SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant X
Filed by a party other than the registrant
Check the appropriate box:
Preliminary proxy statement
X Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Templeton Vietnam Opportunities Fund, Inc.
(Name of Registrant as Specified in Its Charter)
Templeton Vietnam Opportunities Fund, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
X No fee required
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
__ Fee paid previously with preliminary materials
__ Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identifying the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
500 East Broward Boulevard
Ft. Lauderdale, Florida 33394-3091
February 19, 1998
Dear Shareholder:
The enclosed proxy card asks for your vote on an important question concerning
the future of Templeton Vietnam Opportunities Fund, Inc. (the "Fund") that will
have a direct effect on your investment in the Fund. We urge you to review the
accompanying proxy statement, cast your vote and return the enclosed proxy card
in the envelope provided.
As you will see, in addition to electing directors and selecting auditors, you
are being asked to consider and vote on a proposal to change the investment
policies and name of the Fund. This proposal would allow the Fund to invest in
securities of issuers in Southeast Asia as well as issuers in Vietnam and would
change the name of the Fund to "Templeton Vietnam and Southeast Asia Fund,
Inc." The Directors all recommend that you vote "FOR" this proposal.
It may be helpful to understand why we are recommending that you vote FOR the
proposal to change the name and investment policies of the Fund.
When the Fund was established in 1994, it was intended that at least 65% of its
total assets would be invested in the equity and debt securities of Vietnam
Companies (as defined in the propectus). We recognized, however, that Vietnam
was in the preliminary stages of developing a securities market. As a result,
the Fund's prospectus provided that if at least 65% of the Fund's assets were
not invested in 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.
Due to the fact that a securities market in Vietnam is developing far more
slowly than we had hoped, we have not been able to invest 65% of the Fund's
assets in Vietnam Companies. To assist those investors who no longer wished to
remain shareholders of the Fund, the Board approved a tender offer by the Fund
to purchase up to approximately 50 percent of its outstanding shares (as of
December 19, 1997) for cash at a price equal to their net asset value ("Tender
Offer").
When the Board approved the Tender Offer, the Board also decided that, if the
shareholders tendered 50 percent or fewer shares as a result of the Tender
Offer, the Board would propose that the Fund's investment policies be amended
to allow the Fund to invest in other Southeast Asian countries and that the
Fund's name be change to "Templeton Vietnam and
<PAGE>
Southeast Asia Fund, Inc." This proposal would enable the Fund to invest in
securities of Southeast Asia issuers other than Vietnam while permitting the
Fund to invest in Vietnam issuers to the extent that investment opportunites
arise in the future.
We believe that the proposal to change the name and investment policies of the
Fund is the best approach for the Fund and all of its shareholders and urge you
to vote "FOR" the proposal.
We appreciate your participation and prompt response in this matter and thank
you for your continued support.
J. Mark Mobius
President
<PAGE>
[GRAPHIC OMITTED]
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
IMPORTANT SHAREHOLDER INFORMATION
This document announces the date, time and location of the annual shareholders
meeting, identifies the proposals to be voted on at the meeting, and contains
your proxy statement and proxy card. A proxy card is, in essence, a ballot.
When you vote your proxy, it tells us how you wish to vote on important issues
relating to your fund. If you complete and sign the proxy, we'll vote it
exactly as you tell us. If you simply sign the proxy, we'll vote it in
accordance with the Directors' recommendation on page 2 of the proxy statement.
We urge you to spend a few minutes with the proxy statement, reviewing the
proposals at hand. Then, fill out your proxy card and return it to us. When
shareholders return their proxies promptly, the Fund may be able to save money
by not having to conduct additional mailings. We want to know how you would
like to vote and welcome your comments. Please take a few minutes with these
materials and return your proxy to us. If you have any questions, call the Fund
Information Department at 1-800/DIAL BEN.
<PAGE>
[GRAPHIC OMITTED]
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting ("Meeting") of shareholders of Templeton Vietnam
Opportunities Fund, Inc. (the "Fund") will be held at 500 East Broward
Boulevard, 12th Floor, Ft. Lauderdale, Florida 33394-3091 on March 31, 1998 at
10:00 A.M. (EST).
During the Meeting, shareholders of the Fund will vote on four proposals:
1. The election of Directors of the Fund to hold office for the terms
specified;
2. The approval or rejection of (i) an amendment to the Fund's investment
policies to enable the Fund to invest more broadly in other countries
located in Southeast Asia, while continuing to focus its investment
program on Vietnam, and (ii) a corresponding amendment to the Fund's
Articles of Incorporation to change the Fund's name to "Templeton Vietnam
and Southeast Asia Fund, Inc.";
3. The ratification or rejection of the selection of McGladrey & Pullen, LLP as
independent auditors of the Fund for the fiscal year ending March 31,
1998; and
4. The transaction of any other business as may properly come before the
Meeting.
By order of the Board of Directors,
J. Mark Mobius,
President
February 19, 1998
Many shareholders hold shares in more than one Templeton Fund and may
receive proxy materials for each fund owned. Please sign and promptly return
each proxy card in the self-addressed envelope regardless of the number of
shares you own.
<PAGE>
TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
PROXY STATEMENT
- INFORMATION ABOUT VOTING:
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on February 12, 1998 are
entitled to be present and to vote at the Meeting or any adjourned Meeting.
Each share of record is entitled to one vote on all matters presented at
the Meeting. The Notice of Meeting, the proxy card, and the proxy statement
were mailed to shareholders of record on or about February 19, 1998.
ON WHAT ISSUES AM I BEING ASKED TO VOTE?
You are being asked to vote on four proposals:
1. The election of four nominees to the position of Director;
2. The approval or rejection of (i) an amendment to the Fund's investment
policies to enable the Fund to invest more broadly in other countries
located in Southeast Asia, while continuing to focus its investment
program on Vietnam, and (ii) a corresponding amendment to the Fund's
Articles of Incorporation to change the Fund's name to "Templeton
Vietnam and Southeast Asia Fund, Inc.";
3. The ratification or rejection of the selection of McGladrey & Pullen,
LLP as independent auditors of the Fund for the fiscal year ending
March 31, 1998; and
4. The transaction of any other business that may properly come before
the Meeting.
1
<PAGE>
HOW DO THE FUND'S DIRECTORS RECOMMEND THAT I VOTE?
The Directors unanimously recommend that you vote:
1. FOR the election of nominees;
2. FOR (i) the amendment to the Fund's investment policies to enable the
Fund to invest more broadly in other countries located in Southeast
Asia, while continuing to focus its investment program on Vietnam, and
(ii) the corresponding amendment to the Fund's Articles of
Incorporation to change the Fund's name to "Templeton Vietnam and
Southeast Asia Fund, Inc.";
3. FOR the ratification of the selection of McGladrey & Pullen, LLP as
independent auditors of the Fund; and
4. FOR the proxyholders to vote, in their discretion, on any other
business that may properly come before the Meeting.
HOW DO I ENSURE THAT MY VOTE IS ACCURATELY RECORDED?
