SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
(X) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
LEGG MASON GLOBAL TRUST, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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 materials.
( ) 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:
<PAGE>
[LOGO] LEGG MASON GLOBAL TRUST, INC.
GLOBAL GOVERNMENT TRUST
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
APRIL 30, 1997
To The Shareholders:
A special meeting of the shareholders ("Meeting") of the Legg Mason Global
Government Trust ("Fund"), a series of Legg Mason Global Trust, Inc., will be
held on Wednesday, April 30, 1997 at 1:00 p.m., eastern time, at the offices of
Legg Mason, Inc., 111 South Calvert Street, 20th Floor, Baltimore, Maryland
21202 for the following purposes:
(1) To approve a Subadvisory Agreement between Western Asset Management
Company and Western Asset Global Management, Ltd. with respect to the
Fund, and to amend the current Investment Advisory Agreement expressly
to permit sub-advisory arrangements;
(2) To ratify the selection of Coopers & Lybrand L.L.P. as the Fund's
independent accountants for the fiscal year ending December 31, 1997;
and
(3) To transact such other business as may properly come before the
Meeting or any adjournments thereof.
You are entitled to vote at the Meeting and any adjournments thereof if you
owned shares of the Fund at the close of business on March 19, 1997. Whether or
not you intend to attend the Meeting in person, you may vote in any one of the
following three ways:
1. Vote, sign, and return the enclosed proxy card in the enclosed
postage-paid envelope; or
2. Vote by telephone by calling Shareholder Communications Corporation
("SCC") toll-free at 1-800-733-8481, Ext. [ ] from 9:00 a.m. to 8:00
p.m. (eastern time) (a confirmation of your telephone vote will be
mailed to you); or
3. Vote, sign, date and fax the enclosed proxy card to SCC at
1-800-733-1885 (a confirmation of your telefacsimile vote will be mailed
to you).
By order of the Board of Directors,
/s/ Kathi D. Bair
______________________
Kathi D. Bair
SECRETARY
March , 1997
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy card, date
and sign the card, and return it in the envelope provided. IF YOU SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL
BE VOTED "FOR" THE PROPOSALS NOTICED ABOVE. In order to avoid the additional
expense of further solicitation, we ask your cooperation in mailing your proxy
card promptly. Unless proxy cards submitted by corporations and partnerships are
signed by the appropriate persons as indicated in the voting instructions on the
proxy card, they will not be voted.
<PAGE>
LEGG MASON GLOBAL TRUST, INC.
GLOBAL GOVERNMENT TRUST
111 SOUTH CALVERT STREET
BALTIMORE, MARYLAND 21202
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 30, 1997
This proxy statement is being furnished to shareholders of the Legg Mason
Global Government Trust ("Fund"), a series of Legg Mason Global Trust, Inc.
("Corporation"), in connection with the solicitation of proxies made by, and on
behalf of, the Corporation's board of directors ("Directors" or "Board") to be
used at the special meeting of shareholders of the Fund and at any adjournments
thereof ("Meeting").
One-third of the shares of the Fund ("Shares") outstanding on March 19,
1997 ("Record Date"), represented in person or by proxy, must be present for the
transaction of business at the Meeting. In the absence of such a quorum or in
the event that a quorum is present at the Meeting but votes sufficient to
approve any of the proposals are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of a majority
of those Shares represented at the Meeting in person or by proxy. If a quorum is
present, the persons named as proxies will vote in favor of such an adjournment
those proxies which they are entitled to vote FOR any such proposal and will
vote against such adjournment those proxies required to be voted AGAINST any
such proposal. A shareholder vote may be taken on one or more of the proposals
in this proxy statement prior to any such adjournment if sufficient votes have
been received and it is otherwise appropriate.
Broker non-votes are shares held in "street name" for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and the broker does not have discretionary voting
authority. Abstentions and broker non-votes will be counted as shares present
for purposes of determining whether a quorum is present but will not be voted
for or against any adjournment. Accordingly, abstentions and broker non-votes
effectively will be a vote against adjournment or against any proposal where the
required vote is a percentage of the shares present. Abstentions and broker
non-votes will not be counted, however, as votes cast for purposes of
determining whether sufficient votes have been received to approve a proposal.
The individuals named as proxies in the enclosed proxy card will vote in
accordance with your directions as indicated thereon if your proxy card is
received properly executed. If you give no voting instructions, your Shares will
be voted in favor of the proposals described in this proxy statement. Your proxy
card may be revoked by giving another proxy; by letter received by the Secretary
of the Fund prior to the Meeting; by calling Shareholder Communications
Corporation toll-free at 1-800-733-8481, Ext. [ ]; or by appearing and voting
at the Meeting.
