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As filed with the Securities and Exchange Commission on March 14, 1996
Registration Statement No. 33-64131
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
AMENDMENT NO. 5
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FRANKLIN SELECT REAL ESTATE INCOME FUND
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
California 6512 94-3095938
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
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<TABLE>
<S> <C>
777 Mariners Island Boulevard DAVID P. GOSS, ESQ.
San Mateo, California 94403-7777 Franklin Select Real Estate Income Fund
(415) 312-3000 777 Mariners Island Boulevard
(Address, including zip code, and telephone number, San Mateo, California 94403-7777
including area code, of agent for service) (415) 312-3000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
</TABLE>
Copies to:
DAVID J. ROMANSKI, ESQ.
Steinhart & Falconer
333 Market Street, Suite 3200
San Francisco, California 94105
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
in connection with the formation of a holding company, check the following box.
/ /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. /x/
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to be Offering Price Aggregate Offering Registration
Securities to be Registered Registered Per Share(1) Price(1) Fee(2)
------------------------------- ------------ ---------------- ------------------ ------------
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Shares of Series A Common Stock 8,800,000 (2) $42,195,652 $14,550
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(1) Estimated solely for purposes of calculating the registration
fee in accordance with Rule 457(f) of the Securities Act of
1933 on the basis of the market value of the securities to be
exchanged.
(2) This Registration Statement relates to the proposed merger of
Franklin Real Estate Income Fund ("FREIF") and/or Franklin
Advantage Real Estate Income Fund ("Advantage") into Franklin
Select Real Estate Income Fund. At the merger, there will be
a maximum of 3,999,514 shares of Series A Common Stock of
FREIF outstanding, and a maximum of 3,013,713 shares of Series
A Common Stock of Advantage outstanding. The average of the
high and low prices of such securities reported on the
American Stock Exchange on November 7, 1995 were $5.44 and
$5.31, respectively.
The Registrant hereby amends this Registration Statement on such date
or 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 the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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FRANKLIN SELECT REAL ESTATE INCOME FUND
Cross Reference Sheet Showing Location in Prospectus
of Information Required by Form S-4
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Registration Statement Item Location in Prospectus
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A. Information About the Transaction
1. Forepart of Registration Front Cover Page
Statement and Outside Front Cover
Page of Prospectus
2. Inside Front and Outside Back Inside Front and Outside Back Cover
Cover Pages of Prospectus Pages
3. Risk Factors, Ratio of Earnings Summary; Risk Factors;
to Fixed Charges and Other Selected Financial Information of
Information the Company, FREIF and Advantage;
Pro Forma Financial Statements
4. Terms of the Transaction Summary; Terms of the Merger;
Voting Procedure; Rights of
Dissenting Shareholders; Comparative
Information; Description
of Capital Stock; Income Tax
Considerations; Appendix A, D and E
5. Pro Forma Financial Information Summary; Pro Forma Financial Statements;
Selected Financial Information of
the Company; The Company's Management
Discussion and Analysis of Financial
Condition and Results of Operations
6. Material Contacts with the Summary; Investment Considerations;
Company Being Acquired Terms of the Merger
7. Additional Information Required *
for Reoffering by Persons and
Parties Deemed to be Underwriters
8. Interests of Named Experts and Legal Opinions; Experts
Counsel
9. Disclosure of Commission Position Part II
on Indemnification for Securities
Act Liabilities
B. Information About the Registrant
10. Information with Respect to S-3 *
Registrants
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* Omitted as inapplicable
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11. Incorporation of Certain *
Information By Reference
12. Information with Respect to S-2 *
or S-3 Registrants
13. Incorporation of Certain *
Information By Reference
14. Information with Respect to The Company; Policies of the
Registrants Other than S-2 or S-3 Company With Respect to Certain
Registrants Activities; Description of Real
Properties; Summary; Financial
Information of the Company and the
Funds; Pro Forma Financial Statements;
Selected Financial Information of
the Company; Market Price,
Distributions and Holders of the
Company's and the Funds'
Securities; The Company's
Management's Discussion and
Analysis of the Financial Condition
and Results of Operations
C. Information About the Company Being
Acquired
15. Information with Respect to S-3 *
Companies
16. Information with Respect to S-2 *
or S-3 Companies
17. Information with Respect to The Funds; Description of Real
Companies Other than S-2 or S-3 Properties; Investment Policies
Companies and Activities of the Funds;
Market Price, Distributions and Holders
of the Company's and the Funds'
Securities; Summary; Selected
Financial Information of FREIF;
FREIF's Management's Discussion
and Analysis of Financial Condition
and Results of Operations; Selected
Financial Information of Advantage;
Advantage's Management's Discussion
and Analysis of Financial Condition
