SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.)
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section.240-14a-11(c) or
Section.240-14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
FRANKLIN UNIVERSAL TRUST
(Name of Registrant as Specified in its Charter)
FRANKLIN UNIVERSAL TRUST
(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 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary material.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
FRANKLIN UNIVERSAL TRUST
IMPORTANT SHAREHOLDER INFORMATION
These materials are for the annual shareholders' meeting scheduled for Tuesday,
February 24, 2004 at 2:00 p.m. Pacific Time. They discuss the proposal to be
voted on at the meeting, and contain 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 Trustees' recommendation on page 1
of the proxy statement.
WE URGE YOU TO SPEND A FEW MINUTES REVIEWING THE PROPOSAL IN THE PROXY
STATEMENT. THEN, FILL OUT THE PROXY CARD AND RETURN IT TO US SO THAT WE KNOW HOW
YOU WOULD LIKE TO VOTE. WHEN SHAREHOLDERS RETURN THEIR PROXIES PROMPTLY, THE
FUND MAY BE ABLE TO SAVE MONEY BY NOT HAVING TO CONDUCT ADDITIONAL MAILINGS.
RETURNING YOUR PROXY DOES NOT PRECLUDE YOU FROM ATTENDING THE MEETING, OR LATER
CHANGING YOUR VOTE.
WE WELCOME YOUR COMMENTS. IF YOU HAVE ANY QUESTIONS, CALL FUND INFORMATION AT
1-800/DIAL BEN(R) (1-800/342-5236).
TELEPHONE AND INTERNET VOTING
FOR YOUR CONVENIENCE, YOU MAY BE ABLE TO VOTE BY TELEPHONE OR THROUGH THE
INTERNET, 24 HOURS A DAY. IF YOUR ACCOUNT IS ELIGIBLE, A CONTROL NUMBER AND
SEPARATE INSTRUCTIONS ARE ENCLOSED.
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FRANKLIN UNIVERSAL TRUST
NOTICE OF 2004 ANNUAL SHAREHOLDERS' MEETING
The Annual Shareholders' Meeting ("Meeting") of Franklin Universal Trust (the
"Fund") will be held at the Fund's offices, One Franklin Parkway, San Mateo,
California, 94403, on Tuesday, February 24, 2004 at 2:00 p.m. Pacific Time.
During the Meeting, shareholders of the Fund will vote on the following
proposal:
o The election of a Board of Trustees of the Fund.
The Board of Trustees has fixed December 12, 2003 as the record date for the
determination of shareholders entitled to vote at the Meeting.
By Order of the Board of Trustees,
Murray L. Simpson
Secretary
San Mateo, California
Dated: January 16, 2004
PLEASE SIGN AND PROMPTLY RETURN YOUR PROXY CARD IN THE SELF-ADDRESSED ENVELOPE
(OR RETURN YOUR PROXY BY TELEPHONE OR THROUGH THE INTERNET, IF YOU ARE ELIGIBLE
TO DO SO) REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
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FRANKLIN UNIVERSAL TRUST
PROXY STATEMENT
o INFORMATION ABOUT VOTING
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on December 12, 2003 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 each matter presented at the
Meeting. The Notice of Meeting, the proxy card, and the proxy statement were
mailed to shareholders of record on or about January 16, 2004.
ON WHAT ISSUES AM I BEING ASKED TO VOTE?
You are being asked to vote on one proposal:
o The election of nine nominees to the position of Trustee. How do the
Fund's Trustees recommend that I vote? The Trustees unanimously recommend
that you vote FOR the election of the nine nominees to the position of
Trustee.
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 enclosed proxy card. If you are eligible to vote by telephone or through
the Internet, a control number and separate instructions are enclosed.
Proxy cards that are properly signed, dated and received at or prior to the
Meeting will be voted as specified. If you specify a vote for the Proposal,
your proxy will be voted as you indicated. If you simply sign and date the
proxy card, but don't specify a vote for the Proposal, your shares will be
voted IN FAVOR of the election of the nominees for Trustee.
CAN I REVOKE MY PROXY?
You may revoke your proxy at any time before it is voted by forwarding a
written revocation or a later-dated proxy to the Fund that is received by the
Fund at or prior to the Meeting, or by attending the Meeting and voting in
person.
o THE PROPOSAL: ELECTION OF TRUSTEES
HOW ARE NOMINEES SELECTED?
The Board of Trustees of the Fund (the "Board" or the "Trustees") has a
Nominating Committee (the "Committee") consisting of Harris J. Ashton, Robert
F. Carlson, S. Joseph Fortunato, Edith E. Holiday, Frank W.T. LaHaye and
Gordon S. Macklin, Chairman, none of whom is an "interested person" of the
Fund as defined by the Investment Company Act of 1940, as amended (the "1940
Act"). Trustees who are not interested persons of the Fund are referred to as
"Independent Trustees."
