Edgar Filing: FRANKLIN UNIVERSAL TRUST

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.)

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FRANKLIN UNIVERSAL TRUST
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FRANKLIN UNIVERSAL TRUST
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[GRAPHIC OMITTED]

FRANKLIN UNIVERSAL TRUST

IMPORTANT SHAREHOLDER INFORMATION

We have enclosed important information about the Annual
Shareholders' Meeting (the "Meeting") of Franklin Universal Trust
(the "Fund") scheduled for Friday, March 14, 2008, at 2:00 p.m.,
Pacific Time. These materials discuss the proposals to be voted
on at the meeting.

THIS MEETING IS VERY IMPORTANT BECAUSE A GROUP OF DISSIDENT
SHAREHOLDERS CALLED BULLDOG INVESTORS HAS FILED A PROXY STATEMENT
TO ELECT THEIR OWN NOMINEES TO THE BOARD OF THE FUND AT THE
MEETING. BASED ON THEIR PROXY STATEMENT, WE BELIEVE THAT IF THE
DISSIDENT NOMINEES ARE ELECTED, THE FUND WOULD NOT CONTINUE TO
OPERATE AS A CLOSED-END FUND--IT MAY BE LIQUIDATED, OPEN-ENDED OR
SIGNIFICANTLY DIMINISHED THROUGH A TENDER OFFER. IN ADDITION,
ANOTHER SHAREHOLDER OF THE FUND HAS SUBMITTED A PROPOSAL
REQUESTING THAT THE FUND MERGE INTO AN OPEN-END FUND. YOUR BOARD
WANTS TO KEEP THE FUND AS A CLOSED-END FUND BECAUSE THE BOARD
BELIEVES THAT THE FUND'S CURRENT STRUCTURE PROVIDES YOU WITH A
NUMBER OF REAL BENEFITS THAT ARE NOT AVAILABLE TO OPEN-END FUNDS.
FOR THESE REASONS, WE ARE ASKING YOU TO VOTE FOR YOUR FUND'S
CURRENT BOARD OF TRUSTEES, AND AGAINST THE SHAREHOLDER PROPOSAL.

These materials also contain the Notice of Meeting, proxy
statement and proxy card. A proxy card is, in essence, a ballot.
When you vote your proxy, it tells us how you wish to vote on
important issues relating to the Fund. If you complete, sign and
return the proxy card, we'll vote it as you indicated. If you
simply sign, date and return the enclosed WHITE proxy card, but
do not specify a vote on the proposals, your proxy will be voted
FOR the election of the nominees to the position of Trustee
(Proposal 1) and AGAINST the shareholder proposal (Proposal 2).

REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS VERY
IMPORTANT. WE URGE YOU TO VOTE FOR YOUR BOARD'S NOMINEES
(PROPOSAL 1) AND AGAINST THE SHAREHOLDER PROPOSAL (PROPOSAL 2) BY
COMPLETING, SIGNING AND DATING THE ENCLOSED WHITE PROXY CARD AND
RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. Returning your
proxy card does not preclude you from attending the meeting or
later changing your vote prior to its being cast.

PLEASE DO NOT SEND BACK ANY GREEN PROXY CARD YOU RECEIVE FROM
BULLDOG INVESTORS, EVEN TO VOTE AGAINST THE DISSIDENT NOMINEES AS
THIS MAY CANCEL YOUR PRIOR VOTE FOR YOUR FUND'S NOMINEES. IF YOU
HAVE ALREADY RETURNED BULLDOG INVESTORS' GREEN PROXY CARD, YOU
CAN STILL SUPPORT YOUR BOARD BY RETURNING THE ENCLOSED WHITE
PROXY CARD. ONLY YOUR LATEST DATED PROXY CARD WILL COUNT.

If you have any questions, please call the Fund's proxy
solicitor, The Altman Group, at (800) 336-5159.

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FRANKLIN UNIVERSAL TRUST

NOTICE OF 2008
ANNUAL SHAREHOLDERS' MEETING

The Annual Shareholders' Meeting (the "Meeting") of Franklin
Universal Trust (the "Fund") will be held at the Fund's offices,
One Franklin Parkway, San Mateo, California 94403, on Friday,
March 14, 2008, at 2:00 p.m., Pacific Time.

During the Meeting, shareholders of the Fund will vote on the
following proposals:

o The election of a Board of Trustees of the Fund.

o If properly presented, a shareholder proposal.

o Such other matters as may properly come before the Meeting.

The Board of Trustees has fixed January 14, 2008, as the record
date for the determination of shareholders entitled to vote at
the Meeting.

YOUR VOTE IS EXTREMELY IMPORTANT, ESPECIALLY IN LIGHT OF THE
DISSIDENT NOMINEES AND THE SHAREHOLDER PROPOSAL, BOTH OF WHICH
ARE UNANIMOUSLY OPPOSED BY YOUR FUND'S BOARD. Whether or not you
plan to attend the Meeting, and regardless of the number of
shares you own, we urge you to vote FOR your Board's nominees
(Proposal 1) and AGAINST the shareholder proposal (Proposal 2) by
promptly completing, signing, dating and returning the enclosed
WHITE proxy card.

PLEASE DO NOT SEND BACK ANY GREEN PROXY CARD YOU RECEIVE FROM
BULLDOG INVESTORS, EVEN TO VOTE AGAINST THE BULLDOG NOMINEES, AS
THIS MAY CANCEL YOUR PRIOR VOTE FOR YOUR FUND'S NOMINEES. ONLY
YOUR LATEST DATED PROXY WILL COUNT AT THE MEETING.

If you have any questions or need additional information, please
contact The Altman Group, Inc., the Fund's proxy solicitors, at
60 East 42nd Street, Suite 405, New York, NY 10165, or toll-free
by telephone at (800) 336-5159.

By Order of the Board of Trustees,

Karen L. Skidmore
SECRETARY

San Mateo, California
Dated: January 31, 2008

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FRANKLIN UNIVERSAL TRUST

PROXY STATEMENT

o INFORMATION ABOUT VOTING

WHO IS ASKING FOR MY VOTE?

In this proxy statement for the Annual Meeting of Shareholders
(the "Meeting") of Franklin Universal Trust (the "Fund"), the
Board of Trustees of the Fund (the "Board" or the "Trustees")
are unanimously asking you to vote:

o FOR the election of your Board's eleven nominees to the
position of Trustee (Proposal 1), and

o AGAINST the shareholder proposal to merge into an open-end
fund (Proposal 2),

by promptly completing, signing, dating and returning the
enclosed WHITE proxy card.

WHY DO THE FUND'S TRUSTEES OPPOSE THE CHANGES TO THE FUND
ADVOCATED BY THE DISSIDENT NOMINEES?

A group of dissident shareholders called Bulldog Investors has
filed a proxy statement to elect their own nominees to the
Fund's Board at the Meeting. Bulldog Investors has said that
it wants to "permanently eliminate the Trust's persistent
double-digit discount to net asset value ("NAV") through
open-ending, liquidation or conducting a self-tender offer for
100% of the Trust's shares at NAV."

IF THE DISSIDENT NOMINEES ARE ELECTED, WE STRONGLY BELIEVE THAT
YOUR FUND WOULD NOT CONTINUE TO OPERATE AS A CLOSED-END FUND -
IT MAY BE LIQUIDATED, OPEN-ENDED OR SIGNIFICANTLY DIMINISHED
THROUGH A TENDER OFFER.

Your Board wants to keep the Fund as a closed-end fund because
the Board believes that the Fund's current structure provides
you with real benefits. For that reason, we urge you to vote
FOR your Board's nominees by promptly completing, signing,
dating and returning the enclosed WHITE proxy card.

WHY DO THE FUND'S TRUSTEES RECOMMEND THAT I VOTE AGAINST THE
SHAREHOLDER PROPOSAL (PROPOSAL 2)?

The shareholder proposal requests that the Fund's Board of
Trustees promptly take the steps necessary to merge the Fund
into the Franklin Income Fund, an open-end fund, or otherwise
enable shareholders to realize net asset value for their
shares. The Fund's Trustees oppose the shareholder proposal
because they believe it is in your best interests to retain the
Fund's closed-end structure. Closed-end funds do not have to
keep sufficient cash on hand to meet possible redemptions as do
open-end funds, so they can be fully invested at all times for
the benefit of the shareholders. Also, no other closed-end
fund offers your Fund's combination of investments in both high
yield bonds and utility stocks, which provides investors with
both high current income as well as the potential for capital
appreciation. Combining this investment strategy with leverage
and low cash balances, your Fund has delivered consistently
strong market returns to investors over time. The Trustees
believe strongly that your Fund remains viable in its
closed-end form, but may not be able to provide the same
benefits to shareholders if merged into Franklin Income Fund or
another open-end fund.

WHAT SHOULD I DO WITH THE GREEN PROXY CARD I RECEIVED FROM
BULLDOG INVESTORS?

We urge you to vote the Fund's WHITE proxy card and discard the
GREEN proxy from Bulldog Investors. If you have already sent
back the GREEN proxy card, you can still change your vote and
we ask that you promptly complete, sign, date and return the
enclosed WHITE proxy card because that will replace the GREEN
proxy card you previously sent. If you have already sent in
the WHITE proxy card, please do not send back any GREEN card
you receive, even to vote against Bulldog's nominees. Doing so
will cancel out your prior vote on the WHITE card.

HOW DO I ENSURE THAT MY VOTE IS ACCURATELY RECORDED?

You may attend the Meeting and vote in person or you may
complete and return the enclosed WHITE proxy card. The Fund's
management needs you to return the WHITE proxy card so that
they can count your shares as present at the Meeting, so please
do not return the GREEN proxy card, even if you are withholding
votes on the dissident nominees and voting against the
shareholder proposal.