You may attend the Meeting and vote in person or you may complete and
return the attached proxy card. Proxy cards that are signed, dated and
received at or prior to the Meeting will be voted as specified. If you
specify a vote for any of the Proposals 1 through 4, your proxy will be
voted as you indicated. If you simply sign and date the proxy card, but do
not specify a vote for any of Proposals 1 through 4, your shares will be
voted IN FAVOR of the nominees for Director (Proposal 1); IN FAVOR of (i)
the amendment to the Fund's investment policies to enable the Fund to
invest more broadly in other countries located in Southeast Asia, while
continuing to focus its investment program on Vietnam, and (ii) the
corresponding amendment to the Fund's Articles of Incorporation to change
the Fund's name to "Templeton Vietnam and Southeast Asia Fund, Inc."
(Proposal 2); IN FAVOR of ratifying the selection of McGladrey & Pullen,
LLP as independent auditors (Proposal 3); and/or IN ACCORDANCE with the
discretion of the persons named in the proxy card as to any other matters
that legally may come before the Meeting (Proposal 4).
2
<PAGE>
CAN I REVOKE MY PROXY?
You may revoke your proxy at any time before it is voted by (1) delivering
a written revocation to the Secretary of the Fund, (2) forwarding to the
Fund a later-dated proxy card that is received by the Fund at or prior to
the Meeting, or (3) attending the Meeting and voting in person.
- THE PROPOSALS:
PROPOSAL 1: ELECTION OF DIRECTORS
HOW ARE NOMINEES SELECTED?
The Board of Directors of the Fund (the "Board") has established a
Nominating and Compensation Committee (the "Committee") consisting of
Andrew H. Hines, Jr., Edith E. Holiday and Gordon S. Macklin. The Committee
is responsible for the selection, nomination for appointment and election
of candidates to serve as Directors of the Fund. The Committee will review
shareholders' nominations to fill vacancies on the Board, if these
nominations are in writing and addressed to the Committee at the Fund's
offices. However, the Committee expects to be able to identify from its own
resources an ample number of qualified candidates.
WHO ARE THE NOMINEES AND DIRECTORS?
The Board is divided into three classes, each class having a term of three
years. Each year the term of office of one class expires. This year, the
terms of four Directors are expiring. Harris J. Ashton, Nicholas F. Brady,
S. Joseph Fortunato and Edith E. Holiday have been nominated for terms set
to expire at the 2000 annual meeting of shareholders. These terms continue,
however, until successors are duly elected and qualified. In addition, all
of the nominees are currently members of the Board and all of the current
Directors are also directors or trustees of other investment companies in
the Franklin Group of Funds- and the Templeton Group of Funds (the
"Franklin Templeton Group of Funds").
Certain Directors of the Fund hold director and/or officer positions with
Franklin Resources, Inc. ("Resources") and its affiliates. Resources is a
publicly owned holding company, the principal shareholders of which are
Charles B. Johnson and Rupert H. Johnson, Jr., who own
3
<PAGE>
approximately 19 percent and 15 percent respectively, of its outstanding
shares. Resources is primarily engaged, through various subsidiaries, in
providing investment management, share distribution, transfer agent and
administrative services to a family of investment companies. Resources is a
New York Stock Exchange, Inc. listed holding company (NYSE: BEN). Charles
E. Johnson, a vice president of the Fund, is the son and nephew,
respectively, of brothers Charles B. Johnson, the chairman of the Board and
a vice president of the Fund, and Rupert H. Johnson, Jr., a vice president
of the Fund.
Each nominee is currently available and has consented to serve if elected.
If any of the nominees should become unavailable, the persons named in the
proxy card will vote in their discretion for another person or other
persons who may be nominated as Directors.
Listed below, for each nominee and current Director, is a brief description
of recent professional experience.
4
<TABLE>
<CAPTION>
Shares
Beneficially
Owned in the
Franklin
Fund Shares Templeton
Beneficially Owned Group of Funds
Principal Occupation and % of Total (including the
Name and Offices During Past Five Outstanding on Fund) as of
with the Fund Years and Age January 30, 1998 November 18, 1997
- ------------------------ ------------------------------------- -------------------- ------------------
<S> <C> <C> <C>
Nominees to serve until 2000 Annual Meeting of Shareholders:
HARRIS J. ASHTON Director of RBC Holdings Inc. (a 500(**) 304,319
Director since 1994 bank holding company) and Bar-S
Foods (a meat packing company);
formerly, chairman of the board,
president and chief executive
officer of General Host
Corporation (nursery and craft
centers); and director or trustee of
52 of the investment companies in
the Franklin Templeton Group of
Funds. Age 65.
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially
Owned in the
Franklin
Fund Shares Templeton
Beneficially Owned Group of Funds
Principal Occupation and % of Total (including the
Name and Offices During Past Five Outstanding on Fund) as of
with the Fund Years and Age January 30, 1998 November 18, 1997
- ------------------------ ------------------------------------- -------------------- ------------------
<S> <C> <C> <C>
NICHOLAS F. BRADY* Chairman of Templeton Emerging 0 23,314
Director since 1994 Markets Investment Trust PLC;
chairman of Templeton Latin
America Investment Trust PLC;
chairman of Darby Overseas
Investments, Ltd. and Darby
Emerging Markets Investments
LDC (investment firms)
(1994-present); chairman and
director of Templeton Central and
Eastern European Investment
Company; director of Templeton
Global Strategy Funds; director of
Amerada Hess Corporation,
Christiana Companies, and H.J.
Heinz Company; formerly,
Secretary of the United States
Department of the Treasury
(1988-1993) and chairman of the
board of Dillon, Read & Co., Inc.
(investment banking) prior to
1988; and director or trustee of 23
of the investment companies in the
Franklin Templeton Group of
Funds. Age 67.
S. JOSEPH FORTUNATO Member of the law firm of Pitney, 100(**) 389,377
Director since 1994 Hardin, Kipp & Szuch; formerly,
director of General Host
Corporation (nursery and craft
centers); and director or trustee of
54 of the investment companies in
the Franklin Templeton Group of
Funds. Age 65.
5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially
Owned in the
Franklin
Fund Shares Templeton
Beneficially Owned Group of Funds
Principal Occupation and % of Total (including the
Name and Offices During Past Five Outstanding on Fund) as of
with the Fund Years and Age January 30, 1998 November 18, 1997
- ------------------------ ------------------------------------ -------------------- ------------------
<S> <C> <C> <C>
EDITH E. HOLIDAY Director (1993-present) of 0 1,542
Director since 1996 Amerada Hess Corporation and
Hercules Incorporated; director of
Beverly Enterprises, Inc.
(1995-present) and H.J. Heinz
Company (1994-present); formerly,
chairman (1995-1997) and trustee
(1993-1997) of National Child
Research Center, assistant to the
President of the United States and
Secretary of the Cabinet
(1990-1993), general counsel to the
United States Treasury
Department (1989-1990) and
counselor to the Secretary and
Assistant Secretary for Public
Affairs and Public Liaison-United
States Treasury Department
(1988-1989); and director or
trustee of 24 of the investment
companies in the Franklin
Templeton Group of Funds.
Age 46.
