SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for
use of the
Commission only
(as permitted
Rule 14a-6(e)(2)
[ X ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
(Name of Registrant as Specified in Its Charter)
TEMPLETON GLOBAL INCOME FUND, INC.
(Name of Person(s) Filing Proxy Statement)
TEMPLETON GLOBAL INCOME FUND, INC.
Payment of filing fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
O-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11(Set forth the
amount on which the filing fee is calculated and state how
it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary material.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
Franklin Templeton Logo
TEMPLETON GLOBAL INCOME FUND, INC.
IMPORTANT SHAREHOLDER INFORMATION
This document announces the date, time and location of the annual shareholders
meeting, identifies the proposals to be voted on at the meeting, and contains
your proxy statement and proxy card. A proxy card is, in essence, a ballot. When
you vote your proxy, it tells us how you wish to vote on important issues
relating to your fund. If you complete and sign the proxy, we'll vote it exactly
as you tell us. If you simply sign the proxy, we'll vote it in accordance with
the Directors' recommendations on page 2.
WE URGE YOU TO SPEND A FEW MINUTES WITH THE PROXY STATEMENT REVIEWING THE
PROPOSALS AT HAND. THEN, FILL OUT YOUR PROXY CARD AND RETURN IT TO US. WHEN
SHAREHOLDERS DON'T RETURN THEIR PROXIES IN SUFFICIENT NUMBERS, WE HAVE TO INCUR
THE EXPENSE OF FOLLOW-UP SOLICITATIONS, WHICH CAN COST YOUR FUND MONEY. WE WANT
TO KNOW HOW YOU WOULD LIKE TO VOTE AND WELCOME YOUR COMMENTS. PLEASE TAKE A FEW
MINUTES WITH THESE MATERIALS AND RETURN YOUR PROXY TO US. IF YOU HAVE ANY
QUESTIONS, CALL THE FUND INFORMATION DEPARTMENT AT 1-800/DIAL BEN.
Franklin Templeton Logo
TEMPLETON GLOBAL INCOME FUND, INC.
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting ("Meeting") of shareholders of Templeton Global Income Fund,
Inc. (the "Fund") will be held at 500 East Broward Blvd., 12th Floor, Ft.
Lauderdale, Florida 33394-3091 on Tuesday, March 25, 1997 at 10:00 A.M. (EST).
During the Meeting, shareholders of the Fund will vote on four proposals:
1. The election of Directors of the Fund to hold office for the terms
specified;
2. The ratification or rejection of the selection of McGladrey & Pullen, LLP
as independent auditors of the Fund for the fiscal year ending August 31,
1997;
3. The approval or rejection of a shareholder proposal to request and
recommend that the Board of Directors approve, and submit to shareholders
for approval at the earliest practicable date, amendments to the Fund's
Articles of Incorporation to convert the Fund to an open-end investment
company; and
4. The transaction of any other business that may properly come before the
Meeting.
By order of the Board of Directors,
Barbara J. Green,
Secretary
February 10, 1997
- --------------------------------------------------------------------------------
MANY SHAREHOLDERS HOLD SHARES IN MORE THAN ONE TEMPLETON FUND AND WILL RECEIVE
PROXY MATERIAL FOR EACH FUND OWNED. PLEASE SIGN AND PROMPTLY RETURN EACH PROXY
CARD IN THE SELF-ADDRESSED ENVELOPE REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
- --------------------------------------------------------------------------------
TEMPLETON GLOBAL INCOME FUND, INC.
PROXY STATEMENT
o INFORMATION ABOUT VOTING:
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on December 27, 1996 are
entitled to be present and to vote at the Meeting or any adjourned Meeting. Each
share of record is entitled to one vote on all matters presented at the Meeting.
The Notice of Meeting, the proxy, and the proxy statement were mailed to
shareholders of record on or about February 10, 1997.
ON WHAT ISSUES AM I BEING ASKED TO VOTE?
You are being asked to vote on four proposals:
1. The election of five nominees to the position of Director;
2. The ratification or rejection of the selection of McGladrey & Pullen, LLP
as independent auditors of the Fund for the fiscal year ending August 31,
1997;
3. The approval or rejection of a shareholder proposal to request and
recommend that the Board of Directors approve, and submit to shareholders
for approval at the earliest practicable date, amendments to the Fund's
Articles of Incorporation to convert the Fund to an open-end investment
company; and
4. The transaction of any other business that may properly come before the
Meeting.
1
HOW DO THE FUND'S DIRECTORS RECOMMEND THAT I VOTE?
The Directors recommend that you vote:
1. FOR the election of nominees;
2. FOR the ratification of the selection of McGladrey & Pullen, LLP as
independent auditors of the Fund;
3. AGAINST the shareholder proposal that the Board of Directors approve, and
submit to shareholders for approval, amendments to the Fund's Articles of
Incorporation to convert the Fund to an open-end investment company; and
4. FOR the proxyholders to vote, at their discretion, on any other business
that may properly come before the Meeting.
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
attached proxy. Proxies that are signed, dated and received by the close of
business on Monday, March 24, 1997 will be voted as specified. If you specify a
vote for any of Proposals 1 through 4, your proxy will be voted as you
indicated. If you simply sign and date the proxy, but don't specify a vote for
any of Proposals 1 through 4, your shares will be voted in favor of the nominees
for Director (Proposal 1), in favor of ratifying the selection of McGladrey &
Pullen, LLP as independent auditors (Proposal 2), against the shareholder
proposal that the Board of Directors approve, and submit to shareholders for
approval, amendments to the Fund's Articles of Incorporation to convert the Fund
to an open-end investment company (Proposal 3), and/or in accordance with the
discretion of the persons named in the proxy as to any other matters (Proposal
4).
2
CAN I REVOKE MY PROXY?
You may revoke your proxy at any time before it is voted by (1) delivering a
written revocation to the Secretary of the Fund, (2) forwarding to the Fund a
later-dated proxy that is received by the Fund at or prior to the meeting, or
(3) attending the Meeting and voting in person.
o THE PROPOSALS:
1. ELECTION OF DIRECTORS: HOW ARE NOMINEES SELECTED?
The Board of Directors of the Fund (the "Board") established a Nominating and
Compensation Committee (the "Committee") consisting of Andrew H. Hines, Jr. and
Gordon S. Macklin. The Committee is responsible for the selection, nomination
for appointment and election of candidates to serve as Directors of the Fund.
The Committee will review shareholders' nominations to fill vacancies on the
Board, if these nominations are in writing and addressed to the Committee at the
Fund's offices. However, the Committee expects to be able to identify from its
own resources an ample number of qualified candidates.
WHO ARE THE NOMINEES AND DIRECTORS?
The Board is divided into three classes, each class having a term of three
years. Each year the term of office of one class expires. Andrew H. Hines, Jr.,
Harris J. Ashton, S. Joseph Fortunato and Nicholas F. Brady have been nominated
for a three-year term, set to expire at the 2000 Annual Meeting of Shareholders,
and Edith E. Holiday has been nominated for a two-year term, set to expire at
the 1999 Annual Meeting of Shareholders. These terms continue, however, until
successors are duly elected and qualified. All of the nominees are currently
members of the Board and all of the current Directors are also directors or
trustees of other investment companies in the Franklin Group of Funds and the
Templeton Group of Funds (the "Franklin Templeton Group of Funds").
Certain nominees and Directors of the Fund hold director and/or officer
positions with Franklin Resources, Inc. ("Resources") and its affiliates.
Resources is a publicly owned
3
holding company, the principal shareholders of which are Charles B. Johnson and
Rupert H. Johnson, Jr. who own approximately 20% and 16%, respectively, of its
outstanding shares. Resources is primarily engaged, through 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).