WHO IS ELIGIBLE TO VOTE?

Shareholders of record at the close of business on January 14,
2008, are entitled to be present and to vote at the Meeting or
any adjourned Meeting. Each share of record is entitled to one
vote (and a proportionate fractional vote for each fractional
share) on each matter presented at the Meeting. The Notice of
Meeting, the proxy card, and the proxy statement were first
mailed to shareholders of record on or about February 1, 2008.

HOW WILL MY WHITE PROXY CARD BE VOTED?

WHITE proxy cards that are properly signed, dated and received
at or prior to the Meeting will be voted as specified. If you
specify a vote for the proposals, your proxy will be voted as
you indicate. If you simply sign, date and return the proxy
card, but don't specify a vote on the proposals, your shares
will be voted FOR the election of the Fund's eleven nominees
for Trustee (Proposal 1) and AGAINST the shareholder proposal
(Proposal 2).

MAY I REVOKE MY PROXY?

You may revoke your proxy at any time before it is voted by
forwarding a written revocation or a later-dated proxy to the
Fund that is received by the Fund at or prior to the Meeting,
or by attending the Meeting and voting in person.

Returning the GREEN proxy card to Bulldog Investors will revoke
any previously returned WHITE proxy card that you sent to the
Fund, even if you withheld votes on the dissident nominees and
voted against the shareholder proposal on the GREEN proxy
card. Therefore, PLEASE DISCARD THE GREEN PROXY CARD AND ONLY
RETURN THE WHITE PROXY CARD.

WHAT IF MY SHARES ARE HELD IN A BANK OR BROKERAGE ACCOUNT?

If your shares are held by your bank or broker, then in order
to vote in person at the Meeting, you will need to obtain a
"Legal Proxy" from your bank or broker and present it to the
Inspector of Election at the Meeting.

o PROPOSAL 1: ELECTION OF TRUSTEES

WHO ARE THE FUND'S NOMINEES?

The Fund's nominees and the current Trustees of the Fund are
Harris J. Ashton, Robert F. Carlson, Sam Ginn, Edith E.
Holiday, Edward B. Jamieson, Charles B. Johnson, Rupert H.
Johnson, Jr., Frank W.T. LaHaye, Frank A. Olson, Larry D.
Thompson and John B. Wilson. As described more fully below,
these nominees have significant experience managing investment
vehicles. Many of the Fund's nominees have been Trustees since
the Fund was launched in 1988, and are also on the Boards of
other open-end and closed-end funds in Franklin Templeton
Investments. They have had experience as senior officers and
directors of major business corporations, and some have also
held senior positions in state and federal government.

The Fund's nominees believe that the Fund's current structure
provides you with real benefits, and believe the Fund should
remain as a closed-end fund for the following reasons, as
discussed further under Proposal 2 below:

o The Fund has had competitive market price performance, with
a total return of 9.20% for the year ended December 31, 2007
(based on change in net asset value).

o The Fund's discount is cyclical, not permanent - for more
than 2 years between 2001 and 2003, it traded at a premium.

o The Fund's Board has already taken affirmative steps to help
reduce the discount, including extending the Fund's
open-market share repurchase program.

o The Fund's combination of investments in utility stocks and
high yield bonds is unique in the marketplace - there is no
other closed-end or open-end fund quite like it.

o The Fund can use leverage in the form of debt securities to
help increase returns; open-end funds cannot.

o The Fund is almost always fully invested because it does not
have to meet redemptions; if the Fund were to open-end, it
would rarely be fully invested because it would need to keep
cash on hand to pay for redemptions.

o The Fund trades throughout the day on the New York Stock
Exchange; mutual funds are only priced once a day.

HOW ARE FUND NOMINEES SELECTED?

The Board has a Nominating Committee consisting of Harris J.
Ashton, Robert F. Carlson, Sam Ginn, Edith E. Holiday, Frank
W.T. LaHaye, Frank A. Olson, Larry D. Thompson and John B.
Wilson, none of whom is an "interested person" of the Fund as
defined by the Investment Company Act of 1940, as amended (the
"1940 Act"). Trustees who are not interested persons of the
Fund are referred to as "Independent Trustees," and Trustees
who are interested persons of the Fund are referred to as
"Interested Trustees."

The Nominating Committee is responsible for selecting
candidates to serve as Trustees and recommending such
candidates (a) for selection and nomination as Independent
Trustees by the incumbent Independent Trustees and the full
Board; and (b) for selection and nomination as Interested
Trustees by the full Board. In considering a candidate's
qualifications, the Nominating Committee generally considers
the potential candidate's educational background, business or
professional experience, and reputation. In addition, the
Nominating Committee has established as minimum qualifications
for Board membership as an Independent Trustee (1) that such
candidate be independent from relationships with the Fund's
investment manager and other principal service providers both
within the terms and the spirit of the statutory independence
requirements specified under the 1940 Act and the rules
thereunder; (2) that such candidate demonstrate an ability and
willingness to make the considerable time commitment, including
personal attendance at Board meetings, believed necessary to
his or her function as an effective Board member; and (3) that
such candidate have no continuing relationship as a director,
officer or board member of any U.S. registered investment
company other than those within the Franklin Templeton
Investments fund complex or a closed-end business development
company primarily investing in non-public entities.

When the Board has or expects to have a vacancy, the Nominating
Committee receives and reviews information on individuals
qualified to be recommended to the full Board as nominees for
election as Trustees, including any recommendations by
"Qualifying Fund Shareholders" (as defined below). Such
individuals are evaluated based upon the criteria described
above. To date, the Nominating Committee has been able to
identify, and expects to continue to be able to identify, from
its own resources an ample number of qualified candidates. The
Nominating Committee will, however, review recommendations from
Qualifying Fund Shareholders to fill vacancies on the Board if
these recommendations are submitted in writing and addressed to
the Nominating Committee at the Fund's offices and are
presented with appropriate background material concerning the
candidate that demonstrates his or her ability to serve as a
Trustee, including as an Independent Trustee, of the Fund. A
Qualifying Fund Shareholder is a shareholder who (i) has
continuously owned of record, or beneficially through a
financial intermediary, shares of the Fund having a net asset
value of not less than two hundred and fifty thousand dollars
($250,000) during the twenty-four month period prior to
submitting the recommendation; and (ii) provides a written
notice to the Nominating Committee containing the following
information: (a) the name and address of the Qualifying Fund
Shareholder making the recommendation; (b) the number of shares
of the Fund which are owned of record and beneficially by such
Qualifying Fund Shareholder and the length of time that such
shares have been so owned by the Qualifying Fund Shareholder;
(c) a description of all arrangements and understandings
between such Qualifying Fund Shareholder and any other person
or persons (naming such person or persons) pursuant to which
the recommendation is being made; (d) the name, age, date of
birth, business address and residence address of the person or
persons being recommended; (e) such other information regarding
each person recommended by such Qualifying Fund Shareholder as
would be required to be included in a proxy statement filed
pursuant to the proxy rules of the U.S. Securities and Exchange
Commission ("SEC") had the nominee been nominated by the Board;
(f) whether the shareholder making the recommendation believes
the person recommended would or would not be an "interested
person" of the Fund, as defined in the 1940 Act; and (g) the
written consent of each person recommended to serve as a
Trustee of the Fund if so nominated and elected/appointed.

The Nominating Committee may amend these procedures from time
to time, including the procedures relating to the evaluation of
nominees and the process for submitting recommendations to the
Nominating Committee.
The Board has adopted and approved a formal written charter for
the Nominating Committee. A copy of the charter is attached
hereto as "Appendix A."

WHAT IS THE BACKGROUND OF THE FUND NOMINEES?

Harris J. Ashton, Robert F. Carlson, Sam Ginn, Edith E.
Holiday, Edward B. Jamieson, Charles B. Johnson, Rupert H.
Johnson, Jr., Frank W.T. LaHaye, Frank A. Olson, Larry D.
Thompson and John B. Wilson have been nominated to be Trustees
of the Fund, to hold office until the next Annual Shareholders'
Meeting, and until their successors are duly elected and
qualified to serve. Among the nominees, Edward B. Jamieson,
Charles B. Johnson and Rupert H. Johnson, Jr. are deemed to be
"interested persons" of the Fund for purposes of the 1940 Act.
All of the nominees are currently members of the Board;
however, Messrs. Ginn and Thompson are standing for election by
shareholders of the Fund for the first time. Incumbent
Independent Trustees nominated Messrs. Ginn and Thompson for
consideration by the Nominating Committee as nominees for
Trustee. In addition, all of the nominees are directors and/or
trustees of other investment companies within the Franklin
Templeton Investments fund complex.

Certain Trustees of the Fund hold director and/or officer
positions with Franklin Resources, Inc. ("Resources") and its
affiliates. Resources is a publicly owned holding company, the
principal shareholders of which are Charles B. Johnson and
Rupert H. Johnson, Jr., who owned approximately 17.86% and
15.54%, respectively, of its outstanding shares as of December
4, 2007. Resources, a global investment management organization
operating as Franklin Templeton Investments, is primarily
engaged, through its various subsidiaries, in providing
investment management, share distribution, transfer agent and
administrative services to a family of investment companies.
Resources is a New York Stock Exchange, Inc. ("NYSE") listed
holding company (NYSE: BEN). Charles B. Johnson, Chairman of
the Board and Trustee of the Fund, and Rupert H. Johnson, Jr.,
Trustee and Senior Vice President of the Fund, are brothers.

Each nominee is currently available and has consented to serve
if elected. If any of the nominees should become unavailable,
the designated proxy holders will vote in their discretion for
another person or persons who may be nominated as Trustees.

Listed below, for each nominee, is his or her name, year of
birth and address, as well as position and length of service
with the Fund, a brief description of recent professional
experience, the number of portfolios in the Franklin Templeton
Investments fund complex that he or she oversees, and other
directorships held.

