SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section.240-14a-11(c) or Section.240-
14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Franklin Universal Trust
(Name of Registrant as Specified In Its Charter)
Franklin Universal Trust
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary material.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
[FT LOGO]
Franklin(R) Templeton(R)
777 Mariners Island Blvd.
San Mateo, CA 94403-7777
IMPORTANT INFORMATION
FOR SHAREHOLDERS OF
FRANKLIN UNIVERSAL TRUST
The enclosed materials include your proxy statement and proxy card. The proxy
card serves as a ballot which allows you to express your views regarding
certain aspects of Franklin Universal Trust's operations. To assure that your
votes are cast in accordance with your preferences, please fill out and sign
the proxy card, and return it in the accompanying postage-prepaid envelope to
the Fund.
The Fund requests your vote on five matters -- the election of a Board of
Trustees, the confirmation of the Board of Trustees' appointment of the
independent auditors for the Fund -- which are annually presented to the
Fund's shareholders for their consideration and three changes to the Fund's
fundamental investment restrictions. Please complete, sign and mail the proxy
card to the Fund to reduce the need to spend money to conduct additional or
follow-up solicitations of shareholders.
We look forward to receiving your votes on the proposed matters. Please take
a moment to review these materials and return your proxy to the Fund.
TABLE OF CONTENTS
A LETTER FROM THE CHAIRMAN
PROXY INFORMATION
NOTICE OF ANNUAL MEETING
THE PROXY STATEMENT
PROPOSAL 1
PROPOSAL 2
PROPOSAL 3
PROPOSAL 4
PROPOSAL 5
OTHER INFORMATION
Franklin Templeton
777 Mariners Island Blvd.
San Mateo, CA 94403-7777
A LETTER FROM THE CHAIRMAN
Dear Fellow Shareholders:
I am writing to request that you consider five matters that relate to your
Franklin Universal Trust (the "Fund"). The Board of Trustees (the "Board") of
the Fund asks that you cast your vote in favor of:
1. Electing a Board of Trustees;
2. Ratifying the appointment by the Trustees of Coopers &
Lybrand L.L.P. as the independent auditors for the Fund for
its current fiscal year; and
3. Eliminating or revising three fundamental investment
restrictions.
Each year, in accordance with legal requirements, the Fund, in connection
with or as part of its annual meeting, submits the election of Trustees and
the approval of the Fund's auditors to a shareholder vote. As in past years,
we urge you to confirm the Board's recommendations by electing the proposed
Trustees and ratifying the selection of the auditors.
We have also proposed the elimination of certain fundamental investment
restrictions. These restrictions were once required by various states' "Blue
Sky Laws," but because of Congressional action last year are no longer
mandatory. With respect to the third restriction regarding lending, we
believe that will provide additional investment opportunities to the Fund. We
urge you to approve these proposals which are designed to benefit all
shareholders by providing the Fund with greater flexibility in pursuing its
investment objectives.
The proxy statement includes explanatory notes (in italics) and
question-and-answer format that are designed to provide you with a simpler
and more concise explanation of certain issues. While much of the information
in the proxy statement is technical and required by the various regulations
that govern the Fund, we hope that the use of this format will be helpful to
you.
The vote of each shareholder is important to the Fund. On behalf of the
Trustees, thank you in advance for the consideration of these issues and for
promptly returning your proxy card.
Sincerely,
/s/ Charles B. Johnson
Charles B. Johnson
Chairman of the Board
This page intentionally left blank.
PROXY INFORMATION
Your Franklin Universal Trust (the "Fund") will host its Annual Meeting of
Shareholders on August 26,1998, at our Headquarters at 777 Mariners Island
Blvd., San Mateo, California 94404. The purpose is to vote on some important
matters affecting the Fund.
The first few pages of this booklet summarize the Fund's proposals and
explain the proxy process - including how to cast your vote(s). Before you
vote, please read the full text of the proxy statement for a complete
understanding of the proposals.
PROPOSALS 1 AND 2: ELECTION OF A BOARD OF TRUSTEES; RATIFICATION OF THE
SELECTION OF THE INDEPENDENT AUDITORS
In accordance with certain legal requirements, the Fund is required to hold
an annual meeting of shareholders for the purpose of electing a board of
trustees and ratifying the appointment by the Fund's board of the Fund's
independent auditors for the current fiscal year.
PROPOSALS 3, 4 AND 5: THREE CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS
We want to make a number of minor changes to the Fund's fundamental
investment restrictions. These proposals would eliminate a prohibition
against investment in oil, gas, mineral and real estate interests (although
the Fund has no present intention in doing so); engage in short sales of
securities; and invest in a broader range of commercial loans. By
eliminating or revising those fundamental investment restrictions, the Fund
will be provided added flexibility to pursue its investment objectives
without affecting current operations. The Fund will continue to be subject
to the Investment Company Act of 1940, as amended, and Board oversight with
respect to the proposed transactions.
- -Q&A-
Q. WHO IS ASKING FOR MY VOTE?
A. Trustees of Franklin Universal Trust (the "Fund") in connection with the
Annual Meeting of Shareholders to be held August 26, 1998 (the "Meeting"),
have asked that you vote on several matters. It is expected that this proxy
statement will be first mailed to shareholders on or about July 9, 1998.