As of the Record Date, the Fund had [ ] Shares outstanding.
Management does not know of any person who owns of record or beneficially 5% or
more of the Fund's outstanding Shares. All costs associated with the Meeting,
including the cost of third-party soliciting and tallying services, will be
borne by Legg Mason Fund Adviser, Inc., the Fund's investment manager
("Manager") and Western Asset Management Company, adviser to the Fund ("Western
Asset"). Proxies will be solicited by mail and may be solicited in person, by
telephone, telegraph or other electronic means by personnel or agents of Legg
Mason Wood Walker, Incorporated ("Legg Mason"), the Fund's distributor, and its
affiliates.
Each full Share of the Fund is entitled to one vote, and each fractional
Share is entitled to a proportionate share of one vote. This proxy statement
along with the Notice of Meeting and proxy card will first be mailed to
shareholders on or about March 28, 1997. As of March [ ], 1997, all
1
<PAGE>
officers and directors of the Fund, as a group, owned less than 1% of the
outstanding Shares of the Fund. The Fund's annual report, containing financial
statements for the year ended December 31, 1996, was recently sent to
Shareholders. A copy may be obtained, without charge, by calling toll-free
1-800-822-5544.
PROPOSAL 1. APPROVAL OF THE PROPOSED SUBADVISORY AGREEMENT
The Directors and the Manager propose that Western Asset Global Management,
Ltd. ("Western Asset Global") be added as a subadviser to the Fund.
The proposed retention of Western Asset Global is based on the desire to
expand the resources available to the Fund in the area of global bond
management. Western Asset would also remain as subadviser to the Fund and Keith
J. Gardner, who has managed the Fund since its inception, would remain as the
Fund's portfolio manager. Mr. Gardner would be responsible for coordinating and
managing the global investment strategies of Western Asset and Western Asset
Global.
The Directors and the Manager believe the addition of Western Asset Global
would strengthen materially the advisory services available to the Fund. Western
Asset Global is a specialist in the management of global fixed-income securities
with substantial research, portfolio management and quantitative tools dedicated
to that effort. Western Asset and Western Asset Global are working to integrate
their global bond management capabilities in an effort to capture the experience
and strength of both firms.
In determining to approve the proposed subadvisory agreement ("Proposed
Subadvisory Agreement") and recommend it to shareholders, the Board of Directors
of the Fund, including a majority of the directors who are not "interested
persons" of the Fund, the Manager, Western Asset or Western Asset Global as that
term is defined in the Investment Company Act of 1940, as amended ("1940 Act")
("Independent Directors"), considered the potential of the proposed new
arrangement to strengthen the advisory services available to the Fund. The Board
considered the depth of Western Asset's experience in domestic fixed-income
management and Western Asset Global's experience in international and global
fixed-income management. The Board also considered that the addition of Western
Asset Global would provide more resources at no additional cost to the Fund, as
the subadvisory fee paid to Western Asset Global will come from a portion of the
fees currently paid to Western Asset. The Board also considered that Western
Asset and Western Asset Global are currently working together to provide joint
global bond portfolio management to other clients. The Board also considered the
nature and quality of services provided by Western Asset Global to its other
clients; its personnel, operational history and capabilities, and financial
condition; the proposed fee schedule; and other factors which could affect
positively or negatively the provision of portfolio management services.
DESCRIPTION OF THE PROPOSED SUBADVISORY AGREEMENT
Under the Proposed Subadvisory Agreement, Western Asset Global will provide
research, analytical and trading support for the Fund's investment program, and
will select investments in certain parts of the world, subject to the
supervision of Western Asset and the Manager and the overall direction of the
Board.
As does the investment advisory agreement between the Fund and the Manager
("Management Agreement"), the Proposed Subadvisory Agreement would provide that
Western Asset Global will not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with the performance of
the Proposed Subadvisory Agreement, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under the
Proposed Subadvisory Agreement.
