FRANKLIN

TEMPLETON

Founding Funds Strategy

Franklin Templeton Investments

Gain From Our Perspective

Franklin Templetons distinct multi-manager structure combines the specialized expertise of three world-class investment management groupsFranklin, Templeton and Mutual Series.

Specialized Expertise
Each of our portfolio management groups operates autonomously, relying on its own research and staying true to the unique investment disciplines that underlie its success. Franklin. Founded in 1947, Franklin is a recognized leader in xed income investing and also brings expertise in growth- and value-style U.S. equity investing. Templeton. Founded in 1940, Templeton pioneered international investing and, in 1954, launched what has become the industrys oldest global fund. Today, with ofces in over 25 countries, Templeton offers investors a truly global perspective. Mutual Series. Founded in 1949, Mutual Series is dedicated to a unique style of value investing, searching aggressively for opportunity among what it believes are undervalued stocks, as well as arbitrage situations and distressed securities.

True Diversication
Because our management groups work independently and adhere to different investment approaches, Franklin, Templeton and Mutual Series funds typically have distinct portfolios. Thats why our funds can be used to build truly diversied allocation plans covering every major asset class.

Reliability You Can Trust

At Franklin Templeton Investments, we seek to consistently provide investors with exceptional risk-adjusted returns over the long term, as well as the reliable, accurate and personal service that has helped us become one of the most trusted names in nancial services.

NOT FDIC INSURED

MAY LOSE VALUE

NO BANK GUARANTEE

The Strategy
Franklin Templeton Founding Funds Strategy combines three value-oriented fundseach a cornerstone fund with a 50-year track record run independently by the Franklin, Templeton or Mutual Series management group to create an investment portfolio offering diversication across multiple asset classes and the potential for attractive, long-term results.

Three FundsThree Distinct Value Perspectives

Franklin Income Fund
Focuses on undervalued dividend-paying stocks, convertible securities and bonds across a variety of industries.
Introduced in 1948, seeks to maximize income while maintaining prospects for capital appreciation Provided positive average annual total returns in 57 of 58 rolling calendar ve-year periods since inception (without sales charge)1

Franklin Income Fund . . . . . . . . . . . . . . . . .33 1 3% Templeton Growth Fund . . . . . . . . . . . . . . .33 1 3% Mutual Shares Fund . . . . . . . . . . . . . . . . . .33 1 3%

Uninterrupted dividends for 62 calendar years (Class A) Distributed capital gains in 56 of the past 62 calendar years (Class A) Pays dividends monthly and Class A had a 30-day standardized yield of 4.86% as of February 28, 2011

The following pages illustrate a hypothetical combined investment divided equally among Class A shares of the three funds. The performance of the combined hypothetical portfolio assumes rebalancing to an equal allocation of each of the three funds on an annual basis. The allocations and performance of the hypothetical investment are for illustration only and do not constitute investment advice. You should consider your goals, risk tolerance and time horizon when selecting investments or making asset allocation decisions for your portfolio.

Templeton Growth Fund

Searches worldwide for stocks selling at prices believed to be low relative to managers appraisal of value.
Introduced in 1954, it is the oldest global mutual fund in the industry Follows a bottom-up, value-oriented, long-term approach to investing Provided positive average annual total returns in 49 of 52 rolling calendar ve-year periods since inception (without sales charge)1

Mutual Shares Fund

Seeks to invest primarily in undervalued stocks, and to a lesser extent, distressed securities and merger arbitrage.
Introduced in 1949, adheres to a disciplined value investment strategy Provided positive annual total returns in 27 out of the past 30 calendar years (without sales charge)1 Provided positive average annual total returns in 30 rolling calendar ve-year periods over the last 31 years (without sales charge)1

1. As of 12/31/10. Class A: Average annual total returns include reinvestment of dividends and capital gains at net asset value.
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The Benets
1]

Diversication (As of December 31, 2010)

2

Total of 547 portfolio securities Only four stocks common to all three funds Invested in 23 industries
Largest Equity Holdings Pfizer Inc. Microsoft Corp. Vodafone Group PLC CVS Caremark Corp. Wells Fargo & Co. Bank of America Corp. Royal Dutch Shell Merck & Co. Inc. Amgen Inc. Nestle SA Total percentage of portfolio: 1.51% 1.47% 1.43% 1.23% 1.22% 1.05% 1.02% 1.01% 0.90% 0.90% 11.76%