The Committee is responsible for selecting candidates to serve as Trustees
and recommending such candidates (a) for selection and nomination as
Independent Trustees by the incumbent Independent Trustees andthe full Board;
and (b) for selection and nomination as Interested Trustees by the full
Board. In considering a candidate's qualifications, the Committee generally
considers the potential candidate's educational background, business or
professional experience, and reputation. In addition, the Committee has
established as minimum qualifications for Board membership as an Independent
Trustee (1) that such candidate be independent from relationships with the
Fund's investment manager and other principal service providers both within
the terms and the spirit of the statutory independence requirements specified
under the 1940 Act, (2) that such candidate demonstrate an ability and
willingness to make the considerable time commitment, including personal
attendance at Board meetings, believed necessary to his or her function as an
effective Board member, and (3) that such candidate have no continuing
relationship as a director, officer or board member of any mutual fund other
than those within the Franklin Templeton Investments fund complex.
When the Board has or expects to have a vacancy, the Committee receives and
reviews information on individuals qualified to be recommended to the full
Board as nominees for election as Trustees, including any recommendations by
shareholders. Such individuals are evaluated based upon the criteria
described above. To date, the Committee has been able to identify, and
expects to continue to be able to identify, from its own resources an ample
number of qualified candidates. The Committee, however, will review
shareholders' recommendations to fill vacancies on the Board if these
recommendations are submitted in writing and addressed to the Committee at
the Fund's offices.
The Board has adopted and approved a formal written charter for the
Committee. A copy of the charter is attached as Exhibit A to this Proxy
Statement.
WHO ARE THE NOMINEES?
Harris J. Ashton, Robert F. Carlson, S. Joseph Fortunato, Edith E. Holiday,
Edward B. Jamieson, Charles B. Johnson, Rupert H. Johnson, Jr., Frank W.T.
LaHaye, and Gordon S. Macklin have been nominated to be Trustees of the
Fund, to hold office until the next Annual Shareholders' Meeting, and until
their successors are duly elected and qualified to serve. All of the
nominees are currently members of the Board; however, Mrs. Holiday is
standing for election by shareholders of the Fund for the first time.
Incumbent Independent Trustees recomended Mrs. Holiday for consideration by
the Committee as a Nominee for Trustee. In addition, all of the current
nominees are also directors and/or trustees of other U.S. registered mutual
funds of Franklin Templeton Investments (collectively "Franklin Templeton
funds").
Certain Trustees of the Fund hold director and/or officer positions with
Franklin Resources, Inc. ("Resources") and its affiliates. Resources is a
publicly-owned holding company, the principal shareholders of which are
Charles B. Johnson and Rupert H. Johnson, Jr., who own approximately 18.05%
and 15.42%, respectively, of its outstanding shares. Resources is primarily
engaged, through its 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. ("NYSE") listed holding company (NYSE: BEN). Charles B.
Johnson, the Chairman of the Board of the Fund, and Rupert H. Johnson, Jr.,
a Vice President of the Fund, are brothers.
Each nominee is currently eligible 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 persons who may be
nominated as Trustees.
Listed below, for each nominee, is his or her name, age and address, as well
as position and length of service with the Fund, a brief description of
recent professional experience, ownership of shares of the Fund and shares of
all Franklin Templeton funds, and any other directorships held by the
nominee.
NOMINEES FOR INDEPENDENT TRUSTEE
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX OTHER
NAME, AGE AND ADDRESS LENGTH OF OVERSEEN BY DIRECTORSHIPS
DIRECTORSHIPS HELD POSITION TIME SERVED BOARD MEMBER* HELD
- -------------------------------------------------------------------------------
Harris J. Ashton (71) Trustee Since 1988 142 Director, Bar-S
One Franklin Parkway Foods (meat
San Mateo, CA 94403-1906 packing company).
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director of various companies; and FORMERLY, Director, RBC Holdings, Inc. (bank
holding company) (until 2002); and President, Chief Executive Officer and
Chairman of the Board, General Host Corporation (nursery and craft centers)
(until 1998).
- -------------------------------------------------------------------------------
Robert F. Carlson (75) Trustee Since 2000 52 None
One Franklin Parkway
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice President and past President, Board of Administration, California Public
Employees Retirement Systems (CALPERS); and FORMERLY, member and Chairman of the
Board, Sutter Community Hospitals; member, Corporate Board, Blue Shield of
California; and Chief Counsel, California Department of Transportation.
- -------------------------------------------------------------------------------
S. Joseph Fortunato (71) Trustee Since 1989 143 None
One Franklin Parkway
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Attorney; and FORMERLY, member of the law firm of Pitney, Hardin, Kipp & Szuch.
- -------------------------------------------------------------------------------
Edith E. Holiday (51) Trustee Since 2004 83 Director,
One Franklin Parkway Amerada Hess
San Mateo, CA 94403-1906 Corporation
(exploration and
refining of oil
and gas);
Hercules
Incorporated
(chemicals,
fibers and
resins); Beverly
Enterprises,Inc.
(health care);
H.J. Heinz
Company
(processed foods
and allied
products); RTI
International
Metals, Inc.
(manufacture and
distribution of
titanium); and
Canadian
National Railway
(railroad).
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director or Trustee of various companies and trusts; and FORMERLY, 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).
- -------------------------------------------------------------------------------
Frank W.T. LaHaye (74) Trustee Since 1988 115 Director, The
One Franklin Parkway California Center
San Mateo, CA 94403-1906 for Land Recycling
(redevelopment) .
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
General Partner, Las Olas L.P. (Asset Management); and FORMERLY, Chairman,
Peregrine Venture Management Company (venture capital).
