We're going to learn a lot from Franklin. We'll get smarter.
   Shareholder: I want to quote something from Morningstar dated August 30th, 1996:

   "The drafters of the Investment Company Act of 1940 saw fit to give independent trustees a distinct role.... The fund's advisor has the duty to interpret the fund's investment mandate faithfully, but also to seek to maximize the total profits of managing the fund's assets. Only independent trustees - those with no direct ties to the advisor - are paid specifically to safeguard shareholders' interests."

   It goes on to say:

   "One of the simplest ways for fund trustees to serve investors is to exert pressure on the advisor to keep expenses modest."

   Back in the 1970s, if I recall correctly, Mutual Shares had $5, $10, $20 or $25 million - certainly it was less than $100 million - under management. So you're entitled to get more money because the fund has grown. But I believe that the shareholders are entitled to see the benefits of the reduced expenses of the growth of the firm. It's obviously not 10 times as expensive to manage a firm with $10 billion under management as it is to manage a firm with $1 billion.

   Price: I agree with a lot of where you're coming from. And I'm one of the directors, too. I'll be the largest shareholder in Mutual. So keep that in mind....
   [As for your comments on independent directors,] our board will be made up of 12 directors. And I believe that the interested directors will only be Mr. Lippman, Mr. Price and Mr. Langerman. So that's three interested and nine disinterested. Some of the directors will be on other Franklin/Templeton boards. And the thought there is that over time - because Franklin/Templeton is running 110 funds and is very skilled at the best ways to get printing jobs done, organize annual reports and service shareholders - we'll have a cross-fertilization from all of the experience in the Franklin/Templeton group to the Mutual group.
   We've been basically a small fund company for years. We've evolved into a big fund. And in this partnership, we're going to learn a lot from them. Adding Mr. Milsap and Mr. Heinz and one or two others who are [already] on the boards of Franklin and Templeton funds will, I think, be a terrific benefit for Mutual shareholders. We'll get smarter.

Mutual's been both unique and a bargain for years.
   Price: The board negotiates the advisory contract annually - the fee and the terms - with the advisor. And since 1949, that negotiation has resulted in Mutual Shares having one of the best track records in the industry and one of the lowest expense ratios in the industry.

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