<PAGE> 1
As filed with the Securities and Exchange Commission on December 19, 1997
Securities Act File no. 33-81640
Investment Company Act File no. 811-8632
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
(Name of Issuer)
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
(Name of Person(s) Filing Statement)
SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
88022J107
(CUSIP Number of Class of Securities)
Barbara J. Green, Esq.
Templeton Vietnam Opportunities Fund, Inc.
500 East Broward Blvd.
Ft. Lauderdale, Florida 33394-3091
(800) 770-5001
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Person(s) Filing Statement)
With Copies to:
Allan S. Mostoff, Esq.
Dechert Price & Rhoads
1500 K Street, N.W.
WASHINGTON, D.C. 20005
(202) 626-3300
December 19, 1997
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
Transaction Amount of
Valuation (a):$32,516,467.14 Filing Fee (b): $6,503.29
(a) Calculated as the aggregate maximum purchase price to be paid for shares
in the offer, based upon the net asset value per share ($8.07) at
December 15, 1997.
(b) Calculated as 1/50th of 1% of the Transaction Valuation.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid:
Form or Registration No.:
Filing Party:
Date Filed:
1
<PAGE> 2
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Templeton Vietnam Opportunities Fund,
Inc. (the "Fund"), a non-diversified, closed-end management investment company.
The principal executive office of the Fund is 500 East Broward Blvd., Ft.
Lauderdale, Florida 33394-3091.
(b) The Fund is seeking tenders for up to 4,029,302 (approximately
50%) of its issued and outstanding shares of common stock, par value $.01 per
share (the "Shares") for cash at a price equal to their net asset value ("NAV")
determined as of the close of the regular trading session of the New York Stock
Exchange ("NYSE") on January 20, 1998, unless the Offer is extended, subject to
the terms and conditions set forth in the Offer to Purchase dated December 19,
1997 and the related Letter of Transmittal (which together constitute the
"Offer"). THE OFFER EXPIRES AT 12:00 MIDNIGHT, EASTERN STANDARD TIME, ON JANUARY
20, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE"). If the Offer is extended
beyond January 20, 1998, the purchase price for Shares will be equal to their
NAV determined as of the close of the regular trading session of the NYSE on the
Expiration Date, as extended. Copies of the Offer to Purchase and the Letter of
Transmittal are filed as Exhibits (a)(1)(i) and (a)(2)(i) to this statement,
respectively.
As of December 19, 1997, there were 8,058,603 Shares issued and
outstanding.
Reference is made to the Cover Page, Section 1 - "Price; Number of
Shares," Section 3 "Alternative Investment" and Section 10 - "Interest of
Certain Related Persons" of the Offer to Purchase, which are incorporated by
reference.
(c) The principal market in which the Shares are traded is the New
York Stock Exchange. Reference is made to the Cover Page and Section 8 - "Price
Range of Shares; Dividends" of the Offer to Purchase, which are incorporated by
reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is made to Section 13 - "Source and Amount of
Funds" of the Offer to Purchase, which is incorporated by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
Reference is made to Section 7 - "Purpose of the Offer; Plans or
Proposals of the Fund," Section 8 - "Price Range of Shares; Dividends," Section
11 - "Certain Effects of the Offer" and Section 13 - "Source and Amount of
Funds" of the Offer to Purchase, which are incorporated by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Reference is made to Section 10 - "Interest of Certain Related
Persons" of the Offer to Purchase, which is incorporated by reference. To the
Fund's knowledge, there have not been any transactions in Shares of the Fund
that were effected during the past 40 business days by
<PAGE> 3
the Fund, any member of the Board or executive officer of the Fund, any person
controlling the Fund, any executive officer or director of any corporation
ultimately in control of the Fund or by any associate or subsidiary of the
foregoing, including any officer or director of any such subsidiary. To the
Fund's knowledge, no officer, director or affiliate of the Fund intends to
tender Shares pursuant to the Offer.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE ISSUER'S SECURITIES.
Reference is made to Section 2 - "Procedure for Tendering Shares,"
Section 3 - "Alternative Investment," Section 5 - "Payment For Shares," Section
7 - "Purpose of the Offer; Plans or Proposals of the Fund" and Section 13 -
"Source and Amount of Funds" of the Offer to Purchase, which are incorporated by
reference.
Except as set forth in those sections or otherwise in the Offer to
Purchase, the Fund does not know of any contract, arrangement, understanding or
relationship relating, directly or indirectly, to the Offer between the (A)
Fund, any executive officer or director of the Fund, or any person controlling
the Fund or any executive officer or director of any corporation ultimately in
control of the Fund, and (B) any other person, with respect to any securities of
the Fund (including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss, or the giving or withholding of
proxies, consents or authorizations).
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The Fund has entered into a Depositary Agreement and an Information
Agent Services Agreement, each dated as of December 19, 1997, with ChaseMellon
Shareholder Services, L.L.C. ("ChaseMellon") to provide certain depositary and
information agent services in connection with the Offer. For its services under
the Depositary Agreement, ChaseMellon will receive a fee approximating
($45,000), plus expenses. The Depositary Agreement is filed as Exhibit (c)(1) to
this statement and is incorporated by reference. For its services under the
Information Agent Services Agreement, ChaseMellon will receive a fee
approximating ($3,500), plus $3.50 per phone call and expenses. The Information
Agent Services Agreement is filed as Exhibit (c)(2) to this statement and is
incorporated by reference.
No other persons have been employed or retained or are to be
compensated by or on behalf of the Fund to make solicitations or recommendations
in connection with the Offer.
ITEM 7. FINANCIAL INFORMATION
(a)(1) The Fund's audited financial statements for the fiscal years
ended March 31, 1997 and March 31, 1996 (the "Audited Financial Statements"),
together with the consent of McGladrey & Pullen, LLP, the independent auditors
of the Fund, are included as part of Exhibit (a)(1) attached hereto, which is
incorporated by reference in its entirety.
(2) The Fund is not required to file quarterly reports under the
Securities Exchange Act of 1934, as amended. Unaudited financial statements for
the six months ended September 30, 1997, which were included in the Fund's
semi-annual report to shareholders, and unaudited financial statements for the
period from April 1, 1997 to December 11, 1997, are included as part of Exhibit
(a)(1) which is incorporated by reference in its entirety.
2
<PAGE> 4
(3) Not applicable, however, certain ratios applicable to the Fund
for the period April 1, 1995 to March 31, 1997 are contained in the Audited
Financial Statements. Certain ratios applicable to the Fund for the period
April 1, 1997 to September 30, 1997 are contained in the Unaudited Financial
Statements, which are included as part of Exhibit (a)(1) and are incorporated by
reference in its entirety.
(4) The Fund's NAV per share as of March 31, 1997 and as of
September 30, 1997 are set forth in Section 8 - "Price Range of Shares;
Dividends" and Section 9 - "Selected Financial Information" of the Offer to
Purchase, which is incorporated by reference; that information is also set forth
in the Audited Financial Statements and the Unaudited Financial Statements,
respectively.
(b)(1) Historical and Pro Forma Statements of Assets and
Liabilities (assuming a 25% and 50% tender of shares) as of December 12, 1997
September 30, 1997 and March 31, 1997 (the "Pro Forma Financial Statements")
are included as part of Exhibit (a)(1) attached hereto, which is incorporated
by reference in its entirety.
(2) Historical and Pro Forma Statements of Operations (assuming
a 25% and 50% tender of shares) for the period April 1, 1997 to December 12,
1997, the six months ended September 30, 1997 and the year ended March 31, 1997.
The pro forma ratio of expenses to average net assets is included with the
Historical - Pro Forma Statements of Operations.
(3) The pro forma net asset value per share is included with
(b)(1) above.
ITEM 8. ADDITIONAL INFORMATION
(a)-(d) Not applicable.
(e) The Offer to Purchase, which is filed as Exhibit (a)(1), is
incorporated by reference in its entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS:
(a) (1) (i) Advertisement printed in The Wall Street Journal.
(a) (1) (ii) Offer to Purchase.
(a) (2) (i) Form of Letter of Transmittal.
(a) (2) (ii) Form of Notice of Guaranteed Delivery.
(a) (2) (iii)Form of Templeton Funds Application.
(a) (3) (i) Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and other Nominees.
(a) (3) (ii) Form of Letter to Clients of Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees.
(a) (3) (iii)Form of Letter to Shareholders who have requested
Information.
(a) (4) Text of Press Release dated December 19, 1997.
(b) Not applicable.
(c) (1) Depositary Agreement, dated as of December 19, 1997,
between the Fund and ChaseMellon Shareholder Services,
L.L.C.
3
<PAGE> 5
(c) (2) Investment Advisory Agreement, dated as of September
15, 1994, between the Fund and Templeton Asset
Management Limited (formerly Templeton Investment
Management (Singapore) Pte. Ltd.).
(c) (3) Information Agent Services Agreement between the Fund
and ChaseMellon Shareholder Services, L.L.C. dated as
of December 19, 1997.
(d)-(f) Not applicable.
4
<PAGE> 6
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
/s/ BARBARA J. GREEN /s/ JEFFREY L. STEELE
By: Barbara J. Green By: Jeffrey L. Steele
Title: Secretary Title: Assistant Secretary
Date: December 19, 1997
5
<PAGE> 7
EXHIBIT INDEX
(a)(1)(i) Advertisement printed in The Wall Street Journal.
(a)(1)(ii) Offer to Purchase.
(a)(2)(i) Form of Letter of Transmittal.
(a)(2)(ii) Form of Notice of Guaranteed Delivery.
(a)(2)(iii) Form of Templeton Funds Application Form.
(a)(3)(i) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and other Nominees.
(a)(3)(ii) Form of Letter to Clients of Brokers, Dealers, Commercial Banks,
Trust Companies and other Nominees.
(a)(3)(iii) Form of Letter to Shareholders who have requested information.
(a)(4) Text of Press Release dated December 19, 1997.
(b) Not applicable.
(c)(1) Depositary Agreement, dated as of December 19, 1997, between the
Fund and ChaseMellon Shareholder Services, L.L.C.
(c)(2) Investment Advisory Agreement, dated as of September 15,
1994, between the Fund and Templeton Asset Management Limited
(formerly Templeton Investment Management (Singapore) Pte. Ltd.).
(c)(3) Information Agent Services Agreement, dated as of December 19,
1997, between the Fund and ChaseMellon Shareholder Services,
L.L.C.
(d)-(f) Not applicable.
6
<PAGE> 1
This announcement is not an offer to purchase or a
solicitation of an offer to sell Shares. The Offer is
made only by the Offer to Purchase dated December 19,
1997 and the related Letter of Transmittal.
The Offer is not being made to, nor will tenders be
accepted from or on behalf of, holders of Shares in
any jurisdiction in which making or
accepting the offer would violate that jurisdiction's law.
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTICE OF OFFER TO PURCHASE UP TO
4,029,302 OF ITS ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
Templeton Vietnam Opportunities Fund, Inc. (the "Fund") is offering to
purchase up to 4,029,302 (approximately 50%) of its issued and outstanding
Shares of common stock, par value of $.01 per share ("Shares"), for cash at a
price equal to their net asset value ("NAV") determined as of the close of the
regular trading session of the New York Stock Exchange ("NYSE") on Tuesday,
January 20, 1998, unless extended (the "Expiration Date"), upon the terms and
conditions set forth in the Offer to Purchase dated December 19, 1997 and the
related Letter of Transmittal (which together constitute the "Offer"). The NAV
on December 15, 1997 was $8.07 per Share.
THE EXPIRATION DATE AND WITHDRAWAL DEADLINE ARE 12:00 MIDNIGHT, EASTERN
STANDARD TIME, ON TUESDAY, JANUARY 20, 1998, UNLESS EXTENDED.
The purpose of the Offer is to provide shareholders who may no longer
wish to participate in the Fund with the opportunity to sell their Shares to the
Fund at net asset value. At the time of the Fund's initial public offering, the
Fund's prospectus stated that, if at least 65% of the Fund's total assets are
not invested in the equity and debt securities of Vietnam Companies (as defined
in the prospectus) by October 1, 1997, management of the Fund would call a
shareholders meeting to vote either on a proposal to modify the Fund's
investment policies (and to change the name of the Fund) or on a proposal to
liquidate the Fund. The securities markets in Vietnam have not developed to the
point where the Fund was able to achieve this 65% target and the Fund's Shares
have generally traded on the NYSE at a discount from their net asset value.
Accordingly, to assist those investors who no longer desire to remain
shareholders of the Fund, the Fund's Board of Directors has determined that the
Fund should conduct this Offer, to the extent consistent with the best interests
of the Fund. The Offer is not conditioned upon the tender of any minimum number
of Shares, but is subject to certain conditions as set forth in the Offer.
After completion of the Offer, the Fund intends to hold its Annual
Meeting of Shareholders on or before March 31, 1998 to determine the future of
the Fund. If 4,029,302 or fewer of the Fund's Shares are tendered and not
withdrawn, the Board intends to submit to shareholders a proposal to change the
name of the Fund to "Templeton Vietnam and Southeast Asia Fund, Inc.," and to
change the Fund's investment policies to expand its ability to invest in other
<PAGE> 2
Southeast Asian countries, while continuing to focus its investment program on
Vietnam. The new policies would allow the Fund to invest its assets in Vietnam
as that country's markets develop, while giving it the flexibility to invest in
other Southeast Asian countries. In the event that an organized securities
market develops in Vietnam, the Fund would have the ability to invest a
significant amount of its assets in Vietnam. If more than 4,029,302 of the
Fund's shares are tendered and not withdrawn, the Board currently intends to
submit to shareholders a proposal to liquidate the Fund.
This advertisement does not constitute a solicitation of any proxies.
Any such solicitations will be made only pursuant to separate proxy materials
complying with the requirements of Section 14(a) of the Securities Exchange Act
of 1934, as amended.
If more than 4,029,302 Shares are tendered prior to the expiration of
the Offer, the Fund intends to extend the Expiration Date of the Offer by ten
business days in order to give shareholders who may not have initially tendered
their Shares an opportunity to tender their Shares.
As described in the Offer to Purchase, tendering shareholders may elect
to direct that all or a portion of their tender proceeds be used to purchase, at
no sales charge, Class I shares of certain open-end investment companies
distributed by Franklin/Templeton Distributors, Inc. (the "Alternative Funds").
Although the ability to purchase shares of an Alternative Fund has been made
available as a convenience to the Fund's shareholders, neither the Fund nor its
Board of Directors makes any recommendation as to whether shareholders should
elect to apply their tender proceeds towards the purchase of Alternative Fund
shares.
Shares tendered pursuant to the Offer may be withdrawn at any time
prior to 12:00 Midnight Eastern Standard Time on January 20, 1998, and, if not
yet accepted for payment by the Fund, Shares may also be withdrawn after
February 17, 1998.
The information required to be disclosed by paragraph (d)(1) of Rule
13e-4 under the Securities Exchange Act of 1934, as amended, is contained in the
Offer to Purchase and is incorporated herein by reference.
The Offer to Purchase and the related Letter of Transmittal contain
important information that should be read carefully before any decision is made
with respect to the Offer.
Questions and requests for assistance or for copies of the Offer to
Purchase, Letter of Transmittal and any other tender offer document, may be
directed to ChaseMellon Shareholder Services, L.L.C. (the "Information Agent")
at the address and telephone number below. Copies will be furnished promptly at
no expense to you. Shareholders who do not own Shares directly may tender their
Shares through their broker, dealer or nominee. Requests for current net asset
value quotations should be directed to Franklin Templeton's Fund Information
Department at 1-800-DIAL-BEN (1-800-342-5236).
-2-
<PAGE> 3
The Information Agent for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
450 West 33rd Street, 14th Floor
New York, New York 10001
Toll Free: (800) 851-9671
(Between the hours of 8:00 am to 8:00 pm Eastern Standard Time)
Banks and Brokerage Firms please call (212) 273-8293
December 19, 1997
-3-
<PAGE> 1
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
OFFER TO PURCHASE FOR CASH UP TO 4,029,302
OF ITS ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
THE EXPIRATION DATE AND THE WITHDRAWAL
DEADLINE IS 12:00 MIDNIGHT, EASTERN STANDARD TIME,
ON JANUARY 20, 1998, UNLESS EXTENDED.
To the Shareholders of
Templeton Vietnam Opportunities Fund, Inc.:
Templeton Vietnam Opportunities Fund, Inc. (the "Fund") is offering to
purchase up to 4,029,302 shares (approximately 50%) of its common stock, par
value $.01 per share (the "Shares"), for cash at a price equal to their net
asset value ("NAV") determined as of the close of the regular trading session of
the New York Stock Exchange ("NYSE") on January 20, 1998, unless the Offer is
extended. This Offer is subject to the terms and conditions set forth in the
Offer to Purchase dated December 19, 1997 and the related Letter of Transmittal
(which together constitute the "Offer") (certain terms used in this document
beginning with capital letters are explained in the Appendix). THE OFFER EXPIRES
AT 12:00 MIDNIGHT, EASTERN STANDARD TIME, ON JANUARY 20, 1998, UNLESS EXTENDED
(THE "EXPIRATION DATE"). If the Offer is extended beyond January 20, 1998, the
purchase price for Shares will be equal to their NAV determined as of the close
of the regular trading session of the NYSE on the Expiration Date, as extended
(the "Offering Price"). In the event that more than 4,029,302 Shares are
Tendered, the Fund intends to extend the Expiration Date of the Offer by ten
business days in order to give Shareholders who may not have initially tendered
their Shares an opportunity to tender their Shares.
The Shares are currently traded on the NYSE under the symbol "TVF." You can
obtain current NAV quotations as of the close of business on the previous
business day during the pendency of the Offer by calling Franklin Templeton's
Fund Information Department after 10:00 a.m., Eastern Standard time, at
1-800-DIAL-BEN (1-800-342-5236).
BACKGROUND AND PURPOSE OF THE OFFER
The purpose of the Offer is to provide shareholders who may no longer wish
to participate in the Fund with the opportunity to sell Shares to the Fund at
net asset value. At the time of the Fund's initial public offering, the Fund's
prospectus stated that, if at least 65% of the Fund's total assets were not
invested in the equity and debt securities of Vietnam Companies (see Section 12)
by October 1, 1997, management of the Fund would call a shareholders meeting to
vote either on a proposal to modify the Fund's investment policies (and to
change the name of the Fund) or on a proposal to liquidate the Fund. The
securities markets in Vietnam have not developed to the point where the Fund was
able to achieve this 65% target and the Fund's Shares have generally traded on
the NYSE at a discount from their net asset value. Accordingly, to assist those
investors who no longer desire to remain shareholders of the Fund, the Fund's
Board of Directors has determined that the Fund should conduct this Offer, to
the extent consistent with the best interests of the Fund.
After completion of the Offer, the Fund intends to hold its Annual Meeting
of Shareholders on or before March 31, 1998 to determine the future of the Fund.
If 4,029,302 or fewer of the Fund's Shares are Tendered, the Board intends to
submit to shareholders a proposal to change the name of the Fund to "Templeton
Vietnam and Southeast Asia Fund, Inc.," and to change the Fund's investment
policies to expand its ability to invest in other Southeast Asian countries,
while continuing to focus its investment program on Vietnam. The new policies
would allow the Fund to invest its assets in Vietnam as that country's markets
develop, while giving it the flexibility to invest in other Southeast Asian
countries. In the event that an organized securities market develops in Vietnam,
the Fund would have the ability to invest a significant amount of its assets in
Vietnam. If more than 4,029,302 of the Fund's Shares are Tendered, the Board
currently intends to submit to shareholders a proposal to liquidate the Fund.
See Sections 7, 11 and 12 and Appendix B.
<PAGE> 2
THE OFFER AND THIS OFFER TO PURCHASE DO NOT CONSTITUTE A SOLICITATION OF
ANY PROXIES. ANY SUCH SOLICITATIONS WILL BE MADE ONLY PURSUANT TO SEPARATE PROXY
MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
The Offer is being made to all shareholders of the Fund and is not
conditioned upon the tender of any minimum number of the Fund's outstanding
Shares. HOWEVER, A SHAREHOLDER WISHING TO ACCEPT THE OFFER MUST TENDER, OR CAUSE
THE TENDER OF, ALL SHARES ACTUALLY OWNED OR CONSTRUCTIVELY OWNED BY THE
SHAREHOLDER, PURSUANT TO SECTION 318 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), AS OF THE DATE OF PURCHASE OF SHARES PURSUANT TO THE
OFFER. Shareholders should consult their tax advisers as to the application of
the constructive ownership rules of Section 318. A tender of all Shares actually
and constructively owned is necessary to avoid the risk of adverse tax
consequences to non-tendering shareholders.
If more than 4,029,302 Shares are Tendered prior to the expiration of the
Offer, the Fund will purchase Shares from tendering shareholders, in accordance
with the terms and conditions specified in this Offer to Purchase. Shares will
be purchased on a pro rata basis in accordance with the number of Shares
Tendered by each shareholder during the period the Offer remains open, unless
the Fund determines not to purchase any Shares. See Section 6.
Tendering shareholders may elect to direct that either all or a portion of
the cash proceeds from the tender of Shares of the Fund be used to purchase, at
no sales charge, Class I Shares of certain open-end investment companies
distributed by Franklin/Templeton Distributors, Inc. See Section 3. These funds
are: Templeton Developing Markets Trust; Templeton Growth Fund, Inc.; and
Templeton Pacific Growth Fund (collectively, the "Alternative Funds").
To prevent federal income tax backup withholding equal to 31% of the gross
payments made pursuant to this Offer: (1) each U.S. shareholder must submit to
the Depositary a correct, completed, and signed Form W-9 or Substitute Form W-9,
or other confirmation of an exemption from backup withholding requirements; and
(2) each non-U.S. shareholder must submit to the Depositary a correct,
completed, and signed Form W-8. A Substitute Form W-9 is contained within and a
Form W-8 is included with the Letter of Transmittal and each is to be completed
as appropriate.
THIS OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE SECTION 6.
IMPORTANT
If you desire to tender your Shares, you should either: (1) complete and
sign the Letter of Transmittal and mail or deliver it to the Depositary together
with the Shares (in proper certificated or uncertificated form), and any other
documents required by the Letter of Transmittal; or (2) request your broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for you. IF YOUR SHARES ARE REGISTERED IN THE NAME OF A BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE, YOU MUST CONTACT THAT
FIRM IF YOU DESIRE TO TENDER YOUR SHARES. Shareholders are not required to pay a
service charge to the Fund or the Depositary in connection with the tender of
Shares, but may be charged a fee by a broker, dealer or other institution for
processing the tender requested.
IF YOU DO NOT WISH TO TENDER YOUR SHARES, YOU NEED NOT TAKE ANY ACTION.
NEITHER THE FUND NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. THE OFFER
TO PURCHASE CONTAINS IMPORTANT INFORMATION ABOUT THE OFFER AND THE FUND.
SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER TO
PURCHASE, CONSULT THEIR OWN INVESTMENT AND TAX ADVISERS AND MAKE THEIR OWN
DECISIONS WHETHER OR NOT TO TENDER THEIR SHARES.
ii
<PAGE> 3
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
FUND OR TEMPLETON ASSET MANAGEMENT LTD., THE INVESTMENT MANAGER OF THE FUND, AS
TO WHETHER SHAREHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER. ANY
RECOMMENDATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
THE INVESTMENT MANAGER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, ANY INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
THE INVESTMENT MANAGER.
Questions and requests for assistance may be directed to the Information
Agent at the appropriate address and at the telephone number set forth below.
Requests for additional copies of this Offer to Purchase and the Letter of
Transmittal may also be directed to the Information Agent. Shareholders who do
not own Shares directly may also obtain such information and copies from their
broker, dealer, commercial bank, trust company or other nominee and, if they
decide to tender, are required to tender their Shares through that firm.
December 19, 1997
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
500 EAST BROWARD BLVD.
FT. LAUDERDALE, FLORIDA 33394-3091
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., INFORMATION AGENT
450 West 33rd Street, 14th Floor
New York, New York 10001
Phone
1-800-851-9671
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Post Office Box 3301 85 Challenger Road -- 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Mail Drop-Reorg New York, NY 10271
Attn: Reorganization Department Ridgefield Park, NJ 07660 Attn: Reorganization Department
Attn: Reorganization Department
</TABLE>
Facsimile Transmission:
(201) 329-8936
For Confirmation Facsimile:
(201) 296-4860
iii
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
SECTION
1. Price; Number of Shares................................................................... 1
2. Procedure for Tendering Shares............................................................ 2
A. Proper Tender of Shares................................................................ 2
B. Signature Guarantees and Method of Delivery............................................ 2
C. Dividend Reinvestment Plan............................................................. 3
D. Book-Entry Delivery.................................................................... 3
E. Guaranteed Delivery.................................................................... 4
F. Determination of Validity.............................................................. 4
G. Federal Income Tax Withholding......................................................... 4
3. Alternative Investment.................................................................... 5
4. Withdrawal Rights......................................................................... 5
5. Payment For Shares........................................................................ 6
6. Certain Conditions of the Offer........................................................... 7
7. Purpose of the Offer; Plans or Proposals of the Fund...................................... 8
8. Price Range of Shares; Dividends.......................................................... 9
9. Selected Financial Information............................................................ 11
10. Interest of Certain Related Persons....................................................... 12
11. Certain Effects of the Offer.............................................................. 12
12. Certain Information About the Fund........................................................ 13
13. Source and Amount of Funds................................................................ 14
14. Regulatory Approvals...................................................................... 15
15. Additional Information.................................................................... 15
16. Certain U.S. Federal Income Tax Consequences.............................................. 15
17. Extension of Tender Period; Termination; Amendments....................................... 17
18. Miscellaneous............................................................................. 18
Appendix: Glossary........................................................................ 19
Exhibit A-1: Audited Financial Statements of the Fund for the fiscal years ended March 31,
1997 and March 31, 1996, together with the consent of McGladrey & Pullen, LLP,
the independent accountants of the Fund.
Exhibit A-2: Unaudited Financial Statements of the Fund for the periods April 1, 1997 to
December 12, 1997 and April 1, 1997 to September 30, 1997.
Exhibit A-3: Unaudited Pro Forma Financial Information of the Fund for the period April 1,
1997 to December 12, 1997, the period April 1, 1997 to September 30, 1997 and
the year ended March 31, 1997.
Exhibit B: Proposed Investment Policies for Templeton Vietnam and Southeast Asia Fund,
Inc.
</TABLE>
iv
<PAGE> 5
1. PRICE; NUMBER OF SHARES. The Fund will purchase up to 4,029,302
(approximately 50%) of its issued and outstanding Shares for cash at a price
equal to their NAV determined as of the close of the regular trading session of
the NYSE on January 20, 1998, unless the Offer is extended, subject to the terms
and conditions set forth in the Offer to Purchase dated December 19, 1997 and
the related Letter of Transmittal. THE OFFER EXPIRES AT 12:00 MIDNIGHT, EASTERN
STANDARD TIME, ON JANUARY 20, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE"). If
the Offer is extended beyond January 20, 1998, the purchase price for Shares
will be their NAV determined as of the close of the regular trading session of
the NYSE on the Expiration Date, as extended.
The Fund reserves the right to extend, terminate or amend the Offer. See
Sections 6 and 17. IN THE EVENT THAT MORE THAN 4,029,302 SHARES ARE TENDERED,
THE FUND INTENDS TO EXTEND THE EXPIRATION DATE OF THE OFFER BY TEN BUSINESS DAYS
IN ORDER TO GIVE SHAREHOLDERS WHO MAY NOT HAVE INITIALLY TENDERED THEIR SHARES
AN OPPORTUNITY TO TENDER THEIR SHARES. The Fund will not be obligated to
purchase Shares pursuant to the Offer under certain circumstances. See Section
6. Holders of Shares may tender Shares to the Depositary or withdraw Shares
previously tendered until expiration of the Offer. See Sections 2 and 4. The
Fund will not pay interest on the purchase price under any circumstances.
The NAV on December 15, 1997 was $8.07 per Share. The NAV can be expected
to vary with changes in the value of the investments held by the Fund. The
markets in which the Fund's assets are invested are volatile. See Section 12. On
the Expiration Date, the NAV may be higher or lower than it was on December 15,
1997. During the pendency of the Offer, you may obtain current NAV quotations
for the Fund as of the close of business on the previous business day by calling
Franklin Templeton's Fund Information Department after 10:00 a.m. Eastern
Standard Time at 1-800-DIAL-BEN (1-800-342-5236) Monday-Friday (except
holidays).
The Offer is being made to all shareholders of the Fund and is not
conditioned upon the tender of any minimum number of the Fund's outstanding
Shares. HOWEVER, A SHAREHOLDER WISHING TO ACCEPT THE OFFER MUST TENDER OR CAUSE
THE TENDER OF ALL OF THE SHARES ACTUALLY OWNED OR CONSTRUCTIVELY OWNED BY THE
SHAREHOLDER, PURSUANT TO SECTION 318 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), AS OF THE DATE OF PURCHASE OF SHARES PURSUANT TO THE
OFFER. Shareholders should consult their tax advisers as to the application of
the constructive ownership rules of Section 318. A tender of all Shares actually
and constructively owned is necessary to avoid the risk of adverse tax
consequences to non-tendering shareholders. See Section 16.
Proration. If more than 4,029,302 Shares are Tendered, the Fund will
purchase Shares from tendering shareholders, in accordance with the terms and
conditions specified in this Offer to Purchase and the related Letter of
Transmittal. Shares will be purchased on a pro rata basis in accordance with the
number of Shares Tendered by each shareholder during the period the Offer
remains open, unless the Fund determines not to purchase any Shares. See Section
6. In the event that proration of tendered Shares is required, the Fund will
determine the proration factor as soon as practicable following the Expiration
Date. Proration for each shareholder tendering Shares shall be based on the
ratio of the number of Shares Tendered by the shareholder to the total number of
Shares Tendered by all shareholders, subject to the conditions of the Offer
described in Section 6. Because of the difficulty in determining the number of
Shares properly Tendered (including Shares Tendered by guaranteed delivery
procedures, as described in Section 2E), the Fund does not expect that it will
be able to announce the final proration factor or to commence payment for any
Shares purchased pursuant to the Offer until approximately seven NYSE trading
days after the Expiration Date. The preliminary results of any proration, which
may change, will be announced by press release as promptly as practicable after
the Expiration Date. Shareholders may obtain preliminary information from the
Information Agent and may be able to obtain this information from their brokers.
On December 15, 1997 there were 8,058,603 Shares issued and outstanding and
there were approximately 294 holders of record of Shares. Certain of these
holders of record were nominees for brokers, dealers, commercial banks, trust
companies and other institutions that held Shares on behalf of multiple
beneficial owners. To the Fund's knowledge, no officer, director or affiliate of
the Fund intends to tender Shares pursuant to the Offer.
1
<PAGE> 6
2. PROCEDURE FOR TENDERING SHARES.
A. PROPER TENDER OF SHARES. For Shares to be properly tendered pursuant
to the Offer, the Depositary must receive at the appropriate address set forth
on page iii of this Offer to Purchase, on or prior to the Expiration Date, (i) a
properly completed and executed Letter of Transmittal; (ii) all Shares owned or
constructively owned by the tendering shareholder pursuant to Section 318 of the
Code (in proper certificated or uncertificated form); and (iii) any other
documents required by the Letter of Transmittal. Letters of Transmittal and
certificates representing tendered Shares should NOT be sent or delivered to the
Fund. Shareholders who desire to tender Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee should contact
that firm to effect a tender on their behalf.
Any tendering shareholder may elect to direct that either all or a portion
of the cash proceeds from the tender of Shares of the Fund be used to purchase,
at no sales charge, Class I Shares of certain open-end investment companies
distributed by Franklin/Templeton Distributors, Inc. See Section 3. These funds
are Templeton Developing Markets Trust; Templeton Growth Fund, Inc.; and
Templeton Pacific Growth Fund (collectively, the "Alternative Funds").
Shareholders should indicate whether they prefer to receive cash or have
their cash proceeds applied to the purchase of shares of one or more Alternative
Funds. Shareholders who do not indicate a preference will receive cash. If you
choose to direct that the proceeds from a tender of your Shares be invested in
shares of an Alternative Fund(s), the investment will be priced at the NAV of
the Alternative Fund as of the close of the NYSE on January 21, 1998, or, if the
Offer is extended, on the next business day following the Expiration Date, or,
if purchased with Shares Tendered pursuant to a Notice of Guaranteed Delivery,
on the next business day following payment for the Tendered Shares, or if the
Offer is to be prorated, on the next business day following the date that the
final proration factor is determined. The minimum investment for shares of an
Alternative Fund is $100. If tender proceeds applied towards the purchase of
Alternative Fund shares are less than $100, then those proceeds will be
distributed in cash. The transaction will be treated for tax purposes as a sale
of Fund Shares and a purchase of the Alternative Fund's shares, and may result
in a taxable gain or loss for the shareholder. See Section 16.
The initial sales charge for Class I Shares of Alternative Funds will be
waived in connection with purchases arising out of the Offer. A current
prospectus for each Alternative Fund, which describes the risks inherent in an
investment in that fund, the charges and expenses that are borne by that fund
and its shareholders, and the operation of the fund generally, may be obtained
by calling 1-800-DIAL-BEN (1-800-342-5236). Before you may elect to apply your
cash proceeds from the tender of Shares to purchase shares of an Alternative
Fund, you must first obtain that Alternative Fund's prospectus. Please read it
carefully before you decide whether to invest in the Alternative Fund. See
Section 3.
Section 14(e) of the Exchange Act and Rule 14e-4 promulgated thereunder
prohibits both "short" tendering and "hedged" tendering by any person, whether
acting alone or in concert with others. It is a violation of Rule 14e-4 under
the Exchange Act for a person to tender Shares unless, the person tendering (i)
has a net long position equal to or greater than the amount tendered in (a)
Shares tendered or (b) other securities immediately convertible into, or
exercisable or exchangeable for, the number of Shares tendered and will acquire
these Shares for tender by conversion, exercise or exchange of such other
securities and (ii) will cause these Shares to be delivered in accordance with
the terms of the Offer.
The acceptance of Shares by the Fund for payment will constitute a binding
agreement between the tendering shareholder and the Fund upon the terms and
subject to the conditions of the Offer, including the tendering shareholder's
representation that (i) the shareholder has a net long position in the Shares
being tendered within the meaning of Rule 14e-4 under the Exchange Act and (ii)
the tender of the Shares complies with Rule 14e-4.
B. SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee is
required on the Letter of Transmittal (a) if the Letter of Transmittal is signed
by the registered holder(s) (which includes any participant in the Depository
Trust Company ("DTC") book-entry transfer facility whose name appears on DTC's
security position listing as the owner of Shares) of Shares tendered, unless the
holder(s) has completed either the box entitled "Special Payment Instructions"
or the box entitled "Special Delivery Instructions" in the Letter of Transmittal
or (b) if the Shares are tendered for the account of a firm (an
2
<PAGE> 7
"Eligible Institution") which is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of a Stock
Transfer Association approved medallion program (such as STAMP, SEMP or MSP). In
all other cases, all signatures on the Letter of Transmittal must be guaranteed
by an Eligible Institution. See Instruction 5 of the Letter of Transmittal.
If the Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered are owned of record by two or more joint
owners, all such owners must sign the Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If the Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, they
should so indicate when signing, and proper evidence satisfactory to the Fund of
their authority to act must be submitted. What evidence is deemed to be
"satisfactory" is in the sole discretion of the Fund.
If the Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered, no endorsements of certificates or separate stock powers are
required unless payment is to be made to, or certificates for Shares not
purchased are to be issued in the name of, a person other than the registered
holder(s). Signatures on the certificates or stock powers must be guaranteed by
an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appears on the certificate(s)
for such Shares. Signatures on the certificates or stock powers must be
guaranteed by an Eligible Institution.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. Shareholders have
the responsibility to cause timely delivery of their Shares (in proper
certificated or uncertificated form), as well as the Letter of Transmittal, and
any other documents required by the Letter of Transmittal to be delivered in a
timely manner. See Section 2A. Timely delivery is a condition precedent to
acceptance of Shares for purchase pursuant to the Offer and to payment of the
purchase amount.
C. DIVIDEND REINVESTMENT PLAN. ChaseMellon Shareholder Services, L.L.C.,
as the Fund's transfer agent, holds Shares in uncertificated form for certain
shareholders pursuant to the Fund's dividend reinvestment plan. Shareholders
wishing to accept the Offer must tender all uncertificated Shares as well as
their certificated Shares. Any Shares distributed as a result of the
reinvestment of a dividend to tendering shareholders who are participants in the
Fund's Dividend Reinvestment Plan ("DRIP") will be automatically tendered in the
Offer. See Sections 1 and 8.
D. BOOK-ENTRY DELIVERY. The Depositary will establish an account with
respect to the Shares at DTC for purposes of the Offer within two business days
after the date of this Offer to Purchase. Any financial institution that is a
participant in the DTC system may make book-entry delivery of Shares by causing
DTC to transfer the Shares into the Depositary's account at DTC in accordance
with DTC's transfer procedures. Although delivery of Shares may be effected
through book-entry transfer at DTC, a properly completed and executed Letter of
Transmittal or an Agent's Message completed by DTC, and any other documents
required by the Letter of Transmittal, must in any case be received by the
Depositary at one of its addresses set forth on page iii of this Offer to
Purchase on or prior to the Expiration Date, or the tendering shareholder must
comply with the guaranteed delivery procedures described below.
3
<PAGE> 8
Delivery of documents to DTC in accordance with DTC's procedures does not
constitute delivery to the Depositary.
