156575.1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.4a-11(c) or ss. 240.14a-12
Franklin Principal Maturity Trust
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(Name of Registrant as Specified In its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 9, 1996
FRANKLIN PRINCIPAL MATURITY TRUST
To the Shareholders of Franklin Principal Maturity Trust:
Notice is hereby given that the Annual Meeting of Shareholders (the "Meeting")
of Franklin Principal Maturity Trust (the "Fund") will be held at the offices of
the Fund, 777 Mariners Island Blvd., San Mateo, California, at 10:00 a.m.,
Pacific time, on July 9, 1996, for the following purposes:
1. To elect a Board of Trustees of the Fund.
2. To ratify or reject the appointment by the Board of Trustees of Coopers &
Lybrand L.L.P., Certified Public Accountants, as independent auditors for the
Fund for the fiscal year ending November 30, 1996.
3. To vote on a shareholder proposal that the Board of Trustees liquidate the
Fund in an orderly manner and distribute assets to the shareholders of the Fund
no later than August 1, 1996.
4. To consider and act upon any other business (none known as of the date of
this notice) as may legally come before the Meeting or any adjournment thereof.
Pursuant to the Fund's By-Laws, the Board of Trustees has fixed April 15, 1996,
as the record date for the determination of shareholders entitled to notice of
and to vote at the Meeting. Only shareholders of record at the close of business
on that date will be entitled to vote at the Meeting or any adjournment thereof.
By Order of the Board of Trustees
DEBORAH R. GATZEK
Secretary
San Mateo, California
Dated: May 3, 1996
PLEASE RETURN YOUR PROXY CARD PROMPTLY
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Shareholders are cordially invited to attend the Meeting in person. If you do
not expect to attend the Meeting, please indicate your voting instructions on
the enclosed proxy card, date and sign it, and return it in the envelope
provided, which is addressed for your convenience and needs no postage if mailed
in the United States. In order to avoid the additional expense to the Fund of
further solicitation, we ask your cooperation in mailing your proxy promptly.
This page intentionally left blank.
FRANKLIN PRINCIPAL MATURITY TRUST
PROXY STATEMENT
777 Mariners Island Blvd.
San Mateo, California 94404
ANNUAL MEETING OF SHAREHOLDERS
To Be Held July 9, 1996
SOLICITATION, REVOCATION AND VOTING OF PROXIES
The enclosed proxy is solicited by and on behalf of the management of Franklin
Principal Maturity Trust (the "Fund") in connection with the annual meeting of
shareholders to be held on July 9, 1996 (the "Meeting"). You may revoke your
proxy at any time before it is exercised by delivering a written notice to the
Fund expressly revoking your proxy, by signing and forwarding to the Fund a
later-dated proxy, or by attending the Meeting and casting your votes in person.
The cost of soliciting these proxies will be borne by the Fund. In addition to
solicitations by mail, some of the officers and employees of the Fund and
Franklin Advisers, Inc., without extra remuneration, may conduct additional
solicitations by telephone, telegraph, and personal interviews. An outside firm
may also be retained to aid in the solicitation of proxies, the cost of which
will be borne by the Fund. It is expected that this proxy statement will first
be mailed to shareholders on or about May 3, 1996.
The proxyholders will vote all proxies received. It is the present intention
that, absent contrary instructions, the enclosed proxy will be voted: for the
election as trustees of the nominees named hereinafter, but the proxyholders
reserve full discretion to cast votes for other persons in the event any such
nominees are unable to serve; for the ratification of the selection of Coopers &
Lybrand L.L.P., Certified Public Accountants, as independent auditors for the
Fund for the fiscal year ending November 30, 1996; against the proposal that the
Board of Trustees liquidate the Fund in an orderly manner and distribute assets
to the shareholders of the Fund no later than August 1, 1996; and in the
discretion of the proxyholders upon such other business not now known or
determined as may legally come before the Meeting. Under relevant state law and
the Fund's trust documents, abstentions and broker non-votes will be included
for purposes of determining whether a quorum is present at the Meeting, but will
be treated as votes not cast and, therefore, will not be counted for purposes of
determining whether matters to be voted upon at the Meeting have been approved.