The Fund's investment manager and fund administrator are indirect wholly owned
subsidiaries of Resources. There are no family relationships among any of the
Directors or nominees for Director.
Each nominee is currently available and has consented to serve if elected. If
any of the nominees should become unavailable, the persons named in the proxy
will vote in their discretion for another person or other persons who may be
nominated as Directors.
Listed below, for each nominee and Director, is a brief description of recent
professional experience as well as each such person's ownership of shares of the
Fund and shares of all funds in the Franklin Templeton Group of Funds:
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
SHARES BENEFICIALLY TEMPLETON
OWNED IN THE FUND GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING AS OF FUND) AS OF
WITH THE FUND YEARS AND AGE DECEMBER 15, 1996 DECEMBER 15, 1996
- ----------------------------- ------------------------------------ ------------------- -------------------
NOMINEES TO SERVE UNTIL 2000 ANNUAL MEETING OF SHAREHOLDERS:
ANDREW H. HINES, JR. Consultant for the Triangle 169 (**) 30,158
Director since 1990 Consulting Group; chairman and
director of Precise Power
Corporation; executive-in-
residence of Eckerd College
(1991-present); director of
Checkers Drive-In Restaurants,
Inc.; formerly, chairman of
the board and chief executive
officer of Florida Progress
Corporation (1982-1990) and
director of various of its
subsidiaries; and director or
trustee of 24 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 73.
4
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
SHARES BENEFICIALLY TEMPLETON
OWNED IN THE FUND GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING AS OF FUND) AS OF
WITH THE FUND YEARS AND AGE DECEMBER 15, 1996 DECEMBER 15, 1996
- ----------------------------- ------------------------------------ ------------------- ------------------
HARRIS J. ASHTON Chairman of the board, 500 (**) 290,183
Director since 1992 president and chief executive
officer of General Host
Corporation (nursery and craft
centers); director of RBC
Holdings (U.S.A.) Inc. (a bank
holding company) and Bar-S
Foods; and director or trustee
of 55 of the investment
companies in the Franklin
Templeton Group of Funds. Age
64.
NICHOLAS F. BRADY* Chairman of Templeton Emerging -0- 14,626
Director since 1993 Markets Investment Trust PLC;
chairman of Templeton Latin
America Investment Trust PLC;
chairman of Darby Overseas
Investments, Ltd. (an
investment firm)
(1994-present); chairman and
director of Templeton Central
and Eastern European Fund;
director of the Amerada Hess
Corporation, Christiana
Companies, and the H.J. Heinz
Company; formerly, Secretary
of the United States
Department of the Treasury
(1988-1993) and chairman of
the board of Dillon, Read &
Co. Inc. (investment banking)
prior to 1988; and director or
trustee of 23 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 66.
5
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
SHARES BENEFICIALLY TEMPLETON
OWNED IN THE FUND GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING AS OF FUND) AS OF
WITH THE FUND YEARS AND AGE DECEMBER 15, 1996 DECEMBER 15, 1996
- ----------------------------- ------------------------------------ ------------------- ------------------
S. JOSEPH FORTUNATO Member of the law firm of 100 (**) 371,828
Director since 1992 Pitney, Hardin, Kipp & Szuch;
and a director of General Host
Corporation (nursery and craft
centers); and director or
trustee of 57 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 64.
NOMINEE TO SERVE UNTIL 1999 ANNUAL MEETING OF SHAREHOLDERS:
EDITH E. HOLIDAY Director (1993-present) of -0- -0-
Director since 1996 Amerada Hess Corporation and
Hercules Incorporated;
director of Beverly
Enterprises, Inc.
(1995-present) and H. J. Heinz
Company (1994-present);
chairman (1995-present) and
trustee (1993-present) of
National Child Research
Center; 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); and director or
trustee of 15 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 44.
6
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
SHARES BENEFICIALLY TEMPLETON
OWNED IN THE FUND GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING AS OF FUND) AS OF
WITH THE FUND YEARS AND AGE DECEMBER 15, 1996 DECEMBER 15, 1996
- ----------------------------- ------------------------------------ ------------------- ------------------
DIRECTORS SERVING UNTIL 1999 ANNUAL MEETING OF SHAREHOLDERS:
JOHN Wm. GALBRAITH President of Galbraith -0- 3,117,234
Director since 1995 Properties, Inc. (personal
investment company); director
of Gulf West Banks, Inc. (bank
holding company)
(1995-present); formerly,
director of Mercantile Bank
(1991-1995), vice chairman of
Templeton, Galbraith &
Hansberger Ltd. (1986-1992),
and chairman of Templeton
Funds Management, Inc.
(1974-1991); and director or
trustee of 22 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 75.
GORDON S. MACKLIN Chairman of White River 24,500 (**) 273,717
Director since 1993 Corporation (information
services); director of Fund
America Enterprises Holdings,
Inc., MCI Communications
Corporation, Fusion Systems
Corporation, Infovest
Corporation, MedImmune, Inc.,
Source One Mortgage Services
Corporation and Shoppers
Express, Inc. (on-line
shopping service); formerly,
chairman of Hambrecht and
Quist Group, director of H&Q
Healthcare Investors and
Lockheed Martin Corporation,
and president of the National
Association of Securities
Dealers, Inc.; director of 52
of the investment companies in
the Franklin Templeton Group
of Funds. Age 68.
7
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
SHARES BENEFICIALLY TEMPLETON
OWNED IN THE FUND GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING AS OF FUND) AS OF
WITH THE FUND YEARS AND AGE DECEMBER 15, 1996 DECEMBER 15, 1996
- ----------------------------- ------------------------------------ ------------------- ------------------
DIRECTORS SERVING UNTIL 1998 ANNUAL MEETING OF SHAREHOLDERS:
BETTY P. KRAHMER Director or trustee of various 100 (**) 75,812
Director since 1990 civic associations; formerly,
economic analyst, U.S.
government; and director or
trustee of 23 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 67.
FRED R. MILLSAPS Manager of personal -0- 445,471
Director since 1990 investments (1978-present);
director of various other
business and nonprofit
organizations; formerly,
chairman and chief executive
officer of Landmark Banking
Corporation (1969-1978),
financial vice president of
Florida Power and Light
(1965-1969), and vice
president of The Federal
Reserve Bank of Atlanta
(1958-1965); and director or
trustee of 24 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 67.
8
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
SHARES BENEFICIALLY TEMPLETON
OWNED IN THE FUND GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING AS OF FUND) AS OF
WITH THE FUND YEARS AND AGE DECEMBER 15, 1996 DECEMBER 15, 1996
- ----------------------------- ------------------------------------ ------------------- ------------------
CHARLES B. JOHNSON* President, chief executive 1,000 (**) 1,088,337
Chairman of the Board officer, and director of
since 1995 and Vice Franklin Resources, Inc.;
President chairman of the board and
since 1992 director of Franklin Advisers,
Inc. and Franklin Templeton
Distributors, Inc.; director
of General Host Corporation
(nursery and craft centers)
and Franklin Templeton
Services, Inc.; and officer
and/or director, trustee or
managing general partner, as
the case may be, of most other
subsidiaries of Franklin
Resources, Inc. and 57 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 64.