and Results of Operations; Financial
Information of the Company and the
Funds
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* Omitted as inapplicable
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D. Voting and Management Information
18. Information if Proxies, Consents Notice of Special Meetings; Front
or Authorizations are to be Cover Page; Voting Procedure; Rights
Solicited of Dissenting Shareholders; Risk Factors;
Terms of the Merger; Security Ownership
of Certain Beneficial Owners and Management
of the Company and the Funds;
Compensation of the Company, the
Advisor and Continental; Comparative
Information; Management of the
Company, the Advisor and
Continental
19. Information if Proxies, Consents *
or Authorizations are not to be
Solicited or in an Exchange Offer
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* Omitted as inapplicable
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PART II
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INFORMATION NOT REQUIRED IN PROSPECTUS
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Item 20. Indemnification of Directors and Officers
Under its Articles of Incorporation, as amended, the Company has
eliminated the personal liability of a director to the Company and its
Shareholders to the fullest extent permitted under California law. In effect,
a director will not be held liable for damages to the Company or its
Shareholders for mere negligence or lack of due care in carrying out his
fiduciary duties as a director. A director would, however, still be liable if
he acted in bad faith or in reckless disregard of his duties. This limitation
of liability does not affect the availability to the Shareholders of injunctive
relief or other equitable remedies for any violation of a director's duties to
the Company or its Shareholders, although such equitable remedies may not be an
effective remedy in all circumstances. The Company believes that such
limitations of liability are essential to attract and retain qualified
individuals to serve as directors of the Company.
Under its Articles of Incorporation, as amended, and its Bylaws and
pursuant to indemnification agreements, the Company will also indemnify, to the
fullest extent permitted under California law, its directors, and is permitted
to indemnify officers, employees and other agents (including the Advisor, its
Affiliates, and their respective directors, officers and employees) against all
liabilities incurred on account of their serving in those capacities. This
indemnification arrangement protects the Company's agents against liability for
breach of duty to the Company and its Shareholders to the same extent that the
directors' liability is eliminated with three exceptions:
(i) any claim where an agent is found to be liable to the
Company in the performance of his duty to the Company and the
Shareholders, unless the court determines that the agent is fairly and
reasonably entitled to indemnity for such expenses and then only to the
extent that the court determines;
(ii) amounts paid in settling an action without court approval;
or
(iii) expenses incurred in defending an action which is settled
without court approval.
The indemnification and exculpatory arrangements described above will
not deny or limit third party or derivative suits. To the extent an agent is
entitled to indemnification, though, the financial burden of a suit by a third
party would be borne by the Company. The Company could be precluded from
benefiting from a recovery in a suit brought against a director by a Shareholder
on the Company's behalf and, in the case of a suit brought by a Shareholder
against an agent, the Company might be liable for the agent's expenses, even if
the agent is found liable. The Company maintains directors' and officers'
insurance, which might pay for some of these expenses. The Company has also
entered into indemnification agreements with its directors and certain of its
officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions,
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the Registrant has been informed 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.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits: See Exhibit Index contained herein.
(b) Financial Statement Schedules
All financial statement schedules required are located in the footnotes to the
Financial Information of the Company, FREIF or Advantage, respectively. All
other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been omitted.
(c) Information required by Item 4(b)
(1) Fairness Opinion
(Appendix B to the Joint Proxy Statement/Prospectus)
Item 22. Undertakings.
(1) The undersigned registrant hereby undertakes as
follows: that prior to any public reoffering of the securities registered
hereunder through 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), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form
with respect to 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 registrant undertakes that every prospectus: (i)
that is filed pursuant to paragraph (1) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Act and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) The undersigned registrant hereby undertakes to
respond to requests for information that is incorporated by reference into the
prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one
business day of receipt of such request, and to send the incorporated documents
by first class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(4) The undersigned registrant hereby undertakes to
supply by means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein, that was not the
subject of and included in the registration statement when it became effective.