NOMINEES FOR INDEPENDENT TRUSTEE

NUMBER
OF PORTFOLIOS
IN FUND
NAME, YEAR LENGTH COMPLEX OTHER
OF BIRTH AND OF TIME OVERSEEN DIRECTORSHIPS
ADDRESS POSITION SERVED BY TRUSTEE* HELD
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Harris J. Trustee Since 141 Bar-S Foods
Ashton (1932) 1988 (meat packing
One Franklin company).
Parkway
San Mateo,
CA 94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director of various companies; and FORMERLY, Director, RBC
Holdings, Inc. (bank holding company) (until 2002); and
President, Chief Executive Officer and Chairman of the Board,
General Host Corporation (nursery and craft centers) (until
1998).
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Robert F. Trustee Since 121 None
Carlson 2000
(1928)
One Franklin
Parkway
San Mateo,
CA 94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice President, senior member and past President, Board of
Administration, California Public Employees Retirement Systems
(CALPERS); and FORMERLY, member and Chairman of the Board,
Sutter Community Hospitals; member, Corporate Board, Blue
Shield of California; and Chief Counsel, California Department
of Transportation.
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Sam Ginn Trustee Since 121 Chevron
(1937) April Corporation
One Franklin 2007 (global energy
Parkway company) and ICO
San Mateo, Global
CA 94403-1906 Communications
(Holdings)
Limited
(satellite
company).

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Private investor; and FORMERLY, Chairman of the Board, Vodafone
AirTouch, PLC (wireless company); Chairman of the Board and
Chief Executive Officer, AirTouch Communications (cellular
communications) (1993-1998) and Pacific Telesis Groups
(telephone holding company) (1988-1994).
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Edith E. Trustee Since 141 Hess Corporation
Holiday 2004 (exploration and
(1952) refining of oil
One Franklin and gas), H.J.
Parkway Heinz Company
San Mateo, (processed foods
CA 94403-1906 and allied
products), RTI
International
Metals, Inc.
(manufacture and
distribution of
titanium),
Canadian
National Railway
(railroad) and
White Mountains
Insurance Group,
Ltd. (holding
company).

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director or Trustee of various companies and trusts; and
FORMERLY, Assistant to the President of the United States and
Secretary of the Cabinet (1990-1993); General Counsel to the
United States Treasury Department (1989-1990); and Counselor to
the Secretary and Assistant Secretary for Public Affairs and
Public Liaison-United States Treasury Department (1988-1989).
-----------------------------------------------------------------

Frank W.T. Trustee Since 121 Center for
LaHaye (1929) 1988 Creative Land
One Franklin Recycling
Parkway (brownfield
San Mateo, redevelopment).
CA 94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
General Partner, Las Olas L.P. (Asset Management); and
formerly, Chairman, Peregrine Venture Management Company
(venture capital).
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Frank A. Trustee Since 141 Hess Corporation
Olson (1932) 2005 (exploration and
One Franklin refining of oil
Parkway and gas) and
San Mateo, Sentient Jet
CA 94403-1906 (private jet
service).

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Chairman Emeritus, The Hertz Corporation (car rental) (since
2000) (Chairman of the Board (1980-2000) and Chief Executive
Officer (1977-1999)); and FORMERLY, Chairman of the Board,
President and Chief Executive Officer, UAL Corporation
(airlines).
-----------------------------------------------------------------

Larry D. Trustee Since 141 None
Thompson April
(1945) 2007
One Franklin
Parkway
San Mateo,
CA 94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Vice President - Government Affairs, General Counsel and
Secretary, PepsiCo, Inc. (consumer products); and FORMERLY,
Director, Delta Airlines (aviation) (2003-2005) and Providian
Financial Corp. (credit card provider) (1997-2001); Senior
Fellow of The Brookings Institution (2003-2004); Visiting
Professor, University of Georgia School of Law (2004); and
Deputy Attorney General, U.S. Department of Justice (2001-2003).
-----------------------------------------------------------------

John B. Trustee Since 121 None
Wilson (1959) 2006
One Franklin
Parkway
San Mateo,
CA 94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President and Founder, Hyannis Port Capital, Inc. (real estate
and private equity investing); serves on private and non-profit
boards; and FORMERLY, Chief Operating Officer and Executive
Vice President, Gap, Inc. (retail) (1996-2000); Chief Financial
Officer and Executive Vice President - Finance Strategy,
Staples, Inc. (office supplies) (1992-1996); Executive Vice
President - Corporate Planning, Northwest Airlines, Inc.
(airlines) (1990-1992); and Vice President and Partner, Bain &
Company (consulting firm) (1986-1990).
-----------------------------------------------------------------

NOMINEES FOR INTERESTED TRUSTEE

**Edward B. Trustee, Trustee, 1 None
Jamieson President President
(1948) and Chief since
One Franklin Executive 1993 and
Parkway Officer - Chief
San Mateo, Investment Executive
CA 94403-1906 Management Officer -
Investment
Management
since
2002

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President, Chief Investment Officer and Director, Franklin
Advisers, Inc.; Executive Vice President, Franklin Templeton
Institutional, LLC; and officer and/or trustee, as the case may
be, of some of the other subsidiaries of Franklin Resources,
Inc. and of four of the investment companies in Franklin
Templeton Investments.
-----------------------------------------------------------------

**Charles B. Trustee and Trustee 141 None
Johnson Chairman of since
(1933) the Board 1988 and
One Franklin Chairman
Parkway of the
San Mateo, Board
CA 94403-1906 since
1993

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Chairman of the Board, Member - Office of the Chairman and
Director, Franklin Resources, Inc.; Director; Templeton
Worldwide, Inc.; and officer and/or director or trustee, as the
case may be, of some of the other subsidiaries of Franklin
Resources, Inc. and of 42 of the investment companies in
Franklin Templeton Investments.
-----------------------------------------------------------------

**Rupert H. Trustee and Since 56 None
Johnson, Jr. Senior Vice 1988
(1940) President
One Franklin
Parkway
San Mateo,
CA 94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice Chairman, Member - Office of the Chairman and Director,
Franklin Resources, Inc.; Director, Franklin Advisers, Inc. and
Templeton Worldwide, Inc.; Senior Vice President, Franklin
Advisory Services, LLC; and officer and/or director or trustee,
as the case may be, of some of the other subsidiaries of
Franklin Resources, Inc. and of 44 of the investment companies
in Franklin Templeton Investments.
-----------------------------------------------------------------

*We base the number of portfolios on each separate series of
the U.S. registered investment companies within the Franklin
Templeton Investments fund complex. These portfolios have a
common investment manager or affiliated investment managers.

**Charles B. Johnson and Rupert H. Johnson, Jr. are
considered to be interested persons of the Fund under the
federal securities laws due to their positions as officers and
directors and major shareholders of Franklin Resources, Inc.,
which is the parent company of the Fund's investment manager
and distributor. Edward B. Jamieson is considered to be an
interested person of the Fund under the federal securities laws
due to his position as officer and director of the Fund's
investment manager.

Note: Charles B. Johnson and Rupert H. Johnson, Jr. are
brothers.

Board members historically have followed a policy of having
substantial investments in one or more of the funds in Franklin
Templeton Investments, as is consistent with their individual
financial goals. In February 1998, this policy was formalized
through adoption of a requirement that each board member invest
one-third of fees received for serving as a director or trustee
of a Templeton fund (excluding committee fees) in shares of one
or more Templeton funds and one-third of fees received for
serving as a director or trustee of a Franklin fund (excluding
committee fees) in shares of one or more Franklin funds until
the value of such investments equals or exceeds five times the
annual retainer and regular board meeting fees paid such board
member. Investments in the name of family members or entities
controlled by a board member constitute fund holdings of such
board member for purposes of this policy, and a three year
phase-in period applies to such investment requirements for
newly elected board members. In implementing such policy, a
board member's fund holdings existing on February 27, 1998,
were valued as of such date with subsequent investments valued
at cost.

The following tables provide the dollar range of equity
securities of the Fund and of all funds overseen by the
Trustees in the Franklin Templeton Investments fund complex
beneficially owned by the Trustees as of December 31, 2007.

INDEPENDENT TRUSTEES

AGGREGATE
DOLLAR RANGE OF
EQUITY SECURITIES
IN ALL FUNDS
OVERSEEN BY THE
TRUSTEE IN THE
DOLLAR RANGE OF FRANKLIN TEMPLETON
EQUITY SECURITIES INVESTMENTS
NAME IN THE FUND FUND COMPLEX
-------------------------------------------------------------------------------

Harris J. Ashton.......... $1-$10,000 Over $100,000

Robert F. Carlson......... None Over $100,000

Sam Ginn.................. None Over $100,000

Edith E. Holiday.......... None Over $100,000

Frank W.T. LaHaye......... $10,001-$50,000 Over $100,000

Frank A. Olson............ None Over $100,000

Larry D. Thompson......... None Over $100,000

John B. Wilson............ None Over $100,000

INTERESTED TRUSTEES

Edward B. Jamieson........ None Over $100,000

Charles B. Johnson........ $1-$10,000 Over $100,000

Rupert H. Johnson, Jr..... $1-$10,000 Over $100,000

HOW OFTEN DO THE TRUSTEES MEET AND WHAT ARE THEY PAID?