Invested in 27 countries More than $91 billion in assets

Portfolio Allocation

Equity . . . . . . . . . . . 76.30% Fixed Income . . . . . 19.86% Cash . . . . . . . . . . . 3.84%

2]

A Record of Low Relative Volatility

An equal investment in Franklin Income Fund, Templeton Growth Fund and Mutual Shares Fund may help lower your overall portfolio volatility. For the period shown, Founding Funds Strategy, based on a hypothetical combined investment divided equally among Class A shares of each fund, had: A higher rate of return with less volatility compared to equity markets3 A beta of 0.644
Diversification does not assure a profit or protect against a loss.

Risk/Return Comparison3 (Without Sales Charges)

30-Years Ended December 31, 2010
20%

15% Return

Founding Funds Strategy

BC Govt/ Credit Index S&P 500 Index MSCI EAFE Index

10%

5%

0% 0% 5% 10% Risk 15% 20%

Unless otherwise noted, strategy performance figures in this brochure reflect Class A and do not include the maximum, initial 4.25% sales charge for Franklin Income Fund and 5.75% sales charge for Templeton Growth Fund and Mutual Shares Fund. If included, the returns would have been lower. Please see the back cover for each funds standardized returns. Performance data represents past performance, which does not guarantee future results. Current performance may differ from the figures shown. A funds investment return and principal value will change with market conditions, and you may have a gain or a loss when you sell your shares. Please call Franklin Templeton Investments at (800) DIAL BEN/ (800) 342-5236 or visit franklintempleton.com for most recent month-end performance.

2. Based on the combined funds total net assets as of 12/31/10. Portfolio holdings may change. For the funds most recent portfolio holdings, please call Franklin Templeton Investments at (800) DIAL BEN/(800) 342-5236 or visit franklintempleton.com. 2
F R A N K L I N T E M P L E T O N F O U N D I N G F U N D S S T R AT E G Y

3]

Long-Term Performance
In the last 30 years, the market has experienced dramatic upswings and downturns. During this time, Founding Funds Strategy has proven to be a powerful combination for achieving steady growth over the long term. For the 30-year period ended December 31, 2010, Founding Funds Strategy, without sales charges: Produced a 11.11% average annual total return versus 10.71% for the S&P 500 Index3 Had positive total returns in 25 of 30 calendar years5 Outdistanced the U.S. stock market in 83% of the S&P 500 Indexs quarterly market downturns3

Founding Funds Strategy vs. S&P 500 Index

Average Annual Total Returns (Without Sales Charges)
Periods Ended December 31, 2010
If you had invested 1 Yr. Ago 3 Yrs. Ago 5 Yrs. Ago 10 Yrs. Ago 20 Yrs. Ago 30 Yrs. Ago

Founding Funds Strategy 5 S&P 500 Index3

10.62% 15.06%

-3.12% -2.86%

2.40% 2.29%

5.41% 1.41%

10.14% 9.14%

11.11% 10.71%

Rolling 5-Year Average Annual Total Returns (Without Sales Charges)

Positive Total Returns in 33 of 34 5-Year Rolling Periods Since 1972
Dec. 31Dec. 31 Founding Funds Strategy5 S&P 500 Index 3 Dec. 31Dec. 31 Founding Funds Strategy5 S&P 500 Index 3

19721977 19731978 BEST 19741979 19751980 19761981 19771982 19781983 19791984 19801985 19811986 19821987 19831988 19841989 19851990 19861991 19871992 19881993

13.25% 18.28% 26.54% 24.37% 16.77% 17.77% 20.34% 16.07% 16.60% 20.04% 16.86% 15.51% 16.75% 9.66% 11.78% 13.62% 14.39%

-0.19% 4.35% 14.82% 14.02% 8.13% 14.12% 17.35% 14.80% 14.67% 19.87% 16.47% 15.31% 20.36% 13.19% 15.36% 15.88% 14.55%

19891994 19901995 19911996 19921997 19931998 19941999 19952000 19962001 19972002 19982003 19992004 20002005 20012006 20022007 20032008 20042009 20052010

10.85% 17.88% 15.27% 16.51% 11.33% 14.55% 12.36% 9.38% 3.95% 9.66% 9.55% 8.50% 11.94% 14.42% -1.13% 1.65% 2.40%

