SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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
Rule 14a-6(e)(2)
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to 240.14a-11(c) or 240.14a-12
(Name of Registrant as Specified in Its Charter)
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
(Name of Person(s) Filing Proxy Statement)
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
Payment of filing fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2), or Item 22(a)(2) of Schedule 14A..
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and O-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 identifying 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:
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
IMPORTANT SHAREHOLDER INFORMATION
This document announces the date, time and location of the annual shareholders
meeting, identifies the proposals 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. If you complete and sign the proxy, we'll vote it exactly
as you tell us. If you simply sign the proxy, we'll vote it in accordance with
the Directors' recommendations on pages 3 and 4.
We urge you to spend a few minutes with the proxy statement reviewing the
proposals at hand. Then, fill out your proxy card and return it to us. When
shareholders don't return their proxies in sufficient numbers, we have to incur
the expense of follow-up solicitations, which can cost your fund money. We want
to know how you would like to vote and welcome your comments. Please take a few
minutes with these materials and return your proxy to us. If you have any
questions, call the Fund Information Department at 1-800/DIAL BEN.
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting ("Meeting") of shareholders of Templeton Vietnam
Opportunities Fund, Inc. (the "Fund") will be held at 700 Central Avenue,
St. Petersburg, Florida 33701-3628 on Tuesday, October 8, 1996 at 10:00 A.M.
(EDT).
During the Meeting, shareholders of the Fund will vote on five proposals:
1. Election of Directors of the Fund to hold office for the
terms specified;
2. Approval of the deletion of the Fund's current fundamental
investment restriction on loans and the adoption of a new
fundamental investment policy regarding lending;
3. Approval of an amendment to the Fund's current fundamental
investment restriction concerning investments in real estate;
4. Ratification of the selection of McGladrey & Pullen, LLP as
independent auditors of the Fund for the fiscal year ending
March 31, 1997; and
5. Transaction of any other business as may properly come before
the Meeting.
By order of the Board of Directors,
J. Mark Mobius
President
August 23, 1996
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PROXY STATEMENT
INFORMATION ABOUT VOTING
Who is eligible to vote?
Shareholders of record at the close of business on August 22, 1996 are
entitled to be present and to vote at the Meeting or any adjourned
Meeting. Each share of record is entitled to one vote on all matters
presented at the Meeting. The Notice of Meeting, the proxy, and the
proxy statement were mailed to shareholders of record on or about
August 23, 1996.
On what issues am I being asked to vote?
You are being asked to vote on five proposals:
1. Election of three nominees to the position of Director;
2. Approval of the deletion of the Fund's current
fundamental investment restriction on loans and the
adoption of a new fundamental investment policy regarding
lending;
3. Approval of an amendment to the Fund's current
fundamental investment restriction concerning
investments in real estate;
4. Ratification of the selection of McGladrey & Pullen, LLP
as independent auditors of the Fund for the fiscal year
ending March 31, 1997; and
5. Transaction of any other business that may properly come
before the Meeting.
How do the Fund's Directors recommend that I vote?
The Directors recommend that you vote:
1. For the election of nominees;
2. For the approval of the deletion of the Fund's current
fundamental investment restriction on loans and the
adoption of a new fundamental investment policy regarding
lending;
3. For the approval of the amendment of the Fund's current
fundamental investment restriction concerning investments
in real estate;
4. For the ratification of the selection of McGladrey &
Pullen, LLP as independent auditors for the Fund; and
5. For the proxyholders to vote, in their discretion, on any
other business that may properly come before the Meeting.
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. Proxies that are signed, dated and received
by the close of business on October 7, 1996 will be voted as specified.
If you specify a vote for any of the proposals 1 through 5, your proxy
will be voted as you indicated. If you simply sign and date the proxy,
but don't specify a vote for any of the proposals 1 through 5, your
shares will be voted in favor of the nominees for Director (proposal
1), in favor of approval of the deletion of the Fund's current
fundamental investment restriction on loans and the adoption of a new
fundamental investment policy regarding lending (proposal 2), in favor
of the amendment to the Fund's current fundamental investment
restriction concerning investments in real estate (proposal 3), in
favor of ratifying the selection of McGladrey & Pullen, LLP as
independent auditors (proposal 4), and/or in accordance with the
discretion of the persons named in the proxy as to any other matters
(proposal 5).
Can I revoke my proxy?
You may revoke your proxy at any time before it is voted by (1)
delivering a written revocation to the Secretary of the Fund, (2)
forwarding to the Fund a later-dated proxy that is received by the Fund
on or before October 7, 1996, or (3) attending the Meeting and voting
in person.
THE PROPOSALS
1. ELECTION OF DIRECTORS
How are nominees selected?
The Board of Directors of the Fund (the "Board") established a
Nominating and Compensation Committee (the "Committee") consisting of
Messrs. Hines and Macklin. The Committee is responsible for the
selection, nomination for appointment and election of candidates to
serve as Directors of the Fund. The Committee will review shareholders'
nominations to fill vacancies on the Board, if these nominations are in
writing and addressed to the Committee at the Fund's offices. However,
the Committee expects to be able to identify from its own resources an
ample number of qualified candidates.
Who are the nominees and Directors?