The role of the Trustees is to provide general oversight of the
Fund's business, and to ensure that the Fund is operated for
the benefit of all shareholders. The Trustees anticipate
meeting at least nine times during the current fiscal year to
review the operations of the Fund and the Fund's investment
performance. The Trustees also oversee the services furnished
to the Fund by Franklin Advisers, Inc., the Fund's investment
manager (the "Investment Manager"), and various other service
providers. The Fund's Independent Trustees constitute the sole
Independent Trustees of 28 funds in the Franklin Templeton
Investments fund complex, for which each Independent Trustee
currently is paid a $232,000 annual retainer, together with a
$7,000 per meeting fee for attendance at regularly scheduled
board meetings, a portion of which is allocated to the Fund.
John B. Wilson, who serves as the Fund's lead independent
trustee, is paid an annual supplemental retainer of $25,000 for
service to such investment companies, a portion of which is
allocated to the Fund. Trustees who serve on the Audit
Committee of the Fund and such other funds receive a flat fee
of $3,000 per Committee meeting attended in person and $2,000
per telephonic meeting, a portion of which is allocated to the
Fund. John B. Wilson, who serves as chairman of the Audit
Committee of the Fund and such other funds, receives an
additional fee of $40,000 per year, a portion of which is
allocated to the Fund. Members of a committee are not
separately compensated for any committee meeting held on the
day of a Board meeting. Independent Trustees are also
reimbursed for expenses incurred in connection with attending
Board meetings. The foregoing fee arrangements went into effect
June 1, 2007, and the table below reflects fees paid prior to
such date under arrangements then in effect.

During the fiscal year ended August 31, 2007, there were nine
meetings of the Board, three meetings of the Nominating
Committee, and four meetings of the Audit Committee. Each of
the Trustees attended at least 75% of the aggregate of the
total number of meetings of the Board and the total number of
meetings held by all committees of the Board on which the
Trustee served.

The Fund does not currently have a formal policy regarding
Trustees' attendance at the annual shareholders' meeting. None
of the Trustees attended the Fund's last annual meeting held on
March 30, 2007.

Certain Trustees and officers of the Fund are shareholders of
Resources and may receive indirect remuneration due to their
participation in the management fees and other fees received
from the Franklin Templeton funds by the Investment Manager and
its affiliates. The Investment Manager or its affiliates pay
the salaries and expenses of the officers. No pension or
retirement benefits are accrued as part of Fund expenses.

The following table indicates the aggregate compensation paid
to the Independent Trustees by the Fund individually and by all
of the funds in Franklin Templeton Investments. These Trustees
also serve as directors or trustees of other funds in Franklin
Templeton Investments, many of which hold meetings at different
dates and times. The Trustees and the Fund's management believe
that having the same individuals serving on the boards of many
of the funds in Franklin Templeton Investments enhances the
ability of each fund to obtain, at a relatively modest cost to
each separate fund, the services of high caliber, experienced
and knowledgeable Independent Trustees who can more effectively
oversee the management of the funds.

TOTAL NUMBER OF
COMPENSATION BOARDS WITHIN
FROM FRANKLIN
FRANKLIN TEMPLETON
AGGREGATE TEMPLETON INVESTMENTS
COMPENSATION INVESTMENTS FUND COMPLEX
NAME OF TRUSTEE FROM THE FUND ON WHICH
FUND(1) COMPLEX(2) TRUSTEE SERVES(3)
---------------------------------------------------------------------------

Harris J. Ashton $1,612 $426,918 42

Robert F. Carlson 3,882 264,576 28

S. Joseph
Fortunato(4) 0 0 0

Sam Ginn(5) 760 217,873 28

Edith E. Holiday 1,566 469,566 42

Frank W.T. LaHaye 3,601 291,028 28

Gordon S.
Macklin(6) 77 0 0

Frank A. Olson 1,874 462,349 42

Larry D.
Thompson(5) 760 386,461 42

John B. Wilson 3,899 294,848 28

1. Compensation received for the fiscal year ended August 31,
2007.
2. Estimated compensation received for the calendar year
ended December 31, 2007.
3. We base the number of boards on the number of U.S.
registered investment companies in the Franklin Templeton
Investments fund complex. This number does not include the
total number of series or funds within each investment
company for which the Board members are responsible.
Franklin Templeton Investments currently includes 46 U.S.
registered investment companies, with approximately 155 U.S.
based funds or series.
4. Mr. Fortunato retired effective September 6, 2006.
5. Trustee since April 2007.
6. Mr. Macklin retired effective September 12, 2006.

WHO ARE THE EXECUTIVE OFFICERS OF THE FUND?

Officers of the Fund are appointed by the Trustees and serve at
the pleasure of the Board. Listed below, for each Executive
Officer, are his or her name, year of birth, address, a brief
description of his or her recent professional experience, and
his or her position and length of service with the Fund:

NAME, YEAR OF
BIRTH AND
ADDRESS POSITION LENGTH OF TIME SERVED
-------------------------------------------------------------

**Edward B. Trustee, Trustee,
Jamieson President President since
(1948) and Chief 1993 and Chief
One Franklin Executive Executive
Parkway Officer - Officer -
San Mateo, CA Investment Investment
94403-1906 Management Management
since 2002

Please refer to the table "Nominees for Interested Trustee"
for additional information about Mr. Edward B. Jamieson.
--------------------------------------------------------------

**Charles B. Trustee and Trustee since
Johnson (1933) Chairman of 1988 and
One Franklin the Board Chairman of the
Parkway Board since 1993
San Mateo, CA
94403-1906

Please refer to the table "Nominees for Interested
Trustee" for additional information about Mr. Charles B.
Johnson.
----------------------------------------------------------

**Rupert H. Trustee and Since 1988
Johnson, Jr. Senior Vice
(1940) President
One Franklin
Parkway
San Mateo, CA
94403-1906

Please refer to the table "Nominees for Interested
Trustee" for additional information about Mr. Rupert H.
Johnson, Jr.
----------------------------------------------------------

James M. Davis Chief Since 2004
(1952) Compliance
One Franklin Officer
Parkway
San Mateo, CA
94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director, Global Compliance, Franklin Resources, Inc.;
officer of some of the other subsidiaries of Franklin
Resources, Inc. and of 46 of the investment companies in
Franklin Templeton Investments; and FORMERLY, Director
of Compliance, Franklin Resources, Inc. (1994-2001).
----------------------------------------------------------

Laura Treasurer Since 2004
Fergerson
(1962)
One Franklin
Parkway
San Mateo,
CA 94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice President, Franklin Templeton Services, LLC;
officer of 28 of the investment companies in Franklin
Templeton Investments; and FORMERLY, Director and member
of Audit and Valuation Committees, Runkel Funds, Inc.
(2003-2004); Assistant Treasurer of most of the
investment companies in Franklin Templeton Investments
(1997-2003); and Vice President, Franklin Templeton
Services, LLC (1997-2003).
----------------------------------------------------------

Jimmy D. Senior Vice Since 2002
Gambill (1947) President
500 East and Chief
Broward Blvd. Executive
Suite 2100 Officer
Fort -Finance and
Lauderdale, Administration
FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President, Franklin Templeton Services, LLC; Senior Vice
President, Templeton Worldwide, Inc.; and officer of
some of the other subsidiaries of Franklin Resources,
Inc. and of 46 of the investment companies in Franklin
Templeton Investments.
----------------------------------------------------------

David P. Goss Vice Since 2000
(1947) President
One Franklin
Parkway
San Mateo, CA
94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Associate General Counsel, Franklin Templeton
Investments; officer and director of one of the
subsidiaries of Franklin Resources, Inc.; and officer of
46 of the investment companies in Franklin Templeton
Investments.
----------------------------------------------------------

Karen L. Vice Since 2006
Skidmore President
(1952) and
One Franklin Secretary
Parkway
San Mateo, CA
94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Associate General Counsel, Franklin Templeton
Investments; and officer of 30 of the investment
companies in Franklin Templeton Investments.
----------------------------------------------------------

Craig S. Tyle Vice Since 2005
(1960) President
One Franklin
Parkway
San Mateo, CA
94403-1906

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
General Counsel and Executive Vice President, Franklin
Resources, Inc.; officer of some of the other
subsidiaries of Franklin Resources, Inc. and of 46 of
the investment companies in Franklin Templeton
Investments; and FORMERLY, Partner, Shearman & Sterling,
LLP (2004-2005); and General Counsel, Investment Company
Institute (ICI) (1997-2004).
----------------------------------------------------------

Galen G. Chief Since 2004
Vetter (1951) Financial
500 East Officer and
Broward Blvd. Chief
Suite 2100 Accounting
Fort Officer
Lauderdale,
FL 33394-3091

PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Vice President, Franklin Templeton Services, LLC;
officer of some of the other subsidiaries of Franklin
Resources, Inc. and of 46 of the investment companies in
Franklin Templeton Investments; and FORMERLY, Managing
Director, RSM McGladrey, Inc. (1999-2004); and Partner,
McGladrey & Pullen, LLP (1979-1987 and 1991-2004).

WHO ARE THE DISSIDENT NOMINEES?

IF THE DISSIDENT NOMINEES ARE ELECTED, WE STRONGLY BELIEVE THAT
YOUR TRUST WOULD NOT CONTINUE TO OPERATE AS A CLOSED-END FUND -
IT MAY BE LIQUIDATED, OPEN-ENDED OR SIGNIFICANTLY DIMINISHED
THROUGH A TENDER OFFER.

The dissident nominees all sit on the Board of Directors of the
Mexico Equity and Income Fund, Inc. (NYSE: MXE), a publicly
traded closed-end fund. As of December 31, 2007, MXE was
trading at a discount of 14.30%, so the dissident nominees do
not appear to have had any more success preventing "persistent
double-digit discounts" in MXE than have the current Trustees
of the Fund. This is not surprising, given that discounts tend
to be cyclical and driven by market forces beyond the control
of any single closed-end fund.