(5) The undersigned registrant hereby undertakes:
(i) To file, during any period in which offers
or sales are being made, a post-effective amendment to this registration
statement;
(a) To include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933;
(b) To reflect in the prospectus any
facts or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth
in the registration statement.
(c) To include any material information
with respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement;
(ii) That, for the purpose of determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(iii) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(6) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, 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 Securities Act of 1933 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
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 5 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of San Mateo, State of California, on the 14th day of March, 1996.
FRANKLIN SELECT REAL
ESTATE INCOME FUND
By: David P. Goss
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David P. Goss, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 5 to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
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Signature Capacity Date
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David P. Goss Chief Executive Officer, President March 14, 1996
----------------------- and Director (principal executive
David P. Goss officer)
Mark A. TenBoer Vice President - Finance and Chief March 14, 1996
----------------------- Financial Officer (principal
Mark A. TenBoer financial officer and principal
accounting officer)
*Lloyd D. Hanford, Jr. Director March 14, 1996
-----------------------
Lloyd D. Hanford, Jr.
*Lawrence C. Werner Director March 14, 1996
-----------------------
Lawrence C. Werner
*Egon H. Kraus Director March 14, 1996
-----------------------
Egon H. Kraus
*E. Samuel Wheeler Director March 14, 1996
-----------------------
E. Samuel Wheeler
</TABLE>
* Signed pursuant to power of attorney filed on November 13, 1995.
II-3
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EXHIBIT INDEX
2.1 Form of Agreement and Plan of Merger
(Appendix A to Joint Proxy Statement/Prospectus)
3.1 Articles of Incorporation, as amended. Filed with Registrant's
Registration Statement No. 33-26562 and incorporated herein by
reference.
3.2 Amended and Restated Bylaws. Filed with Registrant's
Registration Statement No. 33-26562 and incorporated herein by
reference.
5.1 Opinion Regarding Legality (including Consent of
Counsel)
8.1* Opinion Regarding Tax Matters
10.1 Advisory Agreement. Filed with Registrant's Registration
Statement No. 33-26562 and incorporated herein by reference.
10.2 First Amendment to Advisory Agreement. Filed with Registrant's
Annual Report on 10-K for the year ended December 31, 1994 and
incorporated herein by reference.
10.3 Property Management Agreement. Filed with Registrant's Annual
Report on 10-K for the year ended December 31, 1994 and
incorporated herein by reference.
10.4 Form of Indemnification Agreement.
10.5 Letter Agreement with Prudential Securities Incorporated dated
October 12, 1995.
11.1 Statement regarding computation of earnings per share. See
Note 3 to the Financial Statements of the Company.
13.1 Annual Report to Shareholders for the fiscal year ended
December 31, 1994 (to be deemed filed only to the extent
required by the instructions to exhibits for report on Form
10-K). Filed with Registrant's Annual Report on 10-K for the
year ended December 31, 1994 and incorporated herein by
reference.
24.1 Consent of Steinhart & Falconer (contained in Exhibit 5.1)
24.2 Consent of Coopers & Lybrand, LLP (Independent Public
Accountants).
24.3* Consent of Bear, Stearns & Co., Inc.
25.1 Power of Attorney (contained on signature page)
99.1 Proxy Card for Registrant
99.2 Proxy Card for FREIF
99.3 Proxy Card for Advantage
* Final document filed herewith.
<PAGE> 1
Exhibit 8.1
March 13, 1996
Franklin Select Real Estate Income Fund
P.O. Box 7777
San Mateo, CA 94403-7777
Re: Merger of Franklin Real Estate Income Fund and/or
Franklin Advantage Real Estate Income Fund into
Franklin Select Real Estate Income Fund
Gentlemen:
We are acting as counsel to Franklin Select Real Estate Income
Fund (the "Company") in connection with the proposed merger of Franklin Real
Estate Income Fund ("FREIF") and/or Franklin Advantage Real Estate Income Fund
("Advantage" and, together with FREIF, the "Funds") with and into the Company
(the "Merger") pursuant to that certain Agreement and Plan of Merger dated
November 7, 1995 (the "Merger Agreement"). (The Company, FREIF, and
Advantage are sometimes hereafter referred to collectively as the "REITs".) In
this connection, we have participated in the preparation of the Joint Proxy
Statement/Prospectus distributed to shareholders of the REITs in connection
with the proposed Merger.