The Board is divided into three classes, each class having a term of
three years. Each year the term of office of one class expires. This
year, the terms of four Directors are expiring. F. Bruce Clarke, whose
term expires this year, declined to stand for re-election. Martin L.
Flanagan, Andrew H. Hines, Jr. and Charles B. Johnson have been
nominated for three-year terms, set to expire at the 1999 annual
meeting of shareholders. These terms continue, however, until
successors are duly elected and qualified. In addition, all of the
nominees are currently members of the Board and all of the current
Directors are also directors or trustees of other investment companies
in the Franklin Group of Funds(R) and the Templeton Group of Funds (the
"Franklin Templeton Group of Funds").
Certain nominees and Directors of the Fund hold director and/or
officer positions with Franklin Resources, Inc. ("Resources") and
its affiliates. Resources is a publicly owned holding company, the
principal shareholders of which are Charles B. Johnson and Rupert H.
Johnson, Jr. who own approximately 20% and 16% respectively, of its
outstanding shares. Resources is primarily engaged, through
various subsidiaries, in providing investment management, share
distribution, transfer agent and administrative services to a
family of investment companies. Resources is a New York Stock
Exchange listed holding company (NYSE: BEN). There are no family
relationships among any of the Directors or nominees for Director.
Each nominee is currently available and has consented to serve if
elected. If any of the nominees should become unavailable, the persons
named in the proxy will vote in their discretion for another person or
other persons who may be nominated as Directors.
Listed below, for each nominee and Director, is a brief description of
recent professional experience:
<TABLE>
<CAPTION>
Shares Owned
Beneficially and %
Principal Occupation of Total
Name and Offices with the During Past Five Director Outstanding on June
Fund Years and Age Since 30, 1996
---------------------------- --------------------------------------- ---------- ---------------------
<S> <C> <C> <C>
Nominees to serve until 1999 Annual Meeting of Shareholders:
MARTIN L. FLANAGAN* Senior vice president, treasurer and 1994 -0-
Director and Vice President chief financial officer of Franklin
Resources, Inc.; director and executive
vice president of Templeton Investment
Counsel, Inc.; director, president and
chief executive officer of Templeton
Global Investors, Inc.; accountant with
Arthur Andersen & Company
(1982-1983); and a member of the
International Society of Financial
Analysts and the American
Institute of Certified Public
Accountants. Age 36.
</TABLE>
<TABLE>
Shares Owned
Beneficially and %
Principal Occupation of Total
Name and Offices with the During Past Five Director Outstanding on June
Fund Years and Age Since 30, 1996
---------------------------- --------------------------------------- ---------- ---------------------
<S> <C> <C> <C>
ANDREW H. HINES, JR. Consultant for the Triangle Consulting 1994 -0-
Director Group; chairman of the board and chief
executive officer of Florida Progress
Corporation (1982-1990) and director of
various of its subsidiaries;
chairman and director of Precise
Power Corporation;
executive-in-residence of Eckerd
College (1991-present); and a
director of Checkers Drive-In
Restaurants, Inc. Age 73.
CHARLES B. JOHNSON* President, chief executive officer, and 1994 1,000(**)
Chairman of the Board and Vice director of Franklin Resources, Inc.;
President chairman of the board and director of
Franklin Advisers, Inc. and Franklin
Templeton Distributors, Inc.; director
of General Host Corporation
(nursery and craft centers),
Franklin Templeton Investor
Services, Inc. and Templeton
Global Investors, Inc.; and
officer and director, trustee or
managing general partner, as the
case may be, of most other
subsidiaries of Franklin
Resources, Inc. Age 63.
Directors serving until 1998 Annual Meeting of Shareholders:
HARMON E. BURNS* Executive vice president, secretary and 1994 -0-
Director and Vice President director of Franklin Resources, Inc.;
executive vice president and director of
Franklin Templeton Distributors, Inc.;
executive vice president of Franklin
Advisers, Inc.; and an officer and/or
director, as the case may be, of other
subsidiaries of Franklin Resources,
Inc. Age 51.
</TABLE>
<TABLE>
Shares Owned
Beneficially and %
Principal Occupation of Total
Name and Offices with the During Past Five Director Outstanding on June
Fund Years and Age Since 30, 1996
---------------------------- --------------------------------------- ---------- ---------------------
<S> <C> <C> <C>
JOHN Wm. GALBRAITH President of Galbraith Properties, Inc. 1995 -0-
Director (personal investment company); director
of Gulf West Banks, Inc. (bank holding
company) (1995-present) and Mercantile
Bank (1991-1995); vice chairman of
Templeton, Galbraith & Hansberger Ltd.
(1986-1992); and chairman of Templeton
Funds Management, Inc. (1974-1991). Age
74.
BETTY P. KRAHMER Director or trustee of various civic 1994 500(**)
Director associations; formerly, economic
analyst, U.S. government. Age 66.
GORDON S. MACKLIN Chairman of White River Corporation 1994 2,000(**)
Director (information services); director of Fund
America Enterprises Holdings,
Inc., MCI Communications
Corporation, Fusion Systems
Corporation, Infovest Corporation,
MedImmune, Inc., Source One
Mortgage Services Corporation, and
Shoppers Express, Inc. (on-line
shopping service); and formerly
held the following positions:
chairman of Hambrecht and Quist
Group; director of H&Q Healthcare
Investors and Lockheed Martin
Corporation; and president of the
National Association of Securities
Dealers, Inc. Age 68.