8.70% 16.59% 15.22% 20.27% 24.06% 28.56% 18.33% 10.70% -0.59% -0.57% -2.30% 0.54% 6.19% 12.83% -2.19% 0.42% 2.29% WORST

3. Source: 2011 Morningstar (S&P 500 Index represents large-cap stocks, MSCI EAFE Index represents foreign stocks, Barclays Capital Government/Credit Index represents bonds). All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Index data represents average annual total returns and assume reinvestment of interest or dividends. The hypothetical combined investments performance assumes reinvestment of dividends and capital gains at net asset value, and assumes rebalancing to an equal allocation of each of the three funds on an annual basis. Risk is measured by the annualized standard deviation of monthly total returns. Standard deviation is a statistical measurement of the range of an investments total returns. In general, a higher standard deviation means greater volatility. Indexes are unmanaged, and one cannot invest directly in an index. 4. Source: 2011 Morningstar. A measure of the combined funds volatility relative to the S&P 500 Index. A beta less than 1.00 indicates lower volatility than the index. Based on monthly returns over the 30 years ended 12/31/10. 5. These gures represent performance of a hypothetical combined investment over the periods indicated, include reinvestment of dividends and capital gains at net asset value, and assume rebalancing to an equal allocation of each of the three funds on an annual basis. They are for illustrative purposes only. Please see the back cover of this brochure for standardized performance gures of the funds composing Founding Funds Strategy.
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The Results
A hypothetical $10,000 investment made on December 31, 1972, divided equally among Class A shares of Franklin Income Fund, Templeton Growth Fund and Mutual Shares Fund, with sales charges, would have produced an impressive total return of 7,564.84% or $766,484 as of December 31, 2010.6 Please note that this hypothetical investment does not take into account federal, state or municipal taxes. If taxes were taken into account, the hypothetical values shown would have been lower.

Growth of a $10,000 Investment6 (December 31, 1972December 31, 2010)

$1,000,000

Founding Funds Strategy S&P 500 Index MSCI EAFE Index BC Govt/Credit Index Berlin Wall falls Black Monday Persian Gulf War

S&L crisis
$100,000

Iran hostage crisis

Unemployment at 40-year high

$10,000

$1,000 12/31/72

Founding Funds Strategy % Annual Total Returns (Without Sales Charges) 7

73 -7.56 74 -5.65 75 32.13 76 41.05 77 14.59 78 14.88 79 32.25 80 21.17 81 2.92 82 19.59 83 27.93 84 10.41 85 23.99 86 19.02 87 4.54 88 20.76 89 16.45 90 -9.36 91 30.97

If the sales charge had been included, returns would have been lower.
6. Source: 2011 Morningstar (S&P 500 Index, MSCI EAFE Index and Barclays Capital Government/Credit Index). Indexes are unmanaged and include reinvestment of dividends or interest. One cannot invest directly in an index. The hypothetical combined investments return includes reinvestment of dividends and capital gains, and assumes rebalancing to an equal allocation of each of the three funds on an annual basis. 4
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A Few Words about Risk Stocks have historically outperformed other asset classes over the long term, but tend to fluctuate
more dramatically over the short term. Bonds are affected by changes in interest rates and the creditworthiness of their issuers. Bonds are particularly sensitive to interest rate movements; bond prices and thus the share prices of bond funds, generally move in the opposite direction from interest rates. Thus, as the prices of bonds in a fund adjust to a rise in interest rates, the funds share price may decline. Higher-yielding, lower-rated corporate bonds entail a greater degree of credit risk than investment-grade securities. Foreign investing, especially in developing countries, carries additional risks such as currency and market volatility and political or social instability. Value securities may not increase in price as anticipated or may decline further in value. These and other risks are discussed in each funds prospectus.

Technology market crashes

9/11 attacks Subprime market slowdown

Founding Funds Strategy

$766,484
S&P 500 Index

Dow Jones hits record high: 4011.74

$351,522
MSCI EAFE Index

$323,435 $185,468
BC Govt/Credit Index

12/31/10

92

93

94 -0.48

95

96

97

98 -0.51

99

00

01 2.38

02 -7.24

03

04

05 6.66

06 19.64

07 3.49

08

09

10

13.42 24.90

23.24 17.10 19.68

14.78 11.92

30.00 14.22

-37.36 31.22 10.62

7. Source: 2011 Morningstar. Founding Funds Strategys one-year returns represent the year-over-year change in value of an investment made on 12/31/72 and include reinvestment of dividends and capital gains at net asset value.
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Up, Down and Sideways