E. GUARANTEED DELIVERY. If a shareholder desires to tender Shares
pursuant to the Offer and the Share certificates are not immediately available,
or time will not permit all required documents to reach the Depositary on or
prior to the Expiration Date, or a shareholder cannot complete the procedures
for delivery by book-entry transfer on a timely basis, then the shareholder's
Shares may nevertheless be tendered, provided that all of the following
conditions are satisfied:
(a) the tender is made by or through an Eligible Institution, as
defined above;
(b) a properly completed and executed Notice of Guaranteed Delivery,
substantially in the form provided by the Fund, is received by the
Depositary by the Expiration Date; and
(c) the Share certificates evidencing all Shares, in proper form for
transfer, or a Book-Entry Confirmation, together with the Letter of
Transmittal properly completed and executed with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message)
and any other documents required by the Letter of Transmittal, are received
by the Depositary within three NYSE trading days after the date of
execution of the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution and a representation that the shareholder
owns the Shares tendered within the meaning of, and that the tender of the
Shares complies with, Rule 14e-4 under the Exchange Act, each in the form set
forth in the Notice of Guaranteed Delivery.
Payment for Shares accepted for payment pursuant to the Offer will in all
cases be made only after timely receipt by the Depositary of Required Documents.
Accordingly, payment may not be made to all tendering shareholders at the same
time and will depend upon when Share certificates are received by the Depositary
or Book-Entry Confirmations of tendered Shares are received in the Depositary's
account at DTC. The Fund will not pay interest on the purchase price under any
circumstances.
F. DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of tenders will be
determined by the Fund, in its sole discretion, and the determination shall be
final and binding. The Fund reserves the absolute right to reject any or all
tenders determined not to be in appropriate form or to refuse to accept for
payment, purchase or pay for any Shares if, in the opinion of the Fund's
counsel, accepting, purchasing or paying for the Shares would be unlawful. The
Fund also reserves the absolute right to waive any of the conditions of the
Offer or any defect in any tender, whether generally or with respect to any
particular Share(s) or shareholder(s). The Fund's interpretations of the terms
and conditions of the Offer shall be final and binding.
NONE OF THE FUND, THE INVESTMENT MANAGER, THE DEPOSITARY OR ANY OTHER
PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF DEFECTS OR IRREGULARITIES,
OR WAIVERS OF DEFECTS OR IRREGULARITIES IN TENDERS OR IN ANY NOTICE OF
WITHDRAWAL, AND NONE OF THEM WILL INCUR ANY LIABILITY FOR FAILURE TO DO SO.
G. FEDERAL INCOME TAX WITHHOLDING. To prevent federal income tax backup
withholding equal to 31% of the gross payments made pursuant to the Offer, each
U.S. shareholder who does not otherwise establish an exemption from withholding
must notify the Depositary of the shareholder's correct taxpayer identification
number (or certify that the taxpayer is awaiting a taxpayer identification
number) and provide certain other information by completing the Substitute Form
W-9 included in the Letter of Transmittal.
Non-U.S. shareholders who are individuals must submit a Form W-8 to the
Depositary in order to avoid backup withholding. For those shareholders, a copy
of Form W-8 is included with the Letter of Transmittal.
For a discussion of certain other U.S. federal income tax consequences to
tendering shareholders, see Section 16.
4
<PAGE> 9
3. ALTERNATIVE INVESTMENT. Tendering shareholders may elect to direct that
either all or a portion of the cash proceeds from the tender of Shares of the
Fund be used to purchase for the account of the tendering shareholders Class I
Shares, at no sales charge, of certain open-end investment companies distributed
by Franklin/Templeton Distributors, Inc. These funds are: Templeton Developing
Markets Trust ("TDMT"); Templeton Growth Fund, Inc. ("TGF"); and Templeton
Pacific Growth Fund ("TPGF") (collectively, the "Alternative Funds").
Like the Fund, TDMT is advised by Templeton Asset Management Ltd. and its
principal portfolio manager is Dr. J. Mark Mobius. TDMT's investment objective
is long-term capital appreciation, which it seeks to achieve by investing
primarily in equity securities of issuers in countries having developing
markets. TGF is advised by Templeton Global Advisers Limited and its principal
portfolio manager is Mark Holowesko. TGF's investment objective is long-term
growth, which it seeks to achieve through a flexible policy of investing in
stocks and debt obligations of companies and governments of any nation. TPGF is
a diversified series of Franklin Templeton International Trust and is managed by
Franklin Advisers, Inc. and subadvised by Templeton Investment Counsel, Inc.
("TICI"). TPGF's principal portfolio manager is William T. Howard, Jr. of TICI.
TPGF's investment objective is to seek long-term growth of capital by investing
primarily in equity securities that trade on markets in the Pacific Rim and are
issued by companies domiciled in the Pacific Rim or that derive at least 50% of
their revenues or pre-tax income from activities in the Pacific Rim. Each of the
Alternative Funds pays management, administration and distribution fees to TAML
and/or one or more of its corporate affiliates. See Section 10.
The front-end sales charge normally applicable to sales of Class I Shares
of the Alternative Funds will be waived in connection with purchases arising out
of the Offer. See Section 2. The price paid for tendered Shares will be their
NAV determined as of the close of the regular trading session of the NYSE on the
Expiration Date, as extended. If elected, these proceeds may be used to purchase
shares of an Alternative Fund(s) at NAV determined as of the close of the NYSE
on the next business day following the Expiration Date, as extended, or, if
purchased with Shares Tendered pursuant to a Notice of Guaranteed Delivery, on
the next business day following payment for the Tendered Shares, or if the Offer
is to be prorated, on the next business day following the date that the final
proration factor is determined.
Electing Shareholders should indicate if their tender proceeds are to be
applied to the purchase of shares of one or more Alternative Funds. Each
directed purchase of the shares of an Alternative Fund must involve proceeds
from the tender of Shares which have a total net asset value of at least $100.
If tender proceeds applied towards the purchase of Alternative Fund shares are
less than $100, then those proceeds will be distributed in cash. The purchase of
shares of an Alternative Fund(s) with cash proceeds from the tender of Shares is
a taxable event and may result in a taxable gain or loss for the shareholders.
A current prospectus for each Alternative Fund, which describes the risks
inherent in an investment in that fund, the charges and expenses that are borne
by that fund and its shareholders, and the operation of the fund generally, may
be obtained by calling 1-800-DIAL-BEN (1-800-342-5236). Before you may elect to
apply your cash proceeds from the tender of Shares to be used to purchase shares
of an Alternative Fund, you must first obtain that Alternative Fund's
prospectus. Please read it carefully before you decide whether to invest in the
Alternative Fund.
A shareholder may direct the purchase of shares of an Alternative Fund(s)
by electing and completing the appropriate option on the Letter of Transmittal
or by giving proper instructions to the shareholder's broker or dealer and
completing the Application Form included with the Letter of Transmittal.
Although the ability to purchase shares of an Alternative Fund(s) has been made
available as a convenience to the Fund's shareholders, neither the Fund nor its
Board makes any recommendation as to whether shareholders should elect to apply
their cash proceeds towards the purchase of shares of an Alternative Fund.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4, tenders
of Shares made pursuant to the Offer will be irrevocable. At any time during the
pendency of the Offer on or prior to the Expiration Date (as it may be extended
from time to time), shareholders may withdraw the Shares that they have
tendered. With respect to any withdrawal of a portion of, but not all, tendered
Shares, the Fund reserves the right to ask the withdrawing shareholder to make
additional representations that the shareholder does not own or
5
<PAGE> 10
constructively own any Shares of the Fund on the Expiration Date of the Offer as
a condition to accepting for purchase such shareholder's remaining Shares
Tendered in the Offer. Additionally, if the Shares have not yet been accepted
for payment by the Fund, at any time after 12:00 midnight, Eastern Standard
time, on February 17, 1998, shareholders may withdraw the Shares that they have
tendered.
To be effective, a written or telegraphic notice of withdrawal must be
timely received by the Depositary at the appropriate address set forth on page
iii of this Offer to Purchase. Shareholders may also send a facsimile
transmission notice of withdrawal, which must be timely received by the
Depositary at (201) 329-8936, but the original notice of withdrawal must be
delivered to the Depositary by overnight courier or by hand the next day.
Any notice of withdrawal must specify the name of the person having
tendered the Shares to be withdrawn, and, if certificates representing the
Shares have been delivered or otherwise identified to the Depositary, the name
of the registered owner(s) of the Shares as set forth in the certificates if
different from the name of the person tendering the Shares. If certificates have
been delivered to the Depositary, then, prior to the release of the
certificates, the certificate numbers shown on the particular certificates
evidencing the Shares must also be submitted and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Fund in its sole discretion, and
the determination shall be final and binding. Shares properly withdrawn shall
not thereafter be deemed to be tendered for purposes of the Offer. However,
withdrawn Shares may be retendered by following the procedures described in
Section 2 on or prior to the Expiration Date.
NONE OF THE FUND, THE INVESTMENT MANAGER, THE DEPOSITARY OR ANY OTHER
PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF ANY DEFECTS OR
IRREGULARITIES, OR WAIVERS OF DEFECTS OR IRREGULARITIES IN TENDERS OR IN ANY
NOTICE OF WITHDRAWAL, AND NONE OF THEM WILL INCUR ANY LIABILITY FOR FAILURE TO
DO SO.
5. PAYMENT FOR SHARES. For purposes of the Offer, the Fund will be deemed to
have purchased Shares pursuant to the Offer when, as and if it gives oral or
written notice to the Depositary of its acceptance of the Shares for purchase.
Pursuant to a rule under the Exchange Act, the Fund is obligated to pay for or
return tendered Shares promptly after the termination, expiration or withdrawal
of the Offer. Upon the terms and subject to the conditions of the Offer, the
Fund will pay for Shares properly tendered as soon as practicable after the
Expiration Date. The Fund will make payment for Shares purchased pursuant to the
Offer by depositing the aggregate purchase price with the Depositary, which will
either make payment to shareholders promptly as directed by the Fund or, in the
case of a tendering shareholder electing to use the proceeds to purchase Class I
Shares of an Alternative Fund(s), to purchase the shares for the account of the
shareholder. The Fund will not pay interest on the purchase price under any
circumstances. If more than 4,029,302 Shares are Tendered, the Fund will
purchase Shares on a pro rata basis in accordance with the number of Shares
Tendered by each shareholder during the period the Offer remains open, unless
the Fund determines not to purchase any Shares. See Section 1.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of: (a) a properly completed
and executed Letter of Transmittal, (b) the Shares (in proper certificated or
uncertificated form), and (c) any other documents required by the Letter of
Transmittal. Shareholders are not required to pay a service charge to the Fund
or the Depositary in connection with their tender of Shares, but may be charged
a fee by a broker, dealer or other institution for processing the tender
requested. Certificates representing Shares tendered but not purchased will be
returned promptly following the termination, expiration or withdrawal of the
Offer, without expense to the tendering shareholder.
The Fund will pay any transfer taxes payable on the transfer to it of
Shares purchased pursuant to the Offer. The Fund should be entitled to rebates
or refunds of transfer taxes paid by the Fund on Shares purchased pursuant to
the Offer. However, if tendered Shares are registered in the name of any person
other
6
<PAGE> 11
than the person signing the Letter of Transmittal, the amount of any taxes
(whether imposed on the registered owner or the other person) payable on account
of the transfer to that person of the Shares will be deducted from the purchase
price unless satisfactory evidence of the payment of the taxes, or exemption
therefrom, is submitted. The Fund will not pay any interest on the purchase
price under any circumstances. The Fund may not be obligated to purchase Shares
pursuant to the Offer under certain conditions. See Section 6.
Any tendering shareholder or other payee who fails to complete fully and
sign either the Form W-8 or Substitute Form W-9 in the Letter of Transmittal and
provide that form to the Depositary, may be subject to required federal income
tax withholding of 31% of the gross proceeds paid to the shareholder or other
payee pursuant to the Offer. See Section 16.
6. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the
Offer, the Fund shall not be required to accept for payment or pay for any
Shares, and may (subject to Rule 13e-4(f)(5) under the Exchange Act, relating to
the Fund's obligation to pay for or return tendered Shares after the termination
or withdrawal of the Offer) postpone the acceptance for payment of, or payment
for, tendered Shares, and may, in its sole discretion, terminate or amend the
Offer as to any Shares not then paid for if at any time on or after December 19,
1997 and prior to the time of payment for any of those Shares (whether any
Shares have been accepted for payment, purchased or paid for pursuant to the
Offer) any of the following events shall have been determined to have occurred,
that, in the Board's sole judgment in any case and regardless of the
circumstances giving rise thereto (including any action or omission to act by
the Fund), makes it inadvisable to proceed with the Offer or with acceptance for
payment or payment: (1) such transactions, if consummated, would (a) result in
the delisting of the Fund's Shares from the NYSE, (b) impair the Fund's status
as a regulated investment company under the Code, or (c) result in a failure to
comply with applicable asset coverage requirements; (2) the Fund would not be
able to liquidate portfolio securities in an orderly manner and consistent with
the Fund's investment objective and policies in order to repurchase Shares under
the Offer; or (3) there is, in the sole judgment of the Board, any material
event or condition that would have an adverse effect on the Fund or its
shareholders if Shares were repurchased under the Offer, including, without
limitation, the occurrence of any of the following:
(a) there shall be threatened, instituted or pending any action,
proceeding or application before any court or governmental authority or
other regulatory or administrative agency or commission, domestic or
foreign, by any government or governmental authority or other regulatory or
administrative agency or commission, domestic or foreign, or by any other
person, domestic or foreign, challenging the acquisition by the Fund of the
Shares or seeking to restrain, delay or prohibit the making of the Offer,
or the acceptance for payment, purchase of, or payment for, some or all of
the Shares or resulting in a delay in, or restricting, the ability of the
Fund, or rendering the Fund unable, to accept for payment, purchase or pay
for some or all of the Shares, or otherwise directly or indirectly relating
in any manner to or affecting the Offer;
(b) any statute, rule, regulation or order or injunction shall be
sought, proposed, enacted, promulgated, entered, enforced or deemed to
become applicable to the Offer or any other action shall have been taken,
proposed or threatened, by any government, governmental authority or other
regulatory or administrative agency or commission or court, or any other
person, domestic or foreign, that, in the sole judgment of the Board,
might, directly or indirectly, result in any of the consequences referred
to in paragraph (a) above;
(c) there shall have occurred (i) any general suspension of, or
limitation on times or prices for, trading in securities on any national
securities exchange or in the over-the-counter market or in any other
securities exchange or market on which any portion of the Fund's portfolio
securities are traded; (ii) a declaration of a banking moratorium or any
suspension of payments in respect to banks in the United States or any
other country in which the Fund's assets are invested; (iii) a commencement
of a war, armed hostilities or other international or national calamity
directly or indirectly involving or affecting the United States or any
other country in which the Fund's assets are invested; (iv) any limitation
(whether or not mandatory) by any governmental authority in the United
States or in any other country in which the Fund's assets are invested in,
or any other event which, in the sole judgment of the Board, might
7
<PAGE> 12
affect the extension of credit by banks or other lending institutions or
foreign currency transactions by such institutions; or (v) in the case of
any of the foregoing existing at the time of the commencement of the Offer,
in the sole judgment of the Board, a material acceleration or worsening
thereof; or
(d) any change (or any condition, event or development involving a
prospective change) shall have occurred or be threatened in the general
economic, political, financial, currency exchange or market conditions in
the United States or in any other country that, in the sole judgment of the
Board, has or may have a material adverse effect upon the value of the
assets of the Fund.
These conditions are for the Fund's sole benefit and may be asserted by the
Fund regardless of the circumstances (including any action or inaction of the
Fund), and any condition may be waived by the Fund, in whole or in part, at any
time and from time to time in its sole discretion. The Fund's failure at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
right; the waiver of any right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts or
circumstances; and each right shall be deemed an ongoing right which may be
asserted at any time and from time to time. Any determination by the Fund
concerning the events described in this Section 6 shall be final and shall be
binding.
The Fund reserves the right, at any time during the pendency of the Offer,
to terminate, extend, or amend the Offer in any respect. See Section 17.
7. PURPOSE OF THE OFFER; PLANS OR PROPOSALS OF THE FUND. The purpose of the
Offer is to provide shareholders who may no longer wish to participate in the
Fund with the opportunity to sell their Shares to the Fund at net asset value.
At the time of the Fund's initial public offering in September, 1994, the
prospectus stated that, if at least 65% of the Fund's total assets were not
invested in the equity and debt securities of Vietnam Companies (see Section 12)
by October 1, 1997, management of the Fund would call a shareholders meeting to
vote either on a proposal to modify the Fund's investment policies (and to
change the name of the Fund) or on a proposal to liquidate the Fund. The
securities markets in Vietnam have not developed to the point where the Fund was
able to achieve this 65% target and the Fund's Shares have generally traded on
the NYSE at a discount from their net asset value. Accordingly, to assist those
investors who no longer desire to remain shareholders of the Fund, the Fund's
Board has determined that the Fund should conduct this tender offer to the
extent consistent with the best interests of the Fund. The Fund chose to limit
the Offer to 4,029,302 Shares or approximately 50% of its Shares issued and
outstanding because the Fund believes that this represents the maximum amount of
Shares that may be purchased and still permit the Fund to operate as a viable
investment entity.
After completion of the Offer, the Fund intends to hold its Annual Meeting
of Shareholders on or before March 31, 1998 to determine the future of the Fund.
If 4,029,302 or fewer of the Fund's shares are Tendered in the Offer, the Board
intends to submit to shareholders a proposal to change the name of the Fund to
"Templeton Vietnam and Southeast Asia Fund, Inc.," and to change the Fund's
investment policies to expand its ability to invest in other Southeast Asian
countries, while continuing to focus its investment program on Vietnam. The new
policies would allow the Fund to invest in assets in Vietnam as that country's
markets develop, while giving it the flexibility to invest in other Southeast
Asian countries such as China, Hong Kong, India, Indonesia, Korea, Malaysia,
Myanmar, the Philippines, Singapore, Taiwan and Thailand. In the event that an
organized securities market develops in Vietnam, the Fund would have the ability
to invest a significant amount of its assets in Vietnam. See Appendix B for the
proposed investment policies of the Fund (which may be subject to change). See
Section 12.
If more than 4,029,302 of the Fund's Shares are Tendered, the Board
currently intends to submit to shareholders at the Annual Meeting of
Shareholders a proposal to liquidate the Fund. The liquidation of the Fund would
require the Fund to sell all of its assets and distribute the proceeds to its
shareholders, after making provision for the payment of the costs of liquidation
and dissolution of the Fund. The Fund also intends to extend the Expiration Date
of the Offer by ten business days in order to give Shareholders who may not have
initially tendered their Shares an opportunity to tender their Shares.
8
<PAGE> 13
Approval of either of these proposals would require the approval of a
majority of the Fund's outstanding voting securities. As used herein, a
"majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Shares represented at a meeting at which more than 50% of the
outstanding Shares are represented, and (ii) more than 50% of the outstanding
Shares.
The Fund also has received from a shareholder who claims to own 250 Shares
of the Fund as of April 1, 1997, a shareholder proposal that the shareholders
recommend to the Board that the Fund be converted into an open-end investment
company. The Fund has filed a letter with the staff of the Securities and
Exchange Commission seeking the staff's concurrence that this proposal may be
excluded from the proxy materials if the shareholder refuses to make certain
changes necessary to make aspects of the proposal and its supporting statement
not misleading or otherwise in violation of the proxy rules, or, if the Board
submits a proposal to liquidate the Fund, as fundamentally inconsistent with
such liquidation.
If this proposal is included in the Fund's proxy materials, the Board
intends to recommend that shareholders reject the shareholder proposal, based on
the difficulties of operating the Fund as an open-end company, the Investment
Manager's investment style, and the illiquid nature of many investment
opportunities in this area and of some of the Fund's investments.
THE OFFER AND THIS OFFER TO PURCHASE DO NOT CONSTITUTE A SOLICITATION OF
ANY PROXIES. ANY SUCH SOLICITATIONS WILL BE MADE ONLY PURSUANT TO SEPARATE PROXY
MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
8. PRICE RANGE OF SHARES; DIVIDENDS. The following tables set forth, for the
periods indicated, the high and low NAV per Share and the high and low sales
prices per Share of the Fund as reported by the NYSE Composite Tape and the
amount of any income dividends and distributions of realized capital gains paid
per Share during each period. Shares are traded on the NYSE under the symbol
"TVF." Shareholders are urged to obtain a current market quote for the Shares.
TABLE 1 -- MARKET PRICE AND NET ASSET VALUE OF FUND SHARES
<TABLE>
<CAPTION>
MARKET PRICE NET ASSET VALUE
--------------------- ---------------
PERIOD (CALENDAR QUARTERS) HIGH LOW HIGH LOW
- ------------------------------------------------------- ---- --- ----- -----
<S> <C> <C> <C> <C> <C> <C>
1995
First Quarter.......................................... 12 3/8 10 1/8 13.28 12.23
Second Quarter......................................... 14 1/4 10 3/4 13.80 12.88
Third Quarter.......................................... 14 5/8 11 3/8 14.12 13.56
Fourth Quarter......................................... 13 1/4 11 13.78 13.22
1996
First Quarter.......................................... 15 11 3/4 14.14 13.29
Second Quarter......................................... 13 1/8 11 1/4 14.19 13.80
Third Quarter.......................................... 11 3/4 11 13.95 13.58
Fourth Quarter......................................... 12 1/8 11 14.86 13.92
1997
First Quarter.......................................... 12 11 1/8 14.62 13.92
Second Quarter......................................... 12 3/4 11 13.93 14.57
Third Quarter.......................................... 13 10 15/16 14.93 12.55
Fourth Quarter**....................................... 11 13/16 7 5/8 12.76 8.17
</TABLE>
- ---------------
** Through December 12, 1997.
9
<PAGE> 14
TABLE 2 -- INCOME DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS PAID PER SHARE
<TABLE>
<CAPTION>
CAPITAL
INCOME GAIN
PERIOD (CALENDAR QUARTERS) DIVIDENDS DISTRIBUTIONS
- ------------------------------------------------------------------- --------- -------------
<S> <C> <C>
1995
First Quarter...................................................... 0.000 0.000
Second Quarter..................................................... 0.070 0.000
Third Quarter...................................................... 0.000 0.000
Fourth Quarter..................................................... 0.305 0.070
1996
First Quarter...................................................... 0.000 0.000
Second Quarter..................................................... 0.045 0.000
Third Quarter...................................................... 0.000 0.000
Fourth Quarter..................................................... 0.260 0.050
1997
First Quarter...................................................... 0.000 0.000
Second Quarter..................................................... 0.030 0.035
Third Quarter...................................................... 0.000 0.000
Fourth Quarter**................................................... 0.000 0.000
</TABLE>
- ---------------
** Through December 12, 1997.
During the pendency of the Offer, you may obtain NAV quotations for the
Fund as of the close of business on the previous business day by calling
Franklin Templeton's Fund Information Department after 10:00 a.m., Eastern
Standard time, at 1-800-DIAL-BEN (1-800-342-5236).
The Fund has declared a dividend for record owners of Shares as of December
31, 1997 ("Dividend Declaration Date"), payable on January 14, 1998.
Shareholders of record prior to the Dividend Declaration Date shall be entitled
to receive this dividend whether or not they tender their Shares pursuant to the
Offer. Any Shares distributed as a result of the reinvestment of a dividend to
tendering shareholders who are participants in the Fund's Dividend Reinvestment
Plan ("DRIP") will be automatically tendered in the Offer. See Sections 1 and
2C.
10
<PAGE> 15
9. SELECTED FINANCIAL INFORMATION. Set forth below is a summary of selected
financial information for the Fund for the period April 1, 1995 to December 12,
1997. The information with respect to the period April 1, 1995 to March 31, 1997
has been excerpted from the Fund's audited financial statements and the
information with respect to the period April 1, 1997 to December 12, 1997 has
been excerpted from the Fund's unaudited financial statements and books and
records for those periods. Financial statements are included as Exhibits A-1 and
A-2 to this Offer to Purchase, and the summary of selected financial information
set forth below is qualified in its entirety by reference to those documents.
SUMMARY OF SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PERIOD PERIOD YEAR YEAR
4/1/97- 4/1/97- ENDED ENDED
12/12/97+ 9/30/97+ 3/31/97 3/31/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period................................. $ 14.05 $ 14.05 $ 13.91 $ 13.09
-------- -------- -------- --------
Income from investment operations:
Net investment income.............................................. .10 .14 .29 .36
Net realized and unrealized gains (losses)......................... (5.91) (1.11) .21 .91
-------- -------- -------- --------
Total from investment operations..................................... (5.81) (.97) .50 1.27
-------- -------- -------- --------
Underwriting expenses deducted from capital.......................... -- -- -- --
-------- -------- -------- --------
Less distributions:
Dividends from net investment income............................... (.03) (.03) (.31) (.38)
Distributions from net realized gains.............................. (.04) (.04) (.05) (.07)
-------- -------- -------- --------
Total distributions.................................................. (.07) (.07) (.36) (.45)
-------- -------- -------- --------
Net asset value, end of period....................................... $ 8.17 $ 13.01 $ 14.05 $ 13.91
-------- -------- -------- --------
Total return*
Based on market value per share**.................................... (31.85)% 2.23% (10.87)% 22.11%
Based on net asset value per share***................................ (41.53)% (6.89)% 4.03% 9.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).................................... $65,817 $104,865 $113,214 $112,073
Ratios to average net assets:
Expenses........................................................... 2.15% 1.82% ** 1.82% 1.47%
Net investment income.............................................. 1.08% 1.99% ** 2.04% 2.62%
Portfolio turnover rate.............................................. 73.16% 22.56% 20.16% 4.01%
Average commission rate paid****..................................... $ .0083 $ .0160 $ .0009 $ .0060
</TABLE>
- ---------------
+ Unaudited.
* Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day
of each period reported. Dividends and distributions, if any, are assumed
for the purposes of this calculation to be reinvested at prices obtained
under the Fund's dividend reinvestment plan. Total investment return does
not reflect sales charges that would have been paid on purchases in the
initial public offering or brokerage commissions that would have been paid
in connection with secondary market transactions. Generally, total
investment return based on net asset value will be higher than total
investment return based on market value in periods where there is an
increase in the discount or a decrease in the premium of the market value
to the net asset value from the beginning to the end of such periods.
Conversely, total investment returns based on net asset value will be
lower than total investment returns based on market value in periods where
there is a decrease in the discount or an increase in the premium of the
market value to the net asset value from the beginning to the end of such
periods. Investment return and principal value will fluctuate with market
conditions, currencies and the political, social and economic climates of
countries where investments are made. Emerging markets involve heightened
risks related to the same factors, in addition to those associated
11
<PAGE> 16
with the relatively small size and lesser liquidity of these markets. Past
performance is not predictive of future results. Total investment returns
for periods of less than one full year have not been annualized.
From October 1, 1994 through September 30, 1995, fee reductions by the
Fund's Investment Manager increased the Fund's total return. If the
Investment Manager had not taken this action, the Fund's total return
would have been lower.
** Based on the change in market price of a Share during the period and
assumes reinvestment of distributions at actual prices pursuant to the
Fund's dividend reinvestment plan. Since the inception of the Fund
(September 8, 1994), the cumulative total return through December 12, 1997
based on market value has been -45.36%.
*** Based on the change in net asset value of a Share during the period and
assumes reinvestment of distributions at net asset value. Except at the
inception of the Fund, it has not been possible to actually purchase or
sell shares of the Fund at their net asset value, other than through the
reinvestment of dividends and distributions. Since the inception of the
Fund (September 8, 1994), the cumulative total return through December 12,
1997 based on net asset value has been -37.71%.
**** Relates to purchase and sales of equity securities.
10. INTEREST OF CERTAIN RELATED PERSONS. Pursuant to an Investment Management
Agreement dated September 15, 1994, the Fund employs Templeton Asset Management
Ltd. ("TAML") to manage the investment and reinvestment of the assets of the
Fund. TAML (formerly Templeton Investment Management (Singapore) Pte. Ltd.) has
been the Fund's investment manager since the Fund's commencement of operations.
For services provided by TAML under the Investment Management Agreement, the
Fund pays TAML an investment management fee equal, on an annual basis, to 1.50%
of the average weekly net assets of the Fund. Tendering shareholders have the
option of directing their proceeds from the tender of Shares to purchase shares
of an Alternative Fund(s). Each of the Alternative Funds pays management,
administration and distribution fees to TAML and/or TAML affiliates. See Section
3. Franklin Templeton Services, Inc. ("FTSI") serves as the Fund's
administrative manager pursuant to an Administration Agreement dated October 1,
1996 and is responsible for overall management of the business affairs of the
Fund. FTSI is paid a monthly fee equal, on an annual basis, to 0.15% of the
Fund's average weekly net assets.
To the Fund's knowledge, there have not been any transactions in Shares of
the Fund that were effected during the past 40 business days by the Fund, any
member of the Board or executive officer of the Fund, any person controlling the
Fund, any executive officer or director of any corporation ultimately in control
of the Fund or by any associate or subsidiary of any of the foregoing, including
any officer or director of any such subsidiary. To the Fund's knowledge, no
officer, director or affiliate of the Fund intends to tender Shares pursuant to
the Offer.
11. CERTAIN EFFECTS OF THE OFFER. The purchase of Shares pursuant to the Offer
will have the effect of increasing the proportionate interest in the Fund of
non-tendering shareholders. All shareholders remaining after the Offer may be
subject to any increased risks associated with the reduction in the Fund's
aggregate assets, such as any greater volatility due to decreased
diversification and reduced liquidity due to the increase of the Fund's Direct
Investments (which are not listed for trading on a securities exchange and have
no public trading market) as a percentage of total assets and proportionately
higher expenses. See Sections 12 and 13 and Appendix A-3. Additionally, a
reduction in the number of Shares issued and outstanding may reduce the
liquidity and the depth of the market for the Shares traded.
All Shares purchased by the Fund pursuant to the Offer will remain
authorized but unissued and will be available for issuance by the Fund, subject
to applicable law and the rules of the NYSE. Additionally, the results of the
Offer will, to an extent, determine the future direction of the Fund. If more
than 4,029,302 Shares (which, as of December 15, 1997, constituted approximately
50% of the outstanding shares of the Fund) are Tendered in the Offer, they will
be accepted on a pro rata basis, and the Board currently intends to submit to
shareholders a proposal to liquidate the Fund. In the event that more than
4,029,302 Shares are Tendered, the Fund intends to extend the Expiration Date of
the Offer by ten business days in order to give Shareholders who may not have
initially tendered their Shares an opportunity to tender their Shares. If
4,029,302 or fewer Shares are Tendered, the Board currently intends to submit to
shareholders a proposal to
12
<PAGE> 17
change the name of the Fund and expand its investment objectives to include
investing in other Southeast Asian countries, while continuing to focus its
investment program on Vietnam. See Sections 7 and 13.
The Fund may have to liquidate additional portfolio securities in order to
finance the Offer which may lead to the premature disposition of portfolio
investments and additional transaction costs. See Section 13. Depending upon the
timing of such sales, any resulting decline in NAV may adversely affect any
tendering shareholders whose Shares are accepted for purchase by the Fund, as
well as those shareholders who do not sell Shares pursuant to the Offer. See
Section 13. Additionally, the Fund may realize gains on securities held for less
than three months. The Fund's taxable year began April 1, 1997 and under current
tax law the Fund must limit those gains during such year in order to qualify as
a regulated investment company under the Code. Accordingly, realizing those
gains or realizing cash for the purchase of Shares will reduce the Fund's
ability to sell other portfolio securities held for less than three months that
the Fund might wish to sell in the ordinary course of its portfolio management
during the relevant period. This may adversely affect the Fund's performance.
See Sections 7 and 12.
If the Fund proceeds to liquidation, the Fund will sell all of its assets
and distribute the proceeds to its shareholders, after making provision for the
payment of the costs of liquidation and dissolution of the corporation. The Fund
holds certain private investments in Vietnam Companies, referred to as "Direct
Investments." As of December 12, 1997, the Direct Investments represented 12.07%
of the assets of the Fund. Shareholders should be aware that these Direct
Investments do not trade on established securities markets and, therefore, may
not be readily saleable in a liquidation at prices the Investment Manager
believes attractive. In addition, selling these Direct Investments may cause
delay in the liquidation process and the Fund may be forced to liquidate these
investments at a price that is substantially lower than the value at which the
Fund currently carries these securities. For this reason along with the
possibility of a continuing decline in the Asian markets, liquidation proceeds
per Share may be more or less than current net asset value or the amount a
shareholder may receive pursuant to this Offer. See Section 12.
12. CERTAIN INFORMATION ABOUT THE FUND. The Fund was organized as a Maryland
corporation on July 19, 1994 and is registered as a non-diversified, closed-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund's investment objective is to seek long-term
capital appreciation by investing in the equity securities of Vietnam Companies
as described below. Under normal circumstances, the Fund will invest at least
65% of the value of its total assets in the equity and debt securities of
Vietnam Companies. The term "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. However, because of the extremely limited
number of Vietnam Companies at the time of the Fund's initial public offering,
the Fund's prospectus provided that it would initially invest in the securities
of both (i) Vietnam Companies and (ii) companies that do not qualify as Vietnam
Companies but which the Fund's Investment Manager believes will experience
growth in revenue or income from participation in the development of the economy
of Vietnam ("Vietnam-Related Companies"). The prospectus also stated that, if at
least 65% of the Fund's total assets were not invested in the equity and debt
securities of Vietnam Companies by October 1, 1997, management of the Fund would
call a shareholders meeting to vote either on a proposal to modify the Fund's
investment policies (and to change the name of the Fund) or on a proposal to
liquidate the Fund. The securities markets in Vietnam have not developed to the
point where the Fund has been able to achieve this 65% target. Accordingly, the
Board has considered the alternatives of changing the investment policies and
name of the Fund or liquidation, but determined that the Fund should first
conduct a tender offer to provide shareholders who no longer wish to participate
in the Fund with the opportunity to sell their shares to the Fund at net asset
value, to the extent consistent with the best interests of the Fund. See Section
7.
Recent Developments. Investing in securities of Vietnam Companies and
Vietnam-Related Companies involves special considerations including risks
relating to direct investments, as well as the risks associated with investing
in emerging markets. These risks include adverse economic, social and political
developments, the absence of an organized stock exchange in Vietnam, reduced
liquidity of emerging markets, and greater
13
<PAGE> 18
market and currency volatility. As stated in the Fund's prospectus dated
September 15, 1994, investment in the Fund should be considered speculative.
The Fund's investment objectives and policies, as set forth in its
prospectus, permit the Fund to invest in Vietnam-Related Companies. The Fund has
invested in certain liquid Vietnam-Related Companies whose securities are traded
on Asian markets and acquired those investments at what were then considered by
the Investment Manager to be attractive prices. In recent months, many Asian
stock markets have declined in value due to severe currency, financial and
economic crises in Hong Kong, Thailand and other Southeast Asian countries. In
this adverse market environment, the values of many of the Fund's investments in
both Vietnam and Vietnam-Related Companies also have declined. The recent
market, currency and economic developments in Southeast Asia have also put
negative pressure on Vietnam's economy and the competitiveness of its exports.
Vietnam's currency has not weakened significantly, making its exports less
competitive compared to its Southeast Asian neighbors, which have had currency
devaluation of 30% or more against the U.S. dollar. In addition, the real estate
market in Vietnam has dropped, which has contributed to declines in the values
of Direct Investments held by the Fund. See Sections 8 and 9; Exhibits A-1 and
A-2 listing the Fund's investments, including number of shares and dollar value.
Looking forward, it remains to be seen whether the Vietnamese economy will
continue to grow in the near term. The recent slowdown in foreign investment and
a lack of government initiatives to further liberalize and privatize the economy
are causes for concern. The International Monetary Fund ("IMF") has warned
Vietnam that it must institute urgent financial reforms in order to avoid a
financial crisis similar to those that have occurred elsewhere in Asia.
The risks of investing in many emerging Southeast Asian countries are
similar in many respects to the risks of investing in Vietnam and investments in
these countries may be affected by developments in other countries, the region
or elsewhere. Recent developments in Asia emphasize this point. As mentioned
above, currency and economic crises in several Asian countries have had a severe
impact on many Asian stock markets. Specifically, the recent depreciation of the
South Korean won caused the Hong Kong Stock Exchange to fall sharply and
interest rates in Hong Kong to rise sharply. In addition, shares have dropped in
value in Indonesia due to concerns that South Korean banks, struggling with an
increase in bad debt, may reduce investments in that country. In response to
these and other events, the South Korean Government has announced a package of
stabilization measures for the country's economy and has asked the United States
and Japan for assistance. Korea, the Philippines, Thailand and Indonesia have
also requested assistance from the IMF to stabilize their exchange rates and to
render emergency assistance.
Given these and other developments, the markets in which the Fund invests
can be expected to remain volatile for the foreseeable future and the Fund
should continue to be considered a speculative investment. Reference is made to
Section 8 and Section 9 of this Offer to Purchase and to the financial
statements attached as Exhibits A-1 and A-2, and to the Fund's pro forma
financial statements attached as Exhibit A-3, which are incorporated by
reference.
The principal executive office of the Fund is 500 East Broward Boulevard,
Ft. Lauderdale, Florida 33394-3091.
13. SOURCE AND AMOUNT OF FUNDS. The total cost to the Fund of purchasing
4,029,302 of its issued and outstanding Shares pursuant to the Offer would be
approximately $32,516,467 (based on a price per share of $8.07, the NAV as of
December 15, 1997; this figure does not include costs of the Offer which are
approximately $.04 per share). On December 15, 1997, the net assets of the Fund
aggregated approximately $65,035,475.
