SCHEDULE 14A
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
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
FRANKLIN TEMPLETON JAPAN FUND
(Name of Registrant as Specified In Its Charter)
...............................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 materials.
[ ] 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:
...........................................................
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FRANKLIN TEMPLETON JAPAN FUND
100 Fountain Parkway
P.O. Box 33030
St. Petersburg, FL 33733-8030
1-800/DIAL BEN
December 29, 1997
Dear Shareholder:
This document announces the date, time and location of a Special Meeting of
Shareholders of the Franklin Templeton Japan Fund (the "Fund"). It identifies
the proposal to be voted on at the meeting, and contains your proxy statement
and proxy card. A proxy card is, in essence, a ballot. When you vote your proxy,
it tells us how you wish to vote on important issues relating to your fund.
PLEASE TAKE A MOMENT TO FILL OUT, SIGN AND
RETURN THE ENCLOSED PROXY CARD!
This meeting is critically important. You are being asked to consider and
approve a Plan of Liquidation and Dissolution which would result in the Fund
being liquidated and the proceeds from your shares of the Fund being distributed
to you.
The transaction is being proposed because the projected growth in assets of the
Fund was not sufficient to continue to offer competitive performance and high
quality service to shareholders over the long term. Consequently, after studying
several options, the Fund's Board of Trustees has recommended that it would be
in the best interest of the shareholders to terminate the Fund.
In making this decision, the Board took into consideration your ability to
exchange your Fund shares for shares of other funds in the Franklin Templeton
Group of Funds. Generally, you will not pay a front-end sales charge or a
Contingent Deferred Sales Charge when you exchange shares. HOWEVER, BEFORE
MAKING AN EXCHANGE, YOU SHOULD CAREFULLY READ THE PROSPECTUS OF THE FUND YOU ARE
INTERESTED IN, TO LEARN MORE ABOUT THE FUND AND ITS RULES AND REQUIREMENTS FOR
EXCHANGES. If you are interested in receiving a free prospectus for a Franklin
Templeton Fund, call 1-800/DIAL BEN.
In this respect, the Templeton Pacific Growth Fund (the "Pacific Fund") offers
investment objectives and policies which are similar to the Fund's.
The Pacific Fund has the same investment objective as the Fund which is
long-term growth of capital. Also, the Pacific Fund has substantially similar
investment strategies and policies by which it seeks to achieve the investment
objective. Under normal circumstances, the Pacific Fund invests at least 65% of
its assets in equity securities that trade on markets in the Pacific Rim and
which are issued by companies (i) domiciled in the Pacific Rim, or (ii) that
derive at least 50% of either their revenues or pre-tax income from activities
in the Pacific Rim. A copy of the prospectus for the Pacific Fund is included
with this proxy statement.
Thank you for the confidence you have demonstrated in the Franklin Templeton
Japan Fund. It has been our constant endeavor to reward your confidence by
serving your best interest at all times. We believe that our proposed action is
consistent with that objective. We hope that you will read the attached Proxy
Statement and vote in favor of the liquidation and dissolution of the Fund.
Sincerely,
Barbara J. Green
Secretary
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TABLE OF CONTENTS
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
PROXY STATEMENT..........................................................1
Information about Voting........................................1
Liquidation and Dissolution of the Fund.........................3
Other Information About the Fund................................5
EXHIBIT A - Plan of Liquidation and Dissolution
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PRELIMINARY COPY
FRANKLIN TEMPLETON JAPAN FUND
100 Fountain Parkway
P.O. Box 33030
St. Petersburg, FL 33733-8030
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
A Special Meeting of Shareholders of the Franklin Templeton Japan Fund (the
"Fund") will be held at 500 East Broward Blvd., 12th Floor, Fort Lauderdale, FL
33394-3091 on February 19, 1998 at 10:00 a.m., Eastern time. During the Meeting,
shareholders of the Fund will vote:
1. To approve or disapprove the liquidation and dissolution of
the Fund, pursuant to the proposed Plan of Liquidation and
Dissolution; and
2. To vote upon any other matters which may legally come before the
Meeting or any adjournment thereof.
By Order of the Board of Trustees,
Barbara J. Green
Secretary
December 29, 1997
PLEASE SIGN AND RETURN YOUR PROXY CARD PROMPTLY.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN.