FRED R. MILLSAPS Manager of personal investments 1994 -0-
Director (1978-present); chairman and chief
executive officer of Landmark Banking
Corporation (1969-1978); financial vice
president of Florida Power and
Light (1965-1969); vice president
of The Federal Reserve Bank of
Atlanta (1958-1965); and a
director of various other business
and nonprofit organizations. Age
67.
</TABLE>
<TABLE>
Shares Owned
Beneficially and %
Principal Occupation of Total
Name and Offices with the During Past Five Director Outstanding on June
Fund Years and Age Since 30, 1996
---------------------------- --------------------------------------- ---------- ---------------------
<S> <C> <C> <C>
Directors serving until 1997 Annual Meeting of Shareholders:
HARRIS J. ASHTON Chairman of the Board, president and 1994 500(**)
Director chief executive officer of General Host
Corporation (nursery and craft centers);
and a director of RBC Holdings (U.S.A.)
Inc. (a bank holding company) and Bar-S
Foods. Age 64.
NICHOLAS F. BRADY* Chairman of Templeton Emerging Markets 1994 -0-
Director Investment Trust PLC; chairman of
Templeton Latin America Investment Trust
PLC; chairman of Darby Overseas
Investments, Ltd. (an investment firm)
(1994-present); chairman and director of
Templeton Central and Eastern European
Fund; director of the Amerada Hess
Corporation, Christiana Companies, and
the H.J. Heinz Company; Secretary of the
United States Department of the Treasury
(1988-1993); and chairman of the board
of Dillon, Read & Co. Inc. (investment
banking) prior to 1988. Age 66.
S. JOSEPH FORTUNATO Member of the law firm of Pitney, 1994 100(**)
Director Hardin, Kipp & Szuch; and a director of
General Host Corporation (nursery
and craft centers). Age 63.
HASSO-G VON DIERGARDT-NAGLO Farmer; president of Clairhaven 1994 -0-
Director Investments, Ltd. and other private
investment companies. Age 80.
</TABLE>
- --------------------------------
Messrs. Brady, Burns, Flanagan, and Johnson are "interested persons" as
defined by the Investment Company Act of 1940 (the "1940 Act"). The 1940 Act
stipulates that interested persons can comprise no more than 60% of a fund's
board of directors. Mr. Johnson is an interested person due to his ownership
interest in Resources. Mssrs. Burns and Flanagan are interested persons due
to their employment affiliation with Resources, whereas Mr. Brady's status
as an interested persons results from his business affiliations with
Resources and Templeton Global Advisors Limited. Mr. Brady and Resources are
both limited partners of Darby Overseas Partners, LP ("Darby Overseas"). Mr.
Brady established Darby Overseas in February 1994, and is Chairman and
shareholder of the corporate general partner of Darby Overseas. In addition,
Darby Overseas and Templeton Global Advisors Limited are limited partners of
Darby Emerging Markets Fund, LP. The remaining nominees and Directors of the
Fund are not interested persons (the "Independent Directors").
** Less than 1%.
How often do the Directors meet and what are they paid?
The Directors generally meet quarterly to review the operations of the
Fund and other funds within the Franklin Templeton Group of Funds. Each
fund pays its independent directors/trustees and Mr. Brady an annual
retainer and/or fees for attendance at board and committee meetings.
This compensation is based on the level of assets in the fund.
Accordingly, the Fund pays the Independent Directors and Mr. Brady an
annual retainer of $1,000 and a fee of $100 per meeting of the Board
and its portion of a flat fee of $2,000 for each Audit Committee
meeting and/or Nominating and Compensation Committee meeting attended.
Independent Directors are reimbursed by the Fund for any expenses
incurred in attending Board meetings.
During the fiscal year ended March 31, 1996, there were four meetings
of the Board, three meetings of the Nominating and Compensation
Committee and one meeting of the Audit Committee. Each of the Directors
then in office attended at least 75% of the total number of meetings of
the Board and the Audit Committee throughout the year. There was 100%
attendance at the meeting of the Nominating and Compensation Committee.
Certain Directors and Officers of the Fund are shareholders of
Resources and may receive indirect remuneration due to their
participation in management fees and other fees received from the
Franklin Templeton Group of Funds by Templeton Asset Management Ltd.
and its affiliates. Templeton Asset Management Ltd. or its affiliates
pay the salaries and expenses of the Officers. No pension or retirement
benefits are accrued as part of Fund expenses.