To pay the aggregate purchase price of Shares accepted for payment pursuant
to the Offer, the Fund anticipates that funds will first be derived from any
cash on hand, and then from the proceeds from the sale of portfolio securities
held by the Fund. As of December 15, 1997, the Fund had $39,581,949 in cash and
cash equivalents on hand approximating 61% of its total assets. Although the
Fund is authorized and reserves the right to borrow money to finance the
repurchase of Shares, the Board believes that the Fund will have sufficient
resources through disposition of assets to repurchase Shares in the Offer
without utilizing borrowing.
14
<PAGE> 19
If it is necessary for the Fund to sell portfolio securities in order to
help finance a portion of the purchase price of tendered Shares, the selection
of which portfolio securities to sell will be made by TAML, the Fund's
investment manager, taking into account investment merit, relative liquidity and
applicable investment restrictions and legal requirements. See Section 11.
Under some market circumstances it may be necessary to raise cash by
liquidating portfolio securities in a manner that could tend to reduce their
market value and, thus, reduce both the NAV of the Shares and the proceeds from
the sale of the securities. Liquidating portfolio securities, if necessary, may
also lead to the premature disposition of portfolio investments and additional
transaction costs. Depending upon the timing of such sales, any such decline in
NAV may adversely affect any tendering shareholders whose Shares are accepted
for purchase by the Fund, as well as those shareholders who do not sell Shares
pursuant to the Offer. Shareholders who retain their Shares may be subject to
certain other effects of the Offer. See Section 11.
The repurchase of Shares by the Fund will decrease the total assets of the
Fund and, therefore, have the effect of increasing the Fund's expense ratio
which would have an adverse effect on the Fund's investment performance. See
Appendix A-3 for pro forma financial information.
14. REGULATORY APPROVALS. The Fund is not aware of any approval or other
action by any government or governmental, administrative or regulatory authority
or agency, domestic or foreign, that would be required for the acquisition or
ownership of Shares by the Fund. Should any approval or other action be
required, the Fund presently contemplates that it will seek this approval or
other action. The Fund is unable to predict whether it may determine that it is
required to delay the acceptance for payment of, or payment for, Shares tendered
pursuant to the Offer pending the outcome of any such matter. There can be no
assurance that any such approval or other action, if needed, would be obtained
without substantial conditions or that the failure to obtain any such approval
or other action might not result in adverse consequences to the Fund's business.
The Fund's obligations under the Offer to accept for payment and pay for Shares
are subject to certain conditions. See Section 6.
15. ADDITIONAL INFORMATION. The Fund is subject to the information and
reporting requirements of the 1940 Act and, accordingly, is obligated to file
reports and other information with the Securities and Exchange Commission (the
"SEC") relating to its business and financial condition and other matters. The
Fund has also filed an Issuer Tender Offer Statement on Schedule 13E-4 with the
SEC; the Schedule 13E-4 includes certain additional information relating to the
Offer, which material may be inspected and copied at prescribed rates at the
SEC's public reference facilities at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and Seven World Trade Center, New York, New York 10048.
Copies of the Schedule 13E-4 may also be obtained by mail at prescribed rates
from the Public Reference Branch of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or may be viewed and downloaded by accessing the SEC's
EDGAR database through the SEC's website at http://www.sec.gov.
16. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES. The following discussion is
a general summary of the U.S. federal income tax consequences of a sale of
Shares or a purchase of Class I Shares of an Alternative Fund(s) using the
proceeds from the tender of Shares pursuant to the Offer. The discussion is for
general information purposes only and does not purport to consider all aspects
of U.S. federal income taxation that might be relevant to beneficial owners of
Shares. The discussion is based upon current provisions of the Internal Revenue
Code of 1986, as amended, existing regulations promulgated thereunder, and
administrative and judicial interpretations thereof, all of which are subject to
change, which change could be retroactive. The discussion applies only to
beneficial owners of Shares in whose hands Shares are capital assets within the
meaning of Section 1221 of the Code, and may not apply to certain types of
beneficial owners of Shares (such as insurance companies, tax-exempt
organizations, and broker-dealers) who may be subject to special rules. Persons
who may be subject to tax in more than one country should consult the provisions
of any applicable tax treaty to determine the potential tax consequences to
them. YOU SHOULD CONSULT YOUR OWN TAX ADVISER FOR A COMPLETE DESCRIPTION OF THE
TAX CONSEQUENCES TO YOU OF A SALE OF SHARES PURSUANT TO THE OFFER, INCLUDING
POTENTIAL STATE, LOCAL AND NON-U.S. TAXATION BY TAXING JURISDICTIONS OF WHICH
YOU ARE A RESIDENT OR DOMICILIARY. As described above, tendering shareholders
may elect to receive cash from the sale of Shares pursuant to the
15
<PAGE> 20
Offer or may elect to direct that the cash proceeds from the sale of Shares
pursuant to the Offer be used to purchase Class I Shares of an Alternative
Fund(s). In either case, the sale of the Shares is a taxable event.
U.S. SHAREHOLDERS. This subsection will be relevant to individuals who are
citizens of the U.S. or resident aliens of the U.S., domestic corporations,
domestic partnerships, and certain estates and trusts treated as "U.S. persons"
under the U.S. federal tax law. Under current federal income tax law,
regulations and Internal Revenue Service rulings, the receipt of cash for Shares
pursuant to the Offer will be a taxable transaction for federal income tax
purposes. Subject to the discussion below, it is anticipated that shareholders
selling Shares in accordance with the terms of the Offer will recognize gain or
loss for U.S. federal income tax purposes equal to the difference between the
amount of cash received pursuant to the Offer and the adjusted tax basis of the
Shares sold. The gain or loss will be capital gain or loss if the Shares sold
have been held by the tendering shareholder as a capital asset. In general,
capital gain or loss with respect to the Shares sold will be long-term capital
gain or loss if the Shares have been held for more than 18 months, mid-term
capital gain or loss if such shares have been held for more than one year and 18
months or less, and short-term capital gain or loss if such shares have been
held for less than one year. Gain or loss must be determined separately for each
block of Shares (i.e., Shares acquired at the same cost in a single transaction)
sold pursuant to the Offer.
Notwithstanding the discussion above, if the Fund redeems less than all of
the Shares actually owned or constructively owned by a particular shareholder
(for example if more than 4,029,302 Shares were tendered for payment and the
Fund elects to purchase a portion of the tendered Shares) the sale of Shares
pursuant to the Offer could be treated for federal income tax purposes as a
dividend (i.e., ordinary income) not as capital gain or loss. Under Section 302
of the Code, a sale of Shares pursuant to the Offer will generally be treated as
a "sale or exchange" if the receipt of cash: (a) is "substantially
disproportionate" with respect to the shareholder; (b) results in a "complete
redemption" of the shareholder's interest in the Fund; or (c) is "not
essentially equivalent to a dividend" with respect to the shareholder. A
"substantially disproportionate" distribution generally requires a reduction of
more than 20% in the shareholder's proportionate interest in the Fund after
repurchases of all Shares are complete. A "complete redemption" of a
shareholder's interest generally requires that the shareholder dispose of all
Shares directly owned or attributed to it under Section 318 of the Code. A
distribution "not essentially equivalent to a dividend" requires that there be a
"meaningful reduction" in the shareholder's interest, which should be the case
if the shareholder has a minimal interest in the Fund, exercises no control over
Fund affairs and suffers a reduction in its proportionate interest. If any of
these three tests for "sale or exchange" treatment is met, you will recognize
gain or loss equal to the difference between the amount of cash received
pursuant to the Offer and the adjusted tax basis of the Shares sold. Such gain
or loss will be a capital gain or loss if the Shares sold have been held by you
as a capital asset. Except as specified to the contrary, this discussion will
assume that the sale of Shares will be a sale or exchange (and not a dividend).
In view of the requirement of the Offer that a tendering shareholder tender
or cause the tender of all of the Shares actually owned and constructively owned
by the shareholder under Section 318 of the Code as of the date of purchase of
Shares pursuant to the Offer, shareholders should consult their tax advisers
regarding the application of the constructive ownership rules of Section 318. In
general, Section 318 provides that Shares owned by certain family members of,
and by entities treated by that section as related to, the tendering shareholder
are treated as owned by the tendering shareholder. Under the "wash sale" rules,
recognition of a loss on Shares sold pursuant to the Offer will ordinarily be
disallowed to the extent a shareholder acquires either an option to purchase
Shares or Shares within 30 days before or after the date Shares are purchased
pursuant to the Offer and, in that event, the basis and holding period of the
Shares acquired will be adjusted to reflect the disallowed loss.
The Depositary may be required to withhold 31% of the gross proceeds paid
to a shareholder or other payee pursuant to the Offer unless either: (a) the
shareholder has completed and submitted to the Depositary the Substitute Form
W-9 included with the Letter of Transmittal, providing the shareholder's
taxpayer identification number/social security number and certifying under
penalties of perjury: (i) that the number is correct, and (ii) either that (A)
the shareholder is exempt from backup withholding, (B) the shareholder has not
been notified by the Internal Revenue Service that the shareholder is subject to
backup withholding as a result of an under-reporting interest or dividends or
(C) the Internal Revenue Service has notified the shareholder that the
shareholder is no longer subject to backup withholding; (b) the shareholder is a
16
<PAGE> 21
corporation; or (c) an exception applies under applicable law and Treasury
regulations to such shareholders. A beneficial owner who does not provide a
correct TIN may be subject to penalties imposed by the IRS. Any amount paid as
backup withholding does not constitute an additional tax and will be creditable
against the beneficial owner's federal income tax liability. Each beneficial
owner of Shares should consult with his or her own tax advisor as to his or her
qualification for exemption from backup withholding and the procedure for
obtaining such exemption.
NON-U.S. SHAREHOLDERS. In general, a "Non-U.S. shareholder" is any person
other than (1) a citizen or resident of the United States, (2) a corporation or
partnership created or organized in the United States under the laws of the
United States or any state thereof, or (3) an estate or trust that is subject or
potentially subject to U.S. federal income tax on its worldwide income on a net
basis. U.S. taxation of a "Non-U.S. shareholder" depends on whether the income
from the Fund is "effectively connected" with a U.S. trade or business carried
on by the Non-U.S. shareholder. Ordinarily, income from the Fund will not be
treated as "effectively connected" and, if that is the case, any gain realized
upon the tender of Shares pursuant to the terms of the Offer will not ordinarily
be subject to U.S. taxation. If, however, the Non-U.S. shareholder is treated as
a non-resident alien individual but is physically present in the United States
for more than 182 days during the taxable year, then, in certain circumstances,
gain from the tender of Shares pursuant to the terms of the Offer will be
subject to U.S. tax of 30% (or lower treaty rate).
If the income from the Fund is "effectively connected" with a U.S. trade or
business carried on by a Non-U.S. shareholder, then any gain (or dividend
income) realized upon the sale of Shares of the Fund pursuant to the terms of
the Offer will be subject to U.S. federal income tax at the graduated rates
applicable to U.S. taxpayers.
Non-U.S. shareholders may be subject to dividend tax withholding at a 30%
rate or a lower applicable tax treaty rate on the gross proceeds received by
such shareholder, if the proceeds are treated as a "dividend" under the rules
described above. In the event that the tax status of the redemption proceeds as
a dividend is not clear to the Fund and the Depository at the time of payment,
the Fund will withhold a portion of the proceeds as if the proceeds constitute a
dividend. In that case, the redeeming shareholder may be eligible to claim a
refund of the withheld tax if the shareholder can demonstrate that the proceeds
were not dividends. Non-U.S. shareholders should consult their tax advisers
regarding application of these withholding rules.
Non-U.S. shareholders must provide the Depositary with a completed Form W-8
in order to avoid 31% backup withholding. A copy of Form W-8 is provided with
the Letter of Transmittal for such shareholders.
Non-U.S. shareholders are advised to consult their own tax advisers with
respect to the particular tax consequences to them of a tender of Shares
pursuant to the Offer.
SHAREHOLDERS ELECTING TO PURCHASE CLASS I SHARES OF AN ALTERNATIVE
FUND(S). Tendering shareholders who elect to direct that the cash proceeds from
the sale of Shares pursuant to the Offer be used to purchase Class I Shares of
an Alternative Fund(s) will be subject to the federal income tax consequences
described above with respect to the sale of Shares. The purchase of the Class I
Shares of an Alternative Fund is a separate event for tax purposes. An electing
shareholder will have an initial federal income tax basis in his or her Class I
Shares of an Alternative Fund equal to the amount of cash proceeds that such
shareholder used to purchase such Alternative Fund shares. The holding period
for the Class I Shares of an Alternative Fund will commence on the date that the
cash proceeds are used to purchase Class I Shares of that Alternative Fund.
17. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS. IN THE EVENT THAT
MORE THAN 4,029,302 SHARES ARE TENDERED, THE FUND INTENDS TO EXTEND THE
EXPIRATION DATE OF THE OFFER BY TEN BUSINESS DAYS IN ORDER TO GIVE SHAREHOLDERS
WHO MAY NOT HAVE INITIALLY TENDERED THEIR SHARES AN OPPORTUNITY TO TENDER THEIR
SHARES.
The Fund expressly reserves the right, in its sole discretion, at any time
or from time to time, to extend the period of time during which the Offer is
open by giving oral or written notice of extension to the Depositary. During any
extension, all Shares previously tendered and not purchased or withdrawn will
remain subject to the Offer, except to the extent that Shares may be withdrawn
as set forth in Section 4. The Fund also expressly reserves the right, in its
sole discretion, to terminate the Offer and not accept for purchase or pay for
any Shares not accepted for purchase or paid for, or, subject to applicable law,
to postpone paying for
17
<PAGE> 22
Shares upon the occurrence of any of the conditions specified in Section 6 by
giving oral or written notice of termination or postponement to the Depositary
and making a public announcement of that action. The Fund's right to delay
payment for Shares which it has accepted for purchase is limited by Rule
13e-4(f)(5) promulgated under the Exchange Act which requires the Fund to either
pay the consideration offered or return the Shares tendered promptly after
termination or withdrawal of a tender offer. Subject to compliance with
applicable law, the Fund further reserves the right, in its sole discretion, to
amend the Offer in any respect. Amendments to the Offer may be made at any time
or from time to time effected by public announcement to be issued no later than
9:00 a.m., Eastern Standard time, on the next business day after the previously
scheduled Expiration Date. Any public announcement made pursuant to the Offer
will be disseminated promptly to shareholders in a manner reasonably designed to
inform shareholders of the change. Without limiting the manner in which the Fund
may choose to make a public announcement, except as required by applicable law,
the Fund will have no obligation to publish, advertise or otherwise communicate
any public announcement other than by making a release to the Dow Jones News
Service.
If the Fund materially changes the terms of the Offer or the information
concerning the Offer, the Fund will extend the Offer to the extent required by
Rules 13e-4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act. These
rules set forth the minimum period during which an offer must remain open
following material changes in the terms or information concerning the offer. The
materiality of the change depends on the facts and circumstances, including the
relative materiality of the terms or information. If: (i) the Fund increases or
decreases the consideration offered for Shares pursuant to the Offer or the Fund
increases the number of Shares being sought by an amount exceeding 2% of the
outstanding Shares, or the Fund decreases the number of Shares being sought; and
(ii) the Offer is scheduled to expire at any time earlier than the expiration of
a period ending on the tenth business day from, and including, the date that
notice of increase or decrease is first published, sent or given, the Offer will
be extended until the expiration of a period of ten business days.
Except to the extent required by applicable law (including Rule 13e-4(f)(1)
promulgated under the Exchange Act), the Fund will have no obligation to extend
the Offer. In the event that the Fund is obligated or elects to extend the
Offer, the purchase price for Shares will be equal to the NAV determined as of
the close of the regular trading session of the NYSE on the Expiration Date, as
extended. Between the previously scheduled Expiration Date and the new
Expiration Date, the rights of shareholders (such as rights to tender and
withdraw Shares) will remain unchanged. No Shares will be accepted for payment
until on or after the new Expiration Date. As NAV is determined on the last day
of the Offer, if the Offer is extended, NAV could be more or less than it would
have been on the original Expiration Date.
18. MISCELLANEOUS. The Offer is not being made to, nor will the Fund accept
tenders from, owners of Shares in any jurisdiction in which the Offer or its
acceptance would not comply with the securities or "blue sky" laws of such
jurisdiction. The Fund is not aware of any jurisdiction in which the making of
the Offer or the acceptance of tenders of, purchase of or payment for Shares
would not be in compliance with the laws of such jurisdiction. However, the Fund
reserves the right to exclude shareholders in any jurisdiction in which it is
asserted that the Offer cannot lawfully be made or tendered Shares cannot
lawfully be accepted, purchased or paid for. So long as the Fund makes a
good-faith effort to comply with any state law deemed applicable to the Offer,
the Fund believes that the exclusion of those holders is permitted under Rule
13e-4(f)(9) promulgated under the Exchange Act. In any jurisdiction the
securities or "blue sky" laws of which require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on the Fund's
behalf by one or more registered brokers or dealers licensed under the laws of
that jurisdiction.
December 19, 1997
Templeton Vietnam Opportunities Fund, Inc.
500 East Broward Boulevard
Ft. Lauderdale, Florida 33394-3091
18
<PAGE> 23
APPENDIX: GLOSSARY
1940 Act -- Investment Company Act of 1940, as amended
Agent's Message -- A message from DTC transmitted to, and received by, the
Depositary forming a part of a timely Book-Entry Confirmation, which states that
(i) DTC has received an express acknowledgment from the DTC participant
tendering the Shares that are the subject of the Book-Entry Confirmation, (ii)
the DTC participant has received and agrees to be bound by the terms of the
Letter of Transmittal and (iii) the Fund may enforce the agreement against the
DTC participant
Alternative Funds -- Templeton Developing Markets Trust, Templeton Growth
Fund, Inc., Templeton Pacific Growth Fund
Board -- The Board of Directors of the Fund
Book-Entry Confirmation -- a confirmation of a book-entry transfer
Code -- Internal Revenue Code of 1986, as amended
Depositary -- ChaseMellon Shareholder Services, L.L.C.
Exchange Act -- Securities Exchange Act of 1934, as amended
FTSI -- Franklin Templeton Services, Inc., the Fund's administrator
Information Agent -- ChaseMellon Shareholder Services, L.L.C.
Letter of Transmittal -- A properly completed and executed Letter of
Transmittal includes a photocopy or facsimile thereof bearing original
signatures(s) and any required signature guarantees
Net Asset Value (NAV) -- The net asset value of a fund is determined by
deducting the fund's liabilities from the total assets of the portfolio. The net
asset value per share is determined by dividing the net asset value of the fund
by the number of shares outstanding
NYSE -- New York Stock Exchange
Offer -- Offer to Purchase and the related Letter of Transmittal
Required Documents -- These include: (i) Share certificates evidencing the
Shares or a Book-Entry Confirmation of the delivery of the Shares (if
available); (ii) a properly completed and executed Letter of Transmittal or, in
the case of a book-entry transfer, an Agent's Message; and (iii) any other
documents required by the Letter of Transmittal
SEC -- U.S. Securities and Exchange Commission
TAML -- Templeton Asset Management Ltd., the Fund's investment manager
Tendered -- Shares have been Tendered if they have been validly tendered
pursuant to the Offer and not withdrawn
19
<PAGE> 24
EXHIBIT A-1
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
AUDITED FINANCIAL STATEMENTS
20
<PAGE> 25
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL HIGHLIGHTS
FISCAL YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
SEPTEMBER 8, 1994
YEAR ENDED MARCH 31, (COMMENCEMENT
--------------------- OF OPERATIONS) TO
1997 1996 MARCH 31, 1995
-------- -------- -----------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period.................. $ 13.91 $ 13.09 $ 14.10
-------- -------- --------
Income from investment operations:
Net investment income............................... .29 .36 .13
Net realized and unrealized gain (loss)............. .21 .91 (1.00)
-------- -------- --------
Total from investment operations...................... .50 1.27 (.87)
-------- -------- --------
Underwriting expenses deducted from capital........... -- -- (.09)
-------- -------- --------
Distributions:
Dividends from net investment income................ (.31) (.38) (.05)
Distributions from net realized gains............... (.05) (.07) --
-------- -------- --------
Total distributions................................... (.36) (.45) (.05)
-------- -------- --------
Change in net asset value............................. .14 .82 (1.01)
-------- -------- --------
Net asset value, end of period........................ $ 14.05 $ 13.91 $ 13.09
======== ======== ========
Total return*
Based on market value per share....................... (10.87)% 22.11% (26.33)%
Based on net asset value per share.................... 4.03% 9.80% (6.74)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)..................... $113,214 $112,073 $ 105,306
Ratio of expenses, net of fee waiver, to average net
assets.............................................. 1.82% 1.47% 1.72%*
Ratio of net investment income to average net
assets.............................................. 2.04% 2.62% 1.81%**
Portfolio turnover rate............................... 20.16% 4.01% 11.77%
Average commission rate paid (per share)***........... $ .0009 $ .0060 --
</TABLE>
- ---------------
* Not annualized for periods of less than one year.
** Annualized.
*** Relates to purchases and sales of equity securities. Prior to fiscal year
end 1996 disclosure of average commission rate was not required.
See notes to financial statements.
21
<PAGE> 26
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
INVESTMENT PORTFOLIO
MARCH 31, 1997
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------- ----------- ------------
<S> <C> <C> <C>
COMMON STOCKS 40.9%
BANKING 0.4%
Bangkok Bank Public Co. Ltd. ...................... Thailand 76,000 $ 521,210
------------
BEVERAGES & TOBACCO 4.3%
Asia Pacific Breweries Ltd. ....................... Singapore 30,000 150,571
British American Tobacco Ltd. ..................... Singapore 235,000 976,116
Carnaudmetalbox Asia Ltd., fgn. ................... Singapore 371,000 898,927
Rothmans Industries Ltd., fgn. .................... Singapore 605,000 2,806,161
------------
4,831,775
------------
CHEMICALS 2.1%
PT Unggul Indah Corp., fgn. ....................... Indonesia 1,724,800 2,370,612
------------
CONSTRUCTION & HOUSING 0.5%
Siam Syntech Construction Public Co. Ltd., fgn. ... Thailand 421,900 390,121
*Sino-Thai Engineering & Construction Public Co.,
fgn. ............................................ Thailand 122,000 130,437
------------
520,558
------------
FINANCIAL SERVICES 1.0%
Peregrine Investments Holdings Ltd. ............... Hong Kong 685,000 1,091,764
*Peregrine Investments Holdings Ltd., wts. ........ Hong Kong 76,300 18,512
------------
1,110,276
------------
FOOD & HOUSEHOLD PRODUCTS 2.8%
*Charoen Pokphand Feedmill Public Co. Ltd. ........ Thailand 138,500 389,540
*Chareon Pokphand Feedmill Public Co. Ltd., fgn.
................................................ Thailand 124,500 371,749
Golden Resources Development International Ltd. ... Hong Kong 21,284,000 2,362,234
------------
3,123,523
------------
MERCHANDISING 0.4%
Wo Kee Hong Holdings Ltd. ......................... Hong Kong 4,949,000 498,177
*Wo Kee Hong Holdings Ltd., wts. .................. Hong Kong 989,800 11,880
------------
510,057
------------
METALS & MINING 5.4%
Natsteel Ltd., fgn. ............................... Singapore 2,467,000 5,943,344
*Padaeng Industry Public Co. Ltd., fgn. ........... Thailand 459,450 181,443
------------
6,124,787
------------
MULTI-INDUSTRY 8.0%
Jardine Matheson Holdings Ltd. (Singapore) ........ Hong Kong 463,103 2,685,997
Saha Union Public Co. Ltd., fgn. .................. Thailand 339,000 284,078
Swire Pacific Ltd., B.............................. Hong Kong 3,560,000 4,525,404
Thai Wah Public Co. Ltd., fgn. .................... Thailand 410,850 280,971
Wheelock & Co. Ltd. ............................... Hong Kong 600,000 1,312,478
------------
9,088,928
------------
REAL ESTATE 11.0%
Lai Sun Development Co. Ltd. ...................... Hong Kong 1,304,000 1,514,577
*Lai Sun Development Co. Ltd., wts. ............... Hong Kong 752,000 70,846
Lim Kah Ngam Ltd., fgn. ........................... Singapore 1,108,000 1,242,617
New World Development Co. Ltd. .................... Hong Kong 1,779,758 9,600,821
------------
12,428,861
------------
</TABLE>
22
<PAGE> 27
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
INVESTMENT PORTFOLIO -- (CONTINUED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------- ----------- ------------
<S> <C> <C> <C>
COMMON STOCKS -- (Continued)
RECREATION & OTHER CONSUMER GOODS 0.2%
*KTP Holdings Ltd. ................................ Hong Kong 5,062,500 $ 231,934
------------
TEXTILES & APPAREL 4.8%
Hua Thai Manufacturing Public Co. Ltd. ............ Thailand 259,400 679,607
PT Polysindo Eka Perkasa, fgn. .................... Indonesia 8,729,500 4,726,510
------------
5,406,117
------------
TOTAL COMMON STOCKS (COST $46,406,841)............. 46,268,638
------------
DIRECT EQUITY INVESTMENTS 14.7%
REAL ESTATE 4.9%
*+(R)Mayfair Hanoi, Ltd., 30% equity interest owned
through HEA Holdings Ltd., a wholly owned
investment acquired 10/31/96..................... Vietnam 5,519,699
------------
LEISURE & TOURISM 8.0%
*+(R)Indotel Ltd. acquired 11/22/96................ Vietnam 900,000 9,135,540
------------
MULTI-INDUSTRY 1.8%
*+(R)Phuben Tea Joint Venture, 30% equity interest
owned through Sipef East Asia Holdings, a 50%
owned investment acquired 5/29/96................ Vietnam 2,031,357
------------
TOTAL DIRECT EQUITY INVESTMENTS (COST
$16,686,596)..................................... 16,686,596
------------
PRINCIPAL
IN LOCAL
CURRENCY**
-----------
SHORT TERM OBLIGATIONS (COST $50,538,069) 44.6%
U.S. Treasury Bills, 4.94% to 5.20% with maturities
to 6/19/97....................................... United States $50,930,000 50,533,185
------------
TOTAL INVESTMENTS (COST $113,631,506) 100.2%....... 113,488,419
OTHER ASSETS, LESS LIABILITIES (0.2%).............. (274,271)
------------
TOTAL NET ASSETS 100.0%............................ $113,214,148
============
</TABLE>
- ---------------
* Non-income producing.
** Currency of country indicated.
+ See note 5.
(R) Restricted securities, see note 6.
See notes to financial statements.
23
<PAGE> 28
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (identified cost $113,631,506)............. $113,488,419
Receivables:
Investment securities sold................................................... 131,054
Dividends and interest....................................................... 44,693
Unamortized organization costs................................................. 10,280
--------------
Total assets......................................................... 113,674,446
--------------
LIABILITIES
Funds advanced by custodian.................................................... 13,923
Accrued expenses............................................................... 446,375
--------------
Total liabilities.................................................... 460,298
--------------
Net assets, at value................................................. $113,214,148
==============
Net assets consist of:
Undistributed net investment income.......................................... $ 217,520
Net unrealized depreciation.................................................. (143,087)
Accumulated net realized gain................................................ 235,964
Net capital paid in on shares of capital stock............................... 112,903,751
--------------
Net assets, at value................................................. $113,214,148
==============
Shares outstanding............................................................. 8,058,603
==============
Net asset value per share ($113,214,148 / 8,058,603 shares outstanding)........ $ 14.05
==============
</TABLE>
See notes to financial statements.
24
<PAGE> 29
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS -- (CONTINUED)
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<S> <C> <C>
Investment income: (net of $134,368 foreign taxes withheld)
Dividends......................................................... $1,505,395
Interest.......................................................... 2,868,748
Other............................................................. 11,861
-----------
Total income.............................................. $4,386,004
Expenses:
Management fees (Note 3).......................................... 1,702,398
Administrative fees (Note 3)...................................... 170,246
Custodian fees.................................................... 50,000
Reports to shareholders........................................... 38,825
Audit fees........................................................ 37,647
Legal fees........................................................ 30,000
Registration and filing fees...................................... 18,460
Directors' fees and expenses...................................... 12,100
Amortization of organization costs................................ 4,380
Other............................................................. 125
-----------
Total expenses............................................ 2,064,181
-----------
Net investment income..................................... 2,321,823
-----------
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments.................................................. 1,237,398
Foreign currency transactions................................ (11,317)
-----------
1,226,081
Net unrealized appreciation on investments........................ 453,690
-----------
Net realized and unrealized gain.................................... 1,679,771
-----------
Net increase in net assets resulting from operations................ $4,001,594
===========
</TABLE>
See notes to financial statements.
25
<PAGE> 30
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS -- (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
-----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income...................................... $ 2,321,823 $ 2,877,144
Net realized gain on investment and foreign currency
transactions............................................. 1,226,081 169,122
Net unrealized appreciation................................ 453,690 7,145,378
------------ ------------
Net increase in net assets resulting from
operations.......................................... 4,001,594 10,191,644
Distributions to shareholders:
From net investment income................................. (2,457,874) (3,042,096)
From net realized gain..................................... (402,930) --
In excess of net realized gain............................. -- (538,861)
Fund share transactions (Note 2).............................. -- 156,421
------------ ------------
Net increase in net assets............................ 1,140,790 6,767,108
Net assets:
Beginning of year............................................. 112,073,358 105,306,250
------------ ------------
End of year................................................... $113,214,148 $112,073,358
============ ============
</TABLE>
See notes to financial statements.
26
<PAGE> 31
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Vietnam Opportunities Fund, Inc. (the Fund) is a closed-end,
non-diversified management investment company registered under the Investment
Company Act of 1940. The Fund seeks long-term capital appreciation by investing
at least 65% of its total assets in the equity and debt securities of Vietnam
companies. The following summarizes the Fund's significant accounting policies.
a. Securities Valuations:
Securities listed or traded on a recognized national or foreign exchange or
NASDAQ are valued at the last reported sales prices on the principal exchange on
which the securities are traded. Over-the-counter securities and listed
securities for which no sale is reported are valued at the mean between the last
current bid and asked prices. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by
management and approved by the Board of Directors.
b. Foreign Currency Transactions:
Portfolio securities and other assets and liabilities denominated in
foreign currencies are translated into U.S. dollars based on the rate of
exchange of such currencies against U.S. dollars on the date of valuation.
Purchases and sales of portfolio securities and income items denominated in
foreign currencies are translated into U.S. dollar amounts on the respective
dates of such transactions. When the Fund purchases or sells foreign securities
it customarily enters into a foreign exchange contract to minimize foreign
exchange risk between the trade date and the settlement date of such
transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the differences between the amounts
of dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities other than investments in securities at the end of the
fiscal period, resulting from changes in the exchange rates.
c. Income Taxes:
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income to its shareholders. Therefore, no provision has been made
for income taxes.
d. Unamortized Organization Costs:
Organization costs are being amortized on a straight line basis over five
years.
e. Security Transactions, Investment Income, Distributions and Expenses:
Security transactions are accounted for on a trade date basis. Dividend
income is recorded on the ex-dividend date. Certain dividend income on foreign
securities is recorded as soon as information is available to the Fund. Interest
income and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
27
<PAGE> 32
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
1. SUMMARY OF ACCOUNTING POLICIES -- (CONTINUED)
f. Accounting Estimates:
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the amounts of income and expense during
the reporting period. Actual results could differ from those estimates.
2. TRANSACTIONS IN SHARES OF CAPITAL STOCK
At March 31, 1997, there were 100,000,000 shares of capital stock
authorized ($0.01 par value). During the year ended March 31, 1997, there were
no share transactions. During the year ended March 31, 1996, 11,510 shares were
issued for $156,421 from reinvested distributions.
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton
Asset Management Limited (TAML) and Franklin Templeton Services, Inc. (FTSI),
the Fund's investment manager and administrative manager, respectively.
The Fund pays monthly an investment management fee to TAML equal, on an
annual basis, to 1.5% of the average weekly net assets of the Fund. The Fund
pays FTSI monthly a fee of 0.15% per annum on the Fund's average weekly net
assets. TAML pays monthly a shareholder servicing agent fee to Paine Webber
equal, on an annual basis, to 0.10% of the average daily net assets of the Fund.
An officer of the Fund is a partner of Dechert Price & Rhoads, legal
counsel for the Fund, which firm received legal fees for the year ended March
31, 1997.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the
year ended March 31, 1997 aggregated $18,969,754 and $11,546,987, respectively.
The cost of securities for federal income tax purposes is the same as that shown
in the Investment Portfolio. Realized gains and losses are reported on an
identified cost basis.
At March 31, 1997, the aggregate gross unrealized appreciation and
depreciation of portfolio securities, based on cost for federal income tax
purposes, was as follows:
<TABLE>
<S> <C>
Unrealized appreciation................................. $ 8,283,087
Unrealized depreciation................................. (8,426,174)
-----------
Net unrealized depreciation............................. $ (143,087)
===========
</TABLE>
5. HOLDING OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
The Investment Company Act of 1940 defines "affiliated companies" as
investments in portfolio companies in which the Fund owns 5% or more of the
outstanding voting securities. Investments in "affiliated companies" at March
31, 1997 amounted to $14,508,147.
6. DIRECT INVESTMENTS IN VIETNAM VENTURES
The Fund may invest up to 65% of its total assets in direct equity
investments. These investments typically take the form of a business cooperation
contract, joint venture company established in Vietnam or a wholly owned foreign
company established in Vietnam. Since these securities are not publicly traded,
and may
28
<PAGE> 33
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
6. DIRECT INVESTMENTS IN VIETNAM VENTURES -- (CONTINUED)
be restricted as to resale, they may be less liquid than securities traded in
active markets. Direct investments in Vietnam ventures include certain risks not
typically associated with investing in countries with developed securities
markets, such as political, economic and legal uncertainties. Readily available
market quotations cannot be obtained for these securities. The fair value of
these securities is estimated using methods approved by the Board. However,
because of the inherent uncertainty of valuation, those estimated values may
differ significantly from the values that would have been used had a ready
market for the securities existed, and the differences could be material. The
total value of direct equity investments was $16,686,596 (14.7% of net assets)
at March 31, 1997.
29
<PAGE> 34
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders
Templeton Vietnam Opportunities Fund, Inc.
We have audited the accompanying statement of assets and liabilities,
including the investment portfolio, of Templeton Vietnam Opportunities Fund,
Inc. as of March 31, 1997, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two years in
the period then ended and the financial highlights for the periods indicated in
the accompanying financial statements. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Templeton Vietnam Opportunities Fund, Inc. as of March 31, 1997, the results of
its operations, the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles.
[McGLADREY & PULLEN, LLP LOGO]
New York, New York
April 25, 1997
30
<PAGE> 35
FISCAL YEAR ENDED MARCH 31, 1996
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SEPTEMBER 8, 1994
(COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
MARCH 31, 1996 MARCH 31, 1995
-------------- -----------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period.......................... $ 13.09 $ 14.10
-------- --------
Income from investment operations:
Net investment income....................................... .36 .13
Net realized and unrealized gain (loss)..................... .91 (1.00)
-------- --------
Total from investment operations.............................. 1.27 (.87)
-------- --------
Underwriting expenses deducted from capital................... -- (.09)
-------- --------
Distributions:
Dividends from net investment income........................ (.38) (.05)
Distributions in excess of net realized gains............... (.07) --
-------- --------
Total distributions........................................... (.45) (.05)
-------- --------
Change in net asset value..................................... .82 (1.01)
-------- --------
Net asset value, end of period................................ $ 13.91 $ 13.09
======== ========
Total return*
Based on market value per share............................... 22.11% (26.33)%
Based on net asset value per share............................ 9.80% (6.74)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............................... $112,073 $ 105,306
Ratio of expenses, net of fee waiver, to average net assets... 1.47% 1.72%**
Ratio of net investment income to average net assets.......... 2.62% 1.81%**
Portfolio turnover rate....................................... 4.01% 11.77%
Average commission rate paid (per share)***................... $ .0060 --
</TABLE>
- ---------------
* Not annualized for periods of less than one year.
** Annualized.
*** Relates to purchases and sales of equity securities. Prior to fiscal year
end 1996 disclosure of average commission rate was not required.
See notes to financial statements.