VOTING OF SECURITIES
Only shareholders of record at the close of business on April 15, 1996, are
entitled to vote at the Meeting or any adjournment thereof. On that date, the
Fund had 20,462,600 shares of beneficial interest outstanding, with each share
being entitled to one vote.
From time to time, the number of shares held in the "street name" accounts of
various securities dealers for the benefit of their clients may exceed 5% of the
total shares outstanding. To the Fund's knowledge, there are no other entities
holding beneficially or of record more than 5% of the Fund's outstanding shares.
PROPOSAL 1: ELECTION OF TRUSTEES
The following persons, who constitute the current Board of Trustees of the Fund
(the "Board"), have been nominated to be trustees of the Fund, to hold office
until the next annual meeting of shareholders and until their successors are
elected and shall qualify to serve. All of the nominees have consented to serve
as trustees if elected. However, if any nominee is not available for election at
the time of the Meeting, the proxyholders may vote for any other person in their
discretion or may refrain from electing or voting to elect anyone to fill the
position. The favorable vote of the holders of a plurality of the shares
represented at the Meeting, in person or by proxy, is required to elect the
trustees. Trustees who are "interested persons" of the Fund, as defined in the
Investment Company Act of 1940, as amended, are designated by an asterisk (*).
Shares
Beneficially
Name, Age, Address, and Held as of
Five-Year Business Experience Length of Service March 29, 1996
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FRANK H. ABBOTT, III Trustee since None
Age 75 November 1988
1045 Sansome St.
San Francisco, CA 94111
Trustee
President and Director, Abbott Corporation (an investment company); and
director, trustee or managing general partner, as the case may be, of 31 of the
investment companies in the Franklin Group of Funds.
HARRIS J. ASHTON Trustee since 500
Age 63 November 1988
General Host Corporation
Metro Center, 1 Station Place
Stamford, CT 06904-2045
Trustee
President, Chief Executive Officer and Chairman of the Board, General Host
Corporation (nursery and craft centers); Director, RBC Holdings Inc. (a bank
holding company) and Bar-S Foods; and director, trustee or managing general
partner, as the case may be, of 56 of the investment companies in the Franklin
Templeton Group of Funds.
S. JOSEPH FORTUNATO Trustee since 100
Age 63 March 1989
Park Avenue at Morris County
P.O. Box 1945
Morristown, NJ 07962-1945
Trustee
Member of the law firm of Pitney, Hardin, Kipp & Szuch; Director of General
Host Corporation; director, trustee or managing general partner, as the case may
be, of 58 of the investment companies in the Franklin Templeton Group of Funds.
DAVID W. GARBELLANO Trustee since 100
Age 81 November 1988
1101 New Montgomery Street #402
San Francisco, CA 94105
Trustee
Private Investor; Assistant Secretary/Treasurer and Director, Berkeley Science
Corporation (a venture capital company); and director, trustee or managing
general partner, as the case may be, of 30 of the investment companies in the
Franklin Group of Funds.
* EDWARD B. JAMIESON President and None
Age 47 Trustee since
777 Mariners Island Blvd. August 1993
San Mateo, CA 94404
President and Trustee
Senior Vice President and Portfolio Manager, Franklin Advisers, Inc.; and
officer and/or director or trustee of five of the investment companies in the
Franklin Group of Funds.
* CHARLES B. JOHNSON Chairman of the 1807.871
Age 63 Board since
777 Mariners Island Blvd. August 1993 and
San Mateo, CA 94404 Trustee since
Chairman of the Board and Trustee November 1988
President and Director, Franklin Resources, Inc.; Chairman of the Board and
Director, Franklin Advisers, Inc. and Franklin Templeton Distributors, Inc.;
Director, Franklin/Templeton Investor Services,Inc. and General Host
Corporation; and officer and/or director, trustee or managing general partner,
as the case may be, of most other subsidiaries of Franklin Resources,Inc. and of
57 of the investment companies in the Franklin Templeton Group of Funds.