The following table shows the compensation paid to Independent
Directors and Mr. Brady by the Fund and by the Franklin Templeton Group
of Funds:
<TABLE>
<CAPTION>
Aggregate Number of Boards within Total Compensation from
Compensation from the Franklin Templeton the Franklin Templeton
Name of Director the Fund* Group of Funds on which Group of Funds**
Director Serves
----------------------- ---------------------- ----------------------------- ---------------------------
<S> <C> <C> <C>
Harris J. Ashton $1,400 55 $327,925
Andrew H. Hines, Jr. 1,646 23 106,325
Hasso-G von
Diergardt-Naglo 1,400 17 77,350
Betty P. Krahmer 1,400 23 93,475
Fred R. Millsaps 1,579 23 104,325
S. Joseph Fortunato 1,400 57 344,745
Gordon S. Macklin 1,467 52 321,525
John Wm. Galbraith 1,300 22 70,100
Nicholas F. Brady 1,400 24 98,225
F. Bruce Clarke 1,579 19 83,350
</TABLE>
--------------------------------------------
* For the fiscal year ended March 31, 1996.
** For the calendar year ended December 31, 1995.
Who are the Executive Officers of the Fund?
Officers of the Fund are appointed by the Directors and serve at the
pleasure of the Board. Listed below, for each Executive Officer, is a
brief description of recent professional experience:
<TABLE>
<CAPTION>
Principal Occupation
Name and Offices with the Fund During Past Five Years and Age
-------------------------------------- ------------------------------------------------------------------
<S> <C>
CHARLES B. JOHNSON See Proposal 1, "Election of Directors".
Chairman and Vice President since
1995
J. MARK MOBIUS Portfolio manager of various Templeton advisory affiliates;
President since 1994 managing director of Templeton Asset Management Ltd.; president
of International Investment Trust Company Limited (investment
manager of Taiwan R.O.C. Fund) (1983-1986); director of Vickers
da Costa, Hong Kong (1980-1983). Age 59.
RUPERT H. JOHNSON, JR. Executive vice president and director of Franklin Resources,
Vice President since 1996 Inc. and Franklin Templeton Distributors, Inc.; president and
director of Franklin
Advisers, Inc.;
director of Franklin
Templeton Investor
Services, Inc.; and
officer and/or
director, trustee or
managing general
partner, as the case
may be, of most other
subsidiaries of
Franklin Resources,
Inc.; and an officer
and/or director, as the
case may be, of various
investment companies in
the Franklin Templeton
Group of Funds. Age 55.
HARMON E. BURNS See Proposal 1, "Election of Directors".
Vice President since 1996
CHARLES E. JOHNSON Senior vice president and director of Franklin Resources, Inc.;
Vice President since 1996 senior vice president of Franklin Templeton Distributors, Inc.;
president and chief
executive officer of
Templeton Worldwide,
Inc.; president and
director of Franklin
Institutional Services
Corporation; chairman
of the board of
Templeton Investment
Counsel, Inc.; vice
president and/or
director, as the case
may be, for some of the
subsidiaries of
Franklin Resources,
Inc.; and an officer
and/or director, as the
case may be, of various
investment companies in
the Franklin Templeton
Group of Funds.
Age 40.
DEBORAH R. GATZEK Senior vice president and general counsel of Franklin Resources,
Vice President since 1996 Inc.; senior vice president of Franklin Templeton Distributors,
Inc.; vice president of Franklin Advisers, Inc. and officer of
various investment companies in the Franklin Templeton Group of
Funds. Age 47.
</TABLE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Offices with the Fund During Past Five Years and Age
-------------------------------------- ------------------------------------------------------------------
<S> <C>
MARK G. HOLOWESKO President and director of Templeton Global Advisors Limited;
Vice President since 1994 chief investment officer of global equity research for Templeton
Worldwide, Inc.;
president or vice
president of the
Templeton Funds;
formerly, investment
administrator with Roy
West Trust Corporation
(Bahamas) Limited
(1984-1985).
Age 36.
MARTIN L. FLANAGAN See Proposal 1, "Election of Directors".
Vice President since 1994
SAMUEL J. FORESTER, JR. President of the Templeton Global Bond Managers Division of
Vice President since 1994 Templeton Investment Counsel, Inc.; president or vice president
of other Templeton Funds; founder and partner of Forester,
Hairston Investment Management (1989-1990); managing director
(Mid-East Region) of Merrill Lynch, Pierce, Fenner & Smith Inc.
(1987-1988); advisor for Saudi Arabian Monetary Agency
(1982-1987). Age 48.
JOHN R. KAY Vice president of the Templeton Funds; vice president and
Vice President since 1994 treasurer of Templeton Global Investors, Inc. and Templeton
Worldwide, Inc.;
assistant vice
president of Franklin
Templeton Distributors,
Inc.; formerly, vice
president and
controller of the
Keystone Group, Inc.
Age 55.
JAMES R. BAIO Certified public accountant; treasurer of the Templeton Funds;
Treasurer since 1994 senior vice president of Templeton Worldwide, Inc., Templeton
Global Investors, Inc.,
and Templeton Funds
Trust Company;
formerly, senior tax
manager with Ernst &
Young (certified public
accountants)
(1977-1989). Age 42.
</TABLE>
APPROVAL OF AMENDMENTS TO THE FUND'S FUNDAMENTAL INVESTMENT POLICIES
The 1940 Act requires registered investment companies such as the Fund
to adopt investment policies with regard to certain types of investments. These
policies, which can be changed only by shareholder vote, are often referred to
as "fundamental policies."
