As filed with the U.S. Securities and Exchange Commission on April 5, 2010
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ( )
Post-Effective Amendment No. ( )
(Check appropriate box or boxes)
FRANKLIN TEMPLETON FUND ALLOCATOR SERIES
(Exact Name of Registrant as Specified in Charter)
Registrant's Area Code and Telephone Number (650) 312-2000
ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
(Address of Principal Executive Offices) (Number, Street, City , State, Zip
Code)
CRAIG S. TYLE, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
(Name and Address of Agent for Service) (Number and Street) (City)(State)(Zip
Code)
Copies to:
Bruce G. Leto, Esquire
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Approximate Date of Proposed Public Offering: As soon as practicable after
this Registration Statement becomes effective under the Securities Act of
1933, as amended.
Title of the securities being registered: Class A, C, R and Advisor shares of
beneficial interest, with no par value, of Franklin Templeton Corefolio
Allocation Fund. No filing fee is due because Registrant is relying on
Section 24(f) of the Investment Company Act of 1940, as amended.
It is proposed that this filing will become effective on May 5, 2010 pursuant
to Rule 488.
FRANKLIN TEMPLETON INVESTMENTS
FRANKLIN TEMPLETON PERSPECTIVES ALLOCATION FUND
IMPORTANT SHAREHOLDER INFORMATION
The enclosed Prospectus/Information Statement is being provided to inform
you that on or about June 22, 2010, Franklin Templeton Perspectives Allocation
Fund ("Perspectives Fund"), a series of Franklin Templeton Fund Allocator Series
(the "Trust"), will be reorganized with and into the Franklin Templeton
Corefolio Allocation Fund ("Corefolio Fund"), also a series of the Trust. The
Prospectus/Information Statement discusses this proposed reorganization and
provides you information that you should consider. The Board of Trustees of the
Trust, on behalf of the Funds, approved the reorganization and concluded that
the reorganization is in the best interest of Perspectives Fund and its
shareholders. Both Funds have the same investment goal and have similar
investment strategies and risks.
We urge you to spend a few minutes reviewing the information in the
Prospectus/Information Statement. You do not need to take any action with
regards to your account. On or about June 22, 2010, your shares of Perspectives
Fund will be converted automatically at their net asset value into shares of the
corresponding class of Corefolio Fund.
We welcome your comments. If you have any questions, call Fund Information
at (800) DIAL BEN(R)/(800) 342-5236.
When reading this Prospectus/Information Statement, you will see
certain terms beginning with capital letters. This means the
term is explained in our glossary section.
TABLE OF CONTENTS
COVER PAGE Cover
PROSPECTUS/INFORMATION STATEMENT [__]
INTRODUCTION [__]
SUMMARY [__]
The Reorganization [__]
How do the investment goals and strategies of the [__]
Funds compare?
What are the risks of an investment in the Funds? [__]
Who administers the Funds? [__]
What are the administration fees of Perspectives [__]
Fund and Corefolio Fund?
What are the fees and expenses of each Fund and what [__]
might they be after the Reorganization?
How do the performance records of the Funds compare? [__]
Where can I find more financial and performance [__]
information about the Funds?
What are other key features of the Funds? [__]
REASONS FOR THE REORGANIZATION [__]
INFORMATION ABOUT THE REORGANIZATION [__]
How will the Reorganization be carried out? [__]
Who will pay the expenses of the Reorganization? [__]
What are the tax consequences of the Reorganization? [__]
What should I know about the shares of Corefolio [__]
Fund?
What are the capitalizations of the Funds and what [__]
might the capitalization be after the
Reorganization?
COMPARISON OF INVESTMENT GOALS, STRATEGIES AND RISKS [__]
Are there any significant differences between the [__]
investment goals,strategies and risks of each Fund?
What are the principal risk factors associated with [__]
investments in the Funds?
INFORMATION ABOUT THE FUNDS [__]
FURTHER INFORMATION ABOUT THE FUNDS [__]
PRINCIPAL HOLDERS OF SHARES [__]
GLOSSARY-USEFUL TERMS AND DEFINITIONS [__]
EXHIBITS TO PROSPECTUS/INFORMATION STATEMENT [__]
EXHIBIT A- Form of Plan of Reorganization by
Franklin Templeton Fund Allocator Series,
on behalf of its series Franklin
Templeton Perspectives Allocation Fund
and Franklin Templeton Corefolio
Allocation Fund (attached)
EXHIBIT B- Prospectus of Franklin Templeton Corefolio Allocation Fund
- Class A, Class B, Class C, Class R and Advisor Class and
Franklin Templeton Perspectives Allocation Fund - Class A,
Class C, Class R and Advisor Class, dated May 1, 2010
(enclosed)
EXHIBIT C- Ownership of the Funds
DATED [MAY 3, 2010]
ACQUISITION OF SUBSTANTIALLY ALL OF THE ASSETS OF
FRANKLIN TEMPLETON PERSPECTIVES ALLOCATION FUND
(A SERIES OF FRANKLIN TEMPLETON FUND ALLOCATOR SERIES)
BY AND IN EXCHANGE FOR SHARES OF
FRANKLIN TEMPLETON COREFOLIO ALLOCATION FUND
(A SERIES OF FRANKLIN TEMPLETON FUND ALLOCATOR SERIES)
This Prospectus/Information Statement is being furnished to shareholders
of Franklin Templeton Perspectives Allocation Fund ("Perspectives Fund"), a
series of Franklin Templeton Fund Allocator Series (the "Trust"), in connection
with a Plan of Reorganization (the "Plan"). According to the Plan, substantially
all of the assets of Perspectives Fund will be acquired by Franklin Templeton
Corefolio Allocation Fund ("Corefolio Fund," and together with Perspectives
Fund, the "Funds"), also a series of the Trust, in exchange for shares of
Corefolio Fund - Class A ("Corefolio Fund Class A shares"), Corefolio Fund -
Class C ("Corefolio Fund Class C shares"), Corefolio Fund - Class R ("Corefolio
Fund Class R shares") and Corefolio Fund - Advisor Class ("Corefolio Fund
Advisor Class shares") (the "Reorganization"). The Board of Trustees of the
Trust (the "Board") has approved the Plan and the Reorganization. Shareholders
of Perspectives Fund are not required to and are not being asked to approve the
Plan or the Reorganization.
Pursuant to the Plan, you will receive Corefolio Fund Class A shares of
equivalent aggregate net asset value ("NAV") to your investment in Class A
shares of Perspectives Fund ("Perspectives Fund Class A shares"), Corefolio Fund
Class C shares of equivalent aggregate NAV to your investment in Class C shares
of Perspectives Fund ("Perspectives Fund Class C shares"), Corefolio Fund Class
R shares of equivalent aggregate NAV to your investment in Class R shares of
Perspectives Fund ("Perspectives Fund Class R shares"), and Corefolio Fund
Advisor Class shares of equivalent aggregate NAV to your investment in Advisor
Class shares of Perspectives Fund ("Perspectives Fund Advisor Class shares").
Perspectives Fund will then be liquidated and dissolved.
Both Funds have the same investment goal - capital appreciation. The Funds
have similar investment strategies and risks. Both Funds are "static allocation"
funds; that is, they invest a fixed percentage of their assets in a combination
of other Franklin Templeton mutual funds ("underlying F-T funds"). The
underlying F-T funds, in turn, invest in U.S. and foreign equity securities,
fixed-income and money market securities. The Funds' performance depends on the
performance of the underlying F-T funds in which the Funds invest; therefore,
the risks associated with an investment in a Fund are also the risks associated
with an investment in the underlying F-T funds. Because the Funds are "static
allocation" funds, neither Fund has an investment manager; however, each Fund
has entered into a Fund Administration Agreement with Franklin Templeton
Services, LLC ("FT Services") pursuant to which FT Services periodically
rebalances each Fund's portfolio in accordance with its established investment
guidelines.
This Prospectus/Information Statement is being mailed on or about May 10,
2010 to the shareholders of record of Perspectives Fund as of the close of
business on April 5, 2010. This Prospectus/Information Statement provides the
information that you should know about the Reorganization and information about
Corefolio Fund that you ought to know before investing in Corefolio Fund. You
should retain it for future reference. Additional information about Corefolio
Fund and the proposed Reorganization has been filed with the SEC and can be
found in the following documents:
o The Prospectus of Corefolio Fund - Class A, Class B, Class C,
Class R and Advisor Class, dated May 1, 2010 (the "Corefolio Fund
Prospectus"), is enclosed with and considered a part of this
Prospectus/Information Statement.
o A Statement of Additional Information ("SAI") dated [May 3,
2010] relating to this Prospectus/Information Statement has been filed
with the SEC and is incorporated by reference into (considered a part
of) this Prospectus/Information Statement.
You may request a free copy of the SAI relating to this
Prospectus/Information Statement, the Corefolio Fund Prospectus referred to
above or additional information about Corefolio Fund without charge by calling
(800) DIAL BEN (R) or by writing to Franklin Templeton Investments at P.O. Box
997151, Sacramento, CA 95899-7151. The principal offices of the Trust are
located at One Franklin Parkway, San Mateo, California 94403-1906. You can reach
the offices of the Trust by telephone by calling (800) 632-2301.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON
THE ADEQUACY OF THIS PROSPECTUS/INFORMATION STATEMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER U.S. GOVERNMENT AGENCY.
MUTUAL FUND SHARES INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
INTRODUCTION
Pursuant to the Plan (attached hereto as Exhibit A), substantially all of
the assets of Perspectives Fund will be acquired by Corefolio Fund in exchange
for Class A, Class C, Class R and Advisor Class shares of Corefolio Fund.
Shareholders of Perspectives Fund will receive Class A, Class C, Class R or
Advisor Class shares of Corefolio Fund with an aggregate NAV equal to the
aggregate NAV of such shareholders' Class A, Class C, Class R or Advisor Class
shares of Perspectives Fund.
Below are some of the important questions you might have about the
Reorganization:
WHAT WILL HAPPEN TO MY PERSPECTIVES FUND INVESTMENT AFTER THE
REORGANIZATION IS COMPLETED?
You will become a shareholder of Corefolio Fund, an open-end investment
company, on or about June 22, 2010, and will no longer be a shareholder of
Perspectives Fund. You will receive Class A, Class C, Class R or Advisor Class
shares of Corefolio Fund with a value equal to the value of your investment in
Perspectives Fund as of the closing date. Perspectives Fund will then cease
operations and will be dissolved as a series of the Trust. The Board has
approved the Plan and the Reorganization. Shareholders of Perspectives Fund are
not required to and are not being asked to approve the Plan or the
Reorganization.
WHEN WILL PERSPECTIVES FUND CLOSE TO NEW INVESTMENTS?
Effective on or about March 19, 2010, Perspectives Fund closed to new
investors, with limited exceptions. After March 19, 2010, additional purchases
may be made by: (1) Employer Sponsored Retirement Plans with participant
accounts invested in Perspectives Fund on March 18, 2010; and (2) existing
shareholders. Perspectives Fund will not accept any additional purchases on or
after June 15, 2010.
WHAT ARE THE BENEFITS OF THE REORGANIZATION FOR ME?
The Board, on behalf of the Funds, approved the Reorganization at its
February 23, 2010 Board of Trustees meeting in order to combine Perspectives
Fund with a larger fund that has the same investment goal and substantially
similar investment strategies and risks. Perspectives Fund shareholders will
likely experience a slightly lower expense ratio and become shareholders of a
fund that will have a substantially similar asset allocation.
WILL I ENJOY THE SAME PRIVILEGES AS A SHAREHOLDER OF COREFOLIO
FUND THAT I CURRENTLY HAVE AS A SHAREHOLDER OF PERSPECTIVES FUND?
Yes. You will continue to enjoy the same shareholder privileges such as
the Automatic Investment Plan, Automatic Payroll Deduction, Automated Telephone
System, Distribution Options, Retirement Plans, Telephone/Online Privileges,
Systematic Withdrawal Plan and Franklin Templeton VIP Services.
DO PERSPECTIVES FUND AND COREFOLIO FUND HAVE SIMILAR INVESTMENT
GOALS AND STRATEGIES?
Perspectives Fund and Corefolio Fund have the same investment goal -
capital appreciation. The investment strategies and risks of the Funds are
similar. They both invest a fixed percentage of their assets in combination of
underlying F-T funds. The main difference between Perspectives Fund and
Corefolio Fund is their asset allocation among the underlying F-T funds in which
they invest. Perspectives Fund currently invests in Franklin Flex Cap Growth
Fund, Mutual Shares Fund and Templeton Growth Fund. Corefolio Fund currently
invests in Franklin Growth Fund, Mutual Shares Fund and Templeton Growth Fund.
However, the Board has recently approved an adjustment to Corefolio Fund's
investment allocation to underlying F-T funds whereby Corefolio Fund will invest
in Franklin Flex Cap Growth Fund, Franklin Growth Fund, Mutual Shares Fund and
Templeton Growth Fund (the "Corefolio allocation adjustment"). The investment
goals and strategies of Perspectives Fund and Corefolio Fund and the Corefolio
allocation adjustment are discussed further in the Summary below.
ARE THE EXCHANGE RIGHTS OF COREFOLIO FUND SIMILAR TO THOSE OF
PERSPECTIVES FUND?
Yes. How to exchange shares is described in the Corefolio Fund Prospectus
enclosed with this Prospectus/Information Statement.
WHO WILL PAY THE EXPENSES FOR THE REORGANIZATION?
Total expenses for the Reorganization are estimated at $127,920.
Perspectives Fund and Corefolio Fund will each pay 25% of the total cost of the
Reorganization ($31,980 per Fund) and FT Services will pay 50% of the total cost
of the Reorganization ($63,960).
SUMMARY
This is only a summary of certain information contained in this
Prospectus/Information Statement. You should read the more complete information
in the rest of this Prospectus/Information Statement, including the Plan
(attached as Exhibit A) and the Corefolio Fund Prospectus (enclosed as Exhibit
B).
THE REORGANIZATION
At a meeting held on February 23, 2010, the Board, on behalf of the Funds,
considered and approved a proposal to reorganize Perspectives Fund with and into
Corefolio Fund. Pursuant to the Plan, Perspectives Fund will transfer
substantially all of its assets to Corefolio Fund, in exchange for Class A,
Class C, Class R and Advisor Class shares of Corefolio Fund of equivalent
aggregate NAV. Your Class A, Class C, Class R and Advisor Class shares of
Perspectives Fund will then be exchanged for Class A, Class C, Class R and
Advisor Class shares, respectively, of Corefolio Fund of equivalent aggregate
NAV. This means that, although the total value of your investment will be the
same immediately before and after the exchange, the number of Corefolio Fund
shares that you receive will likely be different than the number of Perspectives
Fund shares that you surrender because of the Funds' different NAV per share.
After the shares of Corefolio Fund are distributed to Perspectives Fund
shareholders, Perspectives Fund will be completely liquidated and dissolved. As
a result of the Reorganization, you will cease to be a shareholder of
Perspectives Fund and will become a shareholder of Corefolio Fund. The exchange
will occur on the closing date of the Reorganization, which is the specific date
on which the Reorganization takes place. The closing date of the Reorganization
is expected to occur on or about June 22, 2010.
Each Fund is a static allocation fund, meaning that each Fund invests a
fixed percentage of its assets in specified underlying F-T funds. Therefore, the
Funds are not considered to be actively managed. The investment goals of the
Funds are the same and their allocations to underlying F-T funds are similar. In
addition, their respective allocations to the underlying F-T funds will become
even more similar upon completion of the Corefolio allocation adjustment
approved by the Board at its February 23, 2010 Board meeting. For the reasons
set forth in the "Reasons for the Reorganization" section of this
Prospectus/Information Statement, the Board, on behalf of each Fund, has
determined that the Reorganization is in the best interests of each Fund and its
shareholders. The Board also concluded that the interests of each Fund's
shareholders will not be diluted as a result of the Reorganization.
It is expected that Perspectives Fund shareholders will not recognize any
gain or loss for federal income tax purposes as a result of the exchange of
their shares for Corefolio Fund shares. You should, however, consult your tax
adviser regarding the effect, if any, of the Reorganization in light of your
individual circumstances. You should also consult your tax adviser about state
and local tax consequences. For more information about the tax consequences of
the Reorganization, please see the section entitled "Information About the
Reorganization - WHAT ARE THE TAX CONSEQUENCES OF THE REORGANIZATION?"
HOW DO THE INVESTMENT GOALS AND STRATEGIES OF THE FUNDS COMPARE?
Both Funds have the same investment goal - capital appreciation. Each Fund
is a "static allocation" fund that invests a fixed percentage of its assets in a
combination of underlying F-T funds. The underlying F-T funds, in turn, invest
primarily in U.S. and foreign equity securities, and, to a lesser extent,
fixed-income and money market securities. The main difference in the investment
strategies between Perspectives Fund and Corefolio Fund is their asset
allocation among the underlying F-T funds. Perspectives Fund currently invests
in a combination of Franklin Flex Cap Growth Fund, Mutual Shares Fund and
Templeton Growth Fund. Corefolio Fund currently invests in Franklin Growth Fund,
Mutual Shares Fund and Templeton Growth Fund. The Corefolio allocation
adjustment will provide a 25% allocation to each of Franklin Growth Fund,
Franklin Flex Cap Growth Fund, Mutual Shares Fund and Templeton Growth Fund. It
is anticipated that the Corefolio allocation adjustment will take place prior to
the closing of the Reorganization. The table below shows the current allocation
by each Fund in the underlying F-T funds, as well as the anticipated allocation
of Corefolio Fund following the Corefolio allocation adjustment:
PERSPECTIVES FUND COREFOLIO FUND COREFOLIO FUND
(CURRENT) (CURRENT) (AFTER COREFOLIO
ALLOCATION ADJUSTMENT)
Franklin Flex Cap Fund Franklin Flex Cap
(33 1/3%) ______________________ Fund (25%)
Franklin Growth Fund Franklin Growth Fund
______________________ (50%) (25%)
Mutual Shares Fund Mutual Shares Fund Mutual Shares Fund
(33 1/3%) (25%) (25%)
Templeton Growth Fund Templeton Growth Fund Templeton Growth Fund
(33 1/3%) (25%) (25%)
For more information about the investment goals and strategies of
Perspectives Fund and Corefolio Fund, including a description of the investment
goals and strategies of the underlying F-T funds, please see the section
"Comparison of Investment Goals, Strategies and Risks" in this
Prospectus/Information Statement.
WHAT ARE THE RISKS OF AN INVESTMENT IN THE FUNDS?
Investments in Perspectives Fund and Corefolio Fund involve risks common
to most mutual funds. There is no guarantee against losses resulting from an
investment in Perspectives Fund or Corefolio Fund, or that Perspectives Fund or
Corefolio Fund will achieve its investment goal.
Because the Funds' investments are concentrated in the underlying F-T
funds, and the Funds' performance is directly related to the performance of the
underlying F-T funds held by them, the ability of the Funds to achieve their
investment goal is directly related to the ability of the underlying F-T funds
to meet their investment goals. In addition, shareholders of the Funds will
indirectly bear the fees and expenses of the underlying F-T funds. The Funds
have the following principal risks in common: Risk of investing in stocks, value
style investing risk, growth style investing risk, risk of investing in foreign
securities, sector risk, risk of investing in smaller and midsize companies,
risk of investing in derivative instruments and management risk. Below is a
summary of the principal risks to which the Funds, through their investment in
the underlying F-T funds, are subject:
STOCK RISK - Generally, stocks historically have outperformed other types
of investments over the long term, but individual stock prices tend to go up and
down more dramatically. A slower-growth or recessionary economic environment
could have an adverse effect on the price of the various stocks held by an
underlying F-T fund.
VALUE STYLE INVESTING RISK - A value stock may not increase in price as
anticipated by the investment manager if other investors fail to recognize the
company's value and bid up the price, the markets favor faster-growing
companies, or the factors that the investment manager believes will increase the
price of the security do not occur.
GROWTH STYLE INVESTING RISK - Growth stock prices reflect projections of
future earnings or revenues, and can, therefore, fall dramatically if the
company fails to meet those projections. Prices of these companies' securities
may be more volatile than other securities, particularly over the short term.
FOREIGN SECURITIES RISK - Investing in foreign securities typically
involves more risks than investing in U.S. securities, and include risks
associated with: political and economic developments - the political, economic
and social structures of some foreign countries may be less stable and more
volatile than those in the U.S.; trading practices - government supervision and
regulation of foreign security and currency markets, trading systems and brokers
may be less than in the U.S.; availability of information - foreign issuers may
not be subject to the same disclosure, accounting and financial reporting
standards and practices as U.S. issuers; limited markets - certain foreign
issuers may be less liquid (harder to sell) and more volatile; and currency
exchange rate fluctuations and policies. The risks of foreign investments
typically are greater in less developed countries or emerging market countries.