* RUPERT H. JOHNSON, JR. Vice President 1000
Age 55 and Trustee since
777 Mariners Island Blvd. November 1988
San Mateo, CA 94404
Vice President and Trustee
Executive Vice President and Director, Franklin Resources, Inc. and Franklin
Templeton Distributors, Inc.; President and Director, Franklin Advisers, Inc.;
Director, Franklin/Templeton Investor Services, Inc., and officer and/or
director, trustee or managing general partner, as the case may be, of most other
subsidiaries of Franklin Resources, Inc. and of 61 of the investment companies
in the Franklin Templeton Group of Funds.
FRANK W. T. LAHAYE Trustee since None
Age 67 November 1988
20833 Stevens Creek Blvd.
Suite 102
Cupertino, CA 95014
Trustee
General Partner, Peregrine Associates and Miller & LaHaye, which are General
Partners of Peregrine Ventures and Peregrine Ventures II (venture capital
firms); Chairman of the Board and Director, Quarterdeck Office Systems, Inc.;
Director, FischerImaging Corporation; and director or trustee, or managing
general partner, as the case may be, of 26 of the investment companies in the
Franklin Group of Funds.
GORDON S. MACKLIN Trustee since None
Age 67 April 1993
8212 Burning Tree Road
Bethesda, MD 20817
Trustee
Chairman, White River Corporation (information services); Director, Fund
American Enterprises Holdings, Inc., Lockheed Martin Corporation, MCI
Communications Corporation, MedImmune, Inc. (biotechnology), InfoVest
Corporation (information services), and Fusion Systems Corporation (industrial
technology); and director, trustee or managing general partner, as the case may
be, of 53 of the investment companies in the Franklin Templeton Group of Funds;
and formerly held the following positions: Chairman, Hambrecht and Quist Group;
Director, H&Q Healthcare Investors; and President, National Association of
Securities Dealers Inc.
On March 29, 1996, the trustees and officers as a group owned beneficially less
than one percent of the Fund's outstanding shares. Charles E. Johnson is the son
and nephew, respectively, of Charles B. Johnson and Rupert H. Johnson, Jr., who
are brothers. Chauncey Lufkin is the son-in-law and brother-in-law,
respectively, of Charles B. Johnson and Charles E. Johnson.
Trustees not affiliated with the investment manager ("nonaffiliated trustees")
are currently paid fees of $1,200 per year and $100 per meeting attended. As
indicated above, certain of the Fund's nonaffiliated trustees also serve as
directors, trustees or managing general partners of other investment companies
in the Franklin Group of Funds(R) and the Templeton Group of Funds (the
"Franklin Templeton Group of Funds"). The following table indicates the total
fees paid to nonaffiliated trustees by the Fund and by other funds in the
Franklin Templeton Group of Funds.
Total Fees Received Number of Boards in
from Franklin Templeton the Franklin Templeton
Total Fees Group of Funds, Group of Funds on
Name Received from Fund* including the Fund** Which Each Serves***
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Frank H. Abbott, III....... $2,400 $162,420 31
Harris J. Ashton........... 2,400 327,925 56
S. Joseph Fortunato........ 2,400 344,745 58
David W. Garbellano........ 2,400 146,100 30
Frank W.T. LaHaye.......... 2,400 143,200 26
Gordon S. Macklin.......... 2,400 321,525 53
*For the fiscal year ended November 30, 1995.
**For the calendar year ended December 31, 1995.
***The number of boards is based on the number of registered investment
companies in the Franklin Templeton Group of Funds and does not include the
total number of series or funds within each investment company for which the
trustees are responsible. The Franklin Templeton Group of Funds currently
includes 61 registered investment companies, consisting of more than 162 U.S.
based mutual funds or series.