As discussed in Proposal 2 below, the Fund's current Board
believes that it is in shareholders' best interests to maintain
the Fund as a closed-end fund. As a result, the Fund's current
Board intends to vigorously contest the election of the dissident
nominees. We urge you to vote FOR your Board's nominees by
promptly completing, signing, dating and returning the enclosed
WHITE proxy card.

o PROPOSAL 2: A SHAREHOLDER PROPOSAL

A shareholder (the "Shareholder Proponent") has submitted the
following proposal (the "Shareholder Proposal") to be included
in this proxy statement:

RESOLVED: The shareholders ask the Trustees to
take the steps necessary to merge the Franklin
Universal Trust (FT) into the Franklin Income Fund
(FKINX), an open-end fund, or otherwise permit
shareholders to realize net asset value (NAV) for their
shares.

OPPOSITION STATEMENT OF
FRANKLIN UNIVERSAL TRUST

YOUR FUND'S BOARD UNANIMOUSLY OPPOSES THE SHAREHOLDER
PROPOSAL AND BELIEVES IT IS IN YOUR BEST INTERESTS TO RETAIN
THE FUND'S CLOSED-END STRUCTURE. No other closed-end fund
offers your Fund's combination of investments in both high
yield bonds and utility stocks, which provides investors with
both high current income as well as the potential for capital
appreciation. Combining this investment strategy with leverage
and low cash balances, your Fund has delivered consistently
strong market returns to investors over time. The Board
believes strongly that your Fund remains viable in its
closed-end form, but may not be able to provide the same
benefits to shareholders if merged into Franklin Income Fund or
another open-end fund. THE BOARD THEREFORE UNANIMOUSLY
RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THE SHAREHOLDER
PROPOSAL.

REASONS FOR THE BOARD'S RECOMMENDATION

Your Fund's Board has reviewed and considered the Shareholder
Proposal but believes that it is not in the best interests of
the Fund and its shareholders. For the reasons discussed
below, the Board believes that the Fund's shareholders, and
particularly the Fund's long-term shareholders, are best served
by retaining the Fund's closed-end structure.

1. ADVANTAGES OF KEEPING YOUR FUND AS A CLOSED-END FUND
As a closed-end fund, your Fund has particular advantages
over open-end funds, including:

YOUR FUND CAN USE LEVERAGE; OPEN-END FUNDS CANNOT. As a
closed-end fund, your Fund is able to issue debt securities and
use the proceeds to make investments. Your Fund would not be
able to do this if it were merged into an open-end fund. The
Fund currently has issued and outstanding $55 million in 5-year
notes maturing in August 2008, representing approximately 22%
of its total assets as of December 31, 2007. The Fund pays a
fixed rate of interest on these debt securities at an annual
rate of 4.14%. While there is no guarantee that the Fund will
be able to obtain similarly favorable terms if it decides to
refinance its leverage in August, 2008, shareholders will still
receive direct benefits from the Fund's use of leverage to the
extent that the total return on portfolio securities purchased
with the leverage exceeds the interest payments on the debt
securities. By using leverage, your Fund has the potential to
experience enhanced returns compared to open-end funds.
Moreover, repayment of your Fund's outstanding debt in
connection with a merger into an open-end fund would generate
transaction costs and could require payment of a make-whole
premium, which would increase merger costs for the Fund's
shareholders.

YOUR FUND HAS THE ABILITY TO ALWAYS BE FULLY INVESTED;
OPEN-END FUNDS DO NOT. By definition, an open-end fund permits
shareholders to redeem their shares every business day. As a
result, open-end funds typically cannot have their assets fully
invested because they need to maintain cash balances to pay for
net redemptions. Alternatively, open-end funds can temporarily
borrow cash to finance net redemptions, but they must pay
interest on those borrowings. In either case, maintaining cash
balances or paying interest on borrowing instead of investing
in appreciable assets can reduce an open-end fund's total
return. Similarly, an open-end fund in times of market turmoil,
such as those experienced recently in connection with the
turmoil in the sub-prime mortgage market, may be forced to keep
large cash balances or sell assets at what it believes to be
temporarily depressed market prices in order to process
redemptions. A closed-end fund like your Fund, by contrast,
does not generally permit redemptions except in extraordinary
circumstances, such as in a tender offer or liquidation. As a
result, your Fund typically maintains cash balances of less
than 1% of total assets, thus potentially enhancing returns by
remaining essentially fully invested at all times. The Fund is
not forced to liquidate securities in order to process
redemptions. For the same reason, your Fund has the ability to
invest more extensively in illiquid securities than open-end
funds, although currently it does not do so.

YOUR FUND HAS THE ABILITY TO TRADE THROUGHOUT THE DAY; MOST
OPEN-END FUNDS DO NOT. Open-end funds typically price their
shares once a day, usually just after the close of trading on
the New York Stock Exchange ("NYSE") at 4:00 p.m., Eastern
Time. Closed-end funds like your Fund, however, can be traded
throughout the day. That means that a closed-end fund
shareholder's buy or sell order can be executed for the market
price prevailing on the exchange at precisely the time the
shareholder's broker-dealer places the trade, rather than at
the very end of the trading day. This may give holders of
closed-end fund shares certain liquidity and trading advantages
that are not available to holders of most open-end fund
shares.(1)

2. YOUR FUND'S DISCOUNT IS CYCLICAL, NOT PERMANENT
As with most other closed-end funds, the market price of the
Fund's shares is often lower than the Fund's NAV per share.
That is, the Fund's shares often trade at a discount.
Discounts tend to be cyclical, however, often moving in
conjunction with interest rates. Indeed, from March 2001
through April 2003, your Fund's shares traded at a premium.
Based on history, it should not be assumed that the Fund's
current discount will last indefinitely. Accordingly, the
Board believes that the presence of a discount should not, by
itself, necessitate the drastic step of merging your Fund into
an open-end fund.

(1) Certain open-end funds, known as exchange-traded funds
or ETFs, trade on a stock exchange throughout the day, but only
as long as a large institution, such as a bank or
broker-dealer, agrees to make a market in the ETF's
securities. Closed-end funds like your Fund, however, will
continue to trade as long as they are listed on a stock
exchange, regardless of whether an institution agrees to make a
market in their securities.

Your Fund's Board has already taken steps to address the
discount, authorizing the Fund's management in January 2006 to
implement an open-market share repurchase program that allowed
the Fund to purchase up to 10% of its common stock in
open-market transactions. As of October 31, 2007, the share
repurchase program had resulted in the repurchase of
approximately 8.9% of the Fund's outstanding shares. In
December 2007, the Board authorized an extension of the share
repurchase program for an additional 10% of the Fund's
outstanding shares. The share repurchase program is intended
to benefit shareholders by enabling your Fund to acquire its
own shares at a discount to NAV, thereby increasing the
proportionate interest of each remaining shareholder in the
Fund. The Board also hopes that the share repurchase program
will help bring the market price of the Fund's shares closer to
NAV. At the same time, beginning in February 2006, the Board
authorized an increase in your Fund's monthly dividend from 3.5
cents to 3.8 cents per share. Both of these measures were
designed by the Board to help address your Fund's discount.

The Fund's management believes that the Fund's discount is
largely attributable to broad-based market volatility and
unrest that has generally affected the closed-end fund
industry. Indeed, as of October 31, 2007, the average discount
for leveraged and non-leveraged multi-sector closed-end funds
was 10.19% compared to the Fund's discount of 10.43%.
(Source: UBS Investment Bank). The Fund's discount is thus in
line with that experienced by multi-sector closed-end funds
generally.

Accordingly, the Fund's management views the current discount
as a result of transient market movements unrelated to the
Fund's core investment strategies, and not as a permanent or
long-term phenomenon arising from Fund's investment program.
The Fund's management therefore believes that it would be
unwise to recommend a merger with an open-end fund based on
market conditions unrelated to the Fund's overall investment
mandate.

3. YOUR FUND'S UNIQUE MARKET POSITION
Despite the Fund's current market price discount to NAV, the
Board believes that your Fund's performance, coupled with its
unique position in the marketplace, justifies retaining your
Fund's closed-end structure as in the best interests of
long-term shareholders. For these shareholders, the Fund's
investment approach and long-term market price performance may
be more important than its discount.

Your Fund has a unique strategy and investment parameters
that are different from its closed-end fund competitors, as
well as any open-end fund in the Franklin Templeton complex,
including Franklin Income Fund. As stated in its annual
report, the Fund invested approximately 69% of its assets in
high yield debt of U.S. issuers and 29% in utility stocks as of
August 31, 2007. Your Fund is the only closed-end fund
currently in existence that has this unique asset mix, which
provides investors with both high current income as well as the
potential for price appreciation on both high yield bonds and
utility stocks. This portfolio composition and risk/return
profile may directly appeal to many of the Fund's current
long-term shareholders, who might not be able to find a
comparable investment if, for example, the Fund were to merge
with a dissimilar open-end fund such as Franklin Income Fund.

While Franklin Income Fund has a history dating back almost
60 years, it does not share the same unique investment style as
your Fund. Franklin Income Fund's investment goal is to
maximize income, while maintaining prospects for capital
appreciation, by investing in a diversified portfolio of stocks
and bonds. As a general rule, Franklin Income Fund invests in
stocks across many industries, such as technology and
healthcare, to a much greater extent than the Fund. It
typically does not invest as great a percentage of its assets
in securities of medium sized companies, utility stocks or high
yield bonds as the Fund, nor does it typically invest in
emerging market sovereign debt. Not surprisingly, the two
funds have had different investment performance over different
market cycles.

While Franklin Income Fund is always available as an option
for investors seeking an open-end fund with its investment
approach, the Fund's investment approach is distinctly
different. The Shareholder Proposal would deprive both current
and potential shareholders of the unique investment program
currently offered by the Fund.