<FN>
- -----------------------
* NICHOLAS F. BRADY AND CHARLES B. JOHNSON ARE "INTERESTED PERSONS" AS
DEFINED BY THE INVESTMENT COMPANY ACT OF 1940 (THE "1940 ACT"). THE 1940
ACT LIMITS THE PERCENTAGE OF INTERESTED PERSONS THAT COMPRISE A FUND'S
BOARD OF DIRECTORS. CHARLES B. JOHNSON IS AN INTERESTED PERSON DUE TO HIS
OWNERSHIP INTEREST IN RESOURCES. MR. BRADY'S STATUS AS AN INTERESTED PERSON
RESULTS FROM HIS BUSINESS AFFILIATIONS WITH RESOURCES AND TEMPLETON GLOBAL
ADVISORS LIMITED. MR. BRADY AND RESOURCES ARE BOTH LIMITED PARTNERS OF
DARBY OVERSEAS PARTNERS, L.P. ("DARBY OVERSEAS"). MR. BRADY ESTABLISHED
DARBY OVERSEAS IN FEBRUARY 1994, AND IS CHAIRMAN AND SHAREHOLDER OF THE
CORPORATE GENERAL PARTNER OF DARBY OVERSEAS. IN ADDITION, DARBY OVERSEAS
AND TEMPLETON GLOBAL ADVISORS LIMITED ARE LIMITED PARTNERS OF DARBY
EMERGING MARKETS FUND, L.P. THE REMAINING NOMINEES AND DIRECTORS OF THE
FUND ARE NOT INTERESTED PERSONS (THE "INDEPENDENT DIRECTORS").
** LESS THAN 1%.
</FN>
9
HOW OFTEN DO THE DIRECTORS MEET AND WHAT ARE THEY PAID?
The Directors generally meet quarterly to review the operations of the Fund and
other funds within the Franklin Templeton Group of Funds. Each fund pays its
independent directors and Mr. Brady an annual retainer and/or fees for
attendance at board and committee meetings. This compensation is based on the
total net assets in each fund. Accordingly, the Fund pays the Independent
Directors and Mr. Brady an annual retainer of $6,000 and a fee of $500 per
meeting of the Board and its portion of a flat fee of $2,000 for each Audit
Committee and/or Nominating and Compensation Committee meeting attended.
Independent Directors also are reimbursed by the Fund for any expenses incurred
in attending Board and Committee meetings.
During the fiscal year ended August 31, 1996, there were four meetings of the
Board, one meeting of the Nominating and Compensation Committee, and one meeting
of the Audit Committee. Each of the Directors then in office attended at least
75% of the total number of meetings of the Board and the Audit Committee
throughout the year. There was 100% attendance at the meeting of the Nominating
and Compensation Committee.
Certain Directors and Officers of the Fund are shareholders of Resources and may
receive indirect remuneration due to their participation in management fees and
other fees received from the Franklin Templeton Group of Funds by Templeton
Global Bond Managers division of Templeton Investment Counsel, Inc., the Fund's
investment manager, and its affiliates. Templeton Investment Counsel, Inc. or
its affiliates pays the salaries and expenses of the Officers. No pension or
retirement benefits are accrued as part of Fund expenses.
10
The following table shows the compensation paid to Independent Directors and Mr.
Brady by the Fund and by the Franklin Templeton Group of Funds:
AGGREGATE NUMBER OF BOARDS WITHIN THE TOTAL COMPENSATION FROM
COMPENSATION FROM THE FRANKLIN TEMPLETON GROUP OF THE FRANKLIN TEMPLETON
NAME OF DIRECTOR FUND* FUNDS ON WHICH DIRECTOR SERVES GROUP OF FUNDS**
- --------------------- --------------------- ------------------------------ -----------------------
Harris J. Ashton $5,750 55 $339,592
F. Bruce Clarke*** 2,843 -0- 69,500
Andrew H. Hines, Jr. 5,960 24 130,525
Hasso-G von 2,700 -0- 66,375
Diergardt-Naglo****
Betty P. Krahmer 5,750 23 119,275
Fred R. Millsaps 5,893 24 130,525
S. Joseph Fortunato 5,750 57 356,412
Gordon S. Macklin 5,817 52 331,542
John Wm. Galbraith 5,193 22 102,475
Nicholas F. Brady 5,750 23 119,275
Edith E. Holiday***** -0- 15 15,450
<FN>
- -------------------------
* For the fiscal year ended August 31, 1996.
** For the calendar year ended December 31, 1996.
*** Mr. Clarke resigned as a Director on October 20, 1996.
**** Mr. von Diergardt did not stand for re-election at the February 20,
1996 shareholders meeting.
***** Ms. Holiday was elected to the Board on December 3, 1996.
</FN>
WHO ARE THE EXECUTIVE OFFICERS OF THE FUND?
Officers of the Fund are appointed by the Directors and serve at the pleasure of
the Board. Listed below, for each Executive Officer, is a brief description of
recent professional experience:
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH FUND DURING PAST FIVE YEARS AND AGE
- ----------------------------- --------------------------------------------------
CHARLES B. JOHNSON See Proposal 1, "Election of Directors".
Chairman since 1995 and
Vice President since 1992
GREGORY E. McGOWAN Director and executive vice president of Templeton
President since 1996 Investment Counsel, Inc.; executive vice
president-- international development and chief
international general counsel of Templeton
Worldwide, Inc.; executive vice president,
director and general counsel of Templeton
International, Inc.; executive vice president and
secretary of Templeton Global Advisors Limited;
formerly, senior attorney for the U.S. Securities
and Exchange Commission; and an officer of 4 of
the investment companies in the Franklin Templeton
12 Group of Funds. Age 47.
11
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH FUND DURING PAST FIVE YEARS AND AGE
- ----------------------------- --------------------------------------------------
SAMUEL J. FORESTER, JR. Vice president of 10 of the investment companies
Vice President since 1996 in the Franklin Templeton Group of Funds;
formerly, president of Templeton Global Bond
Managers division of Templeton Investment Counsel,
Inc.; founder and partner of Forester, Hairston
Investment Management (1989-1990); managing
director (Mid-East Region) of Merrill Lynch,
Pierce, Fenner & Smith, Inc. (1987-1988); advisor
of Saudi Arabian Monetary Agency (1982-1987). Age
48.
RUPERT H. JOHNSON, JR. Executive vice president and director of Franklin
Vice President since 1996 Resources, Inc. and Franklin Templeton
Distributors, Inc.; president and director of
Franklin Advisers, Inc.; director of Franklin
Templeton Investor Services, Inc. and Franklin
Templeton Services, Inc.; and officer and/or
director, trustee or managing general partner, as
the case may be, of most other subsidiaries of
Franklin Resources, Inc.; and officer and/or
director or trustee of 61 of the various
investment companies in the Franklin Templeton
Group of Funds. Age 56.
HARMON E. BURNS Executive vice president, secretary and director
Vice President since 1996 of Franklin Resources, Inc.; director and
executive vice president of Franklin Templeton
Distributors, Inc.; executive vice president of
Franklin Advisers, Inc.; officer and/or director,
as the case may be, of other subsidiaries of
Franklin Resources, Inc.; and officer and/or
director or trustee of 61 of the investment
companies in the Franklin Templeton Group of
Funds. Age 51.
CHARLES E. JOHNSON Senior vice president and director of Franklin
Vice President since 1996 Resources, Inc.; senior vice president of Franklin
Templeton Distributors, Inc.; president and chief
executive officer of Templeton Worldwide, Inc.;
president and director of Franklin Institutional
Services Corporation; chairman of the board of
Templeton Investment Counsel, Inc.; officer and/or
director, as the case may be, of other
subsidiaries of Franklin Resources, Inc.; and
officer and/or director or trustee of 41 of the
investment companies in the Franklin Templeton
Group of Funds. Age 40.
DEBORAH R. GATZEK Senior vice president and general counsel of
Vice President since 1996 Franklin Resources, Inc.; senior vice president of
Franklin Templeton Distributors, Inc.; vice
president of Franklin Advisers, Inc.; and officer
of 61 of the investment companies in the Franklin
Templeton Group of Funds. Age 48.