If approved by shareholders, the Proposed Subadvisory Agreement would be
executed promptly by Western Asset and Western Asset Global, and become
effective May 1, 1997. Unless sooner terminated,
2
<PAGE>
the Proposed Subadvisory Agreement, like the Management Agreement, would remain
in effect for two years following its effective date. Thereafter, it would
continue for successive annual periods, provided that its continuance is
specifically approved at least annually (1) by a vote of a majority of the
Independent Directors and (2) by a vote of a majority of all Directors or by a
vote of a majority of the Fund's outstanding voting securities. In accordance
with the 1940 Act, the term "vote of a majority of the Fund's outstanding voting
securities" means the lesser of (1) more than 50% of the outstanding Shares of
the Fund entitled to vote at the Meeting, or (2) 67% or more of the Shares
present or represented by proxy at the Meeting.
The Proposed Subadvisory Agreement will terminate automatically upon
assignment. It will also be terminable at any time without penalty by vote of
the Fund's Board of Directors, by a vote of a majority of the Fund's outstanding
voting securities, or by Western Asset, on not less than 60 days' notice to the
other party to the Proposed Subadvisory Agreement and may be terminated
immediately upon the mutual written consent of both parties to the Subadvisory
Agreement. The Proposed Subadvisory Agreement will also terminate automatically
upon termination of the Management Agreement between the Manager and the Fund or
termination of the Investment Advisory Agreement between the Manager and Western
Asset.
Fees: Approval of the Proposed Subadvisory Agreement will not change the
rate paid by the Fund for investment management services. The Manager currently
receives an annual fee of 0.75% of the Fund's average daily net assets under the
Management Agreement. The Fund's fee is equal to the median fee paid by other
global income funds, according to a recent analysis by an independent service.
The Manager currently pays Western Asset a fee, under its Investment
Advisory Agreement, at an annual rate equal to 0.40% of the Fund's average daily
net assets. As compensation for Western Asset Global's services and for expenses
born by Western Asset Global under the Proposed Subadvisory Agreement, Western
Asset Global will be paid monthly by Western Asset (not the Fund) at an annual
rate equal to 0.20% of the Fund's average daily net assets. A copy of the
Proposed Subadvisory Agreement is attached as Exhibit A. In addition, beginning
May 1, 1997, the Manager will pay Western Asset Global a fee at an annual rate
of 0.10% of the Fund's average daily net assets for certain administrative
services.
INFORMATION ABOUT WESTERN ASSET GLOBAL MANAGEMENT, LTD.
Western Asset Global Management, Ltd., located at 144 Bishopsgate, London,
England, was founded in 1984 by the American Express organization. In 1992, the
firm became a wholly owned indirect subsidiary of Lehman Brothers Holdings, Inc.
and in 1996 was acquired by Legg Mason Holdings Ltd., a corporation organized
under the laws of the United Kingdom and, wholly owned by Legg Mason, Inc. The
firm has provided management of global and international fixed-income portfolios
since its inception and currently manages $2.2 billion for clients worldwide. It
does not currently manage assets for any other investment company.
Western Asset Global is a corporation organized under the laws of the
United Kingdom. The firm is registered with the U.S. Securities and Exchange
Commission as an investment adviser under the Investment Advisers Act of 1940
and is regulated by the Investment Management Regulatory Organization under the
UK Financial Services Act of 1986.
The directors and principal executive officers of Western Asset Global are
as follows:
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH WESTERN ASSET GLOBAL PRINCIPAL OCCUPATION
---------------- ---------------------------------- --------------------
<S> <C>
W. Curtis Livingston, III Chairman Investment Management
Western Asset Management Company
117 East Colorado Blvd. Suite 600
Pasadena, CA 91105
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH WESTERN ASSET GLOBAL PRINCIPAL OCCUPATION
---------------- ---------------------------------- --------------------
<S> <C>
James W. Hirschmann Managing Director Investment Management
Western Asset Global Management
144 Bishopsgate
London EC2M 3TY
Laura Panayotou Director, Administration Investment Management
Western Asset Global Management
144 Bishopsgate
London EC2M 3TY
Trevor K. Owers Manager, Global Investment Support Investment Management
Western Asset Global Management
144 Bishopsgate
London EC2M 3TY
Michael B. Zelouf Director, International Investments Investment Management
Western Asset Global Management
144 Bishopsgate
London EC2M 3TY
Edward A. Taber, III Non-Employee Director Senior Executive
Legg Mason, Inc. Vice President and
111 S. Calvert Street Director of Legg
Baltimore, MD 21202 Mason and Senior
Executive Vice
President of Legg
Mason, Inc.
Andrew J. Bowden Non-Employee Director Vice President,
Legg Mason, Inc. Legg Mason, Inc.