SECTORS RISK - To the extent that an underlying F-T fund focuses on
particular sectors of the market from time to time, such underlying F-T fund may
carry greater risks of adverse developments in such sectors than a fund that
invests in a wider variety of sectors.
RISK OF INVESTING IN SMALLER AND MIDSIZE COMPANIES - Securities issued by
smaller and midsize companies may be more volatile in price than those of larger
companies, involve substantial risks and should be considered speculative. Such
risks may include greater sensitivity to economic conditions, less certain
growth prospects, lack of depth of management and funds for growth and
development and limited or less developed product lines and markets. In
addition, smaller companies may be particularly affected by interest rate
increases, as they may find it more difficult to borrow money to continue or
expand operations, or may have difficulty in repaying any loans.
RISK OF INVESTING IN DERIVATIVE INSTRUMENTS - The performance of
derivative instruments depends largely on the performance of an underlying
currency, security or index and often has risks similar to its underlying
instrument, in addition to other risks. Derivative instruments involve costs,
may be volatile and illiquid, may give rise to leverage and may involve a small
initial investment relative to the risk assumed. There may also be imperfect
correlation between the value of the derivative and the underlying instrument.
When used for hedging, the change in value of the derivative may also not
correlate specifically with the currency, security or other risk being hedged.
With over-the-counter derivatives, there is the risk that the other party to the
transaction will fail to perform.
MANAGEMENT RISK - The underlying F-T funds are subject to management risk
because they are each an actively managed investment portfolio. Each underlying
F-T fund's investment manager will apply investment techniques and risk analyses
in making investment decisions for the underlying F-T fund, but there can be no
guarantee that these decisions will produce the desired results.
For more information about the principal risks of the Funds, see the
section "What are the principal risk factors associated with investments in the
Funds?" under the heading "Comparison of Investment Goals, Strategies and Risks"
below.
WHO ADMINISTERS THE FUNDS?
Because each Fund is a "static allocation" fund that invests a fixed
percentage of its assets in certain specific underlying F-T funds, neither the
Perspectives Fund nor the Corefolio Fund have an investment manager; however,
each Fund has entered into a Fund Administration Agreement with FT Services to
provide certain administrative services and facilities to the Funds. FT Services
monitors the percentage of each Fund's assets allocated to the underlying F-T
funds and rebalances the Fund's portfolio whenever the percentage of assets
allocated to one or more underlying F-T funds is below or above 3% of the
applicable fixed percentage. In addition, FT Services provides services in
connection with the preparation and maintenance of books, records, and tax and
financial reports and monitoring compliance with regulatory requirements.
The management of the business and affairs of the Funds is the
responsibility of the Board. Each Fund is a series of the Trust, an open-end,
registered management investment company, commonly referred to as a mutual fund.
The Trust was organized as a Delaware statutory trust on October 2, 1995.
FT Services may receive assistance, at no charge to the Funds, from its
corporate affiliate, Franklin Advisers, Inc. ("Advisers"), in monitoring the
underlying F-T funds and the Funds' investments in the underlying F-T funds. T.
Anthony Coffey, CFA, Vice President of Advisers, assists FT Services, at no
charge to the Fund, in monitoring the underlying F-T funds and the Funds'
investments therein and assists in the periodic rebalancing of the Funds.
Advisers is a direct, wholly owned subsidiary of Franklin Resources, Inc.
("Resources"). Resources is a publicly owned global investment organization
operating as Franklin Templeton Investments. As of February 28, 2010, Resources
reported preliminary month-end assets under management by the company's
subsidiaries of $556.3 billion. The principal shareholders of Resources are
Charles B. Johnson and Rupert H. Johnson, Jr. Franklin Templeton Investments
provides global and domestic investment management services through its
Franklin, Templeton, Mutual Series and Fiduciary Trust subsidiaries.
Franklin Templeton Investments currently includes 44 U.S. registered
investment companies, with approximately 144 U.S.-based funds or series.
WHAT ARE THE ADMINISTRATION FEES OF PERSPECTIVES FUND AND
COREFOLIO FUND?
Under the Fund Administration Agreement between the Trust and FT Services,
the Perspectives Fund and Corefolio Fund each pay FT Services a monthly
administration fee equal to an annual rate of 0.10% of such Fund's average daily
net assets.
For the fiscal year ended December 31, 2009, the administration fees,
before any fee waiver or expense reimbursement, totaled $190,760 and $413,938
for Perspectives Fund and Corefolio Fund, respectively. However, under an
agreement by F-T Services to limit its fees, the Funds did not pay an
administration fee for the fiscal year ended December 31, 2009.
Perspectives Fund and Corefolio Fund, as shareholders of the underlying
F-T funds, will indirectly bear their proportionate share of any management fees
and other expenses paid by the underlying F-T funds. For more information about
the management fees and other expenses paid by the underlying F-T funds, see the
section entitled "Administration" in the Corefolio Fund Prospectus, which is
enclosed with this Prospectus/Information Statement and also the section below
entitled "WHAT ARE THE FEES AND EXPENSES OF EACH FUND AND WHAT MIGHT THEY BE
AFTER THE REORGANIZATION?"
WHAT ARE THE FEES AND EXPENSES OF EACH FUND AND WHAT MIGHT
THEY BE AFTER THE REORGANIZATION?
The tables below describe the fees and expenses that you may pay if you
buy and hold shares of the Funds. The tables also show the estimated fees and
expenses for Corefolio Fund after the Reorganization. The purpose of the tables
is to assist you in understanding the various costs and expenses that you will
bear directly or indirectly as a shareholder of Corefolio Fund.
FEE TABLE FOR CLASS A SHARES OF
PERSPECTIVES FUND AND COREFOLIO FUND
ACTUAL+ PROJECTED++
---------------------------------
PERSPECTIVES COREFOLIO COREFOLIO FUND
FUND FUND CLASS A AFTER
CLASS A CLASS A REORGANIZATION
---------------------------------
SHAREHOLDER FEES
(fees paid directly from your
investment)
Maximum sales charge (load)
imposed on purchase (as
percentage of offering price) 5.75% 5.75% 5.75%
Maximum deferred sales charge
(load) (as a percentage of the
lower of original purchase
price or sale proceeds) None None None
ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year
as a percentage of the value of
your investment)
Distribution and service (12b-1)
fees 0.28% 0.27% 0.27%
---------------------------------
Other expenses (including
administration fees) 0.28%(1) 0.24%(1) 0.21%(3)
---------------------------------
Acquired fund fees and expenses 0.83%(2) 0.82%(2) 0.81%
---------------------------------
Total annual fund operating
expenses 1.39% 1.33% 1.29%
---------------------------------
Fee waiver and expense
reimbursement (0.18%)(1) (0.14%)(1) (0.11%)(1)
---------------------------------
TOTAL ANNUAL FUND OPERATING
EXPENSES AFTER FEE WAIVER AND
EXPENSE REIMBURSEMENT 1.21%(1)(2) 1.19%(1)(2) 1.18%(1)
---------------------------------
+ Information for Perspectives Fund and Corefolio Fund is provided as of
December 31, 2009.
++ Projected expenses based on current and anticipated Corefolio Fund expenses.
(1) The administrator has contractually agreed to waive or assume certain
expenses so that common expenses (excluding Rule 12b-1 fees and acquired fund
fees and expenses) for Class A shares of the Fund do not exceed 0.10% (other
than certain non-routine expenses) until April 30, 2011.
(2) Total annual fund operating expenses differ from the ratio of expenses to
average net assets shown in the Financial Highlights in the Corefolio Fund
Prospectus, which reflect the operating expenses of the Funds and do not
include acquired fund fees and expenses.
(3) Projected expenses are based on current and anticipated Corefolio Fund
expenses as if the Transaction had been effective as of January 1, 2009 and
do not include the estimated costs of the transaction of approximately
$31,980 to be borne by Corefolio Fund.
EXAMPLE
This example can help you compare the cost of investing in Perspectives
Fund Class A Shares with the cost of investing in Corefolio Fund Class A Shares,
both before and after the Reorganization. The Example assumes that you invest
$10,000 in each respective Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The Example also assumes that
your investment has a 5% return each year and that each Fund's operating
expenses remain the same. Although your actual costs and returns may be higher
or lower, based on these assumptions your costs would be:
1 3 5 10
Year Years Years Years
--------------------------------------------------------------------
If you sell your shares at the end of the period:
Perspectives Fund - Class A $691 $973 $1,276 $2,133
Corefolio Fund - Class A $689 $959 $1,249 $2,073
Projected Corefolio Fund - Class A $688 $950 $1,232 $2,033
(after Reorganization)
FEE TABLE FOR CLASS C SHARES OF
PERSPECTIVES FUND AND COREFOLIO FUND
ACTUAL+ PROJECTED++
---------------------------------
PERSPECTIVES COREFOLIO COREFOLIO
FUND FUND FUND
CLASS C CLASS C CLASS C
AFTER
REORGANIZATION
---------------------------------
SHAREHOLDER FEES
(fees paid directly from your
investment)
Maximum sales charge (load)
imposed on purchase (as
percentage of offering price) None None None
Maximum deferred sales charge
(load) (as a percentage of the
lower of original purchase
price or sale proceeds) 1.00% 1.00% 1.00%
ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year
as a percentage of the value of
your investment)
Distribution and service (12b-1)
fees 0.99% 0.99% 0.99%
---------------------------------
Other expenses (including 0.28%(1) 0.24%(1) 0.21%(3)
administration fees)
---------------------------------
Acquired fund fees and expenses 0.83%(2) 0.82%(2) 0.81%
---------------------------------
Total annual fund operating 2.10% 2.05% 2.01%
expenses
---------------------------------
Fee waiver and expense
reimbursement (0.18%)(1) (0.14%)(1) (0.11%)(1)
---------------------------------
TOTAL ANNUAL FUND OPERATING
EXPENSES AFTER FEE WAIVER AND
EXPENSE REIMBURSEMENT 1.92%(1)(2) 1.91%(1)(2) 1.90%(1)
=================================
+ Information for Perspectives Fund and Corefolio Fund is provided as of
December 31, 2009.
++ Projected expenses based on current and anticipated Corefolio Fund expenses.
(1) The administrator has contractually agreed to waive or assume certain
expenses so that common expenses (excluding Rule 12b-1 fees and acquired fund
fees and expenses) for Class C shares of the Fund do not exceed 0.10% (other
than certain non-routine expenses) until April 30, 2011.
(2) Total annual fund operating expenses differ from the ratio of expenses to
average net assets shown in the Financial Highlights in the Corefolio Fund
Prospectus, which reflect the operating expenses of the Funds and do not
include acquired fund fees and expenses.
(3) Projected expenses are based on current and anticipated Corefolio Fund
expenses as if the Transaction had been effective as of January 1, 2009 and
do not include the estimated costs of the transaction of approximately
$31,980 to be borne by Corefolio Fund.
EXAMPLE
This example can help you compare the cost of investing in Perspectives
Fund Class C Shares with the cost of investing in Corefolio Fund Class C Shares,
both before and after the Reorganization. The Example assumes that you invest
$10,000 in each Fund for the time periods indicated and then redeem all of your
shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that each Fund's operating expenses
remain the same. Although your actual costs and returns may be higher or lower,
based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------
If you sell your shares at the end of the period:
Perspectives Fund - Class C $ 295 $ 641 $1,112 $ 2,417
Corefolio Fund - Class C $ 294 $ 629 $1,090 $ 2,368
Projected Corefolio Fund - Class C $ 293 $ 620 $1,073 $ 2,329
(after Reorganization)
If you do not sell your shares
Perspectives Fund - Class C $ 195 $ 641 $1,112 $ 2,417
Corefolio Fund - Class C $ 194 $ 629 $1,090 $ 2,368
Projected Corefolio Fund - Class C $ 193 $ 620 $1,073 $ 2,329
(after Reorganization)
FEE TABLE FOR CLASS R SHARES OF
PERSPECTIVES FUND AND COREFOLIO FUND
ACTUAL+ PROJECTED++
---------------------------------
PERSPECTIVES COREFOLIO COREFOLIO FUND
FUND FUND CLASS RAFTER
CLASS R CLASS R REORGANIZATION
---------------------------------
SHAREHOLDER FEES
(fees paid directly from your
investment)
Maximum sales charge (load)
imposed on purchase (as
percentage of offering price) None None None
Maximum deferred sales charge
(load) (as a percentage of the
lower of original purchase
price or sale proceeds) None None None
ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year
as a percentage of the value of
your investment)
Distribution and service (12b-1)
fees 0.50% 0.50% 0.50%
---------------------------------
Other expenses (including
administration fees) 0.28%(1) 0.24%(1) 0.21%(3)
---------------------------------
Acquired fund fees and expenses
0.83%(2) 0.82%(2) 0.81%
---------------------------------
Total annual fund operating
expenses 1.61% 1.56% 1.52%
---------------------------------
Fee waiver and expense
reimbursement (0.18%)(1) (0.14%)(1) (0.11%)(1)
---------------------------------
TOTAL ANNUAL FUND OPERATING
EXPENSES AFTER FEE WAIVER AND
EXPENSE REIMBURSEMENT 1.43%(1)(2) 1.42%(1)(2) 1.41%(1)
=================================
+ Information for Perspectives Fund and Corefolio Fund is provided as of
December 31, 2009.
++ Projected expenses based on current and anticipated Corefolio Fund expenses.
(1) The administrator has contractually agreed to waive or assume certain
expenses so that common expenses (excluding Rule 12b-1 fees and acquired fund
fees and expenses) for Class R shares of the Fund do not exceed 0.10% (other
than certain non-routine expenses) until April 30, 2011.
(2) Total annual fund operating expenses differ from the ratio of expenses to
average net assets shown in the Financial Highlights in the Corefolio Fund
Prospectus, which reflect the operating expenses of the Funds and do not
include acquired fund fees and expenses.
(3) Projected expenses are based on current and anticipated Corefolio Fund
expenses as if the Transaction had been effective as of January 1, 2009 and
do not include the estimated costs of the transaction of approximately
$31,980 to be borne by Corefolio Fund.
EXAMPLE
This example can help you compare the cost of investing in Perspectives
Fund Class R Shares with the cost of investing in Corefolio Fund Class R Shares,
both before and after the Reorganization. The Example assumes that you invest
$10,000 in each Fund for the time periods indicated and then redeem all of your
shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that each Fund's operating expenses
remain the same. Although your actual costs and returns may be higher or lower,
based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------
--------------------------------------------------------------------
If you sell your shares at the end of the period:
Perspectives Fund - Class R $ 146 $ 490 $ 859 $ 1,896
Corefolio Fund - Class R $ 145 $ 479 $ 837 $ 1,845
Projected Corefolio Fund - Class R $ 144 $ 469 $ 819 $ 1,803
(after Reorganization)
FEE TABLE FOR ADVISOR CLASS SHARES OF
PERSPECTIVES FUND AND COREFOLIO FUND
ACTUAL+ PROJECTED++
---------------------------------
-----------
PERSPECTIVES COREFOLIO COREFOLIO FUND
FUND FUND ADVISOR CLASS
ADVISOR ADVISOR AFTER
CLASS CLASS REORGANIZATION
---------------------------------
SHAREHOLDER FEES
(fees paid directly from your
investment)
Maximum sales charge (load)
imposed on purchase (as
percentage of offering price) None None None
Maximum deferred sales charge
(load) (as a percentage of the
lower of original purchase
price or sale proceeds) None None None
ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year
as a percentage of the value of
your investment)
Distribution and service (12b-1)
fees None None None
---------------------------------
Other expenses (including 0.28%(1) 0.24%(1) 0.21%(3)
administration fees)
---------------------------------
Acquired fund fees and expenses 0.83%(2) 0.82%(2) 0.81%
---------------------------------
Total annual fund operating
expenses 1.11% 1.06% 1.02%
---------------------------------
Fee waiver and expense
reimbursement (0.18%)(1) (0.14%)(1) (0.11%)(1)
---------------------------------
TOTAL ANNUAL FUND OPERATING 0.93%(1)(2) 0.92%(1)(2) 0.91%(1)
EXPENSES AFTER FEE WAIVER AND
EXPENSE REIMBURSEMENT
=================================
+ Information for Perspectives Fund and Corefolio Fund is provided as of
December 31, 2009.
++ Projected expenses based on current and anticipated Corefolio Fund expenses.
(1) The administrator has contractually agreed to waive or assume certain
expenses so that common expenses (excluding Rule 12b-1 fees and acquired fund
fees and expenses) for Advisor Class shares of the Fund do not exceed 0.10%
(other than certain non-routine expenses) until April 30, 2011.
(2) Total annual fund operating expenses differ from the ratio of expenses to
average net assets shown in the Financial Highlights in the Corefolio Fund
Prospectus, which reflect the operating expenses of the Funds and do not
include acquired fund fees and expenses.
(3) Projected expenses are based on current and anticipated Corefolio Fund
expenses as if the Transaction had been effective as of January 1, 2009 and
do not include the estimated costs of the transaction of approximately
$31,980 to be borne by Corefolio Fund.
EXAMPLE
This example can help you compare the cost of investing in Perspectives
Fund Advisor Class Shares with the cost of investing in Corefolio Fund Advisor
Class Shares, both before and after the Reorganization. The Example assumes that
you invest $10,000 in each Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The Example also assumes that
your investment has a 5% return each year and that each Fund's operating
expenses remain the same. Although your actual costs and returns may be higher
or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------
If you sell your shares at the end of the period:
Perspectives Fund - Advisor Class $ 95 $ 335 $ 594 $ 1,336
Corefolio Fund - Advisor Class $ 94 $ 323 $ 571 $ 1,281
Projected Corefolio Fund - Advisor $ 93 $ 314 $ 553 $ 1,238
Class (after Reorganization)
----------------------
SPECIAL SERVICING AGREEMENT
Effective May 1, 2009, the Funds entered into a Special Servicing
Agreement with their underlying F-T funds and certain service providers of the
Funds and the underlying F-T funds, pursuant to which each underlying F-T fund
pays a portion of the Funds' expenses, including transfer agency and shareholder
servicing costs, to the extent such payments are less than the amount of the
benefits realized or expected to be realized by the underlying F-T fund from the
investment in the underlying F-T fund by the Funds.
HOW DO THE PERFORMANCE RECORDS OF THE FUNDS COMPARE?
Corefolio Fund Class A Shares have outperformed Perspectives Fund Class A
shares over the one-year, five-year and since inception periods ended December
31, 2009. The average annual total return figures at net asset value, as of
December 31, 2009, are shown below:
AVERAGE ANNUAL TOTAL RETURNS
(FIGURES REFLECT SALES CHARGES)
Since
1 Year 5 Years Inception(1)
Perspectives Fund - Class A 23.13% -0.23% 2.05%
Corefolio Fund - Class A 25.05% 0.02% 3.43%
Perspectives Fund - Class C 28.70% 0.26% 2.47%
Corefolio Fund - Class C 30.80% 0.53% 3.67%
Perspectives Fund - Class R 30.34% 0.77% 2.98%
Corefolio Fund - Class R 32.49% 1.02% 4.21%
Perspectives - Advisor Class 31.02% 1.30% 3.51%
Corefolio Fund - Advisor Class 33.01% 1.51% 4.69%
(1) Perspectives Fund's inception date is August 2, 2004. Corefolio Fund's
inception date is August 15, 2003.
WHERE CAN I FIND MORE FINANCIAL AND PERFORMANCE INFORMATION ABOUT
THE FUNDS?
The Corefolio Fund Prospectus (enclosed as Exhibit B) contains additional
financial and performance information about each Fund, including each Fund's
financial performance for the past five years under the heading "Financial
Highlights." Additional performance information as of the calendar year ended
December 31, 2009, including after-tax return information, is contained in the
Corefolio Fund Prospectus under the heading "Fund Summary - Performance." The
Funds' Annual Report to Shareholders for the fiscal year ended December 31, 2009
contains additional performance information about the Funds under the heading
"Performance Summary." The Funds' Annual Report to Shareholders is available
free of charge upon request (see below the section entitled "Information about
the Funds").
WHAT ARE OTHER KEY FEATURES OF THE FUNDS?
The Funds use the same service providers for the following services:
CUSTODY SERVICES. Franklin Templeton Investor Services, LLC ("Investor
Services"), 3344 Quality Drive, Rancho Cordova, CA 95670-7313, as the transfer
agent for the underlying F-T funds, effectively acts as the Funds' custodian and
holds the Funds' shares of the underlying F-T funds on its books. The Bank of
New York Mellon, Mutual Funds Division, 100 Church Street, New York, NY 10286,
acts as custodian of the Funds' cash, pending investment in shares of the
underlying F-T funds.
TRANSFER AGENCY SERVICES. Investor Services, an indirect wholly owned
subsidiary of Resources, is the shareholder servicing and transfer agent and
dividend-paying agent for Perspectives Fund and Corefolio Fund.
DISTRIBUTION SERVICES. Franklin Templeton Distributors, Inc.
("Distributors") acts as the principal underwriter in the continuous public
offering of each Fund's shares under the same terms and conditions.