Q. WHY DO I NEED TO VOTE?
A. Your vote makes a difference. Shareholders, like any other business owner,
should express their opinions about the Fund's Board and auditors, and its
operations. Further, if numerous shareholders just like you fail to vote
their proxies, the Fund may not receive enough votes to go forward with its
meeting. If this happens, we will need to mail proxies again -- a costly
proposition for your Fund which you will ultimately bear in part. We
encourage all shareholders to participate in the governance of the Fund.
Q. WHO GETS TO VOTE?
A. Any person who owned shares of beneficial interest ("Shares") of the Fund
on the "record date," which was June 25, 1998, gets to vote at the Meeting
and any adjournments, even if the investor later sold the Shares.
Shareholders are entitled to cast one vote for each proposal, for each Share
owned on the record date. Your completed and signed proxy will be voted in
accordance with your instructions. If you sign the proxy, but do not mark a
preference, your Shares will be voted in accordance with the Trustees'
recommendations.
Q. HOW CAN I VOTE?
A. You can vote in any one of four ways:
By mail, with the enclosed ballot.
In person at the meeting.
Through Shareholder Communications Corporation ("SCC"), a proxy
solicitor, by calling 1-800-_________ or faxing your completed ballot to
SCC at 1-800________.
Whichever method you choose, please take the time to read the full text of
the proxy statement before you vote.
Q. I PLAN TO VOTE BY MAIL OR FAX. HOW SHOULD I SIGN MY PROXY CARD?
A. If you are an individual account owner, please sign exactly as your name
appears on the proxy card. If you are an owners of a joint account, both
owners must sign the proxy card. You should sign proxy cards for other types
of accounts in a way that indicates your authority.
Q. HOW DOES THE BOARD OF TRUSTEES SUGGEST THAT I VOTE?
A. After careful consideration, the Board of Trustees unanimously recommends
that you vote your Fund Shares FOR:
1. The election of all nominees as trustees;
2. The ratification of the selection of Coopers & Lybrand, L.L.P., as
independent auditors; and
3. The elimination to the Fund's fundamental investment restriction
regarding the purchase and sale of oil, gas, mineral and/or real estate
interests;
4. The elimination to the Fund' fundamental investment restriction
regarding short sales of securities; and
5. The amendment to the Fund's fundamental investment restriction
regarding lending.
Q. HOW CAN I GET MORE INFORMATION ABOUT THE FUND?
A. A copy of the Fund's annual report has previously been mailed to
shareholders. If you would like to have copies of the Fund's most recent
annual and semi-annual reports sent to you free of charge, please call us
toll free at 1-800/DIAL BEN(R) or write to the Fund at the address above.
Q. WHOM DO I CALL IF I HAVE QUESTIONS?
A. Please call us at 1-800/DIAL BEN(R) or SCC at 1-800/_______.
THE NOTICE, SET FORTH BELOW, CONSTITUTES THE FORMAL AGENDA FOR THE ANNUAL
MEETING OF SHAREHOLDERS. THE NOTICE SPECIFIES WHAT ISSUES WILL BE CONSIDERED
BY SHAREHOLDERS, AND THE TIME AND LOCATION OF THE MEETING.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IF
YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE INDICATE YOUR VOTING
INSTRUCTIONS ON THE PROXY CARD, WHICH IS INCLUDED WITH THESE MATERIALS, DATE
AND SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED. THIS IS ADDRESSED FOR
YOUR CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE U.S. YOU MAY ALSO VOTE
BY TELEPHONE OR FAX, IF PREFERRED, BY FOLLOWING THE DIRECTIONS ON THE PROXY
CARD. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER
SOLICITATION, PLEASE MAIL IN YOUR EXECUTED PROXY OR VOTE PROMPTLY.
FRANKLIN UNIVERSAL TRUST
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 26, 1998
To the Shareholders of Franklin Universal Trust:
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of Franklin Universal Trust (the "Fund") will be held at the
offices of the Fund, 777 Mariners Island Blvd., San Mateo, California, 94404
at 10:00 a.m. Pacific time, on August 26, 1998, to consider the following
matters:
1. To elect a Board of Trustees of the Fund.
2. To ratify the selection of Coopers & Lybrand L.L.P., as
independent auditors for the Fund for the current fiscal year.
3. To eliminate the Fund's fundamental investment restriction
regarding the purchase and sale of oil, gas, mineral and/or real
estate interests.
4 . To eliminate the Fund's fundamental investment restriction
regarding short sales of securities.
5. To amend the Fund's fundamental investment restriction regarding
lending.
6. To consider any other business (none being known to the Board as
of the date of this Notice) as may properly come before the
Meeting.
By Order of the Board of Trustees,
DEBORAH R. GATZEK
Secretary
San Mateo, California
Dated: July 9, 1998
- -------------------------------------------------------------------------------
PLEASE RETURN YOUR PROXY CARD PROMPTLY
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
- -------------------------------------------------------------------------------
THE PROXY STATEMENT, WHICH BEGINS BELOW, IS DESIGNED TO FURNISH SHAREHOLDERS
WITH THE INFORMATION NECESSARY TO VOTE ON THE MATTERS COMING BEFORE THE
MEETING. IF YOU HAVE ANY QUESTIONS, PLEASE CALL US AT OUR TOLL FREE NUMBER:
1-800/DIAL BEN(R).
