File No. 811-2605
As filed with the SEC on October 18, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No.
(Check appropriate box or boxes)
FRANKLIN MONEY FUND
(Exact Name of Registrant as Specified in Charter)
(415) 312-2000
(Area Code and Telephone Number)
777 Mariners Island Blvd., San Mateo, CA 94404
(Address of Principal Executive Offices
Number, Street, City, State, Zip Code)
Harmon E. Burns, Esquire
777 Mariners Island Blvd.,
San Mateo, CA 94404
(Name and Address of Agent for Service,
Number, Street, City, State, Zip Code)
Copies to:
Mark H. Plafker, Esquire
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103
Approximate Date of Proposed Public Offering: As soon as
practicable after this Registration Statement becomes effective
under the Securities Act of 1933.
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
No filing fee is required because an indefinite number of shares have previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940.
A Rule 24f-2 Notice for the registrant's fiscal year ended June 30, 1996, was
filed on August 29, 1996.
Registrant hereby amends this Registration Statement on such dates as may be
necessary to delay its effective date until the Registrant shall file a further
amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until this Registration Statement shall become effective on such
date as the Commission, acting pursuant to such Section 8(a), may determine.
FRANKLIN MONEY FUND
CROSS REFERENCE SHEET
(Pursuant to Rule 481(a) under the
Securities Act of 1933)
N-14 ITEM NO. AND CAPTION LOCATION IN PROSPECTUS
PART A
1. Beginning of Registration Cover Page of Registration
Statement and outside Front Cover Statement; Front Cover Page of
Page of Prospectus Prospectus
2. Beginning and outside Back Cover
Page of Prospectus Table of Contents
3. Synopsis Information and Risk
Factors Summary; Risk Factors
4. Information About the Transaction Summary; Reasons for the
Transaction; Information About the
Transaction
5. Information About the Registrant Prospectus Cover Page; Summary;
Comparison of Investment Policies
and Risks; Information About
Franklin Money
6. Information About the Company Prospectus Cover Page; Comparison
Being Acquired of Investment Policies and Risks;
Information About the Trust
7. Voting Information Prospectus Cover Page; Notice of
Special Meeting of Shareholders;
Summary-Voting Information; Voting
Information and Principal
Stockholders
8. Interest of Certain Persons and
Experts None
9. Additional Information Required
for Reoffering by Persons Deemed
to be Underwriters Not Applicable
N-14 ITEM NO. AND CAPTION LOCATION IN PROSPECTUS
PART B
10. Cover Page Cover Page of Statement of
Additional Information
11. Table of Contents Not Applicable
12. Additional Information about the Incorporation of Documents by
Registrant Reference in the Statement of
Additional Information
13. Additional Information about the Incorporation of Documents by
Company being Acquired Reference in the Statement of
Additional Information
14. Financial Statements Incorporation of Documents by
Reference in the Statement of
Additional Information
PART C - OTHER INFORMATION
Part C contains the information required by Items 15-17 under the items set
forth in the form.
[November 15, 1996]
Dear Shareholder:
Enclosed is a Notice of Meeting for a Special Shareholders Meeting which
has been called for December 31, 1996 at 10:00 a.m., at the offices of the
fund's business manager located at 700 Central Avenue, St. Petersburg, Florida
33701-3628. The accompanying Proxy Statement/Prospectus details a proposal being
presented for your consideration and requests your prompt attention and vote via
the enclosed proxy card.
PLEASE TAKE A MOMENT TO FILL OUT, SIGN AND RETURN THE ENCLOSED PROXY CARD!
This meeting is critically important as you are being asked to consider
and approve an Agreement and Plan of Complete Liquidation which would result in
an exchange of shares in your fund for those of a comparable fund administered
by Franklin Advisers, Inc. ("Advisers"), Franklin Money Fund ("Franklin Money").
On the date of the exchange, you will receive shares in Franklin Money equal in
value to your investment in Templeton Money Fund ("Templeton Money")
The transaction is being proposed because, in the opinion of the Board of
Trustees, a larger fund would achieve greater economies of scale and have a
greater ability to deliver high levels of quality and service to shareholders at
reasonable cost over the long term.
Please take the time to review this document and vote now! To ensure that
your vote is counted, indicate your position on the enclosed proxy card. Sign
and return your card promptly. If you determine at a later date that you wish to
attend this meeting, you may revoke your proxy and vote in person.
Thank you for your attention to this matter.
Sincerely,
Barbara J. Green
SECRETARY
TEMPLETON MONEY FUND
700 Central Avenue, St. Petersburg, Florida 33701-3628
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS To Be Held on
December 31, 1996
To the Shareholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the
Templeton Money Fund series ("Templeton Money") of Templeton Income Trust (the
"Trust"), will be held at the offices of Templeton Money's business manager
which are located at 500 East Broward Blvd., Fort Lauderdale, Florida 33394-3091
on December 31, 1996, at 10:00 a.m., local time, for the following reasons:
1. To approve or disapprove an Agreement and Plan of Complete Liquidation
between the Trust on behalf of Templeton Money and Franklin Money Fund
("Franklin Money") that provides for the acquisition of substantially all
of the assets of Templeton Money in exchange for shares of Franklin Money,
the distribution of such shares to the shareholders of Templeton Money,
and the liquidation and dissolution of Templeton Money.
2. To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
The transaction contemplated by the Agreement and Plan of Complete
Liquidation is described in the attached Prospectus/Proxy Statement. A copy of
the Agreement and Plan of Complete Liquidation is attached as Exhibit A thereto.
Shareholders of record as of the close of business on October 25, 1996 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment
thereof.
By Order of the Board of Trustees,
Barbara J. Green, Secretary
[November 15, 1996]
IF YOU ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON. IF YOU DO
NOT EXPECT TO ATTEND THE MEETING, THE BOARD OF TRUSTEES URGES YOU TO COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) IN THE ENCLOSED POSTAGE-PAID
RETURN ENVELOPE. IT IS IMPORTANT THAT YOU RETURN YOUR SIGNED PROXY PROMPTLY SO
THAT A QUORUM MAY BE ENSURED.
Combined Proxy Statement and Prospectus
TABLE OF CONTENTS
PAGE
Cover Page................................................. Cover
Summary.................................................... 5
Proposed Transaction....................................... 5
Voting Information......................................... 5
Tax Consequences........................................... 6
Investment Objectives and Policies......................... 6
Management of Franklin Money............................... 7
Fees and Expenses.......................................... 7
Purchase Price, Redemption Price, Dividends and
Distributions.............................................. 9
Risk Factors............................................... 10
Special Information Regarding Franklin Money's Master
/Feeder Fund Structure..................................... 11
Reasons for the Transaction................................ 13
Information about the Transaction.......................... 14
Method of Carrying Out Transaction......................... 14
Conditions Precedent to Closing............................ 14
Expenses of the Transaction................................ 15
Tax Considerations......................................... 15
Description of Shares of Franklin Money.................... 15
Capitalization............. ............................... 16
Comparison of Investment Policies and Risks................ 17
Franklin Money and Templeton Money......................... 17
Investment Policies........................................ 17
Investment Restrictions.................................... 18
Risk Factors............................................... 20
Information about Franklin Money........................... 21
Information about the Trust................................ 21
Voting Information and Principal Stockholders.............. 21
Transfer Agent and Custodian............................... 21
Exhibit A - Agreement and Plan of Complete
Liquidation......................................... Attached
Exhibit B - Franklin Money Fund Prospectus dated
November 1, 1996.................................... Attached
Exhibit C - Franklin Money Fund Annual Report....... Attached
COMBINED PROXY STATEMENT AND PROSPECTUS
Dated [November 15, 1996]
Acquisition of the Assets of the
Templeton Money Fund series of
TEMPLETON INCOME TRUST
By and in exchange for shares of
FRANKLIN MONEY FUND
This Prospectus/Proxy Statement is being furnished to you in connection
with the solicitation of proxies by the Board of Trustees of Templeton Income
Trust (the "Trust"). The Trust is a series investment company with two series of
shares of beneficial interest outstanding. Each series represents an interest in
a separate investment portfolio, designated as Templeton Global Bond Fund and
Templeton Money Fund ("Templeton Money" or the "Selling Portfolio"). The
transaction described herein relates solely to Templeton Money.
Proxies solicited will be voted at a Special Meeting of Shareholders to
approve or disapprove an Agreement and Plan of Complete Liquidation (the
"Agreement and Plan"). The Agreement and Plan provides for the acquisition of
substantially all of the assets of Templeton Money by and in exchange for shares
of a mutual fund in the Franklin Templeton Group, Franklin Money Fund ("Franklin
Money" or the "Acquiring Fund"), which is administered by Franklin Advisers,
Inc. ("Advisers"), and which has investment objectives and policies which
correspond to those of Templeton Money. Franklin Money, in turn, invests all of
its assets in The Money Market Portfolio (the "Portfolio"), a separate series of
shares of The Money Market Portfolios ("Money Market"), an open-end, diversified
management investment company. The Portfolio has the same objectives, policies
and restrictions as Franklin Money and is managed by Advisers.
Following such transfer, shares of Franklin Money will be distributed to
shareholders of Templeton Money in complete liquidation of Templeton Money and
individual shareholders will receive that number of shares of Franklin Money
having an aggregate net asset value equal to the aggregate net asset value of
such shareholder's shares of Templeton Money.
Franklin Money is a no-load, open-end, diversified management investment
company, with principal offices located at 777 Mariners Island Boulevard, San
Mateo, California 94404. Advisers and Templeton Global Bond Managers, a division
of Templeton Investment Counsel, Inc. ("Templeton"), adviser to Templeton Money,
are respectively direct and indirect wholly owned subsidiaries of Franklin
Resources, Inc. Franklin Money has substantially the same investment objectives
as Templeton Money, namely current income, stability of principal and liquidity.
Franklin Money and Templeton Money each seeks to maintain a stable net asset
value of $1.00, although there can be no assurance that either fund will be able
to do so. Investments in Franklin Money and Templeton Money are neither insured
nor guaranteed by the U.S.
Government.
Shares of Franklin Money are not deposits or obligations of, or guaranteed
or endorsed by, any bank; further, such shares are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
agency. Shares of Franklin Money involve investment risks including the possible
loss of
principal.
The Trust will request broker-dealer firms, custodians, nominees and
fiduciaries to forward proxy material to the beneficial owners of the shares
owned of record by such persons. Templeton Money may reimburse such
broker-dealer firms, custodians, nominees and fiduciaries for their reasonable
expenses incurred in connection with such proxy solicitation. In addition to
solicitations by mail, some of the officers and employees of the Trust and
Templeton, without extra remuneration, may conduct additional solicitations by
telephone, telegraph and personal interviews. The Trust has engaged [______] to
solicit proxies from brokers, banks, other institutional holders and individual
shareholders for an approximate fee, including out-of-pocket expenses, ranging
between [$________] and [$________].
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about Franklin Money that a
prospective investor should know before investing. This Prospectus/Proxy
Statement is accompanied by the prospectus of Franklin Money dated [November 1,
1996], which is incorporated by reference into this Prospectus/Proxy Statement
and attached hereto as Exhibit B. A Statement of Additional Information dated
[November 15, 1996], relating to this Prospectus/Proxy Statement, the
transactions described herein and the parties thereto, has been filed with the
Securities and Exchange Commission and is incorporated by reference into this
Prospectus/Proxy Statement. A copy of that Statement may be obtained without
charge by writing to the address noted above or by calling 1-800-292-9293. A
Prospectus for Templeton Money and a Statement of Additional Information for the
Trust, each dated January 1, 1996, as well as an Annual Report for Templeton
Money as of August 31, 1996 are also on file with the Securities and Exchange
Commission; each of these documents is incorporated by reference herein and is
available without charge upon request to the Trust. This Prospectus/Proxy
Statement will first be sent to shareholders on or about [November 15, 1996].
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS/PROXY STATEMENT
AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE TRUST OR FRANKLIN MONEY.
SUMMARY
This summary of certain information contained in this Prospectus/Proxy
Statement is qualified by reference to the more complete information contained
elsewhere in this Prospectus/Proxy Statement, the Prospectus of Franklin Money
and the Agreement and Plan of Complete Liquidation (the "Agreement and Plan")
attached to this Prospectus/Proxy Statement as Exhibit A.
PROPOSED TRANSACTION. At a meeting held on October 19, 1996, the Board of
Trustees of the Trust, including a majority of the trustees ("Independent
Trustees") who are not "interested persons" of the Trust as defined in the
Investment Company Act of 1940, as amended (the "1940 Act", approved the
Agreement and Plan providing for the transfer of substantially all of the assets
of Templeton Money to Franklin Money, in exchange for shares issued by Franklin
Money and the distribution of such Franklin Money shares received, in complete
liquidation of Templeton Money. (The proposed transaction is referred to in this
Prospectus/Proxy Statement as the "Transaction." The value of shares issued by
Franklin Money in connection with the Transaction will equal the value of the
assets of Templeton Money.
Pursuant to the Agreement and Plan, shares issued by Franklin Money to
Templeton Money will be distributed to the shareholders of Templeton Money in
complete liquidation of Templeton Money. As a result, shareholders of Templeton
Money will cease to be shareholders of such fund and will instead be the owners
of that number of full and fractional shares of Franklin Money having an
aggregate net asset value equal to the aggregate net asset value of the shares
of Templeton Money on the Closing Date of the Transaction.
For the reasons set forth below under "Reasons for the Transaction," the
Board of Trustees of the Trust, including all of the Independent Trustees
present at the meeting at which the Transaction was approved, has concluded that
the Transaction is in the best interests of the shareholders of Templeton Money
and, therefore, recommends approval of the Agreement and Plan. The Board of
Trustees of the Trust and the Board of Directors of Franklin Money,
respectively, also concluded that no dilution would result to the shareholders
of Templeton Money or Franklin Money, respectively, as a result of the
Transaction.
VOTING INFORMATION. The affirmative vote of the holders of a majority of
the outstanding shares of Templeton Money on the Record Date is necessary to
approve the Agreement and Plan. Under relevant state law and the Trust's trust
documents, abstentions and broker non-votes will be included for purposes of
determining whether a quorum is present at the Special Meeting, but will be
treated as votes not cast and, therefore, will not be counted for purposes of
determining whether the matter to be voted upon at the Special Meeting has been
approved.