111 S. Calvert Street
Baltimore, MD 21202
Edmund J. Cashman Non-Employee Director Senior Executive
Legg Mason Wood Walker, Inc. Vice President,
111 S. Calvert Street Securities Brokerage
Baltimore, MD 21202
Thomas P. Mulroy Non-Employee Director Senior Vice President,
Legg Mason Wood Walker, Inc. Securities Brokerage
111 S. Calvert Street
Baltimore, MD 21202
Philip E. Sachs Non-Employee Director President,
Legg Mason Investment Adviser
Capital Management, Inc.
111 S. Calvert Street
Baltimore, MD 21202
Timothy C. Scheve Non-Employee Director Treasurer & Senior
Legg Mason Wood Walker, Inc. V.P., Securities
111 S. Calvert Street Brokerage
Baltimore, MD 21202
</TABLE>
4
<PAGE>
Mr. Taber is also President and a director of Legg Mason Global Trust,
Inc., and is a director of Western Asset.
Proposal 1 also includes approval of a technical amendment to the current
Investment Advisory Agreement between the Manager and Western Asset to provide
expressly for the use of a subadviser. Thus, if Proposal 1 is approved, the
current Investment Advisory Agreement would be amended to include the following
new paragraph:
"Western may enter into a contract ("Sub-advisory Agreement") with an
investment adviser in which Western delegates to such investment
adviser any or all of its duties specified in Paragraph 3 hereunder,
provided that such Sub-advisory Agreement imposes on the investment
adviser bound thereby all duties and conditions to which Western is
subject hereunder with respect to the duties so delegated. Such
Sub-advisory Agreement must meet all requirements of the 1940 Act and
rules thereunder."
The terms and conditions of the Investment Advisory Agreement between the
Manager and Western Asset are otherwise substantially identical to those of the
Proposed Sub-advisory Agreement attached to this Proxy Statement as Exhibit A.
VOTE REQUIRED
Approval of Proposal 1 requires the affirmative vote of the holders of the
LESSER of (1) more than 50% of the outstanding Shares of the Fund entitled to
vote at the Meeting or (2) 67% or more of the Shares of the Fund present at the
Meeting, if the holders of more than 50% of the outstanding Fund Shares are
present or represented by proxy at the Meeting. If Proposal 1 is not approved by
shareholders, Western Asset will continue as the Fund's investment adviser. The
Directors might then consider whether any other arrangements for the provision
of subadvisory services are appropriate and in the best interest of the Fund's
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE "FOR" PROPOSAL 1.
PROPOSAL 2. RATIFICATION OF SELECTION OF ACCOUNTANTS
The financial statements for the Fund for the fiscal year ended December
31, 1996 were audited by Coopers & Lybrand L.L.P., independent accountants.
The Board of Directors has selected Coopers & Lybrand L.L.P. as independent
accountants for the fiscal year ending December 31, 1997, subject to termination
by either the shareholders of the Fund or the Directors. Coopers & Lybrand
L.L.P. has been the Fund's independent accountants since the Fund's inception.
Coopers & Lybrand L.L.P. has informed the Fund that it has no material direct or
indirect financial interest in the Fund. Representatives of Coopers & Lybrand
L.L.P. are not expected to be present at the Meeting but have been given the
opportunity to make a statement if they so desire, and will be available should
any matter arise requiring their presence. The affirmative vote of at least a
majority of the Shares of the Fund present, in person or by proxy, is required
for ratification.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE "FOR" PROPOSAL 2.
THE FUND'S MANAGER
The Manager, a Maryland corporation, is located at 111 South Calvert
Street, Baltimore, Maryland 21202. The Manager is a wholly owned subsidiary of
Legg Mason, Inc., which also is the parent of Legg Mason Wood Walker,
Incorporated ("Legg Mason"), the Fund's distributor, which is located at the
same
5
<PAGE>
address. The Manager serves as the Fund's investment adviser and manager under a
management agreement dated May 1, 1995. The Management Agreement was approved on
April 21, 1995 by a vote of a majority of the outstanding voting securities of
the Fund. Continuation of the agreement was most recently approved by the Board
of Directors on November 15, 1996.
The Management Agreement provides that, subject to overall direction by the
Board of Directors, the Manager manages the investment and other affairs of the
Fund. The Manager is responsible for managing the Fund consistent with the
Fund's investment objectives and policies described in its Prospectus and
Statement of Additional Information. The Manager also is obligated to (a)
furnish the Fund with office space and executive and other personnel necessary
for the operations of the Fund; (b) supervise all aspects of the Fund's
operations; (c) bear the expense of certain informational and purchase and
redemption services to the Fund's shareholders; (d) arrange, but not pay for,
the periodic updating of prospectuses, proxy material, tax returns and reports
to shareholders and state and federal regulatory agencies; and (e) report
regularly to the Corporation's officers and directors. The Manager and its
affiliates pay all the compensation of directors and officers of the Corporation
who are employees of the Manager.