FRANKLIN UNIVERSAL TRUST
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 26, 1998
PROPOSAL 1: TO ELECT A BOARD OF TRUSTEES
THE ROLE OF TRUSTEES IS TO PROVIDE GENERAL OVERSIGHT OF THE FUND'S BUSINESS
AND TO ENSURE THAT THE FUND IS OPERATED FOR THE BENEFIT OF SHAREHOLDERS. THE
TRUSTEES MEET MONTHLY AND REVIEW THE FUND'S INVESTMENT PERFORMANCE. THE
TRUSTEES ALSO OVERSEE THE SERVICES FURNISHED TO THE FUND BY ITS INVESTMENT
ADVISER AND VARIOUS OTHER SERVICE PROVIDERS. THE BOARD OF TRUSTEES (THE
"BOARD") RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH NOMINEE AS A
TRUSTEE.
The following persons, who make up the current Board have been nominated to
be Trustees of the Fund, to hold office until the next Annual Meeting of
Shareholders, and until their successors are elected and qualified to serve:
Frank H. Abbott, III, Harris J. Ashton, S. Joseph Fortunato, Edward B.
Jamieson, Charles B. Johnson, Rupert H. Johnson, Jr., Frank W.T. LaHaye, and
Gordon S. Macklin.
All of the nominees have consented to serve as trustees if elected. However,
if any nominee is not available for election at the time of the Meeting, the
person(s) named in the proxy may vote for any other person in their
discretion, or they may choose not to elect or vote to elect anyone to fill
the position. Provided that a quorum is present, the eight nominees receiving
the greatest number of votes will be elected. Trustees who are "interested
persons" of the Fund, as defined in the Investment Company Act of 1940, as
amended, (the "1940 Act") are designated by an asterisk(*).
SHARES BENEFICIALLY
OWNED IN THE
FUND FRANKLIN TEMPLETON
SHARES GROUP OF FUNDS
NAME, AGE, ADDRESS, LENGTH BENEFICIALLY (INCLUDING THE FUND)
AND FIVE-YEAR OF SERVICE OWNED AS OF JUNE AS OF JUNE 16, 1998
BUSINESS EXPERIENCE 16, 1998
- --------------------------------------------------------------------------------
Frank H. Abbott, III (77) Trustee None 613,974
1045 Sansome Street since
San Francisco, CA 94111 June 1988
Trustee
President and Director, Abbott Corporation (an investment company); director
or trustee, as the case may be, of 28 of the investment companies in the
Franklin Templeton Group of Funds; and FORMERLY, Director, MotherLode Gold
Mines Consolidated (gold mining) and Vacu-Dry Co. (food processing).
Harris J. Ashton (66) Trustee None 861,472
191 Clapboard Ridge Road since
Greenwich, CT 06830 June 1988
Trustee
Director, RBC Holdings, Inc. (a bank holding company) and Bar-S Foods (a meat
packing company); director or trustee, as the case may be, of 50 of the
investment companies in the Franklin Templeton Group of Funds; and FORMERLY,
President, Chief Executive Officer and Chairman of the Board, General Host
Corporation (nursery and craft centers).
S. Joseph Fortunato (65) Trustee 2,365 359,946
Park Avenue at Morris County since
P.O. Box 1945 March 1989
Morristown, NJ 07962-1945
Trustee
Member of the law firm of Pitney, Hardin, Kipp & Szuch; director or trustee,
as the case may be, of 52 of the investment companies in the Franklin
Templeton Group of Funds; and FORMERLY, Director, General Host Corporation
(nursery and craft centers).
*Edward B. Jamieson (49) Trustee None 181,521
777 Mariners Island Blvd. since
San Mateo, CA 94404 September 1993
President and Trustee
Senior Vice President and Portfolio Manager, Franklin Advisers, Inc.; and
officer and trustee of five of the investment companies in the Franklin
Templeton Group of Funds.
SHARES BENEFICIALLY
OWNED IN THE
FUND FRANKLIN TEMPLETON
SHARES GROUP OF FUNDS
NAME, AGE, ADDRESS, LENGTH BENEFICIALLY (INCLUDING THE FUND)
AND FIVE-YEAR OF SERVICE OWNED AS OF JUNE AS OF JUNE 16, 1998
BUSINESS EXPERIENCE 16, 1998
- --------------------------------------------------------------------------------
*Charles B. Johnson (65) Trustee 1,000
777 Mariners Island Blvd. since
San Mateo, CA 94404 June 1988
Chairman of the Board and Trustee
President, Chief Executive Officer and Director, Franklin Resources, Inc.;
Chairman of the Board and Director, Franklin Advisers, Inc., Franklin
Advisory Services, Inc., Franklin Investment Advisory Services, Inc. and
Franklin Templeton Distributors, Inc.; Director, Franklin/Templeton Investor
Services, Inc. and Franklin Templeton Services, Inc.; officer and/or director
or trustee, as the case may be, of most of the other subsidiaries of Franklin
Resources, Inc. and of 51 of the investment companies in the Franklin
Templeton Group of Funds; and FORMERLY, Director, General Host Corporation
(nursery and craft centers).