Market Performance
See How Founding Funds Strategy Performed in Various Market Environments
Historically, the stock market has exhibited various periods of up, down and sideways movement. As shown in the tables below, Founding Funds Strategy has been competitive in all three types of market environments, compared to the major U.S. and global stock indexes.8, 9

U.S. Market Performance Dow Jones Industrial Average (12/31/9912/31/09)

DOWN SIDEWAYS UP DOWN

12000 11497.12

10428.05

8000

4000

0 12/99 12/01 12/03 12/05 12/07 12/09

In a Down Market Average Annual Total Returns

S&P 500 Index
9

In an Up Market
3/31/0310/31/07
16.13% 28.19% 15.44% 17.55%

In a Down Market
10/31/072/28/09
-41.39% -46.34% -38.03% -39.21%

12/31/993/31/03
-14.36% -17.97% -8.97% 0.96%

MSCI EAFE Index9 Dow Jones Industrial Average9 Franklin Templeton Founding Funds StrategyClass A (Without sales charges)8

In a Sideways Market
12/31/9912/31/09 S&P 500 Index
9

-0.95% 1.58% 1.30% 5.50%

MSCI EAFE Index9 Dow Jones Industrial Average9 Franklin Templeton Founding Funds StrategyClass A (Without sales charges)8

If the sales charge had been included, returns would have been lower.

8. The hypothetical combined investments average annual total returns include reinvestment of dividends and capital gains, are for illustrative purposes only, and assume rebalancing to an equal allocation of each of the three funds on an annual basis. 9. Sources: 2011 Morningstar, Dow Jones, Inc. The S&P 500 Index is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market performance. MSCI EAFE Index is a free oat-adjusted, market capitalization-weighted index that is designed to measure the equity market performance of global developed markets, excluding the United States and Canada. The Dow Jones Industrial Average is a price-weighted average of blue-chip stocks that are generally the leaders in their industry. Indexes are unmanaged and assume reinvestment of dividends. One cannot invest directly in an index. 6
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The Power of Dollar-Cost Averaging

Regular Investments May Help You Reach Your Long-Term Goals
Dollar-cost averaging is a proven investment technique that may help lower the average cost of the shares you purchase. Even modest investments made regularly can make a difference when pursuing your longterm objectives. By investing a fixed dollar amount at regular intervals, you buy more shares when the price is low and fewer shares when the price is high. As a result, your average share cost may be less than the average price per share. Dollar-cost averaging requires continuous investments in securities, regardless of fluctuation in price levels, and investors should consider their financial ability to continue purchases through periods of low price levels or in changing economic conditions. Such a plan does not assure a profit, nor protect against a loss in a declining market. The table below illustrates what would have happened if the maximum annual individual retirement plan (IRA) contribution was put into a hypothetical investment, the Founding Funds Strategy, every year since 1974, the year IRAs were first available. As you can see, consistent, regular investments over time can make a big difference. Past performance does not guarantee future results. Please note that this hypothetical investment does not take into account federal, state or municipal taxes. If taxes were taken into account, the hypothetical values shown would have been lower.

Dollar-Cost Averaging with Founding Funds Strategy (With Sales Charges)10

Contribution Year Annual Investment Value at Year End Contribution Year Annual Investment Value at Year End

1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992

$1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

$1,341 $3,657 $7,179 $9,834 $13,000 $19,111 $24,940 $27,191 $34,844 $47,076 $54,154 $69,602 $85,214 $91,174 $112,523 $133,434 $122,744 $163,343 $187,504

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $3,000 $3,000 $3,000 $4,000 $4,000 $4,000 $5,000 $5,000 $5,000

$236,674 $237,500 $295,125 $347,886 $418,687 $418,511 $482,584 $542,266 $557,159 $519,524 $679,195 $779,151 $835,228 $1,003,918 $1,043,097 $656,500 $867,885 $965,464

Total

$88,000

$965,464

10. The illustration represents performance of a hypothetical combined investment and is for illustrative purposes only. Breakpoints apply; please see prospectus for details. Figures assume reinvestment of dividends and capital gains at net asset value and assume rebalancing to an equal allocation of each of the three funds on an annual basis.
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Are You

Looking for Income?