The Fund pays all its other expenses which are not expressly assumed by the
Manager. These expenses include, among others, interest expense, taxes,
brokerage fees, commissions, expenses of preparing and printing prospectuses,
statements of additional information, proxy statements and reports and of
distributing them to existing shareholders, custodian charges, transfer agency
fees, organizational expenses, distribution fees paid to the Fund's distributor,
compensation of the independent directors, legal and audit expenses, insurance
expenses, expenses of registering and qualifying shares of the Fund for sale
under federal and state law, governmental fees and expenses incurred in
connection with membership in investment company organizations.
As explained above, the Manager receives for its services a management fee,
calculated daily and payable monthly, at an annual rate equal to 0.75% of the
Fund's average daily net assets. The Manager voluntarily agreed to waive its
fees and reimburse the Fund if and to the extent its expenses (exclusive of
taxes, interest, brokerage and extraordinary expenses) exceeded during any month
an annual rate of the Fund's average daily net assets in accordance with the
following schedule: 0.50% until January 31, 1994; 0.70% until February 28, 1994;
0.90% until March 31, 1994; 1.10% until April 30, 1994; 1.30% until May 31,
1994; 1.50% until June 30, 1994; 1.70% until July 31, 1994; and 1.90%
indefinitely. For the years ended December 31, 1996, 1995 and 1994, the Fund
paid management fees of $1,150,265, $1,120,329 and $428,854, respectively. For
the years ended December 31, 1996, 1995 and 1994, the Manager waived management
fees of $0, $0 and $765,018, respectively.
Under the Management Agreement, the Manager is not liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in connection
with the performance of the agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of its
obligations or duties thereunder.
Unless sooner terminated, the Management Agreement will continue
automatically for successive annual periods, provided that it is specifically
approved at least annually (1) by a vote of a majority of the Independent
Directors and (2) by a vote of a majority of all Directors or by a vote of a
majority of the Fund's outstanding voting securities. The Management Agreement
terminates automatically upon assignment. It also is terminable at any time
without penalty by vote of the Corporation's Board of Directors, by vote of a
majority of the Fund's outstanding voting securities, or by the Manager, on not
less than 60 days' notice to the other party to the agreement and may be
terminated immediately upon the mutual written consent of both parties to the
agreement.
Under the Management Agreement, the Fund has the non-exclusive right to use
the name "Legg Mason" until that agreement is terminated or until the right is
withdrawn in writing by the Manager.
6
<PAGE>
Legg Mason is the distributor of the Fund's shares pursuant to an
Underwriting Agreement with the Fund. The Underwriting Agreement obligates Legg
Mason to promote the sale of Fund Shares and to pay certain expenses in
connection with its distribution efforts, including the printing and
distribution of prospectuses and periodic reports used in connection with the
offering to prospective investors (after the prospectuses and reports have been
prepared, set in type and mailed to existing shareholders at the Fund's expense)
and for any supplementary sales literature and advertising costs.
The Fund has adopted a Distribution Plan ("Plan") which, among other
things, permits the Fund to pay Legg Mason fees for its services related to
sales and distribution of Fund Shares and the provision of ongoing services to
shareholders. Distribution activities for which such payments may be made
include, but are not limited to, compensation to persons who engage in or
support distribution and redemption of shares, printing of prospectuses and
reports for persons other than existing shareholders, advertising, preparation
and distribution of sales literature, overhead, travel and telephone expenses.
As compensation for its services and expenses, Legg Mason receives from the
Fund an annual distribution fee equivalent to 0.50% of its average daily net
assets and a service fee equivalent to 0.25% of its average daily net assets in
accordance with the Plan. The distribution and service fees are calculated daily
and payable monthly. Legg Mason voluntarily agreed to waive its fees and
reimburse the Fund if and to the extent its expenses (exclusive of taxes,
interest, brokerage and extraordinary expenses) exceeded during any month an
annual rate of the Fund's average daily net assets in accordance with the
following schedule: 0.50% until January 31, 1994; 0.70% until February 28, 1994;
0.90% until March 31, 1994; 1.10% until April 30, 1994; 1.30% until May 31,
1994; 1.50% until June 30, 1994; 1.70% until July 31, 1994; and 1.90%
indefinitely. For the years ended December 31, 1996, 1995 and 1994, the Fund
paid distribution and service fees of $1,150,140, $1,120,329 and $1,193,872,
respectively. For the same years, Legg Mason waived no distribution and service
fees.