4. YOUR FUND'S COMPETITIVE PERFORMANCE
Your Fund's long-term performance at market price has been
consistently competitive, both in absolute terms and relative
to its Lipper peer group and benchmark indices, as shown in the
table below:

FRANKLIN UNIVERSAL TRUST PERFORMANCE AS OF DECEMBER 31, 2007

AVERAGE ANNUAL TOTAL RETURN(1) 1-YEAR 3-YEAR 5-YEAR 10-YEAR
----------------------------------------------------------------------

Fund Return Based on Change 6.38% 11.96% 13.76% 4.98%
in Market Price(2)

Fund Return Based on Change 9.20% 10.20% 16.09% 5.55%
in Net Asset
Value(3)

Credit Suisse (CS) High Yield 2.65% 5.52% 10.97% 6.10%
Index(4)

Standard & Poor's (S&P) 500 19.38% 19.06% 21.50% 7.77%
Utilities
Index(5)

Lipper Closed End High -6.91% 2.70% 13.91% 4.20%
Current Yield Funds
(Leveraged)(6)

Rank in Lipper Category 1 out of 35 1 out of 31 3 out of 23 6 out of 13
Based on Change in
NAV(6)

Franklin Income Fund - Class 5.31% 8.51% 13.42% 8.49%
A Based on Change in NAV

Performance data represent past performance, which does not
guarantee future results. Investment return and principal
value will fluctuate, and you may have a gain or loss when you
sell your shares. Current performance may differ from figures
shown.

(1) Total return calculations represent the cumulative and
average annual changes in value of an investment over the
periods indicated.
(2) Source: Bloomberg L.P. Assumes reinvestment of distributions
based on the dividend reinvestment and cash purchase plan.
(3) Source: Lipper Inc. Assumes reinvestment of distributions
based on net asset value.
(4) Source: Credit Suisse. The Credit Suisse High Yield Index is
designed to mirror the investible universe of the U.S.
dollar denominated high yield debt market. The index is
unmanaged and includes reinvestment of any income or
distributions. One cannot invest directly in an index, nor
is an index representative of the Fund's portfolio.
(5) Source: S&P's Micropal: The S&P 500 Utilities Index is a
market capitalization weighted index that includes electric
utility stocks in the S&P 500. The index is unmanaged and
includes reinvestment of any income or distributions. One
cannot invest directly in an index, nor is an index
representative of the Fund's portfolio.
(6) Source: Lipper Inc. The Lipper Closed-End High Current Yield
Fund (Leveraged) Universe is comprised of the fund and all
closed-end debt leveraged high current yield funds
regardless of asset size or primary channel of
distribution. Returns are based on change in net asset
value.

5. YOUR FUND CONTINUES TO BE VIABLE AND SUCCESSFUL AS A
CLOSED-END FUND

Given the costs of merging your Fund into an open-end fund,
the Board would only recommend this action in the face of
compelling circumstances, such as if there were serious
concerns about the continuing viability of the Fund as a
suitable long-term investment for shareholders. The Board does
not believe that these circumstances are present in the case of
your Fund.

Rather, the Board believes that your Fund is viably situated
as a closed-end fund. The Fund continues to maintain adequate
trading volume, variable discounts and premiums, and viable
size. The Board therefore believes that a merger of the Fund
into an open-end fund would deprive the Fund's long-term
shareholders of the unique characteristics they were seeking
when they originally chose to invest in this closed-end fund
instead of any open-end fund, including Franklin Income Fund.

CONCLUSION

For the reasons stated above, the Board UNANIMOUSLY
recommends that Shareholders vote AGAINST the Shareholder
Proposal.

SUPPORTING STATEMENT OF THE SHAREHOLDER PROPONENT

FT shares not only continue to sell at a large discount to
NAV, but despite FT's use of leverage, its performance lags
that of the open-end Franklin Income Fund both on a short-term
(6 month) and long-term (five year) basis. Moreover, FT's
relative performance suffers because its expense ratio is more
than twice as high as that of FKINX. A merger into FKINX would
significantly reduce the expense ratio for FT shareholders,
allow us to benefit from the larger size and efficiency of
FKINX, and eliminate the FT discount once and for all.

The Shareholder Proponent is Walter S. Baer, 344 S. Canyon
Views Drive, Los Angeles, California 90049. Neither the Fund,
its Board of Trustees, nor management is responsible for the
contents of the Shareholder Proposal or the Supporting
Statement of the Shareholder Proponent.

o ADDITIONAL INFORMATION ABOUT THE FUND

THE INVESTMENT MANAGER. The Investment Manager is Franklin
Advisers, Inc., a California corporation, whose principal
address is One Franklin Parkway, San Mateo, CA 94403. The
Investment Manager is a wholly-owned subsidiary of Resources.

THE ADMINISTRATOR. The administrator of the Fund is Franklin
Templeton Services, LLC ("FT Services"), whose principal
address is also One Franklin Parkway, San Mateo, CA 94403.
Under an agreement with Advisers, FT Services performs certain
administrative functions, such as portfolio recordkeeping, for
the Fund. FT Services is an indirect, wholly-owned subsidiary
of Resources.

THE TRANSFER AGENT. The transfer agent, registrar and dividend
disbursement agent for the Fund is PFPC Inc., 4400 Computer
Drive, Westborough, MA 01850.

THE CUSTODIAN. Bank of New York, Mutual Funds Division, 90
Washington Street, New York, NY 10286, acts as custodian of the
Fund's securities and other assets.

REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS. The Fund's
last audited financial statements and annual report for the
fiscal year ended August 31, 2007, are available free of
charge. To obtain a copy, please call 1-800/DIAL BEN(R)
(1-800/342-5236) or forward a written request to Franklin
Templeton Investor Services, LLC, P.O. Box 997151, Sacramento,
CA 95899-9983.

PRINCIPAL SHAREHOLDERS. As of January 14, 2008, the Fund had
25,187,893.784 shares outstanding and total net assets of
$194,303,235.44. The Fund's shares are listed on the NYSE
(symbol: FT). From time to time, the number of shares held in
"street name" accounts of various securities dealers for the
benefit of their clients may exceed 5% of the total shares
outstanding. To the knowledge of the Fund's management, as of
January 14, 2008, there were no other entities holding
beneficially or of record more than 5% of the Fund's
outstanding shares, except as shown in the following table:

AMOUNT AND
NAME AND ADDRESS NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING SHARES
-----------------------------------------------------------------

Bulldog Investors General $2,724,437(1) 10.09(2)
Partnership and Phillip
Goldstein
Park 80 West-Plaza
Two, Suite 750
Saddle Brook, NJ 07663

(1) The nature of beneficial ownership is sole voting and
dispositive power by Bulldog Investors General Partnership
and Phillip Goldstein, as reported on Schedule 13D/A, filed
with the U.S. Securities and Exchange Commission as of
November 16, 2007.
(2) As reported on Schedule 13D/A, filed with the U.S.
Securities and Exchange Commission as of November 16, 2007.

In addition, to the knowledge of the Fund's management, as of
January 14, 2008, no Trustee of the Fund owned 1% or more of
the outstanding shares of the Fund, and the officers and
Trustees of the Fund owned, as a group, less than 1% of the
outstanding shares of the Fund.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. U.S.
securities law requires that the Fund's Trustees, officers and
shareholders owning more than 10% of outstanding shares, as
well as affiliated persons of its Investment Manager, report
their ownership of the Fund's shares and any changes in that
ownership. Specific due dates for these reports have been
established and the Fund is required to report in this proxy
statement any failure to file by these dates during the fiscal
year ended August 31, 2007. Based solely on its review of
copies of such reports or written representations from such
Trustees, officers and 10% shareholders, the Fund believes
that, all Section 16(a) filing requirements applicable to its
Trustees, officers and 10% shareholders were complied with
during the fiscal year ended August 31, 2007, except that a
Form 3 filing made by Mr. Sam Ginn was inadvertently filed
several days late. The Fund's management believes that Bulldog
Investors should have filed Forms 3 and 4 together with its
Schedule 13D/A filed as of November 16, 2007, although to date
it has not done so.

CONTACTING THE BOARD OF TRUSTEES. If a shareholder wishes to
send a communication to the Board, such correspondence should
be in writing and addressed to the Board of Trustees at the
Fund's offices, One Franklin Parkway, San Mateo, California
94403. The correspondence will then be given to the Board for
their review and consideration.

o AUDIT COMMITTEE

The Board has a standing Audit Committee currently consisting
of Messrs. Wilson (Chairman), Carlson and LaHaye, all of whom
are Independent Trustees and also are considered to be
"independent" as that term is defined by the NYSE's listing
standards. The Fund's Audit Committee is responsible for the
appointment, compensation and retention of the Fund's
independent registered public accounting firm (auditors),
including evaluating their independence, recommending the
selection of the Fund's auditors to the full Board, and meeting
with such auditors to consider and review matters relating to
the Fund's financial reports and internal accounting.

SELECTION OF AUDITORS. The Audit Committee and the Board have
selected the firm of PricewaterhouseCoopers LLP ("PwC") as
auditors of the Fund for the current fiscal year.
Representatives of PwC are not expected to be present at the
Meeting, but will have the opportunity to make a statement if
they wish, and will be available should any matter arise
requiring their presence.

AUDIT FEES. The aggregate fees paid to PwC for professional
services rendered by PwC for the audit of the Fund's annual
financial statements or for services that are normally provided
by PwC in connection with statutory and regulatory filings or
engagements were $38,082 for the fiscal year ended August 31,
2007, and $22,209 for the fiscal year ended August 31, 2006.

AUDIT-RELATED FEES. The aggregate fees paid to PwC for
assurance and related services rendered by PwC to the Fund that
are reasonably related to the performance of the audit or
review of the Fund's financial statements and are not reported
under "Audit Fees" above were $0 for the fiscal year ended
August 31, 2007, and $8,736 for the fiscal year ended August
31, 2006. The services for which these fees were paid included
attestation services.