Nonaffiliated trustees are also reimbursed for expenses incurred in connection
with attending Board meetings, paid pro rata by all Franklin Templeton Group of
Funds for which they serve as trustees, directors or managing general partners.
No officer or trustee received any other compensation directly from the Fund.
Certain officers of the Fund are shareholders of Franklin Resources, Inc. and
may be deemed to receive indirect remuneration by virtue of their participation
in the management fees received by Franklin Advisers, Inc.
During the last fiscal year, there were twelve meetings of the Board. All of the
Trustees attended at least 75% of such meetings. Messrs. Abbott, Garbellano and
LaHaye compose the Audit Committee of the Board with the function of making
recommendations to the full Board with respect to the selection of auditors. The
Audit Committee met twice during the fiscal year ended November 30, 1995. The
Fund currently does not have a standing nominating or compensation committee of
the Board of Trustees.
The executive officers of the Fund other than those listed above are:
Name, Age, Address and Five-Year Business Experience
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Harmon E. Burns
Age 51
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President since 1988
Executive Vice President, Secretary and Director, Franklin Resources, Inc.;
Executive Vice President and Director, Franklin Templeton Distributors, Inc.;
Executive Vice President, Franklin Advisers, Inc.; Director, Franklin/Templeton
Investor Services, Inc.; officer and/or director, as the case may be, of other
subsidiaries of Franklin Resources, Inc.; and officer and/or director or trustee
of 61 of the investment companies of the Franklin Templeton Group of Funds.
Kenneth V. Domingues
Age 63
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President - Financial Reporting and Accounting Standards since 1995
Senior Vice President, Franklin Resources, Inc., Franklin Advisers, Inc., and
Franklin Templeton Distributors, Inc.; officer and/or director, as the case may
be, of other subsidiaries of Franklin Resources, Inc., and officer and/or
managing general partner, as the case may be, of 37 of the investment companies
in the Franklin Group of Funds.
Martin L. Flanagan
Age 34
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President and Chief Financial Officer since 1995
Senior Vice President, Chief Financial Officer and Treasurer, Franklin
Resources, Inc.; Executive Vice President, Templeton Worldwide, Inc.; Senior
Vice President and Treasurer, Franklin Advisers, Inc. and Franklin Templeton
Distributors, Inc.; Senior Vice President, Franklin/Templeton Investor Services,
Inc.; officer of most other subsidiaries of Franklin Resources, Inc.; and
officer of 61 of the investment companies in the Franklin Templeton Group of
Funds.
Deborah R. Gatzek
Age 47
777 Mariners Island Blvd.
San Mateo, CA 94404
Secretary since 1988 and Vice President since 1992
Senior Vice President and General Counsel, Franklin Resources, Inc.; Senior Vice
President, Franklin Templeton Distributors, Inc.; Vice President, Franklin
Advisers, Inc. and officer of 61 of the investment companies in the Franklin
Group of Funds.
Charles E. Johnson
Age 39
500 East Broward Blvd.
Fort Lauderdale, FL 33394-3091
Vice President since 1988
Senior Vice President and Director, Franklin Resources, Inc.; Senior Vice
President, Franklin Templeton Distributors, Inc.; President and Director,
Templeton Worldwide Inc. and Franklin Institutional Services Corporation;
officer and/or director, as the case may be, of some of the subsidiaries of
Franklin Resources, Inc. and officer and/or director or trustee, as the case may
be, of 40 of the investment companies of the Franklin Templeton Group of Funds.
Diomedes Loo-Tam
Age 57
777 Mariners Island Blvd.
San Mateo, CA 94404
Treasurer and Principal Accounting Officer since 1995
Employee of Franklin Advisers, Inc. and officer of 37 of the investment
companies in the Franklin Group of Funds.