31
<PAGE> 36
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
INVESTMENT PORTFOLIO
MARCH 31, 1996
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
------- ---- -------------- ----------- ------------
<S> <C> <C> <C>
COMMON STOCKS 48.1%
APPLIANCES & HOUSEHOLD DURABLES: 1.1%
Luks Industrial Co. Ltd. .......................... Hong Kong 11,260,000 $ 1,193,845
------------
BEVERAGES & TOBACCO 4.7%
Asia Pacific Breweries Ltd. ....................... Singapore 58,000 358,457
British American Tobacco Ltd. ..................... Singapore 235,000 984,940
Carnaudmetalbox Asia Ltd., fgn. ................... Singapore 399,000 1,587,270
Rothmans Industries Ltd., fgn. .................... Singapore 605,000 2,299,318
------------
5,229,985
------------
CHEMICALS 1.6%
PT Unggul Indah Corp., fgn. ....................... Indonesia 1,724,800 1,862,754
------------
CONSTRUCTION & HOUSING 2.1%
*Christiani and Nielsen (Thai) Public Co. Ltd., new
fgn. ............................................ Thailand 278,766 273,268
Siam Syntech Construction Public Co. Ltd., fgn. ... Thailand 499,000 1,393,358
*Sino-Thai Engineering & Construction Public Co.,
fgn. ............................................ Thailand 122,000 710,314
------------
2,376,940
------------
FINANCIAL SERVICES 1.1%
Peregrine Investments Holdings Ltd. ............... Hong Kong 763,000 1,228,258
------------
FOOD & HOUSEHOLD PRODUCTS 4.1%
Charoen Pokphand Feedmill Public Co. Ltd., fgn. ... Thailand 113,000 716,096
Chareon Pokphand Feedmill Public Co. Ltd. ......... Thailand 150,000 754,515
Golden Resources Development International Ltd. ... Hong Kong 21,284,000 3,137,285
------------
4,607,896
------------
LEISURE & TOURISM 3.5%
*Glynhill International Ltd. ...................... Hong Kong 27,678,000 880,371
Hongkong & Shanghai Hotels Ltd. ................... Hong Kong 1,875,000 3,066,815
------------
3,947,186
------------
MERCHANDISING 0.8%
Wo Kee Hong Holdings Ltd. ......................... Hong Kong 4,949,000 883,064
------------
METALS & MINING 4.5%
Natsteel Ltd. fgn. ................................ Singapore 2,467,000 4,854,436
*Padaeng Industry Public Co. Ltd., fgn. ........... Thailand 306,300 197,139
------------
5,051,575
------------
MULTI-INDUSTRY 10.2%
Jardine Matheson Holdings Ltd. (Singapore) ........ Hong Kong 558,842 4,358,968
Saha Union Public Co. Ltd., fgn. .................. Thailand 400,000 546,578
Swire Pacific Ltd., B.............................. Hong Kong 3,560,000 4,879,235
Thai Wah Public Co. Ltd., fgn. .................... Thailand 410,850 406,814
Wheelock & Co. Ltd. ............................... Hong Kong 600,000 1,202,483
------------
11,394,078
------------
REAL ESTATE 9.8%
*Lai Sun Development Co. Ltd. ..................... Hong Kong 7,520,000 1,273,752
Lim Kah Ngam., fgn. ............................... Singapore 1,108,000 1,243,617
New World Development Co. Ltd. .................... Hong Kong 1,735,965 8,080,520
*South Sea Development Co. Ltd. ................... Hong Kong 12,239,000 357,643
------------
10,955,532
------------
</TABLE>
32
<PAGE> 37
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
INVESTMENT PORTFOLIO -- (CONTINUED)
MARCH 31, 1996
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
------- ---- -------------- ----------- ------------
<S> <C> <C> <C>
COMMON STOCKS -- (Continued)
RECREATION & OTHER CONSUMER GOODS 0.2%
KTP Holdings Ltd. ................................. Hong Kong 4,050,000 $ 183,282
------------
TEXTILES & APPAREL 4.4%
Hua Thai Manufacturing Public Co. Ltd. ............ Thailand 259,400 657,541
PT Polysindo Eka Perkasa, fgn...................... Indonesia 7,144,000 4,277,844
------------
4,935,385
------------
TOTAL COMMON STOCKS (COST $54,439,310)............. 53,849,780
------------
PRINCIPAL
IN LOCAL
CURRENCY
-----------
SHORT TERM OBLIGATIONS (COST $58,139,954) 51.8%
U.S. Treasury Bills, 4.59% to 5.06% with maturities
to 6/06/96......................................... United States $58,389,000 58,132,707
------------
TOTAL INVESTMENTS (COST $112,579,264) 99.9%........ 111,982,487
OTHER ASSETS, LESS LIABILITIES 0.1%................ 90,871
------------
TOTAL NET ASSETS 100.0%............................ $112,073,358
============
</TABLE>
- ---------------
* Non-income producing.
See notes to financial statements.
33
<PAGE> 38
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (identified cost $112,579,264)............. $111,982,487
Cash........................................................................... 461
Receivables:
Investment securities sold................................................... 502,961
Dividends.................................................................... 81,172
Unamortized organization costs................................................. 14,660
--------------
Total assets......................................................... 112,581,741
--------------
LIABILITIES
Payables for investment securities purchased................................... 194,111
Accrued expenses............................................................... 314,272
--------------
Total liabilities.................................................... 508,383
--------------
Net assets, at value................................................. $112,073,358
==============
Net assets consist of:
Undistributed net investment income.......................................... $ 379,647
Net unrealized depreciation.................................................. (596,777)
Distributions in excess of net realized gain................................. (613,263)
Net capital paid in on shares of capital stock............................... 112,903,751
--------------
Net assets, at value................................................. $112,073,358
==============
Shares outstanding............................................................. 8,058,603
==============
Net asset value per share ($112,073,358 [DIVIDED BY] 8,058,603).............. $ 13.91
==============
</TABLE>
See notes to financial statements.
34
<PAGE> 39
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS -- (CONTINUED)
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
<TABLE>
<S> <C> <C>
Investment income: (net of $321,085 foreign taxes withheld)
Dividends....................................................... $ 1,587,813
Interest........................................................ 2,905,250
-----------
Total income............................................ $ 4,493,063
Expenses:
Management fees (Note 3)........................................ 1,234,481
Administrative fees (Note 3).................................... 164,287
Transfer agent fees............................................. 1,000
Custodian fees.................................................. 55,000
Reports to shareholders......................................... 56,500
Audit fees...................................................... 44,850
Legal fees (Notes 3)............................................ 22,000
Registration and filing fees.................................... 23,235
Directors' fees and expenses.................................... 8,000
Amortization of organization costs.............................. 4,392
Other........................................................... 2,174
-----------
Total expenses.......................................... 1,615,919
-----------
Net investment income................................... 2,877,144
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments..................................................... 195,198
Foreign currency transactions................................... (26,076)
-----------
169,122
Net unrealized appreciation on investments...................... 7,145,378
-----------
Net realized and unrealized gain.................................. 7,314,500
-----------
Net increase in net assets resulting from operations.............. $10,191,644
===========
</TABLE>
See notes to financial statements.
35
<PAGE> 40
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS -- (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 8, 1994
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
MARCH 31, 1996 MARCH 31, 1995
-------------- -----------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income.................................... $ 2,877,144 $ 1,022,089
Net realized gain (loss) on investment and foreign
currency transactions.................................. 169,122 (278,424)
Net unrealized appreciation (depreciation)............... 7,145,378 (7,742,155)
------------ ------------
Net increase (decrease) in net assets resulting from
operations........................................ 10,191,644 (6,998,490)
Distributions to shareholders:
From net investment income............................... (3,042,096) (442,590)
In excess of net realized gain........................... (538,861) --
Capital share transactions (Note 2)......................... 156,421 112,647,319
------------ ------------
Net increase in net assets.......................... 6,767,108 105,206,239
Net assets:
Beginning of period......................................... 105,306,250 100,011
------------ ------------
End of period............................................... $ 112,073,358 $ 105,306,250
============ ============
</TABLE>
See notes to financial statements.
36
<PAGE> 41
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Vietnam Opportunities Fund, Inc. (the Fund) is a Maryland
corporation and a closed-end, non-diversified management investment company
registered under the Investment Company Act of 1940. The Fund seeks long-term
capital appreciation by investing at least 65% of its total assets in the equity
and debt securities of Vietnam or Vietnam-related companies. The following
summarizes the Fund's significant accounting policies.
a. Security Valuations:
Securities listed or traded on a recognized national or foreign exchange or
NASDAQ are valued at the last reported sales prices on the principal exchange on
which the securities are traded. Over-the-counter securities and listed
securities for which no sale is reported are valued at the mean between the last
current bid and asked prices. Securities for which market quotations are not
readily available are valued at fair value as determined by management and
approved in good faith by the Board of Directors.
b. Foreign Currency Transactions:
Portfolio securities and other assets and liabilities denominated in
foreign currencies are translated into U.S. dollars based on the rate of
exchange of such currencies against U.S. dollars on the date of valuation.
Purchases and sales of portfolio securities and income items denominated in
foreign currencies are translated into U.S. dollar amounts on the respective
dates of such transactions. When the Fund purchases or sells foreign securities
it customarily enters into a foreign exchange contract to minimize foreign
exchange risk between the trade date and the settlement date of such
transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the differences between the amounts
of dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities other than investments in securities at the end of the
fiscal period, resulting from changes in the exchange rates.
c. Income Taxes:
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income to its shareholders. Therefore, no provision has been made
for income taxes.
d. Unamortized Organization Costs:
Organization costs are being amortized on a straight line basis over five
years.
e. Security Transactions, Investment Income, Distributions and Expenses:
Security transactions are accounted for on a trade date basis. Dividend
income is recorded on the ex-dividend date. Certain dividend income on foreign
securities is recorded as soon as information is available to the Fund. Interest
income and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
37
<PAGE> 42
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
1. SUMMARY OF ACCOUNTING POLICIES -- (CONTINUED)
f. Accounting Estimates:
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the amounts of income and expense during
the reporting period. Actual results could differ from those estimates.
2. TRANSACTIONS IN SHARES OF CAPITAL STOCK
On September 22, 1994, the Fund completed its initial public offering of
7,000,000 shares of its common stock. Proceeds paid to the Fund amounted to
$97,983,319, after deduction of underwriting commissions and expenses of
$716,681. On October 26, 1994, the Fund completed a subsequent offering of
1,040,000 shares of its common stock resulting in additional proceeds of
$14,664,000.
At March 31, 1996, there were 100,000,000 shares of capital stock
authorized ($0.01 par value).
During the year ended March 31, 1996, 11,510 shares were issued for
$156,421 from reinvested distributions.
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton
Asset Management Limited (TAML) and Templeton Global Investors, Inc. (TGII), the
Fund's investment manager and administrative manager, respectively.
The Fund pays monthly an investment management fee to TAML equal, on an
annual basis, to 1.5% of the average weekly net assets of the Fund. The Fund
pays TGII monthly a fee of 0.15% per annum of the Fund's average weekly net
assets. From its investment management fee, TAML pays monthly a shareholder
servicing agent fee to Paine Webber (formerly Kidder, Peabody & Co.) equal, on
an annual basis, to 0.10% of the average daily net assets of the Fund. TAML and
Paine Webber have agreed to reduce their fees by one half during the fiscal
quarter following any of the first four fiscal quarters of the Fund if the
average closing price of the Fund's Shares in the preceding quarter is less than
the $15.00 initial offering price. Such reduction in fees for TAML attributable
to the Fund amounted to $408,359 for the year ended March 31, 1996.
An officer of the Fund is a partner of Dechert Price & Rhoads, legal
counsel for the Fund, which firm received fees of $22,000 for the year ended
March 31, 1996.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the
year ended March 31, 1996 aggregated $2,190,716 and $14,144,063, respectively.
The cost of securities for federal income tax purposes is the same as that shown
in the Investment Portfolio. Realized gains and losses are reported on an
identified cost basis.
At March 31, 1996, the aggregate gross unrealized appreciation and
depreciation of portfolio securities, based on cost for federal income tax
purposes, was as follows:
<TABLE>
<S> <C>
Unrealized appreciation................................. $ 5,943,978
Unrealized depreciation................................. (6,540,755)
-----------
Net unrealized depreciation............................. $ (596,777)
===========
</TABLE>
5. DEFERRED TAX LOSSES
At March 31, 1996, the Fund has deferred capital losses occurring
subsequent to October 31, 1995 of $587,000. Such losses will be reorganized in
the year ending March 31, 1997.
38
<PAGE> 43
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
INDEPENDENT AUDITOR'S REPORT
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders
Templeton Vietnam Opportunities Fund, Inc.
We have audited the accompanying statement of assets and liabilities,
including the investment portfolio, of Templeton Vietnam Opportunities Fund,
Inc. as of March 31, 1996, and the related statement of operations for the year
then ended, the statements of changes in net assets and the financial highlights
for the periods indicated in the accompanying financial statements. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1996, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Templeton Vietnam Opportunities Fund, Inc. as of March 31, 1996, the results of
its operations, the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles.
[McGLADREY & PULLEN, LLP LOGO]
New York, New York
April 26, 1996
39
<PAGE> 44
[McGLADREY & PULLEN, LLP]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Offer To Purchase on Schedule 13E-4 of our
reports, dated April 25, 1997 and April 26, 1996, relating to the financial
statements of Templeton Vietnam Opportunities Fund, Inc. for the years ended
March 31, 1997 and 1996, respectively. We also consent to the reference to our
Firm under the caption 'Selected Financial Information' in the Offer To
Purchase.
McGladrey & Pullen, LLP
McGLADREY & PULLEN LLP
New York, New York
December 17, 1997
40
<PAGE> 45
EXHIBIT A-2
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
UNAUDITED FINANCIAL STATEMENTS
41
<PAGE> 46
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL HIGHLIGHTS
PERIOD FROM APRIL 1, 1997 TO DECEMBER 12, 1997
<TABLE>
<CAPTION>
FOR THE
PERIOD
APRIL 1,
1997 TO
DECEMBER 12, YEAR ENDED MARCH 31,
1997 ----------------------------------
(UNAUDITED) 1997 1996 1995+
------------ -------- -------- --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the
period)
Net asset value, beginning of period.......... $ 14.05 $ 13.91 $ 13.09 $ 14.10
------- -------- -------- --------
Income from investment operations:
Net investment income....................... .10 .29 .36 .13
Net realized and unrealized gains
(losses)................................. (5.91) .21 .91 (1.00)
------- -------- -------- --------
Total from investment operations.............. (5.81) .50 1.27 (.87)
------- -------- -------- --------
Underwriting expenses deducted from capital... -- -- -- (.09)
------- -------- -------- --------
Less distributions:
Dividends from net investment income........ (.03) (.31) (.38) (.05)
Distributions from net realized gains....... (.04) (.05) (.07) --
------- -------- -------- --------
Total distributions........................... (.07) (.36) (.45) (.05)
------- -------- -------- --------
Net asset value, end of period................ $ 8.17 $ 14.05 $ 13.91 $ 13.09
======= ======== ======== ========
Total return*
Based on market value per share............... (31.85)% (10.87)% 22.11% (26.33)%
Based on net asset value per share............ (41.53)% 4.03% 9.80% (6.74)%
RATIOS/SUPPLEMENTAL DATA :
Net assets, end of period (000's)............. $ 65,817 $113,214 $112,073 $105,306
Ratios to average net assets:
Expenses.................................... 2.15% 1.82% 1.47% 1.72%**
Net investment income....................... 1.08% 2.04% 2.62% 1.81%**
Portfolio turnover rate....................... 73.16% 20.16% 4.01% 11.77%
Average commission rate paid***............... $ .0083 $ .0009 $ .0060 --
</TABLE>
* Total return is not annualized.
** Annualized.
*** Relates to purchases and sales of equity securities. Prior to fiscal year
end 1996 disclosure of average commission rate was not required.
+ For the period September 8, 1994 (commencement of operations) to March 31,
1995.
See notes to financial statements.
42
<PAGE> 47
TEMPLETON VIETNAM OPPORTUNITIES FUND
STATEMENT OF INVESTMENTS
DECEMBER 12, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------- ----------- ------------
<S> <C> <C> <C>
COMMON STOCKS AND WARRANTS: 26.6%
BANKING: 9.8%
Bangkok Bank Public Co. Ltd. ...................... Thailand 795,800 $ 1,458,157
Bank of Ayudhya Public Co. Ltd., fgn. ............. Thailand 2,350,000 1,304,831
Siam Commercial Bank............................... Thailand 203,440 226,836
Siam Commercial Bank Ltd., fgn..................... Thailand 1,257,360 1,466,105
*Siam Commercial Bank, rts......................... Thailand 171,546 2,916
*Siam Commercial Bank, rts., fgn. ................. Thailand 419,119 51,197
Thai Farmers Bank Public Co. Ltd., fgn. ........... Thailand 60,000 134,592
Thai Farmers Bank Public Co. Ltd., SEC............. Thailand 900,000 1,469,184
Thai Military Bank Ltd., fgn. ..................... Thailand 1,453,900 330,982
------------
6,444,800
------------
BEVERAGES & TOBACCO 3.2%
Asia Pacific Breweries Ltd......................... Singapore 30,000 79,252
British American Tobacco Co. Ltd................... Singapore 235,000 719,315
Carnaudmetalbox Asia Ltd., fgn..................... Singapore 170,000 172,768
Rothmans Industries Ltd., fgn...................... Singapore 224,000 1,128,106
------------
2,099,441
------------
BUILDING MATERIALS & COMPONENTS: 2.2%
Siam Cement Public Co. Ltd. ....................... Thailand 70,200 389,783
Siam Cement Public Co. Ltd., fgn................... Thailand 22,200 173,557
*Siam Cement Public Co. Ltd., SEC.................. Thailand 154,700 853,171
------------
1,416,511
------------
CHEMICALS: 1.6%
PT Unggul Indah Corp............................... Indonesia 3,449,600 904,264
Thai Petrochemical Industry Public Co. Ltd.,
fgn. ............................................ Thailand 1,138,000 149,122
------------
1,053,386
------------
CONSTRUCTION & HOUSING: 0.2%
Italian-Thai Development Public Company, fgn. ..... Thailand 409,900 141,109
*Sino-Thai Engineering & Construction Public Co.,
fgn. ............................................ Thailand 120,500 21,410
------------
162,519
------------
FINANCIAL SERVICES: 0.0%
*Asia Credit Public Co. Ltd........................ Thailand 226,300 59,057
------------
FOOD & HOUSEHOLD PRODUCTS: 2.3%
Charoen Pokphand Feedmill Public Co. Ltd. ......... Thailand 175,663 117,044
Chareon Pokphand Feedmill Public Co. Ltd., fgn. ... Thailand 135,737 226,103
Golden Resources Development International Ltd. ... Hong Kong 9,540,000 984,819
Saha Pathanapibul Public Co. Ltd., fgn. ........... Thailand 71,100 73,824
Serm Suk Public Co. Ltd............................ Thailand 15,700 83,687
Serm Suk Public Co. Ltd., fgn. .................... Thailand 300 1,636
------------
1,487,113
------------
INSURANCE: 0.6%
Bangkok Insurance Public Co. Ltd. BKI, SEC......... Thailand 55,000 393,337
------------
</TABLE>
43
<PAGE> 48
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
STATEMENT OF INVESTMENTS DECEMBER 12, 1997 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------- ----------- ------------
<S> <C> <C> <C>
COMMON STOCKS AND WARRANTS -- (Continued)
LEISURE & TOURISM: 0.6%
Dusit Thani Public Company Ltd., fgn. ............. Thailand 530,000 $ 370,794
*Lai Sun Hotels International Ltd., wts. .......... Hong Kong 111,717 721
------------
371,515
------------
MERCHANDISING: 0.5%
*Siam Makro Public Company Ltd., fgn. ............. Thailand 342,000 296,235
------------
METALS & MINING: 2.6%
Natsteel Ltd., fgn. ............................... Singapore 1,102,000 1,688,227
------------
MULTI-INDUSTRY: 0.6%
Saha Union Public Co. Ltd. ........................ Thailand 1,000 511
Saha Union Public Co. Ltd., fgn. .................. Thailand 339,000 210,816
Thai Wah Public Co. Ltd., fgn. .................... Thailand 410,850 38,781
United Communications Industries, fgn. ............ Thailand 320,000 163,465
------------
413,573
------------
REAL ESTATE: 1.0%
First Capital Corp. Ltd., fgn. .................... Singapore 40,000 39,083
*Lai Fung Holdings Ltd. ........................... Hong Kong 25,840 9,086
*Lai Sun Development Co. Ltd., wts. ............... Hong Kong 522,000 7,005
Lim Kah Ngam Ltd. ................................. Singapore 42,000 22,039
Lim Kah Ngam Ltd., fgn. ........................... Singapore 1,108,000 581,399
------------
658,612
------------
RECREATION & OTHER CONSUMER GOODS: 0.1%
KTP Holdings Ltd. ................................. Hong Kong 220,000 54,790
*KTP Holdings Ltd., wts. .......................... Hong Kong 101,250 1,764
------------
56,554
------------
TELECOMMUNICATIONS: 0.4%
Jasmine International Public Co. Ltd., fgn. ....... Thailand 500,000 122,154
Total Access Communication Public Co. Ltd. ........ Thailand 180,000 161,100
------------
283,254
------------
TEXTILES & APPAREL: 0.3%
Hua Thai Manufacturing Public Co. Ltd. ............ Thailand 259,400 218,927
------------
TRANSPORTATION: 0.5%
Thai Airways International Public Co. Ltd.,
fgn. ............................................ Thailand 326,600 346,366
TOTAL COMMON STOCKS AND WARRANTS (COST
$41,168,371)..................................... 17,449,427
------------
DIRECT EQUITY INVESTMENTS: 12.0%
REAL ESTATE: 6.2%
*+(R)Mayfair Hanoi, Ltd., 30% equity interest owned
through HEA Holdings Ltd., a wholly owned
investment acquired 10/31/96..................... Vietnam 4,093,534
LEISURE & TOURISM: 5.8%
*+(R)Indotel Ltd., acquired 11/22/96............... Vietnam 900,000 3,850,200
------------
TOTAL DIRECT EQUITY INVESTMENTS (COST
$14,702,155)..................................... 7,943,734
------------
</TABLE>
44
<PAGE> 49
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
STATEMENT OF INVESTMENTS DECEMBER 12, 1997 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
COUNTRY AMOUNT** VALUE
-------------- ----------- ------------
<S> <C> <C> <C>
SHORT TERM OBLIGATIONS: (COST $39,529,696) 60.1%
U.S. Treasury Bills, 4.765% to 5.530%, with
maturities to 4/30/98....................... United States 39,840,000 $ 39,551,270
------------
TOTAL INVESTMENTS: (COST $95,400,222) 98.7%........ 64,944,431
OTHER ASSETS, LESS LIABILITIES: 1.3%............... 872,927
------------
TOTAL NET ASSETS: 100.0%........................... $ 65,817,358
============
</TABLE>
- ---------------
* Non-income producing.
** Securities traded in U.S. dollars.
+ See note 6.
(R) Restricted securities, see note 7.
See notes to financial statements.
45
<PAGE> 50
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 12, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $95,400,222)......................... $ 64,944,431
Cash........................................................................... 26,861
Receivables:
Investment securities sold................................................... 3,849,266
Dividends and interest....................................................... 12,991
Unamortized organization costs................................................. 7,208
--------------
Total assets......................................................... 68,840,757
--------------
LIABILITIES
Payables:
Investment securities purchased.............................................. 2,603,144
To affiliates................................................................ 42,437
Accrued expenses............................................................... 377,818
--------------
Total liabilities.................................................... 3,023,399
--------------
Net assets, at value................................................. $ 65,817,358
==============
Net assets consist of:
Undistributed net investment income.......................................... $ 773,474
Net unrealized depreciation.................................................. (30,455,791)
Accumulated net realized loss................................................ (17,404,076)
Capital shares............................................................... 112,903,751
--------------
Net assets, at value................................................. $ 65,817,358
==============
Net asset value per share
($65,817,358 [DIVIDED BY] 8,058,603 shares outstanding).................... $ 8.17
==============
</TABLE>
See Notes to Financial Statements
46
<PAGE> 51
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS -- (CONTINUED)
STATEMENT OF OPERATIONS
FOR THE PERIOD APRIL 1, 1997 TO DECEMBER 12, 1997
(UNAUDITED)
<TABLE>
<S> <C> <C>
Investment income: (net of foreign taxes of $122,234)
Dividends..................................................... $ 1,281,628
Interest...................................................... 1,103,615
-----------
Total investment income............................... $ 2,385,243
Expenses:
Management fees (Note 3)...................................... 1,108,703
Administrative fees (Note 3).................................. 215,870
Custodian fees................................................ 29,614
Reports to shareholders....................................... 20,100
Registration and filing fees.................................. 15,300
Professional fees............................................. 166,503
Directors' fees and expenses.................................. 6,300
Amortization of organization costs............................ 3,072
Other......................................................... 22,069
-----------
Total expenses........................................ 1,587,531
-----------
Net investment income................................. 797,712
-----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments................................................... (17,307,799)
Foreign currency transactions................................. (50,189)
-----------
Net realized loss..................................... (17,357,988)
Net unrealized depreciation on investments............ (30,312,704)
-----------
Net realized and unrealized loss................................ (47,670,692)
-----------
Net decrease in net assets resulting from operations............ $(46,872,980)
===========
</TABLE>
See Notes to Financial Statements.
47
<PAGE> 52
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS -- (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD
APRIL 1, 1997 TO
DECEMBER 12, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997
----------------- --------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income.................................... $ 797,712 $ 2,321,823
Net realized gain (loss) from investments and foreign
currency transactions.................................. (17,357,988) 1,226,081
Net unrealized appreciation (depreciation) on
investments............................................ (30,312,704) 453,690
------------ ------------
Net increase (decrease) in net assets resulting from
operations........................................ (46,872,980) 4,001,594
Distributions to shareholders from:
Net investment income.................................... (241,758) (2,457,874)
Net realized gains....................................... (282,052) (402,930)
------------ ------------
Net increase (decrease) in net assets............... (47,396,790) 1,140,790
Net assets:
Beginning of period......................................... 113,214,148 112,073,358
------------ ------------
End of period............................................... $ 65,817,358 $ 113,214,148
============ ============
Undistributed net investment income included in net assets:
End of period............................................... $ 773,474 $ 217,520
============ ============
</TABLE>
See notes to financial statements.
48
<PAGE> 53
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Vietnam Opportunities Fund, Inc. (the Fund) is registered under
the Investment Company Act of 1940 as a closed-end, non-diversified investment
company. The Fund seeks long-term capital appreciation by investing at least 65%
of its total assets in the equity and debt securities of Vietnam companies. The
following summarizes the Fund's significant accounting policies.
a. Security Valuation:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Directors.
b. Foreign Currency Translation:
Portfolio securities and other assets and liabilities denominated in
foreign currencies are translated into U.S. dollars based on the exchange rate
of such currencies against U.S. dollars on the date of valuation. Purchases and
sales of securities and income items denominated in foreign currencies are
translated into U.S. dollars at the exchange rate in effect on the transaction
date. When the Fund purchases or sells foreign securities it will customarily
enter into a foreign exchange contract to minimize foreign exchange risk from
the trade date to the settlement date of such transactions.
The Fund does not separately report the effect of changes in foreign
exchange rates from changes in market prices on securities held. Such changes
are included in net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.
c. Income Taxes:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.
d. Security Transactions, Investment Income, Expenses and Distributions:
Security transactions are accounted for on trade date. Realized gains and
losses on security transactions are determined on a specific identification
basis. Certain income from foreign securities is recorded as soon as information
is available to the Fund. Interest income and estimated expenses are accrued
daily. Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
e. Organization Costs:
Organization costs are amortized on a straight line basis over five years.
49
<PAGE> 54
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
f. Accounting Estimates:
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the amounts of income and expense during
the reporting period. Actual results could differ from those estimates.
2. CAPITAL SHARES
At December 12, 1997, there were 100,000,000 shares authorized ($0.01 par
value). During the period April 1, 1997 to December 12, 1997 and during the year
ended March 31, 1997, there were no share transactions.
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also directors or officers of Templeton
Asset Management Limited (TAML) and Franklin Templeton Services, Inc. (FT
Services), the Fund's investment manager and administrative manager,
respectively.
The Fund pays an investment management fee to TAML of 1.5% per year of the
average weekly net assets of the Fund. From its investment management fee, TAML
pays a shareholder servicing agent fee to Paine Webber of 0.10% per year of the
average daily net assets of the Fund. The Fund pays FT Services an
administrative fee of 0.15% per year of the Fund's average weekly net assets.
4. INCOME TAXES
The cost of securities for income tax purposes is the same as that shown in
the investment portfolio. For the period April 1, 1997 to December, 12, 1997,
the net unrealized depreciation based on the cost of investments for income tax
purposes of was as follows:
<TABLE>
<S> <C>
Unrealized appreciation................................ $ 444,840
Unrealized depreciation................................ (30,900,631)
-------------
Net unrealized depreciation............................ $(30,455,791)
=============
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period April 1, 1997 to December 12, 1997 aggregated $59,278,463 and $49,194,807
respectively.
6. HOLDING OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
The Investment Company Act of 1940 defines "affiliated companies" as
investments in portfolio companies in which the Fund owns 5% or more of the
outstanding voting securities. Investments in "affiliated companies" during the
period April 1, 1997 to December 12, 1997 were $7,943,734.
7. DIRECT INVESTMENTS IN VIETNAM VENTURES
The Fund may invest up to 65% of its total net assets in direct equity
investments. These investments typically take the form of a business corporation
contract, joint venture company established in Vietnam or a wholly owned foreign
company established in Vietnam. Since these securities are not publicly traded,
and may be restricted as to resale, they may be less liquid than securities
traded in active markets. Direct investments in
50
<PAGE> 55
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
7. DIRECT INVESTMENTS IN VIETNAM VENTURES -- (CONTINUED)
Vietnam ventures involve certain risks not typically associated with investing
in more developed countries with established securities markets, such as
political, economic, and legal uncertainties. Readily available market
quotations cannot be obtained for these securities. The fair value of these
securities is estimated using methods approved by the Board. However, because of
the inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market for
the securities existed, and the differences could be material. The Fund retained
independent consultants including a real estate advisory firm to assist with the
evaluation of these investments. Based upon the information provided to
management and recent developments in the region, the direct equity investments
were valued at $7,943,734 (12.07% of net assets) at December 12, 1997, resulting
in an unrealized loss of $6,758,428.
8. TENDER OFFER
The Board of Directors has approved a tender offer for up to 50% of the
Fund's shares. Tendered shares will be accepted by the Fund at their net asset
value on the last day of the tender offering period, currently anticipated to
commence in December 1997 and conclude in January 1998. If more than 50% of the
shares are tendered, they will be accepted on a pro rata basis, and the Board
currently intends to submit to shareholders a proposal to liquidate the Fund. If
less than 50% of the shares are tendered, the Board intends to submit to
shareholders a proposal to change the name of the Fund and expand its investment
objectives to include investing in other Southeast Asian countries, while
continuing to focus its investment program on Vietnam.
51
<PAGE> 56
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL HIGHLIGHTS
SIX MONTH PERIOD ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED MARCH 31,
1997 ----------------------------------
(UNAUDITED) 1997 1996 1995+
------------- -------- -------- --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the
period)
Net asset value, beginning of period......... $ 14.05 $ 13.91 $ 13.09 $ 14.10
-------- -------- -------- --------
Income from investment operations:
Net investment income...................... .14 .29 .36 .13
Net realized and unrealized gains
(losses)................................ (1.11) .21 .91 (1.00)
-------- -------- -------- --------
Total from investment operations............. (.97) .50 1.27 (.87)
-------- -------- -------- --------
Underwriting expenses deducted from
capital.................................... -- -- -- (.09)
-------- -------- -------- --------
Less distributions:
Dividends from net investment income....... (.03) (.31) (.38) (.05)
Distributions from net realized gains...... (.04) (.05) (.07) --
-------- -------- -------- --------
Total distributions.......................... (.07) (.36) (.45) (.05)
-------- -------- -------- --------
Net asset value, end of period............... $ 13.01 $ 14.05 $ 13.91 $ 13.09
======== ======== ======== ========
Total return*
Based on market value per share.............. 2.23% (10.87)% 22.11% (26.33)%
Based on net asset value per share........... (6.89)% 4.03% 9.80% (6.74)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)............ $ 104,865 $113,214 $112,073 $105,306
Ratios to average net assets:
Expenses................................... 1.82%** 1.82% 1.47% 1.72%**
Net investment income...................... 1.99%** 2.04% 2.62% 1.81%**
Portfolio turnover rate...................... 22.56% 20.16% 4.01% 11.77%
Average commission rate paid***.............. $ .0160 $ .0009 $ .0060 --
</TABLE>
- ---------------
* Total return is not annualized.
** Annualized.
*** Relates to purchases and sales of equity securities. Prior to fiscal year
end 1996 disclosure of average commission rate was not required.
+ For the period September 8, 1994 (commencement of operations) to March 31,
1995.
See notes to financial statements.
52
<PAGE> 57
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------- ----------- ------------
<S> <C> <C> <C>
COMMON STOCKS AND WARRANTS 71.8%
BANKING 18.7%
Bangkok Bank Public Co. Ltd. ...................... Thailand 1,155,800 $ 3,979,997
Bank of Ayudhya Public Co. Ltd. ................... Thailand 77,050 124,171
Bank of Ayudhya Public Co. Ltd., fgn. ............. Thailand 2,272,950 3,694,326
Siam Commercial Bank............................... Thailand 980,000 3,185,686
Siam Commercial Bank Ltd., loc. ................... Thailand 529,300 1,720,590
Siam Commercial Bank Ltd., fgn. ................... Thailand 262,700 853,956
Thai Farmers Bank Public Co. Ltd. ................. Thailand 506,500 1,332,528
Thai Farmers Bank Public Co. Ltd., fgn. ........... Thailand 60,000 209,917
Thai Farmers Bank Public Co. Ltd., SEC............. Thailand 1,300,000 3,420,110
Thai Military Bank Ltd., fgn. ..................... Thailand 1,453,900 1,021,335
------------
19,542,616
------------
BEVERAGES & TOBACCO 4.0%
Asia Pacific Breweries Ltd. ....................... Singapore 30,000 103,956
British American Tobacco Co. Ltd. ................. Singapore 235,000 746,715
Carnaudmetalbox Asia Ltd., fgn. ................... Singapore 371,000 566,384
Rothmans Industries Ltd., fgn. .................... Singapore 605,000 2,768,879
------------
4,185,934
------------
BUILDING MATERIALS & COMPONENTS 2.8%
Siam Cement Public Co. Ltd. ....................... Thailand 70,200 812,230
Siam Cement Public Co. Ltd., fgn. ................. Thailand 22,200 364,496
*Siam Cement Public Co. Ltd., SEC.................. Thailand 154,700 1,789,910
------------
2,966,636
------------
CHEMICALS 2.0%
PT Unggul Indah Corp., fgn. ....................... Indonesia 1,724,800 1,782,468
Thai Petrochemical Industry Public Co. Ltd.,
fgn. ............................................ Thailand 1,138,000 344,848
------------
2,127,316
------------
CONSTRUCTION & HOUSING 1.2%
Italian-Thai Development Public Company, fgn. ..... Thailand 409,900 790,441
Siam Syntech Construction Public Co. Ltd., fgn. ... Thailand 646,350 227,024
*Sino-Thai Engineering & Construction Public Co.,
fgn. ............................................ Thailand 122,000 201,653
------------
1,219,118
------------
FINANCIAL SERVICES 1.6%
Asia Credit Public Co. Ltd. ....................... Thailand 226,300 561,074
Peregrine Investments Holdings Ltd. ............... Hong Kong 685,000 1,164,093
------------
1,725,167
------------
FOOD & HOUSEHOLD PRODUCTS 4.3%
Charoen Pokphand Feedmill Public Co. Ltd. ......... Thailand 175,663 367,779
Chareon Pokphand Feedmill Public Co. Ltd., fgn. ... Thailand 135,737 758,145
Golden Resources Development International Ltd. ... Hong Kong 21,284,000 3,163,169
Saha Pathanapibul Public Co. Ltd., fgn. ........... Thailand 71,100 121,438
Serm Suk Public Co. Ltd. .......................... Thailand 16,000 144,573
------------
4,555,104
------------
</TABLE>
53
<PAGE> 58
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1997 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
------------
<S> <C> <C> <C>
COMMON STOCKS AND WARRANTS -- (Continued)
INSURANCE 0.6%
Bangkok Insurance Public Co. Ltd. BKI.............. Thailand 4,700 $ 55,675
Bangkok Insurance Public Co. Ltd. BKI, SEC......... Thailand 50,300 595,840
------------
651,515
------------
LEISURE & TOURISM 0.6%
Dusit Thani Public Company Ltd., fgn. ............. Thailand 530,000 624,174
*Lai Sun Hotels International Ltd., wts. .......... Hong Kong 211,717 10,671
------------
634,845
------------
MERCHANDISING 1.1%
*Siam Makro Public Company Ltd., fgn. ............. Thailand 342,000 565,289
*Wo Kee Hong Holdings Ltd. ........................ Hong Kong 5,938,800 613,988
------------
1,179,277
------------
METALS & MINING 6.4%
Natsteel Ltd., fgn. ............................... Singapore 2,467,000 6,742,112
------------
MULTI-INDUSTRY 11.2%
Jardine Matheson Holdings Ltd. (Singapore)......... Hong Kong 474,731 3,845,321
Saha Union Public Co. Ltd. ........................ Thailand 1,000 813
Saha Union Public Co. Ltd., fgn. .................. Thailand 339,000 275,496
Swire Pacific Ltd., B.............................. Hong Kong 3,620,000 5,356,552
Thai Wah Public Co. Ltd., fgn. .................... Thailand 410,850 70,739
United Communications Industries, fgn. ............ Thailand 320,000 934,435
Wheelock and Co. Ltd. ............................. Hong Kong 600,000 1,221,246
------------
11,704,602
------------
REAL ESTATE 12.6%
First Capital Corp. Ltd., fgn. .................... Singapore 40,000 89,441
Lai Sun Development Co. Ltd. ...................... Hong Kong 1,292,000 1,177,126
*Lai Sun Development Co. Ltd., wts. ............... Hong Kong 532,000 33,345
Lim Kah Ngam Ltd. ................................. Singapore 42,000 37,895
Lim Kah Ngam Ltd., fgn. ........................... Singapore 1,108,000 999,699
New World Development Co. Ltd. .................... Hong Kong 1,791,681 10,836,220
------------
13,173,726
------------
RECREATION & OTHER CONSUMER GOODS 0.3%
KTP Holdings Ltd. ................................. Hong Kong 506,250 320,577
------------
TELECOMMUNICATIONS 1.0%
Jasmine International Public Co. Ltd., fgn. ....... Thailand 500,000 416,667
Total Access Communication Public Co. Ltd. ........ Thailand 180,000 594,000
------------
1,010,667
------------
TEXTILES & APPAREL 2.7%
Hua Thai Manufacturing Public Co. Ltd. ............ Thailand 259,400 257,256
PT Polysindo Eka Perkasa, fgn. .................... Indonesia 6,386,000 2,523,343
------------
2,780,599
------------
TRANSPORTATION 0.7%
Thai Airways International Public Co. Ltd.,
fgn. ............................................ Thailand 444,000 736,942
------------
TOTAL COMMON STOCKS AND WARRANTS (COST
$81,476,145)..................................... 75,256,753
------------
</TABLE>
54
<PAGE> 59
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1997 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------- ----------- ------------
<S> <C> <C> <C>
DIRECT EQUITY INVESTMENTS 15.9%
REAL ESTATE 5.3%
*+(R)Mayfair Hanoi, Ltd., 30% equity interest owned
through HEA Holdings Ltd., a wholly owned
investment acquired 10/31/96..................... Vietnam $ 5,547,596
LEISURE & TOURISM 8.7%
*+(R)Indotel Ltd., acquired 11/22/96............... Vietnam 900,000 9,154,566
MULTI-INDUSTRY 1.9%
*+(R)Phuben Tea Joint Venture, 30% equity interest
owned through Sipef East Asia Holdings, a 50%
owned investment acquired 5/29/96................ Vietnam 2,031,357
------------
TOTAL DIRECT EQUITY INVESTMENTS (COST
$16,733,519)..................................... 16,733,519
------------
PRINCIPAL
AMOUNT**
---------
SHORT TERM OBLIGATIONS (COST $12,737,274) 12.2%
GOVERNMENT AND GOVERNMENT AGENCIES
U.S. Treasury Bills, 4.765% to 5.160% with
maturities to 12/26/97...................... United States $12,888,000 12,742,731
------------
TOTAL INVESTMENTS (COST $110,946,938) 99.9%........ 104,733,003
OTHER ASSETS, LESS LIABILITIES 0.1%................ 132,135
------------
TOTAL NET ASSETS 100.0%............................ $104,865,138
============
</TABLE>
- ---------------
* Non-income producing.