12
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH FUND DURING PAST FIVE YEARS AND AGE
- ----------------------------- --------------------------------------------------
MARK G. HOLOWESKO President and director of Templeton Global
Vice President since 1989 Advisors Limited; chief investment officer of
global equity research for Templeton Worldwide,
Inc.; president or vice president of the Templeton
Funds; formerly, investment administrator with Roy
West Trust Corporation (Bahamas) Limited
(1984-1985); and officer of 23 of the investment
companies in the Franklin Templeton Group of
Funds. Age 36.
MARTIN L. FLANAGAN Senior vice president, treasurer and chief
Vice President since 1989 financial officer of Franklin Resources, Inc.;
director and executive vice president of Templeton
Investment Counsel, Inc.; director and president
of Franklin Templeton Services, Inc.; a member of
the International Society of Financial Analysts
and American Institute of Certified Public
Accountants; formerly, with Arthur Andersen &
Company (1982-1983); officer and/or director, as
the case may be, of other subsidiaries of Franklin
Resources, Inc.; and officer and/or director or
trustee of 61 of the investment companies in the
Franklin Templeton Group of Funds. Age 36.
NEIL S. DEVLIN Executive vice president of the Templeton Global
Vice President since 1993 Bond Managers division of Templeton Investment
Counsel, Inc.; formerly, portfolio manager and
bond analyst for Constitution Capital Management
(1985-1987); bond trader and research analyst for
Bank of New England (1982-1985); and officer of 4
of the investment companies in the Franklin
Templeton Group of Funds. Age 39.
JOHN R. KAY Vice president and treasurer of Templeton
Vice President since 1994 Worldwide, Inc.; assistant vice president of
Franklin Templeton Distributors, Inc.; formerly,
vice president and controller of the Keystone
Group, Inc.; and officer of 27 of the investment
companies in the Franklin Templeton Group of
Funds. Age 56.
ELIZABETH M. KNOBLOCK General counsel, secretary and a senior vice
Vice President--Compliance president of Templeton Investment Counsel, Inc.;
since 1996 formerly, vice president and associate general
counsel of Kidder Peabody & Co. Inc. (1989-1990),
assistant general counsel of Gruntal & Co., Inc.
(1988), vice president and associate general
counsel of Shearson Lehman Hutton Inc. (1988) and
E. F. Hutton & Co. Inc. (1986-1988); special
counsel of the Division of Investment Management
of the U.S. Securities and Exchange Commission
(1984-1986); and officer of 23 of the investment
companies in the Franklin Templeton Group of
Funds. Age 41.
13
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH FUND DURING PAST FIVE YEARS AND AGE
- ----------------------------- --------------------------------------------------
BARBARA J. GREEN Senior vice president of Templeton Worldwide, Inc.
Secretary since 1996 and an officer of other subsidiaries of Templeton
Worldwide, Inc.; formerly, deputy director of the
Division of Investment Management, executive
assistant and senior advisor to the Chairman,
counselor to the Chairman, special counsel and
attorney fellow, U.S. Securities and Exchange
Commission (1986-1995), attorney, Rogers & Wells,
and judicial clerk, U.S. District Court (District
of Massachusetts); and secretary of 23 of the
investment companies in the Franklin Templeton
Group of Funds. Age 49.
JAMES R. BAIO Certified public accountant; senior vice president
Treasurer since 1994 of Templeton Worldwide, Inc. and Templeton Funds
Trust Company; formerly, senior tax manager with
Ernst & Young (certified public accountants)
(1977-1989); and treasurer of 23 of the investment
companies in the Franklin Templeton Group of
Funds. Age 42.
2. RATIFICATION OR REJECTION OF INDEPENDENT AUDITORS:
HOW IS AN INDEPENDENT AUDITOR SELECTED?
The Board has established a standing Audit Committee consisting of Messrs.
Galbraith, Hines, and Millsaps, all of whom are Independent Directors. The Audit
Committee reviews generally the maintenance of the Fund's records and the
safekeeping arrangements of the Fund's custodian, reviews both the audit and
non-audit work of the Fund's independent auditor, and submits a recommendation
to the Board as to the selection of an independent auditor.
WHICH INDEPENDENT AUDITOR DID THE BOARD OF DIRECTORS SELECT?
For the current fiscal year, the Board selected as auditors the firm of
McGladrey & Pullen, LLP, 555 Fifth Avenue, New York, New York 10017. McGladrey &
Pullen, LLP has been the auditors of the Fund since its inception in 1988, and
has examined and reported on the fiscal year-end financial statements, dated
August 31, 1996, and certain related Securities and Exchange Commission filings.
Neither the firm of McGladrey & Pullen, LLP nor any of its members have any
material direct or indirect financial interest in the Fund.
14
Representatives of McGladrey & Pullen, LLP are not expected to be present at the
Meeting, but have been given the opportunity to make a statement if they wish,
and will be available should any matter arise requiring their presence.
3. SHAREHOLDER PROPOSAL THAT THE BOARD APPROVE, AND SUBMIT FOR SHAREHOLDER
APPROVAL, A PROPOSAL TO CONVERT THE FUND FROM A CLOSED-END INVESTMENT COMPANY
TO AN OPEN-END INVESTMENT COMPANY:
WHAT IS BEING CONSIDERED UNDER THIS ITEM?
At the meeting, a shareholder of the Fund will ask you to vote on his proposal
that the Board approve, and submit for shareholder approval at a future meeting,
a proposal to convert the Fund from a closed-end investment company to an
open-end investment company. THE DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE
AGAINST THIS PROPOSAL. This recommendation is based on the Directors' view that,
as a closed-end fund, the Fund has significant investment and other advantages.
If the shareholder proposal is approved, the Directors would consider the
proposal to convert the Fund to an open-end investment company and to submit the
proposal to shareholders for consideration at a future meeting. If approved at
that meeting, the conversion would result in a "delisting" of the Fund's shares
from the NYSE, where the shares currently may be bought or sold at the
prevailing market price. After conversion, the shares would become redeemable
from the Fund at net asset value.
WHAT IS THE SHAREHOLDER PROPOSAL?
TheFund has been informed by John M. Cunningham, John M. Cunningham, Inc., 200
Eagle Road, Wayne, Pennsylvania 19087, a shareholder who claims beneficial
ownership of 7,500 shares of the Fund as of September 25, 1996, that he will
present the following proposal:
"RESOLVED, that the shareholders request and recommend that
the Board of Directors approve, and submit to shareholders
for approval at the earliest practicable date, amendments to
the Fund's Articles of Incorporation to convert the Fund to
an open-end investment company."
15
Mr. Cunningham has requested that the following statement be included in the
proxy statement in support of his proposal:
The prospectus, dated March 17, 1988, pursuant to which the
Fund offered its shares of Common Stock to the public states
that "in recognition of the possibility that the Fund's
shares may trade at a discount, the Directors presently
contemplate that the Fund may from time to time take action
to attempt to reduce or eliminate a market value discount
from net asset value either by repurchasing Fund shares . .
. or by making a tender offer at net asset value for shares
of the Fund." "The Board of Directors may also consider
whether to submit to shareholders a proposal that the Fund
be converted to an open-end investment company."
DESPITE THE FACT THAT THE FUND HAS TRADED AT A DISCOUNT TO
ITS NET ASSET VALUE EVERY WEEK FOR THE LAST 3 YEARS, THE
BOARD HAS NOT: A) MADE SHARE REPURCHASES, B) MADE A TENDER
OFFER FOR SHARES OR C) PROPOSED THE CONVERSION TO OPEN-END
STATUS.