Legg Mason receives a fee from Boston Financial Data Services, the Fund's
transfer agent, for assisting it with its transfer agent and shareholder
servicing functions. For the year ended December 31, 1996, Legg Mason received
$31,000 for performing such services in connection with this Fund.
WESTERN ASSET MANAGEMENT COMPANY
Western Asset, a California corporation, is located at 117 East Colorado
Boulevard, Pasadena, CA 91105. Western Asset is an affiliate of Legg Mason and
serves as investment adviser to the Fund under an investment advisory agreement
dated May 1, 1995. The Investment Advisory Agreement was approved on April 21,
1995 by a vote of a majority of the outstanding voting securities of the Fund.
Continuation of the agreement was most recently approved by the Board of
Directors on November 15, 1996.
Western Asset acts as the portfolio manager for the Fund and is responsible
for the actual investment management of the Fund, including the responsibility
for making decisions and placing orders to buy, sell or hold a particular
security. For Western Asset's services to the Fund, the Manager (not the Fund)
pays Western Asset a fee, computed daily and payable monthly, at an annual rate
equal to 53 1/3% of the fee received by the Manager or 0.40% of the Fund's
average daily net assets. For the years ended December 31, 1996 and 1995, the
Manager paid Western Asset $613,475 and $407,240, respectively.
Under the Investment Advisory Agreement, Western Asset will not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Manager or by the Fund in connection with the performance of the Investment
Advisory Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations or
duties thereunder.
7
<PAGE>
The Investment Advisory Agreement terminates automatically upon assignment
and is terminable at any time without penalty by vote of the Directors, by vote
of a majority of the Fund's outstanding voting securities, by the Manager or by
Western Asset, on not less than 60 days' notice to the Fund and/or the other
party(ies). The Investment Advisory Agreement terminates immediately upon any
termination of the Management Agreement or upon the mutual written consent of
the Manager, Western Asset and the Fund.
The table below sets forth certain information about other investment
companies advised by Western Asset that have an investment objective similar to
that of the Fund:
<TABLE>
<CAPTION>
NET ASSETS AS OF
FEBRUARY 28, ANNUAL RATE OF ADVISORY FEE
NAME OF FUND 1997 AS A PERCENTAGE OF NET ASSETS
- ------------ ---------------- -----------------------------
<S> <C>
Legg Mason U.S. Government Intermediate-Term Portfolio $296,735,470 0.20%(1)
Legg Mason Investment Grade Income Portfolio 94,944,565 0.24 (1)
Legg Mason High Yield Portfolio 268,960,736 0.50 (1)
Western Asset Core Portfolio 432,441,984 0.40 (2)
Western Asset Intermediate Portfolio 194,369,003 0.35 (2)
Western Asset Limited Duration Portfolio 23,015,486 0.30 (2)
Western Asset International Securities Portfolio 271,666,534 0.475 (3)
Pacific American Income Shares, Inc. 146,311,028 0.70% up to $60mm;
0.40% in excess of
$60mm
</TABLE>
(1) Western Asset serves as investment adviser for these funds and receives its
fee from their respective managers.
(2) Western Asset has voluntarily agreed to waive its fees and/or reimburse each
fund to the extent the fund's expenses (exclusive of taxes, interest,
brokerage and extraordinary expenses) exceed during any month an annual rate
of 0.50% of Core Portfolio's, 0.45% of Intermediate Portfolio's and 0.40% of
Limited Duration Portfolio's average daily net assets.
(3) Western Asset has voluntarily agreed to waive its fees and/or reimburse the
fund to the extent the fund's expenses (exclusive of taxes, interest,
brokerage and extraordinary expenses) exceed during any month an annual rate
of 0.85% of the fund's average daily net assets.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Under the Management Agreement and Investment Advisory Agreement between
the Manager and Western Asset, Western Asset is responsible for the execution of
portfolio transactions. Corporate and government debt securities are generally
traded on the OTC market on a "net" basis without a stated commission, through
dealers acting for their own account and not as brokers. Prices paid to a dealer
in debt securities will generally include a "spread," which is the difference
between the price at which the dealer is willing to purchase and sell the
specific security at the time, and includes the dealer's normal profit. Some
portfolio transactions may be executed through brokers acting as agent. In
selecting brokers or dealers, Western Asset must seek the most favorable price
(including the applicable dealer spread) and execution for such transactions,
subject to the possible payment as described below of higher brokerage
commissions to brokers who provide research and analysis. The Fund may not
always pay the lowest commission or spread available. Rather, in placing orders
on behalf of the Fund, Western Asset also takes into account such factors as
size of the order, difficulty of execution, efficiency of the executing broker's
facilities (including the services described below) and any risk assumed by the
executing broker.