** Securities traded in U.S. dollars.
+ See note 6.
(R) Restricted securities, see note 7.
See notes to financial statements.
55
<PAGE> 60
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $110,946,938)........................ $104,733,003
Cash........................................................................... 626
Receivables:
Investment securities sold................................................... 24,387
Dividends and interest....................................................... 280,808
Unamortized organization costs................................................. 8,084
--------------
Total assets......................................................... 105,046,908
--------------
LIABILITIES
Payable to affiliates.......................................................... 146,302
Accrued expenses............................................................... 35,468
--------------
Total liabilities.................................................... 181,770
--------------
Net assets, at value................................................. $104,865,138
==============
Net assets consist of:
Undistributed net investment income.......................................... $ 1,107,615
Net unrealized depreciation.................................................. (6,213,935)
Accumulated net realized loss................................................ (2,932,293)
Capital shares............................................................... 112,903,751
--------------
Net assets, at value................................................. $104,865,138
==============
Net asset value per share ($104,865,138 [divided by] 8,058,603 shares
outstanding)............................................................... $ 13.01
==============
</TABLE>
See notes to financial statements.
56
<PAGE> 61
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS -- (CONTINUED)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C> <C>
Investment income: (net of foreign taxes of $112,555)
Dividends....................................................... $ 1,274,959
Interest........................................................ 889,893
-----------
Total investment income................................. $ 2,164,852
Expenses:
Management fees (Note 3)........................................ 852,696
Administrative fees (Note 3).................................... 85,270
Custodian fees.................................................. 25,000
Reports to shareholders......................................... 16,100
Registration and filing fees.................................... 9,000
Professional fees............................................... 36,500
Directors' fees and expenses.................................... 5,000
Amortization of organization costs.............................. 2,196
Other........................................................... 1,237
-----------
Total expenses.......................................... 1,032,999
-----------
Net investment income................................... 1,131,853
-----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments..................................................... (2,948,917)
Foreign currency transactions................................... 62,712
-----------
Net realized loss....................................... (2,886,205)
Net unrealized depreciation on investments.............. (6,070,848)
-----------
Net realized and unrealized loss.................................. (8,957,053)
-----------
Net decrease in net assets resulting from operations.............. $(7,825,200)
===========
</TABLE>
See notes to financial statements.
57
<PAGE> 62
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
FINANCIAL STATEMENTS -- (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997
------------------ --------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income................................... $ 1,131,853 $ 2,321,823
Net realized gain (loss) from investments and foreign
currency transactions................................. (2,886,205) 1,226,081
Net unrealized appreciation (depreciation) on
investments........................................... (6,070,848) 453,690
------------ ------------
Net increase (decrease) in net assets resulting
from operations.................................. (7,825,200) 4,001,594
Distributions to shareholders from:
Net investment income................................... (241,758) (2,457,874)
Net realized gains...................................... (282,052) (402,930)
------------ ------------
Net increase (decrease) in net assets.............. (8,349,010) 1,140,790
Net assets:
Beginning of period........................................ 113,214,148 112,073,358
------------ ------------
End of period.............................................. $104,865,138 $ 113,214,148
============ ============
Undistributed net investment income included in net assets:
Beginning of period........................................ $ 217,520 $ 379,647
============ ============
End of period.............................................. $ 1,107,615 $ 217,520
============ ============
</TABLE>
See notes to financial statements.
58
<PAGE> 63
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Vietnam Opportunities Fund, Inc. (the Fund) is registered under
the Investment Company Act of 1940 as a closed-end, non-diversified investment
company. The Fund seeks long-term capital appreciation by investing at least 65%
of its total assets in the equity and debt securities of Vietnam companies. The
following summarizes the Fund's significant accounting policies.
a. Security Valuation:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Directors.
b. Foreign Currency Translation:
Portfolio securities and other assets and liabilities denominated in
foreign currencies are translated into U.S. dollars based on the exchange rate
of such currencies against U.S. dollars on the date of valuation. Purchases and
sales of securities and income items denominated in foreign currencies are
translated into U.S. dollars at the exchange rate in effect on the transaction
date. When the Fund purchases or sells foreign securities it will customarily
enter into a foreign exchange contract to minimize foreign exchange risk from
the trade date to the settlement date of such transactions.
The Fund does not separately report the effect of changes in foreign
exchange rates from changes in market prices on securities held. Such changes
are included in net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.
c. Income Taxes:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.
d. Security Transactions, Investment Income, Expenses and Distributions:
Security transactions are accounted for on trade date. Realized gains and
losses on security transactions are determined on a specific identification
basis. Certain income from foreign securities is recorded as soon as information
is available to the Fund. Interest income and estimated expenses are accrued
daily. Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
e. Organization Costs:
Organization costs are amortized on a straight line basis over five years.
59
<PAGE> 64
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
f. Accounting Estimates:
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the amounts of income and expense during
the reporting period. Actual results could differ from those estimates.
2. CAPITAL SHARES
At September 30, 1997, there were 100,000,000 shares authorized ($0.01 par
value). During the period ended September 30, 1997 and the year ended March 31,
1997, there were no share transactions.
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also directors or officers of Templeton
Asset Management Limited (TAML) and Franklin Templeton Services, Inc. (FT
Services), the Fund's investment manager and administrative manager,
respectively.
The Fund pays an investment management fee to TAML of 1.5% per year of the
average weekly net assets of the Fund. From its investment management fee, TAML
pays a shareholder servicing agent fee to Paine Webber of 0.10% of the average
daily net assets of the Fund. The Fund pays FT Services an administrative fee of
0.15% per year of the Fund's average weekly net assets.
4. INCOME TAXES
The cost of securities for income tax purposes is the same as that shown in
the investment portfolio. At September 30, 1997, the net unrealized depreciation
based on the cost of investments for income tax purposes was as follows:
<TABLE>
<S> <C>
Unrealized appreciation................................ $ 9,428,718
Unrealized depreciation................................ (15,642,653)
------------
Net unrealized depreciation............................ $ (6,213,935)
============
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended September 30, 1997 aggregated $55,639,842 and $17,575,991
respectively.
6. HOLDING OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
The Investment Company Act of 1940 defines "affiliated companies" as
investments in portfolio companies in which the Fund owns 5% or more of the
outstanding voting securities. Investments in "affiliated companies" at
September 30, 1997 were $16,733,519.
7. DIRECT INVESTMENTS IN VIETNAM VENTURES
The Fund may invest up to 65% of its total net assets in direct equity
investments. These investments typically take the form of a business corporation
contract, joint venture company established in Vietnam or a wholly owned foreign
company established in Vietnam. Since these securities are not publicly traded,
and may be restricted as to resale, they may be less liquid than securities
traded in active markets. Direct investments in Vietnam ventures include certain
risks not typically associated with investing in countries with developed
60
<PAGE> 65
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
7. DIRECT INVESTMENTS IN VIETNAM VENTURES -- (CONTINUED)
securities markets, such as political, economic, and legal uncertainties.
Readily available market quotations cannot be obtained for these securities. The
fair value of these securities is estimated using methods approved by the Board.
However, because of the inherent uncertainty of valuation, those estimated
values may differ significantly from the values that would have been used had a
ready market for the securities existed, and the differences could be material.
The total value of direct equity investments was $16,733,519 (15.9% of net
assets) at September 30, 1997.
8. TENDER OFFER
The Board of Directors has approved a tender offer for up to 50% of the
Fund's shares. Tendered shares will be accepted by the Fund at their net asset
value on the last day of the tender offering period, currently anticipated to
commence in December 1997 and conclude in January 1998. If more than 50% of the
shares are tendered, they will be accepted on a pro rata basis, and the Board
currently intends to submit to shareholders a proposal to liquidate the Fund. If
less than 50% of the shares are tendered, the Board intends to submit to
shareholders a proposal to change the name of the Fund and expand its investment
objectives to include investing in other Southeast Asian countries, while
continuing to focus its investment program on Vietnam.
61
<PAGE> 66
EXHIBIT A-3
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information illustrates certain
pro forma effects of the Offer assuming the use of cash and, as necessary,
proceeds from the sale of portfolio securities to fund the Offer.
The pro forma financial statements present the pro forma effects of both a
25% tender of the Fund's Shares and a 50% tender of the Fund's Shares pursuant
to the Offer. The 25% tender option is based on the assumption that a total of
2,014,651 Shares were purchased at a price equal to their net asset value
adjusted to reflect estimated costs of the Offer approximating $300,000. The 50%
tender option is based on the assumption that a total of 4,029,302 Shares were
purchased at a price equal to their net asset value adjusted to reflect
estimated costs of the Offer approximating $300,000. For both the 25% and 50%
tender options, the pro forma adjustments assume that the transaction occurred,
for the purposes of the pro forma consolidated statement of income and expenses
as of the first day of the period presented, and for purposes of the pro forma
consolidated balance sheet, as of its date.
The pro forma financial information should be read in conjunction with the
historical consolidated financial information and does not purport to be
indicative of the results which may be obtained in the future or which would
actually have been obtained had the Offer occurred as of the dates indicated.
62
<PAGE> 67
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(ASSUME 50% TENDER)
DECEMBER 12, 1997
<TABLE>
<CAPTION>
UNAUDITED
-------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS NOTE REF. PRO FORMA
------------ ------------ --------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value.............................. $ 64,944,431 $(32,758,225) (b) $ 32,186,206
Cash................................. 26,861 26,861
Receivables:
Investment securities sold......... 3,849,266 32,758,225 (b) 36,607,491
Dividends and interest............. 12,991 12,991
Unamortized organization costs....... 7,208 7,208
----------- ------------ -----------
Total assets............... 68,840,757 0 68,840,757
----------- ------------ -----------
LIABILITIES:
Payables:
Investment securities purchased.... 2,603,144 2,603,144
Tender............................. 32,758,225 (b) 32,758,225
Accrued expenses..................... 420,255 300,000 (a) 720,255
----------- ------------ -----------
Total liabilities.......... 3,023,399 33,058,225 36,081,624
----------- ------------ -----------
Net assets, at value................. $ 65,817,358 $(33,058,225) $ 32,759,133
=========== ============ ===========
Net assets consist of:
Undistributed net investment
income.......................... $ 773,474 $ 773,474
Net unrealized depreciation........ (30,455,791) (17,848) (c) (30,473,639)
Accumulated net realized loss...... (17,404,076) 17,848 (c) (17,386,228)
Capital shares..................... 112,903,751 (32,758,225) (b) 79,845,526
(300,000) (a)
----------- ------------ -----------
Net assets, at value................. $ 65,817,358 $(33,058,225) $ 32,759,133
=========== ============ ===========
Shares outstanding................... 8,058,603 (4,029,302) (b) 4,029,301
=========== ============ ===========
Net asset value per share............ $ 8.17 $ (0.04) (a) $ 8.13
=========== ============ ===========
</TABLE>
See Notes to Pro Forma Financial Information.
63
<PAGE> 68
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF OPERATIONS
(ASSUME 50% TENDER)
FOR THE PERIOD APRIL 1, 1997 TO DECEMBER 12, 1997
<TABLE>
<CAPTION>
UNAUDITED
------------------------------------
PRO FORMA NOTE
HISTORICAL ADJUSTMENTS REF. PRO FORMA
------------ ----------- --- ------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends.................................. $ 1,281,628 $ (879,143) (d) $ 402,485
Interest................................... 1,103,615 (1,103,615) (d) 0
----------- ---------- ------------
Total income..................... 2,385,243 (1,982,758) 402,485
----------- ---------- ------------
Expenses:
Management fees............................ 1,108,703 (554,352) (e) 554,351
Administration fees........................ 215,870 (107,935) (e) 107,935
Custodian fees............................. 29,614 (17,004) (f) 12,610
Reports to shareholders.................... 20,100 20,100
Registration and filing fees............... 15,300 15,300
Professional fees.......................... 166,503 166,503
Directors' fees and expenses............... 6,300 6,300
Amortization of organization costs......... 3,072 3,072
Other...................................... 22,069 22,069
----------- ---------- ------------
Total expenses................... 1,587,531 (679,291) 908,240
----------- ---------- ------------
Net investment income............ 797,712 (1,303,467) (505,755)
----------- ---------- ------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments.............................. (17,307,799) 17,848 (c) (17,289,951)
Foreign currency transactions............ (50,189) (50,189)
----------- ---------- ------------
Net realized loss.......................... (17,357,988) 17,848 (17,340,140)
Net unrealized depreciation on
investments.............................. (30,312,704) (17,848) (c) (30,330,552)
----------- ---------- ------------
Net realized and unrealized loss........... (47,670,692) 0 (47,670,692)
----------- ---------- ------------
Net decrease in net assets resulting from
operations............................... $(46,872,980) $(1,303,467) $(48,176,447)
=========== ========== ============
Ratio of expenses to average net assets.... 2.15% 2.46%
</TABLE>
See Notes to Pro Forma Financial Information.
64
<PAGE> 69
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(ASSUME 25% TENDER)
DECEMBER 12, 1997
<TABLE>
<CAPTION>
UNAUDITED
-------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS NOTE REF. PRO FORMA
------------ ------------ --------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value.............................. $ 64,944,431 $(16,379,113) (b) $ 48,565,318
Cash................................. 26,861 26,861
Receivables:
Investment securities sold......... 3,849,266 16,379,113 (b) 20,228,379
Dividends and interest............. 12,991 12,991
Unamortized organization costs....... 7,208 7,208
----------- ------------ -----------
Total assets............... 68,840,757 0 68,840,757
----------- ------------ -----------
LIABILITIES:
Payables:
Investment securities purchased.... 2,603,144 2,603,144
Tender............................. 16,379,113 (b) 16,379,113
Accrued expenses..................... 420,255 300,000 (a) 720,255
----------- ------------ -----------
Total liabilities.......... 3,023,399 16,679,113 19,702,512
----------- ------------ -----------
Net assets, at value................. $ 65,817,358 $(16,679,113) $ 49,138,245
=========== ============ ===========
Net assets consist of:
Undistributed net investment
income.......................... $ 773,474 $ 773,474
Net unrealized depreciation........ (30,455,791) (8,924) (c) (30,464,715)
Accumulated net realized loss...... (17,404,076) 8,924 (c) (17,395,152)
Capital shares..................... 112,903,751 (16,379,113) (b) 96,224,638
(300,000) (a)
----------- ------------ -----------
Net assets, at value................. $ 65,817,358 $(16,679,113) $ 49,138,245
=========== ============ ===========
Shares outstanding................... 8,058,603 (2,014,651) (b) 6,043,952
=========== ============ ===========
Net asset value per share............ $ 8.17 $ (0.04) (a) $ 8.13
=========== ============ ===========
</TABLE>
See Notes to Pro Forma Financial Information.
65
<PAGE> 70
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF OPERATIONS
(ASSUME 25% TENDER)
FOR THE PERIOD APRIL 1, 1997 TO DECEMBER 12, 1997
<TABLE>
<CAPTION>
UNAUDITED
---------------------------------
PRO FORMA NOTE
HISTORICAL ADJUSTMENTS REF. PRO FORMA
----------- --------- --- -----------
<S> <C> <C> <C> <C>
Investment Income:
Dividends..................................... $ 1,274,959 $(564,772) (d) $ 710,187
Interest...................................... 889,893 (278,821) (d) 611,072
----------- -------- -----------
Total income........................ 2,164,852 (843,593) 1,321,259
----------- -------- -----------
Expenses:
Management fees............................... 852,696 (213,174) (e) 639,522
Administration fees........................... 85,270 (21,318) (e) 63,952
Custodian fees................................ 25,000 (6,000) (f) 19,000
Reports to shareholders....................... 16,100 16,100
Registration and filing fees.................. 9,000 9,000
Professional fees............................. 36,500 36,500
Directors' fees and expenses.................. 5,000 5,000
Amortization of organization costs............ 2,196 2,196
Other......................................... 1,237 1,237
----------- -------- -----------
Total expenses...................... 1,032,999 (240,492) 792,507
----------- -------- -----------
Net investment income............... 1,131,853 (603,101) 528,752
----------- -------- -----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments................................. (2,948,917) 8,924 (c) (2,939,993)
Foreign currency transactions............... 62,712 62,712
----------- -------- -----------
Net realized loss............................. (2,886,205) 8,924 (2,877,281)
Net unrealized depreciation on investments.... (6,070,848) (8,924) (c) (6,079,772)
----------- -------- -----------
Net realized and unrealized loss.............. (8,957,053) 0 (8,957,053)
----------- -------- -----------
Net decrease in net assets resulting from
operations.................................. $(7,825,200) $(603,101) $(8,428,301)
=========== ======== ===========
Ratio of expenses to average net assets....... 2.15% 1.86%
</TABLE>
See Notes to Pro Forma Financial Information.
66
<PAGE> 71
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(ASSUME 50% TENDER)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
UNAUDITED
-------------------------------------
PRO FORMA NOTE
HISTORICAL ADJUSTMENTS REF. PRO FORMA
------------ ------------ --- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value....... $104,733,003 $(52,300,340) (b) $ 52,432,663
Cash...................................... 626 626
Receivables:
Investment securities sold.............. 24,387 52,300,340 (b) 52,324,727
Dividends and interest.................. 280,808 280,808
Unamortized organization costs............ 8,084 8,084
------------ ------------ ------------
Total assets.................... 105,046,908 0 105,046,908
------------ ------------ ------------
LIABILITIES:
Payables:
Affiliates.............................. 146,302 146,302
Tender.................................. 52,300,340 (b) 52,300,340
Accrued expenses.......................... 35,468 300,000 (a) 335,468
------------ ------------ ------------
Total liabilities............... 181,770 52,600,340 52,782,110
------------ ------------ ------------
Net assets, at value...................... $104,865,138 $(52,600,340) $ 52,264,798
============ ============ ============
Net assets consist of:
Undistributed net investment income..... $ 1,107,615 $ 1,107,615
Net unrealized depreciation............. (6,213,935) 3,263,675 (c) (2,950,260)
Accumulated net realized loss........... (2,932,293) (3,263,675) (c) (6,195,968
Capital shares.......................... 112,903,751 (52,300,340) (b) 60,303,411
(300,000) (a)
------------ ------------ ------------
Net assets, at value...................... $104,865,138 $(52,600,340) $ 52,264,798
============ ============ ============
Shares outstanding........................ 8,058,603 (4,029,302) (b) 4,029,301
============ ============ ============
Net asset value per share................. $ 13.01 $ (0.04) (a) $ 12.97
============ ============ ============
</TABLE>
See Notes to Pro Forma Financial Information.
67
<PAGE> 72
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF OPERATIONS
(ASSUME 50% TENDER)
SIX MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
UNAUDITED
-----------------------------------
PRO FORMA NOTE
HISTORICAL ADJUSTMENTS REF. PRO FORMA
----------- ----------- --- -----------
<S> <C> <C> <C> <C>
Investment Income:
Dividends.................................... $ 1,274,959 $ (458,551) (d) $ 816,408
Interest..................................... 889,893 (889,893) (d) 0
----------- ---------- ----------
Total income....................... 2,164,852 (1,348,444) 816,408
----------- ---------- ----------
Expenses:
Management fees.............................. 852,696 (426,348) (e) 426,348
Administration fees.......................... 85,270 (42,635) (e) 42,635
Custodian fees............................... 25,000 (12,155) (f) 12,845
Reports to shareholders...................... 16,100 16,100
Registration and filing fees................. 9,000 9,000
Professional fees............................ 36,500 36,500
Directors' fees and expenses................. 5,000 5,000
Amortization of organization costs........... 2,196 2,196
Other........................................ 1,237 1,237
----------- ---------- ----------
Total expenses..................... 1,032,999 (481,138) 551,861
----------- ---------- ----------
Net investment income.............. 1,131,853 (867,306) 264,547
----------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments................................ (2,948,917) (3,263,675) (c) (6,212,592)
Foreign currency transactions.............. 62,712 62,712
----------- ---------- ----------
Net realized loss............................ (2,886,205) (3,263,675) (6,149,880)
Net unrealized depreciation on investments... (6,070,848) 3,263,675 (c) (2,807,173)
----------- ---------- ----------
Net realized and unrealized loss............. (8,957,053) 0 (8,957,053)
----------- ---------- ----------
Net decrease in net assets resulting from
operations................................. $(7,825,200) $ (867,306) $(8,692,506)
=========== ========== ==========
Ratio of expenses to average net assets...... 1.82% 1.94%
</TABLE>
See Notes to Pro Forma Financial Information.
68
<PAGE> 73
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(ASSUME 25% TENDER)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
UNAUDITED
-------------------------------------
PRO FORMA NOTE
HISTORICAL ADJUSTMENTS REF. PRO FORMA
------------ ------------ --- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value....... $104,733,003 $(26,150,170) (b) $ 78,582,833
Cash...................................... 626 626
Receivables:
Investment securities sold.............. 24,387 26,150,170 (b) 26,174,557
Dividends and interest.................. 280,808 280,808
Unamortized organization costs............ 8,084 8,084
------------ ------------ ------------
Total assets.................... 105,046,908 0 105,046,908
------------ ------------ ------------
LIABILITIES:
Payables:
Affiliates.............................. 146,302 146,302
Tender.................................. 26,150,170 (b) 26,150,170
Accrued expenses.......................... 35,468 300,000 (a) 335,468
------------ ------------ ------------
Total liabilities............... 181,770 26,450,170 26,631,940
------------ ------------ ------------
Net assets, at value...................... $104,865,138 $(26,450,170) $ 78,414,968
============ ============ ============
Net assets consist of:
Undistributed net investment income..... $ 1,107,615 $ 1,107,615
Net unrealized depreciation............. (6,213,935) 1,102,565 (c) (5,111,370)
Accumulated net realized loss........... (2,932,293) (1,102,565) (c) (4,034,858)
Capital shares.......................... 112,903,751 (26,150,170) (b) 86,453,581
(300,000) (a)
------------ ------------ ------------
Net assets, at value...................... $104,865,138 $(26,450,170) $ 78,414,968
============ ============ ============
Shares outstanding........................ 8,058,603 (2,014,651) (b) 6,043,952
============ ============ ============
Net asset value per share................. $ 13.01 $ (0.04) (a) $ 12.97
============ ============ ============
</TABLE>
See Notes to Pro Forma Financial Information.
69
<PAGE> 74
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF OPERATIONS
(ASSUME 25% TENDER)
SIX MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
UNAUDITED
-----------------------------------
PRO FORMA NOTE
HISTORICAL ADJUSTMENTS REF. PRO FORMA
----------- ----------- --- -----------
<S> <C> <C> <C> <C>
Investment Income:
Dividends.................................... $ 1,274,959 $ (296,120) (d) $ 978,839
Interest..................................... 889,893 (396,951) (d) 492,942
----------- --------- -----------
Total income....................... 2,164,852 (693,071) 1,471,781
----------- --------- -----------
Expenses:
Management fees.............................. 852,696 (213,174) (e) 639,522
Administration fees.......................... 85,270 (21,318) (e) 63,952
Custodian fees............................... 25,000 (4,289) (f) 20,711
Reports to shareholders...................... 16,100 16,100
Registration and filing fees................. 9,000 9,000
Professional fees............................ 36,500 36,500
Directors' fees and expenses................. 5,000 5,000
Amortization of organization costs........... 2,196 2,196
Other........................................ 1,237 1,237
----------- --------- -----------
Total expenses..................... 1,032,999 (238,781) 794,218
----------- --------- -----------
Net investment income.............. 1,131,853 (454,290) 677,563
----------- --------- -----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments................................ (2,948,917) (1,102,565) (c) (4,051,482)
Foreign currency transactions.............. 62,712 62,712
----------- --------- -----------
Net realized loss............................ (2,886,205) (1,102,565) (3,988,770)
Net unrealized depreciation on investments... (6,070,848) 1,102,565 (c) (4,968,283)
----------- --------- -----------
Net realized and unrealized loss............. (8,957,053) 0 (8,957,053)
----------- --------- -----------
Net decrease in net assets resulting from
operations................................. $(7,825,200) $ (454,290) $(8,279,490)
=========== ========= ===========
Ratio of expenses to average net assets...... 1.82% 1.86%
</TABLE>
See Notes to Pro Forma Financial Information.
70
<PAGE> 75
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(ASSUME 50% TENDER)
MARCH 31, 1997
<TABLE>
<CAPTION>
UNAUDITED
-------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS NOTE REF. PRO FORMA
------------ ------------ --------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value.............................. $113,488,419 $(56,450,521) (b) $ 57,037,898
Receivables:
Investment securities sold......... 131,054 56,450,521 (b) 56,581,575
Dividends and interest............. 44,693 44,693
Unamortized organization costs....... 10,280 10,280
------------ ------------ ------------
Total assets............... 113,674,446 0 113,674,446
------------ ------------ ------------
LIABILITIES:
Funds advanced by custodian.......... 13,923 13,923
Tender payable....................... 56,450,521 (b) 56,450,521
Accrued expenses..................... 446,375 300,000 (a) 746,375
------------ ------------ ------------
Total liabilities.......... 460,298 56,750,521 57,210,819
------------ ------------ ------------
Net assets, at value................. $113,214,148 $(56,750,521) $ 56,463,627
============ ============ ============
Net assets consist of:
Undistributed net investment
income.......................... $ 217,520 $ 217,520
Net unrealized depreciation........ (143,087) 22,559 (c) (120,528)
Accumulated net realized gain...... 235,964 (22,559) (c) 213,405
Net capital paid in on shares of
capital stock................... 112,903,751 (56,450,521) (b) 56,153,230
(300,000) (a)
------------ ------------ ------------
Net assets, at value................. $113,214,148 $(56,750,521) $ 56,463,627
============ ============ ============
Shares outstanding................... 8,058,603 (4,029,302) (b) 4,029,301
============ ============ ============
Net asset value per share $ 14.05 $ (0.04) (a) $ 14.01
============ ============ ============
</TABLE>
See Notes to Pro Forma Financial Information.
71
<PAGE> 76
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF OPERATIONS
(ASSUME 50% TENDER)
YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
UNAUDITED
----------------------------------
PRO FORMA NOTE
HISTORICAL ADJUSTMENTS REF. PRO FORMA
---------- ----------- --- ----------
<S> <C> <C> <C> <C>
Investment Income:
Dividends...................................... $1,505,395 $1,505,395
Interest....................................... 2,868,748 $(2,868,748) (d) 0
Other.......................................... 11,861 11,861
---------- ---------- ----------
Total income......................... 4,386,004 (2,868,748) 1,517,256
---------- ---------- ----------
Expenses:
Management fees................................ 1,702,398 (851,199) (e) 851,199
Administration fees............................ 170,246 (85,123) (e) 85,123
Custodian fees................................. 50,000 (5,572) (f) 44,428
Reports to shareholders........................ 38,825 38,825
Audit fees..................................... 37,647 37,647
Legal fees..................................... 30,000 30,000
Registration and filing fees................... 18,460 18,460
Directors' fees and expenses................... 12,100 12,100
Amortization of organization costs............. 4,380 4,380
Other.......................................... 125 125
---------- ---------- ----------
Total expenses....................... 2,064,181 (941,894) 1,122,287
---------- ---------- ----------
Net investment income................ 2,321,823 (1,926,854) 394,969
---------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments.................................. 1,237,398 (22,559) (c) 1,214,839
Foreign currency transactions................ (11,317) (11,317)
---------- ---------- ----------
Net realized gain.............................. 1,226,081 (22,559) 1,203,522
Net unrealized appreciation on investments..... 453,690 22,559 (c) 476,249
---------- ---------- ----------
Net realized and unrealized gain............... 1,679,771 0 1,679,771
---------- ---------- ----------
Net increase in net assets resulting from
operations................................... $4,001,594 $(1,926,854) $2,074,740
========== ========== ==========
Ratio of expenses to average net assets........ 1.82% 1.98%
</TABLE>
See Notes to Pro Forma Financial Information.
72
<PAGE> 77
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(ASSUME 25% TENDER)
MARCH 31, 1997
<TABLE>
<CAPTION>
UNAUDITED
------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS NOTE REF. PRO FORMA
------------ ------------ --------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value... $113,488,419 $(28,225,261) (b) $85,263,158
Receivables:
Investment securities sold.......... 131,054 28,225,261 (b) 28,356,315
Dividends and interest.............. 44,693 44,693
Unamortized organization costs........ 10,280 10,280
------------ ----------- ------------
Total assets................ 113,674,446 0 113,674,446
------------ ----------- ------------
LIABILITIES:
Funds advanced by custodian........... 13,923 13,923
Tender payable........................ 28,225,261 (b) 28,225,261
Accrued expenses...................... 446,375 300,000 (a) 746,375
------------ ----------- ------------
Total liabilities........... 460,298 28,525,261 28,985,559
------------ ----------- ------------
Net assets, at value.................. $113,214,148 $(28,525,261) $84,688,887
============ =========== ============
Net assets consist of:
Undistributed net investment
income........................... $ 217,520 $ 217,520
Net unrealized depreciation......... (143,087) 2,728 (c) (140,359)
Accumulated net realized gain....... 235,964 (2,728) (c) 233,236
Net capital paid in on shares of
capital stock.................... 112,903,751 (28,225,261) (b) 84,378,490
(300,000) (a)
------------ ----------- ------------
Net assets, at value.................. $113,214,148 $(28,525,261) $84,688,887
============ =========== ============
Shares outstanding.................... 8,058,603 (2,014,651) (b) 6,043,952
============ =========== ============
Net asset value per share............. $ 14.05 $ (0.04) (a) $ 14.01
============ =========== ============
</TABLE>
See Notes to Pro Forma Financial Information.
73
<PAGE> 78
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PRO FORMA STATEMENT OF OPERATIONS
(ASSUME 25% TENDER)
YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
UNAUDITED
---------------------------------------
PRO FORMA NOTE
HISTORICAL ADJUSTMENTS REF. PRO FORMA
---------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Investment Income:
Dividends................................ $1,505,395 $1,505,395
Interest................................. 2,868,748 $(1,490,277) (d) 1,378,471
Other.................................... 11,861 11,861
---------- ----------- ----------
Total income................... 4,386,004 (1,490,277) 2,895,727
---------- ----------- ----------
Expenses:
Management fees.......................... 1,702,398 (425,600) (e) 1,276,798
Administration fees...................... 170,246 (42,562) (e) 127,684
Custodian fees........................... 50,000 (1,129) (f) 48,871
Reports to shareholders.................. 38,825 38,825
Audit fees............................... 37,647 37,647
Legal fees............................... 30,000 30,000
Registration and filing fees............. 18,460 18,460
Directors' fees and expenses............. 12,100 12,100
Amortization of organization costs....... 4,380 4,380
Other.................................... 125 125
---------- ----------- ----------
Total expenses................. 2,064,181 (469,291) 1,594,890
---------- ----------- ----------
Net investment income.......... 2,321,823 (1,020,986) 1,300,837
---------- ----------- ----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................ 1,237,398 (2,728) (c) 1,234,670
Foreign currency transactions.......... (11,317) (11,317)
---------- ----------- ----------
Net realized gain........................ 1,226,081 (2,728) 1,223,353
Net unrealized appreciation on 453,690 2,728 (c) 456,418
investments............................
---------- ----------- ----------
Net realized and unrealized gain......... 1,679,771 0 1,679,771
---------- ----------- ----------
Net increase in net assets resulting from $4,001,594 $(1,020,986) $2,980,608
operations.............................
========== =========== ==========
Ratio of expenses to average net 1.82% 1.87%
assets.................................
</TABLE>
See Notes to Pro Forma Financial Information.
74
<PAGE> 79
NOTES TO PRO FORMA FINANCIAL INFORMATION
(UNAUDITED)
SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies utilized in these Pro Forma Statements
of Assets and Liabilities, and of Operations are the same used by the Fund to
prepare its annual and semiannual reports to shareholders which have also been
included in this tender offer.
The Pro Forma Statements of Assets and Liabilities, and of Operations give
effect to the assumed tender of 25% or 50% of the Fund's shares pursuant to the
tender offer, described in Item 1 of Schedule 13E-4. The actual number of shares
tendered could be different from these assumptions and therefore could effect
the pro forma financial information presented. The Pro Forma Financial
Information is based on the following assumptions:
Note A.
The estimated costs of this tender offer are charged to capital in excess
of par value upon filing of the tender offer. This pro forma adjustment has the
effect of reducing net asset value per share by approximately $.04.
Note B.
For purposes of the Pro Forma Statements of Assets and Liabilities, and Pro
Forma Statements of Operations, it is assumed that either 25% or 50% of the
Fund's outstanding shares would be tendered. The Pro Forma Statements of Assets
and Liabilities assume the tender offer is consummated as of the end of the pro
forma period at the net asset value per share as of that date (a "pro forma
tender date"). The Pro Forma Statements of Operations assume the tender offer is
consummated as the beginning of the pro forma period (a "pro forma tender
date").
The source of funds used to purchase the shares in the tender offer are
assumed to be obtained first from the sale of United States Treasury Bills as of
the pro forma tender date with the balance of the funds being obtained from the
pro rata sale of the remaining portfolio holdings which are not direct
investments of the Fund. Direct investments held by the Fund are not publicly
traded, and may be restricted as to resale, and they may be less liquid than
securities traded in active markets.
Note C.
These amounts represent reclassification of the pro rata share of
unrealized gain (loss) on United States Treasury Bills and other portfolio
holdings assumed sold (see Note B) to obtain the cash used to fund the tender
offer.
Note D.
Reduction of interest income earned on United States Treasury Bills and
dividends from other portfolio holdings due to assumed sales to obtain cash to
fund the purchase of shares pursuant to the tender offer.
Note E.
Reduction of asset based expenses by 25%, in the case of an assumed 25%
tender of the Fund's shares, or 50%, in the case of an assumed 50% tender of the
Fund's shares, as a result of the decline in net asset value resulting from the
tender offer.
Note F.
Reduction of custody fees based upon changes in portfolio holdings as a
result of the tender offer. This reduction is based upon prevailing custody
rates, and the pro forma assumptions with respect to the sale of United States
Treasury Securities and other portfolio holdings as outlined in Note B.
75
<PAGE> 80
EXHIBIT B
PROPOSED INVESTMENT POLICIES FOR
TEMPLETON VIETNAM AND SOUTHEAST ASIA FUND, INC.
The Fund's investment objective is long-term capital appreciation. The
Fund's investment policy, under normal market conditions, is to invest at least
65% of its assets in equity and debt securities of companies (i) that are
organized under the laws of, or have a principal office in, Vietnam or other
Southeast Asian countries (the "Region Countries"); (ii) for which the principal
equity securities trading market is in a Region Country; or (iii) that derive at
least 50% of their revenues or profits from goods produced or sold, investments
made, or services performed in a Region Country or that have at least 50% of
their assets invested in a Region Country (collectively, "Region Country
Issuers").
The Fund invests in equity and debt securities of Region Country Issuers as
appropriate opportunities arise. In seeking to invest at least 65% of its assets
in Region Country Issuers, the Fund's focus is to invest in equity and debt
securities of Vietnam Issuers to the extent attractive investments are
available. A "Vietnam Issuer" is a company (i) that is organized under the laws
of, or has 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 invested in
Vietnam. To the extent the Investment Manager is unable to find Vietnam Issuers
it considers attractive investment opportunities for the Fund, the Fund's assets
will be invested in equity and debt securities of other Region Country Issuers.