DISTRIBUTION AND SERVICE (12B-1) FEES. Class A shares, Class C shares and
Class R shares of each Fund have a separate distribution or "Rule 12b-1" plan.
Under each plan, each Fund may pay Distributors or others for the expenses of
activities that are primarily intended to sell shares of that class. These
expenses may include, among others, distribution or service fees paid to
Securities Dealers or others who have executed a servicing agreement with such
Fund, Distributors or its affiliates; and the expenses of printing prospectuses
and reports used for sales purposes, and preparing and distributing sales
literature and advertisements. The distribution and service (12b-1) fees charged
to each class are based only on the fees attributable to that particular class.
Under the Class A plans for Corefolio Fund and Perspectives Fund, the Funds may
pay up to 0.35% per year of the average daily net assets of Class A shares;
however, the Board has determined to set the current amount payable under the
Class A plans at 0.30% until further notice. Under the Class C plans, each Fund
may pay up to 1.00% per year of the average daily net assets of Class C shares.
Under the Class R plans, the Funds may pay up to 0.50% per year of the average
daily net assets of Class R shares. For more information regarding Corefolio
Fund's Rule 12b-1 plans, please see "The Underwriter - Distribution and Service
(12b-1) fees" in its current SAI dated May 1, 2010.
Advisor Class shares of Corefolio Fund and Perspectives Fund have not
adopted a Rule 12b-1 plan.
PURCHASES AND REDEMPTIONS. The maximum front-end sales charge imposed on
purchases of Class A shares of Corefolio Fund and Perspectives Fund is 5.75%
with reduced charges for purchases of $50,000 or more and no front-end sales
charges for purchases of $1 million or more. However, for purchases of $1
million or more, redemptions of Class A shares that were purchased without an
initial sales charge generally are subject to a 1% contingent deferred sales
charge ("CDSC") if you sell the shares within 18 months of purchase. Class C
shares do not have an initial sales charge but have a 1% CDSC if shares are sold
within 12 months of purchase. Class R and Advisor shares do not have an initial
sales charge or a CDSC.
Shares of each Fund may be redeemed at their respective NAV per share,
subject to any applicable CDSC. Additional information and specific instructions
explaining how to buy, sell, and exchange shares of Corefolio Fund are outlined
in the Corefolio Fund Prospectus under the heading "Your Account." The
accompanying Corefolio Fund Prospectus also lists phone numbers for you to call
if you have any questions about your account under the heading "Questions."
DIVIDENDS AND DISTRIBUTIONS. Each Fund intends to pay a dividend
semiannually representing substantially all of its net investment income and to
distribute capital gains, if any, annually. The amount of these distributions
will vary and there is no guarantee that Perspectives Fund or Corefolio Fund
will pay income dividends or capital gains distributions.
The tax implications of an investment in each Fund are generally the same.
For more information about the tax implications of investments in the Funds, see
the Corefolio Fund Prospectus under the heading "Distributions and Taxes."
REASONS FOR THE REORGANIZATION
The Board, on behalf of Perspectives Fund, has approved the Reorganization
in order to combine Perspectives Fund with a larger fund that has generally
similar investment goals and strategies. Shareholders of both Funds potentially
could benefit from the growth in assets realized by the Reorganization.
Perspectives Fund shareholders would become shareholders of a fund with a lower
expense ratio.
A meeting of the Board was held on February 23, 2010 to consider the
proposed Reorganization. The Trustees who are not interested persons (as that
term is defined in the 1940 Act) of the Trust (the "Independent Trustees")
advised on this matter by their independent counsel.
The Board requested and received from Distributors written materials
containing relevant information about Corefolio Fund and the proposed
Reorganization, including fee and expense information on an actual and future
estimated basis, and comparative performance data. The Board considered the
potential benefits and costs of the Reorganization to Perspectives Fund's
shareholders. The Board reviewed detailed information about: (1) the investment
goals and strategies of Corefolio Fund; (2) the portfolio administration of
Corefolio Fund; (3) the differences in the investment strategies used by
Perspectives Fund in achieving its investment goal from those used by Corefolio
Fund; (4) the comparative short-term and long-term investment performance of
Perspectives Fund and Corefolio Fund; (5) the current expense ratios of
Perspectives Fund and Corefolio Fund; (6) the agreement by FT Services to pay
50% of the expenses related to the Reorganization; and (7) the expected tax
consequences of the Reorganization to Perspectives Fund and its shareholders.
At its February 23, 2010 Board meeting, the Board also considered and
approved the Corefolio allocation adjustment by adding Franklin Flex Growth Fund
as an underlying F-T fund to Corefolio Fund, in order to realign Corefolio Fund
to its original four underlying F-T funds strategy. Prior to May 6, 2009,
Corefolio Fund held a 25% allocation in Franklin Capital Growth Fund, a growth
style equity product. Franklin Capital Growth Fund was reorganized into Franklin
Growth Fund, resulting in Corefolio Fund holding a 50% position in Franklin
Growth Fund. The Board determined that Franklin Flex Cap Growth Fund would be a
suitable replacement for Franklin Capital Growth Fund. Based upon Fund
management's recommendation, the Board also determined that the addition of this
fourth underlying F-T fund would increase Corefolio Fund's diversification for
shareholders among holdings and investment styles. In connection with the
Reorganization, the Board considered that after the Corefolio allocation
adjustment, Perspectives Fund and Corefolio Fund would have even more similar
investment strategies including each having an allocation to Franklin Flex Cap
Growth Fund.
The Board also considered the administration fee paid by the Funds. Each
Fund pays an administration fee equal to 0.10% of such Fund's average daily net
assets. The Board also considered the fact that the administrator has
contractually agreed to waive or assume certain expenses so that common expenses
(excluding Rule 12b-1 fees and acquired fund fees and expenses) for each class
of the Fund do not exceed 0.10% (other than certain non-routine expenses) until
April 30, 2011.
Based upon their evaluation of the relevant information presented to them,
and in light of their fiduciary duties under federal and state law, the Board,
including all of the Independent Trustees, concluded that the Reorganization is
in the best interests of Perspectives Fund and its shareholders and that the
interests of the Perspectives Fund's shareholders will not be diluted as a
result of the Reorganization. The Board approved the Plan and the Reorganization
on February 23, 2010.
The Board, on behalf of Corefolio Fund, also concluded that the
Reorganization is in the best interests of Corefolio Fund and its shareholders
and that the interests of the Corefolio Fund's shareholders will not be diluted
as a result of the Reorganization.
INFORMATION ABOUT THE REORGANIZATION
This is only a summary of the Plan. You should read the actual Plan, which
is attached as Exhibit A, for complete information about the Reorganization.
HOW WILL THE REORGANIZATION BE CARRIED OUT?
The Reorganization will take place after various conditions are satisfied,
including the preparation of certain documents. The Trust will determine a
specific date, called the "closing date," for the actual Reorganization to take
place. Perspectives Fund closed to new investors on or about March 19, 2010.
However, existing investors will be permitted to purchase additional shares
until June 15, 2010.
Pursuant to the Plan, Perspectives Fund will transfer substantially all of
its assets to Corefolio Fund on the closing date, which is expected to occur on
or about June 22, 2010, but which may occur on a later date as the officers of
the Trust may determine. In exchange, the Trust will issue shares of Corefolio
Fund of the corresponding classes that have an aggregate NAV equal to the dollar
value of the assets delivered to Corefolio Fund. The Trust will distribute the
Corefolio Fund shares it receives to the shareholders of Perspectives Fund. Each
shareholder of Perspectives Fund will receive a number of Corefolio Fund shares
with an aggregate NAV equal to the aggregate NAV of his or her shares of
Perspectives Fund. The share transfer books of Perspectives Fund will be
permanently closed as of 1:00 p.m., Pacific time, on the closing date.
Perspectives Fund will only accept requests for redemptions received in proper
form before 1:00 p.m., Pacific time, on the closing date. Requests received
after that time will be considered requests to redeem shares of Corefolio Fund.
As soon as is reasonably practicable after the transfer of its assets,
Perspectives Fund will pay or will have made provisions for payment of all its
liabilities. Perspectives Fund will then terminate its existence as a separate
series of the Trust.
To the extent permitted by law, the Trust may amend the Plan without
shareholder approval or notice.
The Trust, on behalf of each Fund, has made representations in the Plan
that are customary in matters such as the Reorganization. The obligations of the
Trust under the Plan with respect to each Fund are subject to various
conditions, including:
o The Trust's registration statement on Form N-14 under the
Securities Act of 1933 (the "Registration Statement"),
of which this Prospectus/Information Statement is a
part, shall have been filed with the SEC and such
Registration Statement shall have become effective, and
no stop-order suspending the effectiveness of the
Registration Statement shall have been issued, and no
proceeding for that purpose shall have been initiated or
threatened by the SEC (and not withdrawn or terminated);
and
o The Trust shall have received the tax opinion described below
that the consummation of the Reorganization will not result in the
recognition of gain or loss for federal income tax purposes for
Perspectives Fund, Corefolio Fund or their shareholders.
The Trust may determine to terminate or abandon the Plan and the
Reorganization at any time before the closing date.
Following the closing date, until outstanding certificates for shares of
Perspectives Fund are surrendered, certificates for shares of Perspectives Fund
shall be deemed, for all Corefolio Fund purposes, to evidence ownership of the
appropriate number of Corefolio Fund shares into which the shares of
Perspectives Fund have been converted.
WHO WILL PAY THE EXPENSES OF THE REORGANIZATION?
Total expenses for the Reorganization are estimated at $127,920.
Perspectives Fund and Corefolio Fund will each pay 25% of the total cost of the
Reorganization ($31,980 per Fund) and FT Services will pay 50% of the total cost
of the Reorganization ($63,960). The expenses of the Reorganization include
legal counsel fees, accountant fees, expenses related to the printing and
mailing of this Proxy/Information Statement, but do not include any portfolio
transaction costs arising from the Reorganization and from the Corefolio
allocation adjustment, which will be borne by the respective Fund.
WHAT ARE THE TAX CONSEQUENCES OF THE REORGANIZATION?
The following is a general summary of the material federal income tax
consequences of the Reorganization and is based upon the current provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), the existing U.S.
Treasury Regulations thereunder, current administrative rulings of the Internal
Revenue Service and published judicial decisions, all of which are subject to
change.
The Reorganization is intended to qualify as a tax-free reorganization for
federal income tax purposes under Section 368(a)(1) of Code. Based on certain
assumptions and representations received from the Trust, on behalf of the Funds,
a condition to the closing of the Reorganization is that the Funds will have the
opinion of Stradley Ronon Stevens & Young, LLP, counsel to the Funds, to the
effect that, (i) the shareholders of Perspectives Fund will not recognize any
gain or loss for federal income tax purposes as a result of the exchange of
their shares of Perspectives Fund for shares of Corefolio Fund, and (ii) neither
Corefolio Fund nor its shareholders will recognize any gain or loss upon
Corefolio Fund's receipt of the assets of Perspectives Fund. In addition, the
holding period and aggregate tax basis for Corefolio Fund shares that are
received by a Perspectives Fund shareholder will be the same as the holding
period and aggregate tax basis of the shares of Perspectives Fund previously
held by such shareholder. Such opinion of counsel may state that no opinion is
expressed as to the effect of the Reorganization on the Funds or any shareholder
with respect to any transferred asset as to which any unrealized gain or loss is
required to be recognized for federal income tax purposes on the termination or
transfer thereof under a mark-to-market system of accounting.
Opinions of counsel are not binding upon the Internal Revenue Service or
the courts. If the Reorganization is consummated but does not qualify as a
tax-free reorganization under the Code, Perspectives Fund would recognize gain
or loss on the transfer of its assets to Corefolio Fund and each shareholder of
Perspectives Fund would recognize a taxable gain or loss equal to the difference
between its tax basis in its Perspectives Fund shares and the fair market value
of the shares of Corefolio Fund it received.
ORDERLY REORGANIZATION OF PERSPECTIVES FUND. The parties have agreed to
cooperate to facilitate the orderly reorganization of Perspectives Fund into
Corefolio Fund. The transition may include an adjustment to the allocation of
Perspectives Fund in the underlying F-T funds which may result in the
realization of capital gains that, to the extent not offset by capital losses,
would be distributed to the shareholders of Perspectives Fund prior to the
closing date. Because Perspectives Fund is in a net loss position at December
31, 2009, as reflected in the chart below under "General Limitation on Capital
Losses," it is not anticipated that the adjustment to Perspectives Fund's
allocation to the underlying F-T funds prior to the Reorganization will result
in any material amounts of capital gains to be distributed to shareholders. No
transaction costs are anticipated to be incurred in connection with the
adjustment to Perspectives Fund's allocation to the underlying F-T funds prior
to the Reorganization.
PERSPECTIVES FUND DIVIDEND DISTRIBUTION. Before the Reorganization,
Perspectives Fund expects to distribute ordinary income and realized capital
gains (net of available capital loss carryovers) on account of the prior fiscal
year and for the short-period through the closing date, if any, to shareholders.
GENERAL LIMITATION ON CAPITAL LOSSES. Capital losses can generally be
carried forward to each of the eight (8) years succeeding the loss year to
offset future capital gains, subject to an annual limitation if there is a more
than 50% "change in ownership" of a fund. The reorganization of Perspectives
Fund, as the smaller of the two Funds, will result in a more than 50% change in
ownership of Perspectives Fund on a combined basis. As a result, any capital
loss carryovers of Perspectives Fund, together with any current year loss and
net unrealized depreciation in the value of its assets (collectively, its "total
capital loss carryovers"), will be subject to an annual limitation for federal
income tax purposes. In addition, for five years beginning after the closing
date, neither Fund will be permitted to offset its "built-in" gains, if any, at
the time of the Reorganization against the capital losses (including capital
loss carry-forwards) built-in to the other Fund at the time of the
Reorganization. The total capital loss carryovers of the Funds, and the
approximate annual limitation on the use of Perspectives Fund's total capital
loss carryovers following the Reorganization are as follows:
-------------------------------------------------------------------
PERSPECTIVES COREFOLIO
FUND FUND
(12/31/2009) (12/31/2009)
-------------------------------------------------------------------
LINE
-------------------------------------------------------------------
1 Capital Loss Carryovers
-------------------------------------------------------------------
2 Expiring 2016 -2017 ($10,567,318) ($35,778,052)
-------------------------------------------------------------------
3 Post-October Loss (1) ($1,572,645) ($242,331)
-------------------------------------------------------------------
Unrealized depreciation in
value of investments on a tax
4 basis ($40,399,839) ($16,342,822)
-------------------------------------------------------------------
5 Total Capital Loss Carryovers
($52,539,802) ($52,363,205)
-------------------------------------------------------------------
Unrealized depreciation in
investments on a tax basis as
a percentage of net asset
6 value [L4/L7] -18.5% -3.4%
-------------------------------------------------------------------
7 Net Asset Value $217,932,845 $475,100,488
-------------------------------------------------------------------
8 Long-Term Tax-Exempt Rate 4.03% n/a
(Mar 2010)
-------------------------------------------------------------------
9 Approximate Annual Limitation $8,782,694 n/a
[L6 x L8] (2)
-------------------------------------------------------------------
(1) Treated as arising on January 1, 2010. (2) The actual limitation will equal
the aggregate net asset value of Perspectives Fund on the closing date
multiplied by the long-term tax-exempt rate for ownership changes during the
month in which the Reorganization closes; such limitation will be increased by
the amount of any built-in gain, i.e., unrealized appreciation in value of
investments, of Perspectives Fund on the closing date that is recognized in a
taxable year.
This annual limitation on use of Perspectives Fund's total capital loss
carryovers may result in some portion of such carryovers expiring unutilized,
depending on the facts at the time of closing the Reorganization. This might be
viewed as resulting in some reduction in the available tax benefits for the
shareholders of Perspectives Fund, although such capital loss carryovers are a
tax benefit only to the extent such losses offset future capital gains. In
addition, some portion of such total capital loss carryovers might have expired
unutilized in any event. Also, any total capital loss carryovers of Corefolio
Fund will be available to the shareholders of both Funds post-Reorganization.
APPRECIATION IN VALUE OF INVESTMENTS. Buying shares in a fund that has
material unrealized appreciation in portfolio investments may be less tax
efficient than buying shares in a fund with no such unrealized appreciation in
value of investments. Conversely, buying shares in a fund with unrealized
depreciation in value of investments may be more tax efficient because such
deprecation when realized will offset other capital gains that might otherwise
be distributed to shareholders causing the shareholders to pay tax on such
distributions. These same considerations apply in the case of a reorganization.
The shareholders of Perspectives Fund and Corefolio Fund will be subject to
either greater or less appreciation (depreciation) in value of portfolio
investments as a result of the Reorganization. Based on Perspectives Fund's
unrealized depreciation in value of investments on a tax basis as a percentage
of its net asset value as of December 31, 2009 of -18.5 % compared to that of
Corefolio Fund of -3.4%, and of -8.2% on a combined basis post-Reorganization,
the shareholders of Perspectives Fund are being exposed to slightly less
unrealized depreciation in value of investments post-Reorganization relative to
what they are presently exposed. However, this determination can only be made at
time of closing the Reorganization, taking into account each Fund's normal
portfolio activities as well as the effect of any changes in each Fund's
allocation to the underlying F-T funds which occur prior to closing. For a
discussion of the anticipated changes in each Fund's anticipated allocation to
underlying F-T funds, see "Summary - How do the investment goals and strategies
of the Funds compare."
TRACKING YOUR BASIS AND HOLDING PERIOD; STATE AND LOCAL Taxes. After the
Reorganization, you will continue to be responsible for tracking the adjusted
tax basis and holding period of your shares for federal income tax purposes. You
should consult your tax adviser regarding the effect, if any, of the
Reorganization in light of your particular circumstances, as well as the state
and local tax consequences, if any, of the Reorganization because this
discussion only relates to the federal income tax consequences.
WHAT SHOULD I KNOW ABOUT THE SHARES OF COREFOLIO FUND?
Class A, Class C, Class R and Advisor Class shares of Corefolio Fund will
be distributed to Class A, Class C, Class R and Advisor Class shareholders of
Perspectives Fund, respectively, and generally will have the same legal
characteristics as the shares of Perspectives Fund with respect to such matters
as voting rights, accessibility, conversion rights, and transferability.
Corefolio Fund issues one other class of shares - Class B shares, which has
different expenses than Corefolio Fund Class A, Class C, Class R and Advisor
Class shares. Corefolio Fund and Perspectives Fund are series of the Trust,
which is organized as Delaware statutory trust.
WHAT ARE THE CAPITALIZATIONS OF THE FUNDS AND WHAT MIGHT THE
CAPITALIZATION BE AFTER THE REORGANIZATION?
The following table sets forth, as of December 31, 2009, the
capitalization of Perspectives Fund and Corefolio Fund. The table also shows the
projected capitalization of Corefolio Fund as adjusted to give effect to the
Reorganization. The capitalization of Corefolio Fund and its classes is likely
to be different when the Reorganization is consummated.
COREFOLIO FUND
PERSPECTIVES COREFOLIO PROJECTED AFTER
FUND FUND REORGANIZATION
(AUDITED) (AUDITED) ADJUSTMENTS (UNAUDITED)*
-------------------------------------------------
Net assets (all classes)
(thousands)** $ 217,933 $ 475,100 ($64) $ 692,969
Total shares outstanding
(all classes) 21,951,175 42,973,625 62,678,088
Class A net assets
(thousands) $ 160,725 $ 319,688 ($45) $ 480,368
Class A shares
outstanding 16,172,461 28,851,278 43,355,018
Class A net asset value
per share $ 9.94 $ 11.08 $ 11.08
Class B net assets $ 39,093 ($3) $ 39,090
(thousands) --
Class B shares 3,542,296 3,542,296
outstanding --
Class B net asset value $ 11.04 $ 11.04
per share --
Class C net assets $52,314 $ 113,040 ($15) $ 165,339
(thousands)
Class C shares
outstanding 5,287,649 $10,284,227 15,043,692
Class C net asset value
per share $9.89 $ 10.99 $ 10.99
Class R net assets $ 702 $ 1,364 $ 2,066
(thousands)
Class R shares 70,487 123,198 186,510
outstanding
Class R net asset value $ 9.95 $ 11.08 $ 11.08
per share
Advisor Class net assets
(thousands) $ 4,192 $ 1,915 ($1) $ 6,106
Advisor Class shares
outstanding 420,578 172,626 550,572
Advisor Class net asset
value per share $ 9.97 $ 11.09 $ 11.09
* The projected capitalization of Corefolio Fund after the Reorganization
includes the estimated expenses of the Reorganization borne by Corefolio Fund
and Perspectives Fund. The total estimated expenses are $127,920 which will
be allocated 25% to each Fund, and 50% to FT Services.