Each shareholder will be entitled to one vote for each share of Templeton
Money held on the Record Date. If you give no voting instructions on your proxy,
your shares will be voted in favor of the Agreement and Plan.
Shareholders of record of Templeton Money at the close of business on
October 25, 1996 (the "Record Date") will be entitled to vote at the Special
Meeting. On the Record Date, there were [_____________] outstanding shares of
Templeton Money. If any other matter comes properly before the Special Meeting,
your shares will be voted in accordance with the recommendation of the Trust's
Board of Trustees. You may, however, revoke your proxy by executing another
proxy, by giving written notice of such revocation to the Trust or by attending
the meeting and voting by ballot at the meeting.
TAX CONSEQUENCES. In the opinion of Stradley, Ronon, Stevens & Young, LLP,
counsel to Franklin Money, based on certain assumptions and representations
received from the Trust and Franklin Money, the Transaction will not result in
the recognition of income, gain or loss for Federal income tax purposes to the
Trust, Franklin Money or to the holders of the shares of Templeton Money. For
further information about the tax consequences of the Transaction, see
"Information About the Transaction-Tax Considerations."
INVESTMENT OBJECTIVES AND POLICIES. The investment objective of Franklin
Money is to obtain as high a level of current income (in the context of the type
of investments available to the fund) as is consistent with capital preservation
and liquidity. Franklin Money pursues its investment objective by investing all
of its assets in the Portfolio, which has the same investment objectives, and
substantially similar policies and restrictions as Franklin Money. The Portfolio
is a separate diversified series of Money Market, an open-end management
investment company managed by Advisers. Shares of the Portfolio are acquired by
Franklin Money at net asset value with no sales charge. Accordingly, an
investment in Franklin Money is an indirect investment in the Portfolio.
The Portfolio operates in accordance with the requirements of Rule 2a-7
under the 1940 Act. The Portfolio limits its investments to those U.S. dollar
denominated instruments which the Board of Trustees of Money Market determines
present minimal credit risks and which are, as required by the federal
securities laws, rated in one of the two highest rating categories as determined
by nationally recognized statistical rating organizations, or which are unrated
and of comparable quality, with remaining maturities of 397 calendar days or
less. The Portfolio also maintains a dollar weighted average maturity of the
securities in its portfolio of 90 days or less. There is no assurance that it
will be able to maintain a stable net asset value of $1.00 per share. An
investment in Franklin Money or the Portfolio is neither guaranteed nor insured
by the U.S. Government.
The investment objective of Templeton Money is current income, stability
of principal and liquidity, which it seeks to achieve by investing in high-grade
"money market" instruments with maturities not exceeding 397 days, consisting
primarily of short-term U.S. Government securities, certificates of deposit,
time deposits, bankers' acceptances, commercial paper and repurchase agreements
with banks or broker-dealers with respect to these securities. Templeton Money
operates in accordance with the requirements of Rule 2a-7 under the 1940 Act.
Accordingly, all securities purchased by Templeton Money must be rated in one of
the two highest rating categories for debt obligations by at least two
nationally recognized statistical rating organizations (or one rating
organization if the instrument was rated by only one such organization, subject
to ratification of the investment by the Board of Trustees). If a security is
unrated, it must be of comparable quality as determined in accordance with
procedures established by the Board of Trustees, including approval or
ratification of the security by the Board except in the case of U.S. Government
securities. An investment in Templeton Money (like Franklin Money) is neither
insured nor guaranteed by the U.S. Government. While Templeton Money (like
Franklin Money) seeks to maintain a stable net asset value of $1.00 per share,
there can be no assurance that it will be able to do so.
MANAGEMENT OF FRANKLIN MONEY. The management of the business and affairs
of Franklin Money is the responsibility of its Board of Directors. Franklin
Money was incorporated under the laws of the State of California on November
7,1975. The management of the business and affairs of Money Market, which is a
Delaware Business Trust established on July 10,1992, is the responsibility of
its Board of Trustees.
Franklin Money is administered by Advisers, whose address is 777 Mariners
Island Boulevard, San Mateo, California 94404. Advisers is a wholly-owned
subsidiary of Franklin Resources, Inc. ("Resources"), a publicly owned holding
company, the principal shareholders of which are Charles B. Johnson and Rupert
H. Johnson, Jr., who own approximately 16% and 10%, respectively, of Resources'
outstanding shares. Through its subsidiaries, Resources is engaged in various
aspects of the financial services industry. Advisers acts as investment manager
to 36 U.S. registered investment companies (116 separate series) with aggregate
assets of over [$____] billion. Because Franklin Money invests all of its assets
in the Portfolio, it has no investment manager. The investments of the
Portfolio, however, are managed by Advisers.
FEES AND EXPENSES. Pursuant to an administration agreement which became
effective on July 29, 1994, Franklin Money is obligated to pay Advisers a daily
fee (payable at the request of Advisers) computed at the annual rate of 91/200
of 1% for the first $100 million of its average daily net assets; plus 33/100 of
1% of its net assets over $100 million up to and including $250 million; and
7/25 of 1% of its net assets over $250 million. In addition, the Portfolio pays
Advisers a fee equal to an annual rate of 15/100 of 1% of its average daily net
assets for the supervision and implementation of the Portfolio's investment
activities and the provision of certain administrative services and facilities.
Franklin Money shareholders will bear a portion of the Portfolio's operating
expenses, including fees paid to Advisers, to the extent that Franklin Money, as
a shareholder of the Portfolio, bears such expenses.
In connection with the participation of Franklin Money as a feeder fund in
a master/feeder structure, Advisers has agreed, without limitation with respect
to any time period, to limit its administration and management fees in order to
ensure that the total aggregate operating expenses of Franklin Money and the
Portfolio, which are in effect borne by a shareholder of Franklin Money, are not
higher than if Franklin Money did not operate as a feeder fund. This action by
Advisers to limit its administrative and management fees may be terminated by
Advisers at any time. The contractual management fees which would have been
incurred by the Portfolio absent a fee reduction by Advisers for the Portfolio's
fiscal year ended June 30,1996 was $2,162,519. The management fees actually paid
by the Portfolio to Advisers for the Portfolio's fiscal year ended was June 30,
1996 $2,034,014.
Franklin Money also receives shareholder accounting and other clerical
services from Franklin/Templeton Investor Services, Inc. ("Investor Services" or
"Shareholder Services Agent") in its capacity as transfer agent and dividend
disbursing agent. Investor Services is a wholly owned subsidiary of Resources
and is located at the same address as Advisers.
The operating expense ratio for Franklin Money for the year ended June 30,
1996 (after reduction of management fees by Advisers), was .75%.
Templeton Money is obligated to pay Templeton a monthly fee equal on an
annual basis to 0.35% of its average daily net assets, reduced to 0.30% of such
net assets in excess of $200,000,000 and further reduced to 0.25% of such net
assets in excess of $1,300,000,000. For the fiscal year ended August 31, 1996,
the management fees which accrued to Templeton were $533,128 (0.[__]% of average
net assets). The ratio of operating expenses to average net assets for Templeton
Money during the fiscal year ended August 31, 1996 was 1.10%.
Templeton Money pays Templeton Global Investors, Inc., its business
manager, monthly the fund's allocated share of an administrative fee of 0.15%
per annum on the first $200 million of the Trust's aggregate average daily net
assets, 0.135% of the next $500 million, 0.10% of the next $500 million and
0.075% per annum of such average net assets in excess of $1.2 billion. For the
year ended August 31, 1996, Templeton Global Investors, Inc. received fees of
$217,045 from Templeton Money.
Templeton Money pays Franklin Templeton Investor Services, Inc., its
transfer agent, a fee of $23.48 per annum per shareholder account, adjusted each
year for changes in the Department of Labor Consumer Price Index. For the year
ended August 31, 1996, Franklin Templeton Investor Services, Inc.
received fees of $478,500 from Templeton Money.
PRO FORMA FEE TABLES FOR
FRANKLIN MONEY AND TEMPLETON MONEY
(UNAUDITED)
ACTUAL Pro Forma
FRANKLIN TEMPLETON AFTER
MONEY1 MONEY2 TRANSACTION
(fiscal year (fiscal year
ended 6/30/96) ended 8/31/96)
SHAREHOLDER TRANSACTION EXPENSES
Exchange Fee3 $5.00 $5.00 $5.00
ANNUAL FUND OPERATING EXPENSES
(as percentage of average
net assets):
Management Fees (after fee 0.14% 0.15% 0.--%
waivers)......................
Administration Fees (after fee 0.30% None 0.--%
waivers)......................
12b-1 Fees.................... None 0.15% None
Other Expenses................ 0.31% 0.76% --%
- ---------------------------------
Total Operating Expenses...... 0.75% 0.96% --%
1 DUE TO ITS PARTICIPATION IN THE MASTER FEEDER STRUCTURE, FRANKLIN MONEY'S
OPERATING EXPENSES INCLUDE MANAGEMENT FEES PAID BY THE PORTFOLIO AND
ADMINISTRATION FEES PAID BY FRANKLIN MONEY. THE PORTFOLIO'S INVESTMENT
MANAGER AND FRANKLIN MONEY'S ADMINISTRATOR HAVE AGREED TO WAIVE A PORTION OF
THE MANAGEMENT AND ADMINISTRATION FEES AND MAKE CERTAIN PAYMENTS TO REDUCE
EXPENSES OF FRANKLIN MONEY AND THE PORTFOLIO TO ENSURE TOTAL AGGREGATE
EXPENSES OF FRANKLIN MONEY AND THE PORTFOLIO ARE NOT HIGHER THAN IF FRANKLIN
MONEY WERE NOT TO INVEST ALL OF ITS ASSETS IN THE PORTFOLIO. ABSENT ANY
WAIVER OR EXPENSE REDUCTION, MANAGEMENT AND ADMINISTRATIVE FEES WOULD HAVE
REPRESENTED 0.15% AND 0.30%, RESPECTIVELY, AND TOTAL OPERATING EXPENSES WOULD
HAVE REPRESENTED 0.76% OF THE AVERAGE NET ASSETS OF FRANKLIN MONEY.
2 TEMPLETON MONEY'S INVESTMENT MANAGER HAS VOLUNTARILY AGREED TO TEMPORARILY
REDUCE ITS INVESTMENT MANAGEMENT FEES BY 0.20%. IF THIS POLICY WERE NOT IN
EFFECT, TEMPLETON MONEY'S MANAGEMENT FEE WOULD BE 0.35% AND ITS TOTAL
OPERATING EXPENSES WOULD BE 1.10%.
3 THE EXCHANGE FEE FOR FRANKLIN MONEY IS ONLY IMPOSED ON TIMING ACCOUNTS AS
DEFINED UNDER "EXCHANGE PRIVILEGE" IN FRANKLIN MONEY'S PROSPECTUS. ALL
OTHER EXCHANGES ARE PROCESSED WITHOUT A FEE.
EXAMPLE:
Based on the level of total operating expenses listed above (after waivers
or reimbursements), an investor would pay the following expenses on a $1,000
investment, assuming a 5% annual return and redemption at the end of each time
period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Franklin Money $8 $24 $42 $94
Templeton Money $8 $24 $42 $94
Estimated Expenses for $- $- $- $-
Franklin Money
(after proposed transaction)
The foregoing tables are designed to assist the investor in
understanding the various costs and expenses that a shareholder will bear
directly or indirectly. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
PURCHASE PRICE, REDEMPTION Price, DIVIDENDS and DISTRIBUTIONS. Shares of
both Franklin Money and Templeton Money are sold on a continuous basis at the
net asset value, without a sales charge. Templeton Money has a plan of
distribution or "12b-1 Plan" under which it may reimburse Franklin Templeton
Distributors, Inc. ("FTD") for FTD's costs and expenses for activities primarily
intended to result in the sale of fund shares. Expenditures by Templeton Money
under the plan may not exceed 0.15% annually of the fund's average daily net
assets. Under the plan, costs and expenses not reimbursed in any one given month
(including costs and expenses not reimbursed because they exceeded the limit of
0.15% per annum of the fund's average daily net assets) may be reimbursed in
subsequent months or years, subject to applicable law. In connection with the
Transaction, any unreimbursed expenses existing at the time of the Transaction
will be waived by FTD.
Franklin Money requires a minimum initial investment of $500 and
subsequent investments of at least $25. The minimums may be waived when the
shares are purchased through plans established by Franklin providing for regular
periodic investment. Templeton Money requires a minimum initial investment of
$500 and a $25 minimum for subsequent investments.
Shares of both Franklin Money and Templeton Money may be redeemed at their
respective net asset value per share, although redemptions in excess of $250,000
or 1% of net assets in any 90-day period may be subject to certain conditions.
Shares of both Franklin Money and Templeton Money may be exchanged for shares of
other members of the Franklin Templeton Group subject to certain limitations, as
provided in the prospectuses of the respective Franklin Templeton Funds.
Franklin Money and Templeton Money each have policies of distributing
substantially all of their net investment income and net capital gains to their
respective shareholders.
Franklin Money declares dividends for each day that the fund's net asset
value is calculated, payable to shareholders of record as of the close of
business the preceding day. The amount of dividends may fluctuate from day to
day and dividends may be omitted on some days, depending on changes in the
factors that comprise the fund's net investment income. The fund does not pay
"interest" to its shareholders, nor is any amount of dividends or return
guaranteed in any way. Franklin Money dividends are automatically reinvested
daily in the form of additional shares of the fund at the net asset value per
share at the close of business each day, unless the shareholder has requested
dividend payments in cash, which are paid monthly. The daily dividend includes
accrued interest and any original issue and market discount, plus or minus any
gain or loss on the sale of portfolio securities and changes in unrealized
appreciation or depreciation in portfolio securities (to the extent required to
maintain a stable net asset value per share), less amortization of any premiums
paid on the purchase of portfolio securities and the estimated expenses of the
Fund. Templeton Money declares dividends daily, including weekends and holidays,
immediately prior to the determination of net asset value, which are paid to
shareholders monthly. Dividends are declared and reinvested starting on the day
after (whether or not a business day) the fund's shares are issued and including
the day on which the fund's shares are redeemed. Such dividends include net
investment income (consisting of interest accrued or discount earned less
amortization of premium and estimated expenses) and net realized gains. Income
dividends paid by Templeton Money are automatically reinvested on the payable
date in whole or fractional shares of the fund at net asset value as of the
ex-dividend date, unless the shareholder previously requested payment in cash.
