------------------------------------------------------------------- Please keep this supplement for future reference >