** Perspectives Fund offers Class A, Class C, Class R and Advisor Class shares.
Corefolio Fund has five classes of shares: Class A, Class B, Class C, Class R
and Advisor Class.
COMPARISON OF INVESTMENT GOALS, STRATEGIES AND RISKS
This section describes and compares the key differences between the
investment goals and strategies of the Funds as well as the risks associated
with such goals and strategies. The investment goal and most of the investment
restrictions of each Fund are fundamental, which means that they cannot be
changed without the Affirmative Majority Vote, as defined herein, of that Fund's
outstanding shares. Notwithstanding the foregoing, the underlying F-T funds have
adopted certain investment restrictions, which may be more or less restrictive
than the Funds' restrictions, thereby permitting the Fund to engage in
investment strategies indirectly that are prohibited under the Funds' current
investment restrictions. Unless otherwise noted, the investment strategies of
the Funds are non-fundamental and may be changed without shareholder approval.
For a complete description of Corefolio Fund's investment strategies and risks,
you should read the Corefolio Fund Prospectus, which is enclosed with this
Prospectus/Information Statement as Exhibit B, and the SAI relating to this
Prospectus/Information Statement, which is incorporated by reference into this
Prospectus/Information Statement and is available upon request.
ARE THERE ANY SIGNIFICANT DIFFERENCES BETWEEN THE INVESTMENT
GOALS, STRATEGIES AND RISKS OF EACH FUND?
Both Funds have the same investment goal - capital appreciation. The
investment strategies for Perspectives Fund and Corefolio Fund are similar. The
main difference is the asset allocation among the underlying F-T funds.
INVESTMENT STRATEGIES:
Each Fund's assets are invested in a combination of underlying F-T funds
on a fixed percentage basis as stated in the table below. The underlying F-T
funds, in turn, invest primarily in U.S. and foreign equity securities, and to a
lesser extent, fixed-income and money market securities. The Board, on behalf of
Corefolio Fund, has approved the Corefolio allocation adjustment which will
provide a 25% allocation to each of Franklin Growth Fund, Franklin Flex Cap
Growth Fund, Mutual Shares Fund and Templeton Growth Fund. It is anticipated
that the Corefolio allocation adjustment will take place prior to the closing of
the Reorganization. The table below shows the current allocation by each Fund in
the underlying F-T funds, as well as the anticipated allocation of Corefolio
Fund following the Corefolio allocation adjustment:
PERSPECTIVES FUND COREFOLIO FUND COREFOLIO FUND
(CURRENT) (CURRENT) (AFTER COREFOLIO
ALLOCATION ADJUSTMENT)
Franklin Flex Cap Fund ______________________ Franklin Flex Cap
(33 1/3%) Fund (25%)
Franklin Growth Fund Franklin Growth Fund
_____________________ (50%) (25%)
Mutual Shares Fund Mutual Shares Fund Mutual Shares Fund
(33 1/3%) (25%) (25%)
Templeton Growth Fund Templeton Growth Fund Templeton Growth Fund
(33 1/3%) (25%) (25%)
The percentage allocations to the underlying F-T funds is monitored daily
by FT Services and the allocations are rebalanced whenever the actual
allocations exceed plus or minus 3% of the fixed percentages. Below is a brief
description of the investment goals and strategies of the underlying F-T funds.
FRANKLIN FLEX CAP GROWTH FUND The fund seeks capital appreciation by
investing predominantly in equity securities of companies that the manager
believes have the potential for capital appreciation. The fund has the
flexibility to invest in companies located, headquartered, or operating inside
and outside the United States, across the entire market capitalization spectrum
from small, emerging growth companies to well-established, large cap companies.
A substantial portion of the fund's investments may be in smaller and mid-size
companies. The fund, from time to time, may have significant positions in
particular sectors such as technology (including electronic technology,
technology services, biotechnology and healthcare technology).
FRANKLIN GROWTH FUND The fund seeks capital appreciation by investing
substantially in the equity securities of companies that are leaders in their
industries. In selecting securities, the manager considers many factors,
including: historical and potential growth in revenues and earnings; assessment
of strength and quality of management; and determination of a company's
strategic positioning in its industry. The fund may have significant positions
in particular sectors, such as technology (including computers and
telecommunications), healthcare (including biotechnology) and producer
manufacturing. The fund may invest up to 40% of its assets in the securities of
smaller companies. The fund also may invest up to 40% of its assets in foreign
securities and up to 10% in non-U.S. dollar denominated securities.
MUTUAL SHARES FUND The fund principally seeks capital appreciation, which
may occasionally be short-term; its secondary goal is income. The fund invests
primarily in equity securities (including securities convertible into, or that
the manager expects to be exchanged for, common or preferred stock) of U.S. and
foreign companies that the manager believes are available at market prices less
than their value based on certain recognized or objective criteria (intrinsic
value). Following this value-oriented strategy, the fund invests primarily in
undervalued securities, and, to a lesser extent, in risk arbitrage securities
and distressed companies. The equity portion of the fund's investments is
predominantly mid and large cap companies. The fund may invest a significant
portion (up to 35%) of its assets in foreign securities.
TEMPLETON GROWTH FUND The fund seeks long-term capital growth. Under
normal market conditions, the fund invests primarily in the equity securities of
companies located anywhere in the world, including emerging markets.
Additionally, depending upon current market conditions, the fund may invest in
debt securities (up to 25% of total assets) of companies and governments located
anywhere in the world. In selecting equity investments, the fund's manager
applies a "bottom up," value-oriented, long-term approach, focusing on the
market price of a company's securities relative to the manager's evaluation of
the company's long-term earnings, asset value and cash flow potential. The
manager also considers a company's price/earnings ratio, profit margins and
liquidation value.
WHAT ARE THE PRINCIPAL RISK FACTORS ASSOCIATED WITH INVESTMENTS
IN THE FUNDS?
Like all investments, an investment in Perspectives Fund or Corefolio Fund
involves risk. These risks are summarized below. There is no assurance that
Perspectives Fund or Corefolio Fund will meet their investment goals. The value
of an investment in Perspectives Fund and Corefolio Fund is based primarily on
the performance of, and its allocation among, the underlying F-T funds;
therefore, the Funds' risks are based on the risks associated with an investment
in the underlying F-T funds.
Because the Funds' investments are concentrated in the underlying F-T
funds, and each Fund's performance is directly related to the performance of the
underlying F-T funds held by it, the ability of the Funds to achieve their
investment goal is directly related to the ability of the underlying F-T funds
to meet their investment goal. In addition, shareholders of the Funds will
indirectly bear the fees and expenses of the underlying F-T funds.
EQUITY FUNDS If a Fund invests in an underlying stock fund, its returns
will fluctuate with changes in the stock market. Generally, stocks historically
have outperformed other types of investments over the long term. Individual
stock prices, however, tend to go up and down more dramatically. These price
movements may result from factors affecting individual companies or industries,
or the securities market as a whole. A slower growth or recessionary economic
environment could have an adverse effect on the price of the various stocks held
by an underlying F-T fund.
GROWTH STYLE INVESTING Certain underlying F-T funds may use a growth style
of investing. Growth stock prices reflect projections of future earnings or
revenues, and can, therefore, fall dramatically if the company fails to meet
those projections. Growth stocks may be more expensive relative to their current
earnings or assets compared to value or other stocks, and if earnings growth
expectations moderate, their valuations may return to more typical norms,
causing their stock prices to fall. Prices of these companies' securities may be
more volatile than other securities, particularly over the short term.
VALUE STYLE INVESTING Certain underlying F-T funds may use a value style
of investing. Value stock prices are considered "cheap" relative to the
company's perceived value and are often out of favor with other investors. A
value manager may invest in such stocks if it believes the market may have
overreacted to adverse developments or failed to appreciate positive changes.
However, if other investors fail to recognize the company's value (and do not
become buyers, or if they become sellers or favor investing in faster-growing
companies), value stocks may not increase in value as anticipated by the manager
and may even decline in value.
RISK ARBITRAGE SECURITIES AND DISTRESSED COMPANIES Certain underlying F-T
funds may invest in risk arbitrage securities and distressed companies. A merger
or other restructuring or tender or exchange offer proposed at the time an
underlying F-T fund invests in risk arbitrage securities may not be completed on
the terms or within the time frame contemplated, resulting in losses to the
underlying F-T fund. Debt obligations of distressed companies typically are
unrated, lower-rated, in default or close to default. Also, securities of
distressed companies are generally more likely to become worthless than the
securities of more financially stable companies.
FOREIGN SECURITIES Each Fund will indirectly be subject to the following
risks to the extent that an underlying F-T fund invests in foreign securities.
Investing in foreign securities, including securities of foreign governments and
depositary receipts, typically involves more risks than investing in U.S.
securities. Certain of these risks also may apply to securities of U.S.
companies with significant foreign operations. These risks can increase the
potential for losses in the Fund and affect its share price.
o CURRENCY EXCHANGE RATES. Foreign securities may be issued
and traded in foreign currencies. As a result, their
values may be affected by changes in exchange rates
between foreign currencies and the U.S. dollar, as well
as between currencies of countries other than the U.S.
For example, if the value of the U.S. dollar goes up
compared to a foreign currency, an investment traded in
that foreign currency will go down in value because it
will be worth fewer U.S. dollars.
o POLITICAL AND ECONOMIC DEVELOPMENTS. The political,
economic and social structures of some foreign countries
may be less stable and more volatile than those in the
U.S. Investments in these countries may be subject to
the risks of internal and external conflicts, currency
devaluations, foreign ownership limitations and tax
increases. It is possible that a government may take
over the assets or operations of a company or impose
restrictions on the exchange or export of currency or
other assets. Some countries also may have different
legal systems that may make it difficult for an
underlying F-T fund to vote proxies, exercise
shareholder rights, and pursue legal remedies with
respect to its foreign investments. Diplomatic and
political developments, including rapid and adverse
political changes, social instability, regional
conflicts, terrorism and war, could affect the
economies, industries and securities and currency
markets, and the value of the underlying F-T fund's
investments, in non-U.S. countries. These factors are
extremely difficult, if not impossible, to predict and
take into account with respect to an underlying F-T
fund's investments.
o TRADING PRACTICES. Brokerage commissions and other fees
generally are higher for foreign securities. Government
supervision and regulation of foreign securities
markets, currency markets, trading systems and brokers
may be less than in the U.S. The procedures and rules
governing foreign transactions and custody (holding of
the underlying F-T fund's assets) also may involve
delays in payment, delivery or recovery of money or
investments.
o AVAILABILITY OF INFORMATION. Foreign companies may not be
subject to the same disclosure, accounting, auditing and financial
reporting standards and practices as U.S. companies. Thus, there may
be less information publicly available about foreign companies than
about most U.S. companies.
o LIMITED MARKETS. Certain foreign securities may be less liquid
(harder to sell) and their prices may be more volatile than many U.S.
securities. This means the Fund may at times be unable to sell foreign
securities at favorable prices.
o EMERGING MARKETS. The risks of foreign investments
typically are greater in less developed countries,
sometimes referred to as developing or emerging markets.
For example, political and economic structures in these
countries may be less established and may change
rapidly. These countries also are more likely to
experience high levels of inflation, deflation or
currency devaluation, which can harm their economies and
securities markets and increase volatility. In fact,
short-term volatility in these markets and declines of
50% or more are not uncommon. Restrictions on currency
trading that may be imposed by emerging market countries
will have an adverse effect on the value of the
securities of companies that trade or operate in such
countries.
SECTOR FOCUS Although each Fund does not expect any of the underlying F-T
funds to concentrate their investments in any one sector, they may from time to
time allocate more of their holdings in aggregate to a particular sector. To the
extent that an underlying F-T fund has significant investments in one or a few
sectors, the underlying F-T fund, and indirectly a Fund, is subject to more risk
than a fund that maintains broad sector diversification.
o TECHNOLOGY COMPANIES. Technology company stocks can be
subject to abrupt or erratic price movements and have
been volatile, especially over the short term, due to
the rapid pace of product change and development
affecting such companies. Technology companies are
subject to significant competitive pressures, such as
new market entrants, aggressive pricing and tight profit
margins. In addition, the prices of technology issuers
may be influenced not only by developments relating to
the company, but also to factors that affect the sector,
even if those factors are not really relevant to the
company.
o HEALTHCARE TECHNOLOGY COMPANIES. The activities of health
care companies may be funded or subsidized by federal
and state governments. If government funding and
subsidies are reduced or discontinued, the profitability
of these companies could be adversely affected. Health
care companies may also be affected by government
policies on health care reimbursements, regulatory
approval for new drugs and medical instruments, and
similar matters. They are also subject to legislative
risk, i.e., the risk of a reform of the health care
system through legislation.
o ELECTRONIC TECHNOLOGY AND TECHNOLOGY SERVICE COMPANIES.
These companies also face the risks that new services,
equipment or technologies will not be accepted by
consumers and businesses or will become rapidly
obsolete. These factors can affect the profitability of
technology companies and, as a result, the value of
their securities. In addition, many Internet-related
companies are in the emerging stage of development and
are particularly vulnerable to the risks that their
business plans will not develop as anticipated and of
rapidly changing technologies.
o FINANCIAL SERVICES COMPANIES. The underlying F-T funds,
and in particular the Franklin Flex Cap Growth Fund, may
have significant investments in the financial services
sector, which includes such issuers as commercial banks,
thrift institutions, insurance companies and finance
companies. Financial services companies are subject to
extensive government regulation that may affect their
profitability in many ways, including by limiting the
amount and types of loans and other commitments they can
make, and the interest rates and fees they can charge. A
financial services company's profitability, and
therefore its stock price, is especially sensitive to
interest rate changes as well as the ability of
borrowers to repay their loans. Changing regulations,
continuing consolidations, and development of new
products and structures all are likely to have a
significant impact on financial services companies.
SMALLER AND MIDSIZE COMPANIES Certain underlying F-T funds may invest in
smaller and midsize companies. While smaller and midsize companies may offer
substantial opportunities for capital growth, they also involve substantial
risks and should be considered speculative. Historically, smaller and midsize
company securities have been more volatile in price than larger company
securities, especially over the short term. Among the reasons for the greater
price volatility are the less certain growth prospects of smaller and midsize
companies, the lower degree of liquidity in the markets for such securities, and
the greater sensitivity of smaller and midsize companies to changing economic
conditions.
In addition, smaller and midsize companies may lack depth of management,
be unable to generate funds necessary for growth or development, or be
developing or marketing new products or services for which markets are not yet
established and may never become established. This risk is specific to each
Fund's investment in the Mutual Shares, Franklin Growth and Franklin Flex Cap
Growth Funds.
DERIVATIVE INSTRUMENTS To the extent an underlying F-T fund participates
in the following derivative transactions: option transactions, foreign currency
exchange transactions, futures contracts, swap agreements and collateralized
mortgage obligations, its investment may involve a small investment relative to
the amount of risk assumed. Derivative securities involve cost and may be
volatile. To the extent the underlying F-T fund enters into these transactions,
their successful use will depend on the underlying F-T funds manager's ability
to predict market movements. Risks include delivery failure, default by the
other party or the inability to close out a position because the trading market
becomes illiquid. Some derivatives are particularly sensitive to changes in
interest rates.
More information about the risks to which the underlying F-T funds are
subject is available in the Corefolio Fund Prospectus under the section entitled
"Risks of Investing in the Underlying Franklin Templeton Funds" under the
heading "Fund Details."
INFORMATION ABOUT THE FUNDS
Information about each Fund is included in the Corefolio Fund Prospectus,
which is enclosed with and incorporated by reference into (is considered a part
of) this Prospectus/Information Statement. Additional information about the
Funds is included in the Funds' SAI dated May 1, 2010 and the Annual Report to
Shareholders for the fiscal year ended December 31, 2009. You may request
free copies of these documents and other information relating to the Funds by
calling (800) DIAL BEN (R) or by writing to the Trust, P.O. Box 99715,
Sacramento, CA 95899-7151. These documents have been filed with the SEC.
The Trust also files proxy materials, reports and other information with
the SEC in accordance with the informational requirements of the Securities
Exchange Act of 1934 and the 1940 Act. Reports and other information filed by
the Trust can be inspected and copied at the public reference facilities
maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. Also, you
can obtain copies of this information, after paying a duplicating fee at
prescribed rates, by writing to the SEC's Public Reference Branch, Office of
Consumer Affairs and Information Services, Washington, DC 20549 or from the
SEC's Internet site at www.sec.gov or by electronic request at the following
email address: PUBLICINFO@SEC.GOV .
FURTHER INFORMATION ABOUT THE FUNDS
The following is a discussion of the organization of each Fund. More
detailed information about each Fund's current corporate structure is contained
in the Funds' SAI.
COMPARISON OF CAPITAL STRUCTURE. Perspectives Fund and Corefolio Funds are
series of the Trust, which was organized as a Delaware business trust on October
2, 1995 (now referred to as a Delaware statutory trust). The number of shares of
Perspectives Fund and Corefolio Fund is unlimited, each without par value. The
Funds may issue fractional shares.
Shares of both Perspectives Fund and Corefolio Fund are fully paid and
nonassessable and have no preference, preemptive or subscription rights.
Perspectives Fund and Corefolio Fund shareholders have no appraisal rights.
COMPARISON OF VOTING RIGHTS. For each Fund, each whole share is entitled
to one vote as to any matter on which it is entitled to vote and each fractional
share carries a proportionate fractional vote. Shareholders of the Funds are not
entitled to cumulative voting in the election of Trustees. Quorum for a
shareholders' meeting of the Trust is forty per cent (40%) of the outstanding
shares entitled to vote, which are present at a shareholder's meeting in person
or by proxy.
The 1940 Act provides that shareholders of each Fund has the power to vote
with respect to certain matters: specifically, for the election of Trustees, the
selection of auditors (under certain circumstances), approval of investment
advisory agreements and plans of distribution, and amendments to policies, goals
or restrictions deemed to be fundamental.
In addition, shareholders of each Fund are granted the power to vote on
certain matters by the laws of the jurisdiction under which they were formed and
by their Agreement and Declaration of Trust. The rights to vote on these matters
are the same for each Fund.
When a quorum is present, a majority of votes cast at a meeting of
shareholders shall decide any questions and a plurality shall elect a Trustee,
unless the Declaration of Trust, by-laws or applicable law provide otherwise.
The organizational documents for the Trust establish the maximum number of
days prior to a shareholders' meeting during which a record date may be set by
the Funds Board as 120 days.
LEGAL STRUCTURE. Mutual funds, such as the Trust, formed under the
Delaware Statutory Trust Act ("DSTA"), are granted a significant amount of
operational flexibility to adopt features, rights and obligations of the
statutory trust and its trustees and shareholders in their charter instruments.
Investment companies organized as Delaware statutory trusts have been able to
benefit from this flexibility to streamline their operations and minimize
expenses.
Also, funds organized as Delaware statutory trusts have greater
flexibility in structuring shareholder voting rights and shareholder meetings.
The DSTA allows a fund to provide in its governing documents that each of these
types of transactions may go forward with only trustee approval; all are
subject, however, to any special voting requirements of the 1940 Act.
LIMITED LIABILITY FOR SHAREHOLDERS. Under the DSTA, shareholders of the
Trust are entitled to the same limitation of personal liability as is extended
to shareholders of a corporation organized for profit under Delaware General
Corporation Law.
BOARD OF TRUSTEES. Pursuant to the DSTA and the Trust's Agreement and
Declaration of Trust, the responsibility for the management of the Trust is
vested in the Board, which, among other things, is empowered by the Trust's
Agreement and Declaration of Trust to elect the officers of the Trust and
contract with and provide for the compensation of agents, consultants and other
professionals to assist and advise in such management. Pursuant to the Agreement
and Declaration of Trust, no Trustee of the Trust shall be liable for any act or
omission or any conduct whatsoever in his capacity as Trustee, except for his
own willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office.
INSPECTION RIGHTS. Each Fund provides certain inspection rights to
shareholders of its books and records, at least to the extent required by
applicable law.
LEGAL PROCEEDINGS. For information about material pending legal
proceedings and regulatory matters, please see the section entitled
"Administration" in the Funds prospectus.
PRINCIPAL HOLDERS OF SHARES
As of April 15, 2010, the officers and Trustees of the Trust, as a group,
owned of record and beneficially less than 1% of the outstanding voting shares
of Perspectives Fund and Corefolio Fund. From time to time, the number of shares
of each Fund held in the "street name" accounts of various securities dealers
for the benefit of their clients or in centralized securities depositories may
exceed 5% of the total shares outstanding. More information about persons who
owned (beneficially or of record) 5% or more of the outstanding shares of any
class of Corefolio Fund or Perspectives Fund is included in Exhibit C to this
Prospectus/Information Statement.