GIM DISCOUNT CHART
(December 17, 1993 - January 17, 1997)
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T. The plot points replace a chart showing the dicount at which
shares of the Fund have had for the period of December 17, 1993 through
January 17, 1997.]
GIM DISCOUNT
12/17/93 -8.72 10/7/94 -14.01 7/28/95 -14.38 5/17/96 -15.15
12/24/93 -9.46 10/14/94 -14.12 8/4/95 -15.47 5/24/96 -14.84
12/31/93 -9.36 10/21/94 -16.14 8/11/95 -17.39 5/31/96 -16.46
1/7/94 -9.99 10/28/94 -16.03 8/18/95 -13.08 6/7/96 -16.36
1/14/94 -9.57 11/4/94 -17.20 8/25/95 -14.30 6/14/96 -17.38
1/21/94 -8.75 11/11/94 -18.16 9/1/95 -15.84 6/21/96 -16.36
1/28/94 -7.94 11/18/94 -16.34 9/8/95 -16.15 6/28/96 -15.66
2/4/94 -8.96 11/25/94 -13.46 9/15/95 -16.25 7/5/96 -16.77
2/11/94 -10.92 12/2/94 -11.86 9/22/95 -15.02 7/12/96 -15.76
2/18/94 -10.61 12/9/94 -14.85 9/29/95 -15.23 7/19/96 -17.17
2/25/94 -9.55 12/16/94 -13.24 10/6/95 -15.64 7/26/96 -15.36
3/4/94 -9.96 12/23/94 -15.58 10/13/95 -14.00 8/2/96 -16.17
3/11/94 -9.42 12/30/94 -17.32 10/20/95 -12.79 8/9/96 -13.28
3/18/94 -12.23 1/6/95 -15.14 10/27/95 -14.32 8/16/96 -14.57
3/25/94 -9.73 1/13/95 -12.60 11/3/95 -13.22 8/23/96 -14.02
4/1/94 -11.93 1/20/95 -14.59 11/10/95 -14.43 8/30/96 -16.07
4/8/94 -11.60 1/27/95 -13.17 11/17/95 -16.06 9/6/96 -14.67
4/15/94 -13.85 2/3/95 -11.88 11/24/95 -13.32 9/13/96 -13.07
4/22/94 -14.06 2/10/95 -14.70 12/1/95 -13.43 9/20/96 -13.28
4/29/94 -12.94 2/17/95 -11.42 12/8/95 -13.53 9/27/96 -15.58
5/6/94 -11.84 2/24/95 -12.69 12/15/95 -14.18 10/4/96 -14.91
5/13/94 -13.08 3/3/95 -13.29 12/22/95 -16.97 10/11/96 -15.01
5/20/94 -11.05 3/10/95 -12.12 12/29/95 -16.27 10/18/96 -14.71
5/27/94 -13.19 3/17/95 -12.48 1/5/96 -15.08 10/25/96 -16.37
6/3/94 -11.39 3/24/95 -14.36 1/12/96 -13.17 11/1/96 -16.86
6/10/94 -11.39 3/31/95 -13.62 1/19/96 -11.68 11/8/96 -16.09
6/17/94 -8.89 4/7/95 -17.42 1/26/96 -12.44 11/15/96 -15.36
6/24/94 -11.86 4/14/95 -17.85 2/2/96 -13.28 11/22/96 -15.33
7/1/94 -10.03 4/21/95 -16.77 2/9/96 -10.50 11/29/96 -15.62
7/8/94 -11.97 4/28/95 -15.17 2/16/96 -12.97 12/6/96 -16.18
7/15/94 -12.86 5/5/95 -14.99 2/23/96 -10.93 12/13/96 -17.25
7/22/94 -12.08 5/12/95 -13.21 3/1/96 -12.12 12/20/96 -17.53
7/29/94 -11.97 5/19/95 -14.01 3/8/96 -11.26 12/27/96 -16.47
8/5/94 -14.34 5/26/95 -15.94 3/15/96 -13.58 1/3/97 -16.09
8/12/94 -14.85 6/2/95 -12.72 3/22/96 -14.53 1/10/97 -17.63
8/19/94 -13.68 6/9/95 -13.95 3/29/96 -14.63 1/17/96 -15.99
8/26/94 -14.12 6/16/95 -16.88 4/5/96 -16.67
9/2/94 -12.97 6/23/95 -15.94 4/12/96 -15.75
9/9/94 -12.64 6/30/95 -13.63 4/19/96 -14.74
9/16/94 -15.50 7/7/95 -16.36 4/26/96 -16.67
9/23/94 -13.79 7/14/95 -16.15 5/3/96 -15.95
9/30/94 -12.42 7/21/95 -15.52 5/10/96 -15.05
16
If the shareholders of the Fund approve this Proposal and
the Board recommends open-ending, a second affirmative vote
will be required to convert the Fund from closed-end to
open-end status.
o Upon conversion to an open-end fund, stockholders
desiring to dispose of their investments could do so at
Net Asset Value, net of any redemption or conversion
charges and expenses.
o Investors who desired to retain their investments could
do so knowing that their shares would never again trade
at a discount to net asset value.
o Conversion to an open-end fund would also eliminate any
possibility of fund shares trading at a premium to net
asset value, although the last week Fund shares traded at
a premium to net asset value was April 2, 1993, more than
three and a half years ago.
IF SHAREHOLDERS ADOPT THIS PROPOSAL AND BOTH THE BOARD AND
SHAREHOLDERS SUBSEQUENTLY APPROVE CONVERTING THE FUND TO AN
OPEN-END COMPANY, SHAREHOLDERS WOULD BE ABLE TO DISPOSE OF
THEIR SHARES AT THEIR THEN NET ASSET VALUE. IF AT THE TIME
OF SHAREHOLDERS' SUBSEQUENT APPROVAL THE FUND'S SHARES ARE
TRADING AT A DISCOUNT, THE MARKET VALUE OF THE SHARES WOULD
INCREASE IMMEDIATELY.
17
FOR ALL OF THE FOREGOING REASONS, THE PROPONENT STRONGLY
RECOMMENDS THAT SHAREHOLDERS VOTE FOR THIS PROPOSAL.
WHAT IS THE RECOMMENDATION OF THE DIRECTORS?
THE DIRECTORS RECOMMEND A VOTE AGAINST ADOPTING THE SHAREHOLDER PROPOSAL. THE
DIRECTORS BELIEVE THAT THE CLOSED-END NATURE OF THE FUND IS VERY IMPORTANT AT
THIS TIME IN PROVIDING THE FUND WITH FLEXIBILITY TO PURSUE ITS LONG-TERM
INVESTMENT OBJECTIVE. THE DIRECTORS ALSO BELIEVE THAT CONVERSION OF THE FUND TO
OPEN-END STATUS WOULD LIKELY INCREASE ITS OPERATING EXPENSES AND POTENTIALLY
RESULT IN ADVERSE TAX CONSEQUENCES AT THIS TIME.
The Directors review on an on-going basis the operations of the Fund in order to
serve the best interests of the Fund and its shareholders. The Directors have
considered and will continue to consider at regularly scheduled Board meetings
the appropriateness of the Fund remaining a closed-end investment company.
HOW HAVE THE FUND'S SHARES TRADED?