We have reviewed the following documents for purposes of this
opinion:
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Franklin Select Real Estate Income Fund
March 13, 1996
Page 2
(1) The Joint Proxy Statement/Prospectus;
(2) The Merger Agreement;
(3) The 1994 Annual Reports of the REITs filed with the
SEC;
(4) The Forms 10-K for the fiscal years ended December
31, 1994 filed by the REITs with the SEC;
(5) The Forms 10-Q for the quarter ended March 31, 1995
filed by the REITs with the SEC;
(6) The Forms 10-Q for the quarter ended June 30, 1995
filed by the REITs with the SEC,
(7) The Forms 10-Q for the quarter ended September 30,
1995 filed by the REITs with the SEC, and
(8) Certificates of the Chief Financial Officers of each
of the REITs each dated March 13, 1996.
<PAGE> 3
Franklin Select Real Estate Income Fund
March 13, 1996
Page 3
The documents listed in items (1) through (7) are hereinafter
referred to as the "Reports," and the Certificates listed in item (8) are
referred to as the "Certificates."
We have relied on the correctness and accuracy of all facts
set forth in all the Certificates and Reports.
Based on this review, and in reliance on the Reports and
Certificates, we are of the opinion that:
(i) The merger will have the following federal income
tax consequences:
(a) No gain or loss will be recognized by the
Funds or the Company as a result of the Merger;
(b) No gain or loss will be recognized by FREIF
or Advantage Shareholders with respect to their receipt of Company
Common Stock pursuant to the Merger;
(c) The aggregate tax basis of Company Common
Stock received by each FREIF or Advantage Shareholder in the
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Franklin Select Real Estate Income Fund
March 13, 1996
Page 4
Merger will be the same as the aggregate tax basis of the FREIF or
Advantage Common Stock he or she surrenders;
(d) The holding period of Company Common Stock
received by FREIF or Advantage Shareholders will include the period
during which they held their FREIF or Advantage Common Stock;
(e) Each FREIF or Advantage Shareholder who
exercises Dissenter's Rights in the Merger will be treated as
receiving a payment from the Company in redemption of his or her FREIF
or Advantage Common Stock and will recognize capital gain or loss
measured by the difference between the cash received and the tax basis
of his or her FREIF or Advantage Common Stock.
(ii) For the calendar year 1994 and through September 30
of the calendar year 1995, each of the REITs met the requirements of the
Internal Revenue Code for qualification as a real estate investment trust, each
of the REITs currently meets such requirements, and the Company's contemplated
method of operation as described in the Joint Proxy Statement/Prospectus
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Franklin Select Real Estate Income Fund
March 13, 1996
Page 5
will enable the Company to comply with such requirements in the future.
(iii) The discussion in the Joint Proxy Statement/ Prospectus
under the caption entitled "Income Tax Considerations" fairly summarizes the
federal income tax considerations that are material with respect to the Merger
and the subsequent ownership of the Company's common stock by a shareholder
which is not a tax exempt entity, a foreign corporation, trust or partnership,
or a person who is not a United States citizen or resident.
We hereby consent to the filing of this opinion as Exhibit 8.1
to the Joint Proxy Statement/Prospectus and to the use of our name under the
captions "Legal Opinions" and "Taxation" in the Joint Proxy
Statement/Prospectus.
Yours very truly,
STEINHART & FALCONER
By: /s/ DAVID F. BOYLE
--------------------------
David F. Boyle
<PAGE> 1
EXHIBIT 24.3
CONSENT OF BEAR, STEARNS & CO., INC.
We hereby consent to the inclusion in the Joint Proxy Statement/Prospectus
constituting a part of this Registration Statement on Form S-4 of our opinion to
be dated March 13, 1996, to the Independent Committees of the Boards of
Directors of Franklin Select Real Estate Income Fund, Franklin Real Estate
Income Fund and Franklin Advantage Real Estate Income Fund attached as Appendix
B to such Joint Proxy Statement/Prospectus and the references to such opinion
and to our firm in such Joint Proxy Statement/Prospectus. In giving consent, we
do not admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 and the rules and
regulations of the Securities and Exchange Commission issued thereunder.
BEAR, STEARNS & CO., INC.
By: /S/ JAMES D. MARVER
----------------------
James D. Marver
Dated: March 13, 1996