- -------------------------------------------------------------------------------
Gordon S. Macklin (75) Trustee Since 1993 142 Director, White
One Franklin Parkway Mountains
San Mateo, CA 94403-1906 Insurance Group,
Ltd. (holding
company); Martek
Biosciences
Corporation;
MedImmune, Inc.
(biotechnology);
Overstock.com
(Internet
services); and
Spacehab, Inc.
(aerospace
services); and
formerly,Director,
MCI Communication
Corporation
(subsequently
known as MCI
WorldCom,Inc. and
WorldCom, Inc.)
(communications
services)
(1988-2002).
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Deputy Chairman, White Mountains Insurance Group, Ltd. (holding company); and
FORMERLY, Chairman, White River Corporation (financial services) (1993-1998)
and Hambrecht & Quist Group (investment banking) (1987-1992); and President,
National Association of Securities Dealers, Inc. (1970-1987).
- -------------------------------------------------------------------------------
NOMINEES FOR INTERESTED TRUSTEE
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX OTHER
NAME, AGE AND ADDRESS LENGTH OF OVERSEEN BY DIRECTORSHIPS
DIRECTORSHIPS HELD POSITION TIME SERVED BOARD MEMBER* HELD
- -------------------------------------------------------------------------------
**Edward B. Jamieson (55) Trustee, Trustee and 8 None
One Franklin Parkway President President
San Mateo, CA 94403-1906 and Chief since 1993
Executive and Chief
Officer - Executive
Investment Officer-
Management Investment
Management
since 2002
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Executive Vice President and Portfolio Manager, Franklin Advisers, Inc.; and
officer and/or trustee, as the case may be, of other subsidiaries of Franklin
Resources, Inc. and of five of the investment companies in Franklin Templeton
Investments.
- -------------------------------------------------------------------------------
**Charles B. Johnson (70) Trustee and Trustee 142 None
One Franklin Parkway Chairman of since 1988
San Mateo, CA 94403-1906 the Board and
Chairman
of the
Board
since 1993
Principal Occupation During Past 5 Years:
Chairman of the Board, Chief Executive Officer, Member - Office of the Chairman
and Director, Franklin Resources, Inc.; Vice President, Franklin Templeton
Distributors, Inc.; Director, Fiduciary Trust Company International; and officer
and/or director or trustee, as the case may be, of some of the other
subsidiaries of Franklin Resources, Inc. and of 46 of the investment companies
in Franklin Templeton Investments.
- -------------------------------------------------------------------------------
**Rupert H. Johnson, Jr. (63) Trustee and Trustee and 125 None
One Franklin Parkway Senior Vice Senior Vice
San Mateo, CA 94403-1906 President President
since 1988
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice Chairman, Member - Office of the Chairman and Director, Franklin
Resources, Inc.; Vice President and Director, Franklin Templeton
Distributors, Inc.; Director, Franklin Advisers, Inc. and Franklin Investment
Advisory Services, Inc.; Senior Vice President, Franklin Advisory Services,
LLC; and officer and/or director or trustee, as the case may be, of some of
the other subsidiaries of Franklin Resources, Inc. and of 49 of the
investment companies in Franklin Templeton Investments.
- -------------------------------------------------------------------------------
*We base the number of portfolios on each separate series of the registered
investment companies comprising the Franklin Templeton Investments fund
complex. These portfolios have a common investment adviser or affiliated
investment advisers.
**Charles B. Johnson and Rupert H. Johnson, Jr. are considered interested
persons of the Fund under the federal securities laws due to their positions
as officers and directors and major shareholders of Franklin Resources, Inc.,
which is the parent company of the Fund's adviser and distributor. Edward B.
Jamieson is considered an interested person of the Fund under the federal
securities laws due to his position as officer and director of Franklin
Resources, Inc. Charles B. Johnson and Rupert H. Johnson, Jr. are brothers,
and are the father and uncle, respectively, of Gregory E. Johnson, Vice
President at the fund.
Board members historically have followed a policy of having substantial
investments in one or more of the Franklin Templeton funds, as is consistent
with their individual financial goals. In February 1998, this policy was
formalized through adoption of a requirement that each Board member invest
one-third of fees received for serving as a director or trustee of a
Templeton fund in shares of one or more Templeton funds and one-third of fees
received for serving as a director or trustee of a Franklin fund in shares of
one or more Franklin funds until the value of such investments equals or
exceeds five times the annual fees paid such board member. Investments in the
name of family members or entities controlled by a Board member constitute
fund holdings of such Board member for purposes of this policy, and a three
year phase-in period applies to such investment requirements for newly
elected Board members. In implementing such policy, a Board member's fund
holdings existing on February 27, 1998, were valued as of such date with
subsequent investments valued at cost.
The following tables provide the dollar range of equity securities
beneficially owned by the Board members on September 30, 2003.
INDEPENDENT BOARD MEMBERS
AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES IN
ALL FUNDS OVERSEEN BY
THE BOARD MEMBER IN
DOLLAR RANGE OF EQUITY THE FRANKLIN TEMPLETON
NAME OF BOARD MEMBER SECURITIES IN THE FUND FUND COMPLEX
- -------------------------------------------------------------------------------
Frank H. Abbott, III* None Over $100,000
Harris J. Ashton $1 - $10,000 Over $100,000
Robert F. Carlson None Over $100,000
S. Joseph Fortunato $1 - $10,000 Over $100,000
Frank W.T. LaHaye None Over $100,000
Edith E. Holiday* None Over $100,000
Gordon S. Macklin None Over $100,000
*Mr. Abbott retired from the Board effective January 13, 2004. Mrs. Holiday
was appointed to the Board in January 2004.