The graph below shows the market price of the Fund's shares in relation to their
net asset value from the Fund's inception through December 31, 1996. As the
graph shows, during the life of the Fund, the Fund's shares have traded at both
a premium and discount to net asset value.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
TEMPLETON GLOBAL INCOME
Month NAV Mkt
Ending $ $ % Diff
- ------ --- --- ------
3/31/88 9.35 10 7
4/29/88 9.42 10 6.2
5/31/88 9.38 10 6.6
6/30/88 9.13 10 9.5
7/29/88 9.11 10 9.8
8/31/88 8.92 9.625 7.9
9/30/88 8.97 9.375 4.5
10/31/88 9.19 9.25 0.7
11/30/88 9.23 9.375 1.6
12/30/88 9.14 9.125 -0.2
1/31/89 9.18 9.375 2.1
2/28/89 8.92 8.875 -0.5
3/31/89 8.87 8.625 -2.8
4/28/89 8.8 8.875 0.9
5/31/89 8.54 9 5.4
6/30/89 8.57 8.875 3.8
7/31/89 8.75 8.625 -1.4
8/31/89 8.62 8.875 3
9/29/89 8.8 8.5 -1.2
10/31/89 8.54 8.25 -3.4
11/30/89 8.5 8.75 2.9
12/29/89 8.57 8.5 -0.8
1/31/90 8.38 9 7.4
2/28/90 8.24 8.5 3.2
3/30/90 8.13 8.25 1.5
4/30/90 8.05 7.375 -8.4
5/31/90 8.15 7.375 -9.5
6/29/90 8.29 7.75 -6.5
7/31/90 8.53 7.625 -10.6
8/31/90 8.51 7.625 -10.4
9/28/90 8.47 7.375 -12.9
10/31/90 8.61 7.75 -10
11/30/90 8.65 8.375 -3.2
12/31/90 8.54 8.25 -3.4
1/31/91 8.68 8.375 -3.5
2/28/91 8.68 8.5 -2.1
3/28/91 8.37 8.25 -1.4
4/30/91 8.43 8.125 -3.6
5/31/91 8.43 8 -5.1
6/28/91 8.28 8.25 -0.4
7/31/91 8.3 8.25 -0.6
8/30/91 8.48 8.5 0.2
9/30/91 8.74 8.875 1.5
10/31/91 8.75 8.75 0
11/29/91 8.73 8.875 1.7
12/31/91 8.87 8.875 0.1
1/31/92 8.69 9.125 5
2/28/92 8.63 9.125 5.7
3/31/92 8.54 9.125 6.9
4/30/92 8.58 8.875 3.7
5/29/92 8.68 9.375 8
6/30/92 8.84 9.25 4.6
7/31/92 9.01 9.625 6.8
8/31/92 8.86 9.375 5.8
9/30/92 8.36 8.875 6.2
10/30/92 8.38 8.875 5.9
11/30/92 8.23 8.75 6.3
12/31/92 8.17 9 10.2
1/29/93 8.2 8.75 8.7
2/26/93 8.28 8.375 1.2
3/31/93 8.42 8.5 1
4/30/93 8.51 8.25 -3.1
5/28/93 8.55 8 -6.4
6/30/93 8.5 8.25 -2.9
7/30/93 8.5 8.125 -4.4
8/31/93 8.57 8 -6.7
9/30/93 8.46 8.125 -4
10/29/93 8.59 8 -6.9
11/30/93 8.4 7.75 -7.7
12/31/93 8.55 7.75 -9.4
1/31/94 8.7 7.875 -9.5
2/28/94 8.43 7.625 -9.6
3/31/94 8.09 7.125 -11.9
4/29/94 8.04 7 -12.9
5/31/94 7.92 7 -11.6
6/30/94 7.79 6.875 -11.8
7/29/94 7.81 6.875 -12
8/31/94 7.89 6.875 -12.9
9/30/94 7.85 6.75 -14
10/31/94 7.89 6.5 -17.6
11/30/94 7.79 6.75 -13.4
12/30/94 7.71 6.375 -17.3
1/31/95 7.63 6.5 -14.8
2/28/95 7.68 6.875 -10.5
3/31/95 7.67 6.625 -13.6
4/28/95 7.81 6.625 -15.2
5/31/95 8 6.875 -14.1
6/30/95 7.96 6.875 -13.6
7/31/95 8.03 6.813 -15.2
8/31/95 8 6.75 -15.6
9/29/95 8.11 6.875 -15.2
10/31/95 8.19 7 -14.5
11/30/95 8.23 7 -15
12/29/95 8.36 6.875 -17.8
1/31/96 8.35 7.375 -11.7
2/29/96 8.23 7.25 -11.9
3/29/96 8.2 7 -14.6
4/30/96 8.23 7 -15
5/31/96 8.23 6.875 -16.5
6/28/96 8.3 7 -15.7
7/31/96 8.26 7 -15.3
8/30/96 8.34 7 -16.1
9/30/96 8.44 7.25 -14.1
10/31/96 8.57 7.125 -16.9
11/29/96 8.74 7.375 -15.6
12/31/96 8.71 7.125 -18.2
Source: Lipper Analytical Services, Inc. (Feb. 1997)
18
WHY DO THE DIRECTORS RECOMMEND A VOTE AGAINST THIS PROPOSAL?
The Directors recommend a vote against adopting the shareholder proposal for the
following reasons:
1. Investment Flexibility.
THE PROSPECTUS FOR THE ORIGINAL OFFERING OF THE FUND'S SHARES STATED THAT "THE
FUND IS DESIGNED PRIMARILY FOR LONG-TERM INVESTMENT AND NOT AS A TRADING
VEHICLE." CONSISTENT WITH THIS INTENT, THE FUND WAS ORGANIZED AS A CLOSED-END
INVESTMENT COMPANY BECAUSE THIS STRUCTURE PROVIDES THE INVESTMENT MANAGER WITH
THE FLEXIBILITY TO STRUCTURE THE FUND'S PORTFOLIO IN A MANNER BELIEVED MOST
LIKELY TO BENEFIT ITS LONG-TERM SHAREHOLDERS. At the present time, in seeking
higher yields, the Fund invests principally in global bonds and, to a lesser
extent, in emerging market bonds. Its present portfolio composition is 57% in
global bonds of issuers in non-U.S. developed markets, 16% in emerging market
bonds, 22% in U.S. bonds, and 5% in money market instruments. Continuing the
Fund's closed-end structure, so that the Fund need not maintain a buffer of cash
and highly liquid assets to meet redemptions, permits the Investment Manager to
maintain or increase these percentages as opportunities for higher yields arise,
especially in the case of emerging market bonds. In this regard, the Investment
Manager has advised the Board that it presently intends to continue to adjust
the Fund's portfolio composition with a target by year-end 1997 of 50% in global
bonds of issuers in non-U.S. developed markets, 30% in emerging market bonds,
18% in U.S. bonds, and 2% in money market instruments.
Another aspect of the Fund's current investment strategy, which the Investment
Manager believes enhances the opportunities for higher yields, is to assume a
two year horizon on investments that the Fund makes. As a closed-end investment
company, the Fund is not subject to irregular cash flows associated with sales
and redemptions, and it can more easily take this long-term investment view
intended to maximize its investments returns. In particular, the Fund is
protected from the possibility that redemption requests might require it to sell
portfolio securities at a time when their market prices are temporarily
depressed. In this regard, the Investment Manager has advised the Board that the
liquidity of global and particularly emerging market bonds, which together
aggregate 73% of the Fund's current portfolio, tends to become reduced at times
of generally declining market prices. If the Fund
19
were to sell portfolio securities in these circumstances, the decline in their
market prices could be exaggerated, causing a reduction in the value realized by
the Fund on the sale.
The Directors recognize that the Fund's performance will not be determined
entirely by the closed-end nature of the Fund and that other key factors include
the quality of Fund management and the timeliness of the Fund's investment
strategy. The Directors are, however, in agreement with the Investment Manager
who has advised the Board that at this time the closed-end structure is
important to enable the Fund to pursue future investment strategies intended
best to enable the Fund to achieve its investment objective. Accordingly,
although the Fund's shares have traded at a discount since the first calendar
quarter of 1993, the Directors do not now believe that eliminating the
possibility of the Fund's shares trading at a discount from their net asset
value justifies the fundamental changes to the Fund's portfolio management and
operations that would be required if the Fund were to convert to open-end fund
status. The Directors believe that converting the Fund would only benefit those
shareholders who actually then redeem their shares at net asset value.