6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially
Owned in the
Franklin
Fund Shares Templeton
Beneficially Owned Group of Funds
Principal Occupation and % of Total (including the
Name and Offices During Past Five Outstanding on Fund) as of
with the Fund Years and Age January 30, 1998 November 18, 1997
- -------------------------------- ------------------------------------- -------------------- ------------------
<S> <C> <C> <C>
Current Directors serving until 1999 Annual Meeting of Shareholders:
MARTIN L. FLANAGAN* Senior vice president and chief 0 2,803
Director and Vice President financial officer of Franklin
since 1994 Resources, Inc.; director and
executive vice president of
Templeton Worldwide, Inc.;
director, executive vice president
and chief operating officer of
Templeton Investment Counsel,
Inc.; senior vice president and
treasurer of Franklin Advisers,
Inc.; treasurer of Franklin
Advisory Services, Inc.; treasurer
and chief financial officer of
Franklin Investment Advisory
Services, Inc.; president of
Franklin Templeton Services, Inc.;
senior vice president of
Franklin/Templeton Investor
Services, Inc.; and officer and/or
director or trustee, as the case may
be, of 56 of the investment
companies in the Franklin
Templeton Group of Funds.
Age 37.
7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially
Owned in the
Franklin
Fund Shares Templeton
Beneficially Owned Group of Funds
Principal Occupation and % of Total (including the
Name and Offices During Past Five Outstanding on Fund) as of
with the Fund Years and Age January 30, 1998 November 18, 1997
- ---------------------------------- ------------------------------------- -------------------- ------------------
<S> <C> <C> <C>
ANDREW H. HINES, JR. Consultant for Triangle Consulting 0 33,992
Director since 1994 Group; executive-in-residence of
Eckerd College (1991-present);
formerly, chairman of the board
and chief executive officer of
Florida Progress Corporation
(1982-1990) and director of its
various subsidiaries; and director
or trustee of 24 of the investment
companies in the Franklin
Templeton Group of Funds.
Age 75.
CHARLES B. JOHNSON* President, chief executive officer 1,000(**) 2,391,567
Chairman of the Board and director of Franklin
since 1995 and Vice President Resources, Inc.; chairman of the
since 1994 board and director of Franklin
Advisers, Inc., Franklin Investment
Advisory Services, Inc., Franklin
Advisory Services, Inc. and
Franklin Templeton Distributors,
Inc.; director of
Franklin/Templeton Investor
Services, Inc. and Franklin
Templeton Services, Inc.; formerly,
director of General Host
Corporation (nursery and craft
centers); and officer and/or
director or trustee, as the case may
be, of most of the other
subsidiaries of Franklin Resources,
Inc. and 53 of the investment
companies in the Franklin
Templeton Group of Funds.
Age 65.
8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially
Owned in the
Franklin
Fund Shares Templeton
Beneficially Owned Group of Funds
Principal Occupation and % of Total (including the
Name and Offices During Past Five Outstanding on Fund) as of
with the Fund Years and Age January 30, 1998 November 18, 1997
- ------------------------------ ------------------------------------- -------------------- ------------------
<S> <C> <C> <C>
Current Directors serving until 1998 Annual Meeting of Shareholders:
HARMON E. BURNS* Executive vice president, secretary 0 959,843
Director since 1994 and and director of Franklin
Vice President since 1996 Resources, Inc.; executive vice
president and director of Franklin
Templeton Distributors, Inc. and
Franklin Templeton Services, Inc.;
executive vice president of
Franklin Advisers, Inc.; director of
Franklin/Templeton Investor
Services, Inc.; and officer and/or
director or trustee, as the case may
be, of most of the other
subsidiaries of Franklin Resources,
Inc. and 56 of the investment
companies in the Franklin
Templeton Group of Funds.
Age 52.
JOHN Wm. GALBRAITH President of Galbraith Properties, 1,000(**) 1,191,853
Director since 1995 Inc. (personal investment
company); director of Gulf West
Banks, Inc. (bank holding
company) (1995-present); formerly,
director of Mercantile Bank
(1991-1995), vice chairman of
Templeton, Galbraith &
Hansberger Ltd. (1986-1992) and
chairman of Templeton Funds
Management, Inc. (1974-1991); and
director or trustee of 22 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 76.
9
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially
Owned in the
Franklin
Fund Shares Templeton
Beneficially Owned Group of Funds
Principal Occupation and % of Total (including the
Name and Offices During Past Five Outstanding on Fund) as of
with the Fund Years and Age January 30, 1998 November 18, 1997
- ------------------------ -------------------------------------- -------------------- ------------------
<S> <C> <C> <C>
BETTY P. KRAHMER Director or trustee of various civic 500(**) 97,228
Director since 1994 associations; formerly, economic
analyst, U.S. government; and
director or trustee of 23 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 68.
GORDON S. MACKLIN Chairman of White River 2,000(**) 229,733
Director since 1994 Corporation (financial services);
director of Fund American
Enterprises Holdings, Inc., MCI
Communications Corporation,
CCC Information Services Group,
Inc. (information services),
MedImmune, Inc. (biotechnology),
Shoppers Express (home
shopping) and Spacehab, Inc.
(aerospace services); formerly,
chairman of Hambrecht and Quist
Group, director of H&Q
Healthcare Investors and president
of the National Association of
Securities Dealers, Inc.; and
director or trustee of 51 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 69.
10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially
Owned in the
Franklin
Fund Shares Templeton
Beneficially Owned Group of Funds
Principal Occupation and % of Total (including the
Name and Offices During Past Five Outstanding on Fund) as of
with the Fund Years and Age January 30, 1998 November 18, 1997
- ------------------------ ------------------------------------ -------------------- ------------------
<S> <C> <C> <C>
FRED R. MILLSAPS Manager of personal investments 0 248,325
Director since 1994 (1978-present); director of various
business and nonprofit
organizations; formerly, chairman
and chief executive officer of
Landmark Banking Corporation
(1969-1978), financial vice
president of Florida Power and
Light (1965-1969); vice president
of the Federal Reserve Bank of
Atlanta (1958-1965); and director
or trustee of 24 of the investment
companies in the Franklin
Templeton Group of Funds.
Age 68.
</TABLE>
-------------------------
* Messrs. Brady, Burns, Flanagan, and Johnson are "interested persons" as
defined by the Investment Company Act of 1940, as amended (the "1940
Act"). The 1940 Act limits the percentage of interested persons that can
comprise a fund's board of directors. Mr. Johnson is an interested person
due to his ownership interest in Resources. Messrs. Burns and Flanagan are
interested persons due to their employment affiliation with Resources,
whereas Mr. Brady's status as an interested person results from his
business affiliations with Resources and Templeton Global Advisors
Limited. Mr. Brady and Resources are both limited partners of Darby
Overseas Partners, LP ("Darby Overseas"). Mr. Brady is Chairman and
shareholder of Darby Emerging Markets Investments LDC, which is the
corporate general partner of Darby Overseas. In addition, Darby Overseas
and Templeton Global Advisors Limited are limited partners of Darby
Emerging Markets Fund, LP. The remaining nominees and Directors of the
Fund are not interested persons (the "Independent Directors").
** Less than 1%.
11
<PAGE>
HOW OFTEN DO THE DIRECTORS MEET AND WHAT ARE THEY PAID?
The role of the Directors is to provide general oversight of the Fund's
business, and to ensure that the Fund is operated for the benefit of
shareholders. The Directors anticipate meeting at least five times during
the upcoming fiscal year to review the operations of the Fund and the
Fund's investment performance. The Directors also oversee the services
furnished to the Fund by its Investment Manager and various other service
providers. The Fund pays all directors not employed by the Franklin
Templeton Group of Funds an annual retainer and/or fees for attendance at
Board and committee meetings and they are reimbursed by the Fund for any
expenses incurred in attending Board meetings. This compensation is based
primarily on the level of assets in the Fund and at present the Fund pays
these Directors an annual retainer of $1,000 and a fee of $100 per meeting
of the Board and its portion of a flat fee of $2,000 for each committee
meeting attended. Members of the Nominating and Compensation Committee are
not compensated for any committee meeting that is held in conjunction with
a Board meeting.