INTERESTED BOARD MEMBERS
Aggregate Dollar Range
of Equity Securities in
All Funds Overseen by
the Board Member in
Dollar Range of Equity the Franklin Templeton
Name of Board Member Securities in the Fund Fund Complex
- -------------------------------------------------------------------------------
Edward B. Jamieson None Over $100,000
Charles B. Johnson $10,001 - $50,000 Over $100,000
Rupert H. Johnson, Jr. $10,001 - $50,000 Over $100,000
How often do the Trustees meet and what are they paid?
The role of the Trustees is to provide general oversight of the Fund's
business, and to ensure that the Fund is operated for the benefit of
shareholders. The Trustees anticipate meeting at least 11 times during the
current fiscal year to review the operations of the Fund and the Fund's
investment performance. The Trustees also oversee the services furnished to
the Fund by Franklin Advisers, Inc., the Fund's investment manager (the
"Investment Manager"), and various other service providers. The Fund pays the
Independent Trustees $225 per month plus $120 per meeting attended. Board
members who serve on the Audit Committee of the Fund and other Franklin
Templeton funds are paid an aggregate per diem compensation of $2,000, a
portion of which is allocated to the Fund, for attending a meeting of the
Audit Committee on a day when a Board meeting is not held.
During the fiscal year ended August 31, 2003, there were 11
meetings of the Board and five meetings of the Audit Committee. Each of the
Trustees attended at least 75% of the total number of meetings of the Board.
All of the committee members attended the meetings of the Audit Committee.
The Fund does not currently have a formal policy regarding Trustees'
attendance at the Annual Shareholders' Meeting. None of the Trustees attended
the Fund's last annual meeting held on February 24, 2003.
Certain Trustees and Officers of the Fund are shareholders of Resources and
may be deemed to receive indirect remuneration due to their participation in
the management fees and other fees received from the Franklin Templeton funds
by the 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.
Number of Boards
Total Fees within Franklin
Aggregate Received from Templeton Investments
Compensation Franklin Templeton on Which Each
Name of Trustee from the Fund* Funds** Trustee Serves***
- -------------------------------------------------------------------------------
Frank H. Abbott, III**** $3,141 $179,599 29
Harris J. Ashton 3,285 369,700 46
Robert F. Carlson 4,058 110,110 15
S. Joseph Fortunato 3,070 369,700 47
Edith E. Holiday**** 0 297,707 29
Frank W.T. LaHaye 3,021 174,322 29
Gordon S. Macklin 3,155 369,700 46
*For the fiscal year ended August 31, 2003.
**For the calendar year ended December 31, 2003.
***We base the number of boards on the number of registered Franklin
Templeton 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 funds currently includes 52 registered
investment companies, with approximately 156 U.S. based funds or series.
****Mr. Abbott retired from the Board effective January 13, 2004. Mrs.
Holiday was appointed to the Board in January 2004.
The table above indicates the total fees paid to Trustees by the Fund
individually and all of the Franklin Templeton funds. These Trustees also
serve as directors or trustees of other Franklin Templeton funds, many of
which hold meetings at different dates and times. The Trustees and the
Fund's management believe that having the same individuals serving on the
boards of many of the Franklin Templeton 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
Trustees who can more effectively oversee the management of the funds.
WHO ARE THE EXECUTIVE OFFICERS OF THE FUND?
Officers of the Fund are appointed by the Trustees and serve at the pleasure
of the Board. Listed below, for each Executive Officer, is a brief
description of recent professional experience:
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
LENGTH OF OVERSEEN BY OTHER
NAME, AGE AND ADDRESS POSITION TIME SERVED BOARD MEMBER* DIRECTORSHIPS HELD
- -------------------------------------------------------------------------------
**Edward B. Jamieson (55) Trustee, Trustee and 8 None
One Franklin Parkway President President
San Mateo, CA 94403-1906 and Chief since 1993
Executive and Chief
Officer- Executive
Investment Officer -
Management Investment
Management
since 2002
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
See Proposal, "Election of Trustees"
- -------------------------------------------------------------------------------
**Charles B. Johnson (70) Trustee Trustee 142 None
One Franklin Parkway and and
San Mateo, CA 94403-1906 Chairman Chairman
of the of the
Board Board
since since 1993
1988
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
See Proposal, "Election of Trustees"
- -------------------------------------------------------------------------------
**Rupert H. Johnson, Jr.(63) Trustee Trustee 125 None
One Franklin Parkway and Senior and
San Mateo, CA 94403-1906 Vice Senior
President Vice
President
since
1988
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
See Proposal, "Election of Trustees"
- -------------------------------------------------------------------------------
Harmon E. Burns (58) Vice President Since 1988 Not None
One Franklin Parkway Applicable
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice Chairman, Member - Office of the Chairman and Director, Franklin
Resources, Inc.; Vice President and Director, Franklin Templeton
Distributors, Inc.; Executive Vice President, Franklin Advisers, Inc.;
Director, Franklin Investment Advisory Services, Inc.; and officer and/or
director or trustee, as the case may be, of some of the other subsidiaries of
Franklin Resources, Inc. and of 49 of the investment companies in Franklin
Templeton Investments.