There were no fees paid to PwC for assurance and related
services rendered by PwC to the Investment Manager and any
entity controlling, controlled by or under common control with
the Investment Manager that provides ongoing services to the
Fund that are reasonably related to the performance of the
audit of its financial statements for the fiscal years ended
August 31, 2007, and August 31, 2006.

TAX FEES. There were no fees paid to PwC for professional
services rendered by PwC to the Fund for tax compliance, tax
advice and tax planning for fiscal years ended August 31, 2007,
and August 31, 2006.

The fees paid to PwC for professional services rendered by PwC
to the Investment Manager and any entity controlling,
controlled by or under common control with the Investment
Manager that provides ongoing services to the Fund for tax
compliance, tax advice and tax planning were $46,000 for the
fiscal year ended August 31, 2007, and $0 for fiscal year ended
August 31, 2006.

ALL OTHER FEES. The aggregate fees paid to PwC for products and
services rendered by PwC to the Fund not reported in previous
paragraphs were $0 for the fiscal year ended August 31, 2007,
and $110 for the fiscal year ended August 31, 2006. The
services for which these fees were paid included review of
materials provided to the fund Board in connection with the
investment management contract renewal process.

The aggregate fees paid to PwC for products and services
rendered by PwC to the Investment Manager and any entity
controlling, controlled by or under common control with the
Investment Manager that provides ongoing services to the Fund
not reported in previous paragraphs were $0 for the fiscal year
ended August 31, 2007, and $175,751 for the fiscal year ended
August 31, 2006. The services for which these fees were paid
included review of materials provided to the Fund's Board in
connection with the investment management contract renewal
process.

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES. As of the
date of this proxy statement, the Audit Committee has not
adopted pre-approval policies and procedures. As a result, all
such services described above and provided by PwC must be
directly pre-approved by the Audit Committee.

AGGREGATE NON-AUDIT FEES. The aggregate fees paid to PwC for
non-audit services to the Fund, and to the Investment Manager
and any entity controlling, controlled by, or under common
control with the Investment Manager that provides ongoing
services to the Fund, were $46,000 for the fiscal year ended
August 31, 2007, and $184,597 for the fiscal year ended August
31, 2006.

The Audit Committee has determined that the provision of the
non-audit services that were rendered to the Investment Manager
and to any entities controlling, controlled by, or under common
control with the Investment Manager that provide ongoing
services to the Fund is compatible with maintaining PwC's
independence.

AUDIT COMMITTEE REPORT. The Board has adopted and approved a
revised formal written charter for the Audit Committee, which
sets forth the Audit Committee's responsibilities. A copy of
the charter was attached as "Appendix A" to the proxy statement
for the Fund's 2006 Annual Shareholders' Meeting.

As required by the charter, the Audit Committee reviewed the
Fund's audited financial statements and met with management, as
well as with PwC, the Fund's auditors, to discuss the financial
statements.

The Audit Committee received the written disclosures and the
letter from PwC required by Independence Standards Board
Standard No. 1. The Audit Committee also received the report of
PwC regarding the results of their audit. In connection with
their review of the financial statements and the auditors'
report, the members of the Audit Committee discussed with a
representative of PwC, PwC's independence, as well as the
following: the auditors' responsibilities in accordance with
generally accepted auditing standards; the auditors'
responsibilities for information prepared by management that
accompanies the Fund's audited financial statements and any
procedures performed and the results; the initial selection of,
and whether there were any changes in, significant accounting
policies or their application; management's judgments and
accounting estimates; whether there were any significant audit
adjustments; whether there were any disagreements with
management; whether there was any consultation with other
accountants; whether there were any major issues discussed with
management prior to the auditors' retention; whether the
auditors encountered any difficulties in dealing with
management in performing the audit; and the auditors' judgments
about the quality of the Fund's accounting principles.

Based on its review and discussions with management and the
Fund's auditors, the Audit Committee did not become aware of
any material misstatements or omissions in the financial
statements.

Accordingly, the Audit Committee recommended to the Board that
the audited financial statements be included in the Fund's
Annual Report to Shareholders for the fiscal year ended August
31, 2007, for filing with the U.S. Securities and Exchange
Commission.

THE AUDIT COMMITTEE
John B. Wilson (Chairman)
Robert F. Carlson
Frank W.T. LaHaye

o FURTHER INFORMATION ABOUT VOTING AND THE MEETING

SOLICITATION OF PROXIES. Your vote is being solicited by the
Trustees of the Fund. The cost of soliciting these proxies will
be borne in part by the Fund; however, the Investment Manager
will bear half of the costs in excess of the costs expended on
the solicitation of proxies for the Fund's 2007 annual meeting
of shareholders (excluding the salaries and fees of officers
and employees). Subject to the foregoing, the Fund reimburses
brokerage firms and others for their expenses in forwarding
proxy materials to the beneficial owners and soliciting them to
execute proxies.

In addition to solicitation services to be provided by The
Altman Group, Inc. ("Altman"), as described below, proxies may
be solicited by the Fund and its Trustees, officers and
employees (who will receive no compensation therefor in
addition to their regular salaries) and/or regular employees of
the Fund's Investment Manager, administrator, stock transfer
agent, or any of their affiliates.

The Fund has contracted with Altman to assist with solicitation
of proxies. The Fund anticipates that the cost of retaining
Altman will be up to approximately $140,000, plus reimbursement
of reasonable out-of-pocket expenses (which amount is included
in the estimate of total expenses below). The Fund has also
agreed to indemnify Altman against certain liabilities and
expenses, including liabilities under the federal securities
laws. Altman anticipates that approximately 20 of its employees
or other persons will be involved in soliciting shareholders of
the Fund. Altman's address is 60 East 42nd Street, Suite 405,
New York, NY 10165.

The Fund expects that the solicitation will be primarily by
mail, but also may include advertisement, telephone, telecopy,
facsimile transmission, electronic, oral, or other means of
communication, or by personal contacts. If the Fund does not
receive your proxy by a certain time you may receive a
telephone call from a proxy soliciting agent asking you to
vote.

Although no precise estimate can be made at the present time,
it is currently estimated that the aggregate amount to be spent
in connection with the solicitation of proxies by the Fund
(excluding the salaries and fees of officers and employees)
will be approximately $322,000. To date, approximately
$75,000 has been spent on the solicitation. These estimates
include fees for attorneys, accountants, advisers, proxy
solicitors, advertising, printing, distribution and other costs
incidental to the solicitation, but exclude costs normally
expended for the election of Trustees in the absence of a
contest. As described above, the Fund and the Investment
Manager intend to pay all costs associated with the
solicitation and the Meeting.

PARTICIPANTS. Because Bulldog Investors has filed a proxy
statement in support of the Bulldog nominees and, thus, has
commenced a proxy contest, the SEC requires the Fund to provide
shareholders with certain additional information relating to
"participants" as defined in the SEC's proxy rules. Pursuant to
those rules, the Fund's Trustees are, and certain employees and
agents of the Fund may be, deemed to be "participants." The
address of the participants described below is the address of
the Fund's principal executive offices. None of the
participants listed herein have purchased or sold or otherwise
acquired or disposed of any shares of the Fund in the last two
years. Information with respect to the participants'
beneficial ownership of shares of the Fund is as of January 18,
2008.

For information about the Trustees, please refer to Proposal 1
of this Proxy Statement. In addition, the following persons
may also act as participants:

- Greg Johnson is the President and Chief Executive Officer of
Franklin Resources, the parent corporation of the Investment
Manager.

- Christopher J. Molumphy is a Director and Executive Vice
President of the Investment Manager. Mr. Molumphy has been a
manager of the Fund since 1991.

- Glenn I. Voyles is a Vice President of the Investment
Manager. Mr. Voyles has been a manager of the Fund since 1999.

- Karen L. Skidmore is the Secretary and Vice President of the
Fund.

- Craig S. Tyle is a Vice President of the Fund.

- Lisa Gallegos is a Director of Corporate Communications for
Resources.

- Matthew Walsh is a Community and Public Relations Consultant
for Resources.

VOTING BY BROKER-DEALERS. Because the Fund anticipates that the
election of Trustees and the Shareholder Proposal will be
contested, the Fund expects that broker-dealer firms holding
shares of the Fund in "street name" for their customers will
not be permitted by NYSE rules to vote on the election of
Trustees or the Shareholder Proposal on behalf of their
customers and beneficial owners in the absence of voting
instructions from their customers and beneficial owners.

QUORUM. Forty percent of the shares entitled to vote -- present
in person or represented by proxy -- constitutes a quorum at the
Meeting. The shares over which broker-dealers have
discretionary voting power, the shares that represent "broker
non-votes" (i.e., shares held by brokers or nominees as to
which (i) instructions have not been received from the
beneficial owners or persons entitled to vote and (ii) the
broker or nominee does not have discretionary voting power on a
particular matter), and the shares whose proxies reflect an
abstention on any item are all counted as shares present and
entitled to vote for purposes of determining whether the
required quorum of shares exists.

REQUIRED VOTE. Provided that a quorum is present, the election
of Trustees requires a plurality of shares voted, meaning that
the eleven nominees receiving the greatest number of votes
shall be elected. All voting rights are non-cumulative, which
means that the holders of more than 50% of the shares voting
for the election of Trustees can elect 100% of such Trustees if
they choose to do so, and in such event, the holders of the
remaining shares voting will not be able to elect any Trustees.

Provided that a quorum has been established, the affirmative
vote of a majority of shares voted at the Meeting is required
to approve the Shareholder Proposal. For purposes of the
Shareholder Proposal, abstentions and broker non-votes, if any,
will have no effect on the result of the vote. The Shareholder
Proposal is only a recommendation and, if it is approved by the
required vote, will have no binding effect on the Fund or the
Board of Trustees. In considering whether or not to take action
in response to the proposal, the Board of Trustees will give
the request set forth in the Shareholder Proposal such weight
as it believes appropriate based on the voting of shareholders
for the proposal and other relevant factors.