<PAGE>
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS - FEBRUARY 19, 1998
INFORMATION ABOUT VOTING
ON WHAT ISSUE AM I BEING ASKED TO VOTE?
You are being asked to consider and approve a Plan of Liquidation and
Dissolution ("Liquidation Plan") which would result in the Franklin Templeton
Japan Fund (the "Fund") being liquidated and the proceeds from such liquidation
being distributed to you in proportion to the value of your shares. The
Liquidation Plan is described below under "Liquidation and Dissolution of the
Fund."
The Board of Trustees of the Fund is asking you to vote on the proposal
to liquidate the Fund. It is expected that this Proxy Statement and Proxy will
be mailed to shareholders on or about December 29, 1997. In addition to
solicitations by mail, some of the Fund's officers and employees, without extra
compensation, may conduct additional solicitations by telephone, personal
interviews and other means. Shareholder Communications Corporation has been
retained to assist in the solicitation of proxies. The aggregate cost of
solicitation of the shareholders is expected to be approximately $3,500. The
Fund and the Fund's Investment Manager, Templeton Investment Counsel, Inc., are
each paying half the cost of soliciting your vote.
THE TRUSTEES OF THE FUND RECOMMEND THAT YOU VOTE TO APPROVE THE
LIQUIDATION PLAN.
HOW DO I ENSURE THAT MY VOTE IS ACCURATELY RECORDED?
You may attend the Meeting and vote in person or you may complete and
return the attached proxy. A proxy card is, in essence, a ballot.
All proxies that are properly signed, dated and received prior to the
meeting will be voted as specified. If you specify a vote, your proxy will be
voted as you indicated. If you do not specify a choice on the proxy card, your
shares will be voted: (1) FOR the liquidation and dissolution of the Fund,
pursuant to the proposed Liquidation Plan; and (2) in accordance with the views
of management upon any other matters not now known which may legally come before
the Meeting or any adjournment thereof.
CAN I REVOKE MY PROXY?
You may revoke your proxy at any time before it is voted either by
sending a written revocation addressed to the Fund, or by attending the Meeting
and voting in person.
HOW MANY VOTES ARE NEEDED TO APPROVE THE LIQUIDATION PLAN?
According to the Fund's Agreement and Declaration of Trust, an affirmative vote
of a majority
1
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of the outstanding shares of the Fund is necessary to approve the Liquidation
Plan. This is defined as an affirmative vote by the lesser of: (i) 67% of the
shares present at the meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by a proxy at the
Meeting; or (ii) more than 50% of the outstanding shares of the Fund.
Abstentions and broker non-votes will be treated as votes not cast for purposes
of determining whether the Liquidation Plan was approved, and, therefore, will
not be counted. However, they will be counted for purposes of determining
whether a quorum is present at the Meeting.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on December 23, 1997,
will be entitled to vote at this Meeting. Each share is entitled to one vote.
On December 23, 1997 , the outstanding number of shares of the Fund
were [number] each of which had a par value of $0.01. The Fund's net assets
totaled [amount] and were held by [number] shareholders. As of that date, the
Fund's officers and Trustees, as a group, owned of record and beneficially
approximately [number] shares or less than 1% of the Fund's total outstanding
shares. The following companies and individuals owned more than 5% ([number]
shares) of the outstanding shares of the Fund:
<TABLE>
<CAPTION>
TITLE OF CLASS NAME AND ADDRESS OF AMOUNT OF BENEFICIAL PERCENT OF CLASS
BENEFICIAL OWNER OWNERSHIP
<S> <C> <C> <C>
Common Shares
</TABLE>
2
<PAGE>
LIQUIDATION AND DISSOLUTION OF THE FUND
WHY IS THE LIQUIDATION BEING RECOMMENDED?
In October 1997, management of the Fund presented to the Board of
Directors a proposal for the liquidation and dissolution of the Fund.
Management noted that the Japanese market and economy have not performed well
since the Fund was launched. In management's view, the Fund's current expense
ratio is not competitive without waiver of fees by the Investment Manager and
Fund Administrator and expense reimbursements. The Fund's sales and redemption
experience over its three years of operation led management to believe that
there is limited potential for significant investor interest in the Fund in the
future. Without a significiant increase in net assets, management believed it
would be unlikely that the Fund would be able to operate at an efficient
expense level. In light of the above, management recommended that the Board
vote to liquidate and dissolve the Fund.