- -------------------------------------------------------------------------------
Martin L. Flanagan (43) Vice President Since 1995 Not None
One Franklin Parkway Applicable
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President, Franklin Resources, Inc.; Senior Vice President and Chief Financial
Officer, Franklin Mutual Advisers, LLC; Executive Vice President, Chief
Financial Officer and Director, Templeton Worldwide, Inc.; Executive Vice
President and Chief Operating Officer, Templeton Investment Counsel, LLC;
President and Director, Franklin Advisers, Inc.; Executive Vice President,
Franklin Investment Advisory Services, Inc. and Franklin Templeton Investor
Services, LLC; Chief Financial Officer, Franklin Advisory Services, LLC;
Chairman, Franklin Templeton Services, LLC; and officer and/or director or
trustee, as the case may be, of some of the other subsidiaries of Franklin
Resources, Inc. and of 49 of the investment companies in Franklin Templeton
Investments.
- -------------------------------------------------------------------------------
Jimmy D. Gambill (56) Senior Vice Since 2002 Not None
500 East Broward Blvd. President Applicable
Suite 2100 and Chief
Fort Lauderdale, Executive
FL 33394-3091 Officer -
Finance and
Administration
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President, Franklin Templeton Services, LLC; Senior Vice President, Templeton
Worldwide, Inc.; and officer of 51 of the investment companies in Franklin
Templeton Investments.
- -------------------------------------------------------------------------------
David P. Goss (56) Vice President Since 2000 Not None
One Franklin Parkway Applicable
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Associate General Counsel, Franklin Resources, Inc.; officer and director of one
of the subsidiaries of Franklin Resources, Inc.; officer of 51 of the investment
companies in Franklin Templeton Investments; and FORMERLY, President, Chief
Executive Officer and Director, Property Resources Equity Trust (until 1999) and
Franklin Select Realty Trust (until 2000).
- -------------------------------------------------------------------------------
Barbara J. Green (56) Vice President Since 2000 Not None
One Franklin Parkway Applicable
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice President, Deputy General Counsel and Secretary, Franklin Resources,
Inc.; Secretary and Senior Vice President, Templeton Worldwide, Inc.;
Secretary, Franklin Advisers, Inc., Franklin Advisory Services, LLC, Franklin
Investment Advisory Services, Inc., Franklin Mutual Advisers, LLC, Franklin
Templeton Alternative Strategies, Inc., Franklin Templeton Investor Services,
LLC, Franklin Templeton Services, LLC, Franklin Templeton Distributors, Inc.,
Templeton Investment Counsel, LLC, and Templeton/Franklin Investment
Services, Inc.; and officer of some of the other subsidiaries of Franklin
Resources, Inc. and of 51 of the investment companies in Franklin Templeton
Investments; and FORMERLY, Deputy Director, Division of Investment
Management, Executive Assistant and Senior Advisor to the Chairman, Counselor
to the Chairman, Special Counsel and Attorney Fellow, U.S. Securities and
Exchange Commission (1986-1995); Attorney, Rogers & Wells (until 1986); and
Judicial Clerk, U.S. District Court (District of Massachusetts) (until 1979).
- -------------------------------------------------------------------------------
Kimberley H. Monasterio (39) Treasurer and Treasurer Not None
One Franklin Parkway Chief Financial and Chief Applicable
San Mateo, CA 94403-1906 Officer Financial
Officer
since 2002
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Vice President, Franklin Templeton Services, LLC; and officer of 51 of
the investment companies in Franklin Templeton Investments.
- -------------------------------------------------------------------------------
Murray L. Simpson (66) Vice President Since 2000 Not None
One Franklin Parkway and Secretary Applicable
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Executive Vice President and General Counsel, Franklin Resources, Inc.;
officer and/or director, as the case be, of some of the subsidiaries of
Franklin Resources, Inc. and of 51 of the investment companies in Franklin
Templeton Investments; and FORMERLY, Chief Executive Officer and Managing
Director, Templeton Franklin Investment Services (Asia) Limited (until 2000);
and Director, Templeton Asset Management Ltd. (until 1999).
- -------------------------------------------------------------------------------
*We base the number of portfolios on each separate series of the U.S. registered
investment companies within the Franklin Templeton Investments fund complex.
These portfolios have a common investment adviser or affiliated investment
advisers.
**Charles B. Johnson and Rupert H. Johnson, Jr. are considered interested
persons of the Trust under the federal securities laws due to their positions as
officers and directors and major shareholders of Franklin Resources, Inc.
(Resources), which is the parent company of the Trust's adviser and distributor.
Edward B. Jamieson is considered an interested person of the Trust under the
federal securities laws due to his position as an officer of Franklin Advisers,
Inc., which is the Trust's adviser. Note: Charles B. Johnson and Rupert H.
Johnson, Jr. are brothers.
o INFORMATION ABOUT THE FUND
THE INVESTMENT MANAGER. The Investment Manager is Franklin Advisers, Inc.
("Advisers"), whose principal address is One Franklin Parkway, San Mateo,
California 94403. Advisers is a wholly-owned subsidiary of Resources, a
publicly owned holding company.