*Rupert H. Johnson, Jr. (57) Trustee 1,000
777 Mariners Island Blvd. since
San Mateo, CA 94404 June 1988
Senior Vice President and Trustee
Executive Vice President and Director, Franklin Resources, Inc. and Franklin
Templeton Distributors, Inc.; President and Director, Franklin Advisers,
Inc.; Senior Vice President and Director, Franklin Advisory Services, Inc.
and Franklin Investment Advisory Services, Inc.; Director, Franklin/Templeton
Investor Services, Inc.; and officer and/or director or trustee, as the case
may be, of most of the other subsidiaries of Franklin Resources, Inc. and of
54 of the investment companies in the Franklin Templeton Group of Funds.
SHARES BENEFICIALLY
OWNED IN THE
FUND FRANKLIN TEMPLETON
SHARES GROUP OF FUNDS
NAME, AGE, ADDRESS, LENGTH BENEFICIALLY (INCLUDING THE FUND)
AND FIVE-YEAR OF SERVICE OWNED AS OF JUNE AS OF JUNE 16, 1998
BUSINESS EXPERIENCE 16, 1998
- --------------------------------------------------------------------------------
Frank W.T. LaHaye (68) Trustee 2,250 745,011
20833 Stevens Creek Blvd. since
Suite 102 June 1988
Cupertino, CA 95014
Trustee
General Partner, Miller & LaHaye, which is the General Partner of Peregrine
Ventures II (venture capital firm); Chairman of the Board and Director,
Quarterdeck Corporation (software firm); Director, Digital Transmission
Systems, Inc. (wireless communications); director or trustee, as the case may
be, of 28 of the investment companies in the Franklin Templeton Group of
Funds; and FORMERLY, Director, Fischer Imaging Corporation (medical imaging
systems) and General Partner, Peregrine Associates, which was the General
Partner of Peregrine Ventures (venture capital firm).
Gordon S. Macklin (70) Trustee 3,000 458,864
8212 Burning Tree Road since
Bethesda, MD 20817 January 1993
Trustee
Chairman, White River Corporation (financial services); Director, Fund
American Enterprises Holdings, Inc., MCI Communications Corporation, CCC
Information Services Group, Inc. (information services), MedImmune, Inc.
(biotechnology), Spacehab, Inc. (aerospace services) and Real 3D (software);
director or trustee, as the case may be, of 50 of the investment companies in
the Franklin Templeton Group of Funds; and FORMERLY, Chairman, Hambrecht and
Quist Group, Director, H & Q Healthcare Investors and Lockheed Martin
Corporation, and President, National Association of Securities Dealers, Inc.
THE TRUSTEES WHO ARE NOT AFFILIATED WITH THE FUND'S INVESTMENT MANAGER ARE
PAID A FIXED FEE FROM THE FUND FOR SERVING ON THE BOARD. EACH OF THE TRUSTEES
ALSO SERVE AS TRUSTEES OR DIRECTORS OF OTHER INVESTMENT COMPANIES IN THE
FRANKLIN TEMPLETON GROUP OF FUNDS. THERE IS ONE COMMITTEE OF THE BOARD--THE
AUDIT COMMITTEE--WHICH FURNISHES THE BOARD WITH RECOMMENDATIONS REGARDING THE
SELECTION OF AUDITORS.
Trustees not affiliated with the investment manager ("nonaffiliated
trustees") are currently paid fees of $2,400 per year plus $100 per meeting
attended and are reimbursed for expenses incurred in connection with
attending such meetings. Each fund in the Franklin Templeton Group of Funds
for which they serve as director or trustee pays a share of these expenses.
As indicated above, each of the Fund's nonaffiliated trustees also serve as
directors or trustees of certain other investment companies in the Franklin
Templeton Group of Funds. The trustees and the Fund's investment manager
believe that having the same individuals serving on the boards of many of the
funds in the Franklin Templeton Group of Funds enhances the ability of each
fund to obtain, at a relatively modest cost to each separate fund, the
services of high caliber, experienced and knowledgeable independent trustees
who can more effectively oversee the management of the funds. They may
receive fees for their services from other funds, as well. Many meetings of
such other funds are on different days and times. The following table
indicates the total fees paid to nonaffiliated trustees by the Fund AND by
other funds in the Franklin Templeton Group of Funds.
TOTAL FEES NUMBER OF BOARDS
RECEIVED FROM THE IN THE FRANKLIN
TOTAL FEES FRANKLIN TEMPLETON TEMPLETON GROUP
RECEIVED FROM GROUP OF OF FUNDS ON WHICH
NAME THE FUND** FUNDS*** EACH SERVES****
- --------------------------------------------------------------------------------
Frank H. Abbott, III $3,500 $165,937 28
Harris J. Ashton 3,500 344,642 52
S. Joseph Fortunato 3,500 361,562 54
David W. Garbellano* 3,300 91,317 N/A
Frank W.T. LaHaye 3,400 141,433 28
Gordon S. Macklin 3,500 337,292 52
*Deceased September 27, 1997
**For the fiscal year ended August 31, 1997.
***For the calendar year ended December 31, 1997.
****We base the number of boards on the number of registered investment
companies in the Franklin Templeton Group of Funds. This number does not
include the total number of series or funds within each investment company
for which the Board members are responsible. The Franklin Templeton Group of
Funds currently includes 56 registered investment companies, with
approximately 169 U.S. based funds or series.