In light of management's recommendation, the Board on October 18, 1997
unanimously determined that liquidation and dissolution of the Fund was in the
best interests of the shareholders and unanimously approved the Liquidation
Plan.
WHAT HAPPENS IF THE LIQUIDATION IS APPROVED?
The Board of Trustees has approved the Liquidation Plan set forth in
Exhibit A to this proxy statement. If the Shareholders vote to liquidate the
Fund, the liquidation will be carried out according to the terms of the
Liquidation Plan. The terms of the Liquidation Plan are summarized here.
1. EFFECTIVE DATE OF THE LIQUIDATION PLAN AND CESSATION OF THE FUND'S
BUSINESS AS AN INVESTMENT COMPANY. The Liquidation Plan will become effective on
the date that it is adopted and approved by an affirmative vote of a majority of
the outstanding voting shares of the Fund (the "Effective Date"). Following this
approval, the Fund will cease making new investments of its assets in accordance
with its investment objective and begin the process of disposing of its
portfolio securities in order to convert its assets to cash. It will not engage
in any business activities except to dispose of portfolio securities and to
distribute its assets to its shareholders (after it pays in full its creditors)
and to wind up its affairs. (See the Plan at Sections 1-3 and 5)
2. CLOSING OF BOOKS AND RESTRICTION OF TRANSFER AND REDEMPTION
OF SHARES. On the Effective Date, the books of the Fund will be closed and
the shareholders' proportionate interests in the Fund will be fixed. (See the
Plan at Section 4)
3. LIQUIDATING DISTRIBUTION. As soon as practicable after the
approval of the Liquidation Plan, the Fund will mail to each shareholder:
(1) a distribution amount equal to the shareholder's proportionate interest
in the net assets of the Fund; and (2) information concerning the sources of
the liquidating distribution. (See the Plan at Section 6)
3
<PAGE>
4. EXPENSES. The Fund and Templeton Investment Counsel, Inc., the
Fund's Investment Manager, will each pay half of the expenses incurred in
carrying out the Liquidation Plan. Before the liquidating distribution is mailed
to shareholders, the Fund will pay other expenses and liabilities incurred (or
expected to be incurred) by the Fund before the distribution. (See the Plan at
Sections 5 and 7)
5. CONTINUED OPERATION OF THE FUND. After the liquidating distribution is mailed
to shareholders, the Trustees will continue in office until the Fund is
dissolved in accordance with the laws of the state of Delaware and deregistered
as an investment company with the U.S. Securities and Exchange Commission. The
Trustees will have the authority to authorize variations from, or changes to,
the Liquidation Plan if appropriate to accomplish the liquidation and
dissolution. (See the Plan at Sections 8-10)
WHAT WILL I RECEIVE WHEN THE FUND IS LIQUIDATED?
If the Liquidation Plan is approved, you will receive a distribution in
an amount equal to your interest in the net assets of the Fund as determined on
the Effective Date.
WHAT ARE THE GENERAL TAX CONSEQUENCES OF THE LIQUIDATION?
You will recognize gain or loss on the liquidating distribution equal
to the difference between your basis in the Fund shares liquidated and the
proceeds received therefor. Such gain or loss will be capital if the Fund shares
were held as capital assets. For each individual shareholder, such gain or loss
will be short-term if the Fund shares were held one year or less on the date of
the liquidating distribution; mid-term if held more than one year but eighteen
months or less on the date of the liquidating distribution; or long-term if held
more than eighteen months on the date of the liquidating distribution. Net
short-term gains of individuals are taxed at the same rate as ordinary income;
net mid-term gains are taxed at the maximum rate of 28%; and, net long-term
gains are taxed at the maximum tax rate of 20%.
WHAT IF THE LIQUIDATION IS NOT APPROVED?
If the shareholders do not approve the Liquidation Plan, the Fund will
temporarily continue to operate as an open-end registered management investment
company and will continue to offer its shares and invest its assets in
accordance with its stated objectives and policies. The Board will then consider
other alternatives for the future of the Fund.
4
<PAGE>
WILL ANY OTHER MATTERS BE PRESENTED AT THE MEETING?