The Board of Directors has approved, subject to shareholder approval,
two amendments to the Fund's fundamental policies. The first of these amendments
is the deletion of the current restriction on loans and the adoption of a new
investment policy regarding lending. The second is an amendment of the Fund's
fundamental investment restriction on real estate investments. The purpose of
the amendments, which are described in greater detail below, is to allow the
Fund greater investment flexibility so that it may take advantage of a broader
range of available investment opportunities.
Background
The Fund's Prospectus dated September 15, 1994 stated that the Fund
intended to invest by October 1, 1997 at least 65% of its total assets in the
equity and debt securities of Vietnam Companies. A "Vietnam Company" means a
company (i) that is organized under the laws of, or with a principal office in,
Vietnam, (ii) for which the principal equity securities trading market is in
Vietnam, or (iii) that derives at least 50% of its revenues or profits from
goods produced or sold, investments made, or services performed in, Vietnam or
that has at least 50% of its assets situated in Vietnam. In addition, during the
initial investment period ending October 1, 1997, the Fund is authorized to
invest without limit (and thereafter up to 35% of its total assets) in companies
that do not qualify as Vietnam Companies but which the Investment Manager
believes will experience growth in revenue or income from participation in the
development of the economy of Vietnam ("Vietnam-Related Companies").
The development of an organized securities exchange in Vietnam has
progressed slowly and the timing for the establishment of a stock exchange is
uncertain and subject to the control of the Vietnam government. Based upon
current information, the Investment Manager believes that the prospects are not
good for the establishment of a functioning stock exchange in Vietnam by October
1, 1997 and that a variety of publicly traded securities of Vietnam companies
will not be available to the Fund to any significant extent for some time to
come. Accordingly, in October 1995, to facilitate the Fund's investment program,
the Board approved a change to the Fund's non-fundamental investment policies to
increase the percentage of the Fund's assets that may be invested in direct
equity investments from 35% to 65% of the Fund's total assets. Because this
change related to a non-fundamental investment policy, it did not require
shareholder approval, and you are not being asked to approve the change at the
Meeting. Direct equity investments consist of private investments in unlisted
equity securities acquired either directly from the issuer or from a private
investor in the issuer. The Investment Manager believes that the Fund will be
able to attain its investment objective pursuant to its stated investment
policies only if direct investments comprise a significant portion of the
portfolio. However, because of the absence of a trading market for direct
investments, the Fund may take longer to liquidate these positions than would be
the case for publicly traded securities and the prices on these sales could be
less than those originally paid by the Fund. In addition, reduced liquidity may
have an adverse effect on market price and the Fund's ability to dispose of
particular investments. Reduced liquidity may also make it more difficult for
the Fund to obtain accurate market prices for purposes of valuing its portfolio
and calculating its net asset value. As of June 30, 1996, 54.8% of the Fund's
assets were invested in short-term obligations and other temporary investments
outside Vietnam, with the remainder held in equity securities of Vietnam-Related
Companies in Hong Kong, Singapore, Indonesia and Thailand.
The Board also has determined that the Fund should expand the
categories of investments permissible for the Fund so as to take advantage of a
broader range of investment opportunities in Vietnam. These opportunities
include the making of loans, which may take the form of privately placed debt
obligations, and certain real estate related investments such as investment in
real estate mortgage loans and real estate related joint ventures structured as
limited partnerships.
In connection with the proposed changes in the Fund's fundamental
investment policies, the Board has changed the Fund's non-fundamental investment
policy regarding investment in single issuers. That policy formerly provided
that the Fund could invest up to 10% of its total assets in any one issuer. The
amended policy provides that the Fund can invest up to 25% of the Fund's total
assets in any one issuer. The Fund's non-fundamental investment policy which
limits the Fund's investment in any one industry to 25% of the Fund's total net
assets has not been changed and remains in effect. Notwithstanding the change to
the Fund's policy regarding investments in any one issuer, the Fund will only
invest in single issuers if the investment is consistent with the Fund's
investment objective of long-term capital appreciation. Because this change
related to a non-fundamental investment policy, it did not require shareholder
approval, and you are not being asked to approve the change at the Meeting.
In considering the foregoing changes in investment policy, the Board
has noted that the Fund's investment limitations are more restrictive than those
required by applicable U.S. law and regulations and that such changes will
provide the flexibility needed by the Investment Manager to make investments in
Vietnam Companies in view of the fact that a stock exchange has not been
established and, based upon current information, that the Investment Manager
believes that the prospects are not good for the establishment of an exchange by
October 1, 1997. The Board has noted that shareholders were informed in the
Fund's prospectus that investments in Vietnam Companies involve a high degree of
risk and are speculative in nature. Shareholders are urged to keep these
considerations in mind in considering whether or not to approve the requested
changes to the Fund's fundamental investment policies.
In addition, to further facilitate the Fund's investment program in
Vietnam, the Fund has asked the staff of the Securities and Exchange Commission
("SEC") for its concurrence that the Fund may, under applicable U.S. law,
purchase up to 100% of the voting securities of holding companies organized for
the purpose of investing in Vietnam companies, direct ownership of which by the
Fund would not be practicable under Vietnamese law. The reason for the request
is that the holding companies could be regarded as investment companies in which
the Fund might not be able to invest absent SEC staff concurrence. There is no
assurance that the staff of the SEC will grant this request or that the
Investment Manager will be able to identify suitable holding company investments
for the Fund. Again, because this proposed investment does not involve a change
of fundamental investment policy, you are not being asked to approve the Fund's
investments in holding companies organized for the purpose of investing in
Vietnam companies.