Longer-term shareholders (for whom the Fund was created) who prefer to retain
their investment would be disadvantaged because the Fund would have less
investment flexibility.
2. Increased Operating Expenses.
The Directors believe that retaining the closed-end status of the Fund is likely
to help it maintain its current low operating expense ratio. Based upon the
experience of other closed-end funds which have converted to an open-end
structure, the Investment Manager has advised the Board that, were it to
convert, the Fund would likely experience substantial redemptions. In order to
protect against the possibility that, as a much smaller fund, it might have a
higher expense ratio, the Fund would be required to engage in a continuous
public offering intended at a minimum to offset redemptions. This in turn would
subject the Fund to further expenses and a corresponding reduction in the Fund's
return to shareholders. For example, in order to market the Fund's shares
effectively, it would be necessary for the Fund to conform generally to sales
practices of competing dealer-sold funds. For this reason, the Directors would
likely recommend that shareholders approve the adoption of a distribution plan
under Rule 12b-1 of the 1940 Act. Currently, Rule 12b-1 fees for the open-end
investment companies in the Franklin Templeton Group of Funds range from an
annual rate of 0.25% to 1.0% of a fund's average net assets.
Further, a continuous public offering would require the Fund to maintain current
registrations under federal and state securities laws, which involves additional
costs, and
20
also to incur printing costs and other expenses in connection with maintaining a
current prospectus.
If the continuous offering were not successful in raising substantial new assets
for the Fund, and redemptions were significantly more than new sales, the Fund's
expense ratio likely would increase from its current level.
3. Tax Ramifications.
If the Fund converts to an open-end structure, it may be required to sell
portfolio securities to meet redemption requests. In the event of a very large
amount of redemptions, the Fund might be required to sell appreciated securities
to meet redemption requests, and capital and/or ordinary gains might be
generated, which would increase the amount of taxable distributions to
shareholders. If, on the other hand, the Fund were required to sell depreciated
securities, the Fund would incur a loss, which might otherwise have been avoided
had the Fund been able to retain the securities. Moreover, losses realized on
the sale of a security generally reduce amounts distributable to shareholders.
In either event, if the Fund is required to dispose of a significant amount of
its assets to satisfy very large redemption requests, it may be unable to
satisfy certain diversification requirements applicable for tax purposes.
4. New York Stock Exchange Listing.
Conversion to an open-end fund would result in the loss of the Fund's current
listing on the NYSE. This would eliminate the possibility of the Fund's shares
ever trading at a discount or premium to net asset value. The Investment Manager
also has advised the Board that loss of the NYSE listing could be
disadvantageous for the Fund because some investors, particularly foreign
investors and certain institutional investors subject to restrictions with
respect to their portfolios, are believed to consider a listing on the NYSE to
be an important factor in their decision to buy or retain shares of the Fund.
Delisting would save the Fund the annual NYSE fees of approximately $100,000,
but as an open-end company the Fund would pay federal and state registration and
notification fees on sales of new shares, which could offset or even exceed that
savings.
21
5. Reinvestment of Dividends and Distributions.
Shareholders of the Fund currently have the option of participating in the
Fund's Dividend Reinvestment Plan, under which cash distributions paid by the
Fund are generally reinvested through the purchase of additional shares at
market prices (which currently reflect a discount from net asset value). At
times when the Fund's shares are trading at a premium over their net asset
value, reinvestments are made at the higher of net asset value or 95% of market
value. If the Fund retains its closed-end status, shareholders will continue to
be able to reinvest dividends in this manner.
WHAT ADDITIONAL MEASURES WOULD BE TAKEN IN CONNECTION WITH CONVERSION TO
OPEN-END STATUS?
If the shareholder proposal is approved by shareholders, the Directors would,
consistent with Section 2-604(b) of Maryland General Corporation Law, consider
adopting a resolution declaring it advisable to approve and present to
shareholders a proposed amendment to the Fund's Articles of Incorporation to
convert the Fund to an open-end investment company. After consideration,
however, the Board may continue to hold its view that the Fund's best interests
are served by the Fund continuing as a closed-end fund, and may therefore
determine to take no further action to convert the Fund to an open-end
investment company.
In the event that shareholders vote, at a future meeting, to convert the Fund
from a closed-end fund to an open-end fund, a number of additional actions would
need to be taken not only to effect the conversion of the Fund to an open-end
investment company but also to allow the Fund to operate effectively as an
open-end investment company. These actions would include amending the Fund's
Articles of Incorporation and reviewing carefully the investment objectives and
policies of the Fund to ensure that they conform to investment objectives and
policies applicable to open-end investment companies.
The Directors also would consider the adoption of a distribution agreement and a
distribution plan. In the event the Directors approve a distribution plan,
shareholder approval for the plan also would be required. The Investment Manager
would likely recommend that Franklin Templeton Distributors, Inc., an affiliate
of the Investment Manager and principal underwriter for the Franklin Templeton
Group of Funds, serve as principal underwriter for the shares of the Fund.
If the Directors believe that immediately following a conversion to open-end
status there would likely be significant redemptions of shares that would
disrupt long-term portfolio
22
management of the Fund and dilute the interests of the remaining shareholders,
the Directors may determine to impose a temporary redemption fee. Imposition of
a redemption fee may deter certain redemptions and would compensate remaining
long-term shareholders for the costs of the liquidation of a significant
percentage of the Fund's portfolio. The Fund would notify shareholders in
writing prior to the imposition of any temporary redemption fee.
The Directors also would consider whether the Fund should reserve the right to
meet redemptions by delivering portfolio securities rather than paying
redemption proceeds in cash.
THE DIRECTORS BELIEVE THAT THE CONTINUED OPERATION OF THE FUND AS A CLOSED-END
INVESTMENT COMPANY IS IN YOUR BEST LONG-TERM INTEREST, AND UNANIMOUSLY RECOMMEND
A VOTE AGAINST THIS PROPOSAL.
o INFORMATION ABOUT THE FUND
The Fund's last audited financial statements and annual report, dated August 31,
1996, are available free of charge. To obtain a copy, please call 1-800/DIAL BEN
or send a written request to Franklin Templeton Investor Services, Inc., P.O.
Box 33030, St. Petersburg, Florida 33733-8030.
As of December 15, 1996, the Fund had 120,453,400 shares outstanding and assets
of $1,036,692,953. The Fund's shares are listed on the NYSE (symbol: GIM) and on
the Pacific Stock Exchange. 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 December 15, 1996, there are no other entities holding
beneficially or of record more than 5% of the Fund's outstanding shares.
In addition, to the knowledge of the Fund's management, as of December 15, 1996,
no nominee or Director of the Fund owned 1% or more of the outstanding shares of
the Fund, and the Officers and Directors of the Fund owned, as a group, less
than 1% of the outstanding shares of the Fund.
23
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. U.S. securities laws
require that the Fund's shareholders owning more than 10% of outstanding shares,
Directors and Officers, as well as affiliated persons of its investment manager,
report their ownership of the Fund's shares and any changes in that ownership.
During the fiscal year ended August 31, 1996, the filing dates for these reports
were met except that the Statement of Changes in Beneficial Ownership filed on
behalf of Fred R. Millsaps was inadvertently filed late. In making this
disclosure, the Fund relied upon the written representations of the persons
affected and copies of their relevant filings.