The Board is not aware of any other matters to be presented at this
Meeting. If any other matters are properly presented at the Meeting, the proxy
holders will vote in accordance with the views of management.
OTHER INFORMATION ABOUT THE FUND
The Fund was organized as a business trust under the laws of Delaware
on October 29, 1991. The Fund's investment objective is long-term capital growth
which it seeks to achieve through investing its assets primarily in securities
of companies domiciled in Japan and traded in the Japanese securities markets.
Templeton Investment Counsel, Inc. is the Fund's Investment Manager, which is
located at 500 East Broward Blvd., Fort Lauderdale, FL 33394-3091. Franklin
Templeton Services, Inc. is the Fund's Administrator, which is located at 777
Mariners Island Blvd., San Mateo, CA 94403-7777.
The Fund's Annual Report, dated March 31, 1997, and Semi-Annual Report,
dated September 30, 1997, have been mailed to all shareholders. You may request
a free copy of each report by writing to the Fund's principal underwriter,
Franklin Templeton Distributors, Inc., at 777 Mariners Island Blvd., San Mateo,
CA 94403-7777, or by calling 1-800/DIAL BEN.
By Order of the Board of Trustees,
Barbara J. Green
Secretary
Dated: December 29, 1997
5
<PAGE>
EXHIBIT A
FRANKLIN TEMPLETON JAPAN FUND
PLAN OF LIQUIDATION AND DISSOLUTION
The following Plan of Liquidation and Dissolution ("Plan") of Franklin
Templeton Japan Fund (the "Fund"), a business trust organized and existing under
the laws of the State of Delaware and an open-end management investment company
registered under the Investment Company Act of 1940, as amended ("1940 Act"), is
intended to accomplish the complete liquidation and dissolution of the Fund in
conformity with the laws of the State of Delaware.
WHEREAS, on October 18, 1997, the Fund's Board of Trustees unanimously
determined that it is in the best interest of the Fund and its shareholders to
liquidate and dissolve the Fund and has considered and adopted this Plan as the
method of liquidating and dissolving the Fund and has directed that this Plan be
submitted to shareholders of the Fund for approval;
NOW, THEREFORE, the liquidation and dissolution of the Fund shall be
carried out in the manner hereinafter set forth:
1. EFFECTIVE DATE OF PLAN. The Plan shall be and become effective only
upon the approval, by the affirmative vote of a majority of the outstanding
voting shares of the Fund, as defined in the 1940 Act, as modified by or
interpreted by any applicable rules, regulations, releases or orders of the
Securities Exchange Commission (the "SEC"). The day of such approval by
shareholders is hereinafter called the "Effective Date."
2. DISSOLUTION. As promptly as practicable, the Fund shall be dissolved in
accordance with the laws of the State of Delaware, particularly Section 3808
("Existence of business trust") of Title 12, Chapter 38 of the Delaware Code.
3. CESSATION OF BUSINESS. After the Effective Date of the Plan, the
Fund shall cease its business as an investment company and shall not engage in
any business activities except for the purposes of winding up its business and
affairs, preserving the value of its assets and distributing its remaining
assets of each class ratably among the shareholders of the outstanding shares of
that class, in accordance with the provisions of the Plan, after discharging or
making reasonable provision for the Fund's liabilities.
4. RESTRICTION OF TRANSFER AND REDEMPTION OF SHARES. The proportionate
interests of shareholders in the assets of the Fund shall be fixed on the basis
of their respective holdings at the close of business on the Effective Date of
the Plan. On the Effective Date, the books of the Fund shall be closed.
Thereafter, unless the books are reopened because the Plan cannot be carried
into effect, the shareholders' respective interests in the Fund's assets shall
not be transferable by the negotiation of share certificates or otherwise.
5. LIQUIDATION OF ASSETS AND PAYMENT OF DEBTS. As soon as is reasonable
and practicable after the Effective Date, all portfolio securities of the Fund
shall be converted to cash or cash equivalents. As soon as practicable after the
Effective Date, the Fund shall pay, or make reasonable provision to pay, in full
all claims and obligations, including all contingent, conditional or unmatured
<PAGE>
claims and obligations, known to the Fund and all claims and obligations which
are known to the Fund but for which the identity of the claimant is unknown.
