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:
[ ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[X] 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 Principal Maturity Trust
(Name of Registrant as Specified In Its Charter)
Franklin Principal Maturity 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:
FRANKLIN TEMPLETON
777 MARINERS ISLAND BLVD.
P.O. BOX 7777
SAN MATEO, CA 94403-7777
FRANKLIN PRINCIPAL MATURITY TRUST
DEAR FRANKLIN PRINCIPAL MATURITY TRUST SHAREHOLDER:
You previously received an extensive package of information regarding a matter
of CRITICAL IMPORTANCE to your fund and to you. YOU ARE BEING ASKED TO VOTE ON A
PROPOSAL WHOSE EFFECT WILL BE TO HAVE THE SHAREHOLDERS OF FRANKLIN PRINCIPAL
MATURITY TRUST (THE FUND) EXCHANGE THEIR SHARES FOR SHARES OF THE FRANKLIN
INCOME FUND - AN OPEN-END FUND WHOSE SHARES ARE REDEEMABLE AT THEIR NET ASSET
VALUE. AS INDICATED IN THE PROXY STATEMENT, THE FUND'S BOARD OF TRUSTEES IS
RECOMMENDING A "YES" VOTE ON THIS MATTER.
HERE IS A SUMMARY OF THE REASONS WHY THE BOARD OF TRUSTEES IS IN FAVOR OF THIS
PROPOSAL:
o The FUND'S goal was to return $10.00 per share to investors in 2001, but
the FUND has met this goal early - on April 30, 1998, the FUND'S net asset
value was $10.41. The FUND currently trades on the NYSE, at a "discount,"
that is, a market price which is BELOW the current net asset value ($9.88
on April 30, 1998).*
o In order to meet the goals established for the FUND, from now through 2001,
its investment opportunities, and thus its return to shareholders, may be
more limited than those available to the Franklin Income Fund. The goals
and strategies of the Franklin Income Fund, to maximize income while
retaining the prospects for capital appreciation, are described more fully
in the proxy statement and accompanying prospectus.
o IF THE REORGANIZATION DESCRIBED IN THE PROXY STATEMENT IS APPROVED, FUND
SHAREHOLDERS WILL RECEIVE SHARES OF THE FRANKLIN INCOME FUND IN EXCHANGE
FOR THEIR FUND SHARES. THE EXCHANGE RATE WILL BE BASED UPON THE NET ASSET
VALUES OF THE TWO FUNDS ON THE DAY THE REORGANIZATION TAKES EFFECT. BECAUSE
THE FRANKLIN INCOME FUND IS AN OPEN-END FUND, THESE SHARES WILL BE
REDEEMABLE AT NET ASSET VALUE. THE REORGANIZATION WILL BE TAX FREE TO THE
FUND AND ITS SHAREHOLDERS. EXCHANGE PRIVILEGES WITH MOST OTHER FRANKLIN,
TEMPLETON AND MUTUAL SERIES FUNDS ARE AVAILABLE TO SHAREHOLDERS OF THE
FRANKLIN INCOME FUND.
Please refer to the full proxy statement for a complete discussion of the risks
and benefits of this proposal.
If you have any questions about this transaction, please feel free to call
800/DIAL BEN, or your investment representative.
ENCLOSED FOR YOUR CONVENIENCE IS A SECOND PROXY CARD AND ENVELOPE. IF YOU HAVE
NOT YET RETURNED YOUR PROXY, PLEASE SIGN THIS CARD AND RETURN IT IN THE ENVELOPE
PROVIDED. BE SURE TO REVIEW THE PROXY MATERIALS PREVIOUSLY MAILED TO YOU.
IF YOU PREFER, YOU CAN VOTE BY PHONE BY CALLING 800-733-8481 EXT. 480.
REPRESENTATIVES WILL BE AVAILABLE BETWEEN THE HOURS OF 9:00 A.M. AND 11:00 P.M.
EASTERN TIME. YOU MAY ALSO FAX THE PROXY CARD TO US AT 800-733-1885.
Sincerely,
Charles B. Johnson
Chairman of the Board
*As noted in the proxy materials, there can be no guarantee that the FUND'S net
asset value on the day of the reorganization will be above $10.00 per share.
PROXY
FRANKLIN PRINCIPAL MATURITY TRUST
SPECIAL MEETING OF SHAREHOLDERS JUNE 5, 1998
The undersigned hereby revokes all previous proxies for his shares and
appoints Rupert H. Johnson, Harmon E. Burns, 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 Principal Maturity Trust (the
"Fund") which the undersigned is entitled to vote at the Fund's Special Meeting
to be held at 777 Mariners Island Blvd., San Mateo, California at 2:00 p.m.
Pacific time, on the 5th day of June, 1998, including any adjournment thereof,
upon such business as may be brought before the Special Meeting.
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
THE PROPOSAL REGARDING THE REORGANIZATION OF THE FUND PURSUANT TO THE AGREEMENT
AND PLAN OF REORGANIZATION WITH FRANKLIN CUSTODIAN FUNDS, INC. ("CUSTODIAN
FUNDS") AND WITHIN THE DISCRETION OF THE PROXYHOLDERS AS TO ANY OTHER MATTERS
THAT MAY LEGALLY COME BFORE THE MEETING.
SEE REVERSE SIDE SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
X Please mark votes as in this example.
FOR AGAINST ABSTAIN
1 To approve an Agreement and Plan of
Reorganization between the Fund and Custodian
Funds on behalf of the Income Series that
provides for the acquisition of substantially
all of the assets of the Fund in exchange for
Class I shares of the Income Series, the
distribution of such shares to the
shareholders of the Fund, and the dissolution
of the Fund.
GRANT WITHHOLD
2 To grant the proxy holders the authority to
vote in their discretion upon any other
business that may legally come before the
meeting.
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MARK HERE FOR ADDRESS CHANGE AND NOTE AT
LEFT
PLEASE SIGN AND PROMPTLY RETURN IN THE
ACCOMPANYING ENVELOPE. NO POSTAGE
REQUIRED IF MAILED IN THE U.S.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME
APPEARS ON THE PROXY. IF SIGNING FOR
ESTATES, TRUSTS OR CORPORATIONS, TITLE OR
CAPACITY SHOULD BE STATED. IF SHARES ARE
HELD JOINTLY, EACH HOLDER MUST SIGN.
Signature: _____________ Date:______ Signature: _______________ Date: ________