THE FUND ADMINISTRATOR. The administrator of the Fund is Franklin Templeton
Services, LLC ("FT Services"), whose principal address is also One Franklin
Parkway, San Mateo, CA 94403. Under an agreement with Advisers, FT Services
performs certain administrative functions for the Fund. FT Services is a
wholly-owned subsidiary of Resources.
THE TRANSFER AGENT. The transfer agent, registrar and dividend disbursement
agent for the Fund is PFPC, Inc., P.O. Box 8030, Boston, MA 02266-8030.
THE CUSTODIAN. Bank of New York, Mutual Funds Division, 90 Washington
Street, New York, NY 10286, acts as custodian of the Fund's securities and
other assets.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS. The Fund's last
audited financial statements and annual report, dated August 31, 2003, are
available free of charge. To obtain a copy, please call 1-800/DIAL BEN(R) or
forward a written request to Franklin Templeton Investor Services, LLC, P.O.
Box 997151, Sacramento, CA 95899-9983.
PRINCIPAL SHAREHOLDERS. As of December 12, 2003, the Fund had 27,924,293.784
shares outstanding and total net assets of $174,713,989.05. The Fund's shares
are listed on the NYSE (symbol: FT). From time to time, the number of shares
held in "street name" accounts of various securities dealers for the benefit
of their clients may exceed 5% of the total shares outstanding. As of
December 12, 2003, Cede & CO Depository Trust Company at 55 Water St. 25th
Floor, New York, NY 10041 holds 5% of the total shares outstanding.
In addition, to the knowledge of the Fund's management, as of December 12,
2003, no Trustee of the Fund owned 1% or more of the outstanding shares of
the Fund, and the Officers and Trustees of the Fund owned, as a group, less
than 1% of the outstanding shares of the Fund.
CONTACTING THE BOARD OF TRUSTEES. If a shareholder wishes to send a
communication to the Board, such correspondence should be in writing and
addressed to the Board of Trustees at the Fund's offices. The correspondence
will then be given directly to the Board for its review and consideration.
o AUDIT COMMITTEE
The Board has a standing Audit Committee currently consisting of Messrs.
LaHaye (Chairman), Carlson and Fortunato, all of whom are Independent
Trustees and also are considered to be "independent" as that term is defined
by the NYSE's listing standards. The Fund's Audit Committee is responsible
for selection of the Fund's independent auditors, including evaluating their
independence, and meeting with such auditors to consider and review matters
relating to the Fund's financial reports and internal accounting. The Audit
Committee also reviews the maintenance of the Fund's records and safekeeping
arrangements of the Fund's custodian.
SELECTION OF INDEPENDENT AUDITORS. The Audit Committee and the Board selected
the firm of PricewaterhouseCoopers LLP ("PwC") as independent auditors of the
Fund for the current fiscal year. Representatives of PwC are not expected to
be present at the Meeting, but will have the opportunity to make a statement
if they wish, and will be available should any matter arise requiring their
presence.
AUDIT FEES. The aggregate fees paid to PwC for professional services rendered
by PwC for the audit of the Fund's annual financial statements or for
services that are normally provided by PwC in connection with statutory and
regulatory filings or engagements were $29,175 for the fiscal year ended
August 31, 2003 and $29,500 for the fiscal year ended August 31, 2002.
AUDIT RELATED FEES. No fees were paid to PwC for assurance and related
services that were reasonably related to the performance of the audit or
review of the Fund's financial statements and not reported under "Audit Fees"
above for the fiscal years ended August 31, 2003 and August 31, 2002.
In addition, the Audit Committee pre-approves PwC's engagements for audit-
related services with the Investment Manager and certain entities
controlling, controlled by, or under common control with the Investment
Manager that provide ongoing services to the Fund, which engagements relate
directly to the operations and financial reporting of the Fund. The aggregate
fees for such services were $3,531 for the fiscal years ended August 31, 2003
and August 31, 2002.
TAX FEES. No fees were paid to PwC for professional services rendered by PwC
for tax compliance, tax advice and tax planning for the fiscal years ended
August 31, 2003, and no such fees were paid for the fiscal year ended August
31, 2002.
In addition, the Audit Committee pre-approves PwC's engagements for tax
services with the Investment Manager and certain entities controlling,
controlled by, or under common control with the Investment Manager that
provide ongoing services to the Fund, which engagements relate directly to
the operations and financial reporting of the Fund. No such services were
provided for the fiscal years ended August 31, 2003 and August 31, 2002.
ALL OTHER FEES. There were no fees billed for any other products or services
provided by PwC for the fiscal year ended August 31, 2003 or the fiscal year
ended August 31, 2002.
In addition, the Audit Committee pre-approves PwC's engagements for other
services with the Investment Manager and certain entities controlling,
controlled by, or under common control with the Investment Manager that
provide ongoing services to the Fund, which engagements relate directly to
the operations and financial reporting of the Fund. No such services were
provided for the fiscal year ended August 31, 2003 and August 31, 2002.
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES. As of the date of this
proxy statement, the Audit Committee has not adopted pre-approval policies
and procedures. As a result, all services provided by PwC must be directly
pre-approved by the Audit Committee.
