-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q4cIdxcIwUZY/UpS3hXpKApSPjFAT5yNp2bGVxC9kXTMLK2qzLEcKteFcRBjPfJR hpR83i0s2YPMgf0WZW2Qfg== 0000828803-97-000005.txt : 19970222 0000828803-97-000005.hdr.sgml : 19970222 ACCESSION NUMBER: 0000828803-97-000005 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970325 FILED AS OF DATE: 19970218 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLETON GLOBAL INCOME FUND INC CENTRAL INDEX KEY: 0000828803 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-05459 FILM NUMBER: 97537588 BUSINESS ADDRESS: STREET 1: 700 CENTRAL AVE STREET 2: P O BOX 33030 CITY: ST PETERSBURG STATE: FL ZIP: 33701 BUSINESS PHONE: 8138238712 DEF 14A 1 TEMPLETON GLOBAL INCOME FUND PROXY 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. - ----------------------- * 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%.
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 - ------------------------- * 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.
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 EX-99 2 LETTER TO SHAREHOLDERS Franklin Templeton Logo TEMPLETON GLOBAL INCOME FUND, INC. 500 EAST BROWARD BOULEVARD FT. LAUDERDALE, FLORIDA 33394-3091 February 10, 1997 Dear Shareholder: We are writing to you to ask for your vote on important questions that affect your investment in Templeton Global Income Fund, Inc. (the "Fund"). We urge you to review the attached proxy statement, cast your vote, and return the enclosed proxy card in the envelope provided. At the meeting, Fund shareholders will be asked to consider and vote on the following proposals: 1. Election of Directors; 2. Ratification of the selection of McGladrey & Pullen, LLP as the independent auditors of the Fund for the current fiscal year; and 3. A shareholder proposal requesting that the Board of Directors consider, and submit to shareholders for approval, a proposal to amend the Fund's Articles of Incorporation to convert the Fund to an open-end investment company. The Directors unanimously recommend that you vote "FOR" the first two proposals and "AGAINST" the third proposal. The Directors believe that, as a closed-end investment company, the Fund benefits from investment flexibility, which enables the Fund to assume a long-term investment horizon. This affords the Fund the potential to benefit from enhanced earnings and consequently realize a greater return to shareholders. For this reason and in light of the additional considerations discussed in the accompanying proxy statement, the Directors do not now believe that converting the Fund from a closed-end structure to an open-end structure, which would fundamentally change the Fund's style of portfolio management, is in the best interests of the Fund and its shareholders, and the Directors ask you to vote AGAINST Proposal 3. We appreciate your participation and prompt response in this matter and thank you for your continued support. /s/ GREGORY E. McGOWAN GREGORY E. McGOWAN President -----END PRIVACY-ENHANCED MESSAGE-----