RISK FACTORS. Because of the similarities of the investment objectives and
policies of Franklin Money (and consequently the Portfolio) and Templeton Money,
the investment risks associated with an investment in Franklin Money are
generally the same as those of Templeton Money. There are, however, some
distinctions in the investment program of each of the Portfolio and Templeton
Money. These are summarized below. See "Comparison of Investment Policies-Risk
Factors" below and the accompanying prospectus of Franklin Money.
The Portfolio and Templeton Money have very similar investment policies
and restrictions. Both the Portfolio and Templeton Money invest primarily in
high quality, short-term money market instruments. Both of the funds pursue
their investment objectives by investing primarily in: U.S. government
securities; bank obligations, such as certificates of deposit, time deposits,
bankers' acceptances, Eurodollar obligations (dollar-denominated obligations of
foreign banks) and Yankee obligations (dollar-denominated obligations of
domestic branches of foreign banks); commercial paper; and repurchase
agreements. Each fund is permitted to lend its portfolio securities subject to
restrictions described in their respective prospectuses. The Portfolio may
invest in short-term, high quality corporate obligations such as floating or
variable rate bonds, debentures or notes. Templeton Money does not have a policy
of investing in such instruments. Templeton Money, however, has adopted
restrictions against: borrowing money; pledging, mortgaging or hypothecating its
assets for any purpose; investing more than 15% of its total assets in
securities of foreign companies that are not listed on a recognized United
States or foreign securities exchange, including no more than 5% of its total
assets in restricted securities and no more than 10% of its total assets in
restricted securities and other securities which are not readily marketable. The
Portfolio's policies differ to the extent. that while the Portfolio may not
generally borrow or mortgage or pledge its assets, it may borrow money from
banks for temporary or emergency purposes only and pledge its assets for such
loans in amounts up to 5% of the value of the Portfolio's total assets. Further,
the Portfolio may not purchase securities in private placements or in other
transactions for which there are legal or contractual restrictions on resale and
which are not readily marketable, or enter into a repurchase agreement with more
than seven days to maturity if, as a result, more than 10% of the total assets
of the Portfolio would be invested in such securities or repurchase agreements.
Although Templeton Money does not actively invest in or have any present
intention to invest in warrants, it has also adopted a restriction against
investing more than 5% of its net assets in any types of warrants whether or not
listed on the New York or American Stock Exchanges, and more than 2% of its net
assets in warrants that are not listed on those exchanges. Franklin Money may
not purchase warrants.
The Eurodollar and Yankee obligations in which each of Templeton Money and
Franklin Money invest involve risks. Such investment risks may include future
political and economic developments, the possible imposition of withholding
taxes on interest income payable on the Eurodollar and Yankee obligations held
by the respective fund, possible seizure or nationalization and the possible
establishment of exchange controls or the adoption of other foreign government
laws and restrictions applicable to Eurodollar and Yankee obligations, which
might adversely affect the payment of principal and interest.
SPECIAL INFORMATION REGARDING FRANKLIN MONEY'S MASTER/FEEDER FUND
STRUCTURE. An investment in Franklin Money may be subject to certain risks due
to the fund's structure as a feeder fund, such as the potential that, upon
redemption by other shareholders of the Portfolio, Franklin Money's expenses may
increase or the economies of scale which have been achieved as a result of the
structure may be diminished. Institutional investors in the Portfolio that have
a greater pro rata ownership interest in the Portfolio than Franklin Money could
have effective voting control over the operation of the Portfolio. Further, in
the event that the shareholders of Franklin Money do not approve any future
change in the fund's objectives and fundamental policies in order to conform
Franklin Money's objectives or policies to those already approved for the
Portfolio, Franklin Money may be forced to withdraw its investments from the
Portfolio and seek another investment company with substantially similar
objectives and policies.
Franklin Money may withdraw its investment in the Portfolio at any time if
the Board of Directors of Franklin Money considers that it is in the best
interests of the fund to do so. Upon any such withdrawal, the Board of Directors
of Franklin Money would consider what action to take, including the investment
of all the assets of the fund in another pooled investment entity having
substantially similar investment objectives and policies as Franklin Money or
the hiring of an investment adviser to manage Franklin Money's investments. Such
circumstances may cause an increase in fund expenses.
The Franklin Group of Funds(R) has two other funds which may invest in the
Portfolio and which were designed for institutional investors only. It is
possible that in the future other funds may be created which may likewise invest
in the Portfolio or existing funds may be restructured so that they may invest
in the Portfolio. If and when that happens, Franklin Money or Advisers will
forward to any interested shareholders additional information, including a
prospectus and Statement of Additional Information, if requested, regarding such
other funds through which they may make investments in the Portfolio. Any such
fund may be offered at the same or a different public offering price and with
different fee structures; thus, an investor in such fund may experience a
different return from an investment in another investment company which invests
exclusively in the Portfolio. currently anticipated that, following the
Transaction, Franklin Money will have an approximate [____%] interest in the
Portfolio.
In light of the fact that all of Franklin Money's directors are also
trustees of Money Market, the Board of Directors of Franklin Money and the Board
of Trustees of Money Market have adopted Conflict of Interest Procedures, which
are designed to protect shareholders of Franklin Money. Such procedures require
the independent members of the Board of Directors/Trustees to review, no less
frequently than annually, the master/feeder structure to ensure that conflicts
of interest do not arise between the master fund and the feeder fund and to
report to the full Board after their review. Such potential conflicts include:
the creation of additional feeder funds with different fee structures; the need
to ensure that fee waiver commitments are fulfilled; proposals to revise fee
waiver commitments; the creation of additional feeder funds which could have
controlling voting interests in pass-through voting which could affect
investment and other policies; proposals to increase fees at the master fund
level; and consideration of changes in fundamental policies at the master fund
level which may or may not be acceptable to the fund.
In the event that the independent directors or trustees perceive that
there may be a potential conflict, the procedures require the independent
members of the Board to request a written analysis from management describing
whether such an apparent potential conflict of interest will impede the
operation of any constituent feeder fund and its shareholders. Upon receipt of
the written analysis, the independent members of the Board must then review it,
deliberate and present their conclusion to the full Board. If the independent
Board members determine that no actual potential conflict exists, they will
recommend that no further action be taken. If they determine that the analysis
is inconclusive, they may submit the matter to and be guided by the judgment of
an independent legal counsel issued in a written opinion. If the independent
directors determine that a potential conflict exists, they may take one or more
of the following actions: suggest a course of action designed to eliminate the
potential conflict; if appropriate, request that the full Board submit the
conflict to shareholders for resolution; recommend to the full Board that the
fund no longer invest in the master fund and propose either a search for a new
master fund in which to invest or the hiring of an investment manager to manage
the fund's assets; recommend to the full Board that a new group of directors or
trustees be recommended to shareholders for approval; or take other appropriate
action.
REASONS FOR THE TRANSACTION
The Transaction has been recommended by the Board of Trustees of the Trust
on behalf of Templeton Money as a means of combining the fund with a larger fund
which should be better able to diversify its investments and to obtain certain
economies of scale with attendant savings in costs for the fund and its
shareholders over the long term.
Because of the relatively small size of Templeton Money, and concerns
regarding its ability to operate cost competitively on a stand alone basis,
Templeton recommended to the Trustees the sale of the assets of Templeton Money
to a larger fund which has similar investment objectives and policies, subject
to the approval of the Board of Trustees and approval of the fund's
shareholders.
The Agreement and Plan was originally presented to the Trust's Board of
Trustees at meetings held on October 16, 1993, December 6, 1993 and February 25,
1994. The Board of Trustees approved the Transaction at that time, but
management of each fund later recommended postponement of the Transaction to
allow time to resolve certain operational and record-keeping differences between
the Funds. The Agreement and Plan was again presented to the Trustees on October
[______________], 1996. The Trust's Board of Trustees reviewed the potential
benefits to be gained by shareholders of Templeton Money as well as any
additional costs to be borne by it. In determining whether to recommend approval
of the Transaction to shareholders, the Board of Trustees considered, among
other factors: the expense ratio of Franklin Money as well as similar funds; the
comparative investment performance of Franklin Money with the performance of
similar funds; the compatibility of the investment objectives, policies,
restrictions and portfolios of Franklin Money with Templeton Money; the tax
consequences of the Transaction; and the significant experience Franklin
Advisers has as the manager of more than $2.9 billion in assets in money market
mutual funds.
During the course of its deliberations, the Trust's Board of Trustees also
considered the fact that the expenses of the Transaction will be shared equally
by Templeton, Advisers. Franklin Money, and Templeton Money. Templeton and
Advisers have also represented that should the total costs attributable to the
Transaction result in Franklin Money or Templeton Money paying a
disproportionate amount in relation to the benefits received, Templeton and
Advisers will pay such excess amount.
In reaching the decision to recommend that shareholders of Templeton Money
vote to approve the Transaction, the Board of Trustees concluded that the
Transaction is in the best interests of the shareholders of Templeton Money and
that no dilution would result to the shareholders of Templeton Money from the
Transaction. The Board's conclusion was based on a number of factors, including
that the Transaction would permit shareholders to pursue their investment goals
in a fund. A larger fund should have enhanced ability to effect portfolio
transactions on more favorable terms and should have greater investment
flexibility. Higher aggregate net assets also should enable shareholders to
obtain the benefits of economies of scale, permitting the reduction or
elimination of certain duplicate costs and expenses which may result in lower
overall expense ratios through the spreading of both fixed and variable costs of
fund operations over a larger asset base. As a general rule, economies can be
expected to be realized primarily with respect to fixed expenses. However,
expenses that are based on the value of assets or the number of shareholder
accounts, such as custody and transfer agent fees, would be largely unaffected
by the Transaction. The Board of Directors of Franklin Money. also determined
that the Transaction was in the best interests of its shareholders and that no
dilution would result to such shareholders.
FOR THE REASONS DISCUSSED ABOVE, THE BOARD OF TRUSTEES RECOMMENDS THAT YOU
VOTE FOR THE AGREEMENT AND PLAN. If the Agreement and Plan is not approved, the
Board of Trustees will consider other possible courses of action with respect to
Templeton Money, including dissolution and liquidation.
INFORMATION ABOUT THE TRANSACTION
The following summary of the Agreement and Plan does not purport to be
complete, and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the Agreement and Plan, a copy of which is
attached hereto as Exhibit A.
METHOD OF CARRYING OUT THE TRANSACTION. If the shareholders of the Selling
Portfolio approve the Agreement and Plan relating to the Selling Portfolio, the
reorganization of such Portfolio will be consummated promptly after the various
conditions to the obligations of each of the parties are satisfied. (See
"Conditions Precedent to Closing.") Consummation of the Transaction (the
"Closing Date") will be on December 31, 1996, or such other date as is agreed to
by Franklin Money and the Trust on behalf of Templeton Money, provided that the
Agreement and Plan may be terminated by either party if the Closing Date does
not occur on or before January 31, 1997.
On the Closing Date, the Selling Portfolio will deliver substantially all
of its assets in exchange for shares of the Acquiring Fund having an aggregate
net asset value equal to the aggregate value of assets so delivered as of 3:00
P.M. Pacific time on the Closing Date. In the event that the shareholders of
Templeton Money do not approve the Agreement and Plan, the assets of Templeton
Money will not be delivered on the Closing Date and the obligations of the Trust
under the Agreement and Plan relating to Templeton Money shall not be effective.
The stock transfer books of the Trust with respect to Templeton Money, assuming
the shareholders have approved the Plan, will be permanently closed as of 1:00
P.M. Pacific time on the Closing Date and only requests for redemption of shares
of Templeton Money received in proper form prior to 1:00 P.M. on the Closing
Date will be accepted by the Trust. Redemption requests relating to Templeton
Money received by the Trust thereafter shall be deemed to be redemption requests
for shares of the Acquiring Fund to be distributed to the former shareholders of
Templeton Money.
Templeton Money will receive, upon consummation of the Transaction, shares
of the Acquiring Fund. The number of shares shall be equal to the dollar value
of the assets delivered to Franklin Money
Since the relative asset values of Templeton Money and Franklin Money have
not yet been ascertained for the purposes of the Closing, it is not possible to
determine the exact exchange ratio until the Closing Date. Fluctuations and
relative performances of Templeton Money and Franklin Money, among other
matters, will affect this ratio although it is expected that Franklin Money and
Templeton Money will continue to maintain a net asset value of $1.00 per share.
In such event, a shareholder of Templeton Money will receive one (1) share of
Franklin Money for each share of Templeton Money held.
CONDITIONS PRECEDENT TO CLOSING. The obligation of the Trust to deliver
the assets of the Selling Portfolio to the Acquiring Fund pursuant to the
Agreement and Plan is subject to the satisfaction of certain conditions
precedent, including performance by the Acquiring Fund, in all material
respects, of its agreements and undertakings under the Plan, the receipt of
certain documents from the Acquiring Fund, the receipt of an opinion of counsel
to the Acquiring Fund, and requisite approval of the Agreement and Plan by the
shareholders of the Selling Portfolio, as described above. The obligations of
the Acquiring Fund to consummate the Transaction is subject to the satisfaction
of certain conditions precedent, including the performance by the Trust of its
agreements and undertakings under the Agreement and Plan, the receipt of certain
documents and financial statements from the Trust, and the receipt of an opinion
of counsel to the Trust.
EXPENSES OF THE Transaction. The expenses relating to the Transaction will
be borne as follows. Templeton, Advisers, Franklin Money and Templeton Money
will each pay one-fourth of the expenses incurred in connection with entering
into and consummating the transaction contemplated by the Agreement and Plan. To
the extent that it should be determined following the consummation of the
transaction that the Acquiring or the Selling Portfolio has paid a
disproportionate amount of expenses in relation to the benefits received,
Templeton and Advisers have agreed to pay such disproportionate amount.
TAX CONSIDERATIONS. It is anticipated that the Transaction contemplated by
the Agreement and Plan will be tax free for federal income tax purposes.
