SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.)
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FRANKLIN UNIVERSAL TRUST
(Name of Registrant as Specified in its Charter)
FRANKLIN UNIVERSAL TRUST
(Name of Person(s) Filing Proxy Statement)
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[GRAPHIC OMITTED][GRAPHIC OMITTED]
DISSIDENT SHAREHOLDERS LAUNCH PROXY CONTEST TO
UNSEAT FRANKLIN UNIVERSAL TRUST CURRENT BOARD OF TRUSTEES
February 4, 2008
Dear Shareholder:
A group of dissident shareholders called Bulldog Investors has filed a
proxy statement to elect their own nominees to the Board of Franklin
Universal Trust at the Fund's annual shareholder meeting on March 14, 2008.
In a letter to your current Board dated November 16, 2007, Bulldog Investors
said that it wanted to "permanently eliminate the Trust's persistent
double-digit discount to net asset value ("NAV") through open-ending,
liquidation or conducting a self-tender offer for 100% of the Trust's shares
at NAV."
IF THE DISSIDENT NOMINEES ARE ELECTED, WE STRONGLY BELIEVE THAT YOUR
FUND WOULD NOT CONTINUE TO OPERATE AS A CLOSED-END FUND - IT MAY BE
LIQUIDATED OR OPEN-ENDED.
Your Board wants to keep the Fund as a closed-end fund because they
believe that the Fund's current structure provides you with real benefits,
including:
o The Fund has had competitive market price performance, with a total
return of 6.38% (based on change in market price) for the year ended
December 31, 2007, and the top ranking in its Lipper Category for the
1-year and 3-year periods ended December 31, 2007 (based on change in
net asset value; source: Lipper).
o The Fund's discount is cyclical, not permanent - for more than 2 years
between 2001 and 2003, it traded at a premium.
o The Fund's Board has already taken affirmative steps to help reduce the
discount, including extending the Fund's open-market share repurchase
program.
o The Fund's combination of investments in utility stocks and high yield
bonds is unique in the marketplace - there is no other closed-end or
open-end fund quite like it.
o The Fund can use leverage in the form of debt securities to help
increase returns; open-end funds cannot.
o The Fund is almost always fully invested because it does not have to
meet redemptions; if the Fund were to open-end, it would rarely be fully
invested because it would need to keep cash on hand to pay for
redemptions.
o The Fund trades throughout the day on the New York Stock Exchange;
mutual funds are only priced once a day.
Your current Trustees have significant experience overseeing investment
vehicles. As described in the proxy statement, many of the Fund's nominees
have been Trustees since the Fund was launched in 1988, and are also on the
Boards of other open-end and closed-end funds managed by Franklin Templeton
Investments. They have had experience as senior officers and directors of
major business corporations, and some have also held senior positions in
state and federal government.
The dissident nominees all sit on the Board of Directors of the Mexico
Equity and Income Fund, Inc. (NYSE: MXE), a publicly traded closed-end
fund. As of December 31, 2007, MXE was trading at a discount of 14.30%, so
the dissident nominees do not appear to have had any more success preventing
"persistent double-digit discounts" in MXE than have the current Trustees of
the Fund. This is not surprising, given that discounts tend to be cyclical
and driven by market forces beyond the control of any single closed-end fund.
FOR THESE REASONS, WE ARE ASKING YOU TO VOTE FOR YOUR FUND'S CURRENT
TRUSTEES, AND AGAINST THE SHAREHOLDER PROPOSAL IN PROPOSAL 2 TO MERGE THE
FUND INTO FRANKLIN INCOME FUND, AN OPEN-END FUND.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS VERY
IMPORTANT. WE URGE YOU TO VOTE FOR YOUR BOARD'S NOMINEES AND AGAINST THE
DISSIDENT NOMINEES. Please complete, sign and date the enclosed WHITE proxy
card and return it in the enclosed postage-paid envelope. Please discard any
GREEN proxy card you receive.
If you have any questions, please call the Fund's proxy solicitor, The
Altman Group, at 1-800-336-5159.
Sincerely,
Charles B. Johnson
TRUSTEE AND CHAIRMAN OF THE BOARD,
FRANKLIN UNIVERSAL TRUST
YOUR VOTE IS IMPORTANT.
PLEASE SIGN AND RETURN MANAGEMENT'S PROXY CARD TODAY!
o If you hold your shares in a brokerage or bank account (in "street
name"), your broker or bank cannot vote your shares this year (as it has in
past routine annual meetings) unless you complete, sign and return the
enclosed WHITE proxy voting form.
o Please do not send back any GREEN you receive, even to vote against the
dissent nominees. Doing so will cancel any prior vote you cast for your
current Board and against the shareholder proposal (Proposal 2). Please
return only the WHITE proxy card.
o If you have already returned the dissident shareholders' GREEN proxy
card, you can still support your Board by returning the enclosed WHITE
proxy card. Only your latest dated proxy card will count.