Chauncey Lufkin
Age 38
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President since May 1994
Employee of Franklin Advisers, Inc. since 1990. Formerly an employee of
Manufacturers Hanover Trust Co. and Security Pacific National Bank. Officer of
one investment company in the Franklin Group of Funds.
Edward V. McVey
Age 58
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President since 1988
Senior Vice President/National Sales Manager, Franklin Templeton Distributors,
Inc.; and officer of 32 of the investment companies in the Franklin Group of
Funds.
R. Martin Wiskemann
Age 69
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President since 1988
Senior Vice President, Portfolio Manager and Director, Franklin Advisers, Inc.;
Senior Vice President, Franklin Management, Inc.; Vice President, Treasurer and
Director, ILA Financial Services, Inc. and Arizona Life Insurance Company of
America; and officer and/or director, as the case may be, of 21 of the
investment companies in the Franklin Group of Funds.
All officers serve at the pleasure of the Board.
Shareholders are entitled to one vote per share. 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 so
voting will not be able to elect any trustees.
PROPOSAL 2: RATIFICATION OR REJECTION
OF THE SELECTION OF INDEPENDENT AUDITORS
The Board is requesting ratification of its selection of Coopers & Lybrand
L.L.P., Certified Public Accountants, as independent auditors to audit the books
and accounts of the Fund for the fiscal year ending November 30, 1996. The
selection of auditors was approved at a meeting of the Board of Trustees on
November 14, 1995, which approval included the favorable vote of a majority of
the trustees who are not interested persons of the Fund. A representative of
Coopers and Lybrand L.L.P. is not expected to be present at the Meeting. During
the fiscal year ended November 30, 1995, the auditing services of Coopers &
Lybrand L.L.P. consisted of the rendering of an opinion on the financial
statements of the Fund. The favorable vote of a majority of the shares
represented at the Meeting, in person or by proxy, is required to ratify the
selection of the auditors.
The Board recommends that you vote in favor of the selection of Coopers &
Lybrand L.L.P. as independent auditors of the Fund for the fiscal year ending
November 30, 1996.
PROPOSAL 3: SHAREHOLDER PROPOSAL - LIQUIDATION OF THE FUND
Shareholder Proposal
A shareholder has submitted the following proposal and supporting statement for
inclusion in this proxy statement. The Fund will provide the name, address, and
shareholdings of the proposing shareholder to any shareholder of the Fund who
requests such information by written or oral request to Larry L. Greene at
Franklin Principal Maturity Trust, 777 Mariners Island Blvd., San Mateo,
California 94404, telephone number (415) 312-2813.
The text of the proposal and supporting statement of the proposing shareholder
(the "Shareholder Proposal") is as follows:
"Over the past four years the Fund's net asset value per share has exceeded
its market value by up to 12 percent. During this time the return to
shareholders has been among the lowest of most funds. Thus, shareholders
have nothing to lose and can achieve a significant gain by the immediate
termination of the Fund and the distribution of its assets to shareholders.
Thus, this proposal directs the Board of Trustees, most of whom own no
shares in the Fund, to take steps to begin the orderly liquidation of the
Fund and distribute assets to shareholders no later that August 1, 1996."
Board Position on Shareholder Proposal
The Fund was organized in 1988 as a closed-end investment company with an
expected duration of approximately 12 years. The Fund will distribute
substantially all of its net assets on or shortly before May 31, 2001, and will
then terminate (although the distribution and termination may require
shareholder approval under the current policy of the Securities and Exchange
Commission).
As a closed-end investment company, the Fund does not offer daily redemption of
its shares at net asset value as does an open-end fund. Therefore, a shareholder
who wishes to liquidate shares of the Fund must sell those shares at the current
market price in the securities market in which the securities trade (currently,
the New York Stock Exchange). During the last several years the shares of the
Fund have traded in the securities markets at a discount from the net asset
value of the shares. The Board has monitored this discount and evaluated both
the benefits and disadvantages of such discount and intends to continue to do so
in the future in order to determine the effect of the discount upon the Fund's
shareholders and whether any action can and should be taken by the Board to
minimize the effect of any discount on the Fund's shareholders. On March 29,
1996, the closing price of a share of the Fund on the New York Stock Exchange
was $7.625, which reflects a discount of 13.84% from the net asset value per
share of $8.85 at the close of business on that date.