2. APPROVAL OF THE DELETION OF THE FUND'S CURRENT FUNDAMENTA
INVESTMENT RESTRICTION ON LOANS AND THE ADOPTION
OF A NEW FUNDAMENTAL INVESTMENT POLICY REGARDING LENDING
As a fundamental investment policy, the Fund currently may not:
make loans, except that the Fund may (a) purchase and hold debt
instruments (including bonds, debentures or other obligations and
certificates of deposit, bankers' acceptances and fixed time deposits)
in accordance with its investment objectives and policies, (b) enter
into repurchase agreements with respect to portfolio securities, and
(c) make loans of portfolio securities, as described under "Additional
Investment Practices - Loans of Portfolio Securities" in [the Fund's]
Prospectus.
The Securities and Exchange Commission interprets the term "loans," in
effect, to include the purchase of debt obligations that are not publicly
distributed. The proposed investment policy on lending would permit the Fund to
make loans and would specify that these loans may take the form of privately
placed debt obligations.
In recommending the proposed change to the Board, the Investment
Manager noted that, under applicable Vietnamese law, loan financing of certain
Vietnam enterprises offers certain distinct advantages over equity investments
for non-Vietnamese investors, such as the Fund. Specifically, the equity capital
of Vietnamese enterprises involving non-Vietnamese investors is fixed pursuant
to its organizational documents and may not be changed without regulatory
approvals. Loan financing, on the other hand, may be adjusted in response to
changing needs, and is thus more flexible for the parties involved. Moreover,
loan interest and principal payments are usually entitled to priority right of
repayment over enterprise profits, and, unlike dividends, are not subject to
withholding taxes. In addition, the proceeds of loan payments may be more easily
convertible to foreign currency than dividends. Having considered these and
other factors, management recommended and the Board concluded that it may be
more advantageous for the Fund to make investments in foreign invested
enterprises through the purchase of debt securities or the making of loans,
rather than through the purchase of equity securities, recognizing that loans
generally do not hold the same risk/reward potential as equities.
Loans and privately placed debt obligations generally are subject to
greater risks than those associated with publicly traded debt obligations. These
risks include general illiquidity and greater price volatility, as well as the
lack of publicly available information about issuers of privately placed debt
obligations and loan counterparties.
Under the proposed change, the Fund would be subject to the following
new and restated fundamental investment policy:
The Fund may purchase and hold debt instruments (including bonds,
debentures or other obligations and certificates of deposit, bankers'
acceptances and fixed deposits) in accordance with its investment
objectives and policies. In addition, the Fund may make loans, which
may take the form of the purchase of debt obligations that are not
publicly distributed.
The Fund may also enter into repurchase agreements with respect to
portfolio securities, and make loans of portfolio securities in
accordance with its investment objective and policies.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
DELETION OF THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION ON LOANS AND THE
ADOPTION OF A NEW FUNDAMENTAL INVESTMENT POLICY REGARDING LENDING
3. APPROVAL OF AN AMENDMENT OF THE FUND'S FUNDAMENTAL INVESTMENT POLICY
CONCERNING INVESTMENTS IN REAL ESTATE
As a fundamental investment policy, the Fund currently may not:
purchase real estate, real estate mortgage loans or real estate limited
partnership interests (other than securities secured by real estate or
interests therein or securities issued by companies that invest in real
estate or interests therein).
The proposed amendment to this investment restriction would permit the
Fund to make real estate mortgage loans and purchase interests in real estate
related joint ventures structured as limited partnerships, although the Fund
would continue to be restricted from the direct purchase of real estate.
The Fund is considering investment opportunities in Vietnam in
connection with infrastructure projects, such as the development of apartment
complexes or hotels. These opportunities may be available only through joint
ventures that could be construed as limited partnerships. The proposed change
would give the Fund added flexibility to invest in real estate limited
partnerships, or real estate mortgage loans, either by way of investing in joint
ventures or directly.
Real estate related investments entail certain risks, including
relative illiquidity and greater price volatility, and, like other investments
in developing countries, risk of forfeiture due to government action. In
addition, the ability of lenders to obtain complete and enforceable security
interests in real estate is still unsettled under Vietnamese law.
The amended investment restriction would provide that the Fund may not:
purchase real estate, except that the Fund may (i) purchase securities
secured by real estate or interests therein or securities issued by
companies that invest in real estate or interests therein, (ii) make or
purchase real estate mortgage loans, and (iii) purchase interests in
real estate limited partnerships.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
AMENDMENT OF THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION ON REAL ESTATE
INVESTMENTS.
4. RATIFICATION OF INDEPENDENT AUDITORS
How is an independent auditor selected?
The Board established a standing Audit Committee consisting of Messrs.