The amount invested in any one Region Country at any time will vary depending on
market conditions and the Investment Manager's assessment of available
investments. The Fund is not limited in the percentage of its assets that may be
invested in any one country. It is anticipated, but there can be no assurance,
that the Fund may eventually have a significant portion of its assets invested
in securities of Vietnam Issuers. For purposes of the Fund's investment policy,
Region Countries include Vietnam, China, Hong Kong, India, Indonesia, Korea,
Malaysia, Myanmar, the Philippines, Singapore, Taiwan, and Thailand, as well as
any other countries in the same geographic region that may be approved for
investment by the Board of Directors in the future.
76
<PAGE> 81
Facsimile copies of the Letter of Transmittal, properly completed and
executed, will be accepted. The Letter of Transmittal and any other required
documents should be sent or delivered by each shareholder of the Fund or such
shareholder's broker, dealer, commercial bank, trust company or other nominee to
the Depositary at one of addresses set forth below:
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Post Office Box 3301 85 Challenger Road -- 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Mail Drop-Reorg New York, NY 10271
Attn: Reorganization Department Ridgefield Park, NJ 07660 Attn: Reorganization Department
Attn: Reorganization Department
</TABLE>
Facsimile Transmission:
(201) 329-8936
For Confirmation Facsimile:
(201) 296-4860
Questions or requests for assistance may be directed to the Information
Agent at its address or telephone numbers set forth below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be obtained from the Information Agent. Shareholders may also
contact their broker, dealer, commercial bank, trust company or other nominee
for assistance concerning the Offer.
The Information Agent for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
450 West 33rd Street, 14th Floor
New York, New York 10001
Call Toll Free: (800) 851-9671
<PAGE> 1
LETTER OF TRANSMITTAL
TO ACCOMPANY SHARES OF COMMON STOCK $0.01 PAR VALUE OF
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED DECEMBER 19, 1997
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE ON
JANUARY 20, 1998, AT 12:00 MIDNIGHT
EASTERN STANDARD TIME, UNLESS THE OFFER IS EXTENDED
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., DEPOSITARY:
PHONE 201-329-8929
INFORMATION REGARDING TENDER BY MAIL, COURIER, OR BY HAND
<TABLE>
<S> <C>
By Mail: By Hand:
ChaseMellon Shareholder Services, L.L.C. ChaseMellon Shareholder Services, L.L.C.
Post Office Box 3301 120 Broadway, 13th Floor
South Hackensack, NJ 07606 New York, NY 10271
Attn: Reorganization Department Attn: Reorganization Department
</TABLE>
By Overnight Delivery:
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road -- Mail Drop-Reorg
Ridgefield Park, NJ 07660
Attn: Reorganization Department
Facsimile Transmission:
(201) 329-8936
For Confirmation Facsimile:
(201) 296-4860
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN THOSE
LISTED ABOVE IS NOT A VALID DELIVERY TO THE DEPOSITARY. YOU MUST SIGN THE LETTER
OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 OR FORM W-8 (AS APPLICABLE) SET FORTH BELOW. THE
INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY
BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used (a) if you desire to tender your
shares yourself, (b) if you intend to request your broker, dealer, commercial
bank, trust company or other nominee to tender your shares for you and your
shares are not registered in the name of such broker, dealer, commercial bank,
trust company or other nominee, and (c) by a broker, dealer, commercial bank,
trust company or other nominee tendering the Shares as a registered owner or on
behalf of a registered owner. To accept the Offer, a properly completed and
executed Letter of Transmittal (or photocopy bearing original signature(s) and
any required signature guarantees), any certificates representing Shares
tendered, and any other documents required by this Letter of Transmittal should
be mailed or delivered to the Depositary at the appropriate address set forth
above and must be received by the Depositary prior to 12:00 Midnight, Eastern
Standard time, on January 20, 1998, or such later time and date to which the
Offer is extended, unless the tendering party has satisfied the conditions for
guaranteed delivery described in Section 2 of the Offer to Purchase dated
December 19, 1997. Shareholders are not required to pay a service charge to the
Fund or the Depositary in connection with their tender of Shares, but may be
charged a fee by a broker, dealer or other institution for processing the tender
of their shares. Delivery of documents to a book-entry transfer facility does
not constitute delivery to the Depositary.
<PAGE> 2
Ladies and Gentlemen:
The person(s) signing this Letter of Transmittal (the "Signor") hereby
tenders to Templeton Vietnam Opportunities Fund, Inc. (the "Fund") the shares of
common stock described below in "Description of Shares Tendered", par value
$0.01 per share (the "Shares") of the Fund, for cash at a price (the "Purchase
Price") equal to the net asset value ("NAV") per Share determined as of the
close of the regular trading session of the New York Stock Exchange on January
20, 1998 (or, if the Offer is extended, on the Expiration Date as defined in the
Offer to Purchase). This Letter of Transmittal is subject to the terms and
conditions described in the Offer to Purchase dated December 19, 1997 (which
Offer to Purchase and Letter of Transmittal together are referred to in these
documents as the "Offer"). Receipt of the Offer to Purchase is acknowledged by
the Signor.
The shares of common stock described below in "Description of Shares
Tendered" constitute all Shares actually or constructively owned by Signor. Any
Shares distributed as a result of the reinvestment of a dividend to tendering
shareholders who are participants in the Fund's Dividend Reinvestment Plan will
be automatically tendered in the Offer.
Signor may elect to apply all or part of the proceeds from the tender of
Shares to a purchase of Class I shares of certain open-end investment companies
distributed by Franklin/Templeton Distributors, Inc. These Funds are Templeton
Developing Markets Trust; Templeton Growth Fund, Inc.; and Templeton Pacific
Growth Fund (collectively, the "Alternative Funds"). Instead of receiving all of
the proceeds in cash, Signor should select either Option B or C (depending on
whether Signor desires to apply all or part of the proceeds towards a purchase
of shares of the Alternative Fund(s)) and complete and submit the Templeton
Funds Application included with this Letter of Transmittal. Failure to submit a
completed Application Form will result in an automatic election to receive the
proceeds in cash. The initial sales charge for Class I shares of Alternative
Funds will be waived in connection with purchases arising out of the Offer. The
purchase of Alternative Fund shares with cash proceeds from the tender of Shares
will be treated for tax purposes as a sale of Fund Shares and a purchase of the
Alternative Fund's shares, and may result in a taxable gain or loss for the
Signor. Before Signor may elect to apply cash proceeds from the tender of Shares
to a purchase of shares of an Alternative Fund, Signor must first obtain that
Alternative Fund's prospectus. A current prospectus for each Alternative Fund,
which describes the risks inherent in an investment in such Alternative Fund,
the charges and expenses that are borne by such Alternative Fund and its
shareholders, and the operation of such Alternative Fund generally, may be
obtained by calling 1-800-DIAL-BEN (1-800-342-5236).
Subject to, and effective upon acceptance for payment of, or payment for,
Shares tendered by the Signor in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms or conditions of any extension or amendment), the Signor hereby sells,
assigns and transfers to, or upon the order of, the Fund all right, title and
interest in and to all of the Shares that are being tendered as described below
under "Description of Shares Tendered" that are purchased by the Fund pursuant
to the Offer and Signor constitutes and appoints ChaseMellon Shareholder
Services, L.L.C. (the "Depositary") as attorney-in-fact of the Signor with
respect to such Shares, with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to (a)
present certificate(s) for such Shares, if any, for cancellation and transfer on
the Fund's books and (b) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares, subject to the succeeding paragraph, all
in accordance with the terms and conditions set forth in the Offer.
The Signor represents and warrants that (a) the Signor, if a broker,
dealer, commercial bank, trust company or other nominee, has obtained the
tendering shareholder's instructions to tender pursuant to the terms and
conditions of this Offer in accordance with the letter from the Fund to brokers,
dealers, commercial banks, trust companies and other nominees; (b) when, and to
the extent the Fund accepts the Shares for purchase, the Fund will acquire good,
marketable and unencumbered title to the Shares, free and clear of all security
interests, liens, restrictions, charges, encumbrances, conditional sales
agreements or other obligations relating to their sale or transfer, and not
subject to any adverse claim; (c) on request, the Signor will execute and
deliver any additional documents that the Depositary or the Fund deems necessary
or desirable to complete the assignment, transfer and purchase of the Shares
tendered; and (d) the Signor has read and agrees to all of the terms and
conditions of the Offer.
The name(s) and address(es) of the registered owner(s) should be printed as
they appear on the registration of the Shares. If the Shares tendered are in
certificate form, the certificate(s) representing such Shares must be returned
together with this Letter of Transmittal.
The Signor recognizes that, under certain circumstances set forth in the
Offer to Purchase, the Fund may terminate or amend the Offer or may not be
required to purchase any of the Shares tendered. In any such event, the Signor
understands that certificate(s) for Shares not purchased, if any, will be
returned to the Signor at its registered address unless otherwise indicated
under the Special Delivery Instructions below. The Signor recognizes that the
Fund has no obligation, pursuant to the Special Payment Instructions, to
transfer any Shares from the name of the registered owner if the Fund purchases
none of such Shares.
The Signor understands that acceptance of Shares by the Fund for payment
represents a binding agreement between the Signor and the Fund upon the terms
and conditions of the Offer.
The check for the Purchase Price of the tendered Shares purchased will be
issued to the order of the Signor and mailed to the address indicated, unless
otherwise indicated in the box titled Special Payment Instructions or the box
titled Special Delivery Instructions. The Fund will not pay interest on the
Purchase Price under any circumstances.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death or incapacity of the Signor and all
obligations of the Signor under this Letter of Transmittal shall be binding upon
the heirs, personal representatives, successors and assigns of the Signor.
Except as stated in the Offer, this tender is irrevocable.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price and/or return any Share certificates not
accepted for payment in the name(s) of the registered holder(s) appearing under
"Description of Shares Tendered." Similarly, unless otherwise indicated under
"Special Delivery Instructions," please
<PAGE> 3
mail the check for the Purchase Price for any Shares purchased and/or return any
Share certificates not accepted for payment (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered." In the event that both the Special Payment
Instructions and the Special Delivery Instructions are completed, please issue
the check for the Purchase Price and/or return any Share certificates not
accepted for payment in the name of, and deliver such check and/or return any
such Share certificates to, the person(s) indicated in those sections. The
Signor recognizes that the Fund has no obligation under the Special Payment
Instructions to transfer any Shares from the name of the registered holder of
such Shares if the Fund does not accept for payment any of the Shares tendered.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
- --------------------------------------------------------------------------------------------------------
CERTIFICATE(S) TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (ATTACH ADDITIONAL SIGNED LIST, IF
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S)). NECESSARY)
- --------------------------------------------------------------------------------------------------------
TOTAL NUMBER
SHARES OF SHARES
CERTIFICATE REPRESENTED BY
NUMBER(S)* CERTIFICATE(S)*
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
TOTAL SHARES TENDERED
</TABLE>
- --------------------------------------------------------------------------------
* NEED NOT BE COMPLETED BY BOOK-ENTRY SHAREHOLDERS.
- --------------------------------------------------------------------------------
OPTIONS REGARDING
DISTRIBUTION OF PROCEEDS
OPTION A: [ ] I elect to receive the proceeds from the Total Shares
Tendered indicated above in the form of cash.
OPTION B: [ ] In lieu of cash, I elect to have all of the proceeds from the
Total Shares Tendered indicated above to be applied to the
purchase of Class I Shares of the following Alternative
Funds, such proceeds to be applied in the percentages
indicated below.
[ ]
------------------% TEMPLETON DEVELOPING MARKETS TRUST
[ ]
------------------% TEMPLETON GROWTH FUND, INC.
[ ]
------------------% TEMPLETON PACIFIC GROWTH FUND
OPTION C: [ ] I elect to receive
- ------% of the proceeds from the Total Shares Tendered indicated above in the
form of cash and the remainder of the proceeds to be applied to
the purchase of Class I Shares of the following Alternative
Funds, such remainder of the proceeds to be applied in the
percentages indicated below.
[ ]
------------------% TEMPLETON DEVELOPING MARKETS TRUST
[ ]
------------------% TEMPLETON GROWTH FUND, INC.
[ ]
------------------% TEMPLETON PACIFIC GROWTH FUND
IF OPTION B OR C IS ELECTED, YOU MUST OBTAIN THE PROSPECTUS OF THE
ALTERNATIVE FUND(S) ELECTED AND COMPLETE THE TEMPLETON FUNDS APPLICATION FORM
INCLUDED WITH THIS LETTER OF TRANSMITTAL AND RETURN IT TO THE DEPOSITARY WITH
THE LETTER OF TRANSMITTAL. THE PURCHASE OF ALTERNATIVE FUND SHARES WITH THE
PROCEEDS OF SIGNOR'S TENDER OF SHARES WILL BE TREATED FOR TAX PURPOSES AS A SALE
OF FUND SHARES AND A PURCHASE OF THE ALTERNATIVE FUND'S SHARES, AND MAY RESULT
IN A TAXABLE GAIN OR LOSS TO THE SHAREHOLDER. FAILURE TO SUBMIT A COMPLETED
APPLICATION FORM WITH AN ELECTION TO PURCHASE ALTERNATIVE FUND SHARES SHALL BE
CONSIDERED AS AN ELECTION TO RECEIVE ALL PROCEEDS IN CASH.
THE SIGNOR TENDERS ALL UNCERTIFICATED SHARES THAT MAY BE HELD IN THE
NAME(S) OF THE REGISTERED OWNER(S) BY THE FUND'S TRANSFER AGENT PURSUANT TO THE
FUND'S DIVIDEND REINVESTMENT PLAN.
<PAGE> 4
THE BOXES BELOW ARE TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE DEPOSITORY TRUST COMPANY
("DTC") AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
- ---------------------------------------------------------------------------
DTC Participant Number:
- ---------------------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):
- ---------------------------------------------------------------------------
Window Ticket Number (if any):
- ---------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
- ---------------------------------------------------------------------------
Name of Eligible Institution which Guaranteed Delivery:
- ---------------------------------------------------------------------------
DTC Participant Number (if delivered by book-entry transfer):
- ---------------------------------------------------------------------------
<PAGE> 5
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if (i) Share certificates that are not accepted for
payment under the terms of the Offer, (ii) the check for the purchase price of
Shares that are accepted under the terms of the Offer or (iii) shares of
Alternative Funds are to be issued in the name of someone other than the Signor.
Issue: [ ] Check [ ] Certificate(s) to:
Name(s):
(PLEASE TYPE OR PRINT)
Address:
(PLEASE INCLUDE ZIP CODE)
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.,
IF APPLICABLE)
(SEE SUBSTITUTE FORM W-9 BELOW.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if (i) Share certificates that are not accepted for
payment under the terms of the Offer, (ii) the check for the purchase price of
Shares that are accepted for payment under the terms of the Offer or (iii)
shares of Alternative Funds are to be sent to someone other than the Signor, or
to the Signor at an address other than that shown above.
Mail: [ ] Check [ ] Certificate(s) to:
Name(s):
(PLEASE TYPE OR PRINT)
Address:
(PLEASE INCLUDE ZIP CODE)
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.,
IF APPLICABLE)
(SEE SUBSTITUTE FORM W-9 BELOW.)
<PAGE> 6
INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of Shares tendered (including, for purposes of this
document, any participant in the book-entry transfer facility of The Depositary
Trust Company ("DTC") whose name appears on DTC's security position listing as
the owner of Shares), unless such holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" above, or (b) if such Shares are tendered for the account of a
firm (an "Eligible Institution") which is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of a
Stock Transfer Association approved medallion program (such as STAMP, SEMP or
MSP). In all other cases, all signatures on this Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used (a) if Shares are to be forwarded with this Letter of
Transmittal, (b) if uncertificated Shares held by the Fund's transfer agent
pursuant to the Fund's dividend reinvestment plan are to be tendered, or (c) if
tenders are to be made by book-entry transfer to the account maintained by the
Depositary according to the procedure set forth in Section 2 of the Offer to
Purchase.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL,
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Delivery will be deemed made only when actually received by the Depositary.
If delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. Shareholders have the responsibility to cause their
Shares (in proper certificated or uncertificated form), this Letter of
Transmittal (or a photocopy bearing original signature(s) and any required
signature guarantees), and any other documents required by this Letter of
Transmittal to be delivered in accordance with the Offer.
The Fund will not accept any alternative, conditional or contingent
tenders. All tendering shareholders, brokers, dealers, commercial banks, trust
companies and other nominees, by execution of this Letter of Transmittal (or
photocopy hereof), waive any right to receive any notice of the acceptance of
their tender.
3. INADEQUATE SPACE. If the space provided in any of the above boxes is
inadequate, the necessary information should be listed on a separate schedule
signed by all of the required signatories and attached to the Letter of
Transmittal.
4. TENDER OF ALL SHARES HELD BY THE SHAREHOLDER. A SHAREHOLDER WISHING TO
ACCEPT THE OFFER MUST TENDER, OR CAUSE THE TENDER OF, ALL SHARES ACTUALLY OWNED
OR CONSTRUCTIVELY OWNED BY THE SHAREHOLDER PURSUANT TO SECTION 318 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, AS OF THE DATE OF PURCHASE OF SHARES
PURSUANT TO THE OFFER. Shareholders should consult their tax advisers as to the
application of the constructive ownership rules of Section 318. Shares tendered
shall include any Shares received by Shareholders pursuant to a dividend by the
Fund or participation in the Fund's Dividend Reinvestment Plan. The Fund will
purchase no more than 4,029,302 Shares (approximately 50%) from tendering
Shareholders, in accordance with the terms and conditions specified in the Offer
to Purchase. In the event that more than 4,029,302 Shares are tendered by
shareholders, the Fund intends to extend the Expiration Date by ten business
days in order to give shareholders who may not have initially tendered their
Shares an opportunity to tender their Shares. Certificates representing Shares
tendered but not purchased will be returned promptly following the termination,
expiration or withdrawal of the Offer, without expense to the tendering
shareholder.
Shareholders have the option to direct that all or part of the cash
proceeds from the tender of their Shares of the Fund be used to purchase Class I
Shares of certain open-end investment companies distributed by Franklin
Templeton Distributors, Inc. These funds are Templeton Developing Markets Trust;
Templeton Growth Fund, Inc.; and Templeton Pacific Growth Fund (the "Alternative
Funds"). If Signor is considering applying the proceeds from the tender of their
Shares towards a purchase of shares of an Alternative Fund(s) (the "Purchase"),
Signor must first obtain the applicable Alternative Fund's prospectus and should
review it before electing a purchase. The front-end sales charge normally
applicable to sales of shares of the Alternative Funds will be waived in
connection with a Purchase. Each Purchase must involve proceeds which have a
total net asset value of at least $100. If the proceeds from tendered Shares
applied towards a Purchase total less than $100, then those proceeds will be
distributed in cash. The Purchase of Alternative Fund shares will be treated for
tax purposes as a sale of Fund Shares and a purchase of the Alternative Fund's
shares, and may result in taxable gain or loss to Signor. If Signor then
determines to elect a Purchase, Signor should select either Option B or C under
"Options Regarding Distribution of Proceeds" and complete the Application Form
included with this Letter of Transmittal. Failure to submit a completed
Application Form with an election to purchase Alternative Fund shares shall be
treated as an election to receive all proceeds in cash. The shares of the
Alternative Funds will be priced at the net asset value of such shares at the
close of business on the New York Stock Exchange on the next business day
following the Expiration Date, or, if purchased with Shares Tendered pursuant to
a Notice of Guaranteed Delivery, on the next business day following payment for
the Tendered Shares, or, if the Offer is to be prorated, on the next business
day following the date that the final proration factor is determined. A current
Prospectus for each Alternative Fund that describes the risks inherent in a
Purchase of such Alternative Fund shares, the charges and expenses that are
borne by such Alternative Fund and its shareholders, and the operation of such
Alternative Fund generally, may be obtained by calling 1-800-DIAL-BEN
(1-800-342-5236). Please read the prospectus carefully before deciding whether
to invest in any of the Alternative Funds.
SIGNOR REPRESENTS THAT HE/SHE HAS OBTAINED THE PROSPECTUS OF ANY OF THE
ALTERNATIVE FUNDS IN WHICH HE/SHE WILL PURCHASE SHARES PRIOR TO THE PURCHASE OF
SUCH SHARES.
5. SIGNATURES ON LETTER OF TRANSMITTAL, AUTHORIZATIONS, AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered, the signature(s) must correspond with the
name(s) as written on the face of the certificate(s) without alteration,
enlargement or any change whatsoever.
<PAGE> 7
If any of the Shares tendered are owned of record by two or more joint
owners, all of the owners must sign this Letter of Transmittal. If any of the
tendered Shares are registered in different names on several certificates, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or stock powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Fund of their authority to act in such a fiduciary or representative capacity
must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares transmitted, no endorsements of certificates or separate stock powers are
required unless payment is to be made to, or certificates for Shares not
purchased are to be issued in, the name of a person other than the registered
holder(s). Signatures on such certificates or stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appears on the certificate(s)
for such Shares. Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. TRANSFER TAXES. The Fund will pay any transfer taxes payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, (a)
payment of the Purchase Price is to be made to, or (in the circumstances
permitted by the Offer) unpurchased Shares are to be registered in the name(s)
of, any person(s) other than the registered owner(s), or (b) if any tendered
certificate(s) are registered, or the Shares tendered are otherwise held, in the
name(s) of any person(s) other than the registered owner, the amount of any
transfer taxes (whether imposed on the registered owner(s) or such other
person(s)) payable on account of the transfer to such person(s) will be deducted
from the Purchase Price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted. Payment by the Fund of transfer
taxes for which the shareholder is liable may be deemed to result in taxable
income to the shareholder equal in amount to the transfer taxes paid.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If (i) certificate(s) for
unpurchased Shares, (ii) check(s), or (iii) shares of Alternative Funds are to
be issued in the name of a person other than the registered owner(s) or if such
certificate(s), share(s) and/or check(s) are to be sent to someone other than
the registered owner(s) or to the registered owner(s) at a different address,
the captioned boxes "Special Payment Instructions" and/or "Special Delivery
Instructions" on this Letter of Transmittal must be completed.
8. IRREGULARITIES. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of tenders will be determined by the
Fund, in its sole discretion, and the Fund's determination shall be final and
binding. The Fund reserves the absolute right to reject any or all tenders
determined not to be in appropriate form or to refuse to accept for payment,
purchase or pay for any Shares if, in the opinion of the Fund's counsel,
accepting, purchasing or paying for the Shares would be unlawful. The Fund also
reserves the absolute right to waive any of the conditions of the Offer or any
defect in any tender, whether generally or with respect to any particular
Share(s) or shareholder(s). Unless waived, any defects or irregularities in
connection with tenders must be cured within such time as the Fund shall
determine. Tenders will not be deemed to have been made until all defects and
irregularities have been cured or waived. The Fund's interpretations of the
terms and conditions of the Offer (including these instructions) shall be final
and binding.
NONE OF THE FUND, THE FUND'S INVESTMENT MANAGER, THE DEPOSITARY OR ANY
OTHER PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF ANY DEFECTS OR
IRREGULARITIES, OR WAIVERS OF DEFECTS OR IRREGULARITIES IN TENDERS OR IN ANY
NOTICE OF WITHDRAWAL, AND NONE OF THEM WILL INCUR ANY LIABILITY FOR FAILURE TO
DO SO.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Information Agent by
telephoning 1-800-851-9671. Requests for additional copies of the Offer to
Purchase and this Letter of Transmittal may also be directed to the Information
Agent. Shareholders who do not own Shares directly may also obtain such
information and copies from their broker, dealer, commercial bank, trust company
or other nominee. Shareholders who do not own Shares directly are required to
tender their Shares through their broker, dealer, commercial bank, trust company
or other nominee and should NOT submit this Letter of Transmittal to the
Depositary.
10. RESTRICTION ON SHORT SALES. Section 14(e) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Rule 14e-4 promulgated
thereunder prohibits both "short" tendering and "hedged" tendering by any
person, whether acting alone or in concert with others. It is a violation of
Rule 14e-4 under the Exchange Act for a person to tender Shares unless, the
person tendering (i) has a net long position equal to or greater than the amount
tendered in (a) Shares tendered or (b) other securities immediately convertible
into, or exercisable or exchangeable for, the number of Shares tendered and will
acquire these Shares for tender by conversion, exercise or exchange of such
other securities and (ii) will cause these Shares to be delivered in accordance
with the terms of the Offer. The acceptance of Shares by the Fund for payment
will constitute a binding agreement between the tendering shareholder and the
Fund, upon the terms and subject to the conditions of the Offer, including such
shareholder's representation that (i) such shareholder has a net long position
in the Shares being tendered within the meaning of Rule 14e-4 promulgated under
the Exchange Act; and (ii) the tender of such Shares complies with Rule 14e-4.
11. BACKUP WITHHOLDING TAX. Each tendering U.S. shareholder who does not
otherwise establish an exemption from withholding, must notify the Depositary of
his/her/its correct taxpayer identification number ("TIN") (or certify that
he/she/it is awaiting a TIN) and provide certain other information by completing
and providing to the Depositary the Substitute Form W-9 provided under
"Important Tax Information" below. Failure either to provide the information on
the form or to check the box in Part 2 of the form may subject the tendering
shareholder to 31% federal income tax backup withholding on the payments made to
the shareholder (or other payee) with respect to Shares purchased pursuant to
the Offer. The box in Part 2 of the form may be checked if the tendering
shareholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 2 is checked and the
Depositary is
<PAGE> 8
not provided with a TIN within sixty (60) days, the Depositary will withhold 31%
on all payments until a TIN is provided to the Depositary.
Each tendering non-U.S. shareholder must complete the Form W-8 included
with this Letter of Transmittal and provide it to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL, OR FACSIMILE HEREOF BEARING ORIGINAL
SIGNATURE(S), PROPERLY COMPLETED AND DULY EXECUTED, TOGETHER WITH ANY REQUIRED
SIGNATURE GUARANTEES, SHARES (IN PROPER CERTIFICATED OR UNCERTIFICATED FORM),
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR A
PROPERLY COMPLETED AND EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED
BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
THE ACCEPTANCE OF SHARES BY THE FUND FOR PAYMENT WILL CONSTITUTE A BINDING
AGREEMENT BETWEEN THE TENDERING SHAREHOLDER AND THE FUND, UPON THE TERMS AND
CONDITIONS OF THE OFFER, INCLUDING THE TENDERING SHAREHOLDER'S REPRESENTATION
THAT THE SHARES BEING TENDERED REPRESENT AND WILL REPRESENT ALL SHARES ACTUALLY
OWNED BY SUCH SHAREHOLDER AS OF THE DATE OF PURCHASE OF SHARES PURSUANT TO THE
OFFER, AND ALL SHARES CONSTRUCTIVELY OWNED BY SUCH SHAREHOLDER AS OF SUCH DATE
UNDER SECTION 318 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, HAVE BEEN OR
WILL BE TENDERED PURSUANT TO THE OFFER.
IMPORTANT TAX INFORMATION
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. IT MAY NOT BE APPLICABLE TO NON-U.S. SHAREHOLDERS. ALL
SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISERS AS TO THE SPECIFIC TAX
CONSEQUENCES TO THEM OF THE OFFER.
<PAGE> 9
SUBSTITUTE FORM W-9 OR FORM W-8
Under the U.S. federal income tax laws, the Depositary may be required to
withhold 31% of the amount of any payment made to certain holders pursuant to
the Offer. In order to avoid such backup withholding, each tendering U.S.
shareholder must provide the Depositary with such shareholder's correct TIN by
completing the Substitute Form W-9 set forth below. In general, if a shareholder
is an individual, the TIN is the Social Security number of such individual. If
the Depositary is not provided with the correct TIN, the shareholder may be
subject to a penalty imposed by the Internal Revenue Service. Certain
shareholders (including, among others, all corporations) are not subject to
these backup withholding and reporting requirements, but must nonetheless
complete a Substitute Form W-9 to avoid possible erroneous backup withholding.
For further information regarding backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a TIN if you do not
have one and how to complete the Substitute Form W-9 if Shares are held in more
than one name), consult the enclosed Guidelines for Certification of Taxpayer
Identification Number.
In order for a non-U.S. shareholder to avoid 31% backup withholding, the
shareholder must submit a statement to the Depositary signed under penalties of
perjury attesting that he/she/it is a non-U.S. shareholder. Form W-8 and
instructions for such statement are enclosed for non-U.S. shareholders.
CONSEQUENCES OF FAILURE TO FILE SUBSTITUTE FORM W-9 OR FORM W-8
Failure to complete Substitute Form W-9 or Form W-8 will not, by itself,
cause the Shares to be deemed invalidly tendered but may require the Depositary
to withhold 31% of the amount of any payments made pursuant to the Offer. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of a person subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, the
shareholder may claim a refund from the Internal Revenue Service.
<PAGE> 10
IMPORTANT SIGN BELOW AND COMPLETE SUBSTITUTE FORM W-9 (BELOW)
OR FORM W-8 (ENCLOSED) AS APPLICABLE
Under penalty of perjury, I certify (1) that the number set forth below is
my correct Social Security Number or Taxpayer Identification Number and (2) that
I am not subject to backup withholding either because I have not been notified
that I am subject to backup withholding as a result of failure to report all
interest or dividends, or the Internal Revenue Service ("IRS") has notified me
that I am no longer subject to backup withholding. Instruction: You must strike
out the language in (2) above if you have been notified that you are subject to
backup withholding due to underreporting and you have not received a notice from
the IRS that backup withholding has been terminated.
The Signor recognizes that, under certain circumstances set forth in the
Offer to Purchase, the Fund may not be required to purchase the Shares tendered.
The Signor understands that certificate(s) for Shares not purchased will be
returned to the Signor at the address indicated above. In the case of Shares not
evidenced by certificate, ChaseMellon Shareholder Services, L.L.C. will cancel
the tender order as to any Shares not purchased by the Fund.
The check for the purchase price for such of the tendered Shares as are
purchased should be issued to the order of the Signor and mailed to the address
indicated above.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death or incapacity of the Signor and any
obligation of the Signor under this Letter of Transmittal shall be binding upon
the heirs, personal representatives, successors and assigns of the Signor.
Except as stated in the Offer, this tender is irrevocable.
The Offer is hereby accepted in accordance with its terms.
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF SHAREHOLDER(S))
Dated:
------------------------------------------, 199
------
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
the Share certificates or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted under this Letter of Transmittal. If signature is by trustees,
executors, administrators, guardians, attorneys-in-fact, agents, officers of
corporations or others acting in a fiduciary or representative capacity, please
provide the following information. See Instruction 5.)
Name(s):
- --------------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Capacity (Full Title):
(See Instruction 5)
Address:
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Codes and Telephone Numbers:
Home:
- ----------------------------------------------- Business:
- ---------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO. (IF APPLICABLE):
(COMPLETE SUBSTITUTE FORM W-9 BELOW OR FORM W-8 (ENCLOSED), AS APPLICABLE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
Name:
(PLEASE TYPE OR PRINT)
Title:
Name of Firm:
Address:
__
(INCLUDE ZIP CODE)
Area Code and Tel. No.:
Dated: , 199 ____
<PAGE> 11
PAYOR'S NAME: CHASEMELLON SHAREHOLER SERVICES, L.L.C.
- --------------------------------------------------------------------------------
SUBSTITUTE
FORM W-9
DEPARTMENT OF THE
TREASURY
INTERNAL REVENUE
SERVICE
I,2
- --------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
ARE AWAITING (OR WILL SOON APPLY FOR) A TAXPAYER IDENTIFICATION NUMBER
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number has
not been issued to me, and either (a) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a Taxpayer Identification Number to the
payor, 31% of all reportable payments due to me pursuant to the Offer will be
withheld until I provide a Taxpayer Identification Number to the payor and
that, if I do not provide my Taxpayer Identification Number within 60 days,
such retained amounts shall be remitted to the IRS as backup withholding.
<TABLE>
<S> <C>
Signature Date
</TABLE>
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER" FOR
ADDITIONAL DETAILS.
PART 1 -- PLEASE PROVIDE
YOUR TIN (FOR
-------------------------------
INDIVIDUAL, SOCIAL
SECURITY
SOCIAL SECURITY NUMBER
NUMBER) AND CERTIFY
SIGNOR BY
-------------------------------
ING AND DATING
BELOW
EMPLOYER ID NO.
-------------------------------------------------------------
-------------------
CERTIFICATION -- UNDER PENALTIES OF
PERJURY, I CERTIFY THAT:
PART 2 --
(1) THE INFORMATION PROVIDED ON THIS FORM
IS TRUE, CORRECT AND PAYOR'S REQUEST FOR
TAXPAYER IDENTIFICATION NUMBER
AWAITING TIN [ ]
IS COMPLETE AND (2) I AM NOT SUBJECT TO
BACKUP WITHHOLD(PLEASE SEE BELOW)
ING EITHER BECAUSE I AM EXEMPT FROM BACKUP
WITHHOLDING OR I HAVE NOT BEEN NOTIFIED BY
THE INTERNAL REVENUE SERVICE (THE "IRS")
THAT I AM SUBJECT TO BACKUP WITHHOLDING AS
A RESULT OF UNDER-REPORTING INTEREST OR
DIVIDENDS OR THE IRS HAS NOTIFIED ME THAT I
AM NO LONGER SUBJECT TO BACKUP WITHHOLDING.
(YOU MUST CROSS OUT ITEM 2 ABOVE IF YOU
HAVE
--------------------------------------------------------------------------
BEEN NOTIFIED BY THE IRS THAT YOU ARE
SUBJECT TO BACKUP WITHHOLDING BECAUSE OF
UNDER-REPORTING INTEREST OR DIVIDENDS ON
YOUR TAX RETURN. HOWEVER, IF AFTER BEING
NOTIFIED BY THE IRS THAT YOU WERE SUBJECT
TO BACKUP WITHHOLDING YOU RECEIVED ANOTHER
NOTIFICATION FROM THE IRS THAT YOU ARE NO
LONGER SUBJECT TO BACKUP WITHHOLDING, DO
NOT CROSS OUT ITEM (2)).
SIGNATURE DATE
Name:
Address:
I,4
<PAGE> 12
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the Payer.
<TABLE>
<C> <S> <C>
- ---------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: NAME AND
SOCIAL SECURITY
NUMBER OF--
=========================================================
GIVE THE NAME AND
FOR THIS TYPE OF ACCOUNT: EMPLOYER
IDENTIFICATION
NUMBER OF--
- ---------------------------------------------------------
1. Individual The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-
trust (grantor is also trustee(1)
trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under state law
5. Sole proprietorship The owner(3)
- ---------------------------------------------------------
6. Sole proprietorship The owner(3)
7. A valid trust, estate or The legal entity
pension trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(4)
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or
nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that
receives agricultural program
payments
- ---------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
employment identification number (if you have one).
(4) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 13
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Card, or Form SS-4,
Application for Employer Identification Number (for businesses and all other
entities), or Form W-7 for Individual Taxpayer Identification Number (for alien
individuals required to file U.S. tax returns), at an office of the Social
Security Administration or the Internal Revenue Service.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on all payments include the
following:
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under Section 403(b)(7).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
political subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
Payees that may be exempted from backup withholding:
- A corporation.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident alien partner.
- Payments of patronage dividends where the amount receive is not paid in
money.
- Payments made by certain foregoing organizations.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid to you.
Exempt payees described above should file a Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A, and 6050N, and their regulations.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, interest
or other payments to give taxpayer identification numbers to payers who must
report the payments to the IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. Payers must be
given the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividend and certain
other payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties must also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
REGARDING THE OFFER BY
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
- --------------------------------------------------------------------------------
TO PURCHASE FOR CASH UP TO 4,029,302 OF ITS ISSUED AND OUTSTANDING
SHARES AT NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------
This form must be used to accept the Offer (as defined below) if a
shareholder's certificates for Shares are not immediately available or if time
will not permit the Letter of Transmittal and other required documents to reach
the Depositary on or before the Expiration Date. Terms used in this form that
are not otherwise defined in this form shall have the meanings specified in the
Offer to Purchase, dated December 19, 1997. This form may be delivered by hand,
overnight courier or mail to the Depositary at the appropriate address set forth
below AND MUST BEAR ORIGINAL SIGNATURES (NOT PHOTOCOPIES OR FACSIMILES). Tenders
using this form may be made only by or through a member firm of a registered
national securities exchange, or a commercial bank or trust company having an
office, branch or agency in the United States.
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., DEPOSITARY:
<TABLE>
<S> <C>
By Mail: By Hand:
ChaseMellon Shareholder Services, L.L.C. ChaseMellon Shareholder Services, L.L.C.
Post Office Box 3301 120 Broadway, 13th Floor
South Hackensack, NJ 07606 New York, NY 10271
Attn: Reorganization Department Attn: Reorganization Department
</TABLE>
By Overnight Delivery:
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road -- Mail Drop-Reorg
Ridgefield Park, NJ 07660
Attn: Reorganization Department
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS
OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE VALID DELIVERY.
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., INFORMATION AGENT
1-800-851-9671
1
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Templeton Vietnam Opportunities Fund,
Inc. (the "Fund"), upon the terms and conditions set forth in its Offer to
Purchase dated December 19, 1997 and the related Letter of Transmittal (which
together constitute the "Offer"), receipt of which are hereby acknowledged, the
number of Shares specified below and all Shares that may be held in the name(s)
of the registered holder(s) by the Fund's transfer agent under the Fund's
dividend reinvestment plan according to the guaranteed delivery procedures set
forth in Section 2 of the Offer to Purchase.
Number of Shares Tendered:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Certificate Nos. (if available) Name(s) of Record Holder(s)
=============================================
If Shares will be tendered by book-entry Address:
transfer to the Depository Trust Company,
please check box: [ ] Area Code and Telephone Number: -------------
DTC Participant Number:
</TABLE>
The undersigned also tenders all uncertificated Shares that may be held in
the name(s) of the registered holder(s) by the Fund's transfer agent as part of
the Fund's dividend reinvestment plan.