During the fiscal year ended March 31, 1997, there were four scheduled and
one special meeting of the Board. During the same period there were two
meetings of the Fund's Nominating and Compensation Committee and one
meeting of the Fund's Audit Committee. Each of the Directors then in office
attended at least 75 percent of the total number of meetings of the Board.
There was 100 percent attendance at all committee meetings during the
fiscal year.
Certain Directors and Officers of the Fund are shareholders of Resources
and may receive indirect remuneration due to their participation in
management fees and other fees received from the Franklin Templeton Group
of Funds by Templeton Asset Management Ltd, the Fund's investment manager
("Investment Manager"), and its affiliates. The Investment Manager or its
affiliates pay the salaries and expenses of the Officers. No pension or
retirement benefits are accrued as part of Fund expenses.
12
<PAGE>
The following table shows the compensation paid to Directors by the Fund
and by the Franklin Templeton Group of Funds:
<TABLE>
<CAPTION>
Aggregate Number of Boards within the Total Compensation from
Compensation Franklin Templeton Group of the Franklin Templeton
Name of Director from the Fund* Funds on which Director Serves** Group of Funds***
- ------------------------- ---------------- ---------------------------------- ------------------------
<S> <C> <C> <C>
Harris J. Ashton $1,500 52 $344,642
Nicholas F. Brady 1,500 23 119,675
S. Joseph Fortunato 1,500 54 361,562
John Wm. Galbraith 1,595 22 117,675
Andrew H. Hines, Jr. 1,695 24 144,175
Edith E. Holiday**** 700 24 72,875
Betty P. Krahmer 1,500 23 119,675
Gordon S. Macklin 1,500 51 337,292
Fred R. Millsaps 1,695 24 144,175
</TABLE>
-------------------------
* For the fiscal year ended March 31, 1997.
** We base the number of boards on the number of registered investment
companies in the Franklin Templeton Group of Funds. This number does not
include the total number of series or funds within each investment
company for which the Board members are responsible. The Franklin
Templeton Group of Funds currently includes 57 registered investment
companies, with approximately 170 U.S. based funds or series.
*** For the calendar year ended December 31, 1997.
**** Edith E. Holiday was appointed to the Board on December 3, 1996.
The table above indicates the total fees paid to Directors by the Fund AND
by other funds in the Franklin Templeton Group of Funds. Each of these
Directors also serve as directors or trustees of other investment companies
in the Franklin Templeton Group of Funds, many of which hold meetings at
different dates and times. The Directors and the Fund's management believe
that having the same individuals serving on the boards of many of the funds
in the Franklin Templeton Group of Funds enhances the ability of each fund
to obtain, at a relatively modest cost to each separate fund, the services
of high caliber, experienced and knowledgeable independent directors who
can more effectively oversee the management of the funds. They may receive
fees for their services from other funds, as well.
13
<PAGE>
WHO ARE THE EXECUTIVE OFFICERS OF THE FUND?
Officers of the Fund are appointed by the Directors and serve at the
pleasure of the Board. Listed below, for each Executive Officer, is a brief
description of recent professional experience:
<TABLE>
<CAPTION>
Name and Offices Principal Occupation
with Fund During Past Five Years and Age
- ------------------------------------ -----------------------------------------------------------------
<S> <C>
CHARLES B. JOHNSON See Proposal 1, "Election of Directors."
Chairman of the Board since 1995
and Vice President since 1994
J. MARK MOBIUS Portfolio manager of various Templeton advisory affiliates;
President since 1994 managing director of Templeton Asset Management Ltd.;
formerly, president of International Investment Trust
Company Limited (Investment Manager of Taiwan R.O.C.
Fund) (1986-1987); director of Vickers da Costa, Hong Kong
(1983-1986); and officer of 8 of the investment companies in
the Franklin Templeton Group of Funds. Age 61.
RUPERT H. JOHNSON, JR. Executive vice president and director of Franklin Resources,
Vice President since 1996 Inc. and Franklin Templeton Distributors, Inc.; president and
director of Franklin Advisers, Inc.; senior vice president and
director of Franklin Advisory Services, Inc. and Franklin
Investment Advisory Services, Inc.; director of
Franklin/Templeton Investor Services, Inc.; and officer and/or
director or trustee, as the case may be, of most other
subsidiaries of Franklin Resources, Inc. and 56 of the
investment companies in the Franklin Templeton Group of
Funds. Age 57.
HARMON E. BURNS See Proposal 1, "Election of Directors."
Vice President since 1996
CHARLES E. JOHNSON Senior vice president and director of Franklin Resources, Inc.;
Vice President since 1996 senior vice president of Franklin Templeton Distributors, Inc.;
president and director of Templeton Worldwide, Inc.;
president, chief executive officer, chief investment officer and
director of Franklin Institutional Services Corporation;
chairman and director of Templeton Investment Counsel,
Inc.; vice president of Franklin Advisers, Inc.; officer and/or
director of some of the other subsidiaries of Franklin
Resources, Inc.; and officer and/or director or trustee, as the
case may be, of 37 of the investment companies in the
Franklin Templeton Group of Funds. Age 41.
14
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Offices Principal Occupation
with Fund During Past Five Years and Age
- ------------------------------ ---------------------------------------------------------------
<S> <C>
DEBORAH R. GATZEK Senior vice president and general counsel of Franklin
Vice president since 1996 Resources, Inc.; senior vice president of Franklin Templeton
Services, Inc. and Franklin Templeton Distributors, Inc.; vice
president of Franklin Advisers, Inc. and Franklin Advisory
Services, Inc.; vice president, chief legal officer and chief
operating officer of Franklin Investment Advisory Services,
Inc.; and officer of 56 of the investment companies in the
Franklin Templeton Group of Funds. Age 49.
MARK G. HOLOWESKO President and chief investment officer of Templeton Global
Vice president since 1994 Advisors Limited; executive vice president and director of
Templeton Worldwide, Inc.; formerly, investment
administrator with RoyWest Trust Corporation (Bahamas)
Limited (1984-1985); and officer of 23 of the investment
companies in the Franklin Templeton Group of Funds.
Age 37.
MARTIN L. FLANAGAN See Proposal 1, "Election of Directors."
Vice president since 1994
SAMUEL J. FORESTER, JR. Vice president of 10 of the investment companies in the
Vice president since 1994 Franklin Templeton Group of Funds; formerly, president of
Templeton Global Bond Managers, a division of Templeton
Investment Counsel, Inc.; founder and partner of Forester,
Hairston Investment Management (1989-1990), managing
director (Mid-East Region) of Merrill Lynch, Pierce, Fenner
& Smith Inc. (1987-1988) and advisor for Saudi Arabian
Monetary Agency (1982-1987). Age 49.
JOHN R. KAY Vice president and treasurer of Templeton Worldwide, Inc.;
Vice president since 1994 assistant vice president of Franklin Templeton Distributors,
Inc.; formerly, vice president and controller of the Keystone
Group, Inc.; and officer of 27 of the investment companies in
the Franklin Templeton Group of Funds. Age 57.