The Board of the Fund has considered the Shareholder Proposal and what position,
if any, the Board should recommend with respect to the Shareholder Proposal. The
factors which the Board considered include the historical discount in the market
value of the shares of the Fund and of shares of other closed-end funds, the
historical returns provided by the Fund to its shareholders, the liquidity of
the Fund's portfolio, and the nature of the Fund as a long-term investment. The
unanimous conclusion of the Board is that the interests of the shareholders of
the Fund would not be best served by liquidating the Fund at this time and,
therefore, that the Board should oppose the Shareholder Proposal.
The Board believes that the obligation of the Trustees is to achieve the
greatest benefit for the Fund and its shareholders and that continuation of the
Fund in its present form for its stated duration will provide the Fund's
shareholders with a higher return than could be obtained through a liquidation
and distribution at this time.
Although the Fund's shares have traded at a discount from net asset value over
the past four years and traded at a discount of 13.84% on March 29, 1996, the
Board believes that a discount, in and of itself, does not justify a liquidation
and distribution. The shares of many closed-end funds trade at a discount from
net asset value. For example, data obtained from Lipper Analytical Services,
Inc. show that the shares of more than half of the closed-end domestic taxable
bond funds traded at a discount from net asset value on February 29, 1996.
The Board is also cognizant of the long-term nature of the Fund as an
investment. The shares in the Fund were sold as a long-term investment, the
Board expects that the Fund's shareholders view the Fund from that perspective,
and the Fund has been managed from that perspective. A liquidation of the Fund
at this time, therefore, would be premature.
As stated previously, the Board believes that the potential return to the Fund's
shareholders at this time in a liquidation, even an orderly liquidation, is less
than the potential return if the Fund were to continue in existence for its
stated duration. In addition to the Board's expectations for future performance
of the Fund, the Board noted that the Shareholder Proposal calls for the
liquidation of the Fund and a distribution of assets of the Fund by August 1,
1996. The Board does not believe that an orderly liquidation of the Fund is
possible by that date.
Pursuant to the Fund's Declaration of Trust, as amended and restated as of
December 13, 1988, the favorable vote of 66-2/3% of the shares of the Fund
entitled to vote is required to terminate the Fund prior to May 31, 2001, and,
therefore, to approve the Shareholder Proposal.
The Board of Trustees recommends that you vote AGAINST the Shareholder Proposal.
If the shareholders of the Fund approve the Shareholder Proposal, as of July 10,
1996 (which shall be the "Effective Date" for implementation of a plan of
liquidation and dissolution of the Fund pursuant to the Shareholder Proposal)
the Fund (i) will cease to invest its assets in accordance with its investment
objectives, (ii) to the extent necessary, will commence the sale of its
portfolio securities in order to convert its assets to cash by August 1, 1996,
and (iii) will not engage in any business activity except for the purpose of
winding up its business and affairs, preserving the value of its assets and
distributing assets to its creditors and shareholders. On or before August 1,
1996, the Fund will pay (or reserve assets for the payment of) its creditors and
distribute all remaining assets to its shareholders pro rata and will thereafter
be terminated. The interests of shareholders in the assets of the Fund shall be
fixed on the basis of their holdings at the close of business on the Effective
Date. All expenses incurred by the Fund in carrying out the liquidation and
termination will be borne by the Fund.
As of the close of business on April 15, 1996, the value of the Fund's net
assets was $181,793,799 and there were 20,462,600 shares of beneficial interest
outstanding. Accordingly, the Fund's net asset value per share was $8.88. The
amounts to be distributed to shareholders of the Fund upon liquidation will be
reduced by the expenses of the Fund in connection with the liquidation.