Consummation of the Transaction is subject to receipt of an opinion from
Stradley, Ronon, Stevens & Young, LLP, counsel to Franklin Money, based on
certain assumptions and representations received from the Trust and Franklin
Money, that under the Internal Revenue Code of 1986, as amended, the exchange of
assets of Templeton Money for the shares of Franklin Money, and the transfer of
such shares to the Templeton Money shareholders will not result in the
recognition of income, gain or loss for Federal income tax purposes by the
Trust, Franklin Money or by the shareholders of Templeton Money. A shareholder's
adjusted basis for tax purposes in the shares of Franklin Money after the
Transaction will be the same as the person's adjusted basis for tax purposes in
the shares of Franklin Money immediately before the Transaction.
Shareholders of Templeton Money should consult their tax advisors
regarding the effect, if any, of the Transaction in light of their individual
circumstances. Since the foregoing discussion only relates to the federal income
tax consequences of the Transaction, shareholders of Templeton Money should also
consult their tax advisers as to state and local tax consequences, if any, of
the Transaction.
DESCRIPTION OF SHARES OF FRANKLIN MONEY. Shares of Franklin Money will be
issued to shareholders of Templeton Money in accordance with the procedures
under the Agreement and Plan as described above. Each share will be fully paid
and nonassessable when issued with no personal liability attaching to the
ownership thereof, will have no preemptive or conversion rights and will be
transferable upon the books of Franklin Money. In accordance with Franklin
Money's normal procedures as specified in its prospectus, Franklin Money will
not issue certificates for shares of its capital stock to former shareholders of
Templeton Money. Ownership of Franklin Money shares by former shareholders of
Templeton Money will be recorded electronically and Franklin Money will issue a
confirmation to such shareholders relating to those shares acquired as a result
of the Transaction. No redemption or repurchase of any shares of Franklin Money
issued to former shareholders of Templeton Money whose shares are represented by
unsurrendered share certificates shall be permitted until such certificates have
been surrendered for cancellation.
As shareholders of Franklin Money, former shareholders of Templeton Money
will have substantially similar voting rights and rights upon dissolution with
respect to Franklin Money as they currently have with respect to Templeton
Money. Shares of Franklin Money have cumulative voting rights, under California
law, which means that in all elections of directors, each shareholder has the
right to cast a number of votes equal to his number of shares multiplied by the
number of directors to be elected at such election, and each shareholder may
cast the whole number of votes for one candidate or distribute such votes among
two or more candidates. Templeton Money shares, however, do not carry cumulative
voting rights, which means that, in all elections of trustees, the holders of
more than 50% of the shares voting can elect 100% of the trustees, if they
choose to do so and in such event, the holders of the remaining shares voting
will not be able to elect any person or persons to the Board of Trustees.
It is the position of the Division of Investment Management of the U.S.
Securities and Exchange Commission that shareholders of Templeton Money will not
be entitled to any "dissenters' rights" since the Transaction involves two
open-end investment companies registered under the 1940 Act. Although no
dissenters' rights may be available to shareholders of Templeton Money,
shareholders have the right to redeem their shares at net asset value until the
Closing Date, and thereafter such shareholders may redeem their Franklin Money
shares at net asset value or exchange their Franklin Money shares into shares of
certain other funds in the Franklin Templeton Group subject to the terms of the
Prospectus of the fund being acquired.
Like the Trust, Franklin Money does not routinely hold annual meetings of
shareholders. The Trust is a multi-series investment company that currently
issues shares representing interests in two series, and shareholders of each
series currently vote in the aggregate with the shareholders of the other series
on certain matters (for example, the election of trustees and ratification of
independent accountants). Franklin Money is an investment company with
authorized capital stock which consists of five billion shares of common stock
with $0.10 per share par value. Franklin Money presently issues only one class
of shares and, therefore, its shareholders do not vote in the aggregate with any
other shareholder class.
CAPITALIZATION. The following table sets forth, as of August 31, 1996, (i)
the capitalization of Templeton Money, (ii) the capitalization of Franklin
Money, (iii) the capitalization of the Portfolio, (iv) the pro forma combined
capitalization of Franklin Money as adjusted to give effect to the Transaction
and (v) the pro forma combined capitalization of the Portfolio as adjusted to
give effect to the Transaction. The Portfolio currently sells its shares to two
other registered investment companies which invest exclusively in the Portfolio.
The capitalizations of Franklin Money and the Portfolio are likely to be
different when the Transaction is consummated.
Pro Forma of Pro Forma The Templeton Franklin Mon
the Portfolio Franklin Portfolio Money
Combined Money
After Combined
Transaction After
Combined Transaction
After
Net Assets [$___________] [$__________[$__________[$_________[$__________]
Net asset $1.00 $1.00 $1.00 $1.00 $1.00
value per share
Shares [____________] [___________[___________[__________[___________]
outstanding
To the extent permitted by law, the Agreement and Plan may be amended
without shareholder approval by mutual agreement in writing by the Trust and
Franklin Money. The Agreement and Plan may be terminated and the Transaction
abandoned at any time before or, to the extent permitted by law, after the
approval of shareholders of Templeton Money by mutual consent of the parties to
the Agreement and Plan.
COMPARISON OF INVESTMENT POLICIES AND RISKS
FRANKLIN MONEY AND TEMPLETON Money. In seeking to achieve their respective
investment objectives, Franklin Money and Templeton Money are guided by
substantially similar policies and restrictions that should be considered by the
shareholders of Templeton Money. Franklin Money seeks to achieve its objective
by investing all of its assets in the Portfolio. Franklin Money and the
Portfolio have substantially identical objectives, policies and restrictions,
except that Franklin Money's policies and restrictions permit the pursuit of
such policies through investment in another open-end management, investment
company. The following discussion of the policies and restrictions relate to the
Portfolio and Templeton Money since the Portfolio will be actively investing,
whereas Franklin Money will not. Unless otherwise specified, the investment
policies of each of Franklin Money, the Portfolio and Templeton Money may be
changed without shareholder approval and the investment restrictions may not.
Policies or restrictions stated as fundamental may not be changed without the
approval of the lesser of (i) a majority of the outstanding shares, or (ii) 67%
of the shares represented at a meeting of shareholders at which the holders of
more than 50% of the outstanding shares are represented.
INVESTMENT POLICIES. Franklin Money is a no-load, open-end, diversified
management investment company registered under the 1940 Act. Templeton Money is
a diversified series of the Trust, a multi-series investment company registered
under the 1940 Act. Franklin Money calculates net asset value at 3:00 p.m.
Pacific time each day that the New York Stock Exchange (the "Exchange") is open
for business. Templeton Money calculates net asset value per share as of the
close of trading (currently 4:00 p.m. Eastern time) on the Exchange on each day
that it is open for business. Such net asset value per share is calculated by
subtracting the aggregate of all liabilities from the gross value of all assets
and dividing the result by the total number of shares outstanding. Franklin
Money and Templeton Money each have a principal investment objective of current
income, liquidity and preservation of capital. Templeton Money achieves its
objective by investing in high quality money market instruments, consisting
primarily of short-term U.S. Government securities, certificates of deposit,
time deposits, bankers' acceptances, commercial paper and repurchase agreements
and Franklin Money achieves its objectives by investing in the Portfolio which
also invests in such securities. The investment objectives of Franklin Money,
the Portfolio and Templeton Money are fundamental policies of the respective
funds.
The Portfolio and Templeton Money each seek to maintain a stable net asset
value of $1.00 per share, respectively. Both of the funds use the amortized cost
method of valuing their respective securities pursuant to Rule 2a-7 under the
1940 Act. Accordingly, both of the funds: maintain a dollar-weighted average
portfolio maturity of 90 days or less; purchase instruments with remaining
maturities of 397 days or less; and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by their
respective Boards to present minimal credit risks and which are rated in one of
the two highest rating categories for debt obligations as determined by
nationally recognized statistical rating agencies, or which are unrated, but of
comparable quality.
Both the Portfolio and Templeton Money may invest in U.S. government
securities, which are obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities. Certain of these obligations,
including U.S. Treasury bills, notes and bonds, are issued or guaranteed by
the U.S. government and supported by the full faith and credit of the U.S.
government. Other U.S. government securities are issued or guaranteed by
federal agencies or government-sponsored enterprises and are not direct
obligations of the U.S. government, but involve sponsorship or guarantees by
government agencies or enterprises.
Both the Portfolio and Templeton Money invest in bank obligations
consisting of certificates of deposit, bankers acceptances and time deposits.
The Portfolio may not invest more than 10% of its assets in time deposits with
maturities in excess of seven calendar days. The Portfolio also invests in
instruments secured by bank obligations and letters of credit. Both of the funds
also invest in dollar-denominated obligations of foreign branches of domestic
banks ("Eurodollar obligations") and dollar-denominated obligations of domestic
branches of foreign banks ("Yankee obligations"). With respect to the Portfolio,
only up to 25% of its assets may be invested in obligations of foreign branches
of U.S. or foreign banks.
Both the Portfolio and Templeton Money may invest in commercial paper.
Templeton Money limits its investments in commercial paper to obligations rated
Prime-1 or Prime-2 by Moody's Investor's Service, Inc. ("Moody's") or A-1 or A-2
by Standard & Poor's Corporation ("S&P") or, if not rated by Moody's or S&P,
issued by companies having an outstanding debt issue currently rated Aaa or Aa
by Moody's or AAA or AA by S&P. With respect to Templeton Money, commercial
paper must be issued by domestic corporations or foreign corporations affiliated
with domestic issuers. The Portfolio may invest in commercial paper of domestic
or foreign issuers which is considered by the fund to present minimal credit
risks and which is rated within the two highest rating categories by nationally
recognized statistical rating organizations or, if unrated, has been determined
by Advisers to be of comparable quality, pursuant to procedures approved by the
fund's Board of Trustees.
The policies of both of the funds permit the funds to lend their portfolio
securities. Templeton Money may lend portfolio securities with an aggregate
market value of up to one-third of its total assets. The Portfolio may make
loans of its portfolio securities in an amount up to 25% of the value of the
fund's total assets (this policy is a fundamental policy).
The Portfolio may also invest in corporate obligations consisting of
floating or variable rate bonds, debentures or notes which are considered by the
fund to present minimal credit risks and which are rated within the two highest
rating categories by nationally recognized statistical rating organizations or.
if unrated, have been determined by Advisers to be of comparable quality,
pursuant to procedures approved by the fund's Board of Trustees. Such
obligations must mature in 397 calendar days or less.
Templeton Money has no similar policy.
The policies of both of the funds permit the funds to acquire a security
and simultaneously enter into a repurchase agreement, wherein the seller agrees
to repurchase the security at a specified time and price. The repurchase price
is in excess of the purchase price by an amount which reflects an agreed-upon
rate of return, which is not tied to the coupon rate on the underlying security.
INVESTMENT RESTRICTIONS. The investment restrictions of the Franklin
Money, Portfolio, and Templeton Money are similar. As a matter of fundamental
policy, each of the funds will not: buy securities on margin or sell any
securities short; make loans, except through the purchase of debt securities,
the lending of portfolio securities or the purchase of securities with a
simultaneous agreement by the seller to repurchase them; purchase or retain and,
with respect to Franklin Money, purchase from or sell to the fund's officers and
directors or certain affiliate securities of any company in which trustees or
officers of the trust, or certain affiliates, individually own more than 1/2 of
1% of the securities of such company and in the aggregate own more than 5% of
the securities of such company; invest in real estate (or, as to Templeton
Money, mortgages on real estate), except certain securities secured by real
estate or interests therein; invest in commodities, or oil, gas or other mineral
exploration or development programs except that, as to these interests,
Templeton Money may invest in publicly issued debentures or equity stock
interests relating thereto; invest in any company for the purpose of exercising
control or management; invest in other investment companies (except in
connection with a merger, consolidation, acquisition or reorganization; in the
case of Templeton Money, this exception applies to open-end investment companies
only); as to securities with legal or contractual restrictions on resale,
Templeton Money may invest up to 5% of its total assets in such securities and
may invest up to 10% of its total assets in restricted securities and other
securities (including repurchase agreements having more than seven days
remaining to maturity) that are not readily marketable, while the Portfolio may
not purchase securities in private placements or in other transactions, for
which there are legal or contractual restrictions on resale and are not readily
marketable, or enter into a repurchase agreement with more than seven days to
maturity if, as a result, more than 10% of its total assets would be invested in
such securities or repurchase agreements; invest more than 25% of its assets in
securities of any industry (except with respect to Templeton Money, that fund
may invest in obligations issued by domestic banks without regard to such
limitation and with respect to the Portfolio, U.S. Government obligations are
not considered to be part of any industry and further, the restriction does not
apply where the Portfolio's policies state otherwise in its current prospectus);
Templeton Money may not borrow money or pledge, mortgage or hypothecate its
assets (for any purpose), the Portfolio may not borrow money or mortgage or
pledge any of its assets, except that borrowings (and a pledge of assets
therefor) for temporary or emergency purposes may be made from banks in any
amount u to and not in excess of 5% of the total assets; invest more than 5% of
its total assets in securities of issuers which have been in continuous
operation less than three years (the Portfolio's policy in this regard is not
fundamental); invest in puts, calls, straddles or spreads (except that with
respect to the Portfolio, the fund may purchase, hold and dispose of
"obligations with puts attached" or write covered call options in accordance
with its stated investment policies).
Templeton Money also has adopted restrictions against: issuing senior
securities; participating on a joint or a joint and several basis in any trading
account in securities; investing more than 15% of total assets in securities of
foreign companies that are not listed on a recognized United States or foreign
securities exchange and investing more than 5% of its net assets in warrants
whether or not listed on the New York or American Stock Exchanges, and more than
2% of its net assets in warrants that are not listed on those exchanges
(warrants acquired in units or attached to securities are not included in this
restriction); and investing more than 5% of its total assets in the securities
of any one issuer (exclusive of U.S. Government securities) or purchase more
than 10% of any class of securities of any one company, including more than 10%
of its outstanding voting securities.