15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Offices Principal Occupation
with Fund During Past Five Years and Age
- ------------------------------ ---------------------------------------------------------------
<S> <C>
ELIZABETH M. KNOBLOCK General counsel, secretary and senior vice president of
Vice President-Compliance Templeton Investment Counsel, Inc.; senior vice president of
since 1996 Templeton Global Investors, Inc.; formerly, vice president and
associate general counsel of Kidder Peabody & Co. Inc.
(1989-1990), assistant general counsel of Gruntal & Co., Inc.
(1988), vice president and associate general counsel of
Shearson Lehman Hutton Inc. (1988), vice president and
assistant general counsel of E.F. Hutton & Co. Inc.
(1986-1988), and special counsel of the Division of Investment
Management of the U.S. Securities and Exchange
Commission (1984-1986); and officer of 23 of the investment
companies in the Franklin Templeton Group of funds.
Age 42.
BARBARA J. GREEN Senior vice president of Templeton Worldwide, Inc.; senior
Secretary since 1996 vice president of Templeton Global Investors, Inc.; formerly,
deputy director of the Division of Investment Management,
executive assistant and senior advisor to the chairman,
counsellor to the chairman, special counsel and attorney
fellow, U.S. Securities and Exchange Commission (1986-1995),
attorney, Rogers & Wells, and judicial clerk, U.S. District
Court (District of Massachusetts); and secretary of 23 of the
investment companies in the Franklin Templeton Group of
Funds. Age 50.
JAMES R. BAIO Certified public accountant; treasurer of Franklin Mutual
Treasurer since 1994 Advisers, Inc.; senior vice president of Templeton Worldwide,
Inc., Templeton Global Investors, Inc. and Templeton Funds
Trust Company; formerly, senior tax manager with Ernst &
Young (certified public accountants) (1977-1989); and
treasurer of 24 of the investment companies in the Franklin
Templeton Group of Funds. Age 43.
</TABLE>
16
<PAGE>
PROPOSAL 2. APPROVAL OF (i) AN AMENDMENT TO THE FUND'S INVESTMENT POLICIES
TO ENABLE THE FUND TO INVEST MORE BROADLY IN OTHER COUNTRIES LOCATED IN
SOUTHEAST ASIA, WHILE CONTINUING TO FOCUS ITS INVESTMENT PROGRAM ON
VIETNAM, AND (ii) A CORRESPONDING AMENDMENT TO THE FUND'S ARTICLES OF
INCORPORATION TO CHANGE THE FUND'S NAME TO "TEMPLETON VIETNAM AND SOUTHEAST
ASIA FUND, INC."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS
PROPOSAL.
The 1940 Act requires every registered investment company such as the Fund
to adopt investment policies with regard to its portfolio investments. Some
of these policies are considered "fundamental" because they can be changed
only after receiving shareholder approval. In this Proposal, you are being
asked to vote on a proposed change to one of the Fund's fundamental
policies.
The Board has authorized, subject to shareholder approval, an amendment to
the Fund's investment policies that would expand the Fund's ability to
invest in other Southeast Asian countries in addition to Vietnam. The
purpose of this amendment is to provide the Fund with greater investment
flexibility so that it may take advantage of a broader range of investment
opportunities available in Southeast Asian markets, while permitting the
Fund to continue to focus its investment program on Vietnam. As part of
this proposal, the Board also recommends that shareholders approve amending
the Fund's Articles of Incorporation to change the Fund's name to
"Templeton Vietnam and Southeast Asia Fund, Inc."
BACKGROUND
The Fund's prospectus dated September 15, 1994 ("Prospectus") stated that
the Fund's investment policies would be to invest in equity securities of
"Vietnam Companies." A "Vietnam Company" is a company (i) 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 percent of its revenues or profits from goods produced
or sold, investments made, or services performed in Vietnam or that has at
least 50 percent of its assets situated in Vietnam.
17
<PAGE>
At the time of the Fund's initial public offering, there existed an
extremely limited number of Vietnam Companies available to the Fund for
investment. Accordingly, during the Fund's initial period of operations,
the Fund also was permitted to invest in the securities of both (i) Vietnam
Companies and (ii) companies that were not Vietnam Companies but that the
Fund's Investment Manager believed would experience growth in revenue or
income from participation in the economy of Vietnam ("Vietnam-Related
Companies"). As noted in the Prospectus, if the Fund did not have at least
65 percent of the value of its total assets invested in the equity and debt
securities of Vietnam Companies by October 1, 1997, the management of the
Fund is required to 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's assets and distribute
the proceeds, less liabilities, to shareholders.
The securities markets in Vietnam did not develop to the point where the
Fund was able to achieve this 65 percent target by October 1, 1997, and the
Fund's shares generally have traded on the New York Stock Exchange at a
discount from their net asset value ("NAV"). Accordingly, to assist those
investors who no longer wished to remain shareholders of the Fund, the Fund
recently offered to purchase up to 4,029,302 shares (approximately 50
percent of its outstanding shares as of December 19, 1997) of its common
stock for cash at a price equal to their NAV determined at the end of
regular trading on the New York Stock Exchange on January 20, 1998 ("Tender
Offer"). At the time that the Board approved the Tender Offer, the Board
also decided that, if the Fund purchased 4,029,302 or fewer shares as a
result of the Tender Offer, the Board would propose that the Fund's
investment policies be amended to allow the Fund, on behalf of the
remaining shareholders, to invest in other Southeast Asian countries as
well as Vietnam. In that case, the Board also decided that the Fund's name
would need to be changed to "Templeton Vietnam and Southeast Asia
Fund, Inc."
The Tender Offer expired at 12:00 midnight eastern standard time on January
20, 1998 and resulted in the Fund purchasing approximately 3,377,430 shares
of its common stock (approximately 42 percent of the Fund's outstanding
shares), at a net asset value of $7.77 per share. Accordingly, the Fund's
Board is now submitting for shareholder approval the changes to the Fund's
investment policies and name described below.
18
<PAGE>
WHAT ARE THE PROPOSED CHANGES?
The Board recommends that shareholders APPROVE: (i) an amendment to the
Fund's investment policies (the proposed text of which is attached as
Exhibit A) allowing the Fund to invest in other Southeast Asia countries,
while continuing to focus on Vietnam, and (ii) a corresponding amendment to
the Fund's Articles of Incorporation to change the Fund's name to
"Templeton Vietnam and Southeast Asia Fund, Inc."
Under the proposed investment policies, the Fund would invest, under normal
market conditions, at least 65 percent 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 percent of
their revenues or profits from goods produced or sold, investments made, or
services performed in a Region Country, or have at least 50 percent of
their assets invested in a Region Country (collectively, "Region Country
Issuers"). For purposes of these investment policies, Region Countries
include Vietnam, China, Hong Kong, India, Indonesia, Malaysia, Myanmar, the
Philippines, Singapore, South Korea, Taiwan, and Thailand, as well as any
other countries in the same geographic region that the Board may approve in
the future.
Under the proposed investment policies, the Fund will focus on equity and
debt securities of Vietnam Issuers to the extent attractive investments
become available. The proposed investment policies define the term "Vietnam
Issuer" as a company (i) that is organized under the laws of, or has a
principal office in, Vietnam; (ii) for which the principal equity trading
market is in Vietnam; or (iii) that derives at least 50 percent of its
revenues or profits from goods produced or sold, investments made, or
services performed in Vietnam or has at least 50 percent of its assets
invested in Vietnam. This definition is identical to the definition of
"Vietnam Companies" contained in the Fund's current investment policies.