Liquidation expenses will include portfolio transaction costs (including amounts
allocated for dealer markup on securities traded over the counter), legal fees
and expenses, accounting costs and other miscellaneous expenses.
The liquidating distribution received by a shareholder will consist of three
elements: (i) a capital gain dividend to the extent of the Fund's net long-term
capital gains recognized during the final tax year that the Fund designates as a
capital gain dividend; (ii) an ordinary income dividend to the extent of the
Fund's interest income and other capital gains earned during the final tax year
that have not previously been distributed; and (iii) a distribution treated as
payment for the shareholder's shares. The first two elements of the distribution
will be treated in the same manner as any other distribution of the Fund for
United States federal income tax purposes. The last element of the distribution
will be treated for United States federal income tax purposes as full payment in
exchange for the shareholder's shares a shareholder who is a Unitied States
resident or citizen will be taxed only to the extent the amount of such payment
exceeds the shareholder's basis in the shares and will realize a loss if the
amount of such payment is less than the shareholder's basis in the shares. Each
shareholder should consult with his or her own tax adviser for advice regarding
the application of current United States federal income tax law to such
shareholder's particular situation and with respect to the state, local and
other tax implications to such shareholder.
PROPOSAL 4: OTHER MATTERS
The Board does not intend to bring any matters before the Meeting other than
Proposals 1, 2 and 3 described above and is not aware of any other matters to be
brought before the Meeting or any adjournments thereof by others. If any other
matters properly come before the Meeting, it is intended that the accompanying
proxy may be voted on such matters in accordance with the best judgment of the
persons named in said proxy.
In the event that sufficient votes in favor of the proposals set forth in the
Notice of Annual Meeting of Shareholders are not received by the date of the
Meeting, the proxyholders may propose one or more adjournments of the Meeting
for a period or periods of not more than 60 days in the aggregate to permit
further solicitation of proxies, even though a quorum is present. Any such
adjournment will require the affirmative vote of a majority of the votes cast on
the question in person or by proxy at the session of the Meeting to be
adjourned. The costs of any such additional solicitation and of any adjourned
session will be borne by the Fund.
OTHER INFORMATION
The Manager
Franklin Advisers, Inc. ("Advisers"), 777 Mariners Island Blvd., San Mateo,
California 94404, serves as the Fund's investment manager. Advisers is a
wholly-owned subsidiary of Franklin Resources, Inc. ("Resources"), a publicly
owned holding company, the principal shareholders of which are Charles B.
Johnson and Rupert H. Johnson, Jr., who own approximately 20% and 16%,
respectively, of Resources' outstanding shares. Resources is engaged in various
aspects of the financial services industry through its various subsidiaries.
Advisers acts as investment manager or administrator to 36 U.S. registered
investment companies (119 separate series) with aggregate assets of over $81
billion.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16 of the Securities Exchange Act of 1934, as amended, requires that
trustees, certain officers, and persons who own more than ten percent of the
Fund's shares of beneficial interest, as well as the Fund's investment advisers
and certain affiliated persons of those investment advisers, file with the
Securities and Exchange Commission (the "SEC") and the New York Stock Exchange
reports of their ownership and changes in ownership of such common stock on
Forms 3, 4 and 5. Such filing persons are required by SEC regulations to furnish
to the Fund copies of all Forms 3, 4 and 5 that they file.
Based upon a review of these filings and certain written representations from
such persons that no other reports were required to be filed, the Fund believes
that, except as noted, the requirements of Section 16 were met. The Fund notes
that during the fiscal year ended November 30, 1995, Martin L. Flanagan
inadvertently failed to file in a timely manner an initial Form 3 due upon
becoming a Vice President and Chief Financial Officer in January, 1995. Mr.
Flanagan had no transactions in the Trust.