By Order of the Board of Trustees,
Karen L. Skidmore
SECRETARY
[May 3, 2010]
GLOSSARY
USEFUL TERMS AND DEFINITIONS
1940 ACT- Investment Company Act of 1940, as amended.
AFFIRMATIVE MAJORITY VOTE - the affirmative vote of the lesser of: (i) a
majority of the outstanding shares of a Fund, or (ii) 67% or more of the
outstanding shares of a Fund present at or represented by proxy at the a meeting
of shareholders if the holders of more than 50% of the outstanding shares of a
Fund are present or represented by proxy.
CDSC- Contingent Deferred Sales Charge.
DISTRIBUTORS- Franklin Templeton Distributors, Inc., One
Franklin Parkway, San Mateo, CA 94403-1906, the principal underwriter for each
Fund.
DSTA- Delaware Statutory Trust Act.
FRANKLIN ADVISERS- Franklin Advisers, Inc. provides FT
Services with assistance in monitoring the underlying F-T funds
and the Funds' investment in the underlying F-T funds.
FRANKLIN TEMPLETON FUNDS- The U.S. registered mutual funds
in Franklin Templeton Investments except Franklin Templeton
Variable Insurance Products Trust and Franklin Mutual Recovery
Fund.
FRANKLIN TEMPLETON INVESTMENTS- Resources (as defined below), a publicly
owned global investment organization operating as Franklin Templeton
Investments. Franklin Templeton Investments provides global and domestic
investment management services through its Franklin, Templeton, Mutual Series
and Fiduciary Trust subsidiaries.
FT SERVICES- Franklin Templeton Services, LLC, the administrator for each
Fund. FT Services is an indirect, wholly owned subsidiary of Resources and is an
affiliate to the Funds principal underwriter.
INVESTOR SERVICES- Franklin Templeton Investor Services, LLC, 3344 Quality
Drive, Rancho Cordova, CA 95670-7313, the shareholder servicing, transfer agent
and dividend-paying agent for each Fund.
MOODY'S- Moody's Investor Services.
NET ASSET VALUE (NAV)- The value of a mutual fund is determined by
deducting a fund's liabilities from the total assets of the portfolio. The net
asset value per share is determined by dividing the net asset value of the fund
by the number of shares outstanding.
RESOURCES- Franklin Resources, Inc., One Franklin Parkway,
San Mateo, CA 94403-1906.
S&P(R)- Standard & Poor's
SAI- Statement of Additional Information
SEC- U.S. Securities and Exchange Commission
SECURITIES DEALER- A financial institution that, either directly or
through affiliates, has an agreement with Distributors to handle customer orders
and accounts for the Funds. This reference is for convenience only and does not
indicate a legal conclusion of capacity.
U.S.- United States of America.
EXHIBITS TO PROSPECTUS/INFORMATION STATEMENT
EXHIBIT:
A. Form of Plan of Reorganization by Franklin Templeton Fund Allocator
Series, on behalf of its series Franklin Templeton Perspectives Allocation
Fund and Franklin Templeton
Corefolio Allocation Fund (attached)
B. Prospectus of Franklin Templeton Corefolio Allocation Fund - Class A,
Class B, Class C, Class R and Advisor Class and Franklin Templeton
Perspectives Allocation Fund - Class A, Class C, Class R and Advisor
Class, dated May 1, 2010 (enclosed)
C. Ownership of the Funds
EXHIBIT A
FORM OF PLAN OF REORGANIZATION
PLAN OF REORGANIZATION
THIS PLAN OF REORGANIZATION (the "Plan"), is made as of this _______ day
of ________, 2010, by Franklin Templeton Fund Allocator Series (the "Trust"), a
statutory trust created under the laws of the State of Delaware, with its
principal place of business at One Franklin Parkway, San Mateo, CA 94403-1906,
on behalf of its series, Franklin Templeton Perspectives Allocation Fund
("Perspectives Fund") and Franklin Templeton Corefolio Allocation Fund
("Corefolio Fund") (together, the "Funds" and, individually, a "Fund").
PLAN OF REORGANIZATION
The reorganization (hereinafter referred to as the "Reorganization") will
consist of (i) the acquisition by the Templeton Trust, on behalf of Corefolio
Fund, of substantially all of the property, assets and goodwill of Perspectives
Fund in exchange solely for full and fractional Class A, Class C, Class R and
Advisor Class shares of beneficial interest, with no par value, of Corefolio
Fund ("Corefolio Fund Shares"); (ii) the distribution of Corefolio Fund Shares
to the holders of Class A, Class C, Class R and Advisor Class shares of
beneficial interest of Perspectives Fund (the "Perspectives Fund Shares"),
respectively, according to their respective interests in Perspectives Fund in
complete liquidation of Perspectives Fund; and (iii) the dissolution of
Perspectives Fund as soon as is practicable after the closing (as described in
Section 3, hereinafter called the "Closing"), all upon and subject to the terms
and conditions of the Plan hereinafter set forth.
AGREEMENT
In order to consummate the Reorganization and in consideration of the
premises and of the covenants and agreements hereinafter set forth, the Trust
covenants and agrees as follows:
1.SALE AND TRANSFER OF ASSETS, LIQUIDATION AND
DISSOLUTION OF PERSPECTIVES FUND.
(a) Subject to the terms and conditions of the Plan, and in reliance
on the representations and warranties herein contained, and in consideration of
the delivery of the number of Corefolio Fund Shares hereinafter provided, the
Trust, on behalf of Perspectives Fund, agrees that, at the time of Closing, it
will convey, transfer and deliver to the Trust, for the benefit of Corefolio
Fund, all of Perspectives Fund's then existing assets, including any interest in
pending or future legal claims in connection with past or present portfolio
holdings, whether in form of class action claims, opt-out or other direct
litigation claims, or regulator or government-established investor recovery fund
claims, and any and all resulting recoveries, free and clear of all liens,
encumbrances, and claims whatsoever (other than shareholders' rights of
redemption), except for cash, bank deposits, or cash equivalent securities in an
estimated amount necessary to: (i) pay __% of the costs and expenses of carrying
out the Reorganization (including, but not limited to, fees of counsel and
accountants, and expenses of its liquidation and dissolution contemplated
hereunder), in accordance with Section 7 of the Plan, which costs and expenses
shall be established on Perspectives Fund's books as liability reserves; (ii)
discharge its unpaid liabilities on its books at the Closing Date (as such term
is defined in Section 3), including, but not limited to, its income dividends
and capital gains distributions, if any, payable for the period prior to, and
through, the Closing Date; and (iii) pay such contingent liabilities, if any, as
the officers of the Trust, on behalf of Perspectives Fund, shall reasonably deem
to exist against Perspectives Fund at the Closing Date, for which contingent and
other appropriate liability reserves shall be established on Perspectives Fund's
books (such assets hereinafter "Net Assets"). Corefolio Fund shall not assume
any liability of Perspectives Fund, whether accrued or contingent, known or
unknown, and Perspectives Fund shall use its reasonable best efforts to
discharge all of the known liabilities of Perspectives Fund, so far as may be
possible, from the cash, bank deposits and cash equivalent securities described
above.
(b) Subject to the terms and conditions of the Plan, and in reliance
on the representations and warranties of the Trust herein contained, and in
consideration of such sale, conveyance, transfer, and delivery, the Trust agrees
at the Closing to deliver the number of Corefolio Fund Shares, determined by
dividing the net asset value per share of each Class A, Class C, Class R and
Advisor Class share of Perspectives Fund by the net asset value per share each
of Class A, Class C, Class R and Advisor Class shares of Corefolio Fund,
respectively, and separately multiplying the result thereof by the number of
outstanding Class A, Class C, Class R and Advisor Class shares, respectively, of
Perspectives Fund as of 1:00 p.m., Pacific Time, on the Closing Date. The
Corefolio Fund Shares delivered at the Closing shall have an aggregate net asset
value equal to the value of Perspectives Fund's Net Assets, all determined as
provided in Section 2 of the Plan and as of the date and time specified herein.
(c) Immediately following the Closing, Perspectives Fund shall be
dissolved and shall distribute the Corefolio Fund Shares received by
Perspectives Fund pursuant to this Section 1 pro rata to Perspectives Fund's
shareholders of record, based upon their respective holdings of Perspectives
Fund, as of the close of business on the Closing Date. Such distribution shall
be accomplished by the establishment of accounts on the share records of
Corefolio Fund of the type and in the amounts due such shareholders based on
their respective holdings in Perspectives Fund as of the close of business on
the Closing Date. Fractional Corefolio Fund Shares shall be carried to the third
decimal place. As promptly as practicable after the Closing, each holder of any
outstanding certificate or certificates representing Perspectives Fund Shares
shall be entitled to surrender the same to the transfer agent for Corefolio Fund
in exchange for the number of Corefolio Fund Shares of the same class into which
the Perspectives Fund Shares theretofore represented by the certificate or
certificates so surrendered shall have been converted. Until so surrendered,
each outstanding certificate, if any, which, prior to the Closing, represented
Perspectives Fund Shares shall be deemed for all Corefolio Fund purposes to
evidence ownership of the number of Corefolio Fund Shares into which the
Perspectives Fund Shares (which prior to the Closing were represented thereby)
have been converted. - - Certificates for Corefolio Fund Shares shall not be
issued, unless specifically requested by a shareholder. After the distribution,
Perspectives Fund shall be dissolved.
(d) At the Closing, each shareholder of record of Perspectives Fund
as of the record date (the "Distribution Record Date") with respect to any
unpaid dividends and other distributions that were declared prior to the
Closing, including any dividend or distribution declared pursuant to Section
6(c) hereof, shall have the right to receive such unpaid dividends and
distributions with respect to the shares of Perspectives Fund that such person
had on such Distribution Record Date.
2.VALUATION.
(a) The net asset value of Corefolio Fund Shares and Perspectives
Fund Shares and the value of Perspectives Fund's Net Assets to be acquired by
Corefolio Fund hereunder shall in each case be computed as of 1:00 p.m., Pacific
Time, on the Closing Date, unless on such date: (i) the New York Stock Exchange
("NYSE") is not open for unrestricted trading; or (ii) the reporting of trading
on the NYSE or other relevant trading market is disrupted; or (iii) any other
extraordinary financial event or market condition occurs (each of the events
described in (i), (ii) or (iii) are referred to as a "Market Disruption"). The
net asset value per share of Corefolio Fund Shares and Perspectives Fund Shares
and the value of Perspectives Fund's Net Assets shall be computed in accordance
with the valuation procedures set forth in the most recent prospectus of
Corefolio Fund and Perspectives Fund, as amended or supplemented, except that
the net asset value per share of Perspectives Fund shall be carried to the
fourth decimal place.
(b) In the event of a Market Disruption on the proposed Closing Date
so that an accurate appraisal of the net asset value of Corefolio Fund Shares or
Perspectives Fund Shares or the value of Perspectives Fund's Net Assets is
impracticable, the Closing Date shall be postponed until the first business day
when regular trading on the NYSE shall have been fully resumed and reporting
shall have been restored and other relevant trading markets are otherwise
stabilized.
(c) All computations of value regarding the net asset value of
Corefolio Fund Shares and Perspectives Fund Shares and the value of Perspectives
Fund's Net Assets shall be made by the administrator to the Funds.
3.CLOSING AND CLOSING DATE.
The Closing shall take place at the principal office of the Trust at
2:00 p.m., Pacific Time, on [_____], 2010 or such later date as the officers of
the Trust may determine (the "Closing Date"). The Trust, on behalf of
Perspectives Fund, shall have provided for delivery as of the Closing of (a)
those Net Assets of Perspectives Fund represented by cash to be transferred to
the account of Corefolio Fund's custodian, The Bank of New York Mellon, Mutual
Funds Division, 100 Church Street, New York, NY 10286, and (b) those Net Assets
represented by shares of the underlying funds to Franklin Templeton Investor
Services, LLC as agent for such underlying funds. The Trust, on behalf of
Perspectives Fund, shall deliver at the Closing a list of names and addresses of
the shareholders of record of each class of Perspectives Fund Shares and the
number of full and fractional shares of beneficial interest owned by each such
shareholder, indicating thereon which such shares are represented by outstanding
certificates and which by book-entry accounts, as of 1:00 p.m., Pacific Time, on
the Closing Date, certified by its transfer agent or by its [President] to the
best of its or his knowledge and belief. The Trust shall provide evidence that
such Corefolio Fund Shares have been registered in an account on the books of
Corefolio Fund in such manner as the officers of the Trust may reasonably
determine.
4.REPRESENTATIONS AND WARRANTIES BY THE TRUST.
The Trust, on behalf of each Fund, represents and warrants that:
(a) Each Fund is a series of the Trust, which was organized as a
Delaware business trust (now known as a statutory trust) on October 2, 1995. The
Trust is validly existing under the laws of the State of Delaware. The Trust is
duly registered under the 1940 Act as an open-end, management investment company
and all of the Funds' Shares sold were sold pursuant to an effective
registration statement filed under the Securities Act of 1933, as amended (the
"1933 Act"), except for those shares sold pursuant to the private offering
exemption for the purpose of raising initial capital or obtaining any required
initial shareholder approvals.
(b) The Trust is authorized to issue an unlimited number of shares of
beneficial interest, without par value, of each Fund and each outstanding share
of which is, and each share of Corefolio Fund when issued pursuant to and in
accordance with the Plan will be, fully paid, non-assessable, and has or will
have full voting rights. The Trust currently issues shares of ten (10) series,
including the Funds. Corefolio Fund is further divided into five classes of
shares: Class A, Class B, Class C, Class R and Advisor Class shares of
beneficial interest, of which Class A, Class C, Class R and Advisor Class Shares
represent Corefolio Fund Shares. Perspectives Fund issues four classes of
shares: Class A, Class C, Class R and Advisor Class shares of beneficial
interest. No shareholder of the Trust shall have any option, warrant or
preemptive right of subscription or purchase with respect to shares of either
Fund, except for the right of holders of Corefolio Fund Class B shares to have
their shares convert into Class A shares of Corefolio Fund.
(c) The financial statements appearing in the Funds' Annual Report to
Shareholders for the fiscal year ended December 31, 2009, audited by
PricewaterhouseCoopers LLP, and any interim unaudited financial statements
fairly present the financial position of each Fund as of their respective dates
and the results of each Fund's operations for periods indicated, in conformity
with Generally Accepted Accounting Principles applied on a consistent basis.
(d) The books and records of each Fund accurately summarize the
accounting data represented and contain no material omissions with respect to
the business and operations of either Fund.
(e) The Trust, on behalf of either Fund, is not a party to or
obligated under any provision of its Agreement and Declaration of Trust, as
amended (the "Trust Declaration"), or By-laws, as amended (the "By-laws"), or
any contract or any other commitment or obligation and is not subject to any
order or decree that would be violated by its execution of or performance under
the Plan, and no consent, approval, authorization or order of any court or
governmental authority is required for the consummation by a Fund or the Trust
of the transactions contemplated by the Plan, except for [Perspective Fund
shareholders' approval], the registration of Corefolio Fund Shares under the
1933 Act, the 1940 Act, or as may otherwise be required under the federal and
state securities laws or the rules and regulations thereunder. Perspectives Fund
has no material contracts or other commitments (other than the Plan or
agreements for the purchase of securities entered into in the ordinary course of
business and consistent with its obligations under the Plan) which will not be
terminated by Perspectives Fund in accordance with their terms at or prior to
the Closing Date, or which will result in a penalty or additional fee to be due
or payable by Perspectives Fund.
(f) The Trust has elected to treat each Fund as a regulated
investment company ("RIC") for federal income tax purposes under Part I of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). Each
Fund is a "fund" as defined in Section 851(g)(2) of the Code, has qualified as a
RIC for each taxable year since its inception, and will qualify as a RIC as of
the Closing Date. Consummation of the transactions contemplated by the Plan will
not cause either Fund to fail to be qualified as a RIC as of the Closing Date.
(g) Neither Fund is under jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
(h) Neither Fund has any unamortized or unpaid organizational fees or
expenses.
(i) Neither Fund has any known liabilities, costs or expenses of a
material amount, contingent or otherwise, other than those reflected in the
financial statements referred to in Section 4(c) here of and those incurred in
the ordinary course of business as an investment company and of a nature and
amount similar to, and consistent with, those shown in such financial statements
since the dates of those financial statements.
(j) There is no inter-corporate indebtedness existing between
Perspectives Fund and Corefolio Fund that was issued, acquired, or will be
settled at a discount.
(k) Corefolio Fund does not own, directly or indirectly, nor has it
owned during the past five (5) years, directly or indirectly, any shares of
Perspectives Fund.
(l) The Trust has no plan or intention to issue additional shares of
Corefolio Fund following the Reorganization except for shares issued in the
ordinary course of Corefolio Fund's business as a series of an open-end
investment company; nor does the Trust have any plan or intention to redeem or
otherwise reacquire any shares of Corefolio Fund issued pursuant to the Plan,
either directly or through any transaction, agreement, or arrangement with any
other person, other than in the ordinary course of its business or to the extent
necessary to comply with its legal obligation under Section 22(e) of the 1940
Act.
(m) Corefolio Fund is in the same line of business as Perspectives
Fund before the Reorganization and did not enter into such line of business as
part of the Reorganization. Corefolio Fund will actively continue Perspectives
Fund's business in substantially the same manner that Perspectives Fund
conducted that business immediately before the Reorganization and has no plan or
intention to change such business. On the Closing Date, Corefolio Fund expects
that at least 33 1/3% of Perspectives Fund's portfolio assets will meet the
investment objectives, strategies, policies, risks and restrictions of Corefolio
Fund. Corefolio Fund has no plan or intention to change any of its investment
objectives, strategies, policies, risks and restrictions after the
Reorganization, but does intend to revise its underlying fund allocations as
approved by the Trust's Board of Trustees and as described in the Registration
Statement (as defined below). Corefolio Fund has no plan or intention to sell or
otherwise dispose of any of the former assets of Perspectives Fund, except for
dispositions made in the ordinary course of its business or dispositions
necessary to maintain its qualification as a RIC, although in the ordinary
course of its business, Corefolio Fund will continuously review its investment
portfolio (as Perspectives Fund did before the Closing) to determine whether to
retain or dispose of particular securities, including those included among the
former assets of Perspectives Fund.
(n) The registration statement on Form N-14 referred to in Section
5(f) hereof (the "Registration Statement"), and any prospectus or statement of
additional information of Corefolio Fund contained or incorporated therein by
reference, and any supplement or amendment to the Registration Statement or any
such prospectus or statement of additional information, on the effective and
clearance dates of the Registration Statement and on the Closing Date: (i) shall
comply in all material respects with the provisions of the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, the
rules and regulations thereunder, and all applicable state securities laws and
the rules and regulations thereunder; and (ii) shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which the statements were made, not misleading.
(o) Since December 31, 2009, there has not been any material adverse
change in either Fund's financial condition, assets, liabilities, or business
other than changes occurring in the ordinary course of its business.
(p) During the five-year period ending on the Closing Date, (i)
Perspectives Fund has not acquired, and will not acquire, Perspectives Fund
Shares with consideration other than Corefolio Fund Shares or Perspectives Fund
Shares, except for redemptions in the ordinary course of Perspectives Fund's
business or to the extent necessary to comply with its legal obligation under
Section 22(e) of the 1940 Act, and (ii) no distributions will have been made
with respect to Perspectives Fund Shares (other than regular, normal dividend
distributions made pursuant to the Perspectives Fund's historic dividend paying
practice), either directly or through any transaction, agreement, or arrangement
with any other person, except for distributions described in Sections 852 and
4982 of the Code.
(q) As of the Closing Date, Perspectives Fund will not have
outstanding any warrants, options, convertible securities, or any other type of
rights pursuant to which any person could acquire shares of Perspectives Fund,
except for the right of investors to acquire its shares at the applicable stated
offering price in the normal course of its business as an open-end management
investment company operating under the 1940 Act.
(r) Throughout the five year period ending on the Closing Date,
Perspectives Fund will have conducted its historic business within the meaning
of Section 1.368-1(d) of the Income Tax Regulations under the Code. Perspectives
Fund did not enter into (or expand) a line of business as part of the
Reorganization. Perspectives Fund, will not alter its investment portfolio in
connection with the Reorganization.
5.COVENANTS OF THE TRUST.
(a) The Trust covenants to operate each Fund's respective business as
presently conducted between the date hereof and the Closing, it being understood
that such ordinary course of business will include the distribution of customary
dividends and distributions and any other distribution necessary or desirable to
minimize federal income or excise taxes.
(b) The Trust, on behalf of Perspectives Fund, undertakes that it
will not acquire Corefolio Fund Shares for the purpose of making distributions
thereof to anyone other than Perspectives Fund's shareholders.
(c) The Trust, on behalf of Perspectives Fund, undertakes that, if
the Plan is consummated, Perspectives Fund will liquidate and dissolve.
(d) The Trust, on behalf of each Fund, agrees that, by the Closing,
all of the Funds' federal and other tax returns and reports required by law to
be filed on or before such date shall have been filed, and either all federal
and other taxes shown as due on said returns shall have been paid, or adequate
liability reserves shall have been provided for the payment of such taxes, and
to the best of its knowledge no such tax return is currently under audit and no
tax deficiency or liability has been asserted with respect to such tax returns
or reports by the Internal Revenue Service or any state or local tax authority.