Although the Fund may eventually have a significant portion of its assets
invested in Vietnam Issuers, there is no guarantee that the Fund will be
able to achieve this goal.
To the extent that there are insufficient attractive investments in Vietnam
Issuers available, 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 depend on market conditions and the
Investment Manager's assessment of available investments. The Fund will not
have a limit on the percentage of its assets that can be invested in any
one Region Country.
19
<PAGE>
WHY DOES THE BOARD RECOMMEND THAT SHAREHOLDERS APPROVE THIS PROPOSAL?
A. BROADER RANGE OF INVESTMENT OPPORTUNITIES
The securities markets in Vietnam have not yet developed to the point where
the Fund is able to invest a large portion of its assets in securities of
Vietnam Issuers and, to date, the Fund's only investments in Vietnam
Issuers have been through privately issued direct investments.
Nevertheless, the Investment Manager believes that, when the securities
markets in Vietnam develop more fully, attractive investment opportunities
are likely to exist. Accordingly, this proposal would enable the Fund to
invest in securities of Region Country Issuers other than Vietnam, while
permitting the Fund to invest in Vietnam Issuers to the extent that
investment opportunities arise in the future. Of course, there is no
guarantee that securities markets will develop in Vietnam in the
foreseeable future, or that attractive investment opportunities in Vietnam
Issuers will become available.
In recommending this proposal, the Board has taken into consideration
several factors. The proposed change to the Fund's investment policies will
provide the Investment Manager with the flexibility and discretion to
invest the Fund's assets in those Region Country Issuers that provide the
most attractive opportunities for long-term capital appreciation. This will
enable the Fund to invest more broadly in other Southeast Asian countries.
At the same time, the proposed policies will permit the Fund to focus its
investments on Vietnam Issuers if and when attractive investment
opportunities arise.
The Board believes that providing the Investment Manager with the
flexibility to invest in Region Country Issuers, while continuing to permit
the Fund to invest significantly in Vietnam Issuers, is in the best
interests of the Fund and its shareholders. Despite the lack of development
of the securities markets in Vietnam, the Fund should remain in a position
to take advantage of any future positive economic developments that may
occur in Vietnam.
20
<PAGE>
There is considerable uncertainty as to how the Vietnamese economy will
perform in the future. 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. In addition, the
current economic crisis in Southeast Asia has put pressure on Vietnam's
economy and the competitiveness of its exports. Vietnam's currency has not
weakened considerably, making its exports less competitive compared to its
Southeast Asian neighbors, some of which have had currency devaluations of
30 percent or more against the U.S. dollar. In addition, values in the real
estate market in Vietnam have fallen, causing declines in the values of the
direct investments held by the Fund.
Coupled with these problems, a recent slowdown in foreign investment in
Vietnam and the lack of governmental initiatives to further privatize the
economy are additional causes for concern in the future. The International
Monetary Fund ("IMF") has warned Vietnam that it must institute urgent
financial reforms to avoid a financial crisis similar to those that have
occurred elsewhere in Asia.
For these reasons, the proposed investment policies, which will allow the
Investment Manager to invest throughout Southeast Asia, are more desirable
than the current policies that require the Fund to invest 65 percent of its
assets in Vietnam Companies or Vietnam-Related Companies. Even though
certain Region Countries are experiencing significant currency and economic
problems, under these new policies the Investment Manager would have a
broader range of investment markets from which to select suitable portfolio
investments for the Fund. GIVEN THE CURRENCY AND ECONOMIC PROBLEMS
CURRENTLY AFFECTING CERTAIN OF THE REGION COUNTRIES, HOWEVER, THE FUND
SHOULD CONTINUE TO BE CONSIDERED A HIGHLY SPECULATIVE INVESTMENT EVEN IF
THIS PROPOSAL IS APPROVED. (SEE "WHAT ARE THE RISKS OF INVESTING IN
SOUTHEAST ASIA" BELOW.)
21
<PAGE>
B. FEASIBILITY OF OPERATIONS
From the time it commenced operations, the Fund had substantially less than
65 percent of its assets invested in Vietnam Companies. In fact, as of
January 31, 1998, the Fund had only approximately 20.5 percent of its
assets invested in Vietnam Companies. Besides cash and short-term
instruments, the Fund's remaining investments are in securities of
Vietnam-Related Companies from Thailand, Singapore, Indonesia, and Hong
Kong. Management does not think that it is feasible for the Fund to
continue as an investment entity that has investment policies of investing
primarily in Vietnam Companies. Accordingly, if shareholders do not approve
the proposal to change the Fund's investment policies and name in the
manner described above, the Board may consider calling a special meeting of
shareholders to vote on a proposal to liquidate the Fund's assets or to
take other appropriate action. The Board believes that amending the Fund's
investment policies and name is in the best interests of the Fund and its
shareholders. Further, the Board has been advised by management that the
Fund continues to have a sufficient asset base to operate as a viable
investment entity, even after the Tender Offer, which resulted in the Fund
purchasing approximately 42 percent of its outstanding shares of common
stock. Indeed, the Board believes that the results of the Tender Offer
indicate that remaining shareholders have sufficient interest in having the
Fund continue its investment operations with the proposed change to the
investment policies.
WHAT ARE THE RISKS OF INVESTING IN SOUTHEAST ASIA?
The risks of investing in the Southeast Asian region are similar in many
respects to the risks of investing in Vietnam. The markets in which the
Fund would invest are volatile and the Fund's investments would be subject
to the risk of currency fluctuation and local political, economic and
social crises. As mentioned above, recent currency and economic crises in
several Asian countries have had a severe impact on many Asian stock
markets. According to IMF reports, the recent currency crisis started in
Thailand, where certain macroeconomic imbalances and a weakened domestic
economy caused the value of the Thai baht to decline rapidly. Thailand's
currency crisis has been followed by a weakening of the currency and
economic stability of other Southeast Asian countries, including the
Philippines, Indonesia, Malaysia, and Hong Kong. Similarly, the economic
and currency problems of South Korea have had an adverse impact on other
economies in the region. For instance, the recent depreciation of the South
Korean won and the related downturn of the South Korean
22
<PAGE>
economy has been followed by a sharp decline in the Hong Kong Stock
Exchange and a significant rise in interest rates there. In addition,
shares have dropped in value in Indonesia due to concerns that South Korean
banks, struggling with an increase on bad debt, may reduce investments in
that country.
In response to these and other developments, 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. South Korea, the
Philippines, Thailand and Indonesia have also requested assistance from the
IMF to stabilize their exchange rates and to render emergency assistance.
By focusing its investments in Southeast Asia, the Fund would be
particularly subject to political, social, or economic conditions
experienced in that region. Many of the Region Countries are so-called
"developing" or "emerging" economies and markets. The risks of investing in
foreign markets generally are greater for investments in emerging markets.