Franklin Money's investment restrictions are identical to those of the
Portfolio with the exception that certain of Franklin Money's policies
specifically exempt from their coverage an investment by Franklin Money in
another open-end management investment company with the same investment
objectives, policies and restrictions as Franklin Money. The policies which
include this exception are Franklin Money's policies concerning purchasing
restricted securities, underwriting securities, purchasing the securities of
other investment companies, investing for the purpose of exercising control or
management, purchasing the securities of an issuer with less than three years'
continuous operations, and investing more than 25% of its assets in any one
industry.
RISK FACTORS. The risks associated with an investment in either Franklin
Money, and, consequently. the Portfolio, or Templeton Money are similar. Both of
the funds invest in Eurodollar and Yankee obligations. Franklin Money invests in
commercial paper of foreign issuers and Templeton Money invests in commercial
paper issued by foreign corporations affiliated with domestic corporations. Both
investments involve risks that are different from obligations of domestic
entities. These risks may include future unfavorable political and economic
developments, possible withholding taxes, seizure of foreign deposits, currency
control, interest limitations, or other governmental restrictions which might
affect the payment of principal or interest on securities the fund holds. In
addition, there may be less publicly available information regarding such
foreign banks or foreign issuers of commercial paper.
INFORMATION ABOUT FRANKLIN MONEY
Information about Franklin Money is included in its current Prospectus
dated [November 1, 1996] which is attached to this Prospectus/Proxy Statement
and incorporated by reference herein. Additional information about Franklin
Money is included in a Statement of Additional Information also dated [November
1, 1996], has been filed with the Securities and Exchange Commission and is
incorporated by reference herein. A copy of the Statement of Additional
Information may be obtained without charge by writing to Franklin Money, or
calling 1-800-DIAL-BEN. Franklin Money is subject to the informational
requirements of the Securities Exchange Act of 1934 and the Investment Company
Act of 1940, as applicable, and, in accordance with such requirements, files
proxy materials, reports and other information with the Securities and Exchange
Commission. These materials can be inspected and copied at the Public Reference
Facilities maintained by the Securities and Exchange Commission at 450 Fifth
Street NW, Washington, DC 20549, and at the offices of the Fund at 777 Mariners
Island Boulevard, San Mateo, California 94404 and at the Los Angeles Regional
Office of the Securities and Exchange Commission at 5670 Wilshire Boulevard,
11th Floor, Los Angeles, California 90036-3648. Copies of such material can also
be obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, DC 20549,
at prescribed rates.
INFORMATION ABOUT THE TRUST
Information about the Trust is incorporated herein by reference from
Templeton Money's current Prospectus dated January 1, 1996 and the Trust's
Statement of Additional Information of the same date, a copy of which may be
obtained without charge by writing or calling the Trust at the address and
telephone number shown on the cover page of this Prospectus/Proxy Statement.
Reports and other information filed by the Trust can be inspected and copied at
the Public Reference Facilities maintained by the Securities and Exchange
Commission at 450 Fifth Street NW, Washington, DC 20549, and copies of such
material can be obtained from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission.
Washington, DC 20549, at prescribed rates.
VOTING INFORMATION AND PRINCIPAL STOCKHOLDERS
In the event that sufficient votes in favor of the proposal set forth in
the Notice of Special Meeting of Shareholders and Proxy Statement are not
received by the scheduled time of the Meeting, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies, even though a quorum is present. Any such adjournment will require
the affirmative vote of a majority of the votes cast on the question in person
or by proxy at the session of the Meeting to be adjourned. The persons named as
proxies will be voted in the best interests of management and all shareholders
in proposing adjournment or in voting on an adjournment proposed by a
shareholder. The costs of any such additional solicitation and of any adjourned
session will be shared equally by Templeton, Advisers, Franklin Money and
Templeton Money.
To the knowledge of the Trust and Franklin Money, no person owned 5% or
more of the outstanding securities of Templeton Money or Franklin Money as of
the record date, although from time to time, the number of fund shares held in
"street name" accounts of various securities dealers for the benefit of their
clients or in centralized securities depositories may exceed 5% of the total
outstanding shares of a fund or series. All of the respective officers and
trustees or directors of the Trust and Franklin Money, as a group, owned less
than 1% of the outstanding voting securities of Templeton Money and Franklin
Money, respectively.
TRANSFER AGENT AND CUSTODIAN
Franklin Templeton Investor Services, Inc. serves as the transfer agent
and dividend disbursing agent for Franklin Money. Bank of America NT & SA is the
custodian for Franklin Money. The main office of Franklin Templeton Investor
Services, Inc., is 777 Mariners Island Boulevard, San Mateo, California 94404.
The main office of the Bank of America NT & SA is 555 California Street, 4th
Floor, San Francisco, California 94104.
Franklin Templeton Investor Services, Inc. also serves as transfer
agent and dividend agent for the Trust. The Chase Manhattan Bank, N.A., One
Chase Manhattan Plaza, New York, New York 10081, serves as custodian of the
Trust's assets.
By Order of the Board of Trustees
Barbara J. Green, SECRETARY
EXHIBITS TO COMBINED PROXY
STATEMENT AND PROSPECTUS
EXHIBIT
A Agreement and Plan of Complete Liquidation between Franklin Money Fund and
Templeton Income Trust, on behalf of Templeton Money Fund.
B Prospectus dated November 1, 1996 of Franklin Money Fund
C Annual Report of Franklin Money Fund for the fiscal year ended June 30,
1996.
TEMPLETON WORLDWIDE
Member of Franklin/Templeton Group
P.O. Box 976
New York, NY 10274-0976
FOR AGAINST ABSTAIN
No. 1. To approve or disapprove an
Agreement and Plan of Complete
Liquidation between Templeton
Income Trust, on behalf of Templeton
Money Fund ("Templeton Money") and
Franklin Money Fund ("Franklin Money")
that provides for the acquisition of
substantially all of the assets of
Templeton Money in exchange for
shares of Franklin Money, the distribution
of such shares to the shareholders of
Templeton Money, and the liquidation
and dissolution of Templeton Money.
* * * * *
GRANT WITHHOLD
No. 2. In their discretion, the
Proxyholders are authorized to
vote upon such other matters
which may legally come before
the Meeting or any adjournment
thereof.
TEMPLETON INCOME TRUST (THE "TRUST")
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 31, 1996
The undersigned hereby revokes all previous proxies for his shares
and appoints Barbara J. Green, James R. Baio and Jack L. Collins, and each of
them, proxies of the undersigned with full power of substitution to vote all
shares of Templeton Money, which the undersigned is entitled to vote at the
Trust's Special Meeting of Shareholders to be held at the offices of the Trust,
700 Central Avenue, St. Petersburg, Florida 33701-3628 at 10:00 a.m. local time,
on the 31st day of December, 1996, including any adjournments thereof, upon such
business as may legally be brought before the Meeting.
PLEASE SIGN AND PROMPTLY RETURN IN THE ACCOMPANYING ENVELOPE. NO POSTAGE
REQUIRED IF MAILED IN THE U.S.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. IT WILL BE VOTED
AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY SHALL BE VOTED IN
FAVOR OF PROPOSAL NO. 1 AND WITHIN THE DISCRETION OF THE PROXYHOLDERS AS TO
ITEM 2.
Note: Please sign exactly Control No.
as your name appears on Account No.
the proxy. If signing for
Estates, Trusts or Corporations,
Title or Capacity should be ________________________ _____
stated. If shares are held Signature Date
jointly, each holder must sign.
------------------------ -----
Signature Date
IMPORTANT
PLEASE SEND IN YOUR PROXY . . . TODAY!
You are urged to date and sign the
attached proxy and return it promptly.
This will help save the expense of
follow-up letters to stockholders who
have not responded.
A-16
EXHIBIT A
AGREEMENT AND PLAN OF COMPLETE LIQUIDATION
AGREEMENT AND PLAN OF COMPLETE LIQUIDATION (the "Agreement"), made as of this
[___] day of October, 1996 by and between Franklin Money Fund ("Franklin
Money"), a corporation organized under the laws of the State of California, with
its principal place of business at 777 Mariners Island Boulevard, San Mateo,
California 94404 and Templeton Income Trust ("Templeton"), a Massachusetts
business trust with its principal place of business at 700 Central Avenue, St.
Petersburg, Florida 33701-3628.
PLAN OF LIQUIDATION
The transaction (hereinafter referred to as the "Plan of Liquidation")
will consist of (i) the acquisition by Franklin Money of substantially all of
the assets of the Templeton Money Fund series of Templeton ("Templeton Money")
in exchange solely for shares of common stock of Franklin Money, with $0.10 per
share par value, (ii) the distribution of such shares of common stock of
Franklin Money to the shareholders of Templeton Money according to their
respective interests, and (iii) the complete liquidation and dissolution of
Templeton Money as soon as practicable after the closing (as defined in Section
3, hereinafter called the "Closing"), all upon and subject to the terms and
conditions of this Agreement hereinafter set forth.
AGREEMENT
In order to consummate the Plan of Liquidation and in consideration of the
premises and of the covenants and agreements hereinafter set forth, and
intending to be legally bound, the parties hereto covenant and agree as follows:
1. DELIVERY OF ASSETS, LIQUIDATION AND DISSOLUTION OF THE PORTFOLIO. (a)
Subject to the terms and conditions of this Agreement, and in reliance on the
representations and warranties of Franklin Money herein contained, and in
consideration of the delivery by Franklin Money of the number of its shares
hereinafter provided, Templeton on behalf of Templeton Money agrees that it will
convey, transfer and deliver to Franklin Money at the Closing all of the then
existing assets of Templeton Money free and clear of all liens, encumbrances,
and claims whatsoever (other than shareholders' rights of redemption) except for
cash, bank deposits, or cash equivalent securities in an estimated amount
necessary (1) to pay its costs and expenses of carrying out this Agreement
(including, but not limited to, fees of counsel and accountants, and expenses of
its liquidation and dissolution contemplated hereunder), which costs and
expenses shall be established on Templeton Money's books as liability reserves,
(2) to discharge its unpaid liabilities on its books at the closing date (as
defined in Section 3, hereinafter called the "Closing Date"), including, but not
limited to, its income dividends and capital gains distributions, if any,
payable for the period ending on or before the Closing Date, and (3) to pay such
contingent liabilities as the trustees shall reasonably deem to exist against
Templeton Money, if any, at the Closing Date, for which contingent and other
appropriate liability reserves shall be established on Templeton Money's books
(hereinafter "Net Assets"). Templeton Money shall also retain any and all rights
which it may have over and against any person which may have accrued up to and
including the close of business on the Closing Date.
(b) Subject to the terms and conditions of this Agreement, and in reliance
on the representations and warranties of Templeton herein contained, and in
consideration of such sale, conveyance, transfer, and delivery, Franklin Money
agrees at the Closing to deliver to Templeton Money the number of Franklin Money
shares of common stock (with $0.10 per share par value) determined by dividing
the aggregate value of the net assets of Templeton Money on the Closing Date by
the net asset value per share of common stock of Franklin Money on the Closing
Date. All such values shall be determined in the manner and as of the time set
forth in Section 2 hereof.
(c) Immediately following the Closing, Templeton Money shall dissolve and
distribute pro rata to its shareholders of record as of the close of business on
the Closing Date the shares of common stock of Franklin Money received by
Templeton Money pursuant to this Section I. Such liquidation and distribution
shall be accomplished by the establishment of accounts on the share records of
Franklin Money of the type and in the amounts due such shareholders based on
their respective holdings as of the close of business on the Closing Date.
Fractional shares of common stock of Franklin Money shall be carried to the
third decimal place. As promptly as practicable after the Closing, each holder
of any outstanding certificate or certificates representing shares of beneficial
interest of Templeton Money shall be entitled to surrender the same to the
transfer agent for Franklin Money and request in exchange therefor a certificate
or certificates representing the number of whole shares of common stock of
Franklin Money into which the shares of beneficial interest of Templeton Money
theretofore represented by the certificate or certificates so surrendered shall
have been converted. Certificates of fractional shares of common stock of
Franklin Money shall not be issued, but shall continue to be carried by Franklin
Money for the account of such shareholder as unissued shares. Until so
surrendered, each outstanding certificate which, prior to the Closing,
represented shares of beneficial interest of Templeton Money shall be deemed for
all Franklin Money purposes to evidence ownership of the number of shares of
common stock of Franklin Money into which the shares of beneficial interest of
Templeton Money (which prior to the Closing were represented thereby) have been
converted.
2. VALUATION (a) The net asset value of a share of common stock of
Franklin Money shall be determined to the nearest full cent as of 3:00 P.M.
Pacific Time on the Closing Date, using the valuation procedures as set forth in
Franklin Money's then effective prospectus.
(b) The net asset value of a share of beneficial interest of Templeton
Money shall be determined to the nearest full cent as of 1:00 P.M. Pacific Time
on the Closing Date, using the valuation procedures as set forth in Templeton
Money's currently effective prospectus.
3. CLOSING and CLOSING Date. The Closing Date shall be December 31, 1996
or such later date as the parties may mutually agree. The Closing shall take
place at the principal office of Franklin Money, 777 Mariners Island Boulevard,
San Mateo, California 94404 at 3:00 P.M. Pacific Time on the Closing Date.
Templeton Money shall have provided for delivery as of the Closing of those Net
Assets to be transferred to Franklin Money's Custodian, Bank of America, NT &
SA, 555 California Street, 4th Floor, San Francisco, California 94104. Also,
Templeton shall deliver at the Closing a list of names and addresses of the
shareholders of record of Templeton Money and the number of shares of beneficial
interest of Templeton Money owned by each such shareholder, indicating thereon
which such shares are represented by outstanding certificates and which by
book-entry accounts, all as of 1:00 P.M. Pacific Time on the Closing Date,
certified by its Transfer Agent or by its President to the best of their
knowledge and belief. Franklin Money shall issue and deliver a certificate or
certificates evidencing the shares of common stock of Franklin Money to be
delivered to said Transfer Agent registered in such manner as Templeton Money
may request, or provide evidence satisfactory to Templeton Money that such
shares of Franklin Money have been registered in an account on the books of
Franklin Money in such manner as Templeton may request.
4. REPRESENTATIONS AND WARRANTIES BY TEMPLETON. Templeton represents
and warrants to Franklin Money that:
(a) Templeton is a business trust organized under the laws of the
Commonwealth of Massachusetts on June 16,1986, and is validly existing and in
good standing under the laws of that state. Templeton is duly registered under
the Investment Company Act of 1940, as amended, as a diversified, open-end,
management investment company and all its shares sold have been sold pursuant to
an effective registration statement filed under the Securities Act of 1933, as
amended, except for those shares sold pursuant to the private offering exemption
for the purpose of raising the required initial capital.