(e) As of the Closing, the Trust shall have delivered to Perspectives
Fund's shareholders, at least 30 days prior to the Closing Date, a combined
Prospectus/Information Statement that complies in all material respects with the
applicable provisions of the 1933 Act, Section 14(c) of the 1934 Act and Section
20(a) of the 1940 Act, and the rules and regulations, thereunder (the
"Prospectus/Information Statement").
(f) The Trust has filed the Registration Statement with the SEC and
used its best efforts to provide that the Registration Statement became
effective as promptly as practicable. At the time it became effective, the
Registration Statement (i) complied in all material respects with the applicable
provisions of the 1933 Act, and the rules and regulations promulgated
thereunder; and (ii) did not contain any untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading. At the time the Registration Statement
became effective and at the Closing Date, the prospectus and statement of
additional information included in the Registration Statement did not and will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(g) Subject to the provisions of the Plan, the Trust shall take, or
cause to be taken, all action, and do or cause to be done, all things reasonably
necessary, proper or advisable to consummate the transactions contemplated by
the Plan.
6.CONDITIONS PRECEDENT TO BE FULFILLED BY THE FRANKLIN
TRUST AND THE TEMPLETON TRUST.
The consummation of the Plan hereunder shall be subject to the
following respective conditions:
(a) That all the representations and warranties contained herein
shall be true and correct as of the Closing with the same effect as though made
as of and at such date.
(b) That the SEC shall have declared effective the Registration
Statement and not have issued an unfavorable management report under Section
25(b) of the 1940 Act or instituted or threatened to institute any proceeding
seeking to enjoin consummation of the Plan under Section 25(c) of the 1940 Act.
And, further, no other legal, administrative or other proceeding shall have been
instituted or threatened that would materially affect the financial condition of
either Fund or would prohibit the transactions contemplated hereby.
(c) That a distribution or distributions shall have been declared for
Perspectives Fund prior to the Closing Date that, together with all previous
distributions, shall have the effect of distributing to its shareholders: (i)
all of Perspective Fund's investment company taxable income (determined without
regard to any deductions for dividends paid) for the taxable year ended December
31, 2009 and substantially all of such investment company taxable income for the
short taxable year beginning on January 1, 2010 and ending on the Closing Date
and (ii) all of Perspective Fund's net capital gain recognized in its taxable
year ended December 31, 2009 and substantially all of any such net capital gain
recognized in such short taxable year (in each case after reduction for any
capital loss carryover).
(d) That all required consents of other parties and all other
consents, orders, and permits of federal, state and local authorities (including
those of the SEC and of state Blue Sky securities authorities, including any
necessary "no-action" positions or exemptive orders from such federal and state
authorities) to permit consummation of the transaction contemplated hereby shall
have been obtained, except where failure to obtain any such consent, order, or
permit would not involve a risk of material adverse effect on the assets and
properties of Perspectives Fund or Corefolio Fund.
(e) That there shall be delivered to the Trust an opinion in form and
substance satisfactory to it, from the law firm of Stradley Ronon Stevens &
Young, LLP, counsel to the Trust, to the effect that, provided the transaction
contemplated hereby is carried out in accordance with the Plan, and the laws of
the State of Delaware, and based upon certificates of the officers of the Trust
with regard to matters of fact:
(1) The acquisition by Corefolio Fund of substantially all the
assets of Perspectives Fund as provided for herein in exchange for Corefolio
Fund Shares followed by the distribution by Perspectives Fund to its
shareholders of Corefolio Fund Shares in complete liquidation of Perspectives
Fund will qualify as a reorganization within the meaning of Section 368(a)(1) of
the Code, and Perspectives Fund and Corefolio Fund will each be a "party to the
reorganization" within the meaning of Section 368(b) of the Code;
(2) No gain or loss will be recognized by Perspectives Fund upon
the transfer of substantially all of its assets to Corefolio Fund in exchange
solely for voting shares of Corefolio Fund (Sections 361(a) and 357(a) of the
Code), except that Perspectives Fund may be required to recognize gain or loss
with respect to contracts described in Section 1256(b) of the Code or stock in a
passive foreign investment company, as defined in Section 1297(a) of the Code;
(3) Corefolio Fund will recognize no gain or loss upon the
receipt of substantially all of the assets of Perspectives Fund in exchange
solely for voting shares of Corefolio Fund (Section 1032(a) of the Code);
(4) No gain or loss will be recognized by Perspectives Fund upon
the distribution of Corefolio Fund Shares to its shareholders in liquidation of
Perspectives Fund (in pursuance of the Plan) (Section 361(c)(1) of the Code);
(5) The basis of the assets of Perspectives Fund received by
Corefolio Fund will be the same as the basis of such assets to Perspectives Fund
immediately prior to the Reorganization (Section 362(b) of the Code);
(6) The holding period of the assets of Perspectives Fund
received by Corefolio Fund will include the period during which such assets were
held by Perspectives Fund (Section 1223(2) of the Code);
(7) No gain or loss will be recognized by the shareholders of
Perspectives Fund upon the exchange of their shares in Perspectives Fund for
voting shares of Corefolio Fund including fractional shares to which they may be
entitled (Section 354(a) of the Code);
(8) The aggregate basis of Corefolio Fund Shares received by the
shareholders of Perspectives Fund will be the same as the aggregate basis of the
Perspectives Fund Shares exchanged therefor (Section 358(a)(1) of the Code);
(9) The holding period of Corefolio Fund Shares received by
shareholders of Perspectives Fund (including fractional shares to which they may
be entitled) will include the holding period of Perspectives Fund Shares
surrendered in exchange therefor, provided that Perspectives Fund Shares were
held as a capital asset on the effective date of the exchange (Section 1223(1)
of the Code); and
(10) Corefolio Fund will succeed to and take into account as of
the date of the transfer (as defined in Section 1.381(b)-1(b) of the regulations
issued by the United States Treasury ("Treasury Regulations")) the items of
Perspectives Fund described in Section 381(c) of the Code, subject to the
conditions and limitations specified in Sections 381, 382, 383 and 384 of the
Code and the Treasury Regulations.
(f) That there shall be delivered to the Trust an opinion in form and
substance satisfactory to it from Stradley Ronon Stevens & Young, LLP, counsel
to the Trust to the effect that, subject in all respects to the effects of
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and
other laws now or hereafter affecting generally the enforcement of creditors'
rights:
(1) Each Fund is a series of the Trust and that the Trust is a
validly existing statutory trust in good standing under the laws of the State of
Delaware;
(2) The Trust is an open-end investment company of the
management type registered as such under the 1940 Act;
(3) The Trust is authorized to issue an unlimited number of
shares of beneficial interest, without par value, of Corefolio Fund;
(4) Corefolio Fund Shares to be issued pursuant to the terms of
the Plan have been duly authorized and, when issued and delivered as provided in
the Plan and the Registration Statement, will have been validly issued and fully
paid and will be non-assessable by the Trust, on behalf of Corefolio Fund; and
(5) The consummation of the transactions contemplated hereby
have been duly authorized by all necessary trust action on the part of the Trust
on behalf of each Fund.
In giving the opinions set forth above, counsel may state that it is
relying on certificates of the officers of the Trust with regard to matters of
fact, and certain certifications and written statements of governmental
officials with respect to the good standing of the Trust.
(g) That the Trust's prospectus contained in the Registration
Statement with respect to Corefolio Fund Shares to be delivered to Perspectives
Fund shareholders in accordance with the Plan shall be effective, and no stop
order suspending the effectiveness of the Registration Statement or any
amendment or supplement thereto, shall have been issued prior to the Closing
Date or shall be in effect at the Closing, and no proceedings for the issuance
of such an order shall be pending or threatened on that date.
(h) That Corefolio Fund Shares to be delivered hereunder shall be
eligible for sale with each state commission or agency with which such
eligibility is required in order to permit Corefolio Fund Shares lawfully to be
delivered to each holder of Perspectives Fund Shares.
(i) That, at the Closing, there shall be transferred to the Trust, on
behalf of Corefolio Fund, aggregate Net Assets of Perspectives Fund comprising
at least 90% in fair market value of the total net assets and 70% of the fair
market value of the total gross assets recorded on the books of Perspectives
Fund on the Closing Date.
7.EXPENSES.
The expenses of entering into and carrying out the provisions of the
Plan shall be borne as follows: each Fund will each pay 25% of the costs of the
Reorganization, and Franklin Templeton Services, LLC will pay 50% of the costs
of the Reorganization.
8.TERMINATION; POSTPONEMENT; WAIVER; ORDER.
(a) Anything contained in the Plan to the contrary notwithstanding,
the Plan may be terminated and the Reorganization abandoned at any time prior to
the Closing, or the Closing may be postponed by the Trust, on behalf of either
Fund, if any condition of its obligations set forth in Section 6 has not been
fulfilled or waived and it reasonably appears that such condition or obligation
will not or cannot be met;
(b) If the transactions contemplated by the Plan have not been
consummated by [ __________________ ], 2010, the Plan shall automatically
terminate on that date, unless a later date is set by the officers of the Trust.
(c) In the event of termination of the Plan prior to its
consummation, pursuant to the provisions hereof, the Plan shall become void and
have no further effect, and neither the Trust, Perspectives Fund nor Corefolio
Fund, nor its trustees, officers, or agents or the shareholders of Perspectives
Fund or Corefolio Fund shall have any liability in respect of the Plan, but all
expenses incidental to the preparation and carrying out of the Plan shall be
paid as provided in Section 7 hereof.
(d) At any time prior to the Closing, any of the terms or conditions
of the Plan may be waived by the Trust, if, in the judgment of its officers,
such action or waiver will not have a material adverse effect on the benefits
intended under the Plan to its shareholders.
(e) The respective representations and warranties contained in
Sections 4 and 5 hereof shall expire with and be terminated by the Plan on the
Closing Date, and neither the Trust nor any of its officers, trustees, agents or
shareholders shall have any liability with respect to such representations or
warranties after the Closing Date.
(f) If any order of the SEC with respect to the Plan shall be issued
prior to the Closing that imposes any term or condition that is determined by
action of the Board of Trustees of the Trust, on behalf of Perspectives Fund or
Corefolio Fund, to be acceptable, such term or condition shall be binding as if
it were a part of the Plan without a vote or approval of the shareholders of
Perspectives Fund.
9.LIABILITY OF THE TRUST.
It is acknowledged and agreed that all obligations of the Trust under
the Plan with respect to a Fund are binding only with respect to that Fund,
shall be discharged only out of the assets of such Fund; that no other series of
the Trust shall be liable with respect to the Plan or in connection with the
transactions contemplated herein; and that neither the Trust nor a Fund shall
seek satisfaction of any such obligation or liability from the shareholders of
the Trust or a Fund, the trustees, officers, employees or agents of the Trust,
or any of them.
10. ENTIRE AGREEMENT AND AMENDMENTS.
The Plan embodies the entire agreement between the parties and there
are no agreements, understandings, restrictions, or warranties relating to the
transactions contemplated by the Plan other than those set forth herein or
herein provided for. The Plan may be amended only by mutual consent of the
parties in writing. Neither the Plan nor any interest herein may be assigned
without the prior written consent of the other party.
11. GOVERNING LAW.
The Plan shall be governed by and carried out in accordance with the
laws of the State of Delaware.
IN WITNESS WHEREOF, the Trust, on behalf of Perspectives Fund and on
behalf of Corefolio Fund, has caused the Plan to be executed on its behalf by
its duly authorized officers, all as of the date and year first-above written.
FRANKLIN TEMPLETON FUND
ALLOCATOR SERIES,
on behalf of FRANKLIN TEMPLETON
COREFOLIO ALLOCATIONS FUND
By:
-----------------------------
(Name) (Title)
FRANKLIN TEMPLETON FUND
ALLOCATOR SERIES,
on behalf of FRANKLIN TEMPLETON
PERSPECTIVES ALLOCATIONS FUND
By:
-----------------------------
(Name) (Title)
EXHIBIT B
PROSPECTUS OF
FRANKLIN TEMPLETON COREFOLIO ALLOCATION FUND -
CLASS A, CLASS B, CLASS C, CLASS R AND ADVISOR CLASS
AND
FRANKLIN TEMPLETON PERSPECTIVES ALLOCATION FUND -
CLASS A, CLASS C, CLASS R AND ADVISOR CLASS
DATED MAY 1, 2010
The prospectus of Franklin Templeton Corefolio Allocation Fund and Franklin
Templeton Perspectives Allocation Fund dated May 1, 2010, is part of this
Prospectus/Information Statement and will be included in the Information
Statement mailing to all shareholders of record of Franklin Templeton
Perspectives Allocation Fund. For purposes of this EDGAR filing, the prospectus
of Franklin Templeton Corefolio Allocation Fund dated May 1, 2010, is
incorporated by reference to the electronic filing on Form N-1A made by Franklin
Templeton Fund Allocator Series on March 3, 2010, under Accession No.
[0001379491-10-000132].
EXHIBIT C
OWNERSHIP OF THE FUNDS
Listed below is the name, address, share class and percentage ownership of
each person who, as of April 15, 2010 and to the knowledge of the Trust, owned
(beneficially or of record) 5% or more of the outstanding shares of any class of
Corefolio Fund or Perspectives Fund:
NAME AND ADDRESS SHARE CLASS PERCENTAGE (%) OF
THE CLASS
------------------------------------------------------------------
------------------------------------------------------------------
COREFOLIO FUND
Franklin Templeton Bank R [___]
and Trust for the
Rollover IRA of
Christita Fry
36 Pleasant Hill Rd.
Succasunna, NJ
07876-2016
Franklin Templeton Bank R [___]
and Trust
for the Rollover IRA of
Nancy M. Apmann
13750 Eaton Rd.
Pine Grove, CA
95665-9764
Counsel Trust DBA MATC R [___]
FBO
Applied Business
Concepts
1251 Waterford Place,
Suite 525
Pittsburgh, PA
15222-4228
Franklin Templeton Bank R [___]
and Trust
for the Rollover IRA of
Mathew B. Johnson
98 Quail Run Rd.
Corinth, MS 38834-7239
MG Trust Company Cust R [___]
FBO Belway Electrical
Contracting
700 17th St., Ste 300
Denver, CO 80202-3531
Franklin Templeton Bank R [___]
and Trust
for the Rollover IRA of
Jerry L. Spilker
1477 E 700th Ave.
Altamont, IL 62411-2379
Franklin Templeton Bank Advisor [___]
and Trust
for the Rollover IRA of
Ronald C. Mayer
P.O. Box 402594
Miami Beach, FL
33140-0594
Franklin Templeton Bank Advisor [___]
and Trust
for the IRA of Ronald
C. Mayer P.O. Box 402594 Miami Beach, FL
33140-0594
PERSPECTIVES FUND
Franklin Templeton Bank R [___]
and Trust
for the Rollover IRA of
Lon Wilson
1020 Grand Concourse
Bronx, NY 10451-2615
Franklin Templeton Bank R [___]
and Trust
for the Rollover IRA of
Errol V. Marshall
1 Feling Place
Palm Coast, FL
32137-3009
Karen Galbraith, Judith R [___]
K. Todd
and Gail Bilbrey TRSTE
Pacesetters Inc. 401(k)
Plan
2511 Highway 111 N
Cookeville, TN
38506-8683
Christopher J. Molumphy Advisor [___]
One Franklin Parkway
San Mateo, CA 94403-1906
STATEMENT OF ADDITIONAL INFORMATION
FOR
FRANKLIN TEMPLETON COREFOLIO ALLOCATION FUND
DATED [MAY 3, 2010]
Acquisition of Substantially All of the Assets of:
FRANKLIN TEMPLETON PERSPECTIVES ALLOCATION FUND
(a series of Franklin Templeton Fund Allocator Series)
By and in exchange for shares of
FRANKLIN TEMPLETON COREFOLIO ALLOCATION FUND
(a series of Franklin Templeton Fund Allocator Series)
This Statement of Additional Information ("SAI") relates specifically to the
proposed acquisition of substantially all of the assets of Franklin Templeton
Perspectives Allocation Fund ("Perspectives Fund") by and in exchange for Class
A, Class C, Class R, and Advisor Class shares of Franklin Templeton Corefolio
Fund ("Corefolio Fund").
This SAI consists of this Cover Page, the accompanying pro forma financial
statements and related notes, and the following documents, each of which was
filed electronically with the Securities and Exchange Commission and is
incorporated by reference herein (is legally considered to be part of this SAI):
1. Statement of Additional Information of Corefolio Fund and
Perspectives Fund dated May 1, 2010, as previously filed via EDGAR by
Franklin Templeton Fund Allocator Series under Rule [485(a), Accession No.
0001379491-10-000132, filed March 1, 2010].
2. Annual Report to Shareholders of Corefolio Fund and Perspectives Fund
for the fiscal year ended December 31, 2009, as previously filed via EDGAR
in Franklin Templeton Fund Allocator Series' [Form N-CSR, Accession No.
0001022804-10-000008, filed March 3, 2010].
Pro Forma Financial Statements for the Reorganization of Perspectives Fund into
Corefolio Fund are attached hereto.
This SAI is not a prospectus; you should read this SAI in conjunction with the
Prospectus/Information Statement dated [May 3, 2010,] relating to the above-
referenced transaction. You can request a copy of the Prospectus/Information
Statement by calling (800) DIAL BEN(R) ((800) 342-5236) or by writing to
Corefolio Fund at P.O. Box 997151, Sacramento, CA 95899-7151.
FRANKLIN TEMPLETON COREFOLIO ALLOCATION FUND
FRANKLIN TEMPLETON PERSPECTIVES ALLOCATION FUND
PRO FORMA COMBINING STATEMENTS, DECEMBER 31, 2009
(UNAUDITED)
The following unaudited Pro Forma Combining Statements give effect to the
proposed reorganization, accounted as if the reorganization had occurred as of
January 1, 2009. Each Pro Forma Combining Statement has been prepared based upon
the proposed fee and expense structure after the combination, as discussed in
the combined Prospectus/Information Statement.
The unaudited Pro Forma Combining Statements should be read in conjunction with
the historical financial statements and notes thereto of the Franklin Templeton
Perspectives Allocation Fund and the Franklin Templeton Corefolio Allocation
Fund which are incorporated by reference in this Statement of Additional
Information. The reorganization will be accounted for as a tax-free
reorganization.
FRANKLIN TEMPLETON COREFOLIO ALLOCATION FUND
FRANKLIN TEMPLETON PERSPECTIVES ALLOCATION FUND
PRO FORMA COMBINING STATEMENT OF INVESTMENTS, DECEMBER 31, 2009 (UNAUDITED)
FRANKLIN TEMPLETON FRANKLIN TEMPLETON
FRANKLIN PERSPECTIVES COREFOLIO ALLOCATION
TEMPLETON COREFOLIO ALLOCATION FUND PRO FORMA
ALLOCATION FUND FUND COMBINED (UNAUDITED)
---------------------- ---------------------- -----------------------
INVESTMENTS IN UNDERLYING FUNDS SHARES VALUE SHARES VALUE SHARES VALUE
------------------------------- --------- ------------ --------- ------------ ---------- ------------
DOMESTIC EQUITY 74.9%
Franklin Flex Cap Growth Fund, Advisor Class $ -- 1,722,306 $ 72,302,396 4,122,092 $173,045,429
Franklin Growth Fund, Advisor Class 6,121,055 238,782,346 4,435,925 173,045,429
Mutual Shares Fund, Class Z 6,155,883 118,131,393 3,785,235 72,638,657 9,017,479 173,045,429
------------ ------------ ------------
356,913,739 144,941,053 519,136,287
------------ ------------ ------------
FOREIGN EQUITY 25.0%
Templeton Growth Fund Inc., Advisor Class 7,037,625 118,232,092 4,291,359 72,094,833 10,300,323 173,045,430
------------ ------------ ------------
TOTAL INVESTMENTS IN UNDERLYING FUNDS BEFORE
SHORT TERM INVESTMENTS (COST $734,864,318) 475,145,831 217,035,886 692,181,717
------------ ------------ ------------
SHORT TERM INVESTMENTS (COST $1,924,714) 0.3%
MONEY MARKET FUNDS 0.3%
(a) Institutional Fiduciary Trust Money Market
Portfolio, 1.98% 853,209 853,209 1,071,505 1,071,505 1,924,714 1,924,714
------------ ------------ ------------
TOTAL INVESTMENTS IN UNDERLYING FUNDS
(COST $736,789,032) 100.2% 475,999,040 218,107,391 694,106,431
OTHER ASSETS, LESS LIABILITIES (0.2)% (930,532)(b) (206,526)(b) (1,137,058)(b)
------------ ------------ ------------
NET ASSETS 100% $475,068,508(b) $217,900,865(b) $692,969,373(b)
============ ============ ============
FOOTNOTE LEGEND
(a) The rate shown is the annualized seven-day yield at period end.