Additional risks of investment in emerging markets include: (i) a lower
level of social, political, and economic stability; (ii) the smaller size
and lower volume of trading in the securities markets in such countries,
which may result in a lack of liquidity and in greater price volatility;
(iii) certain foreign national policies that may restrict the Fund's
investment opportunities, including restrictions on investments in issuers
or industries deemed sensitive to national interests, or expropriation or
confiscation of assets or property, which could result in the Fund's loss
of its entire investment in that market; (iv) less developed legal
structures governing private or foreign investment or allowing for judicial
redress for injury to private property; (v) higher rates of inflation; (vi)
differences in, or lack of, auditing and financial reporting standards
which may result in unavailability of material information about certain
issuers; (vii) the fact that statistical information regarding the economy
of certain countries may be inaccurate or not comparable to statistical
information regarding the U.S. or other economies; (viii) less extensive
regulation of securities markets; and (ix) risks regarding the maintenance
of Fund portfolio securities and cash with foreign subcustodians and
depositories.
23
<PAGE>
Despite these risks, Fund management and the Board believe that Southeast
Asia has the potential to offer attractive long-term investment
opportunities. In this connection, the Fund already invests a considerable
percentage of its assets in securities of Vietnam-Related Companies that
are located or traded in certain Southeast Asian countries, such as
Thailand and Singapore. Although the Fund currently is subject to many of
the risks inherent in investing in Southeast Asia, and developments in
Southeast Asia have resulted in a drop in the Fund's NAV and market price
per share, management and the Board believe that amending the Fund's
investment policies would permit more extensive investment throughout
Southeast Asia and is in the best long-term interests of shareholders.
THE DIRECTORS BELIEVE THAT AMENDING THE FUND'S INVESTMENT POLICIES AND NAME
TO ENABLE THE FUND TO INVEST MORE BROADLY IN OTHER COUNTRIES LOCATED IN
SOUTHEAST ASIA IS IN THE FUND'S BEST LONG-TERM INTERESTS, AND UNANIMOUSLY
RECOMMEND A VOTE FOR THIS PROPOSAL.
PROPOSAL 3. RATIFICATION OR REJECTION OF INDEPENDENT AUDITORS
HOW ARE INDEPENDENT AUDITORS SELECTED?
The Board has a standing Audit Committee consisting of Messrs. Galbraith,
Hines and Millsaps, all of whom are Independent Directors. The Audit
Committee reviews the maintenance of the Fund's records and the safekeeping
arrangements of the Fund's custodian, reviews both the audit and non-audit
work of the Fund's independent auditors and submits a recommendation to the
Board as to the selection of independent auditors.
WHICH INDEPENDENT AUDITORS DID THE BOARD OF DIRECTORS SELECT?
For the current fiscal year, the Board selected as auditors the firm of
McGladrey & Pullen, LLP, 555 Fifth Avenue, New York, New York 10017.
McGladrey & Pullen, LLP have been the auditors of the Fund since its
inception in 1994, and have examined and reported on the fiscal year-end
financial statements, dated March 31, 1997, and certain related Securities
and Exchange Commission ("SEC") filings. Neither the firm of McGladrey &
Pullen, LLP nor any of its members have any material direct or indirect
financial interest in the Fund.
24
<PAGE>
Representatives of McGladrey & Pullen, LLP are not expected to be present
at the annual meeting, but have been given the opportunity to make a
statement if they wish, and will be available should any matter arise
requiring their presence.
PROPOSAL 4. OTHER BUSINESS
The Directors know of no other business to be presented at the Meeting.
However, if any additional matters should be properly presented, proxies
will be voted or not voted as specified. Proxies reflecting no
specification will be voted in accordance with the judgment of the persons
named in the proxy.
- INFORMATION ABOUT THE FUND
The Fund's last audited financial statements and annual report, dated March
31, 1997, and Semi-Annual Report, dated September 30, 1997, are available
free of charge. To obtain a copy of each report, please call 1-800/DIAL BEN
or forward a written request to Franklin/ Templeton Investor Services,
Inc., P. O. Box 33030, St. Petersburg, Florida 33733-8030.
As of February 12, 1998 the Fund had 4,681,173 shares outstanding and net
assets of $43,281,285. The Fund's shares are listed on the New York Stock
Exchange (NYSE: TVF). From time to time, the number of shares held in
"street name" accounts of various securities dealers for the benefit of
their clients may exceed 5 percent of the total shares outstanding. To the
knowledge of the Fund's management, as of January 30, 1998, there were no
other entities holding beneficially or of record more than 5 percent of the
Fund's outstanding shares.
In addition, to the knowledge of the Fund's management, as of January 30,
1998, no nominee or Director of the Fund owned 1 percent or more of the
outstanding shares of the Fund, and the Officers and Directors of the Fund
owned, as a group, less than 1 percent of the outstanding shares of the
Fund.
25
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. U.S. securities
laws require that the Fund's shareholders owning more than 10 percent of
outstanding shares, Directors and Officers, as well as affiliated persons
of its Investment Manager, report their ownership of the Fund's shares and
any changes in that ownership. Specific due dates for these reports have
been established and the Fund is required to report in this Proxy Statement
any failure to file by these dates during the fiscal year ended March 31,
1997. To the best of the Fund's knowledge, all of these filing requirements
were met. In making this disclosure, the Fund relied upon the written
representations of the persons affected and copies of their relevant
filings.
PENDING LITIGATION. A lawsuit, James C. Roumell v. Templeton Vietnam
Opportunities Fund, Inc., Templeton Investment Management, Ltd., Templeton
Worldwide, Inc., Franklin Resources, Inc. and Mark Mobius, Civ. Action No.
98-6059, was filed on or about January 21, 1998 in U.S. District Court for
the Southern District of Florida alleging various violations of the 1940
Act and related common law with respect to recent investments by the Fund
and the Fund's recently completed tender offer. Management strongly
believes that the claims made in this action are without merit and intends
vigorously to defend against this action.
THE INVESTMENT MANAGER. The Investment Manager of the Fund is Templeton
Asset Management Ltd. ("TAML"), a Singapore company with an office at 7
Temasek Boulevard, #38-03, Suntec Tower One, Singapore. Pursuant to an
investment management agreement, TAML manages the investment and
reinvestment of the Fund's assets. TAML is an indirect, wholly-owned
subsidiary of Resources.
THE ADMINISTRATOR. The administrator of the Fund is Franklin Templeton
Services, Inc. ("FT Services"), with offices at 777 Mariners Island Blvd.,
San Mateo, California 94403-7777, an indirect, wholly-owned subsidiary of
Resources. Pursuant to an administration agreement FT Services performs
certain administrative functions for the Fund.
THE TRANSFER AGENT. The transfer agent, registrar and dividend disbursement
agent for the Fund is ChaseMellon Shareholder Services, L.L.C., 120
Broadway, New York, NY 10271, pursuant to a service agreement.
THE CUSTODIAN. The custodian for the Fund is The Chase Manhattan Bank, 1
Chase Manhattan Plaza, New York, NY 10081, pursuant to a custody agreement.
26
<PAGE>
THE SHAREHOLDER SERVICING AGENT. The shareholder servicing agent for the
Fund is PaineWebber Inc. ("PaineWebber") 1285 Avenue of the Americas, 12th
Floor, New York, NY 10019, an affiliate of the initial underwriter of the
Fund's shares. Pursuant to a shareholder servicing agreement, PaineWebber
provides certain services to the Fund including statistical information and
analysis, ongoing efforts to publicize the Fund's shares and making
information available to investors.