Clarke, Hines, Galbraith and Millsaps, all of whom are Independent
Directors. The Audit Committee reviews generally the maintenance of the
Fund's records and the safekeeping arrangements of the Fund's
custodian, reviews both the audit and non-audit work of the Fund's
independent auditor, and submits a recommendation to the Board as to
the selection of an independent auditor.
Which independent auditor did the Board of Directors select?
For the current fiscal year, the Board selected as auditors the firm of
McGladrey & Pullen, LLP, 555 Fifth Avenue, New York, New York 10017.
McGladrey & Pullen, LLP have been the auditors of the Fund since its
inception in 1994, and have examined and reported on the fiscal year
end financial statements, dated March 31, 1996, and certain related
Securities and Exchange Commissions filings. Neither the firm of
McGladrey & Pullen, LLP nor any of its members have any material direct
or indirect financial interest in the Fund.
Representatives of McGladrey & Pullen, LLP are not expected to be
present at the annual meeting, but have been given the opportunity to
make a statement if they wish, and will be available should any matter
arise requiring their presence.
5. OTHER BUSINESS
The Directors know of no other business to be presented at the Meeting.
However, if any additional matters should be properly presented,
proxies will be voted or not voted as specified. Proxies reflecting no
specification will be voted in accordance with the judgment of the
persons named in the proxy.
INFORMATION ABOUT THE FUND
The Fund's last audited financial statements and annual report, dated
March 31, 1996, are available free of charge. To obtain a copy, please
call 1-800/DIAL BEN or forward a written request to Franklin Templeton
Investor Services, Inc., P.O. Box 33030, St. Petersburg, Florida
33733-8030.
As of June 30, 1996 the Fund had 8,058,603 shares outstanding and
assets of $111,585,387. The Fund's shares are listed on the New York
Stock Exchange (symbol TVF). From time to time, the number of shares
held in "street name" accounts of various securities dealers for the
benefit of their clients may exceed 5% of the total shares outstanding.
To the knowledge of the Fund's management, there are no other entities
holding beneficially or of record more than 5% of the Fund's
outstanding shares.
In addition, to the knowledge of the Fund's management, as of June 30,
1996, no nominee or Director of the Fund owned 1% or more of the
outstanding shares of the Fund, and the Officers and Directors of the
Fund owned, as a group, less than 1% of the outstanding shares of the
Fund.
U.S. securities laws require that the Fund's Directors, Officers, and
shareholders owning more than 10% of outstanding shares, as well as
affiliated persons of its investment manager, report their ownership of
the Fund's shares and any changes in that ownership. Specific due dates
for these reports have been established and the Fund is required to
report in this Proxy Statement any failure to file by these dates
during the fiscal year ended March 31, 1996. All of these filing
requirements were met except that the Initial Statement of Beneficial
Ownership of Securities filed on behalf of Samuel J. Forester, Jr.,
which was inadvertently filed late. In making this disclosure, the Fund
relied upon the written representations of the persons affected and
copies of their relevant filings.
The Investment Manager. The investment manager of the Fund is Templeton
Asset Management Ltd. ("Templeton (Singapore)"), a Singapore company
with an office at 7 Temasek Boulevard, #38-03, Suntec Tower One,
Singapore. Pursuant to an investment management agreement amended and
restated as of November 23, 1995, Templeton (Singapore) manages the
investment and reinvestment of Fund resources. Templeton (Singapore) is
an indirect, wholly-owned subsidiary of Resources.
The Business Manager. The business manager of the Fund is Templeton
Global Investors, Inc. ("TGII"), Broward Financial Center, Suite
2100, Ft. Lauderdale, FL 33394-3091, an indirect, wholly-owned
subsidiary of Resources. Pursuant to a business management
agreement dated September 15, 1994, TGII performs certain
administrative functions for the Fund.
The Transfer Agent. The transfer agent, registrar and dividend
disbursement agent for the Fund is ChaseMellon Shareholder Services,
L.L.C., 120 Broadway, New York, NY 10271, pursuant to a service
agreement dated September 15, 1994.
The Custodian. The custodian for the Fund is The Chase Manhattan Bank,
1 Chase Manhattan Plaza, New York, NY 10081, pursuant to a custody
agreement dated September 15, 1994.
The Shareholder Servicing Agent. The shareholder servicing agent for
the Fund is PaineWebber Inc. ("PaineWebber"), an affiliate of the
initial underwriter of the Fund's shares. Pursuant to a shareholder
servicing agreement assigned as of February 6, 1995, PaineWebber
provides certain services to the Fund including statistical information
and analysis, ongoing efforts to publicize the Fund's shares and making
information available to investors.
FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDERS MEETING
SOLICITATION OF PROXIES. The cost of soliciting proxies, including the
fees of a proxy soliciting agent, are borne by the Fund. The Fund
reimburses brokerage firms and others for their expenses in forwarding
proxy material to the beneficial owners and soliciting them to execute
proxies. The Fund, however, does not reimburse Directors, Officers, and
regular employees and agents involved in the solicitation of proxies.