ADJOURNMENT. Whether or not a quorum is present at the Meeting,
the Meeting may be adjourned by a majority vote of the shares
represented at the Meeting, either in person or by proxy,
properly cast upon the question of adjournment. If the Meeting
is adjourned, notice need not be given of the adjourned meeting
at which the adjournment is taken, unless a new record date of
the adjourned meeting is fixed or unless the adjournment is for
more than 60 days from the date set for the original Meeting,
in which case the Board of Trustees shall set a new date. At
any adjourned Meeting, the Fund may transact any business which
might have been transacted at the original Meeting.

Whether or not a quorum is present, the persons named as
proxies may propose one or more adjournments of the Meeting to
permit the further solicitation of proxies. The persons named
as proxies will vote in their discretion on questions of
adjournment those shares for which proxies have been received
that grant discretionary authority to vote on matters that may
properly come before the Meeting, and on any other proposals
properly raised at the Meeting to the extent permitted by the
SEC's proxy rules, including proposals for which management of
the Fund did not have timely notice, as set forth in the SEC's
proxy rules.

SHAREHOLDER PROPOSALS. The Fund anticipates mailing this proxy
statement on or about February 1, 2008. The Fund anticipates
that its next annual meeting of shareholders will be held on or
about March 26, 2009. Shareholder proposals to be presented at
the next annual meeting must be received at the Fund's offices,
One Franklin Parkway, San Mateo, California 94403, Attention:
Secretary, no later than October 6, 2008, in order to be
considered for inclusion in the Fund's proxy statement and
proxy card relating to that meeting and presented at that
meeting. Submission of a proposal by a shareholder does not
guarantee that the proposal will be included in the proxy
statement. A shareholder who wishes to make a proposal at the
2009 Annual Shareholders' Meeting without including the
proposal in the Fund's proxy statement must notify the Fund at
the Fund's offices of such proposal by December 18, 2008. If a
shareholder fails to give notice by this date, then the persons
named as proxies in the proxies solicited by the Board for the
2009 Annual Shareholders' Meeting may exercise discretionary
voting power with respect to any such proposal.

No business other than the matters described above is expected
to come before the Meeting, but should any other matter
requiring a vote of shareholders arise, including any question
as to an adjournment or postponement of the Meeting, the
designated proxy holders will vote on such matters in
accordance with the views of management.

By order of the Board of Trustees,

Karen L. Skidmore
SECRETARY

Dated: January 31, 2008
San Mateo, California

APPENDIX A

NOMINATING COMMITTEE CHARTER

I. THE COMMITTEE.

The Nominating Committee (the "Committee") is a committee
of, and established by, the Board of Directors/Trustees of
the Fund (the "Board"). The Committee consists of such
number of members as set by the Board from time to time
and its members shall be selected by the Board. The
Committee shall be comprised entirely of "independent
members." For purposes of this Charter, independent
members shall mean members who are not interested persons
of the Fund ("Disinterested Board members") as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as
amended (the "1940 Act").

II. BOARD NOMINATIONS AND FUNCTIONS.

1. The Committee shall make recommendations for nominations for
Disinterested Board members on the Board to the
incumbent Disinterested Board members and to the full
Board. The Committee shall evaluate candidates'
qualifications for Board membership and the
independence of such candidates from the Fund's
investment manager and other principal service
providers. Persons selected must be independent in
terms of both the letter and the spirit of the 1940
Act. The Committee shall also consider the effect of
any relationships beyond those delineated in the 1940
Act that might impair independence, E.G., business,
financial or family relationships with investment
managers or service providers.

2. The Committee also shall evaluate candidates' qualifications
and make recommendations for "interested" members on
the Board to the full Board.

3. The Committee may adopt from time to time specific, minimum
qualifications that the Committee believes a candidate
must meet before being considered as a candidate for
Board membership and shall comply with any rules
adopted from time to time by the U.S. Securities and
Exchange Commission regarding investment company
nominating committees and the nomination of persons to
be considered as candidates for Board membership.

4. The Committee shall review shareholder recommendations for
nominations to fill vacancies on the Board if such
recommendations are submitted in writing and addressed
to the Committee at the Fund's offices. The Committee
shall adopt, by resolution, a policy regarding its
procedures for considering candidates for the Board,
including any recommended by shareholders.

III. COMMITTEE NOMINATIONS AND FUNCTIONS.

The Committee shall make recommendations to the full Board
for nomination for membership on all committees of the
Board.

IV. OTHER POWERS AND RESPONSIBILITIES.

1. The Committee shall meet at least once each year or more
frequently in open or executive sessions. The
Committee may invite members of management, counsel,
advisers and others to attend its meetings as it deems
appropriate. The Committee shall have separate
sessions with management and others, as and when it
deems appropriate.

2. The Committee shall have the resources and authority
appropriate to discharge its responsibilities,
including authority to retain special counsel and other
experts or consultants at the expense of the Fund.

3. The Committee shall report its activities to the Board and
make such recommendations as the Committee may deem
necessary or appropriate.

4. A majority of the members of the Committee shall constitute
a quorum for the transaction of business at any meeting
of the Committee. The action of a majority of the
members of the Committee present at a meeting at which
a quorum is present shall be the action of the
Committee. The Committee may meet in person or by
telephone, and the Committee may act by written
consent, to the extent permitted by law and by the
Fund's by-laws. In the event of any inconsistency
between this Charter and the Fund's organizational
documents, the provisions of the Fund's organizational
documents shall be given precedence.

5. The Committee shall review this Charter at least annually
and recommend any changes to the full Board.

ADDITIONAL STATEMENT
FOR CLOSED-END FUNDS ONLY

The Committee shall comply with any rules of any stock
exchange, if any, applicable to nominating committees of
closed-end funds whose shares are registered thereon.

PROXY

[GRAPHIC OMITTED][GRAPHIC OMITTED]
FRANKLIN UNIVERSAL TRUST
ANNUAL SHAREHOLDERS' MEETING - MARCH 14, 2008

The undersigned hereby revokes all previous proxies for his or her shares and
appoints Craig S. Tyle, David P. Goss, and Karen L. Skidmore, and each of
them, proxies of the undersigned with full power of substitution to vote all
shares of Franklin Universal Trust (the "Fund") that the undersigned is
entitled to vote at the Fund's Annual Shareholders' Meeting (the "Meeting")
to be held at One Franklin Parkway, Building 920, San Mateo, CA 94403 at 2:00
p.m., Pacific Time, on March 14, 2008, including any postponements or
adjournments thereof, upon the matters set forth on the reverse side, and
instructs them to vote upon any other matters that may properly be acted upon
at the Meeting, including matters related to the conduct, adjournment or
postponement of the Meeting.

THE BOARD OF TRUSTEES OF THE FUND SOLICITS THIS PROXY. It will be voted as
specified on the reverse. IF NO SPECIFICATION IS MADE, THIS PROXY SHALL BE
VOTED FOR THE ELECTION OF THE FUND'S NOMINEES TO THE POSITION OF TRUSTEE
(PROPOSAL 1) AND AGAINST THE SHAREHOLDER PROPOSAL (PROPOSAL 2). If any other
matters properly come before the Meeting to be voted on, the proxy holders
will vote, act and consent on those matters in accordance with the views of
management. Management is not aware of any such matters.

You are urged to date and sign this proxy and return it
promptly. This will save the expense of follow-up letters
to shareholders who have not responded.

_________________________________________________________
Signature(s) and Title(s), if applicable Date

Sign your name exactly as it appears in the registration
on the proxy card. If the shares are held jointly,
either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration
on the proxy card. If signing is by attorney, executor,
administrator, trustee or guardian, please print your full
title below your signature.
-------------------------------- FOLD HERE ---------------------------------------------------

THREE SIMPLE METHODS TO VOTE YOUR PROXY:

INTERNET: Log on to WWW.PROXYONLINE.COM. Make sure to
have this proxy card available when you plan
to vote your shares. You will need the
control number found in the box at the right
at the time you execute your vote.

TOUCHTONE Simply dial toll-free 1-866-458-9855 and
PHONE follow the automated instructions. Please
have this proxy card available at the time
of the call.

MAIL: Simply sign, date, and complete the reverse
side of this proxy card and return it in the
postage paid envelope provided.

TAGID: CUSIP:

PLEASE MARK YOUR VOTE AS IN THIS EXAMPLE. [X]

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR ALL NOMINEES.
---
1. Proposal: Election of Trustees.

WITHHOLD
FOR ALL FROM ALL
NOMINEES: (NOMINEES) (NOMINEES)
(01) Harris J. Ashton (05) Edward B. Jamieson (09) Frank A. Olson
(02) Robert F. Carlson (06) Charles B. Johnson (10) Larry D.Thompson
(03) Sam Ginn (07) Rupert H. Johnson, Jr. (11) John B. Wilson
(04) Edith E. Holiday (08) Frank W.T. LaHaye

-------------------------------------------------
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided above.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE AGAINST PROPOSAL 2.

2. Shareholder Proposal: FOR AGAINST ABSTAIN

The shareholders ask the Trustees to take the
steps necessary to merge the Franklin Universal
Trust (FT) into the Franklin Income Fund (FKINX),
an open-end fund, or otherwise permit shareholders
to realize net asset value (NAV) for their shares.

If you should have any questions about the proxy material or the execution of
your vote, simply call 1 800-336-5159 between the hours of 10 am and 10 pm
Eastern time. Representatives will be happy to assist you. Please have this
proxy card available at the time of the call.

TAG ID: SCANNER BAR CODE CUSIP: 355145103