(b) Templeton is authorized to issue an unlimited amount of shares of
beneficial interest, with a par value of $0.01, each outstanding share of which
is fully paid, non-assessable, fully transferable and has full voting rights. Of
such shares, one series has been designated as shares of Templeton Money.
(c) The financial statements appearing in Templeton's Annual Report to
Shareholders for the period ending August 31, 1996, audited by McGladrey &
Pullen, LLP, copies of which have been delivered to Franklin Money, fairly
present the financial position of Templeton Money as of the respective dates
indicated, in conformity with generally accepted accounting principles applied
on a consistent basis.
(d) The books and records of Templeton Money made available to Franklin
Money and/or its counsel, accurately summarize the accounting data represented
and contain no material omissions with respect to the business and operations of
the Portfolio.
(e) Templeton is not a party to or obligated under any provision of its
Agreement and Declaration of Trust, by-laws, or any contract or any other
commitment or obligation, and is not subject to any order or decree, which would
be violated by its execution of or performance under this Agreement.
5. REPRESENTATIONS AND WARRANTIES BY FRANKLIN MONEY. Franklin Money
represents and warrants to Templeton that:
(a) Franklin Money is a corporation organized under the laws of the State
of California on November 7, 1975, and is validly existing and in good standing
under the laws of that state. Franklin Money is duly registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end,
management investment company and all its shares sold have been sold pursuant to
an effective Registration Statement filed under the Securities Act of 1933, as
amended, except for those shares sold pursuant to the private offering exemption
for the purpose of raising the required initial capital.
(b) Franklin Money has an authorized capital of 5,000,000,000 shares of
common stock, with $0.10 per share par value. Each outstanding share is fully
paid, non-assessable, fully transferable, and has full voting rights. The shares
of common stock of Franklin Money issued pursuant to this Agreement and Plan of
Complete Liquidation will be fully paid. non-assessable. freely transferable and
have full voting rights.
(c) At the Closing, the shares of common stock of Franklin Money will be
duly qualified for offering to the public in all states of the United States in
which the sale of shares of Templeton Money are qualified, and there are a
sufficient number of such shares registered under the Securities Act of 1933, as
amended, to permit the transfers contemplated by this Agreement to be
consummated.
(d) The financial statements appearing in Franklin Money's Annual Report
to Shareholders for the fiscal year ending June 30, 1996, audited by Coopers &
Lybrand, L.L.P., copies of which have been delivered to Templeton, fairly
present the financial position of Franklin Money as of the respective dates
indicated and the results of its operations for the periods indicated in
conformity with generally accepted accounting principles applied on a consistent
basis.
(e) Franklin Money is not a party to or obligated under any provision of
its certificate of incorporation, bylaws, or any contract or any other
commitment or obligation, and is not subject to any order or decree, which would
be violated by its execution of or performance under this Agreement.
6. REPRESENTATIONS and WARRANTIES BY TEMPLETON AND FRANKLIN MONEY.
Templeton and Franklin Money each represents and warrants to the other that:
(a) The statement of assets and liabilities to be furnished by it, as of
1:00 P.M. Pacific Time for Templeton and 3:00 P.M. Pacific Time for Franklin
Money on the Closing Date, for the purpose of determining the number of shares
of common stock of Franklin Money to be issued pursuant to Section I of this
Agreement will accurately reflect its Net Assets in the case of Templeton Money
and its net assets in the case of Franklin Money and outstanding shares of
common stock as to Franklin Money and outstanding shares of beneficial interest
as to Templeton Money as of such date in conformity with generally accepted
accounting principles applied on a consistent basis.
(b) At the Closing it will have good and marketable title to all of the
securities and other assets shown on the statement of assets and liabilities
referred to in "(a)" above, free and clear of all liens or encumbrances of any
nature whatever except such imperfections of title or encumbrances as do not
materially detract from the value or use of the assets subject thereto.
or materially affect title thereto.
(c) Except as disclosed in its currently effective prospectus, there is no
material suit, judicial action, or legal or administrative proceeding pending or
threatened against it.
(d) There are no known actual or proposed deficiency assessments with
respect to any taxes payable by it.
(e) It has the necessary power and authority to conduct its business as
such business is now being conducted.
(f) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action of its Board of Trustees or Board of
Directors, respectively, and this Agreement constitutes its valid and binding
obligation enforceable in accordance with its terms.
(g) It anticipates that consummation of this Agreement will not cause it
to fail to conform to the requirements of Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), for Federal income taxation as a
regulated investment company at the end of its fiscal year.
7. COVENANTS OF TEMPLETON AND FRANKLIN MONEY. (a) Templeton and
Franklin Money each covenant to operate their respective businesses as
presently conducted between the date hereof and the Closing.
(b) Templeton undertakes that it will not acquire Franklin Money's shares
for the purpose of making distributions thereof other than to Templeton Money's
shareholders.
(c) Templeton Money and Franklin Money each agree that by the Closing, all
of their respective material Federal and other tax returns or tax extensions and
reports required by law to be filed on or before such date shall have been filed
and all Federal and other taxes shown as due on said returns shall have either
been paid or adequate liability reserves shall have been provided for the
payment of such taxes.
(d) Templeton will at the Closing provide Franklin Money with a copy of
the shareholder ledger accounts for all the shareholders of record of Templeton
Money as of 1:00 P.M. Pacific Time on the Closing Date, who are to become
stockholders of Franklin Money as a result of the transfer of assets which is
the subject of this Agreement, certified by its Transfer Agent or its President
to the best of their knowledge and belief.
(e) Templeton agrees to mail to each shareholder of record of Templeton
Money entitled to vote at the special meeting of shareholders at which action on
this Agreement is to be considered, in sufficient time to comply with
requirements as to notice thereof, a Combined Proxy Statement and Prospectus
which complies in all material respects with the applicable provisions of
Section 14(a) of the Securities Exchange Act of 1934, as amended, and Section
20(a) of the Investment Company Act of 1940, as amended, and the rules and
regulations, respectively, thereunder.
(f) Franklin Money will file with the Securities and Exchange Commission a
Registration Statement on Form N-14 under the Securities Act of 1933, as amended
("Registration Statement") relating to the shares of common stock of Franklin
Money issuable hereunder, and will use its best efforts to provide that the
Registration Statement becomes effective as promptly as practicable. At the time
the Registration Statement becomes effective, it (i) will comply in all material
respects with the applicable provisions of the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder; and (ii) will not
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; at the time the Registration Statement becomes effective, at the
time of Templeton Money's shareholders meeting, and at the Closing Date, the
prospectus and statement of additional information included therein will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
8. CONDITIONS PRECEDENT to be FULFILLED BY TEMPLETON and FRANKLIN
Money. The obligations of Templeton and Franklin Money to effectuate this
Agreement and the Plan of Liquidation hereunder shall be subject to the
following respective conditions:
(a) That (1) all the representations and warranties of the other party
contained herein shall be true and correct as of the Closing with the same
effect as though made as of and at such date; (2) the other party shall have
performed all obligations required by this Agreement to be performed by it prior
to the Closing; and (3) the other party shall have delivered to such party a
certificate signed by the President and by the Secretary or equivalent officer
to the foregoing effect.
(b) That the other party shall have delivered to such party a copy of the
resolutions approving this Agreement adopted by the other party's Board of
Directors, or Board of Trustees, as the case may be, certified by the Secretary
or equivalent officer.
(c) That the Securities and Exchange Commission shall not have issued an
unfavorable management report under Section 25(b) of the Investment Company Act
of 1940, as amended, nor instituted nor threatened to institute any proceeding
seeking to enjoin consummation of the Plan of Liquidation under Section 25(c) of
the Investment Company Act of 1940, as amended, and no other legal,
administrative or other proceeding shall be instituted or threatened which would
materially affect the financial condition of either party or would prohibit the
transactions contemplated hereby.
(d) That the holders of at least a majority of the outstanding shares of
beneficial interest of Templeton Money shall have voted in favor of the adoption
of this Agreement and the Plan of Liquidation contemplated hereby at an annual
or special meeting to be held no later than December 31, 1996 or other such date
as the parties may agree.
(e) That each party shall have declared a distribution or distributions
prior to the Closing Date which, together with all previous distributions, shall
have the effect of distributing to its shareholders (i) all of its net
investment income and all of its net realized capital gains, if any, for the
period from the close of its last fiscal year to 1:00 P.M. Pacific Time for
Templeton and 3:00 P.M. Pacific Time for Franklin Money on the Closing Date, and
(ii) any undistributed net investment income and net realized capital gains from
any period to the extent not otherwise declared for distribution.
(f) That prior to or at the Closing, Franklin Money and Templeton Money
shall receive an opinion from Messrs. Stradley, Ronon, Stevens & Young, LLP, to
the effect that, provided the acquisition contemplated hereby is carried out in
accordance with this Agreement:
(1) Provided the Transaction is carried out in accordance with the
applicable laws of the State of California, the acquisition by Franklin Money of
substantially all the assets of Templeton Money as provided for herein in
exchange for shares of Franklin Money shares will qualify as a reorganization
within the meaning of Section 368(a)(1)(C) of the Code, and Franklin Money and
Templeton Money will each be a party to the respective reorganization within the
meaning of Section 368(b) of the Code;
(2) No gain or loss will be recognized by Templeton Money upon the
transfer of substantially all of its assets to Franklin Money in exchange solely
for voting shares of Franklin Money (Sections 361(a) and 357(a));
(3) No gain or loss will be recognized by Franklin Money upon the
receipt of substantially all of the assets of Templeton Money in exchange solely
for voting shares of Franklin Money (Section 1032(a));
(4) The basis of the assets of Templeton Money received by Franklin
Money will be the same as the basis of such assets to Templeton Money
immediately prior to the exchange (Section 362(b));
(5) The holding period of the assets of Templeton Money received by
Franklin Money will include the period during which such assets were held by
Templeton Money (Section 1223(2));
(6) No gain or loss will be recognized by the shareholders of
Templeton Money upon the exchange of their shares in Templeton money for voting
shares of Franklin Money (including fractional shares to which they may be
entitled) (Section 354(a));
(7) The basis of Franklin Money shares received by Templeton Money
shareholders (including fractional shares to which they may be entitled) shall
be the same as the basis of the shares of Templeton Money exchanged therefor
(Section 358(a)(1));
(8) The holding period of Franklin Money shares received by
Templeton Money shareholders (including fractional shares to which they may be
entitled) will include the holding period of Templeton Money shares surrendered
in exchange therefor, provided that Templeton Money shares were held as a
capital asset on the date of the exchange (Section 1223(1)); and
(9) Franklin Money will succeed to and take into account as of the
date of the proposed transfer (as defined in Section 1.381(b)-1(b) of the Income
Tax Regulations) the items of Templeton Moneys' described in Section 381(c) of
the Code, subject to the conditions and limitations specified in Sections 381(b)
and (c), 382, 383 and 384 of the Code.
(g) That Franklin Money shall have received an opinion in form and
substance satisfactory to it from Messrs. Dechert, Price & Rhoads, counsel to
Templeton, to the effect that, subject in all respects to the effects of
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and
other laws now or hereafter affecting generally the enforcement of creditors'
rights:
(1) Templeton was organized as a business trust under the laws of the
Commonwealth of Massachusetts on June 16, 1986, and is validly existing and in
good standing under the laws of the Commonwealth of Massachusetts;
(2) Templeton has an authorized capital of an unlimited number of shares
of beneficial interest, with a par value of $0.01, of which one series of shares
has been designated as shares of Templeton Money, and, assuming that the initial
capital shares of Templeton Money were issued in accordance with the Investment
Company Act of 1940, as amended, and the Agreement and Declaration of Trust and
By-Laws of Templeton and that all outstanding shares of Templeton Money were
sold, issued and paid for in accordance with the terms of Templeton Money's
prospectus in effect at the time of such sales, each such outstanding share is
fully paid, non-assessable, fully transferable and has full voting rights;
(3) Templeton is an open-end, diversified investment company of the
management type registered as such under the Investment Company Act of 1940, as
amended;
(4) Except as disclosed in Templeton's currently effective prospectus,
such counsel does not know of any material suit, action, or legal or
administrative proceeding pending or threatened against Templeton, the
unfavorable outcome of which would materially and adversely affect Templeton or
Templeton Money;
(5) All actions required to be taken by Templeton to authorize this
Agreement and to effect the Plan of Liquidation contemplated hereby have been
duly authorized by all necessary corporate action on the part of Templeton; and
(6) This Agreement is the legal, valid and binding obligation of Templeton
and is enforceable against Templeton in accordance with its terms.
In giving the opinion set forth above, this counsel may state that it is
relying on certificates of the officers of Templeton with regard to matters of
fact and certain certifications and written statements of governmental officials
with respect to the good standing of Templeton.