VOTING BY BROKER-DEALERS. The Fund expects that, before the Meeting,
broker-dealer firms holding shares of the Fund in "street name" for
their customers and clients, will request voting instructions from
their customers, clients and beneficial shareholders. If these
instructions are not received by the date specified in the
broker-dealer firms' proxy solicitation materials, the Fund understands
that New York Stock Exchange Rules permit the broker-dealers to vote on
certain of the items to be considered at the Meeting on behalf of their
customers, clients, and the beneficial shareholders. Certain
broker-dealers may exercise discretion over shares held in their name
for which no instructions are received by voting these shares in the
same proportion as they vote shares for which they received
instructions.
QUORUM. A majority of the shares entitled to vote - (present in person
or represented by proxy) constitutes a quorum at the Meeting. The
shares over which broker-dealers have discretionary voting power, the
shares that broker-dealers have declined to vote ("broker non-votes")
and the shares whose proxies reflect an abstention on any item are all
counted as shares present and entitled to vote for purposes of
determining whether the required quorum of shares exists.
METHODS OF TABULATION. Proposal 1, election of Directors, requires the
affirmative vote of the holders of a plurality of the Fund's shares
present and voting at the Meeting. Proposals 2 and 3, concerning
amendments to the Fund's fundamental investment restrictions, each
require the affirmative vote of a majority of the Fund's outstanding
shares. As defined by the 1940 Act, the vote of the holders of a
majority of the outstanding shares of the Fund means the lesser of
either (1) the vote of 67% or more of the Fund shares present at the
Meeting, if the holders of more than 50% of the outstanding shares of
the Fund are present or represented by proxy, or (2) the vote of the
holders of more than 50% of the outstanding shares of the Fund.
Proposal 4, ratification of the selection of the independent auditors,
requires the affirmative vote of a majority of the Fund's shares
present and voting at the Meeting. Proposal 5, the transaction of any
other business, requires the affirmative vote of a majority of the
Fund's shares present and voting at the Meeting. Abstentions and broker
"non-votes" will be treated as votes not cast and, therefore, will not
be counted for purposes of obtaining approval of Proposals 1, 2, 3, 4,
and 5.
ADJOURNMENT. If a sufficient number of votes in favor of the proposals
contained in the Notice of Annual Meeting and Proxy Statement is not
received by the time scheduled for the Meeting, the persons named in
the proxy may propose one or more adjournments of the Meeting to permit
further solicitation of proxies with respect to any such proposals. Any
proposed adjournment requires the affirmative vote of a majority of
shares present at the Meeting. Proxies will be voted as specified.
Those proxies reflecting no specification will be voted in accordance
with the judgment of the persons named in the proxy.
SHAREHOLDER PROPOSALS. The Fund anticipates that its next annual
meeting will be held in July 1997. Shareholder proposals to be
presented at the next annual meeting must be received at the Fund's
offices, 700 Central Avenue, St. Petersburg, Florida 33701-3628, no
later than February 28, 1997.
By order of the Board of Directors,
J. Mark Mobius
President
August 23, 1996
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
ANNUAL MEETING OF SHAREHOLDERS, OCTOBER 8, 1996
PLEASE VOTE PROMPTLY
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints BARBARA J. GREEN and ELLEN F. STOUTAMIRE, and
each of them, with full power of substitution, as proxies to vote for and in the
name, place and stead of the undersigned at the Annual Meeting of Shareholders
of Templeton Vietnam Opportunities Fund, Inc. (the "Fund") to be held at the
Fund's offices, 700 Central Avenue, St. Petersburg, Florida 33701-3628, on
Tuesday, October 8, 1996 at 10:00 A.M., EDT, and at any adjournment thereof,
according to the number of votes and as fully as if personally present.
This Proxy when properly executed will be voted in the manner (or not
voted) as specified. If no specification is made, the Proxy will be voted FOR
all nominees for Director in Proposal 1, and in favor of Proposal 2, 3 and 4 and
within the discretion of the Proxyholders as to Proposal 5.
, 1996
- ------------------------------------------------ -------------------------
Signature(s) Date
Please date this Proxy and sign exactly as your name or names appear hereon. If
more than one owner is registered as such, all must sign. If signing as
attorney, executor, trustee or any other representative capacity, or as a
corporate officer, please give full title.
(Continued on other side)
FOLD AND DETACH HERE
Please mark your ballot as
indicated in this example
The Board of Directors Recommends a vote FOR Proposals 1 through 5.
Proposal 1 - Election of Directors
FOR all nominees WITHHOLD Nominees: Martin L.
listed (except as AUTHORITY Flanagan, Andrew H. Hines,
marked to the right) to vote for all Jr. andCharles B. Johnson.
nominees listed
[ ] [ ] To withhold authority to
vote for any individual
nominee, write that
nominee's name on the line
below.
------------------------
Proposal 2 - Approval of the deletion of the Fund's current fundamental
investment restriction on loans and the adoption of a new
fundamental investment policy regarding lending.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Proposal 3 - Approval of the amendment to the Fund's current fundamental
investment restriction concerning investments in real estate.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Proposal 4 - Ratification of the selection of McGladrey & Pullen, LLP as
independent public accountants for the Fund for the fiscal year
ending March 31, 1997.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Proposal 5 - In their discretion, the Proxyholders are authorized to vote
upon such other matters which may legally come before the
Meeting or any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
I PLAN TO ATTEND THE MEETING. [ ]
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
FOLD AND DETACH HERE