6. LIQUIDATING DISTRIBUTION. As soon as practicable after the Effective
Date the Fund shall mail to each shareholder of record on the Effective Date:
(1) a liquidating distribution equal to the shareholder's proportionate interest
in the net assets of the Fund; and (2) information concerning the sources of the
liquidating distribution. Upon the mailing of the liquidating distribution, all
outstanding certificated shares of the Fund will be deemed canceled.
Shareholders in possession of certificated shares of the Fund will not be
required to surrender their certificates to complete the liquidating
distribution.
7. MANAGEMENT AND EXPENSES OF THE FUND SUBSEQUENT TO THE LIQUIDATING
DISTRIBUTION. The Fund and Templeton Investment Counsel, Inc. (the "Adviser")
shall bear equally the expenses incurred in carrying out this Plan including,
but not limited to, printing, legal, accounting, custodian and transfer agency
fees, and the expenses of reports to or meeting of shareholders.
8. CERTIFICATE OF CANCELLATION. Upon completion of the Liquidating
Distribution, the trustees shall cause a certificate of cancellation of the
Trust's certificate of trust to be filed in accordance with Section 3810 of the
Delaware Business Trust Act, which certificate may be signed by any one trustee.
9. DEREGISTRATION AS AN INVESTMENT COMPANY. Upon completion of the Liquidating
Distribution, the trustees shall cause to be filed with the SEC an application
for an order declaring that the Fund has ceased to be an investment company.
10. POWER OF BOARD OF TRUSTEES. The Board, and subject to the trustees,
the officers, shall have authority to do or authorize any acts and things as
provided for in the Plan and as they may consider necessary or desirable to
carry out the purposes of the Plan, including the execution and filing of
certificates, tax returns and other papers. The death, resignation or disability
of any trustee or any officer of the Fund shall not impair the authority of the
surviving or remaining trustees or officers to exercise any of the powers
provided for in the Plan. The Board of Trustees shall have the authority to
authorize variations from or amendments of the provisions of the Plan as may be
necessary or appropriate to effect the liquidation and dissolution of the Fund,
and the distribution of its net assets to shareholders in accordance with the
laws of the State of Delaware.
Date: October 18, 1997
A-2
<PAGE>
SPECIAL MEETING OF SHAREHOLDERS OF FRANKLIN TEMPLETON
JAPAN FUND
February 19, 1998
The undersigned hereby revokes all previous proxies for his shares and appoints
Barbara J. Green, James R. Baio and John R. Kay, and each of them, proxies of
the undersigned with full power of substitution to vote all shares of Franklin
Templeton Japan Fund (the "Japan Fund") which the undersigned is entitled to
vote at the Japan Fund's Special Meeting to be held at 500 E. Broward Blvd.,
12th Floor, Fort Lauderdale, FL 33394 at 10:00 a.m., Eastern time on February19,
1998, including any adjournment thereof, upon such business as may properly be
brought before the Meeting.
No. 1 To approve the liquidation and dissolution of the Fund, pursuant to
the proposed Plan of Liquidation and Dissolution.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
To vote in accordance with the views of management upon any
other matters which may legally come before the Meeting or any
adjournment thereof.
GRANT WITHHOLD
[ ] [ ]
PLEASE SEE REVERSE SIDE
<PAGE>
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 OF THE FRANKLIN
TEMPLETON JAPAN FUND. IT WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, THIS PROXY SHALL BE VOTED IN FAVOR OF PROPOSAL 1, REGARDING THE
LIQUIDATION AND DISSOLUTION OF THE FRANKLIN TEMPLETON JAPAN FUND PURSUANT TO THE
PLAN OF LIQUIDATION AND DISSOLUTION. IF ANY OTHER MATTERS PROPERLY COME BEFORE
THE MEETING ABOUT WHICH THE PROXYHOLDERS WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN THE PROXYHOLDERS TO VOTE IN ACCORDANCE WITH
THE VIEWS OF MANAGEMENT ON SUCH MATTERS. THE MANAGEMENT IS NOT AWARE OF ANY SUCH
MATTERS.
Dated:
--------------------------------
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Signature
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Print Name
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Signature
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Print Name
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.
IMPORTANT: PLEASE SIGN AND SEND 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 SHAREHOLDERS WHO HAVE NOT
RESPONDED.