AGGREGATE NON-AUDIT FEES. PwC did not render any non-audit services to the
Fund, to the Investment Manager and any entity controlling, controlled by, or
under common control with the Investment Manager that provides ongoing
services to the Fund for the fiscal year ended March 31, 2003 or for the
fiscal year ended March 31, 2002.
AUDIT COMMITTEE REPORT. The Fund's Board of Trustees has adopted and approved
a formal written charter for the Audit Committee, which sets forth the Audit
Committee's responsibilities.
As required by the charter, the Audit Committee reviewed the Fund's audited
financial statements and met with management, as well as with PwC, the Fund's
independent auditors, to discuss the financial statements.
The Audit Committee received the written disclosures and the letter from PwC
required by Independence Standards Board Standard No. 1. The Audit Committee
also received the report of PwC regarding the results of their audit. In
connection with their review of the financial statements and the auditors'
report, the members of the Audit Committee discussed with a representative of
PwC, their independence, as well as the following: the auditors'
responsibilities in accordance with generally accepted auditing principles;
the auditors' responsibilities for information prepared by management that
accompanies the Fund's audited financial statements and any procedures
performed and the results; the initial selection of, and whether there were
any changes in, significant accounting policies or their application;
management's judgments and accounting estimates; whether there were any
significant audit adjustments; whether there were any disagreements with
management; whether there was any consultation with other accountants;
whether there were any major issues discussed with management prior to the
auditors' retention; whether the auditors encountered any difficulties in
dealing with management in performing the audit; and the auditors' judgments
about the quality of the company's accounting principles.
Based on its discussions with management and the Fund's auditors, the Audit
Committee did not become aware of any material misstatements or omissions in
the financial statements. Accordingly, the Audit Committee recommended to the
Board of Trustees that the audited financial statements be included in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31,
2003 for filing with the SEC.
THE AUDIT COMMITTEE
Frank W.T. LaHaye (Chairman)
Frank H. Abbott, III
Robert F. Carlson
o FURTHER INFORMATION ABOUT VOTING AND THE MEETING
SOLICITATION OF PROXIES. Your vote is being solicited by the Board of
Trustees of the Fund. The cost of soliciting these proxies will be 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 will be primarily by mail, but also may
include telephone, telecopy or oral solicitations. The Fund does not
reimburse Trustees and Officers of the Fund, or regular employees and agents
of the Investment Manager involved in the solicitation of proxies. The Fund
intends to pay all costs associated with the solicitation and the Meeting.
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 will request voting instructions from their customers and
beneficial owners. If these instructions are not received by the date
specified in the broker-dealer firms' proxy solicitation materials, the Fund
understands that NYSE Rules permit the broker-dealers to vote on the items to
be considered at the Meeting on behalf of their customers and beneficial
owners. Certain broker-dealers may exercise discretion over shares held in
their name for which no instructions are received by voting those shares in
the same proportion as they vote shares for which they received instructions.
QUORUM. Forty percent 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.
REQUIRED VOTE. Provided that a quorum is present, the election of Trustees
requires that the nine nominees receiving the greatest number of votes be
elected. All voting rights are non-cumulative, which means that the holders
of more than 50% of the shares voting for the election of Trustees can elect
100% of such Trustees if they choose to do so, and in such event, the holders
of the remaining shares voting will not be able to elect any Trustees.
Abstentions and broker non-votes will be treated as votes not cast and,
therefore, will not be counted for purposes of obtaining approval of the
Proposal.
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 the Proposal, the persons named as proxies may propose one or more
adjournments of the Meeting to permit the further solicitation of proxies for
a period or periods of not more than 60 days in the aggregate. 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 matters that may properly come before the Meeting.
SHAREHOLDER PROPOSALS. The Fund anticipates that its next Annual
Shareholders' Meeting will be held in February 2005. Shareholder proposals to
be presented at the next Annual Shareholders' Meeting must be received at the
Fund's offices, One Franklin Parkway, San Mateo, CA 94403, no later than
November 1, 2004, in order to be included in the Fund's proxy statement and
proxy card relating to that meeting and presented at that meeting. Submission
of a proposal by a shareholder does not guarantee that the proposal will be
included in the proxy statement. A shareholder who wishes to make a proposal
at the 2005 Annual Shareholders' Meeting without including the proposal in
the Fund's proxy statement must notify the Fund at the Fund's offices, of
such proposal by December 1, 2004. If a shareholder fails to give notice by
this date, then the persons named as proxies in the proxies solicited by the
Board for the 2004 Annual Shareholders' Meeting may exercise discretionary
voting power with respect to any such proposal.
No business other than the matters described above is expected to come before
the Meeting, but should any other matter requiring a vote of shareholders
arise, including any question as to any adjournment or postponement of the
meeting, the persons named on the enclosed proxy card will vote on such
matters in accordance with the view of management.
By order of the Board of Trustees,
Murray L. Simpson
SECRETARY
Dated: January 16, 2004
San Mateo, California
EXHIBIT A
NOMINATING COMMITTEE CHARTER
I. THE COMMITTEE.
The Nominating Committee (the "Committee") is a committee of, and established
by, the Board of Directors/Trustees of the Fund (the "Board"). The Committee
consists of such number of members as set by the Board from time to time and
its members shall be selected by the Board. The Committee shall be comprised
entirely of "independent members." For purposes of this Charter, independent
members shall mean members who are not interested persons of the Fund
("Disinterested Board members") as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended (the "1940 Act").
