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
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
FRANKLIN TEMPLETON JAPAN FUND
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(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 transactions applies:
(2) Aggregate number of securities to which transactions 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
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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 for your convenience. You may wish
to consult your financial representative before making any investment decision.
Neither management nor the Fund's Board makes any recommendation whether
Shareholders should invest in the Pacific Fund or another Fund in the Franklin
Templeton Group of Funds.
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 interests 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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[GRAPHIC OMITTED]
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.
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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 .......................... 4
Other Information About the Fund ................................. 7
EXHIBIT A - Plan of Liquidation and Dissolution ........................ A-1
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PROXY STATEMENT
Special Meeting of Shareholders--February 19, 1998
o 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.
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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 adjournments 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 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.
2
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On December 23, 1997, the outstanding number of Advisor Class shares and
Class I shares of the Fund were 4746 and 1,329,620, respectively, each of
which had a par value of $0.01.
As of December 26, 1997, the Fund's officers and Trustees, as a group,
owned of record and beneficially approximately 55.1 of the Fund's Advisor
Class shares or 1.16% of the Fund's total outstanding Advisor Class shares.
As a group, the Fund's officers and Trustees owned less than 1% of the
Fund's total outstanding Class I shares. Each of the Fund's officers and
Trustees individually owned less than 1% of the total outstanding shares of
each class of the Fund. As of December 26, 1997, the following companies
and individuals owned more than 5% of the outstanding Advisor Class shares
of the Fund:
Name and Address of Amount of Beneficial
Beneficial Owner Ownership Percent of Class
---------------- --------- ----------------
Franklin Resources, Inc. 2,472.11 52.08%
1850 Gateway Drive 6th Floor
San Mateo, CA 94404
Franklin Templeton Trust Company for 744.42 15.68%
the IRA of Chu-Sen Cheng
832 Columba Lane
Foster City, CA 94404
Jennifer Y. Lee 289.25 6.09%
2527 Oregon Street
Union City, CA 94587-4317
Susan P. Meyer and Ronald W. Meyer 241.63 5.09%
12244 La Maida Street
Valley Village, CA 91607-3623
No person is known to management to have owned of record or beneficially
more than 5% of the outstanding shares of Class I of the Fund as of
December 26, 1997.
3
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o 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 significant 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.
4
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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)
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
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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.
6
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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.
o 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
7
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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.
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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 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
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.
A-2
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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-3
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PROXY SPECIAL MEETING OF SHAREHOLDERS OF FRANKLIN TEMPLETON PROXY
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 February
19, 1998, including any adjournment thereof, upon such business as may properly
be brought before the Meeting.
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.
Dated: , 1998
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Signature(s) Title(s), if applicable
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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 to the proxyholders to vote in accordance
with the views of management on such matters. The management is not aware of any
such matters.
PLEASE MARK YOUR VOTE BELOW IN BLUE OR BLACK INK. DO NOT USE RED. EXAMPLE:|
1. To approve the liquidation and dissolution of the Fund, pursuant to
the proposed Plan of Liquidation and Dissolution.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To vote in accordance with the views of management upon any
other matters which may legally come before the Meeting or any
adjournment thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
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.