See How a Systematic Withdrawal Plan Works
A systematic withdrawal plan allows an investor to sell shares at regular intervals for income. In the example below, a hypothetical, lump-sum purchase of $100,000 was made 30 years ago, on December 31, 1980, in the funds composing the Founding Funds Strategy, with sales charges. Beginning the following year, $6,000 of the accounts value was withdrawn each year, increasing 3% annually to adjust for the cost of living. At the end of the 30-year period, although over a quarter of a million dollars had been withdrawn, the value of the investment would still have increased to over $1 million.11 Please note that this hypothetical investment does not take into account federal, state or municipal taxes. If taxes were taken into account, the hypothetical values shown would have been lower.
Period Ended Dec. 31 Annual Withdrawal Value at End of Period11

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$0 $6,000 $6,180 $6,365 $6,556 $6,753 $6,956 $7,164 $7,379 $7,601 $7,829 $8,063 $8,305 $8,555 $8,811 $9,076 $9,348 $9,628 $9,917 $10,215 $10,521 $10,837 $11,162 $11,497 $11,842 $12,197 $12,563 $12,940 $13,328 $13,728 $14,139 $285,452 Total Withdrawn

$96,536 $93,575 $105,909 $129,349 $136,484 $162,681 $186,890 $188,410 $220,369 $249,314 $218,243 $277,870 $306,942 $374,932 $364,387 $440,075 $505,996 $595,953 $583,022 $658,950 $726,943 $733,383 $669,091 $858,312 $968,541 $1,020,855 $1,208,743 $1,237,992 $762,118 $986,313 $1,076,905 $1,076,905 Value Remaining

CONCERNED ABOUT BAD TIMING?

What if
this hypothetical Systematic Withdrawal Plan was started eight years earlier, on 12/31/72, right before the brutal bear market of 197374? On 12/31/10 the total amount withdrawn would have been $414,958, and the value left in the account would have been $3,596,211.11

The results of such a program vary substantially depending on investment performance during the period the program is in effect. The rate or amount chosen for withdrawal determines the value remaining at the end of the period. In a period of declining market values, continued withdrawals could eventually exhaust the principal.
11. Founding Funds Strategys performance includes reinvestment of dividends and capital gains, and assumes rebalancing to an equal allocation of each of the three funds on an annual basis. The gures represent performance of a hypothetical combined investment, are for illustrative purposes only, and assume a 3.5% sales charge (for initial purchases of $100,000 but less than $250,000). The amounts withdrawn do not represent dividends or income but, rather, the proceeds from the sale of shares. Sufcient shares are sold from the shareholders account at the time of each withdrawal to provide for such payments. Investors participating in a systematic withdrawal plan should annually review with their nancial advisor the results being obtained and the value of remaining shares. Based on this annual review, individuals can increase or decrease the amount of withdrawals, as appropriate. Investors should probably not begin a systematic withdrawal plan until at least six months following the initial investment. Otherwise, investors could receive a portion of their initial investment, which most likely would not have had sufcient time to appreciate to offset the sales charges incurred.

F R A N K L I N T E M P L E T O N F O U N D I N G F U N D S S T R AT E G Y

Investing Is Easy
Franklin Templeton Investments Provides Service You Can Count On
Affordable investment opportunities For most funds, start by investing as little as $1,000. Or, begin an Automatic Investment Plan, and your initial and subsequent investments can be as low as $50. Fund shares are purchased at the offering price, which includes a sales charge. Automatic dividend reinvestment Dividends can be mailed to you or automatically reinvested in your account or in another Franklin Templeton fund account within the same class, generally without any additional fees or sales charges. Exchange shares between Franklin Templeton funds Fund shares can be exchanged between most Franklin Templeton funds within the same class, usually without any additional fees or charges.12 Easy access to your money You may sell your shares at any time. Their value may be more or less than your original cost. Monthly investment and distribution plans The Automatic Investment Plan lets you electronically transfer monthly investments from your savings or checking account to your Franklin Templeton fund account. Franklin Templeton also offers a Systematic Withdrawal Plan that lets you receive xed-amount checks from your account on a regular basis. Discounts on sales charges Shareholders who use a Letter of Intent or the combined purchase privileges based on Cumulative Quantity Discounts may be eligible for sales charge discounts on Class A shares. Please see the appropriate fund prospectus for details. Convenient online transactions Online Shareholder Services at franklintempleton.com allows you to manage your investments and fund accounts 24 hours a day. You can purchase, exchange and sell fund shares, and opt for electronic delivery of statements.
Registration for Online Shareholder Services is quick and easy. Just log on to franklintempleton.com and follow the instructions.13