THE INVESTMENT MANAGER. The investment manager of the Fund is Templeton Global
Bond Managers, a division of Templeton Investment Counsel, Inc. ("TICI"), a
Florida corporation with offices at Broward Financial Centre, 500 East Broward
Blvd., Suite 2100, Ft. Lauderdale, Florida 33394-3091. Pursuant to an investment
management agreement dated October 30, 1992 and amended and restated as of
December 6, 1994, TICI manages the investment and reinvestment of Fund assets.
TICI is an indirect, wholly-owned subsidiary of Resources.
THE FUND ADMINISTRATOR. The administrator of the Fund is Franklin Templeton
Services, Inc. ("FTSI"), with offices at Broward Financial Centre, 500 East
Broward Blvd., Suite 2100, Ft. Lauderdale, Florida 33394-3091. FTIS is an
indirect, wholly-owned subsidiary of Resources. Pursuant to an administration
agreement dated October 1, 1996, FTIS performs certain administrative functions
for the Fund.
THE TRANSFER AGENT. The transfer agent, registrar and dividend disbursement
agent for the Fund is ChaseMellon Shareholder Services, L.L.C., 120 Broadway,
New York, New York 10271, pursuant to a service agreement dated January 2, 1992.
THE CUSTODIAN. The custodian for the Fund is The Chase Manhattan Bank, 1 Chase
Manhattan Plaza, New York, New York 10081, pursuant to a custody agreement dated
February 29, 1988 and amended July 5, 1996.
24
o FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDERS MEETING:
SOLICITATION OF PROXIES. The cost of soliciting proxies, including the fees of a
proxy soliciting agent, are borne by the Fund. The Fund reimburses brokerage
firms and others for their expenses in forwarding proxy material to the
beneficial owners and soliciting them to execute proxies. In addition, the Fund
may retain a professional proxy solicitation firm to assist with any necessary
solicitation of proxies. The Fund expects that the solicitation would be
primarily by mail, but also may include telephone or oral solicitations. If
professional proxy solicitors are retained, it is expected that soliciting fees
and expenses would be approximately $20,000. The Fund does not reimburse
Directors, Officers, and regular employees and their agents involved in the
solicitation of proxies.
VOTING BY BROKER-DEALERS. The Fund expects that, before the Meeting,
broker-dealer firms holding shares of the Fund in "street name" for their
customers and clients will request voting instructions from their customers and
clients. If these instructions are not received by the date specified in the
broker-dealer firms' proxy solicitation materials, the Fund understands that the
NYSE permits the broker-dealers to vote on behalf of their customers and clients
only with regard to Proposals 1 and 2.
QUORUM. A majority 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 broker-dealers
have declined to vote ("broker non-votes") 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.
METHODS OF TABULATION. Proposal 1, the election of Directors, requires the
affirmative vote of the holders of a plurality of the Fund's shares present and
voting on the Proposal at the Meeting. Proposal 2, ratification of the selection
of the independent auditors, requires the affirmative vote of a majority of the
Fund's shares present and voting on the Proposal at the Meeting. Proposal 3, the
shareholder proposal that the Board of Directors approve, and submit to
shareholders for approval, amendments to the Fund's Articles of Incorporation to
convert the Fund to an open-end investment company, requires the affirmative
vote of a majority of the Fund's shares present and voting on the Proposal at
the Meeting. Proposal 4, the transaction of any other business, is expected to
require the affirmative vote of a majority of the Fund's shares present and
voting on the Proposal at the Meeting. Abstentions and
25
broker "non-votes" will be treated as votes not cast and, therefore, will not be
counted for purposes of obtaining approval of Proposals 1, 2, 3 and 4.
SIMULTANEOUS MEETINGS. The Meeting is to be held at the same time as the meeting
of Templeton Global Governments Income Trust. It is anticipated that both
meetings will be held simultaneously. If any shareholder at the Meeting objects
to the holding of a simultaneous meeting and moves for an adjournment of the
Meeting to a time promptly after the simultaneous meeting, the persons named as
proxies will vote in favor of such adjournment.
ADJOURNMENT. If a sufficient number of votes in favor of the proposals contained
in the Notice of Annual Meeting and Proxy Statement is not received by the time
scheduled for the Meeting, the persons named in the proxy may propose one or
more adjournments of the Meeting to a date not more than 120 days after the
original record date to permit further solicitation of proxies with respect to
any such proposals. Any proposed adjournment requires the affirmative vote of a
majority of shares present and voting at the Meeting. Proxies will be voted as
specified. Those proxies reflecting no specification will be voted in accordance
with the judgment of the persons named in the proxy.
SHAREHOLDER PROPOSALS. The Fund anticipates that its next annual meeting will be
held in February 1998. Shareholder proposals to be presented at the next annual
meeting must be received at the Fund's offices, 500 East Broward Blvd., Ft.
Lauderdale, Florida 33394-3091, no later than October 13, 1997.
By order of the Board of Directors,
Barbara J. Green,
Secretary
February 10, 1997
26
TEMPLETON GLOBAL INCOME FUND, INC.
ANNUAL MEETING OF SHAREHOLDERS, MARCH 25, 1997
PLEASE VOTE PROMPTLY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints BARBARA J. GREEN AND JOHN K. CARTER,
and each of them, with full power of substitution, as proxies to vote for and
in the name, place and stead of the undersigned at the Annual Meeting of
Shareholders of Templeton Global Income Fund, Inc. (the "Fund") to be held at
the Fund's offices, 500 East Broward Blvd., Ft. Lauderdale Florida 33394-3091,
on Tuesday, Mrach 25, 1997 at 10:00 A.M., EST, and at any adjournment thereof,
according to the number of votes and as fully as if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER (OR NOT
VOTED) AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE VOTED FOR
ALL NOMINEES FOR DIRECTOR IN PROPOSAL 1, IN FAVOR OF PROPOSAL 2, AGAINST
PROPOSAL 3 AND WITHIN THE DISCRETION OF THE PROXYHOLDERS AS TO PROPOSAL 4.
, 1997
- ------------------------------------------- -------------------------
Signature(s) Date
PLEASE DATE THIS PROXY AND SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR HEREON. IF
MORE THAN ONE OWNER IS REGISTERED AS SUCH, ALL MUST SIGN. IF SIGNING AS
ATTORNEY, EXECUTOR, TRUSTEE OR ANY OTHER REPRESENTATIVE CAPACITY, OR AS A
CORPORATE OFFICER, PLEASE GIVE FULL TITLE.
(CONTINUED ON OTHER SIDE)
FOLD AND DETACH HERE
Please mark your ballot as
indicated in this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 4, AND AGAINST
PROPOSAL 3.
Proposal 1 - Election of Directors.
FOR all nominees WITHHOLD Nominees: Andrew H. Hines, Jr., Harris J. Ashton, S.
listed (except as AUTHORITY Joseph Fortunato, Nicholas F. Brady and Edith E. Holiday.
marked to the right) to vote for all
nominees listed
To withhold authority to
vote for any individual
nominee, write that
nominee's name on the line
below.
------------------------------------------------------------
Proposal 2 - Ratification of the selection of McGladrey & Pullen, LLP as
independent public accountants for the Fund for the fiscal year ending August
31, 1997.
FOR AGAINST ABSTAIN
Proposal 3 - To request and recommend that the Board of Directors approve, and
submit to Shareholders for approval at the earliest practicable date, amendments
to the Fund's Articles of Incorporation to convert the Fund to an open-end
investment company.
FOR AGAINST ABSTAIN
Proposal 4 - In their discretion, the Proxyholders are authorized to vote upon
such other matters which may legally come before the Meeting or any adjournments
thereof.
FOR AGAINST ABSTAIN
I PLAN TO ATTEND THE MEETING.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
FOLD AND DETACH HERE