Consistent with the policy of most favorable price and execution, Western
Asset may give consideration to research and statistical services furnished by
brokers and dealers to Western Asset for its use, may
8
<PAGE>
place orders with brokers who provide supplemental investment and market
research and securities and economic analysis, and may pay to these brokers a
higher brokerage commission than may be charged by other brokers. Such research
and analysis may be useful to Western Asset in connection with services to
clients other than the Fund. Western Asset's fee is not reduced by reason of its
receiving such brokerage and research services.
Although the Fund does not expect to purchase securities on a commission
basis, the Fund may use Legg Mason to effect agency transactions in listed
securities at commission rates and under circumstances consistent with the
policy of best execution. Commissions paid to Legg Mason will not exceed "usual
and customary brokerage commissions." Rule 17e-1 under the 1940 Act defines
"usual and customary" commissions to include amounts which are "reasonable and
fair compared to the commission, fee or other remuneration received or to be
received by other brokers in connection with comparable transactions involving
similar securities being purchased or sold on a securities exchange during a
comparable period of time." In the OTC market, the Fund generally will deal with
responsible primary market makers unless a more favorable execution can
otherwise be obtained.
Except as permitted by SEC rules or orders, the Fund may not buy securities
from, or sell securities to, Legg Mason or its affiliated persons as principal.
The Fund's Board of Directors has adopted procedures in conformity with Rule
10f-3 under the 1940 Act whereby the Fund may purchase securities that are
offered in certain underwritings in which Legg Mason or any of its affiliated
persons is a participant. These procedures, among other things, limit the Fund's
investment in the amount of securities of any class of securities offered in an
underwriting in which Legg Mason or any of its affiliated persons is a
participant so that: (i) the Fund together with all other registered investment
companies advised by the Manager, Western Asset or Western Asset Global, may not
purchase more than 4% of the principal amount of the offering of such class or
$500,000 in principal amount, whichever is greater, but in no event greater than
10% of the principal amount of the offering; and (ii) the consideration to be
paid by the Fund in purchasing the securities being offered may not exceed 3% of
the total assets of the Fund. In addition, the Fund may not purchase securities
during the existence of an underwriting if Legg Mason is the sole underwriter of
those securities.
Section 11(a) of the Securities Exchange Act of 1934 prohibits Legg Mason
from retaining compensation for executing transactions on an exchange for its
affiliates, such as the Fund, unless the affiliate expressly consents by written
contract. The Management Agreement expressly provides such consent.
Investment decisions for the Fund are made independently from those of
other funds and accounts advised by the Manager, Western Asset or Western Asset
Global. However, the same security may be held in the portfolios of more than
one fund or account. When two or more accounts simultaneously engage in the
purchase or sale of the same security, the prices and amounts will be equitably
allocated to each account. In some cases, this procedure may adversely affect
the price or quantity of the security available to a particular account. In
other cases, however, an account's ability to participate in large-volume
transactions may produce better executions and prices.
During the fiscal year ended December 31, 1996, the Fund paid no brokerage
commissions to Legg Mason or other affiliated brokers.
DIRECTORS AND OFFICERS
The following table lists the principal executive officer and the directors
of the Manager. The address of all such persons is the same as that of the
Manager.
9
<PAGE>
<TABLE>
<CAPTION>
NAME POSITION WITH MANAGER PRINCIPAL OCCUPATION
---- --------------------- --------------------
<S> <C>
EDWARD A. TABER, III Chairman of the Board Senior Executive Vice President and Director of Legg
(principal executive Mason and Senior Executive Vice President of Legg
officer) Mason, Inc.
JOHN F. CURLEY, JR. Vice Chairman of the Board Vice Chairman, Legg Mason and Legg Mason, Inc.
THOMAS M. DALY, JR. Director Senior Vice President, Legg Mason
CHARLES A. BACIGALUPO Director Senior Vice President and Secretary, Legg Mason and
Legg Mason, Inc.