(h) That Templeton shall have received an opinion in form and substance
satisfactory to it from Messrs. Stradley, Ronon, Stevens & Young, LLP, counsel
to Franklin Money, to the effect that, subject in all respects to the effects of
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other laws now or hereafter affecting generally the enforcement of creditors'
rights:
(1 ) Franklin Money was incorporated under the laws of the State of
California on November 7, 1975, and is validly existing and in good standing
under the laws of that state;
(2) Franklin Money has an authorized capital of 5,000,000,000 shares of
common stock, with $0.10 per share par value, and, assuming that the initial
capital shares of Franklin Money were issued in accordance with the investment
Company Act of 1940, as amended. and its Certificate of Incorporation and
By-Laws and that all other shares were sold, issued and paid for in accordance
with the terms of Franklin Money's prospectus in effect at the time of such
sales, each such outstanding share is fully paid, non-assessable, fully
transferable and has full voting rights;
(3) Franklin Money is an open-end, diversified investment company of the
management type registered as such under the Investment Company Act of 1940, as
amended;
(4) Except as disclosed in Franklin Money's currently effective
prospectus, such counsel does not know of any material suit, action, or legal or
administrative proceeding pending or threatened against Franklin Money, the
unfavorable outcome of which would materially and adversely affect Franklin
Money;
(5) The shares of common stock of Franklin Money to be issued pursuant to
the terms of this Agreement have been duly authorized and, when issued and
delivered as provided in this Agreement, will have been validly issued and fully
paid and will be nonassessable by Franklin Money;
(6) All corporate actions required to be taken by Franklin Money to
authorize this Agreement and to effect the Plan of Liquidation contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Franklin Money;
(7) Neither the execution, delivery nor performance of this Agreement by
Franklin Money violates any provision of its Certificate of Incorporation, its
by-laws, or the provisions of any agreement or other instrument, known to such
counsel to-which Franklin Money is a party or by which Franklin Money is
otherwise bound; this Agreement is the legal, valid and binding obligation of
Franklin Money and is enforceable against Franklin Money in accordance with its
terms except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws pertaining to the enforcement of creditors'
rights generally and by equitable principles; and
(8) The Registration Statement of which the Prospectus of Franklin Money
is a part, dated [November 1, 1996], (the "Prospectus"), is, at the time of the
signing of this Agreement, effective under the Securities Act of 1933, as
amended, and, to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued, and no
proceedings for such purpose have been instituted or are pending before or
threatened by the Securities and Exchange Commission under the Securities Act of
1933, as amended, and nothing has come to its attention which causes it to
believe that at the time the Prospectus became effective, or at the time of the
signing of this Agreement, or at the Closing, such Prospectus (except for the
financial statements and other financial and statistical data included therein,
as to which counsel need express no opinion), contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and such
counsel knows of no legal or government proceedings required to be described in
the Prospectus or of any contract or document of a character required to be
described in the Prospectus that is not described as required.
In giving the opinion set forth above, this counsel may state that it is
relying on certificates of the officers of Templeton with regard to matters of
fact and certain certifications and written statements of governmental officials
with respect to the good standing of Templeton.
(i) That Templeton shall have received a certificate from the President
and Secretary of Franklin Money to the effect that the statements contained in
the Franklin Money Prospectus dated [November 1, 1996], at the time the
Prospectus became effective, at the date of the signing of this Agreement and at
the Closing, did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and
(j) That Franklin Money's Registration Statement with respect to its
shares to be delivered to the Fund shareholders in accordance with this
Agreement shall have become effective, and no stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto, shall have been issued prior to the Closing Date or shall be in effect
at Closing, and no proceedings for the issuance for such an order shall be
pending or threatened on that date.
(k) That the shares of Franklin Money to be delivered hereunder shall have
been registered by Franklin Money with each state commission or agency with
which such registration is required in order to permit the shares lawfully to be
delivered to each Portfolio shareholder.
9. BROKERAGE FEES AND Expenses. (a) Templeton and Franklin Money each
represents and warrants to the other that there are no broker or finders fees
payable by it in connection with the transactions provided for herein.
(b) The expenses of entering into and carrying out the provisions of this
Agreement shall be borne as follows: Franklin Advisers, Inc. ("Franklin"),
Templeton Global Bond Managers, Inc. ("TGBM"), Templeton Money and Franklin
Money shall each pay one-fourth of the total expenses incurred in connection
with this Agreement. Following the consummation of the transactions, Advisers
and TGBM will determine if such arrangement relating to the expenses is
disproportionate to either Templeton Money or to Franklin Money in relation to
the benefits derived by each. In such event, Advisers and TGBM will assume
responsibility for paying that portion of the expenses which is deemed to be so
disproportionate.
10. TERMINATION; WAIVER; ORDER. (a) Anything contained in this
Agreement to the contrary notwithstanding, this Agreement may be terminated
and the Plan of Liquidation abandoned at any time (whether before or after
adoption thereof by the shareholders of Templeton Money) prior to the Closing
as follows:
(1) by mutual consent of Templeton and Franklin Money;
(2) by Franklin Money if any condition of its obligations set forth in
Section 8 has not been fulfilled or waived by Franklin Money;
(3) by Templeton if any condition of its obligations set forth in Section
8 has not been fulfilled or waived by Templeton.
An election by Templeton or Franklin Money to terminate this Agreement and
to abandon the Plan of Liquidation shall be exercised respectively by the Board
of Trustees or Directors of Templeton or Franklin Money, respectively
(b) If the transactions contemplated by this Agreement have not been
consummated by January 31, 1997, the Agreement shall automatically terminate on
that date, unless a later date is agreed to by both Franklin Money and
Templeton.
(c) In the event of termination of this Agreement pursuant to the
provisions hereof, the same shall become void and have no further effect, and
there shall not be any liability on the part of either Templeton or Franklin
Money or persons who are their directors, trustees, officers, agents or
shareholders in respect of this Agreement
(d) At any time prior to the Closing, any of the terms or conditions of
this Agreement may be waived by either Templeton or Franklin Money, respectively
(whichever is entitled to the benefit thereof), by action taken by the Board of
Trustees of Templeton or Board of Directors of Franklin Money, if, in the
judgment of the Board of Trustees of Templeton or the Board of Directors of
Franklin Money (as the case may be), such action or waiver will) not have a
material adverse affect on the benefits intended under this Agreement to the
holders of shares of Templeton Money or Franklin Money, on behalf of which such
action is taken.
(e) The respective representations and warranties contained in Sections
4-7 hereof shall expire with, and be terminated by, the Plan of Liquidation, and
neither Templeton nor Franklin Money nor any of their officers, directors,
trustees, agents or shareholders shall have any liability with respect to such
representations or warranties after the Closing. This provision shall not
protect any officer, director, trustee, agent or shareholder of Templeton Money
or Franklin Money against any liability to the entity for which that officer,
director, trustee, agent or shareholder who so acts or to which that officer,
director, agent or shareholder would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties in
the conduct of such office.
(f) If any order or orders of the U.S. Securities and Exchange Commission
with respect to this Agreement shall be issued prior to the Closing and shall
impose any terms or conditions which are determined by action of the Board of
Trustees of Templeton and Board of Directors of Franklin Money to be acceptable,
such terms and conditions shall be binding as if a part of this Agreement
without further vote or approval of the shareholders of Templeton Money, unless
such terms and conditions shall result in a change in the method of computing
the number of shares of Franklin Money to be issued to Templeton Money in which
event, unless such terms and conditions shall have been included in the proxy
solicitation material furnished to the shareholders of Templeton Money prior to
the meeting at which the transactions contemplated by this Agreement shall have
been approved, this Agreement shall not be consummated and shall terminate
unless Templeton shall promptly call a special meeting of shareholders of
Templeton Money at which such conditions so imposed shall be submitted for
approval.
11. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement embodies the entire
Agreement between the parties and there are no agreements, understandings,
restrictions, or warranties between the parties other than those set forth
herein or herein provided for. This Agreement may be amended only by mutual
consent of the parties in writing. Neither this Agreement nor any interest
herein may be assigned without the prior written consent of the other party.
12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts together shall constitute but one instrument.
13. NOTICES. Any notice, report, or demand required or permitted by any
provision of this Agreement shall be in writing, shall be deemed to have been
given if delivered or mailed, first class postage prepaid, addressed to:
Templeton at 700 Central Avenue, St. Petersburg, Florida 33701- 3628,
Attention: Mr. Samuel J. Forester, Jr., President; or Franklin Money at 777
Mariners Island Boulevard, P. O. Box 7777, San Mateo, CA 94403-7777,
Attention: Mr. Rupert H. Johnson, Jr., President, as the case may be.
14. GOVERNING LAW. This Agreement shall be governed by and carried out
in accordance with the internal laws of the State of California.
In Witness Whereof, Templeton and Franklin Money have each caused this
Agreement and Plan of Complete Liquidation to be executed on its behalf by its
duly authorized officers, all as of the day and year first above written.
Franklin Money Fund
By: HARMON E. BURNS
Harmon E. Burns
Vice President
Templeton Income Trust
By: BARBARA J. GREEN
Barbara J. Green
Secretary
B-1
EXHIBIT B
The Prospectus of Franklin Money Fund, dated November 1, 1996, which is to be
filed with the U.S. Securities and Exchange Commission on or about October 25,
1996 in Post-Effective Amendment No. 29 to Franklin Money's Registration
Statement on Form N-1A, will be provided in a Pre-Effective Amendment to this
Combined Prospectus/Proxy Statement.
C-1
EXHIBIT C
Financial Statements are incorporated herein by reference to the Registrant's
Annual Report to Shareholders dated June 30, 1996 as filed with the SEC
electronically on Form Type N-30D on September 10, 1996
STATEMENT OF ADDITIONAL INFORMATION
FOR
FRANKLIN MONEY FUND
This Statement of Additional Information relates specifically to the
proposed delivery of substantially all of the assets of the Templeton Money Fund
series of Templeton Income Trust to and in exchange for shares of Franklin Money
Fund ("Franklin Money").
This Statement of Additional Information consists of this Cover
Page, a Statement of Additional Information dated November 1, 1996 relating to
the Prospectus of Franklin Money, which Prospectus is included as Exhibit B to
the Proxy Statement/Prospectus dated [November 15, 1996], and a copy of Franklin
Money's Annual Report which includes audited financial statements for the fiscal
year ended June 30, 1996. Also included is a copy of Templeton Money Fund's
Annual Report which includes audited financial statements for the fiscal year
ended August 31, 1996.
This Statement of Additional Information is not a Prospectus; a
Proxy Statement/Prospectus dated [November 15, 1996], relating to the
above-referenced transaction may be obtained from Templeton Income Trust, 700
Central Avenue, St. Petersburg, Florida 33701-3628, (800) 354-9191 and Franklin
Money at 777 Mariners Island Boulevard, P. O. Box 7777, San Mateo, California
94403-7777, 1-800/DIAL BEN. This document should be read in conjunction with
such Proxy Statement/Prospectus. The date of this Statement of Additional
Information is [November 15, 1996].
[The following items (which are to be part of this Statement of Additional
Information) will be filed in a Pre-Effective Amendment to this Registration
Statement:
1. Statement of Additional Information dated [November
1, 1996] of Franklin Money Fund which is to be filed with the
U.S. Securities and Exchange Commission in Post-Effective
Amendment No. [29] to Franklin Money's Registration Statement on
Form N-1A.
2. Annual Report of Templeton Money Fund for the fiscal year ended
August 31, 1996, which is to be filed with the SEC shortly after the
filing of this Registration Statement.
FRANKLIN MONEY FUND
FORM N-14
PART C. OTHER INFORMATION
Item 15. INDEMNIFICATION
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 16. EXHIBITS (Incorporated by reference to the filings as
noted)
(1) Copies of the charter as now in effect:
(i) Articles of Incorporation dated November 4, 1975
Filing: Post-Effective Amendment No. 28 to Registration
Statement of Registrant on Form N-1A
File No. 2-55029
Filing Dated: August 31, 1995
(ii)Certificate of Amendment to Articles of
Incorporation dated February 12, 1980
Filing: Post-Effective Amendment No. 28 to Registration
Statement of Registrant on Form N-1A
File No. 2-55029
Filing Dated: August 31, 1995
(2) Copies of the existing By-Laws or instruments corresponding
thereto;
(i) By-Laws
Filing: Post-Effective Amendment No. 28 to
Registration Statement of Registrant on Form N-1A
File No. 2-55029
Filing Dated: August 31, 1995
(ii) Amendment to By-Laws dated November 17, 1987
Filing: Post-Effective Amendment No. 28 to Registration
Statement of Registration Form N-1A
File No. 2-55029
Filing Date: August 31, 1995
(iii)Amendment to By-Laws dated October 27, 1994
Filing: Post-Effective Amendment No. 28 to
Registration Statement on Form N-1A
File No. 2-55029
Filing DateL August 31, 1995
(3) Copies of any voting trust agreement with respect to more than five
percent of any class of equity securities of the Registrant;
Not Applicable
(4) Copies of the Agreement and Plan of Complete Liquidation are
included in this Registration Statement as Exhibit A to the
Prospectus/Proxy Statement.
(5) Specimens or copies of each security issued by the Registrant,
including copies of all constituent instruments, defining the rights
of the holders of such securities, and copies of each security being
registered;
Not Applicable
(6) Copies of all investment advisory contracts relating to the
management of the assets of the Registrant;
(i) Form of Administration Agreement between
Registrant and Franklin Advisers, Inc., dated
August 1, 1994
Filing: Post-Effective Amendment No. 28 to Registration
Statement of Registrant on Form N-1A
File No. 2-55029
Filing Date: August 31, 1995
(7) Copies of each underwriting or distribution contract between the
Registrant and a principal underwriter, and specimens or copies of
all agreements between principal underwriters and dealers;
(i) Amended and Restated Distribution Agreement between
Registrant and Franklin/Templeton Distributors, Inc., dated
April 23, 1995
Filing: Post-Effective Amendment No. 28 to Registration
Statement of Registrant on Form N-1A
File No. 2-55029
Filing Date: August 31, 1995
(ii) Forms of Dealer Agreements between Franklin/Templeton
Distributors, Inc., and Securities Dealers
Registrant: Franklin Tax-Free Trust
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 2-94222
Filing Date: March 14, 1996
(8) Copies of all bonus, profit sharing, pension or other similar
contracts or arrangements wholly or partly for the benefit of
directors or officers of the Registrant in their capacity as such;
any such plan that is not set forth in a formal document, furnish a
reasonably detailed description thereof;
Not Applicable
(9) Copies of all custodian agreements and depository contracts under
Section 17(f) of the 1940 Act, with respect to securities and
similar investments of the Registrant, including the schedule of
remuneration;
(i) Custodian Agreement between Registrant and Bank of
America NT & SA dated February 1, 1983
Filing: Post-Effective Amendment No. 28 to Registration
Statement of Registrant on Form N-1A
File No. 2-55029
Filing Date: August 31, 1995
(ii) Copy of Custodian Agreements between Registrant
and Citibank Delaware:
1. Citicash Management ACH Customer Agreement
2. Citibank Cash Management Services Master Agreement
3. Short Form Bank Agreement - Deposits and
Disbursements of Funds Incorporated herein by reference to
Registrant: Franklin Premier Return Fund
Filing: Post-Effective Amendment No. 55 to
Registration on Form N-1A
File No. 2-12647
Filing Date: May 17, 1996
(iii)Master Custody Agreement between Registrant and Bank of New
York dated February 16, 1996
Registrant: Franklin New York Tax-Free Trust
Filing: Post-Effective Amendment No. 13 to Registration
Statement on Form N-1A
File No. 33-7785
Filing Date: March 1, 1996
(iv) Terminal Link Agreement between Registrant and Bank of New
York dated February 16, 1996
Registrant: Franklin New York Tax-Free Trust
Filing: Post-Effective Amendment No. 13 to Registration
Statement on Form N-1A
File No. 33-7785
Filing Date: March 1, 1996
(10) Copies of any plan entered into by Registrant pursuant to Rule 12b-1
under the 1940 Act and any agreements with any person relating to
implementation of the plan:
Inapplicable
(11) An opinion and consent of counsel as to the legality of the
securities being registered, indicating whether they will, when
sold, by legally issued, fully paid and nonassessable is included as
Exhibit 11 to the Registration Statement.