II. BOARD NOMINATIONS AND FUNCTIONS.
1. The Committee shall make recommendations for nominations for Disinterested
Board members on the Board to the incumbent Disinterested Board members and
to the full Board. The Committee shall evaluate candidates' qualifications
for Board membership and the independence of such candidates from the Fund's
investment manager and other principal service providers. Persons selected
must be independent in terms of both the letter and the spirit of the 1940
Act. The Committee shall also consider the effect of any relationships beyond
those delineated in the 1940 Act that might impair independence, E.G.,
business, financial or family relationships with investment managers or
service providers.
2. The Committee also shall evaluate candidates' qualifications and make .
recommendations for "interested" members on the Board to the full Board.
3. The Committee may adopt from time to time specific, minimum qualifications
that the Committee believes a candidate must meet before being considered as
a candidate for Board membership and shall comply with any rules adopted from
time to time by the U.S. Securities and Exchange Commission regarding
investment company nominating committees and the nomination of persons to be
considered as candidates for Board membership.
4. The Committee shall review shareholder recommendations for nominations to
fill vacancies on the Board if such recommendations are submitted in writing
and addressed to the Committee at the Fund's offices. The Committee shall
adopt, by resolution, a policy regarding its procedures for considering
candidates for the Board, including any recommended by shareholders.
III. COMMITTEE NOMINATIONS AND FUNCTIONS.
1. The Committee shall make recommendations to the full Board for nomination
for membership on all committees of the Board.
2. The Committee shall review as necessary the responsibilities of any
committees of the Board, whether there is a continuing need for each
committee, whether there is a need for additional committees of the Board,
and whether committees should be combined or reorganized. The Committee shall
make recommendations for any such action to the full Board.
3. The Committee shall, on an annual basis, review the performance of the
Disinterested Board members.
IV. OTHER POWERS AND RESPONSIBILITIES.
1. The Committee shall meet at least twice each year or more frequently in
open or executive sessions. The Committee may invite members of management,
counsel, advisers and others to attend its meetings as it deems appropriate.
The Committee shall have separate sessions with management and others, as and
when it deems appropriate.
2. The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including authority to retain special counsel
and other experts or consultants at the expense of the Fund.
3. The Committee shall report its activities to the Board and make such
recommendations as the Committee may deem necessary or appropriate.
4. A majority of the members of the Committee shall constitute a quorum for
the transaction of business at any meeting of the Committee. The action of a
majority of the members of the Committee present at a meeting at which a
quorum is present shall be the action of the Committee. The Committee may
meet in person or by telephone, and the Committee may act by written consent,
to the extent permitted by law and by the Fund's by-laws. In the event of any
inconsistency between this Charter and the Fund's organizational documents,
the provisions of the Fund's organizational documents shall be given
precedence.
5. The Committee shall review this Charter at least annually and recommend
any changes to the full Board.
ADDITIONAL STATEMENT FOR CLOSED-END FUNDS ONLY
The Committee shall comply with any rules of any stock exchange, if any,
applicable to nominating committees of closed-end funds whose shares are
registered thereon.
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FUTPROXY 02/04
PROXY
FRANKLIN UNIVERSAL TRUST
ANNUAL SHAREHOLDERS' MEETING - FEBRUARY 24, 2004
The undersigned hereby revokes all previous proxies for his or her shares and
appoints Rupert H. Johnson, Jr., Harmon E. Burns, Murray L. Simpson, Barbara J.
Green and David P. Goss, and each of them, proxies of the undersigned with full
power of substitution to vote all shares of Franklin Universal Trust (the
"Company") that the undersigned is entitled to vote at the Franklin Universal
Trust Annual Shareholders' Meeting to be held at One Franklin Parkway, Building
920, San Mateo, CA 94403 at 2:00 p.m. Pacific Time on February 24, 2004,
including any postponements or adjournments thereof, upon any matters that may
properly be acted upon at the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF FRANKLIN UNIVERSAL TRUST.
IT WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY SHALL
VOTE FOR THE PROPOSAL . IF ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING TO
BE VOTED ON, THE PROXY HOLDERS WILL VOTE, ACT AND CONSENT ON THOSE MATTERS IN
ACCORDANCE WITH THE VIEWS OF MANAGEMENT. MANAGEMENT IS NOT AWARE OF ANY SUCH
MATTERS.
IMPORTANT: PLEASE SEND IN YOUR PROXY TODAY.
YOU ARE URGED TO DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY. THIS WILL SAVE
THE EXPENSE OF FOLLOW-UP LETTERS TO SHAREHOLDERS WHO HAVE NOT RESPONDED.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
[X] Please mark
votes as in
this example.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL.
1. Proposal: Election of Trustees.
NOMINEES:(01) Harris J. Ashton,(02) Robert F. Carlson, (03) S. Joseph Fortunato,
(04) Edith E. Holiday,(05) Edward B. Jamieson,(06) Charles B. Johnson,
(07) Rupert H. Johnson, Jr.,(08) Frank W.T. LaHaye,(09)Gordon S.Macklin
FOR WITHHOLD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
[ ]
- --------------------------------------------------------------------------------
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided above).
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Signature: _____________ Date:_________Signature:______________ Date:_________