No officer or trustee received any other compensation directly from the Fund.
Certain officers or trustees who are shareholders of Franklin Resources, Inc.
("Resources") may be deemed to receive indirect remuneration by virtue of
their participation in the fees received by subsidiaries of Resources.
During the last fiscal year, there were 11 meetings of the Board. All of the
Trustees attended at least 75% of such meetings. In addition, there were a
total of XXX meetings of other fund boards of the Franklin Templeton Group at
different dates and times. Messrs. Abbott and LaHaye compose the Audit
Committee of the Board with the function of making recommendations to the
full Board with respect to the selection of auditors. The Audit Committee did
not meet during the fiscal year ended August 31, 1997.
THE EXECUTIVE OFFICERS OF THE FUND OTHER THAN THOSE LISTED ABOVE ARE:
NAME, AGE, ADDRESS, AND FIVE-YEAR BUSINESS EXPERIENCE
Harmon E. Burns (53)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Executive Vice President and Director, Franklin Resources, Inc.; Executive
Vice President and Director, Franklin Templeton Distributors, Inc. and
Franklin Templeton Services, Inc.; Executive Vice President, Franklin
Advisers, Inc.; Director, Franklin/Templeton Investor Services, Inc.; and
officer and/or director or trustee, as the case may be, of most of the other
subsidiaries of Franklin Resources, Inc. and of 54 of the investment
companies in the Franklin Templeton Group of Funds.
Martin L. Flanagan (38)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President and Chief Financial Officer
Senior Vice President and Chief Financial Officer, Franklin Resources, Inc.;
Executive Vice President and Director, Templeton Worldwide, Inc.; Executive
Vice President, Chief Operating Officer and Director, Templeton Investment
Counsel, Inc.; Senior Vice President and Treasurer, Franklin Advisers, Inc.;
Treasurer, Franklin Advisory Services, Inc.; Treasurer and Chief Financial
Officer, Franklin Investment Advisory Services, Inc.; President, Franklin
Templeton Services, Inc.; Senior Vice President, Franklin/Templeton Investor
Services, Inc.; and officer and/or director or trustee, as the case may be,
of 54 of the investment companies in the Franklin Templeton Group of Funds.
Deborah R. Gatzek (49)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President and Secretary
Senior Vice President and General Counsel, Franklin Resources, Inc.; Senior
Vice President, Franklin Templeton Services, Inc. and Franklin Templeton
Distributors, Inc.; Vice President, Franklin Advisers, Inc. and Franklin
Advisory Services, Inc.; Vice President, Chief Legal Officer and Chief
Operating Officer, Franklin Investment Advisory Services, Inc.; and officer
of 54 of the investment companies in the Franklin Templeton Group of Funds.
Diomedes Loo-Tam (59)
777 Mariners Island Blvd.
San Mateo, CA 94404
Treasurer and Principal Accounting Officer
Senior Vice President, Franklin Templeton Services, Inc.; and officer of 33
of the investment companies in the Franklin Templeton Group of Funds.
Edward V. McVey (61)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Senior Vice President and National Sales Manager, Franklin Templeton
Distributors, Inc.; and officer of 29 of the investment companies in the
Franklin Templeton Group of Funds.
R. Martin Wiskemann (71)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Senior Vice President, Portfolio Manager and Director, Franklin Advisers,
Inc.; Senior Vice President, Franklin Management, Inc.; Vice President and
Director, ILA Financial Services, Inc.; and officer and/or director or
trustee, as the case may be, of 16 of the investment companies in the
Franklin Templeton Group of Funds.
All officers serve at the pleasure of the Board.
On June 16, 1998, the trustees and officers as a group beneficially owned
10,967 Shares or less than 1% of the Fund's outstanding Shares. Certain
trustees also own shares in various other funds in the Franklin Templeton
Group of Funds. Charles B. Johnson and Rupert H. Johnson, Jr., are brothers.
Shareholders are entitled to one vote per Share. All voting rights are
non-cumulative, which means that the holders of more than 50% of the Shares
voting for the election of Trustees can elect 100% of such Trustees if they
choose to do so, and in such event, the holders of the remaining Shares so
voting will not be able to elect any Trustees.
PROPOSAL 2: TO RATIFY OR REJECT THE SELECTION OF INDEPENDENT AUDITORS
COOPERS & LYBRAND L.L.P. HAS SERVED AS THE INDEPENDENT AUDITORS FOR THE FUND
SINCE ITS INCEPTION IN 1988. THE BOARD RECOMMENDS THAT YOU VOTE IN FAVOR OF
THE SELECTION OF COOPERS & LYBRAND L.L.P. AS AUDITORS FOR THE FUND FOR THE
FISCAL YEAR ENDING AUGUST 31, 1998.
The Board is requesting ratification of its selection of Coopers & Lybrand
L.L.P., Certified Public Accountants, as independent auditors to audit the
books and accounts of the Fund for the fiscal year ending August 31, 1998.