If the undersigned is the beneficial owner of the Shares being tendered,
the undersigned represents and warrants that such Shares represent all Shares
actually owned by the undersigned as of the date of purchase of Shares pursuant
to the Offer, and all Shares constructively owned by the undersigned as of such
date under Section 318 of the Internal Revenue Code of 1986, as amended, have
been or will be tendered pursuant to the Offer.
<TABLE>
<S> <C>
Dated: , 199__ Signature:
</TABLE>
2
<PAGE> 3
GUARANTEE
The undersigned, a member firm of a registered national securities
exchange, or a commercial bank or trust company having an office, branch or
agency in the United States, hereby: (a) represents that the above named
person(s) "own(s)" the Shares tendered within the meaning of Rule 14e-4 under
the Securities Exchange Act of 1934, as amended; (b) represents that the tender
of such Shares complies with Rule 14e-4; and (c) guarantees to deliver to the
Depositary certificates representing the Shares tendered, in proper form for
transfer (or to tender Shares pursuant to the procedure for book-entry transfer
into the Depositary's account at The Depository Trust Company if so specified on
the foregoing page), together with a properly completed and executed Letter of
Transmittal with any required signature guarantees, and any other required
documents, within three New York Stock Exchange trading days after the date of
receipt hereof by the Depositary.
Name of Firm:
(PLEASE PRINT)
Authorized Signature:
Name:
(PLEASE PRINT)
Title:
Name:
Address:
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
Dated: ________________________, 199__
3
<PAGE> 1
TEMPLETON FUNDS
100 Fountain Parkway
St. Petersburg, FL 33716-1205
1-800/632-2301
[FRANKLIN TEMPLETON LOGO]
<TABLE>
<CAPTION>
SHAREHOLDER APPLICATION
<S> <C>
/ / TEMPLETON PACIFIC GROWTH FUND / / TEMPLETON GROWTH FUND, INC. / / TEMPLETON DEVELOPING MARKETS TRUST
1 ACCOUNT REGISTRATION - PLEASE PRINT
/ / INDIVIDUAL OR JOINT ACCOUNT
________________________________________________________ __________________________________________________________________
First name Middle initial Last name Social Security number (SSN)
_________________________________ __________________ __________________________________________________________________
Joint owner(s) (Joint ownership means "joint tenants with rights of survivorship" unless otherwise specified.)
ALL OWNERS MUST SIGN SECTION 4.
/ / GIFTS/TRANSFERS TO A MINOR
______________________________________ As Custodian For _____________________________________________________________________
Name of custodian (one only) Minor's name (one only)
_________________________________________________ Uniform Gifts/Transfers to Minors Act ______________________________________
State (minor's or custodian's state of residence) Minor's Social Security number
Please Note: Custodian's signature, not minor's, is required in Section 4.
PLEASE DO NOT USE THIS FORM FOR RETIREMENT PLANS WITH FRANKLIN TEMPLETON TRUST COMPANY AS CUSTODIAN OR TRUSTEE, OR FOR TEMPLETON
INSTITUTIONAL FUNDS OR TEMPLETON CAPITAL ACCUMULATOR FUND. REQUEST SEPARATE APPLICATIONS.
/ / RETIREMENT PLAN (circle one) 401(k), Profit Sharing, Money Purchase, 403(b), 457,IRA, SEP-IRA, SIMPLE-IRA, (other) _____________
/ / TRUST, CORPORATION, PARTNERSHIP, OR OTHER ENTITY
________________________________________________________ __________________________________________________________________
Name Taxpayer identification number (TIN)
________________________________________________________ __________________________________________________________________
Name of beneficiary (if to be included in the registration) Date of trust document (must be completed for trust registration)
_______________________________________________________________________________________________________________________________
Name of each trustee (if to be included in the registration)
2 ADDRESS
___________________________________________________________________________ Daytime Telephone _(___)_______________________
Street address (P.O. Box acceptable if street address is given) Area code
___________________________________________________________________________ Evening Telephone _(___)_______________________
City State Zip code Area code
I am a citizen of: / / U.S. or / / ______________________________________
3 INITIAL INVESTMENT - $100 MINIMUM INITIAL INVESTMENT IN EACH FUND
/ / ____% of the proceeds are to be applied to a purchase of Templeton Developing Markets Trust shares.
/ / ____% of the proceeds are to be applied to a purchase of Templeton Growth Fund, Inc. shares.
/ / ____% of the proceeds are to be applied to a purchase of Templeton Pacific Growth shares.
4 SIGNATURE AND TAX CERTIFICATIONS - ALL REGISTERED OWNERS MUST SIGN APPLICATION
See BACKUP WITHHOLDING in the "How Taxation Affects the Fund and its Shareholders" section of the Prospectus. The Fund reserves
the right to refuse to open an account without either a certified taxpayer identification number ("TIN"), or a certification of
foreign status. Failure to provide the tax certifications in this section may result in backup withholding on payments relating to
your account and/or in your inability to qualify for treaty withholding rates.
CERTIFICATION: UNDER PENALTIES OF PERJURY, I/WE CERTIFY THAT:
I am not subject to backup withholding because I have not been notified by the IRS that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or because the IRS has notified me that I am no longer subject to backup
withholding. (If you are currently subject to backup withholding as a result of a failure to report all interest or dividends,
please cross out the preceding statement.)
CHECK AS APPROPRIATE:
/ / The number shown above is my correct TIN, or that of the minor named in section 1.
/ / AWAITING TIN. I have not previously been issued a TIN, and either, 1) I have applied for one and am waiting for it to be issued
to me, or 2) I intend to apply for one in the near future. I understand that if I do not provide a certified TIN to the Fund
within 60 days, the Fund is required to commence 31% backup withholding until I provide a certified TIN.
/ / EXEMPT RECIPIENT. The account owner is an exempt recipient. Individuals cannot be exempt recipients. Check this box only after
reading the instructions in the back of the Fund's prospectus to verify that the account owner is an exempt recipient. (As an
exempt recipient, you must still provide a TIN to the Fund.)
/ / EXEMPT FOREIGN PERSON. I am neither a citizen nor a resident of the United States and I qualify as an exempt foreign person
and/or entity. Check this box only after reading the instructions in the back of the Fund's prospectus to verify that you
qualify as an exempt foreign person and/or entity as described in the instructions.
Permanent address for tax purposes: ___________________________________________________________________________________________
Street Address City State Country Postal Code
PLEASE NOTE: The IRS only allows one TIN to be listed on an account. On joint accounts, it is preferable for the primary account
owner (or person listed first on the account) to list his/her number as the TIN.
I/WE FURTHER CERTIFY THAT: (1) THE INFORMATION PROVIDED ON THIS APPLICATION IS TRUE, CORRECT AND COMPLETE, (2) I/WE HAVE READ THE
PROSPECTUS(ES) FOR THE FUND(S) IN WHICH I/WE AM/ARE INVESTING AND AGREE TO THE TERMS THEREOF, AND (3) I/WE AM/ARE OF LEGAL AGE OR AN
EMANCIPATED MINOR.
THE UNDERSIGNED ACKNOWLEDGE(S) THAT SHARES OF THE FUND ARE NOT INSURED OR GUARANTEED BY ANY AGENCY OR INSTITUTION, AND THAT AN
INVESTMENT IN FUND SHARES INVOLVES RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
NOTE: THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISIONS OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS
REQUIRED TO AVOID BACKUP WITHHOLDING.
X X
______________________________________________________________ ________________________________________________________________
Signature Signature
5 BROKER/DEALER USE ONLY - PLEASE PRINT
We hereby submit this application for the purchase of shares of the Fund(s) Franklin Templeton Dealer #
and class(es) indicated in accordance with the terms of our selling agreement
with Franklin/Templeton Distributors, Inc. ("FTD"), and with the
prospectus(es) for the Funds. We agree to notify FTD of any purchases of Class
I shares which may be eligible for reduced or eliminated sales charges.
WIRE ORDER ONLY: The attached check for $________________ should be applied against wire order confirmation number__________________
dated________________________ for________________________ shares
Securities Dealer Name ___________________________________________________________________________________________________________
Main Office Address _________________________________________________________ Main Office Telephone Number _(___)________________
Branch # ____________________________ Representative # _____________________ Representative Name _______________________________
Branch Address ______________________________________________________________ Branch Telephone Number _(___)_____________________
Authorized Signature, Securities Dealer _____________________________________ Title _____________________________________________
ACCEPTED: Franklin/Templeton Distributors, Inc. By ______________________________________________ Date _________________________
YOU MUST OBTAIN A PROSPECTUS FOR THE FUND(S) BEING PURCHASED
BEFORE SUBMITTING THIS APPLICATION.
</TABLE>
<PAGE> 2
6 DISTRIBUTION OPTIONS - CHECK ONE
<TABLE>
<CAPTION>
<S> <C>
Check one - if no box is checked, all dividends and capital gains will be reinvested in additional shares of the Fund.
[ ] Reinvest all dividends and capital gains. [ ] Pay all dividends in cash and reinvest capital gains.
[ ] Pay capital gains in cash and reinvest dividends. [ ] Pay all dividends and capital gains in cash.
7 OPTIONAL SHAREHOLDER PRIVILEGES
A. SPECIAL PAYMENT INSTRUCTIONS FOR DISTRIBUTIONS AND/OR REDEMPTION PROCEEDS
[ ] Invest DISTRIBUTIONS, as noted in Section 6, or [ ] withdrawals, as noted in Section 7B, in another Franklin Templeton
Fund. Restrictions may apply to purchases of shares of a different class. See the prospectuses for details.
Fund Name_______________________________________ Existing Account Number_________________________________
OR
[ ] Send my DISTRIBUTIONS, as noted in Section 6, to the person, named below, instead of as registered and addressed in
Sections 1 and 2.
Name____________________________________________ Street Address_________________________________________
City____________________________________________ State_______________________________ Zip Code__________
AND/OR
[ ] Send my REDEMPTION PROCEEDS to the person, address, or checking account at the bank, named below, instead of as registered
and addressed in Sections 1 and 2.
Name____________________________________________ Street Address_________________________________________
City____________________________________________ State ______________________________ Zip Code__________
________________________________________________________________________________
B. SYSTEMATIC WITHDRAWAL PLAN
Please withdraw ($50 minimum per withdrawal) $_______________________ [ ] Monthly, [ ] Quarterly, [ ] Semi-Annually or [ ]
Annually from my Franklin Templeton account as set forth in the prospectus, starting in
_________________________________________ (month). The net asset value of the shares held must be at least $5,000 at the
time the plan is established. Additional restrictions may apply to Class II or other shares subject to contingent deferred
sales charge, as described in the prospectus. Send the withdrawals to: [ ] address of record OR [ ] the Franklin Templeton
Fund, or person specified in Section 7A - Special Payment Instructions for Distributions and/or Redemption Proceeds.
C. TELEPHONE TRANSACTIONS
TELEPHONE EXCHANGE AND REDEMPTION PRIVILEGES: If the Fund does not receive specific instructions from the shareholder,
either in writing or by telephone, both the Telephone Exchange and Redemption Privileges (see the prospectus) are
automatically extended to each account. The shareholder should understand, however, that the Fund and Franklin/Templeton
Investor Services, Inc. ("FTI") and their agents will not be liable for any loss, injury, damage or expense as a result of
acting upon instructions communicated by telephone reasonably believed to be genuine. The shareholder agrees to hold the
Fund and its agents harmless from any loss, claims, or liability arising from its or their compliance with such
instructions. The shareholder understands that this option is subject to the terms and conditions set forth in the
prospectus of the fund to be acquired.
[ ] No, I do NOT wish to participate in the TELEPHONE EXCHANGE PRIVILEGE or authorize the Fund or its agents, including FTI,
to act upon instructions received by telephone to exchange shares for shares of any other account within Franklin
Templeton.
[ ] No, I do NOT wish to participate in the TELEPHONE REDEMPTION PRIVILEGE or authorize the Fund or its agents, including FTI,
to act upon instructions received by telephone to sell shares of any account within Franklin Templeton.
________________________________________________________________________________
D. AUTOMATIC INVESTMENT PLAN
IMPORTANT: ATTACH AN UNSIGNED, VOIDED CHECK (FOR CHECKING ACCOUNTS) OR A SAVINGS ACCOUNT DEPOSIT SLIP HERE, AND COMPLETE
THE INFORMATION BELOW.
I/We would like to establish an Automatic Investment Plan (the "Plan") as described in the prospectus. I/We agree to
reimburse FTI and/or FTD for any expenses or losses that they may incur in connection with my/our Plan, including any
caused by my/our bank's failure to act in accordance with my/our request. If my/our bank makes any erroneous payment or
fails to make a payment after shares are purchased on my/our behalf, any such purchase may be cancelled and I/we hereby
authorize redemptions and/or deductions from my/our account for that purpose.
Debit my (circle one) savings, checking, other _______________________ account monthly for $____________________ ($25
minimum) on or about the [ ] 1st [ ] 5th [ ] 15th or [ ] 20th day starting ____________________ (month), to be invested in
(name of Fund) ____________________________ Account Number (if known) ____________________________________________
INSTRUCTIONS TO BANK - AUTOMATIC INVESTMENT PLAN AUTHORIZATION
To: __________________________________________________________ _________________________________________________________
Name of Your Bank ABA Number
_________________________________________________ _____________________________ _______________ __________________
Street Address City State Zip Code
I/We authorize you to charge my/our Checking/Savings account and to make payment to FTD, upon instructions from FTD. I/We
agree that in making payment for such charges your rights shall be the same as if each were a charge made and signed
personally by me(us). This authority shall remain in effect until you receive written notice from me/us changing its terms
or revoking it. Until you actually receive such notice, I/we agree that you shall be fully protected in paying any charge
under this authority. I/We further agree that if any such charge is not made, whether with or without cause and whether
intentionally or inadvertently, you shall be under no liability whatsoever.
X______________________________________________________________________
SIGNATURE(S) EXACTLY AS SHOWN ON YOUR BANK RECORDS Date
____________________________________________ _______________________
Print Name(s) Account Number
_____________________________ _____________ __________ __________
Your Street Address City State Zip Code
E. LETTER OF INTENT (LOI)
[ ] I/We agree to the terms of the LOI and provisions for reservations of Class I shares and grant FTD the security interest
set forth in the prospectus. Although I am/we are not obligated to do so, it is my/our intention to invest over a 13 month
period in shares of one or more Franklin Templeton Funds (including all money market funds in the Franklin Templeton Group)
an aggregate amount at least equal to that which is checked below. I understand that reduced sales charges will apply only
to purchases of Class I shares.
[ ] $50,000-99,999 (except for Global Bond Fund and Americas Government
Securities Fund) [ ] $100,000-249,999 [ ] $250,000-499,999 [ ]
$500,000-999,999 [ ] $1,000,000 or more
Purchases of Class I shares under LOI of $1,000,000 or more are made at net asset value and may be subject to a contingent
deferred sales charge as described in the prospectus.
Purchases made within the last 90 days will be included as part of your LOI. However, certain employee benefit plans are
subject to different rules.
Please write in your account number(s)__________________ ________________ ________________
F. CUMULATIVE QUANTITY DISCOUNT
Class I shares may be purchased at the offering price applicable to the total of (a) the dollar amount then being purchased
plus (b) the amount equal to the cost or current value (whichever is higher) of the combined holdings of the purchaser, his
or her spouse, and their children or grandchildren under age 21, of any class of shares issued by any of the Franklin
Templeton Funds. In order for this cumulative quantity discount to be made available, the shareholder or his or her
securities dealer must notify FTI or FTD of the total holdings in Franklin Templeton each time an order is placed. I
understand that reduced sales charges will apply only to purchases of Class I shares.
[ ] I/We own shares of more than one Fund in Franklin Templeton and qualify for the Cumulative Quantity Discount described
above and in the prospectus.
My/Our other account number(s) are__________________ ________________ ________________
</TABLE>
<PAGE> 1
FORM OF LETTER TO BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES
REGARDING THE OFFER BY
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
TO PURCHASE FOR CASH UP TO 4,029,302 OF ITS ISSUED AND OUTSTANDING
SHARES AT NET ASSET VALUE PER SHARE
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Pursuant to your request, we are enclosing the material listed below
relating to the offer by Templeton Vietnam Opportunities Fund, Inc. (the "Fund")
to purchase up to 4,029,302 (approximately 50%) of its issued and outstanding
shares of common stock, par value $.01 per share (the "Shares") for cash at a
price equal to their net asset value ("NAV") determined as of the close of the
regular trading session of the New York Stock Exchange ("NYSE") on January 20,
1998, unless the Offer is extended. The Offer is subject to the terms and
conditions set forth in the Offer to Purchase dated December 19, 1997 and the
related Letter of Transmittal (which together constitute the "Offer"). THE OFFER
EXPIRES AT 12:00 MIDNIGHT, EASTERN STANDARD TIME, ON JANUARY 20, 1998, UNLESS
EXTENDED (THE "EXPIRATION DATE"). If the Offer is extended beyond January 20,
1998, the purchase price for Shares will be their NAV determined as of the close
of the regular trading session of the NYSE on the Expiration Date, as extended
(the "Offering Price"). In the event that more than 4,029,302 Shares are
tendered, the Fund intends to extend the Expiration Date of the Offer by ten
business days in order to give shareholders who may not have initially tendered
their Shares an opportunity to tender their Shares.
The following documents are enclosed:
(1) OFFER TO PURCHASE DATED DECEMBER 19, 1997;
(2) LETTER OF TRANSMITTAL TO BE USED TO TENDER SHARES;
(3) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER;
(4) ALTERNATIVE FUNDS APPLICATION FORM;
(5) NOTICE OF GUARANTEED DELIVERY; AND
(6) LETTER TO CLIENTS, WHICH MAY BE SENT UPON ANY REQUEST FOR INFORMATION
BY YOUR CLIENTS FOR WHOSE ACCOUNT YOU HOLD SHARES REGISTERED IN YOUR
NAME (OR IN THE NAME OF YOUR NOMINEE) WITH SPACE PROVIDED FOR OBTAINING
SUCH CLIENTS' INSTRUCTIONS WITH REGARD TO THE OFFER.
PLEASE NOTE THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 12:00
MIDNIGHT, EASTERN STANDARD TIME, ON JANUARY 20, 1998, UNLESS EXTENDED.
No fees or commissions will be payable to brokers, dealers or other persons
for soliciting tenders of Shares under the terms of the Offer. The Fund will pay
all transfer taxes on its purchase of Shares, subject to Instruction 6 of the
Letter of Transmittal. Backup tax withholding at a 31% rate may be required
unless an exemption is proved or unless the required taxpayer identification
information is provided. Certain withholdings may also apply with respect to
payments to non-U.S. shareholders. See Instruction 11 of the Letter of
Transmittal.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) shareholders residing in any jurisdiction in which the making of the
Offer or its acceptance would not be in compliance with the laws of such
jurisdiction. To the extent that the securities laws of any jurisdiction would
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on the Fund's behalf by one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
1
<PAGE> 2
If a client instructs you by telephone to tender Shares, please record the
telephone conversation (in accordance with applicable law) and ask the client to
affirm that the Shares tendered represent all Shares actually and constructively
owned by the client as of the date of purchase of Shares under the terms of the
Offer and Section 318 of the Internal Revenue Code of 1986, as amended.
Additional copies of the enclosed material may be obtained from ChaseMellon
Shareholder Services, L.L.C., the Information Agent, by calling 212-273-8293.
Any question you have with respect to the Offer should be directed to the
Information Agent at the number indicated in the previous sentence.
Very truly yours,
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTHING CONTAINED IN THIS LETTER OR IN THE ENCLOSED DOCUMENTS SHALL
CONSTITUTE YOU OR ANY OTHER PERSON AS THE AGENT OF EITHER THE FUND OR THE
DEPOSITARY OR AUTHORIZE YOU OR ANY OTHER PERSON (A) TO MAKE ANY STATEMENTS WITH
RESPECT TO THE OFFER, OTHER THAN THE STATEMENTS SPECIFICALLY SET FORTH IN THE
OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL, OR (B) TO DISTRIBUTE ANY
MATERIAL WITH RESPECT TO THE OFFER OTHER THAN AS SPECIFICALLY AUTHORIZED.
2
<PAGE> 1
FORM OF LETTER TO CLIENTS OF BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES
REGARDING THE OFFER BY
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
TO PURCHASE FOR CASH UP TO 4,029,302 OF ITS
ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
To Our Clients:
Pursuant to your request, enclosed for your consideration are the Offer to
Purchase dated December 19, 1997 of Templeton Vietnam Opportunities Fund, Inc.
(the "Fund") and the related Letter of Transmittal by which the Fund is offering
to purchase up to 4,029,302 shares of its issued and outstanding common stock,
par value $0.01 per share (the "Shares") for cash at a price equal to their net
asset value ("NAV") determined as of the close of the regular trading session of
the New York Stock Exchange ("NYSE") on January 20, 1998, unless the Offer is
extended. This Offer is subject to the terms and conditions set forth in the
Offer to Purchase dated December 19, 1997 and the related Letter of Transmittal
(which together constitute the "Offer"). THE OFFER EXPIRES AT 12:00 MIDNIGHT,
EASTERN STANDARD TIME, ON JANUARY 20, 1998, UNLESS EXTENDED (THE "EXPIRATION
DATE"). If the Offer is extended beyond January 20, 1998, the purchase price for
Shares will be their NAV determined as of the close of the regular trading
session of the NYSE on the Expiration Date, as extended (the "Offering Price").
In the event that more than 4,029,302 Shares are tendered, the Fund intends to
extend the Expiration Date of the Offer by ten business days in order to give
shareholders who may not have initially tendered their Shares an opportunity to
tender their Shares.
The purpose of the Offer is to provide shareholders who may no longer wish
to participate in the Fund with the opportunity to sell their Shares to the Fund
at net asset value. At the time of the Fund's initial public offering, the
prospectus stated that, if at least 65% of the Fund's total assets were not
invested in the equity and debt securities of Vietnam Companies (as described in
Section 12 of the Offer) by October 1, 1997, management of the Fund would call a
shareholders meeting to vote either on a proposal to modify the Fund's
investment policies (and to change the name of the Fund) or on a proposal to
liquidate the Fund. The securities markets in Vietnam have not developed to the
point where the Fund was able to achieve the 65% target and the Fund's shares
have generally traded on the NYSE at a discount from their net asset value.
Accordingly, to assist those investors who no longer desire to remain
shareholders of the Fund, the Fund's Board of Directors has determined that the
Fund should conduct this tender offer, to the extent consistent with the best
interests of the Fund. The Fund chose to limit the Offer to 4,029,302 Shares or
approximately 50% of its Shares issued and outstanding because the Fund believes
that this represents the maximum amount of Shares that may be purchased and
still permit the Fund to operate as a viable investment entity.
After completion of the tender offer, the Fund intends to hold its Annual
Meeting of Shareholders on or before March 31, 1998 to determine the future of
the Fund. If 4,029,302 or fewer of the Fund's shares are validly tendered and
not withdrawn, the Board of Directors intends to submit to shareholders a
proposal to change the name of the Fund to "Templeton Vietnam and Southeast Asia
Fund, Inc.," and to change the Fund's investment policies to expand its ability
to invest in other Southeast Asian countries, while continuing to focus its
investment program on Vietnam. The new policies would allow the Fund to invest
its assets in Vietnam as that country's markets develop, while giving it the
flexibility to invest in other Southeast Asian countries such as China, Hong
Kong, India, Indonesia, Korea, Malaysia, Myanmar, the Philippines, Singapore,
Taiwan and Thailand. In the event that an organized securities market develops
in Vietnam, the Fund would have the ability to invest a significant amount of
its assets in Vietnam. If more than 4,029,302 of the Fund's Shares are validly
tendered and not withdrawn, the Board currently intends to submit to
shareholders a proposal to liquidate the Fund. See Sections 7, 11, 12 and
Appendix B of the Offer.
The Offer to Purchase and the Letter of Transmittal are being forwarded to
you as the beneficial owner of Shares held by us for your account but not
registered in your name. We are sending you the Letter of
1
<PAGE> 2
Transmittal for your information only; you cannot use it to tender Shares we
hold for your account. A tender of your Shares can be made only by us as the
holder of record and only according to your instructions.
Your attention is called to the following:
1. The purchase price is the NAV determined as of the close of the regular
trading session of the NYSE on January 20, 1998, subject to the terms and
conditions of the Offer to Purchase dated December 19, 1997 and the related
Letter of Transmittal. THE OFFER EXPIRES AT 12:00 MIDNIGHT, EASTERN STANDARD
TIME, ON JANUARY 20, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE"). If the Offer
is extended beyond January 20, 1998, the purchase price for Shares will be their
NAV determined as of the close of the regular trading session of the NYSE on the
Expiration Date, as extended.
2. The Offer is for up to 4,029,302 (approximately 50%) of the issued and
outstanding Shares of the Fund and is not conditioned upon any minimum number of
outstanding Shares being tendered, but is subject to certain conditions set
forth in the Offer to Purchase. Under the conditions described in the Offer to
Purchase, the Fund can terminate or amend the Offer or can postpone the
acceptance for payment of, payment for or purchase of any Shares.
3. A SHAREHOLDER WISHING TO ACCEPT THE OFFER MUST TENDER, OR CAUSE THE
TENDER OF, ALL SHARES ACTUALLY OR CONSTRUCTIVELY OWNED BY THE SHAREHOLDER,
PURSUANT TO SECTION 318 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AS OF
THE DATE OF PURCHASE OF SHARES PURSUANT TO THE OFFER. Shareholders should
consult their tax advisers as to the application of the constructive ownership
rules of Section 318. Shares tendered shall include any shares received by
shareholders pursuant to a dividend by the Fund or participation in the Fund's
Dividend Reinvestment Plan.
4. Shareholders may receive cash for the tender of Shares or may elect to
have the proceeds from the tender of Shares applied to the purchase of Class I
shares of the following open-end investment companies distributed by Franklin
Templeton Distributors, Inc.: Templeton Developing Markets Trust; Templeton
Growth Fund, Inc.; and Templeton Pacific Growth Fund (the "Alternative Funds").
All sales charges for such purchases are waived. In order to purchase shares of
the Alternative Funds, shareholders must complete and submit the Application
Form included with the Letter of Transmittal. The minimum investment for shares
of an Alternative Fund is $100. If the proceeds from tendered Shares applied
towards a purchase of shares of an Alternative Fund total less than $100, then
those proceeds will be distributed in cash. Before shareholders may elect to
apply cash proceeds from the tender of Shares to purchase shares of an
Alternative Fund, they must first obtain that Alternative Fund's prospectus.
Prospectuses for the Alternative Funds may be obtained free of charge by calling
1-800-DIAL-BEN (1-800-342-5236).
5. In the event that more than 4,029,302 Shares are tendered, the Fund
intends to extend the Expiration Date of the Offer by ten business days in order
to give shareholders who may not have initially tendered their Shares an
opportunity to tender their Shares. The Fund will purchase Shares from tendering
shareholders, in accordance with the terms and conditions specified in the
Offer. Shares will be purchased on a pro rata basis in accordance with the
number of Shares tendered by each shareholder during the period the Offer
remains open, unless the Fund determines not to purchase any Shares.
6. Tendering shareholders will not be obligated to pay brokerage
commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares by the Fund pursuant to the Offer; however, a
broker, dealer or other person may charge a fee for processing the transactions
on behalf of shareholders. Shareholders are not required to pay a service charge
to the Fund or the Depositary in connection with their tender of Shares.
If you wish to have us tender your Shares, please instruct us by
completing, signing and returning to us the instruction form on the reverse
side.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION OF THE OFFER. THE
EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 12:00 MIDNIGHT, EASTERN STANDARD
TIME, ON JANUARY 20, 1998, UNLESS EXTENDED.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) owners of Shares in any jurisdiction in which the Offer or its
acceptance would violate the laws of that jurisdiction. To the extent that the
securities laws of any jurisdiction would require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on the Fund's
behalf by one or more registered brokers or dealers licensed under the laws of
that jurisdiction.
2
<PAGE> 1
FORM OF LETTER TO
SHAREHOLDERS WHO HAVE
REQUESTED INFORMATION
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
500 EAST BROWARD BLVD.
FT. LAUDERDALE, FL 33394-3091
Dear Shareholder:
As you requested, we are enclosing a copy of the Templeton Vietnam
Opportunities Fund, Inc.'s (the "Fund") Offer to Purchase (the "Offer to
Purchase") up to 4,029,302 shares of its issued and outstanding common stock,
par value $0.01 per share (the "Shares"), for cash at a price equal to their net
asset value ("NAV") determined as of the close of the regular trading session of
the New York Stock Exchange on January 20, 1998, subject to the terms and
conditions set forth in the Offer to Purchase dated December 19, 1997 and the
related Letter of Transmittal (which together constitute the "Offer"). THE OFFER
EXPIRES AT 12:00 MIDNIGHT, EASTERN STANDARD TIME ON JANUARY 20, 1998, UNLESS
EXTENDED (THE "EXPIRATION DATE"). In the event that more than 4,029,302 Shares
are tendered, the Fund intends to extend the Expiration Date of the Offer by ten
business days in order to give shareholders who may not have initially tendered
their Shares an opportunity to tender their Shares. If the Offer is extended
beyond January 20, 1998, the purchase price for Shares will be their NAV
determined as of the close of the regular trading session of the NYSE on the
Expiration Date, as extended.
If, after reviewing the information set forth in the Offer to Purchase and
Letter of Transmittal, you wish to tender Shares for purchase by the Fund,
please contact your broker, dealer or other nominee to tender your Shares for
you or, if you are the record owner of the Shares, you may follow the
instructions contained in the Offer to Purchase and Letter of Transmittal to
tender your Shares. YOU MUST TENDER, OR CAUSE THE TENDER OF, ALL SHARES ACTUALLY
OR CONSTRUCTIVELY OWNED BY YOU PURSUANT TO SECTION 318 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AS OF THE DATE OF PURCHASE OF SHARES PURSUANT TO THE
OFFER. You should consult your tax adviser as to the application of the
constructive ownership rules of Section 318. Shares tendered shall include any
shares received by shareholders pursuant to a dividend by the Fund or
participation in the Fund's Dividend Reinvestment Plan. You are not required to
pay a service charge to the Fund or to ChaseMellon Shareholder Services, L.L.C.,
the Depositary, in connection with your tender of Shares, but you may be charged
a fee by a broker, dealer or other institution for processing the tender
requested. You may elect to tender your Shares and receive cash or have the
proceeds from the tender of Shares applied to a purchase of Class I shares of
the following open-end investment companies distributed by Franklin Templeton
Distributors, Inc.: Templeton Growth Fund, Inc.; Templeton Developing Markets
Trust; and Templeton Pacific Growth Fund (collectively, the "Alternative
Funds"). The sales charges for the purchase of shares of these three funds are
waived in connection with a purchase pursuant to the Offer. The purchase of
Alternative Fund shares with cash proceeds from the tender of Shares will be
treated for tax purposes as a sale of Fund Shares and a purchase of the
Alternative Fund shares, and may result in a taxable gain or loss. A current
prospectus for each of the Alternative Funds, which you must obtain and should
review before electing to purchase shares of the Alternative Funds, can be
obtained free of charge by calling 1-800-DIAL-BEN (1-800-342-5236).
Neither the Fund nor its Board of Directors is making any recommendation to
you or any holder of Shares as to whether to tender Shares. You are urged to
consult your broker, investment adviser or tax adviser before deciding whether
to tender any Shares.
The Fund's NAV on December 15, 1997 was $8.07 per Share. The NAV can be
expected to vary with changes in the value of the investments held by the Fund.
On January 20, 1998 the NAV may be higher or lower than it was on December 15,
1997. The Fund publishes its NAV each week in THE WALL STREET JOURNAL under the
heading "Closed End Funds." The Fund's NAV is also published in THE NEW YORK
TIMES and BARRON'S.
1
<PAGE> 2
During the pendency of the Offer, you may obtain current NAV quotations for
the Fund by calling as of the close of business on the previous business day
Franklin Templeton's Fund Information Department, at 1-800-DIAL-BEN
(1-800-342-5236) after 10:00 a.m. Eastern Standard time, Monday - Friday (except
holidays). Requests for additional copies of the Offer to Purchase, the Letter
of Transmittal and any other tender offer documents may also be directed to the
Information Agent at 1-800-851-9671.
Should you have any other questions on the enclosed material, please do not
hesitate to contact your broker, dealer or other nominee, or call the
Information Agent at the number set forth immediately above.
Yours truly,
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
2
<PAGE> 1
FOR IMMEDIATE RELEASE:
For More Information Contact:
The Franklin Templeton Fund Information Department (1-800-342-5236).
Members of the media should contact Franklin Templeton Public Relations at
650-312-4701.
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC. ["TVF"]
COMMENCES TENDER OFFER FOR ITS SHARES
Ft. Lauderdale, Florida, December 19, 1997 - Templeton Vietnam
Opportunities Fund, Inc. (the "Fund") announced today that it has commenced a
tender offer for up to 4,029,302 shares of its common stock, representing
approximately 50% of its outstanding shares. The offer is for cash at a price
equal to the net asset value per share determined as of the close of the regular
trading session of the New York Stock Exchange ("NYSE") on January 20, 1998, the
expiration date, unless the offer is extended. On December 15, 1997, the net
asset value of a share of the Fund was $8.07 per share. The offer and withdrawal
rights will expire at 12:00 Midnight, Eastern Standard time, on January 20,
1998, unless the offer is extended. If the offer is extended beyond January 20,
the purchase price for the shares will be equal to the net asset value per share
determined as of the close of the regular trading session of the NYSE on the
expiration date, as extended. If more than 4,029,302 shares are tendered and not
withdrawn prior to the expiration date of the tender offer, the Fund intends to
extend the expiration date of the offer by ten business days in order to give
shareholders who may not have initially tendered their shares an opportunity to
tender their shares.
The purpose of the tender offer is to provide shareholders who may no
longer wish to participate in the Fund with the opportunity to sell their shares
to the Fund at net asset value. At the time of the Fund's initial public
offering, the Fund's prospectus stated that, if at least 65% of the Fund's total
assets were not invested in the equity and debt securities of Vietnam Companies
(as defined in the prospectus) by October 1, 1997, management of the Fund would
call a shareholders meeting to vote either on a proposal to modify the Fund's
investment policies (and to change the name of the Fund) or on a proposal to
liquidate the Fund. The securities markets in Vietnam have not developed to the
point where the Fund was able to achieve this 65% target and the Fund's shares
have generally traded on the NYSE at a discount from their net asset value.
Accordingly, to assist those investors who no longer desire to remain
shareholders of the Fund, the Fund's Board of Directors determined that the Fund
should conduct this tender offer, to the extent consistent with the best
interests of the Fund. Neither the Fund nor its Board of Directors is making any
recommendation to the Fund's shareholders regarding the tendering of shares.
<PAGE> 2
After completion of the offer, the Fund intends to hold its Annual
Meeting of Shareholders on or before March 31, 1998 to determine the future of
the Fund. If 4,029,302 or fewer of the Fund's shares are tendered and not
withdrawn, the Board intends to submit to shareholders a proposal to change the
name of the Fund to "Templeton Vietnam and Southeast Asia Fund, Inc.," and to
change the Fund's investment policies to expand its ability to invest in other
Southeast Asian countries, while continuing to focus its investment program on
Vietnam. The new policies would allow the Fund to invest its assets in Vietnam
as that country's markets develop, while giving it the flexibility to invest in
other Southeast Asian countries. In the event that an organized securities
market develops in Vietnam, the Fund would have the ability to invest a
significant amount of its assets in Vietnam. If more than 4,029,302 of the
Fund's shares are tendered and not withdrawn, the Board currently intends to
submit to shareholders a proposal to liquidate the Fund. Any solicitation of
proxies by the Fund in connection with the Annual Meeting will be made only
pursuant to separate proxy materials filed under federal securities laws.
While the tender offer is for cash, tendering shareholders may elect to
direct that all or a portion of their tender proceeds be used to purchase, at no
sales charge, Class I shares of certain open-end investment companies
distributed by Franklin/Templeton Distributors, Inc. (the "Alternative Funds").
Although the ability to purchase shares of an Alternative Fund has been made
available as a convenience to the Fund's shareholders, neither the Fund nor its
Board of Directors is making any recommendation as to whether shareholders
should elect to apply their tender proceeds towards the purchase of Alternative
Fund shares.
The terms and conditions of the offer are set forth in the Fund's Offer
to Purchase dated December 19, 1997 and the related Letter of Transmittal.
Questions and requests for assistance or for copies of the Offer to Purchase,
Letter of Transmittal, and any other tender offer documents should be directed
to the Information Agent, ChaseMellon Shareholder Services, L.L.C., 450 West
33rd Street, 14th Floor, New York, New York 10001, or by calling 1-800-851-9671.
Banks and broker-dealers should call (212) 273-8293. ChaseMellon is also acting
as the depositary for the offer. Requests for current net asset value quotations
should be directed to Franklin Templeton's Fund Information Department at
1-800-DIAL-BEN (1-800-342-5236).
The Fund is a non-diversified, closed-end U.S. registered management
investment company whose investment manager is Templeton Asset Management Ltd.
and whose lead portfolio manager is Dr. J. Mark Mobius. The Fund currently has
net assets approximating $65 million. The Fund's investment manager is a
subsidiary of Franklin Resources, Inc. (NYSE: BEN). Franklin's main business
is the $217 billion Franklin Templeton Group. Franklin has its headquarters at
777 Mariners Island Blvd., San Mateo, California 94404.
This announcement is not an offer to purchase or solicitation of an
offer to sell shares of the Fund. The offer is made only by the Offer to
Purchase and the related Letter of Transmittal. The offer is not being made to,
nor will tenders be accepted from or on behalf of, holders of shares in any
jurisdiction in which making or accepting the offer would violate that
jurisdiction's laws.