(b) Includes the estimated expenses of the Transactions borne by the Franklin
Templeton Corefolio Allocation Fund and the Franklin Templeton Perspectives
Allocation Fund.
See Notes to Pro Forma Combining Statements
FRANKLIN TEMPLETON COREFOLIO ALLOCATION FUND
FRANKLIN TEMPLETON PERSPECTIVES ALLOCATION FUND
FINANCIAL STATEMENTS
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2009
(UNAUDITED)
FRANKLIN
TEMPLETON
FRANKLIN FRANKLIN COREFOLIO
TEMPLETON TEMPLETON ALLOCATION
COREFOLIO PERSPECTIVES PRO FORMA FUND
ALLOCATION ALLOCATION ADJUSTMENTS PRO FORMA
FUND FUND (UNAUDITED) COMBINED
------------ ------------ ----------- ------------
Assets:
Investments in Underlying Funds
Cost $486,130,842 $249,220,065 $ 1,438,126 $736,789,033
Value 475,999,040 218,107,391 -- 694,106,431
Receivables:
Capital shares sold 417,937 259,296 -- 677,233
Affiliates 130,894 113,093 -- 243,987
Underlying Funds 90,325 43,380 -- 133,705
Other assets 63 27 -- 90
------------ ------------ ----------- ------------
Total assets 476,638,259 218,523,187 -- 695,161,446
------------ ------------ ----------- ------------
Liabilities:
Payables:
Capital shares redeemed 972,568 311,698 -- 1,284,266
Affiliates 446,924 201,413 -- 648,337
Unaffiliated transfer agent fees 70,327 37,542 -- 107,869
Other liabilities 47,952 39,689 63,960(a) 151,601
------------ ------------ ----------- ------------
Total liabilities 1,537,771 590,342 63,960 2,192,073
------------ ------------ ----------- ------------
Net assets, at value $475,100,488 $217,932,845 $ (63,960) $692,969,373
============ ============ =========== ============
Net assets consist of:
Paid-in capital $526,575,969 $270,123,760 $ -- $796,699,729
Undistributed net investment income 887,724 348,887 (63,960) 1,172,651
Net unrealized appreciation (depreciation) (10,131,802) (31,112,674) (1,438,126) (42,682,602)
Accumulated net realized gain (loss) (42,231,403) (21,427,128) 1,438,126 (62,220,405)
============ ============ =========== ============
Net assets, at value $475,100,488 $217,932,845 $ (63,960) $692,969,373
============ ============ =========== ============
CLASS A:
Net assets, at value $319,687,841 $160,725,031 $ (45,060) $480,367,812
============ ============ =========== ============
Shares outstanding(b) 28,851,278 16,172,461 (1,668,721) 43,355,018
============ ============ =========== ============
Net asset value per share(c) $ 11.08 $ 9.94 $ 11.08
============ ============ ============
Maximum offering price per share
(net asset value / 94.25% and 94.25%) $ 11.76 $ 10.55 $ 11.76
============ ============ ============
CLASS B:
Net assets, at value $ 39,092,906 $ (2,692) $ 39,090,214
============ =========== ============
Shares outstanding 3,542,296 -- 3,542,296
============ =========== ============
Net asset value and maximum offering price
per share(c) $ 11.04 $ 11.04
============ ============
CLASS C:
Net assets, at value $113,040,272 $ 52,314,247 $ (15,334) $165,339,185
============ ============ =========== ============
Shares outstanding(b) 10,284,227 5,287,649 (528,184) 15,043,692
============ ============ =========== ============
Net asset value and maximum offering price
per share(c) $ 10.99 $ 9.89 $ 10.99
============ ============ ============
CLASS R:
Net assets, at value $ 1,364,690 $ 701,599 $ (199) $ 2,066,090
============ ============ =========== ============
Shares outstanding(b) 123,198 70,487 (7,175) 186,510
============ ============ =========== ============
Net asset value and maximum offering price
per share(c) $ 11.08 $ 9.95 $ 11.08
============ ============ ============
ADVISOR CLASS:
Net assets, at value $ 1,914,779 $ 4,191,968 $ (675) $ 6,106,072
============ ============ =========== ============
Shares outstanding(b) 172,626 420,578 (42,632) 550,572
============ ============ =========== ============
Net asset value and maximum offering price
per share(c) $ 11.09 $ 9.97 $ 11.09
============ ============ ============
(a) Estimated expenses of the Transactions borne by the Franklin Templeton
Corefolio Allocation Fund and the Franklin Templeton Perspectives
Allocation Fund.
(b) See note 2 in the accompanying notes to Pro Forma Combining Statements.
(c) Redemption price is equal to the net asset value less contingent sales
charges, if applicable.
See Notes to Pro Forma Combining Statements
FRANKLIN TEMPLETON COREFOLIO ALLOCATION FUND
FRANKLIN TEMPLETON PERSPECTIVES ALLOCATION FUND
FINANCIAL STATEMENTS
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2009 (UNAUDITED)
FRANKLIN
TEMPLETON
COREFOLIO
FRANKLIN FRANKLIN ALLOCATION
TEMPLETON TEMPLETON FUND
COREFOLIO PERSPECTIVES PRO FORMA PRO FORMA
ALLOCATION ALLOCATION ADJUSTMENTS COMBINED
FUND FUND (UNAUDITED) (UNAUDITED)
------------ ------------ ----------- ------------
Investment Income:
Dividends from Underlying Funds $ 7,021,178 $ 2,851,186 $ -- $ 9,872,364
Expenses:
Administrative fees 413,938 190,760 688 605,386(a)
Distribution fees:
Class A 754,761 392,293 1,147,054
Class B 345,816 -- 345,816
Class C 979,209 461,152 -- 1,440,361
Class R 5,906 3,214 -- 9,120
Transfer agent fees 995,906 533,196 (95,166) 1,433,936(b)
Reports to shareholders 79,850 46,026 (3,811) 122,065(c)
Registration and filing fees 76,075 54,948 (54,948) 76,075(d)
Professional fees 23,925 18,408 (18,408) 23,925(e)
Trustee's fees and expenses 4,696 2,139 33 6,868(f)
Other 15,577 9,593 (5,389) 19,781(g)
Expenses borne by Underlying Funds (608,589) (315,854) (72,881) (997,324)(h)
------------ ------------ ----------- ------------
Total expenses 3,087,070 1,395,875 (249,882) 4,233,063
Expenses waived/paid by affiliates (544,832) (303,853) 164,648 (684,037)
------------ ------------ ----------- ------------
Net expenses 2,542,238 1,092,022 (85,234) 3,549,026
------------ ------------ ----------- ------------
Net investment income 4,478,940 1,759,164 85,234 6,323,338
------------ ------------ ----------- ------------
Realized and unrealized gains (losses):
Net realized gain (loss) from sale of investments in
Underlying Funds (29,576,059) (11,670,589) (1,438,126) (42,684,774)
Net change in unrealized appreciation (depreciation) 141,486,761 62,526,844 1,438,126 205,451,731
------------ ------------ ----------- ------------
Net realized and unrealized gain (loss) 111,910,702 50,856,255 -- 162,766,957
------------ ------------ ----------- ------------
Net increase (decrease) in net assets resulting from
operations $116,389,642 $ 52,615,419 $ 85,234 $169,090,295
------------ ------------ ----------- ------------
(a) Increase in Administrative fee based on decreased investment in Sweep after
merger.
(b) Reduction in Transfer agent fees projected for Corefolio post merger due to
vendors not shared by funds.
(c) Reduction in Reports to shareholders projected for Corefolio post merger
due to reduction in shareholder accounts for shareholders invested in both
funds.
(d) Reduction in Registration projected for Corefolio post merger due to fees
being primarily based on state registration renewals, which are not
expected to be renewed for Perspectives.
(e) Reduction in Professional fees projected for Corefolio post merger due to
expenses for Perspectives not expected to continue.
(f) Increase in Trustee's fees projected for Corefolio post merger due to
projected expenses based on Corefolio current expense ratio.
(g) Reduction in Other fees projected for Corefolio post merger.
(h) Increase in Expenses borne by Underlying Funds projected for Corefolio post
merger due to rebalancing Portfolio with increased holding of Underlying
Funds with higher fee ratios.
See Notes to Pro Forma Combining Statements
NOTES TO PRO FORMA COMBINING STATEMENTS (UNAUDITED)
1. BASIS OF COMBINATION
The Franklin Templeton Corefolio Allocation Fund will acquire substantially all
of the assets of the Franklin Templeton Perspectives Allocation Fund in exchange
for the Class A, C, R and Advisor Class shares of the Franklin Templeton
Corefolio Allocation Fund. The reorganization will be accounted for by the
method of accounting for tax-free business combinations of investment companies.
The accompanying Pro Forma Combining Statements are presented to show the effect
of the proposed reorganization as if such reorganization had occurred on January
1, 2009. The Pro Forma Combining Statement of Assets and Liabilities and the Pro
Forma Combining Statement of Investments for the Franklin Templeton Corefolio
Allocation Fund and Franklin Templeton Perspectives Allocation Fund have been
combined to reflect balances as of December 31, 2009. The Pro Forma Combining
Statement of Operations for the Franklin Templeton Corefolio Allocation Fund and
the Franklin Templeton Perspectives Allocation Fund has been combined to reflect
the twelve months ended December 31, 2009. The Pro Forma Combining Statements
are presented for the information of the reader, and should be read in
conjunction with the historical financial statements of the Franklin Templeton
Corefolio Allocation Fund and the Franklin Templeton Perspectives Allocation
Fund.
2. SHARES OF BENEFICIAL INTEREST
The number of Class A shares issued was calculated by dividing the adjusted
Class A net assets of the Franklin Templeton Perspectives Allocation Fund at
December 31, 2009 by the Class A net asset value per share of the Franklin
Templeton Corefolio Allocation Fund at December 31, 2009.
The number of Class C shares issued was calculated by dividing the adjusted
Class C net assets of the Franklin Templeton Perspectives Allocation Fund at
December 31, 2009 by the Class C net asset value per share of the Franklin
Templeton Corefolio Allocation Fund at December 31, 2009.
The number of Class R shares issued was calculated by dividing the adjusted
Class R net assets of the Franklin Templeton Perspectives Allocation Fund at
December 31, 2009 by the Class R net asset value per share of the Franklin
Templeton Corefolio Allocation Fund at December 31, 2009.
The number of Advisor Class shares issued was calculated by dividing the
adjusted Advisor Class net assets of the Franklin Templeton Perspectives
Allocation Fund at December 31, 2009 by the Advisor Class net asset value per
share of the Franklin Templeton Corefolio Allocation Fund at December 31, 2009.
3. INVESTMENT RESTRICTIONS
None of the securities held by the Franklin Templeton Perspectives Allocation
Fund as of the closing date will violate the investment restrictions of the
Franklin Templeton Corefolio Allocation Fund.
4. ACCOUNTING ESTIMATES
The preparation of the Pro Forma Combining Statements in accordance with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the Pro Forma Combining
Statements and the amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.
5. SECURITY VALUATION
Net asset value per share is calculated as of the close of trading of the NYSE.
Investments in the Underlying Funds are valued at their closing net asset value
each trading day.
6. REORGANIZATION COSTS
The Franklin Templeton Corefolio Allocation Fund and the Franklin Templeton
Perspectives Allocation Fund will each pay 25% of the expenses resulting from
their participation in the reorganization. Franklin Templeton Services, LLC will
pay the remaining 50% of such expenses for the reorganization. The total amount
of such expenses for the reorganization is estimated to be $127,920.
7. FAIR VALUE MEASUREMENTS
The Franklin Templeton Fund Allocator Series (Trust) follows a fair value
hierarchy that distinguishes between market data obtained from independent
sources (observable inputs) and the Trust's own market assumptions (unobservable
inputs). These inputs are used in determining the value of the Funds'
investments and are summarized in the following fair value hierarchy:
- Level 1 - quoted prices in active markets for identical securities
- Level 2 - other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speed, credit risk,
etc.)
- Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not an indication of
the risk associated with investing in those securities.
At December 31, 2009, both of the Funds' investments in Underlying Funds carried
at fair value were in Level 1 inputs. For detailed Underlying Funds categories,
see the accompanying Pro Forma Combined Statement of Investments.
The Statement of Additional Information of Corefolio Fund and Perspectives Fund,
dated May 1, 2010, is part of this SAI and will be provided to all shareholders
of Perspectives Fund requesting this SAI.
The Annual Report to Shareholders of Corefolio Fund and Perspectives Fund for
the fiscal year ended December 31, 2009, is part of this SAI and will be
provided to all shareholders of Perspectives Fund requesting this SAI.
FRANKLIN TEMPLETON FUND ALLOCATOR SERIES
FORM N-14
PART C
OTHER INFORMATION
Item 15. Indemnification
The Amended and Restated Agreement and Declaration of Trust (the
"Declaration") provides that any person who is or was a Trustee, officer,
employee or other agent, including the underwriter, of such Trust shall be
liable to the Trust and its shareholders only for (1) any act or omission
that constitutes a bad faith violation of the implied contractual covenant of
good faith and fair dealing, or (2) the person's own willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such person (such conduct referred to herein as Disqualifying
Conduct) and for nothing else. Except in these instances and to the fullest
extent that limitations of liability of agents are permitted by the Delaware
Statutory Trust Act (the "Delaware Act"), these Agents (as defined in the
Declaration) shall not be responsible or liable for any act or omission of
any other Agent of the Trust or any investment adviser or principal
underwriter. Moreover, except and to the extent provided in these instances,
none of these Agents, when acting in their respective capacity as such, shall
be personally liable to any other person, other than such Trust or its
shareholders, for any act, omission or obligation of the Trust or any trustee
thereof.
The Trust shall indemnify, out of its property, to the fullest extent
permitted under applicable law, any of the persons who was or is a party, or
is threatened to be made a party to any Proceeding (as defined in the
Declaration) because the person is or was an Agent of such Trust. These
persons shall be indemnified against any Expenses (as defined in the
Declaration), judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with the Proceeding if the person acted in
good faith or, in the case of a criminal proceeding, had no reasonable cause
to believe that the conduct was unlawful. The termination of any Proceeding
by judgment, order, settlement, conviction or plea of nolo contendere or its
equivalent shall not in itself create a presumption that the person did not
act in good faith or that the person had reasonable cause to believe that the
person's conduct was unlawful. There shall nonetheless be no indemnification
for a person's own Disqualifying Conduct.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to Trustees, officers and controlling
persons of the Trust pursuant to the foregoing provisions, or otherwise, the
Trust has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Trust
of expenses incurred or paid by a Trustee, officer or controlling person of
the Trust in the successful defense of any action, suit or proceeding) is
asserted by such Trustee, officer or controlling person in connection with
securities being registered, the Trust may be required, unless in the opinion
of its counsel the matter has been settled by controlling precedent, to
submit to a court or appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue
Item 16. Exhibits.
The following exhibits are incorporated by reference to the previously filed
documents indicated below, except as noted:
(1) Copies of the charter of the Registrant as now in effect;
(a) Amended and Restated Agreement and Declaration of Trust of
Franklin Templeton Fund Allocator Series dated May 21, 2007
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: April 29, 2008
(b) Certificate of Amendment to the Agreement and Declaration of
Trust of Franklin Templeton Fund Allocator Series dated
October 21, 2008
(c) Certificate of Trust dated September 18, 1995
Filing: Registration Statement on Form N-1A
File No. 333-13601
Filing Date: October 7, 1996
(d) Certificate of Amendment to the Certificate of Trust of
Franklin Templeton Fund Manager dated September 17, 1996
Filing: Registration Statement on Form N-1A
File No. 333-13601
Filing Date: October 7, 1996
(2) Copies of the existing By-Laws or corresponding instruments of the
Registrant;
(a) Amended and Restated By-Laws of Franklin Templeton Fund
Allocator Series dated May 21, 2007
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: April 29, 2008
(3) Copies of any voting trust agreement affecting more than 5 percent
of any class of equity securities of the Registrant;
Not Applicable
(4) Copies of the agreement of acquisition, reorganization, merger,
liquidation and any amendments to it;
(a) Form of Plan of Reorganization by Franklin Templeton Fund
Allocator Series on behalf of Franklin Templeton Corefolio
Allocation Fund and Franklin Templeton Perspectives Allocation
Fund (filed herewith as Exhibit A to the
Prospectus/Information Statement contained within this
Registration Statement)
(5) Copies of all instruments defining the rights of holders of the
securities being registered, including copies, where applicable,
the relevant portion of the articles of incorporation or by-laws of
the Registrant;
Not Applicable
(6) Copies of all investment advisory contracts relating to the
management of the assets of the Registrant;
(a) Investment Advisory and Asset Allocation Agreement between
Registrant, on behalf of Franklin Templeton Conservative
Target Fund, Franklin Templeton Moderate Target Fund and
Franklin Templeton Growth Target Fund, and Franklin Advisers,
Inc. dated November 19, 1996
Filing: Pre-Effective Amendment No. 2 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: December 27, 1996
(b) Investment Management and Asset Allocation
Agreement between Registrant, on behalf of Franklin Templeton
2015 Retirement Target Fund, Franklin Templeton 2025
Retirement Target Fund, Franklin Templeton 2035 Retirement
Target Fund and Franklin Templeton 2045 Retirement Target
Fund, and Franklin Advisers, Inc. dated August 1, 2006
Filing: Post-Effective Amendment No. 19 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: April 27, 2007
(7) Copies of each underwriting or distribution contract between the
Registrant and a principal underwriter, and specimens or copies of
all agreements between principal underwriters and dealers;
(a) Amended and Restated Distribution Agreement between Registrant
and Franklin/Templeton Distributors, Inc. dated October 31,
2000
Filing: Post-Effective Amendment No. 6 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: November 29, 2001
(b) Form of Selling Agreements between Franklin/Templeton
Distributors, Inc. and Securities Dealers dated November 1,
2003
Filing: Post-Effective Amendment No. 12 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: May 19, 2004
(c) Amendment dated May 15, 2006 to Form of Selling Agreements
between Franklin/Templeton Distributors, Inc. and Securities
Dealers dated November 1, 2003
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: April 29, 2008
(8) Copies of all bonus, profit sharing, pension or other similar
contracts or arrangements wholly or partly for the benefit of
directors or officers of the Registrant in their capacity as such.