The selection of auditors was approved at a meeting of the Board on September
16, 1997, and included the favorable vote of a majority of the trustees who
are not interested persons of the Fund. A representative of Coopers & Lybrand
L.L.P. is not expected to be present at the Meeting. During the fiscal year
ended August 31, 1997, the auditing services of Coopers & Lybrand L.L.P.
consisted of the rendering of an opinion on the financial statements of the
Fund.
The favorable vote of a majority of the Shares represented at the Meeting, in
person or by proxy, is required to ratify the selection of auditors.
PROPOSAL 3: TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
REGARDING THE PURCHASE AND SALE OF OIL, GAS, MINERAL AND/OR REAL ESTATE
INTERESTS
PROPOSAL 4: TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
REGARDING SHORT SALES OF SECURITIES
A CHANGE IN A FUNDAMENTAL INVESTMENT RESTRICTION OF THE FUND REQUIRES
SHAREHOLDER APPROVAL. THE ELIMINATION OF THE FUNDAMENTAL INVESTMENT
RESTRICTIONS AGAINST INVESTING IN OIL, GAS, MINERAL AND/OR REAL ESTATE
INTERESTS AND THE PROHIBITION AGAINST ENGAGING IN SHORT SALES OF SECURITIES
WILL PROVIDE ADDED FLEXIBILITY FOR THE FUND IN SEEKING TO ACHIEVE ITS
INVESTMENT OBJECTIVES. THE BOARD RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
ELIMINATION OF THESE INVESTMENT RESTRICTIONS.
Proposal 4 would allow the Fund to engage in short sales of securities as
part of its investment strategy rather than the current restriction limiting
such use solely in connection with the clearance and settlement of securities
or futures and options transactions. Depending on the circumstances, short
sales may be an attractive investment alternative to purchasing securities.
The Board believes that the ability to short securities may benefit the Fund
as part of a hedging strategy and where other available transactions may not
be financially attractive due to transaction costs and market illiquidity.
The existing fundamental investment restrictions identified by Proposals 3
and 4 do not permit the Fund to directly invest in oil, gas, mineral and/or
real estate interests and engage in short sales. These restrictions on
certain types of investments and transactions that the Fund would otherwise
be permitted to engage in are based on the state regulation of open-end
investment companies or mutual funds. Although not subject to state
regulation because the Fund is a closed-end investment company listed and
traded on the New York Stock Exchange, Inc., the Fund for purposes of
conformity initially adopted these state investment restrictions in 1988. In
particular, these fundamental investment restrictions found in the Fund's
current prospectus state that the Fund may not:
(1) Purchase or sell interests in oil, gas or mineral exploration or
development programs, or real estate or any interest therein, except
that the Fund may invest in securities issued by companies (including
partnerships and real estate investment funds) that invest in such
interests or are engaged in such activities and in mortgage related
securities.
(2) Purchase securities on margin, or MAKE SHORT SALES OF SECURITIES,
except for the use of short-term credit necessary for the clearance of
purchases and sales of portfolio securities and except in connection
with options and futures transactions. (the underlined language would
be eliminated as an investment restriction under this Proposal 4)
The Board in requesting that shareholders approve the elimination of these
investment restrictions seeks to conform the Fund's investment restrictions
with the 1940 Act and The National Securities Markets Improvement Act of 1996
(the "1996 Act") which was signed into law on October 11, 1996. One of the
significant aspects of the 1996 Act is that it provides for exclusive federal
regulation of registered investment companies by exempting from state review
and registration such securities offerings.
In light of the foregoing legislative changes and for increased flexibility
to adapt to changing market and economic conditions, the Board believes it
would be appropriate to eliminate the Fund's fundamental investment
restrictions as described in these Proposals 3 and 4. By eliminating these
unnecessary restrictions, the Fund would be provided with additional
flexibility in the pursuit of its investment objectives, and would also
enhance and simplify its prospectus disclosure.
The 1940 Act does not prohibit the Fund from engaging in the transactions
currently prohibited, however, the Fund would be required in connection with
short sale transactions to comply with the requirement of section 18(a)(1) of
the 1940 Act. The Fund will limit its use of short sales to 33 1/3% of the
Fund's total assets after giving effect to the amount of the transaction.
Under the requirements of section 18 of the 1940 Act, the Fund, immediately
after any short sale transaction, is required to have asset coverage of at
least 300%. Asset coverage is defined as the ratio which the value of the
total assets of the Fund, less all liabilities and indebtedness not
represented by senior securities (as defined in the 1940 Act), bears to the
aggregate amount of debt.
THE ELIMINATION OF THESE FUNDAMENTAL INVESTMENT RESTRICTIONS WOULD HAVE NO
EFFECT ON THE CURRENT OPERATION OF THE FUND.
PROPOSAL 5: TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION REGARDING
LENDING.
A CHANGE IN A FUNDAMENTAL INVESTMENT RESTRICTION OF THE FUND REQUIRES
SHAREHOLDER APPROVAL. THE ELIMINATION OF THE FUNDAMENTAL INVESTMENT
RESTRICTION AGAINST OUTRIGHT LENDING RATHER THAN THROUGH THE CURRENT
EXCEPTIONS AVAILABLE TO THE FUND FOR LENDING PORTFOLIO SECURITIES, PURCHASING
DEBT SECURITIES OR ENGAGING IN REPURCHASE AGREEMENT TRANSACTIONS WILL PROVIDE
ADDED FLEXIBILITY IN SEEKING ATTRACTIVE ALTERNATIVE INVESTMENTS TO ACHIEVE
THE FUND'S INVESTMENT OBJECTIVES. THE BOARD RECOMMENDS THAT YOU VOTE IN
FAVOR OF THE AMENDMENT OF THIS INVESTMENT RESTRICTION.