- FURTHER INFORMATION ABOUT VOTING AND
THE SHAREHOLDERS MEETING
SOLICITATION OF PROXIES. The cost of soliciting proxies, including the fees
of a proxy soliciting agent, are borne by the Fund. The Fund reimburses
brokerage firms and others for their expenses in forwarding proxy material
to the beneficial owners and soliciting them to execute proxies. In
addition, the Fund may retain a professional proxy solicitation firm to
assist with any necessary solicitation of proxies. The Fund expects that
the solicitation would be primarily by mail, but also may include
telephone, telecopy or oral solicitations. As the date of the Meeting
approaches, you may receive a call from the professional proxy solicitation
firm of Shareholders Communications Corporation asking you to vote. If
professional proxy solicitors are retained, it is expected that soliciting
fees and expenses would be approximately $35,000. The Fund does not
reimburse Directors, Officers, and regular employees and agents of the
Investment Manager involved in the solicitation of proxies.
VOTING BY BROKER-DEALERS. The Fund expects that, before the Meeting,
broker-dealer firms holding shares of the Fund in "street name" for their
customers and clients, will request voting instructions from their
customers, clients and beneficial shareholders. If these instructions are
not received by the date specified in the broker-dealer firms' proxy
solicitation materials, the Fund understands that New York Stock Exchange
Rules permit the broker-dealers to vote on certain of the items to be
considered at the Meeting on behalf of their customers, clients, and the
beneficial shareholders. Certain broker-dealers may exercise discretion
over shares held in their name for which no instructions are received by
voting these shares in the same proportion as they vote shares for which
they received instructions.
27
<PAGE>
QUORUM. A majority of the shares entitled to vote--present in person or
represented by proxy--constitutes a quorum at the Meeting. The shares over
which broker-dealers have discretionary voting power, the shares that
represent "broker non-votes" (i.e., shares held by brokers or nominees as
to which (i) instructions have not been received from the beneficial owners
or persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on a particular matter), and the shares whose
proxies reflect an abstention on any item are all counted as shares present
and entitled to vote for purposes of determining whether the required
quorum of shares exists.
METHODS OF TABULATION. Proposal 1, the election of Directors, requires the
affirmative vote of the holders of a plurality of the Fund's shares present
and voting at the Meeting. Proposal 2, approving an amendment to the Fund's
investment policies and a corresponding amendment to the Fund's Articles of
Incorporation to change its name, requires the affirmative vote of a
majority of the Fund's shares outstanding and entitled to vote. Proposal 3,
ratification of the selection of the independent auditors, requires the
affirmative vote of a majority of the Fund's shares present and voting at
the Meeting. Proposal 4, the transaction of any other business, requires
the affirmative vote of a majority of the Fund's shares present and voting
on the proposal at the Meeting. Abstentions and broker "non-votes" will be
treated as votes not cast and, therefore, will not be counted for purposes
of obtaining approval of Proposals 1, 2, 3, and 4.
ADJOURNMENT. In the event that a quorum is not present at the Meeting, the
Meeting will be adjourned to permit further solicitation of proxies. In the
event that a quorum is present, but sufficient votes have not been received
to approve one or more of the proposals, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further
solicitation of proxies with respect to those proposals. The persons named
as proxies will vote in their discretion on questions of adjournment those
shares for which proxies have been received that grant discretionary
authority to vote on other matters that may properly come before the
Meeting.
28
<PAGE>
SHAREHOLDER PROPOSALS. The Fund anticipates that its next annual meeting
will be held in December 1998. Shareholder proposals to be presented at the
next annual meeting must be received at the Fund's offices, 500 East
Broward Boulevard, Ft. Lauderdale, Florida 33394, no later than June 15,
1998.
By order of the Board of Directors,
J. Mark Mobius,
President
February 19, 1998
29
<PAGE>
EXHIBIT A
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 policies, under normal market conditions, are to invest
at least 65 percent 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 percent of their
revenues or profits from goods produced or sold, investments made, or
services performed in a Region Country, or have at least 50 percent of
their assets invested in a Region Country (collectively, "Region Country
Issuers"). For purposes of these investment policies, Region Countries
include Vietnam, China, Hong Kong, India, Indonesia, South 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.
The Fund invests in equity and debt securities of Region Country Issuers as
appropriate opportunities arise. In seeking to invest at least 65 percent
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
investment opportunities 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 percent of its revenues or
profits from goods produced or sold, investments made, or services
performed in Vietnam or that has at least 50 percent of its assets invested
in Vietnam. To the extent that the Investment Manager is unable to find
Vietnam Issuers that 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 depend on market conditions and the Investment
Manager's assessment of available investments. The Fund will not be limited
in the percentage of its assets that can be invested in any one Region
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.
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TEMPLETON VIETNAM OPPORTUNITIES FUND, INC.
ANNUAL MEETING OF SHAREHOLDERS, MARCH 31, 1998
PLEASE VOTE PROMPTLY
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints BARBARA J.GREEN, JAMES R. BAIO and JOHN R. KAY,
and each of them, with full power of substitution, as proxies to vote for and in
the name, place and stead of the undersigned at the Annual Meeting of
Shareholders of the Templeton Vietnam Opportunities Fund, Inc. (the "Fund") to
be held at the Fund's offices, 500 East Broward Blvd., 12TH Floor, Ft.
Lauderdale, Florida 33394-3091, on Tuesday, March 31, 1998 at 10:00 A.M. EST,
and at any adjournment thereof, according to the number of votes and as fully as
if personally present.
This Proxy when properly executed will be voted in the manner (or not voted) as
specified. If no specification is made, the Proxy will be voted FOR all nominees
for Director in Proposal 1, IN FAVOR of Proposals 2 and 3, and within the
discretion of the Proxyholders as to Proposal 4.
Please date this Proxy and sign exactly as your name or names appear hereon. If
more than one owner is registered as such, all must sign. If signing as
attorney, executor, trustee or any other representative capacity, or as a
corporate officer, please give full title.
(Continued, and to be signed on the other side.)
FOLD AND DETACH HERE
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The Board of Directors unanimously Recommends a vote FOR Proposals 1, 2, 3 and
4.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ELECTING ALL OF THE
NOMINEES.
1-Election of Directors.
Nominees: Harris J. Ashton, Nicholas F. Brady, S. Joseph Fortunato, Edith E.
Holiday
FOR WITHHOLD
AUTHORITY
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INSTRUCTIONS: If you wish to withhold authority to vote for any individual
nominee, write that nominee's names in the space provided below.
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2 - The amendment to the Fund's investment policies to enable the Fund to invest
more broadly in other countries located in Southeast Asia, while continuing to
focus its investment program on Vietnam, and (ii) the corresponding amendment to
the Fund's Articles of Incorporation to change the Fund's name to "Templeton
Vietnam and Southeast Asia Fund, Inc."
FOR AGAINST ABSTAIN
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3 - Ratification of the selection of McGladrey & Pullen, LLP as independent
auditor for the Fund for the fiscal year ending March 31, 1998.
FOR AGAINST ABSTAIN
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4- In their discretion, the Proxyholders are authorized to vote upon such other
matter which may legally come before the Meeting or any adjournments thereof.
FOR AGAINST ABSTAIN
|_| |_| |_|
I PLAN TO
ATTEND
THE MEETING
Signature Dated , 1998
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Please sign exactly as your name appears on this proxy, if signing for estates,
trusts or corporations, title or capacity should be stated, if shares are held
jointly, each holder should sign.