12. Most funds offer multiple share classes, subject to different fees and expenses. Certain exceptions and restrictions apply to the exchange program, as stated in the prospectus, and it may be modied or discontinued by the fund(s). Transfers between funds within a family, while incurring no additional transaction fees, may nevertheless result in a taxable event. 13. If your account is registered under an Employer Identication Number (EIN) or Tax Identication Number (TIN), you may not have online account access. Please call Shareholder Services at (800) 632-2301 for information about these types of accounts.
F R A N K L I N T E M P L E T O N F O U N D I N G F U N D S S T R AT E G Y

Founding Funds Strategy vs. S&P 500 Index

Average Annual Total Returns (Periods Ended December 31, 2010)
Without Sales Charges
If you had invested 1 Yr. Ago
14

3 Yrs. Ago

5 Yrs. Ago

10 Yrs. Ago

20 Yrs. Ago

30 Yrs. Ago

Founding Funds Strategy

S&P 500 Index15

10.62%
15.06%

-3.12%
-2.86%

2.40%
2.29%

5.41%
1.41%

10.14%
9.14%

11.11%
10.71%

Founding Funds Strategy performance figures above do not include the Class A maximum 5.75% sales charge (4.25% for Franklin Income Fund). If included, the returns would have been lower.

Class A with Maximum Sales Charge for Funds Composing Founding Funds Strategy
1-Year 3-Year 5-Year 10-Year 20-Year 30-Year Total Annual Operating Expenses

Franklin Income Fund16 Templeton Growth Fund17 Mutual Shares Fund18

8.21% 1.33% 5.02%

0.53% -9.17% -5.98%

4.91% -1.38% 0.19%

6.63% 3.62% 4.11%

9.94% 9.07% 10.16%

10.54% 10.26% 11.53%

0.65% 1.10% 1.20%

Class A 30-Day Standardized Yield (As of February 28, 2011)

Franklin Income Fund 4.86%

Performance data represents past performance, which does not guarantee future results. Current performance may differ from the gures shown. The funds investment return and principal value will change with market conditions, and you may have a gain or a loss when you sell your shares. Please call Franklin Templeton Investments at (800) DIAL BEN/(800) 342-5236 or visit franklintempleton.com for performance data current to the most recent month-end.
14. The hypothetical combined investments average annual returns assume an investment divided equally among Class A shares of the funds, include reinvestment of dividends and capital gains at net asset value and assume rebalancing to an equal allocation of each of the three funds on an annual basis. They are for illustrative purposes only. 15. Source: 2011 Morningstar. The index is unmanaged and assumes reinvestment of dividends. One cannot invest directly in an index. 16. On 5/1/94, the funds Class A shares implemented a Rule 12b-1 plan, which affects subsequent performance. 17. On 1/1/93, a plan of distribution was implemented for these shares under Rule 12b-1, which affects subsequent performance. 18. Prior to 11/1/96, only a single class of fund shares was offered without a sales charge or Rule 12b-1 expenses. Returns shown are a restatement of the original class to include both 12b-1 expenses and the current sales charges applicable to Class A shares as though in effect from the funds inception. The funds offer other share classes, subject to different fees and expenses that will affect their performance.

This brochure must be preceded or accompanied by current Franklin Income Fund, Templeton Growth Fund and Mutual Shares Fund summary prospectuses and/or prospectuses. Please carefully read the prospectuses before you invest or send money. Investors should carefully consider a funds investment goals, risks, charges and expenses before investing. Performance information will be updated with a slipsheet each quarter containing standardized performance gures.
Symbols Class A Class C Class R Advisor/Class Z

Franklin Income Fund Templeton Growth Fund Mutual Shares Fund

FKINX TEPLX TESIX

FCISX TEGTX TEMTX

FISRX TEGRX TESRX

FRIAX TGADX MUTHX

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Franklin Templeton Distributors, Inc. One Franklin Parkway, San Mateo, CA 94403-1906 (800) DIAL BEN (800) 342-5236 TDD/Hearing Impaired (800) 851-0637 franklintempleton.com
2011 Franklin Templeton Investments. All rights reserved. UPD 05/11 AA XBVL 03/11