The Board is also requesting that shareholders approve an amendment to the
Fund's fundamental investment restriction regarding lending in order to
permit the Fund to directly invest in corporate loans ("Corporate Loans").
The Board believes it would be appropriate and beneficial for the Fund to
have the ability to invest in Corporate Loans to take advantage of
significant investment opportunities that may exist from time to time in
commercial lending markets.
Investment in a Corporate Loan is structured so that the Fund would be one of
a syndicate of lenders typically led by a large banking organization, which
extends substantial credit directly to certain operating companies (the
"corporate borrower"). In a Corporate Loan, the Fund would become a direct
creditor of the corporate borrower. In many cases, such direct investments
are attractive because they typically are made at par, and unlike loan
participations and assignments, do not impose a fee. In addition, to the
extent that attractive investment opportunities were presented to the Fund
through investment in participations in Corporate Loans, the proposed
amendment to the investment restriction would permit the Fund to take
advantage of such opportunities.
The Fund's current fundamental investment restriction as described in the
prospectus prohibits making loans to other persons except through (1) the
lending of its portfolio securities, (2) through the purchase of debt
securities in accordance with its investment objective and policies, and (3)
to the extent the entry into a repurchase agreement is deemed to be a loan.
The Board believes that the ability to directly invest in Corporate Loans
will enhance the Fund's investment flexibility in pursuing its investment
objectives without increasing the Fund's overall risk. Accordingly, the
Board is proposing that the following revision to the current fundamental
investment restriction be adopted by shareholders:
The Fund may not make loans to other persons except through (1)
the lending of its portfolio securities, (2) through the purchase
of debt securities, LOAN PARTICIPATIONS AND/OR ENGAGING IN DIRECT
CORPORATE LOANS in accordance with its investment objective and
policies, and (3) to the extent the entry into a repurchase
agreement is deemed to be a loan. (The underlined portion shows
the proposed revision)
OTHER INFORMATION
The SEC requires that the following information be provided to the Funds
shareholders even though not directly related to the proposals you are being
asked to consider.
FUND INFORMATION
As of June 25, 1998, the Fund had [ ] Shares outstanding, each Share
being entitled to one vote.
BENEFICIAL OWNERS
Occasionally, the number of Shares of the Fund held in the "street name"
accounts of various securities dealers for the benefit of their clients may
exceed 5% of the total Shares outstanding. To the Fund's knowledge, no person
beneficially owns more than 5% of the Fund's outstanding Shares.
THE MANAGER
Franklin Advisers, Inc. ("Advisers"), 777 Mariners Island Blvd., San Mateo,
California 94404 serves as the Fund's investment manager. Advisers is a
wholly-owned subsidiary of Resources, a publicly owned holding company.
Resources' principal shareholders are Charles B. Johnson and Rupert H.
Johnson, Jr., who own approximately ___% and ___%, respectively, of
Resources' outstanding shares. Resources is engaged in various aspects of the
financial services industry through its various subsidiaries. Advisers and
its affiliates act as investment manager or administrator to 56 U.S.
registered investment companies (169 separate series) with aggregate assets
of over $[ ] billion.]
THE ADMINISTRATOR
Under an agreement with Advisers, Franklin Templeton Services, Inc. ("FT
Services"), whose principal address is also 777 Mariners Island Blvd., San
Mateo, CA 94404, provides certain administrative services and facilities for
the Fund. FT Services is a wholly owned subsidiary of Resources.
REQUIRED VOTE
Under Proposal 1, provided that a quorum is present at the Annual Meeting,
the eight nominees receiving the greatest number of votes will be elected.
All voting rights are non-cumulative, which means that the holders of more
than 50% of the Shares voting for the election of trustees can elect 100% of
such 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 Trustees. Approval of
Proposal 2 requires the affirmative vote of a majority of all votes cast at
the Annual Meeting.
Approval of Proposals 3,4 and 5 requires the affirmative vote of a majority
of the outstanding shares of the Fund. As defined in the 1940 Act, the vote
of a majority of the outstanding shares means the vote of (1) 67% or more of
the Fund's outstanding shares present at a meeting, if the holders of more
than 50% of the outstanding shares of the Fund are present or represented by
proxy; or (2) more than 50% of the Fund's outstanding shares, whichever is
less.
You may revoke your previously granted proxy at any time before it is
exercised (1) by delivering a written notice to the Fund expressly revoking
your proxy, (2) by signing and forwarding to the Fund a later-dated proxy, or
(3) by attending the Meeting and casting your votes in person. The cost of
soliciting these proxies will be borne by the Fund. In addition to
solicitations by mail, some of the officers and employees of the Fund, the
Adviser and its affiliates, without extra compensation, may conduct
additional solicitations by telephone, telegraph and personal interviews. The
Fund has engaged Shareholder Communications Corporation to solicit proxies
from brokers, banks, other institutional holders and individual shareholders
for an approximate fee, including out-of pocket expenses, ranging between $[
] and $[ ].