Shareholder Proposals
Any shareholder intending to present any proposal for consideration at the
Fund's next annual meeting must, in addition to meeting other applicable
requirements, mail such proposal to the Fund so that it is received at the
Fund's executive offices not less than 120 days in advance of May 3, 1997.
Reports to Shareholders and Financial Statements
The Annual Report to Shareholders of the Fund, including financial statements of
the Fund for the fiscal year ended November 30, 1995, has previously been sent
to all shareholders. The Annual Report should be read in conjunction with this
Proxy Statement, but is not part of the proxy soliciting material. Upon request,
shareholders may obtain without charge a copy of the Annual Report and most
recent semi-annual report succeeding the Annual Report, if any, by writing the
Fund at the address above or calling the Fund at 1-800/DIAL BEN.
Respectfully Submitted,
DEBORAH R. GATZEK
Secretary
Dated: May 3, 1996
San Mateo, California
IF YOU ARE UNABLE TO ATTEND THE MEETING IN PERSON YOU ARE REQUESTED TO FILL IN,
DATE AND SIGN THE PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED PREPAID ENVELOPE.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, GIVE
YOUR FULL TITLE AS SUCH. WHERE SHARES ARE HELD JOINTLY, BOTH SIGNATURES ARE
REQUIRED.
PROXY
FRANKLIN PRINCIPAL MATURITY TRUST
ANNUAL MEETING OF SHAREHOLDERS - JULY 9, 1996
The undersigned hereby revokes all previous proxies for his shares and
appoints Rupert H. Johnson, Jr., Harmon E. Burns, Deborah R. Gatzek and Larry
L. Greene, and each of them, proxies of the undersigned with full power of
substitution to vote all shares of Franklin Principal Maturity Trust (the
"Fund") which the undersigned is entitled to vote at the Fund's Annual
Meeting to be held at 777 Mariners Island Blvd., San Mateo, California at
1000 a.m. Pacific time on the 9th day of July 1996, including any
adjournments thereof, upon the matters set forth below.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. IT WILL BE
VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY SHALL BE VOTED
FOR THE PROPOSALS SET FORTH IN ITEMS 1 (INCLUDING ALL NOMINEES FOR TRUSTEES)
AND 2. AGAINST THE PROPOSAL SET FORTH IN ITEM 3 AND WITHIN THE DISCRETION
OF THE PROXYHOLDERS AS TO ANY OTHER MATTER PURSUANT TO ITEM 4.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
X PLEASE MARK VOTES AS IN THIS EXAMPLE.
1. Election of Trustees
Nominees: Frank H. Abbott, III, Harris J. Ashton, S. Joseph Fortunato, David
W. Garbellano, Edward B. Jamieson, Charles B. Johnson, Rupert H. Johnson,
Jr., Frank W.T. LaHaye, Gordon S. Macklin
FOR WITHHOLD AUTHORITY
ALL NOMINEES TO VOTE FOR ALL
LISTED ABOVE NOMINEES LISTED ABOVE
- -------------------------
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. Ratification of the selection of Coopers & Lybrand L.L.P., Certified
Public Accountants, as the independent auditors for the
Fund for the fiscal year ending November 30, 1996.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE AGAINST PROPOSAL 3
FOR AGAINST ABSTAIN
3. Liquidation of the Fund and distribution of assets to shareholders of the
fund no later than August 1, 1996.
GRANT WITHHOLD
4. To vote upon any other business which may legally come before the meeting.
MARK HERE
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
PLEASE SIGN AND PROMPTLY RETURN IN THE
ACCOMPANYING ENVELOPE. NO POSTAGE REQUIRED
IF MAILED IN THE U.S.
Note: please sign exactly as your name appears on the proxy. If signing for
estates, trusts, or corporations, title or capacity should be stated. If
shares are held jointly, each holder must sign.
Signature:_____________________ Date:_______________________
Signature:_____________________ Date:_______________________