-2-
<PAGE> 1
DEPOSITARY AGREEMENT
Date: Dec. 19, 1997
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road
Ridgefield Park, NJ 07660
Attn: Reorganization Administration
Gentlemen:
Templeton Vietnam Opportunities Fund, Inc., a closed-end management investment
company (the "Purchaser"), is offering to purchase up to 4,029,302 shares of its
issued and outstanding Common Stock, $.01 par value (the "Shares"), for cash at
a price equal to their net asset value ("NAV") determined as of the close of the
regular trading session of the New York Stock Exchange ("NYSE") on January 20,
1998, unless the offer is extended, subject to the terms and conditions set
forth in its Offer to Purchase dated December 19, 1997 (the "Offer to Purchase")
and in the related Letter of Transmittal (which shall include the Internal
Revenue Service Form W-8 or Form W-9), copies of which are attached hereto as
Exhibits A and B, respectively, and which together, as they may be amended from
time to time, constitute the "Offer." The "Expiration Date" for the Offer shall
be 12:00 Midnight Eastern Standard time, on January 20, 1998 unless and until
the Purchaser shall have extended the period of time for which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by the Purchaser from time to time,
shall expire. All terms not defined herein shall have the same meaning as in the
Offer.
The Purchaser hereby agrees with you as follows:
1) Subject to the terms and conditions of this Agreement, you will act
as Depositary in connection with the Offer, and in such capacity are authorized
and directed to accept tenders of Shares.
2) (a) Tenders of Shares may be made only as set forth in Section
2 of the Offer to Purchase, and Shares shall be considered validly tendered to
you only if:
(i) you receive prior to the Expiration Date (x) certificates
for such Shares, (or a Confirmation (as defined in paragraph (b) below) relating
to such Shares) and (y) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) or an Agent's Message (as defined in
paragraph (b) below) relating thereto; or
<PAGE> 2
(ii) you receive (x) a Notice of Guaranteed Delivery (as
defined in paragraph (b) below) relating to such Shares from an Eligible
Institution (as defined in paragraph (b) below) prior to the Expiration Date and
(y) certificates for such Shares (or a Confirmation relating to such Shares) and
either a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) or an Agent's Message relating thereto at or prior to 5:00
P.M., Eastern Standard time, on the third New York Stock Exchange, Inc. (the
"NYSE") trading day after the date of execution of such Notice of Guaranteed
Delivery; and
(iii) in the case of either clause (i) or (ii) above, a final
determination of the adequacy of the items received, as provided in Section 4
hereof, has been made by Purchaser.
(b) For the purpose of this Agreement: (i) a "Confirmation"
shall be a confirmation of book-entry transfer of Shares into your account at
The Depository Trust Company, (hereinafter referred to as "DTC") to be
established and maintained by you in accordance with Section 3 hereof; (ii) a
"Notice of Guaranteed Delivery" shall be a notice of guaranteed delivery
substantially in the form attached as Exhibit C hereto or a telegram, telex,
facsimile transmission or letter substantially in such form, or if sent by DTC,
a message transmitted through electronic means in accordance with the usual
procedures of DTC and the Depositary, substantially in such form; provided,
however, that if such notice is sent by DTC through electronic means, it must
state that DTC has received an express acknowledgment from the participant on
whose behalf such notice is given that such participant has received and agrees
to become bound by the form of such notice; (iii) an "Eligible Institution"
shall be a firm which is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of a Stock
Transfer Association approved medallion program (such as STAMP, SEMP or MSP);
(iv) an "Agent's Message" shall be a message from DTC transmitted to, and
received by, the Depositary forming a part of a timely Confirmation, which
states that (a) DTC has received an express acknowledgment from the DTC
participant tendering the Shares that are the subject of the Confirmation, (b)
the DTC participant has received and agrees to be bound by the terms of the
Letter of Transmittal and (c) the Purchaser may enforce the agreement against
the DTC participant; and (v) an "Alternative Fund" shall be one or more open-end
investment companies, distributed by Franklin/Templeton Distributors, Inc. and
designated in the Offer to Purchase, into which tendering shareholders may elect
to direct all or a portion of their cash proceeds from the tender of shares to
be used to purchase shares of such funds. The term Agent's Message shall also
include any hard copy printout evidencing such message generated by a computer
terminal maintained at the Depositary's office.
(c) We acknowledge that in connection with the Offer you may
enter into agreements or arrangements with DTC which, among other things,
provide that (i) delivery of an Agent's Message will satisfy the terms of the
Offer with respect to the Letter of Transmittal, (ii) such agreements or
arrangements are enforceable against the Purchaser by DTC or participants
therein and (iii) you, as Depositary, are authorized to enter into such
agreements or arrangements on behalf of the Purchaser. Without limiting any
other provision of this Agreement, you are expressly authorized to enter into
any such agreements or arrangements on behalf of the Purchaser and to make any
necessary representations or warranties in connection thereunder, and any such
agreement or arrangement shall be enforceable against the Purchaser.
3) You shall take steps to establish and, subject to such
establishments, maintain an account at DTC for book-entry transfers of Shares,
as set forth in the Letter of Transmittal
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<PAGE> 3
and Section 2 of the Offer to Purchase, and you shall comply with the provisions
of Rule 17Ad-14 under the Securities Exchange Act of 1934, as amended.
4) (a) You are authorized and directed to examine any certificate
representing Shares, Letter of Transmittal (or facsimile thereof), Notice of
Guaranteed Delivery or Agent's Message and any other document required by the
Letter of Transmittal received by you to determine whether you believe any
tender may be defective. In the event you conclude that any Letter of
Transmittal, Notice of Guaranteed Delivery, Agent's Message or other document
has been improperly completed, executed or transmitted, any of the certificates
for Shares is not in proper form for transfer (as required by the aforesaid
instructions) or if some other irregularity in connection with the tender of
Shares exists, you are authorized subject to Section 4(b) hereof to advise the
tendering stockholder, or DTC, as the case may be, of the existence of the
irregularity, but you are not authorized to accept any tender of fractional
Shares, any tender not in accordance with the terms and subject to the
conditions set forth in the Offer, or any other tender which you deem to be
defective, unless you shall have received from the Purchaser the Letter of
Transmittal which was surrendered (or if the tender was made by means of a
Confirmation containing an Agent's Message, a written notice), duly dated and
signed by an authorized officer of the Purchaser, indicating that any defect or
irregularity in such tender has been cured or waived and that such tender has
been accepted by the Purchaser.
(b) Promptly upon your concluding that any tender is
defective, you shall, after consultation with and on the written instructions of
the Purchaser, use reasonable efforts in accordance with your regular procedures
to notify the person tendering such Shares, or DTC transmitting the Agent's
Message, as the case may be, of such determination and, when necessary, return
the certificates involved to such person in the manner described in Section 11
hereof. The Purchaser shall have full discretion to determine whether any tender
is complete and proper and shall have the absolute right to reject any or all
tenders of any particular Shares determined by it not to be in proper form and
to determine whether the acceptance of or payment for such tenders may, in the
opinion of counsel for the Purchaser, be unlawful; it being specifically agreed
that you shall have neither discretion nor responsibility with respect to these
determinations. To the extent permitted by applicable law, the Purchaser also
reserves the absolute right to waive any of the conditions of the Offer or any
defect or irregularity with respect to the tender of any particular Shares. The
interpretation by the Purchaser of the terms and conditions of the Offer to
Purchase, the Letter of Transmittal and the instructions thereto, a Notice of
Guaranteed Delivery or an Agent's Message (including without limitation the
determination of whether any tender is complete and proper) shall be final and
binding.
(c) If less than all of the Shares validly tendered pursuant
to the Offer are to be accepted because the Offer is oversubscribed by the
Expiration Date, the Purchaser shall provide you with instructions regarding
proration as soon as practicable. You agree to maintain accurate records as to
all Shares tendered prior to or on the Expiration Date.
5) You are authorized and directed to return to any person tendering
Shares, in the manner described in Section 11 hereof, any certificates
representing Shares tendered by such person but duly withdrawn pursuant to the
Offer to Purchase. To be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be received by you within the time period
specified for withdrawal in the Offer to Purchase at your address set forth on
the back page of the Offer to Purchase. Any notice of withdrawal must specify
the
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<PAGE> 4
name of the person having deposited the Shares to be withdrawn, the number of
Shares to be withdrawn and, if the certificates representing such Shares have
been delivered or otherwise identified to you, the name of the registered
holder(s) of such Shares as set forth in such certificates. If the certificates
have been delivered to you, then prior to the release of such certificates the
tendering stockholder must also submit the serial numbers shown on the
particular certificates evidencing such Shares and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution. You are authorized
and directed to examine any notice of withdrawal to determine whether you
believe any such notice may be defective. In the event you conclude that any
such notice is defective you shall, after consultation with and on the
instructions of the Purchaser, use reasonable efforts in accordance with your
regular procedures to notify the person delivering such notice of such
determination. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Purchaser in its
sole discretion, whose determination shall be final and binding. Any Shares so
withdrawn shall no longer be considered to be properly tendered unless such
Shares are re-tendered prior to the Expiration Date pursuant to the Offer.
6) Subject to Sections 18 and 25 hereof, any amendment to or extension
of the Offer, as the Purchaser shall from time to time determine, shall be
effective upon notice to you from the Purchaser given prior to the time the
Offer would otherwise have expired, and shall be promptly confirmed by the
Purchaser in writing; provided that you may rely on and shall be authorized and
protected in acting or failing to act upon any such notice even if such notice
is not confirmed in writing or such confirmation conflicts with such notice. If
at any time the Offer shall be terminated as permitted by the terms thereof, the
Purchaser shall promptly notify you of such termination.
7) At 11:00 A.M. Eastern Standard time, or as promptly as practicable
thereafter on each business day, or more frequently if reasonably requested
to tally major figures, you shall advise each of the parties named below by
facsimile transmission your preliminary review (and at all times subject to
final determination by Purchaser), as of the close of business on the preceding
business day or the most recent practicable time prior to such request, as the
case may be: (i) the number of Shares duly tendered on such day; (ii) the number
of Shares duly tendered represented by certificates physically held by you on
such day; (iii) the number of Shares represented by Notices of Guaranteed
Delivery on such day; (iv) the number of Shares withdrawn on such day; and (v)
the cumulative totals of Shares in categories (i) thru (iv) above through 12:00
Noon, Eastern Standard time, on such day:
(a) Barbara Green
(b) Lori Weber
(c) Jim Baio
(d) Gail Dutton
You shall also furnish to each of the above-named persons a written report
confirming the above information which has been communicated orally on the day
following such oral communication. Additionally, you shall notify Gail Dutton or
any other persons approved by the Purchase of the number of Alternative Fund
applications received as of the close of business on the preceding day and shall
furnish copies of each such application by 2:00 P.M., Eastern Standard time, or
the next business day following receipt of the application. You shall furnish to
the Purchaser, such reasonable information, to the extent such information has
been furnished to you, on the tendering stockholders as may be requested from
time to time.
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<PAGE> 5
You shall furnish to the Purchaser, upon request, master lists of Shares
tendered for purchase, including an A-to-Z list of the tendering stockholders.
You are also authorized and directed to provide the persons listed above or any
other persons approved by the Purchaser with such other information relating to
the Shares, Offer to Purchase, Letters of Transmittal, Agent's Messages or
Notices of Guaranteed Delivery as the Purchaser may reasonably request from time
to time.
8) Letters of Transmittal, Notices of Guaranteed Delivery, Agent's
Messages, telegrams, telexes, facsimile transmissions, notices and letters
submitted to you pursuant to the Offer shall be stamped by you to indicate the
date and time of the receipt thereof and these documents, or copies thereof,
shall be preserved by you for a reasonable time not to exceed one year or the
term of this Agreement, whichever is longer, and thereafter shall be delivered
by you to the Purchaser. Thereafter, any inquiries relating to or requests for
any of the foregoing shall be directed solely to the Purchaser and not the
Depositary.
9) (a) If under the terms and conditions set forth in the Offer
the Purchaser becomes obligated to accept and pay for Shares tendered, upon
instruction by the Purchaser and as promptly as practicable, but in any event
not later than 5:00 P.M., Eastern Standard time, on the third NYSE trading day
after the latest of: (i) the Expiration Date; (ii) the physical receipt by you
of a certificate or certificates representing tendered Shares (in proper form
for transfer by delivery), a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) or a Confirmation including an Agent's
Message and any other documents required by the Letter of Transmittal; and (iii)
the deposit by the Purchaser with you of sufficient federal or other immediately
available funds to pay, subject to the terms and conditions of the Offer, all
stockholders for whom checks representing payment for Shares are to be drawn,
less any adjustments required by the terms of the Offer, and all applicable tax
withholdings, you shall, subject to Section 16 hereof, deliver or cause to be
delivered to the tendering stockholders, designated payees and/or Alternative
Funds, consistent with this Agreement and the Letter of Transmittal, official
checks of the Depositary, as agent for the Purchaser, and payable through the
Depositary, or its Agent, in the amount of the applicable purchase price
specified in the Offer (less any applicable tax withholding) for the Shares
theretofore properly tendered and purchased under the terms and conditions of
the Offer. Notwithstanding the foregoing, where a tendering stockholder has
indicated in the Letter of Transmittal that either all or a portion of the
proceeds from the tender of Shares be applied toward the purchase of one or more
Alternative Funds, you shall deliver by wire transfer to the account of the
Alternative Funds all such amounts, and shall forward the Alternative Fund
application forms, completed by each such tendering stockholder and sent in with
the Letters of Transmittal, to the Alternative Funds no later than the close of
business on the date that the wire transfer is sent. The Purchaser will also
deposit with you on your request federal or other immediately available funds in
an amount equal to the total stock transfer taxes or other governmental charges,
if any, payable in respect of the transfer or issuance to the Purchaser or its
nominee or nominees of all Shares so purchased. Upon request by the Purchaser
you will apply to the proper authorities for the refund of money paid on account
of such transfer taxes or other governmental charges. On receipt of such refund,
you will promptly pay over to the Purchaser all money refunded. Shares tendered
pursuant to the Offer and Funds transferred to you to pay for the purchase of
tendered shares shall not be subject to any right, charge, security interest,
lien or claim of any kind in your favor, except for their safe custody or
administration.
(b) At such time as you shall be notified by the Purchaser,
you shall request the transfer agent for the Shares to effect the transfer of
all Shares purchased pursuant to the
5
<PAGE> 6
Offer and to issue certificates for such Shares so transferred, in accordance
with written instructions from the Purchaser, and upon your receipt thereof
notify the Purchaser.
10) (a) On or before January 31st of the year following the year
in which the Purchaser accepts Shares for payment, you will prepare and mail to
each tendering stockholder whose Shares were accepted, other than stockholders
who demonstrate their status as nonresident aliens in accordance with United
States Treasury Regulations ("Foreign Stockholders"), a Form 1099-B reporting
the purchase of Shares as of the date such Shares are accepted for payment. You
will also prepare and file copies of such Forms 1099-B by magnetic tape with the
Internal Revenue Service in accordance with Treasury Regulations on or before
February 28th of the year following the year in which the Shares are accepted
for payment.
(b) You will deduct and withhold 31% backup withholding tax
from the purchase price payable with respect to Shares tendered by any
stockholder, other than a Foreign Stockholder, who has not properly provided you
with his taxpayer identification number, in accordance with Treasury
Regulations.
(c) Should any issue arise regarding federal income tax
reporting or withholding, you will take such action as the Purchaser instructs
you in writing.
11) If, pursuant to the terms and conditions of the Offer, the
Purchaser has notified you that it does not accept certain of the Shares
tendered or purported to be tendered or a stockholder withdraws any tendered
Shares, you shall promptly return the deposited certificates for such Shares,
together with any other documents received, to the person who deposited the
same, without expense to such person. Certificates for such unpurchased Shares
shall be forwarded by you, at your option, by: (i) first class mail under a
blanket surety bond protecting you and the Purchaser from losses or liabilities
arising out of the non-receipt or nondelivery of such Shares; or (ii) registered
mail insured separately for the value of such Shares. If any such Shares were
tendered or purported to be tendered by means of a Confirmation containing an
Agent's Message, you shall notify DTC of the Purchaser's decision not to accept
the Shares.
12) You shall take all reasonable action with respect to the Offer as
may from time to time be requested by the Purchaser or the Information Agent.
You are authorized to cooperate with and furnish information to the Information
Agent, any of its representatives or any other organization (or its
representatives) designated from time to time by the Purchaser, in any manner
reasonably requested by any of them in connection with the Offer and tenders
thereunder.
13) Any instructions given to you orally, as permitted by any provision
of this Agreement, shall be confirmed in writing by the Purchaser or Information
Agent, as the case may be, as soon as practicable. You shall be fully authorized
and protected for acting, or failing to act, in accordance with any oral
instructions which do not conform with the written confirmation received in
accordance with this Section.
14) Whether or not any Shares are tendered or the Offer is consummated,
for your services as Depositary hereunder we shall pay to you compensation in
accordance with the fee schedule attached as Schedule 1 hereto, together with
reimbursement for out-of-pocket expenses, including reasonable fees and
disbursements of your counsel. Such additional out-of-pocket expenses must be
approved by the Purchaser prior to being secured.
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<PAGE> 7
15) In the event any question or dispute arises with respect to the
proper interpretation of this Agreement or your duties hereunder or the rights
of the Purchaser or of any stockholders surrendering certificates for Shares
pursuant to the Offer, you shall not be required to act and shall not be held
liable or responsible for your refusal to act until the question or dispute has
been judicially settled (and you may, if you in your sole discretion deem it
advisable, but shall not be obligated to, file a suit in interpleader or for a
declaratory judgment for such purpose) by final judgment rendered by a court of
competent jurisdiction, binding on all stockholders and parties interested in
the matter which is no longer subject to review or appeal, or settled by a
written document in form and substance satisfactory to you and executed by the
Purchaser and each such stockholder and party. In addition, you may require for
such purpose, but shall not be obligated to require, the execution of such
written settlement by all the stockholders and all other parties that may have
an interest in the settlement.
16) As Depositary hereunder you:
(a) shall have no duties or obligations other than those specifically
set forth herein or in Exhibits A, B, and C hereto, or as may subsequently be
agreed to in writing by you and the Purchaser;
(b) shall have no obligation to make payment for any tendered Shares
unless the Purchaser shall have provided the necessary federal or other
immediately available funds to pay in full amounts due and payable with respect
thereto;
(c) shall be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value, or genuineness of any
certificates or the Shares represented thereby deposited with you or tendered
through an Agent's Message hereunder and will not be required to and will make
no representations as to or be responsible for the validity, sufficiency, value,
or genuineness of the Offer;
(d) shall not be obligated to take any legal action hereunder; if,
however, you determine to take any legal action hereunder, and, where the taking
of such action might in your judgment subject or expose you to any expense or
liability, you shall not be required to act unless you shall have been furnished
with an indemnity satisfactory to you;
(e) may rely on and shall be authorized and protected in acting or
failing to act upon any certificate, instrument, opinion, notice, letter,
telegram, telex, facsimile transmission, Agent's Message or other document or
security delivered to you and believed by you to be genuine and to have been
signed by the proper party or parties;
(f) may rely on and shall be authorized and protected in acting upon
the written, telephonic, electronic and oral instructions, with respect to any
matter relating to your actions as Depositary covered by this Agreement (or
supplementing or qualifying any such actions) of officers of the Purchaser;
(g) may consult counsel satisfactory to you, and the advice of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered, or omitted by you hereunder in good faith and in
accordance with the advice of such counsel;
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<PAGE> 8
(h) shall not be called upon at any time to advise any person tendering
or considering tendering pursuant to the Offer as to the wisdom of making such
tender or as to the market value of any security tendered thereunder;
(i) may perform any of your duties hereunder either directly or by or
through agents or attorneys and you shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with reasonable
care by you hereunder;
(j) shall not be liable or responsible for any recital or statement
contained in the Offer or any other documents relating thereto;
(k) shall not be liable or responsible for any failure of the Purchaser
to comply with any of its obligations relating to the Offer, including without
limitation obligations under applicable securities laws;
(l) are not authorized, and shall have no obligation, to pay any
brokers, dealers, or soliciting fees to any person, including without limitation
the Information Agent;
(m) shall not be liable or responsible for any delay, failure,
malfunction, interruption or error in the transmission or receipt of
communications or messages through electronic means to or from DTC, or for the
actions of any other person in connection with any such message or
communication; and
(n) shall take all other actions necessary or appropriate as
Depositary under the terms of the Offer and under the customs and practices
reasonably applied to transactions of this type.
17) The Purchaser covenants to indemnify and hold you and your
officers, directors, employees, agents, contractors, subsidiaries and affiliates
harmless from and against any loss, liability, damage or expense (including
without limitation any loss, liability, damage or expense incurred for
submitting for transfer Shares tendered without a signature guarantee pursuant
to the Letter of Transmittal, or in connection with any communication or message
transmitted or purported to be transmitted through electronic means to or from
DTC, and the fees and expenses of counsel) incurred (a) without negligence or
intentional misconduct or (b) as a result of your acting or failing to act upon
the instructions of the Purchaser arising out of or in connection with the
Offer, this Agreement or the administration of your duties hereunder, including
without limitation the costs and expenses of defending and appealing against any
action, proceeding, suit or claim in the premises. You shall promptly notify the
Purchaser of any action, proceeding, suit or claim by letter or telex or
facsimile transmission confirmed by letter. The Purchaser shall be entitled to
participate at its own expense in the defense of any such action, proceeding,
suit or claim. Anything in this agreement to the contrary notwithstanding, in no
event shall you be liable for special, indirect or consequential loss or damage
of any kind whatsoever (including but not limited to lost profits), even if you
have been advised of the likelihood of such loss or damage and regardless of the
form of action.
18) Unless terminated earlier by the parties hereto, this Agreement
shall terminate upon (a) Purchaser's termination or withdrawal of the Offer, (b)
if Purchaser does not terminate or withdraw the Offer, the date which is two (2)
months after the later of (i) your sending of checks to tendering stockholders
in accordance with Section 9(a) hereof and (ii) your delivery of certificates to
the Purchaser in accordance with Section 9(b) hereof or (c) if not terminated or
withdrawn earlier, the date which is two (2) months after the date of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver to
the Purchaser any certificates, funds or property then held by you as Depositary
under this
8
<PAGE> 9
Agreement, and after such time any party entitled to such certificates, funds or
property shall look solely to the Purchaser and not the Depositary therefore,
and all liability of the Depositary with respect thereto shall cease, provided,
however, that the Depositary, before being required to make such delivery to the
Purchaser, may at the expense of the Purchaser cause to be published in a
newspaper of general circulation in the City of New York, or mail to each person
who has tendered Shares but not received payment, or both, notice that such
certificates, funds or property remain unclaimed and that after a date specified
therein, which shall not be less than 30 days from the date of publication or
mailing, any unclaimed balance of such certificates, funds or property will be
delivered to the Purchaser. Sections 14, 16 and 17 hereof shall survive any
termination of this Agreement.
19) In the event that any claim of inconsistency between this Agreement
and the terms of the Offer arise, as they may from time to time be amended, the
terms of the Offer shall control, except with respect to the duties, liabilities
and rights, including without limitation compensation and indemnification, of
you as Depositary, which shall be controlled by the terms of this Agreement.
20) If any provision of this Agreement shall be held illegal, invalid,
or unenforceable by any court, this Agreement shall be construed and enforced as
if such provision had not been contained herein and shall be deemed an Agreement
among us to the full extent permitted by applicable law.
21) Purchaser represents and warrants that (a) it is each duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, (b) the making and consummation of the Offer and
the execution, delivery and performance of all transactions contemplated thereby
(including without limitation this Agreement) have been duly authorized by all
necessary corporate action, (c) this Agreement has been duly executed and
delivered by the Purchaser and constitutes the legal, valid, binding and
enforceable obligation of it, (d) the Offer will comply in all material respects
with all applicable requirements of law and (e) to the best of its knowledge,
there is no litigation pending or threatened as of the date hereof in connection
with the Offer.
22) Set forth in Exhibit D hereto is a list of the names and specimen
signatures of the persons authorized to act for the Purchaser under this
Agreement. The Secretary of the Purchaser may, from time to time, certify to you
the names and signatures of any other persons authorized to act for the
Purchaser, as the case may be, under this Agreement.
23) Except as expressly set forth elsewhere in this Agreement, all
notices, instructions and communication under this Agreement shall be in
writing, shall be effective upon receipt and shall be addressed, if to the
Purchaser, to its address set forth beneath its signature to this Agreement, or,
if to the Depositary, to ChaseMellon Shareholder Services, L.L.C., 85 Challenger
Road, Ridgefield Park, NJ 07660, Attn Reorganization Administration, or to such
other address as a party hereto shall notify the other parties.
24) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to conflict of
laws rules or principles, and shall inure to the benefit of and be binding upon
the successors and assigns of the parties hereto;
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<PAGE> 10
provided that this Agreement may not be assigned by any party without the prior
written consent of all other parties.
25) No provision of this Agreement may be amended, modified or waived,
except in a writing signed by all of the parties hereto.
Please acknowledge receipt of this Letter, the Offer to Purchase, the Letter of
Transmittal, and the Notice of Guaranteed Delivery, and confirm the arrangements
herein provided by signing and returning the enclosed copy hereof, whereupon
this Agreement and your acceptance of the terms and conditions herein provided
shall constitute a binding Agreement among us.
Very truly yours,
Purchaser
By: /s/ BARBARA J. GREEN
------------------------------------
Name: Barbara J. Green
Title: Secretary
Address for notices: 500 E. Broward Blvd.
Suite 200
Fort Lauderdale, FL
33394-3091
TEL: (954) 527-7500
FAX: (954) 847-2283
Accepted as of the date
above first written:
ChaseMellon Shareholder Services, L.L.C.
as Depositary
By: /s/ MICHAEL LEGREGIN
--------------------------------
Name: MICHAEL LEGREGIN
Title: Assistant Vice President
TEL: (201) 329-8929
FAX: (201) 296-4774
10
<PAGE> 1
EXHIBIT C(2)
INVESTMENT MANAGEMENT AGREEMENT
-------------------------------
AGREEMENT made as of the 15th day of September, 1994, between TEMPLETON
VIETNAM OPPORTUNITIES FUND, INC. (hereinafter referred to as the "Company"),
and TEMPLETON INVESTMENT MANAGEMENT (SINGAPORE) PTE. LTD. (hereinafter referred
to as the "Manager").
In consideration of the mutual agreements herein made, the Company and the
Manager understand and agree as follows:
(1) The Manager agrees, during the life of this Agreement, to furnish the
Company with investment research and advice and continuously to furnish the
Company with an investment program for the assets of the Company consistent
with the provisions of the Articles of Incorporation of the Company and the
investment policies adopted and declared by the Company's Board of Directors.
It is understood that all acts of the Manager in performing this Agreement are
performed by it outside the United States.
(2) The Manager is not required to furnish any personnel, overhead items
or facilities for the Company.
(3) The Manager shall be responsible for selecting members of securities
exchanges, brokers and dealers (such members, brokers and dealers being
hereinafter referred to as "brokers") for the execution of the Company's
portfolio transactions consistent with the Fund's brokerage policies and, when
applicable, the negotiation of commissions in connection therewith.
<PAGE> 2
All decisions and placements shall be made in accordance with the
following principles:
A. Purchase and sale orders will usually be placed with brokers which
are selected by the Manager as able to achieve "best execution" of
such orders. "Best execution" shall mean prompt and reliable
execution at the most favorable security price, taking into
account the other provisions hereinafter set forth. The
determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a
number of considerations, including, without limitation, the
overall direct net economic result to the Company (involving both
price paid or received and any commissions and other costs paid),
the efficiency with which the transaction is effected, the ability
to effect the transaction at all where a large block is involved,
availability of the broker to stand ready to execute possibly
difficult transactions in the future, and the financial strength
and stability of the broker. Such considerations are judgmental and
are weighed by the Manager in determining the overall
reasonableness of brokerage commissions.
B. In selecting brokers for portfolio transactions, the Manager shall
take into account its past
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<PAGE> 3
experience as to brokers qualified to achieve "best execution,"
including brokers who specialize in any foreign securities held by
the Company.
C. The Manager is authorized to allocate brokerage and principal
business to brokers who have provided brokerage and research
services, including brokerage and research services regarding
direct investments, as such services are defined in Section 28(e)
of the Securities Exchange Act of 1934 (the "1934 Act"), for the
Company and/or other accounts, if any, for which the Manager
exercises investment discretion (as defined in Section 3(a)(35) of
the 1934 Act) and, as to transactions for which fixed minimum
commission rates are not applicable, to cause the Company to pay a
commission for effecting a securities transaction in excess of the
amount another broker would have charged for effecting that
transaction, if the Manager determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker, viewed in
terms of either that particular transaction or the Adviser's
overall responsibilities with respect to the Company and the other
accounts, if any, as to which it exercises investment discretion.
In reaching
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<PAGE> 4
such determination, the Manager will not be required to
place or attempt to place a specific dollar value on the
research or execution services of a broker or on the
portion of any commission reflecting either of said
services. In demonstrating that such determinations were
made in good faith, the Manager shall be prepared to show
that all commissions were allocated and paid for purposes
contemplated by the Company's brokerage policy; that the
research services provide lawful and appropriate
assistance to the Manager in the performance of its
investment decision-making responsibilities; and that the
commissions paid were within a reasonable range. Whether
commissions were within a reasonable range shall be based
on any available information as to the level of commission
known to be charged by other brokers on comparable
transactions, but there shall be taken into account (i)
the Company's policy that obtaining a low commission is
deemed secondary to obtaining a favorable securities
price, since it is recognized that usually it is more
beneficial to the Company to obtain a favorable price than
to pay the lowest commission; and (ii) the quality,
comprehensiveness and frequency of research studies
provided for the Manager, which are useful to the
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<PAGE> 5
Manager in performing its advisory activities under this Agreement.
Research services provided by brokers to the Manager are considered
to be in addition to, and not in lieu of, services required to be
performed by the Manager under this Agreement. Research furnished by
brokers through which the Company effects securities transactions
may be used by the Manager for any of its accounts, and not all
research may be used by the Manager for the Company. When execution
of portfolio transactions is allocated to brokers trading on
exchanges with fixed brokerage commission rates, account may be
taken of various services provided by the broker.
(4) The Company agrees to pay to the Manager a monthly fee in dollars at
an annual rate of 1.50% of the Fund's average weekly net assets, payable at the
end of each calendar month.
(5) This Agreement shall become effective on September 15, 1994 and
shall continue in effect until September 15, 1996. If not sooner terminated,
this Agreement shall continue in effect for successive periods of 12 months
each thereafter, provided that each such continuance shall be specifically
approved annually by the vote of a majority of the Company's Board of Directors
who are not parties to this Agreement or "interested persons" (as defined in
Investment Company Act of 1940 (the "1940 Act")) of any such party, cast in
person at a meeting called for the purpose of voting on
- 5 -
<PAGE> 6
such approval and either the vote of (a) a majority of the outstanding voting
securities of the Company, as defined in the 1940 Act, or (b) a majority of the
Company's Board of Directors as a whole.
(6) Notwithstanding the foregoing, this Agreement may be terminated by
either party at any time, without the payment of any penalty, on sixty (60)
days' written notice to the other party, provided that termination by the
Company is approved by vote of a majority of the Company's Board of Directors
in office at the time or by vote of a majority of the outstanding voting
securities of the Company.
(7) This Agreement will terminate automatically and immediately in the
event of its assignment (as defined in the 1940 Act).
(8) In the event this Agreement is terminated and the Manager no longer
acts as Manager to the Company, the Manager reserves the right to withdraw from
the Company the use of the name "Templeton" or any name misleadingly implying a
continuing relationship between the Company and the Manager or any of its
affiliates.
(9) Except as may otherwise be provided by the 1940 Act, neither the
Manager nor its officers, directors, employees or agents shall be subject to
any liability for any error of judgment, mistake of law, or any loss arising
out of any investment or other act or omission in the performance by the
Manager of its duties under the Agreement or for any loss or damage resulting
from the
-6-
<PAGE> 7
imposition by any government of exchange control restrictions which might
affect the liquidity of the Company's assets, or from acts or omissions of
custodians or securities depositories, or from any war or political act of any
foreign government to which such assets might be exposed, or for failure, on
the part of the custodian or otherwise, timely to collect payments or to
exercise rights with respect to emerging country securities, except for any
liability, loss or damage resulting from willful misfeasance, bad faith or
gross negligence on the Manager's part or by reason of reckless disregard of
the Manager's duties under this Agreement.
(10) It is understood that the services of the Manager are not deemed to
be exclusive, and nothing in this Agreement shall prevent the Manager, or any
affiliate thereof, from providing similar services to other investment
companies and other clients, including clients which may invest in the same
types of securities as the Company, or, in providing such services, from using
information furnished by others. When the Manager determines to buy or sell the
same security for the Company that the Manager or one or more of its affiliates
has selected for clients of its affiliates, the orders for all such security
transactions shall be placed for execution by methods determined by the
Manager, with approval by the Company's Board of Directors, to be impartial and
fair.
(11) This Agreement shall be construed in accordance with the laws of the
State of Maryland, provided that nothing herein shall be construed as being
inconsistent with applicable Federal
- 7 -
<PAGE> 8
and state securities laws and any rules, regulations and orders thereunder.
(12) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(13) Nothing herein shall be construed as constituting the Manager an
agent of the Company.
- 8 -
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and their respective corporate
seals to be hereunto duly affixed and attested.
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
By: /s/ Martin L. Flanagan
-----------------------------
Martin L. Flanagan
TEMPLETON INVESTMENT MANAGEMENT
(SINGAPORE) PTE. LTD.
By:
-------------------------------
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<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and their respective corporate
seals to be hereunto duly affixed and attested.
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
By:
------------------------------
Martin L. Flanagan
TEMPLETON INVESTMENT MANAGEMENT
(SINGAPORE) PTE. LTD.
By: /s/ Charles E. Johnson
------------------------------
Charles E. Johnson
-9-
<PAGE> 1
[CHASEMELLON SHAREHOLDER SERVICES LETTERHEAD]
December 9, 1997
Barbara Green
Secretary
Templeton Vietnam Opportunities Fund, Inc.
Broward Financial Center
500 East Broward - Suite 2100
Ft. Lauderdale, FL 33394-3091
To Whom It May Concern:
This letter of agreement sets forth the terms and conditions by which
ChaseMellon Shareholder Services, L.L.C. ("we", "our", "us") shall provide to
Templeton Vietnam Opportunities Fund, Inc., ("you", "your") our information
agent services (the "services") with respect to your tender offer for up to 50%
of your shares.
Services
- --------
1. Establish contacts with brokers, dealers, banks and other nominees on your
behalf.
2. Distribution of materials to the registered and beneficial owners of
Templeton Vietnam Opportunities Fund, Inc., and to other interested parties.
3. Building a file of eligible participants, including registered holders and
beneficial holders.
4. Establishing a toll-free phone number and managing the communications group
for inbound phone calls.
5. Status reporting to management.
6. Paying of all broker forwarding invoices, subject to collection from you of
monies for this purpose.
Fee for Services
- ----------------
The fee for acting as information agent is $3,500.00 plus all out-of-pocket
expenses incurred by us, including, without limitation, documentation
preparation, telephone, Bank/Broker listings, and postage costs. Such fees
shall be payable upon the execution of this agreement. Invoices for
out-of-pocket expenses shall be rendered monthly as incurred and shall be
payable upon receipt. Our services shall commence upon receipt of a signed copy
of this contract and expire thirty days after the expiration of the offer or
March 1st 1998, whichever is sooner.
<PAGE> 2
Responsibility
- --------------
You shall indemnify and hold us, our directors, officers, employees, agents
harmless from and against any and all claims, liabilities, losses, damages
and/or expenses, including reasonable attorneys' fees, which any of them shall
or may incur or sustain in connection with the performance of the services or
this agreement, except to the extent caused directly by our negligence or
intentional misconduct. This indemnification obligation shall survive the
termination of this Agreement.
Anything in this agreement to the contrary notwithstanding, in no event shall we
be liable for special, indirect or consequential loss or damage of any kind
whatsoever, even if we have been advised of the likelihood of such loss or
damage and regardless of the form of action.
Miscellaneous
- -------------
This agreement shall be made in, governed by, and construed in accordance with
the laws of the State of New York, without regard to principles of conflicts of
law.
All information shall be sent to your address as above written or such other
address as you may advise us in writing, or orally and confirmed in writing.
This agreement represents the entire understanding of the parties with respect
to the subject matter hereof, superseded any and all prior understandings, oral
or written, relating hereto and may not be charged orally. Any waiver or change
or any of the provisions hereof must be in writing and signed by the parties
hereto. The failure of either party hereto at any time to require performance
by the other party of any provision hereof shall not effect the right of such
party to require performance at any time thereafter.
If the foregoing terms and conditions are acceptable to you, please sign and
return to us the counterpart of this letter of agreement.
Very truly yours,
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By: /s/ DECLAN DENEHAN
----------------------------------
Title: Vice President
-------------------------------
Date: 12/19/97
-------------------------------
ACCEPTED:
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
By: /s/ BARBARA J. GREEN
------------------------------
Title: Secretary
---------------------------
Date: 12/19/97
----------------------------