(12) An opinion, and consent to its use, of counsel, supporting the tax
matters and consequences to shareholders discussed in the prospectus
is included as Exhibit (12) to the Registration Statement.
(13) Copies of all material contracts of the Registrant not made in the
ordinary course of business which are to be performed in whole or in
part on or after the date of filing the registration statement:
Inapplicable
(14) Copies of any other opinions, appraisals or rulings, and consents to
their use relied on in preparing the registration statement and
required by Section 7 of the 1933 Act are included as Exhibit (14)
to the Registration Statement:
(i) Consent of Coopers & Lybrand, L.L.P., independent
auditors of the Registrant;
(ii) Consent of McGladrey & Pullen, L.L.P., independent auditors of
Templeton Income Trust regarding 1995 financial information of
Templeton Money Fund.
(iii)Consent of McGladrey & Pullen, L.L.P., independent
auditors of Templeton Income Trust regarding 1996 financial
information of Templeton Money Fund.
To be filed by amendment.
(15) All financial statements omitted pursuant to Item 14(a)(1):
Inapplicable
(16) Manually signed copies of any power of attorney pursuant to which
the name of any person has been signed to the Registration Statement
(i) Power of Attorney filed as Exhibit (16) to the
Registration Statement.
(ii) Certificate of Secretary filed as Exhibit (16) to the
Registration Statement.
(17) Any additional exhibits which the Registrant may wish to file:
Evidence of Rule 24-f2 declaration
Item 17. UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this Registration Statement by any
person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act, the reoffering
prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other
items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an
amendment to the registration statement and will not be used until
the amendment is effective, and that, in determining any liability
under the 1933 Act, each post-effective amendment shall be deemed to
be a new Registration Statement for the securities offered therein,
and the offering of the securities at that time shall be deemed to
be the initial bona fide offering for them.
(3) The undersigned Registrant agrees to file, by pre or
post-effective amendment to this registration statement, an opinion
of counsel as to certain federal income tax consequences of this
proposed transaction.
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has
been signed on behalf of the Registrant, in the City of San Mateo, and the State
of California, on the 18th day of October, 1996.
FRANKLIN MONEY FUND
(REGISTRANT)
By: RUPERT H. JOHNSON, JR.*
Rupert H. Johnson, Jr.,
President
As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated.
SIGNATURE: TITLE: DATE:
RUPERT H. JOHNSON, JR.* Director and Principal October 18, 1996
Rupert H. Johnson, Jr. Executive Officer
/S/MARTIN L. FLANAGAN Principal Financial October 18, 1996
Martin L. Flanagan Officer
/S/DIOMEDES LOO-TAM Principal Accounting October 18, 1996
Diomedes Loo-Tam Officer
FRANK H. ABBOTT III* Director October 18, 1996
Frank H. Abbott III
HARRIS J. ASHTON* Director October 18, 1996
Harris J. Ashton
S. JOSEPH FORTUNATO* Director October 18, 1996
S. Joseph Fortunato
DAVID W. GARBELLANO* Director October 18, 1996
David W. Garbellano
CHARLES B. JOHNSON* Director October 18, 1996
Charles B. Johnson
FRANK W.T. LAHAYE* Director October 18, 1996
Frank W.T. LaHaye
*By /s/LARRY L. GREENE
Larry L. Greene
(Attorney-in-Fact Pursuant to Powers of Attorney filed herewith)
EXHIBIT INDEX
EXHIBIT NO. DOCUMENT
(14)(i) Consent of Coopers & Lybrand, L.L.P.
(14)(ii) Consent of McGladrey & Pullen, L.L.P.
(16)(i) Power of attorney relating to initial
filing
(16)(ii) Certificate of Secretary
(17) Evidence of Rule 24(f) declaration
EXHIBIT 14(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference to the Registration Statement of
Franklin Money Fund on Form N-14 (File No. 811-2605) of our report dated August
6, 1996 on our audit of the financial statements and financial highlights of
Franklin Money Fund for the year ended June 30, 1996 and our report dated August
6, 1996 on our audit of the financial statements and financial highlights of The
Money Market Portfolios (File No. 811-7038) for the year ended June 30, 1996.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
San Francisco, California
October 17, 1996
EXHIBIT 14(b)
McGladrey & Pullen, L.L.P.
Consent of Independent Auditors
We hereby consent to the use of our report dated September 29, 1995 on the
financial statements of Templeton Money Fund referred to therein, which appears
in the 1995 Annual Report to Shareholders, which is incorporated by reference in
the Registration Statement on N-14 (File No. 811-2605) of Franklin Money Fund.
We also consent to the reference to our Firm in the Combined Proxy
Statement and Prospectus under the caption "Representations and Warranties by
Templeton."
/s/McGladrey & Pullen, LLP
New York, New York
October 16, 1996
EXHIBIT 16(a)
POWER OF ATTORNEY
The undersigned officers and directors of FRANKLIN MONEY FUND hereby
appoint MARK H. PLAFKER, HARMON E. BURNS, DEBORAH R. GATZEK, KAREN L. SKIDMORE
AND LARRY L. GREENE (with full power to each of them to act alone) his
attorney-in-fact and agent, in all capacities, to execute, and to file any of
the documents relating to the Company's Registration Statement on Form N-14
under the Securities Act of 1933, or any amendment to such Registration
Statement, covering the sale of shares by the Company under a prospectus
becoming effective after this date, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority. Each of
the undersigned grants to each of said attorneys full authority to do every act
necessary to be done in order to effectuate the same as fully, to all intents
and purposes as he could be if personally present, thereby ratifying all that
said attorneys-in-fact and agents may lawfully do or cause to be done by virtue
hereof.
The undersigned officers and directors hereby execute this Power of
Attorney as of this 21st day of June, 1994.
RUPERT H. JOHNSON, JR. CHARLES B. JOHNSON, DIRECTOR
Rupert H. Johnson, Jr. Charles B. Johnson, Director
President and Director
FRANK H. ABBOTT III, DIRECTOR HARRIS J. ASHTON, DIRECTOR
Frank H. Abbott III, Director Harris J. Ashton, Director
S. JOSEPH FORTUNATO, DIRECTOR DAVID W. GARBELLANO, DIRECTOR
S. Joseph Fortunato, Director David W. Garbellano, Director
FRANK W.T. LAHAYE, DIRECTOR KENNETH V. DOMINGUES
Frank W.T. LaHaye, Director Kenneth V. Domingues
Vice President, Treasurer
and Chief Financial Officer
EXHIBIT 16(b)
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, certify that I am Secretary of Franklin Money
Fund (the "Fund").
As Secretary of the Fund I further certify that the following resolution
was adopted by a majority of the Directors of the Fund present at a meeting held
at 777 Mariners Island Boulevard, San Mateo, California, on June 21, 1994:
RESOLVED, that a Power of Attorney, substantially in the form
of the Power of Attorney presented to this Board, appointing
Harmon E. Burns, Deborah R. Gatzek, Mark H. Plafker, Karen L.
Skidmore, and Larry L. Greene as attorneys-in-fact for the
purpose of filing the N-14 registration statement with the
Securities and Exchange Commission, be executed by each
Director and designated officer.
I declare under penalty of perjury that the matters set forth in this
certificate are true and correct of my own knowledge.
June 21, 1994 Deborah R. Gatzek
Secretary
EXHIBIT 17
FRANKLIN RESOURCES LIQUID ASSETS FUND
A MONEY MANAGEMENT FUND
155 BOVET ROAD, SAN MATEO, CALIF. 94402 (415) 574-8800
JANUARY 23, 1979
Securities and Exchange Commission
500 North Capitol Street
Washington, D.C. 20549
Re: Rule 24f-2 Notice for Franklin Resources Liquid Assets Fund
File No. 2-55029
Gentlemen:
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Franklin
Resources Liquid Assets Fund (the "Fund") hereby files its Rule 24f-2 Notice for
the fiscal year ended November 30, 1978 (the "fiscal year"). As shown in the
calculation below, no registration fee is payable.
At the beginning of the Fiscal Year, the Fund had 3,345,761.336 shares of
capital stock which had been registered under the Securities Act of 1933 other
than pursuant to Rule 24f-2, but which remained unsold.
During the Fiscal Year, the Fund registered a total of 17,000,000 shares of
capital stock other than pursuant to Rule 24f-2, and sold a total of
37,534,897.731 capital stock. 1/Of the shares of the Fund sold during the Fiscal
Year, 17,189,136.395 shares were sold in reliance upon the registration pursuant
to Rule 24f-2. Enclosed is an opinion of counsel indicating that these
securities were legally issued, fully paid and non-assessable.
Please acknowledge receipt of these materials by dating and signing the enclosed
copy of this letter and return it to us in the enclosed, self-addressed, stamped
envelope.
Sincerely Yours,
FRANKLIN RESOURCES LIQUID ASSETS FUND
/s/Harmon E. Burns
Harmon E. Burns
Secretary
HEB/dh
Enclosures
1/ Footnote to Rule 24f-2 Notice of Franklin Resources Liquid Assets Fund
The calculation pursuant to subsection (c) of Rule 24f-2 of the fee in
connection with the shares sold in reliance upon Rule 24f-2 is as follows:
Aggregate sales price of securities sold in reliance upon Rule 24f-2
during Fiscal Year $17,189,136
Less: the difference between
(1) the aggregate redemption or
repurchase price of Fund
Shares redeemed or repur-
chased during the Fiscal Year, $27,439,890
and
(2) the aggregate redemption or
repurchase price of Fund
Shares redeemed or repur-
chased during the Fiscal Year
and previously applied pur-
suant to Rule 24e-2(a) in fil-
ings made pursuant to Section
24(e)(1) of the Investment
Company Act of 1940 -0- $27,439,890
Aggregate sales price on which fee will $ -0-
be based
Rate of fee pursuant to Section 6 (b) of $ .00002
Securities Act of 1933
Fee payable $ -0-
LAW OFFICES
JONAS, FERN & SIMPSON
10880 WILSHIRE BOULEVARD
SUITE 1115
LOS ANGELES, CALIFORNIA 90024
JANUARY 17, 1979
Franklin Resources Liquid Assets Fund
155 Bovet Road
San Mateo, California 94402
Gentlemen:
You have requested our opinion with respect to the shares of Common Stock
sold by Franklin Resources Liquid Assets Fund (the "Fund") during its fiscal
year ended November 30, 1978, in connection with the Notice being filed by the
Fund pursuant to Rule 24f-2 under the Investment Company Act of 1940. You have
represented that a total of 37,534,897.731 shares were sold by the Fund during
said fiscal year, of which 17,189,136.395 shares were sold in reliance upon Rule
24f-2.
Based upon our review of such records, documents, and representations as
we deem relevant, it is our opinion that the shares of Common Stock of the Fund
sold and issued by the Fund during its fiscal year ended November 30, 1978 in
reliance upon the registration under the Securities Act of 1933 pursuant to Rule
24f-2, were legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
"Rule 24f-2 Notice" being filed by the Fund.
Very truly yours,
/s/Jonas, Fern & Simpson
JONAS, FERN & SIMPSON
FRLAF RULE 24F-2 NOTICE
a) Shares registered but unsold
at 12/1/77 3,345,761.336
b) Shares registered during year
other than pursuant to
Rule 24f-2 17,000,000.000
c) Shares sold during fiscal
year ended 11/30/78
($1.00 per share) 37,534,898.731
d) Shares sold in reliance upon
indefinite registration
(A+B-C) 17,189,136.395
e) Shares redeemed or repurchased
during the fiscal year ended
11/30/78 27,439,889.760
Note-all numbers for both sales and redemptions should include exchanges.
FRANKLIN RESOURCES LIQUID ASSETS FUND
A MONEY MANAGEMENT FUND
155 BOVET ROAD, SAN MATEO, CALIF. 94402 (415)574-8800
RECEIVED
JAN 29, 1979
8
MAIL PROCESSING SECTION S.E.C.
January 23, 1979
Securities and Exchange Commission
500 North Capitol Street
Washington, D.C. 20549
Re: Rule 24f-2 Notice for Franklin Resources Liquid Assets Fund
File No. 2-55029
Gentlemen:
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Franklin
Resources Liquid Assets Fund (the "Fund") hereby files its Rule 24f-2 Notice for
the fiscal year ended November 30, 1978 (the "Fiscal Year"). As shown in the
calculation below, no registration fee is payable.
At the beginning of the Fiscal Year, the Fund had 3,345,761.336 shares of
capital stock which had been registered under the Securities Act of 1933 other
than pursuant to Rule 24f-2, but which remained unsold.
During the Fiscal Year, the Fund registered a total of 17,000,000 shares of
capital stock other than pursuant to Rule 24f-2, and sold a total of
37,534,897.731 capital stock. 1/Of the shares of the Fund sold during the Fiscal
Year, 17,189,136.395 shares were sold in reliance upon the registration pursuant
to Rule 24f-2. Enclosed is an opinion of counsel indicating that these
securities were legally issued, fully paid and non-assessable.
Please acknowledge receipt of these materials by dating and signing the enclosed
copy of this letter and return it to us in the enclosed, self-addressed, stamped
envelope.
Sincerely yours,
FRANKLIN RESOURCES LIQUID ASSETS FUND
/s/Harmon E. Burns
Harmon E. Burns
Secretary
HEB/dh
Enclosures