Furnish a reasonably detailed description of any plan that is not
set forth in a formal document;
Not Applicable
(9) Copies of all custodian agreements and depository contracts under
Section 17(f) of the 1940 Act, for securities and similar
investments of the Registrant, including the schedule or
remuneration;
(a) Master Custody Agreement between Registrant and The Bank of
New York Mellon dated February 16, 1996
Filing: Pre-Effective Amendment No. 2 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: December 27, 1996
(b) Amendment dated May 7, 1997 to Master Custody Agreement
between Registrant and The Bank of New York Mellon
Filing: Post-Effective Amendment No. 3 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: September 21, 1998
(c) Amendment dated February 27, 1998 to Master Custody Agreement
between Registrant and The Bank of New York Mellon
Filing: Post-Effective Amendment No. 6 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: November 29, 2001
(d) Amendment dated May 16, 2001 to Master Custody Agreement
between Registrant and The Bank of New York Mellon dated
February 16, 1996
Filing: Post-Effective Amendment No. 6 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: November 29, 2001
(e) Amendment dated January 6, 2010 to Exhibit A of the Master
Custody Agreement between the Registrant and The Bank of New
York Mellon dated February 16, 1996
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(f) Amended and Restated Foreign Custody Manager Agreement between
Registrant and The Bank of New York Mellon made as of May 16,
2001
Filing: Post-Effective Amendment No. 6 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: November 29, 2001
(g) Amendment dated January 6, 2010 to Schedule 1 of the Foreign
Custody Manager Agreement
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(h) Amendment dated October 27, 2009 to Schedule 2 of the Foreign
Custody Manager Agreement
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(i) Terminal Link Agreement between Registrant and The Bank of New
York Mellon dated February 16, 1996
Filing: Post-Effective Amendment No. 1 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: June 30, 1997
(10) Copies of any plan entered into by Registrant pursuant to Rule
12b-1 under the 1940 Act and any agreements with any person
relating to implementation of the plan, and copies of any plan
entered into by Registrant pursuant to Rule 18f-3 under the 1940
Act, any agreement with any person relating to implementation of
the plan, any amendment to the plan, and a copy of the portion of
the minutes of the meeting of the Registrant's directors describing
any action taken to revoke the plan;
(a) Amended and Restated Class A Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
Conservative Target Fund and Franklin Templeton Distributors
Inc. dated February 1, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(b) Amended and Restated Class A Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
Distributors Franklin Templeton Moderate Target Fund and Inc.
dated February 1, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(c) Amended and Restated Class A Distribution Plan pursuant to
Rule 12b-1 between Registrant, Franklin Templeton Growth
Target Fund and Franklin Templeton Distributors Inc. dated
February 1, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(d) Amended and Restated Class B Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
Conservative Target Fund, Franklin Templeton Moderate Target
Fund and Franklin Templeton Growth Target Fund, and
Franklin/Templeton Distributors, Inc. dated July 9, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(e) Amended and Restated Class C Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
Conservative Target Fund, Franklin Templeton Moderate Target
Fund and Franklin Templeton Growth Target Fund, and
Franklin/Templeton Distributors, Inc. dated July 9, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(f) Amended and Restated Class R Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
Conservative Target Fund, Franklin Templeton Moderate Target
Fund and Franklin Templeton Growth Target Fund, and
Franklin/Templeton Distributors, Inc. dated July 9, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(g) Amended and Restated Class A Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
Corefolio Allocation Fund and Franklin/Templeton Distributors,
Inc. dated February 1, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(h) Amended and Restated Class A Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
Founding Funds Allocation and Franklin/Templeton Distributors,
Inc. dated May 1, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(i) Amended and Restated Class B Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
Corefolio Allocation Fund and Franklin Templeton Founding
Funds Allocation Fund, and Franklin/Templeton Distributors,
Inc. dated July 9, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(j) Amended and Restated Class C Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
Corefolio Allocation Fund, Franklin Templeton Founding Funds
Allocation Fund, Franklin Templeton Perspectives Allocation
Fund and Franklin/Templeton Distributors, Inc. dated July 9,
2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(k) Amended and Restated Class R Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
Corefolio Allocation Fund, Franklin Templeton Perspectives
Allocation Fund, Franklin Templeton Founding Funds Allocation
Fund, and Franklin/Templeton Distributors, Inc. dated July 9,
2009
(l) Amended and Restated Class A Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
Perspectives Allocation Fund, and Franklin/Templeton
Distributors, Inc. dated February 1, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(m) Amended and Restated Class A Distribution Plan pursuant to
Rule 12b-1 between Registrant, on behalf of Franklin Templeton
2015 Retirement Target Fund and Franklin/Templeton
Distributors, Inc. dated February 1, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(n) Amended and Restated Class A Distribution Plan pursuant to
Rule 12b-1 between Registrant, Franklin Templeton 2025
Retirement Target Fund and Franklin/Templeton Distributors,
Inc. dated February 1, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(o) Amended and Restated Class A Distribution Plan pursuant to
Rule 12b-1 between Registrant, Franklin Templeton 2035
Retirement Target Fund and Franklin/Templeton Distributors,
Inc. dated February 1, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(p) Amended and Restated Class A Distribution Plan pursuant to
Rule 12b-1 between Registrant, Franklin Templeton 2045
Retirement Target Fund and Franklin/Templeton Distributors,
Inc. dated February 1, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(q) Class C Distribution Plan pursuant to Rule 12b-1 between
Registrant, on behalf of Franklin Templeton 2015 Retirement
Target Fund, Franklin Templeton 2025 Retirement Target Fund,
Franklin Templeton 2035 Retirement Target Fund and Franklin
Templeton 2045 Retirement Target Fund, and Franklin/Templeton
Distributors, Inc. dated August 1, 2006
Filing: Post-Effective Amendment No. 19 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: April 27, 2007
(r) Class R Distribution Plan pursuant to Rule
12b-1 between Registrant, on behalf of Franklin Templeton 2015
Retirement Target Fund, Franklin Templeton 2025 Retirement
Target Fund, Franklin Templeton 2035 Retirement Target Fund
and Franklin Templeton 2045 Retirement Target Fund, and
Franklin/Templeton Distributors, Inc. dated August 1, 2006
Filing: Post-Effective Amendment No. 19 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: April 27, 2007
(s) Multiple Class Plan for Franklin Templeton Corefolio
Allocation Fund and Franklin Templeton Founding Funds
Allocation Fund dated November, 18, 2003
Filing: Post-Effective Amendment No. 17 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: May 16, 2006
(t) Multiple Class Plan for Franklin Templeton Conservative Target
Fund, Franklin Templeton Growth Target Fund and Franklin
Templeton Moderate Target Fund dated November 18, 2003
Filing: Post-Effective Amendment No. 17 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: May 16, 2006
(u) Multiple Class Plan for Franklin Templeton Perspectives
Allocation Fund dated July 15, 2004
Filing: Post-Effective Amendment No. 13 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: November 24, 2004
(v) Multiple Class Plan for Franklin Templeton 2015 Retirement
Target Fund, Franklin Templeton 2025 Retirement Target Fund,
Franklin Templeton 2035 Retirement Target Fund and Franklin
Templeton 2045 Retirement Target Fund dated May 10, 2006
Filing: Post-Effective Amendment No. 19 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: April 27, 2007
(11) An opinion and consent of counsel as to the legality of the
securities being registered, indicating whether they will, when
sold, be legally issued, fully paid and nonassessable;
(a) Opinion and Consent of Counsel dated March 31, 2010
(12) An opinion, and consent to their use, of counsel or, in lieu of an
opinion, a copy of the revenue ruling from the Internal Revenue
Service, supporting the tax matters and consequences to
shareholders discussed in the prospectus;
(a) To be filed by amendment.
(13) Copies of all material contracts of the Registrant no made in the
ordinary course of business which are to be performed in whole or
in part on or after the date of filing of the Registration
Statement;
(a) Administration Agreement between Registrant, on behalf of
Franklin Templeton Conservative Target Fund, Franklin
Templeton Moderate Target Fund and Franklin Templeton Growth
Target Fund, and Franklin Templeton Services, LLC dated
January 1, 2001
Filing: Post-Effective Amendment No. 6 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: November 29, 2001
(b) Fund Administration Agreement between Registrant, on behalf of
Franklin Templeton Founding Funds Allocation Fund, and
Franklin Templeton Services, LLC dated April 4, 2008
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: April 29, 2008
(c) Fund Administration Agreement between Registrant, on behalf of
Franklin Templeton Corefolio Allocation Fund, and Franklin
Templeton Services, LLC dated April 4, 2008
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: April 29, 2008
(d) Fund Administration Agreement between Registrant, on behalf of
Franklin Templeton Perspectives Allocation Fund, and Franklin
Templeton Services, LLC dated April 4, 2008
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: April 29, 2008
(e) Fund Administration Agreement between Registrant, on behalf of
Franklin Templeton 2015 Retirement Target Fund, Franklin
Templeton 2025 Retirement Target Fund, Franklin Templeton 2035
Retirement Target Fund and Franklin Templeton 2045 Retirement
Target Fund, and Franklin Templeton Services, LLC dated August
1, 2006
Filing: Post-Effective Amendment No. 19 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: April 27, 2007
(f) Special Servicing Agreement dated December 2, 2009
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(g) Amended Annex II to the Special Servicing Agreement dated
January 13, 2010
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 333-13601
Filing Date: March 1, 2010
(14) Copies of any other opinions, appraisals, or rulings, and consents
to their use, relied on in preparing the Registration Statement and
required by Section 7 of the 1933 Act;
(a) Consent of Independent Registered Public Accounting Firm
(15) All financial statements omitted pursuant to Item 14(a)(1);
Not applicable.
(16) Manually signed copies of any power of attorney pursuant to which
the name of any person has been signed to the Registration
Statement; and
(a) Powers of Attorney dated February 23, 2010
(17) Any additional exhibits which the Registrant may wish to file.
(a) Code of Ethics dated May, 2009
Item 17. Undertakings.
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is part of this registration statement by any
person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act, the reoffering
prospectus will contain the information called for by the
applicable registration form for reofferings by persons who may be
deemed underwriters, in addition to the information called for by
the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an
amendment to the registration statement and will not be used until
the amendment is effective, and that, in determining any liability
under the 1933 Act, each post-effective amendment shall be deemed
to be a new registration statement for the securities offered
therein, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of them.
(3) The undersigned Registrant agrees to file by Post-Effective
Amendment the opinions and consents of counsel regarding the tax
consequences of the proposed reorganizations required by Item
16(12) of Form N-14 within a reasonable time after receipt of such
opinions.
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has
been signed on behalf of the Registrant, in the City of San Mateo and the
State of California, on the 1st day of April, 2010.
FRANKLIN TEMPLETON FUND ALLOCATOR SERIES
(Registrant)
By: /s/ David P. Goss
David P. Goss
Vice President
As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated:
Rupert H. Johnson, Jr.* Chief Executive
Rupert H. Johnson, Jr. Officer-Investment Management
Dated: April 1, 2010
Laura F. Fergerson* Chief Executive Officer-Finance
Laura F. Fergerson and Administration
Dated: April 1, 2010
Gaston Gardey* Chief Financial Officer and
Gaston Gardey Chief Accounting Officer
Dated: April 1, 2010
Harris J. Ashton* Trustee
Harris J. Ashton Dated: April 1, 2010
Sam Ginn* Trustee
Sam Ginn Dated: April 1, 2010
Edith E. Holiday* Trustee
Edith E. Holiday Dated: April 1, 2010
Charles B. Johnson* Trustee
Charles B. Johnson Dated: April 1, 2010
Gregory E. Johnson* Trustee
Gregory E. Johnson Dated: April 1, 2010
Frank W.T. LaHaye* Trustee
Frank W.T. LaHaye Dated: April 1, 2010
J. Michael Luttig* Trustee
J. Michael Luttig Dated: April 1, 2010
Frank A. Olson* Trustee
Frank A. Olson Dated: April 1, 2010
Larry D. Thompson* Trustee
Larry D. Thompson Dated: April 1, 2010
John B. Wilson* Trustee
John B. Wilson Dated: April 1, 2010
*By: /s/ David P. Goss
David P. Goss, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
FRANKLIN TEMPLETON FUND ALLOCATOR SERIES
REGISTRATION STATEMENT
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION LOCATION
EX-99.(1)(a) Amended and Restated Agreement *
and Declaration of Trust of
Franklin Templeton Fund Allocator
Series dated May 21, 2007
EX-99.(1)(b) Certificate of Amendment to the Attached
Agreement and Declaration of
Trust of Franklin Templeton Fund
Allocator Series dated October
21, 2008
EX-99.(1)(c) Certificate of Trust dated *
September 18, 1995
EX-99.(1)(d) Certificate of Amendment to the *
Certificate of Trust of Franklin
Templeton Fund Manager dated
September 17, 1996
EX-99.(2)(a) Amended and Restated By-Laws of *
Franklin Templeton Fund Allocator
Series dated May 21, 2007
EX-99.(6)(a) Investment Advisory and Asset *
Allocation Agreement between
Registrant, on behalf of Franklin
Templeton Conservative Target
Fund, Franklin Templeton Moderate
Target Fund and Franklin
Templeton Growth Target Fund, and
Franklin Advisers, Inc. dated
November 19, 1996
EX-99.(6)(b) Investment Management and Asset *
Allocation Agreement between
Registrant, on behalf of Franklin
Templeton 2015 Retirement Target
Fund, Franklin Templeton 2025
Retirement Target Fund, Franklin
Templeton 2035 Retirement Target
Fund and Franklin Templeton 2045
Retirement Target Fund, and
Franklin Advisers, Inc. dated
August 1, 2006
EX-99.(7)(a) Amended and Restated Distribution *
Agreement between Registrant and
Franklin/Templeton Distributors,
Inc. dated October 31, 2000
EX-99.(7)(b) Form of Selling Agreements *
between Franklin/Templeton
Distributors, Inc. and Securities
Dealers dated November 1, 2003
EX-99.(7)(c) Amendment dated May 15, 2006 to *
Form of Selling Agreements
between Franklin/Templeton
Distributors, Inc. and Securities
Dealers dated November 1, 2003
EX-99.(9)(a) Master Custody Agreement between *
Registrant and The Bank of New
York Mellon dated February 16,
1996
EX-99.(9)(b) Amendment dated May 7, 1997 to *
Master Custody Agreement between
Registrant and The Bank of New
York Mellon
EX-99.(9)(c) Amendment dated February 27, 1998 *
to Master Custody Agreement
between Registrant and The Bank
of New York Mellon
EX-99.(9)(d) Amendment dated May 16, 2001 to *
Master Custody Agreement between
Registrant and Bank of New York
dated February 16, 1996
EX-99.(9)(e) Amendment dated January 6, 2010 *
to Exhibit A of the Master
Custody Agreement between the
Registrant and The Bank of New
York Mellon dated February 16,
1996
EX-99.(9)(f) Amended and Restated Foreign *
Custody Manager Agreement between
Registrant and The Bank of New
York Mellon made as of May 16,
2001
EX-99.(9)(g) Amendment dated January 6, 2010 *
to Schedule 1 of the Foreign
Custody Manager Agreement
EX-99.(9)(h) Amendment dated October 27, 2009 *
to Schedule 2 of the Foreign
Custody Manager Agreement
EX-99.(9)(i) Terminal Link Agreement between *
Registrant and Bank of The New
York Mellon dated February 16,
1996
EX-99.(10)(a) Amended and Restated Class A *
Distribution Plan pursuant to
Rule 12b-1 between Registrant, on
behalf of Franklin Templeton
Conservative Target Fund and Inc.
dated February 1, 2009
EX-99.(10)(b) Amended and Restated Class A *
Distribution Plan pursuant to
Rule 12b-1 between Registrant,
Franklin Templeton Moderate
Target Fund and Inc. dated
February 1, 2009
EX-99.(10)(c) Amended and Restated Class A *
Distribution Plan pursuant to
Rule 12b-1 between Registrant,
Franklin Templeton Growth Target
Fund and Inc. dated February 1,
2009
EX-99.(10)(d) Amended and Restated Class B *
Distribution Plan pursuant to
Rule 12b-1 between Registrant, on
behalf of Franklin Templeton
Conservative Target Fund,
Franklin Templeton Moderate
Target Fund and Franklin
Templeton Growth Target Fund, and
Franklin/Templeton Distributors,
Inc. dated July 9, 2009
EX-99.(10)(e) Amended and Restated Class C *
Distribution Plan pursuant to
Rule 12b-1 between Registrant, on
behalf of Franklin Templeton
Conservative Target Fund,
Franklin Templeton Moderate
Target Fund and Franklin
Templeton Growth Target Fund, and
Franklin/Templeton Distributors,
Inc. dated July 9, 2009
EX-99.(10)(f) Amended and Restated Class R *
Distribution Plan pursuant to
Rule 12b-1 between Registrant, on
behalf of Franklin Templeton
Conservative Target Fund,
Franklin Templeton Moderate
Target Fund and Franklin
Templeton Growth Target Fund,
and Franklin/Templeton
Distributors, Inc. dated July 9,
2009
EX-99.(10)(g) Amended and Restated Class A *
Distribution Plan
pursuant to Rule 12b-1 between
Registrant, on behalf of Franklin
Templeton Corefolio Allocation
Fund and Franklin/Templeton
Distributors, Inc. dated February
1,2009
EX-99.(10)(h) Amended and Restated Class A *
Distribution Plan
pursuant to Rule 12b-1 between
Registrant, on behalf of Franklin
Templeton Founding Funds
Allocation and Franklin/Templeton
Distributors, Inc. dated May 1,
2009
EX-99.(10)(i) Amended and Restated Class B *
Distribution Plan pursuant to
Rule 12b-1 between Registrant, on
behalf of Franklin Templeton
Corefolio Allocation Fund and
Franklin Templeton Founding Funds
Allocation Fund, and
Franklin/Templeton Distributors,
Inc. dated July 9, 2009
EX-99.(10)(j) Amended and Restated Class C *
Distribution Plan
pursuant to Rule 12b-1 between
Registrant, on
behalf of Franklin Templeton
Corefolio Allocation Fund,
Franklin Templeton Founding
Funds Allocation Fund, Franklin
Templeton Perspectives Allocation
Fund and Franklin/Templeton
Distributors, Inc. dated July 9,
2009
EX-.99.(10)(k) Amended and Restated Class R Attached
Distribution Plan pursuant to
Rule 12b-1 between Registrant, on
behalf of Franklin Templeton
Corefolio Allocation Fund,
Franklin Templeton Founding Funds
Allocation Fund, Franklin
Templeton Perspectives Allocation
Fund, and Franklin/Templeton
Distributors, Inc. dated July 9,
2009
EX-.99.(10)(l) Amended and Restated Class A *
Distribution Plan pursuant to
Rule 12b-1 between Registrant, on
behalf of Franklin Templeton
Perspectives Allocation Fund, and
Franklin/Templeton Distributors,
Inc. dated February 1, 2009
EX-99.(10)(m) Amended and Restated Class A *
Distribution Plan pursuant to
Rule 12b-1 between Registrant, on
behalf of Franklin Templeton 2015
Retirement Target Fund and
Franklin/Templeton Distributors,
Inc. dated February 1, 2009
EX-99.(10)(n) Amended and Restated Class A *
Distribution Plan pursuant to
Rule 12b-1 between Registrant,
Franklin Templeton 2025
Retirement Target Fund and
Franklin/Templeton Distributors,
Inc. dated February 1, 2009
EX-99.(10)(o) Amended and Restated Class A *
Distribution Plan pursuant to
Rule 12b-1 between Registrant,
Franklin Templeton 2035
Retirement Target Fund and
Franklin/Templeton Distributors,
Inc. dated February 1, 2009
EX-99.(10)(p) Amended and Restated Class A *
Distribution Plan pursuant to
Rule 12b-1 between Registrant,
Franklin Templeton 2045
Retirement Target Fund and
Franklin/Templeton Distributors,
Inc. dated February 1, 2009
EX-99.(10)(q) Class C Distribution Plan *
pursuant to Rule 12b-1 between
Registrant, on behalf of Franklin
Templeton 2015 Retirement Target
Fund, Franklin Templeton 2025
Retirement Target Fund, Franklin
Templeton 2035 Retirement Target
Fund and Franklin Templeton 2045
Retirement Target Fund, and
Franklin/Templeton Distributors,
Inc. dated August 1, 2006
EX-99.(10)(r) Class R Distribution Plan *
pursuant to Rule 12b-1 between
Registrant, on behalf of Franklin
Templeton 2015 Retirement Target
Fund, Franklin Templeton 2025
Retirement Target Fund, Franklin
Templeton 2035 Retirement Target
Fund and Franklin Templeton 2045
Retirement Target Fund, and
Franklin/Templeton Distributors,
Inc. dated August 1, 2006
EX-99.(10)(s) Multiple Class Plan for Franklin *
Templeton Corefolio Allocation
Fund and Franklin Templeton
Founding Funds Allocation Fund
dated November 18, 2003
EX-99.(10)(t) Multiple Class Plan for Franklin *
Templeton Conservative Target
Fund, Franklin Templeton Growth
Target Fund and Franklin
Templeton Moderate Target Fund
dated November 18, 2003
EX-99.(10)(u) Multiple Class Plan for Franklin *
Templeton Perspectives Allocation
Fund dated July 15, 2004
EX-99.(10)(v) Multiple Class Plan for Franklin *
Templeton 2015 Retirement Target
Fund, Franklin Templeton 2025
Retirement Target Fund, Franklin
Templeton 2035 Retirement Target
Fund and Franklin Templeton 2045
Retirement Target Fund dated May
10, 2006
EX-99.(11)(a) Opinion and Consent of Counsel Attached
dated March 31, 2010
EX-99.(13)(a) Administration Agreement between *
Registrant, on behalf of Franklin
Templeton Conservative Target
Fund, Franklin Templeton Moderate
Target Fund and Franklin
Templeton Growth Target Fund, and
Franklin Templeton Services, LLC
dated January 1, 2001
EX-99.(13)(b) Fund Administration Agreement *
between Registrant, on behalf of
Franklin Templeton Founding Funds
Allocation Fund, and Franklin
Templeton Services, LLC dated
April 4, 2008
EX-99.(13)(c) Fund Administration Agreement *
between Registrant, on behalf of
Franklin Templeton Corefolio
Allocation Fund, and Franklin
Templeton Services, LLC dated
April 4, 2008
EX-99.(13)(d) Fund Administration Agreement *
between Registrant, on behalf of
Franklin Templeton Perspectives
Allocation Fund, and Franklin
Templeton Services, LLC dated
April 4, 2008
EX-99.(13)(e) Administration Agreement between *
Registrant, on behalf of Franklin
Templeton 2015 Retirement Target
Fund, Franklin Templeton 2025
Retirement Target Fund, Franklin
Templeton 2035 Retirement Target
Fund and Franklin Templeton 2045
Retirement Target Fund, and
Franklin Templeton Services, LLC
dated August 1, 2006
EX-99.(13)(f) Special Servicing Agreement dated *
December 2, 2009
EX-99.(13)(g) Amended Annex II to the Special *
Servicing Agreement dated January
13, 2010
EX-99.(14)(a) Consent of Independent Registered Attached
Public Accounting Firm
EX-99.(16)(a) Power of Attorney dated February Attached
23, 2010
EX-99.(17)(a) Code of Ethics dated May, 2009 Attached
*Incorporated by Reference