Abstentions and broker "non-votes" will not be counted for or against the
Proposals but will be counted for purposes of determining whether a quorum is
present. Abstentions and broker non-votes will be counted as votes present
for purposes of determining a "majority of the outstanding voting securities"
present at the Meeting and will therefore have the effect of counting against
Proposals 3,4 and 5. Brokers who hold shares as record owners for beneficial
owners may have the authority under the rules of various stock exchanges to
vote those shares with respect to the Proposals when they have not received
instructions from beneficial owners.
SHAREHOLDER PROPOSALS
The Fund anticipates that its next annual meeting will be held in April,
1999. Any shareholder intending to present any proposal for consideration at
the Fund's next annual meeting must, in addition to meeting other applicable
requirements, mail such proposal to the Fund so that it is received at the
Fund's executive offices not less than 120 days in advance of February 8.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
The Annual Report to Shareholders of the Fund, including financial statements
of the Fund for the fiscal year ended August 31, 1997, has previously been
sent to all shareholders. Upon request, shareholders may obtain without
charge a copy of the Annual Report and Semi-Annual Report by writing the Fund
at the address above or calling the Fund at 1-800/DIAL BEN.
Other Matters
The Board does not intend to bring any matters before the Meeting other than
Proposals 1, 2, 3, 4 and 5 and is not aware of any other matters to be
brought before the Meeting by others. If any other matters do properly come
before the Meeting, the persons named in the enclosed proxy will use their
best judgment in voting on such matters.
In the event that sufficient votes in favor of the Proposals set forth in the
Notice of Annual Meeting of Shareholders are not received by the date of the
Meeting, the persons named in the enclosed proxy may propose one or more
adjournments of the Meeting for a period or periods of not more than 60 days
in the aggregate. This will permit further solicitation of proxies, even
though a quorum is present. Any adjournment will require the affirmative vote
of a majority of the votes cast on the questions, in person or by proxy, at
the session of the Meeting to be adjourned. The costs of any such additional
solicitation and of any adjourned session are paid by the Fund.
Respectfully Submitted,
DEBORAH R. GATZEK
Secretary
Dated: July 9, 1998
San Mateo, California
SHAREHOLDERS WHO ARE UNABLE TO ATTEND THE MEETING IN PERSON ARE REQUESTED TO
FILL IN, DATE AND SIGN THE PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
PREPAID ENVELOPE.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, GIVE
YOUR FULL TITLE AS SUCH. WHERE SHARES ARE HELD JOINTLY, ALL SIGNATURES ARE
REQUIRED.
FRANKLIN UNIVERSAL TRUST PROXY
ANNUAL MEETING OF SHAREHOLDERS - AUGUST 26, 1998
The undersigned hereby revokes all previous proxies for his shares and
appoints Harmon E. Burns, Rupert H. Johnson, Jr., Deborah R. Gatzek and Larry
L. Greene, and each of them, proxies of the undersigned with full power of
substitution to vote all shares of Franklin Universal Trust (the "Fund")
which the undersigned is entitled to vote at the Fund's Annual Meeting to be
held at 777 Mariners Island Blvd., San Mateo, California at 10:00 a.m.
Pacific time on the 26th day of August, 1998, including any adjournments
thereof, upon such business as may properly be brought before the Meeting.
No. 1 Election of Trustees
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary (to vote for all nominees listed
below) below)
NOTE: To withhold authority to vote for any individual nominee, strike a line
through the nominee's name in the list below.
Frank H. Abbott, III, Harris J. Ashton, S. Joseph Fortunato, Edward B. Jamieson,
Charles B. Johnson, Rupert H. Johnson, Jr., Frank W.T. LaHaye, Gordon S. Macklin
FOR AGAINST ABSTAIN
No. 2 Ratification of the selection of Coopers &
Lybrand L.L.P., Certified Public Accountants,
as the independent auditors for the Fund for
the fiscal year ending August 31, 1998.
No. 3 To eliminate the fundamental investment
restriction regarding the purchase and sale of oil,
gas, mineral and/or real estate interests.
No. 4 To eliminate the fundamental investment
restriction regarding short sales of securities.
No. 5 To amend the fundamental investment restriction
regarding lending.
GRANT WITHHOLD
No.6 To grant the proxyholders the authority
to vote upon any other business that may
legally come 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 ALL PROPOSALS. IF ANY OTHER MATTERS
PROPERLY COME BEFORE THE MEETING ABOUT WHICH THE
PROXY HOLDERS WERE NOT AWARE PRIOR TO THE TIME OF
THE SOLICITATION, AUTHORIZATION IS GIVEN THE
PROXY HOLDERS TO VOTE IN ACCORDANCE WITH THE VIEWS
OF MANAGEMENT THEREON. THE MANAGEMENT IS NOT AWARE
OF ANY SUCH MATTERS.
Dated__________________
_______________________
Signature
_______________________
Signature
Note: please sign
exactly as your name
appears on this proxy.
If signing for estates,
trusts, or corporations,
title or capacity should
be stated. If shares are
held jointly, each holder
must sign.