ERNEST C. KIEHNE Director Consultant to Legg Mason
WILLIAM H. MILLER, III Director President of the Manager
</TABLE>
John F. Curley, Jr. and Edward A. Taber, III, are also directors of the
Fund. Marie K. Karpinski, Vice President and Treasurer of the Fund, is also the
Vice President and Treasurer of the Manager. Edward A. Taber, III is also a
non-employee director of Western Asset Global and director of Western Asset.
Legg Mason, Inc., the sole shareholder of the Manager, and Raymond A.
Mason, President and Chief Executive Officer of Legg Mason, Inc., may be deemed
to be "parents" of the Manager, Western Asset and Western Asset Global. The
address of all such persons is the same as that of the Manager.
The following table lists the principal executive officer and the directors
of Western Asset. The address of all such persons is the same as that of Western
Asset, with the exception of Raymond A. Mason, Edward A. Taber, III and
Elisabeth N. Spector, whose addresses are the same as that of the Manager.
<TABLE>
<CAPTION>
NAME POSITION WITH WESTERN ASSET PRINCIPAL OCCUPATION
---- --------------------------- --------------------
<S> <C>
W. CURTIS LIVINGSTON, III President, Chief Executive Officer and President and Chief Executive Officer of
Director (principal executive officer) Western
RAYMOND A. MASON Director Chairman of the Board, President and
Chief Executive Officer of Legg Mason,
Inc.
EDWARD A. TABER, III Director Senior Executive Vice President of Legg
Mason, Inc. and Legg Mason; Chairman of
the Board of the Manager; Director of
Western Asset Global
KENT S. ENGEL Director Chief Investment Officer of Western Asset
ELISABETH N. SPECTOR Director Senior Vice President of Legg Mason, Inc.
</TABLE>
SHAREHOLDER PROPOSALS
Shareholders' meetings will not be held except where the 1940 Act requires
a shareholder vote on certain matters (including the election of directors,
approval of an advisory contract, and approval of a plan of distribution
pursuant to Rule 12b-1). The Fund will call a special meeting of the
shareholders at the request of 10% or more of the shares entitled to vote;
shareholders wishing to call such a meeting should submit a written request to
the Fund at 111 South Calvert Street, Baltimore, Maryland 21202, stating the
purpose of the proposed meeting and the matters to be acted upon.
10
<PAGE>
Shareholders wishing to submit proposals for inclusion in the Fund's next
proxy statement should submit them to the Fund at the address above. Shareholder
proposals that are submitted in a timely manner will not necessarily be included
in the Fund's proxy materials. Inclusion of such proposals is subject to
limitations under federal securities laws.
OTHER BUSINESS
Management knows of no other business to be presented to the Meeting other
than the matters set forth in this statement, but should any other matter
requiring a vote of shareholders arise, the proxies will vote thereon according
to their best judgment in the interests of the Fund.
By order of the Board of Directors,
/s/ Kathi D. Bair
___________________
Kathi D. Bair
SECRETARY
March , 1997
IT IS IMPORTANT THAT YOU EXECUTE AND RETURN YOUR PROXY PROMPTLY.
11
<PAGE>
EXHIBIT A
INVESTMENT SUBADVISORY AGREEMENT
LEGG MASON GLOBAL TRUST, INC.
AGREEMENT made this day of May, 1997 by and between Western Asset
Management Company ("Adviser"), a California corporation, and Western Asset
Global Management, Ltd. ("Western Asset Global"), a corporation organized under
the laws of the United Kingdom, each of which is registered as an investment
adviser under the Investment Advisers Act of 1940.
WHEREAS, the Adviser is investment adviser to Legg Mason Global Government
Trust ("Fund"), a portfolio represented by a separate series of shares of Legg
Mason Global Trust, Inc. (the "Corporation"), an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), and
WHEREAS, the Adviser wishes to retain Western Asset Global to provide it
with certain investment subadvisory services in connection with the Adviser's
provision of investment advisory services to the Fund; and
WHEREAS, Western Asset Global is willing to furnish such services on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. APPOINTMENT. The Adviser hereby appoints Western Asset Global
Management, Ltd. as an investment subadviser for the Fund for the period and on
the terms set forth in this Agreement. Western Asset Global accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Adviser has furnished Western Asset Global
with copies properly certified or authenticated of each of the following:
(a) The Corporation's Articles of Incorporation, as filed with the
State Department of Assessments and Taxation of the State of Maryland on
December 31, 1992 and all amendments thereto (such Articles of
Incorporation, as presently in effect and as they shall from time to time
be amended, are herein called the "Articles");
(b) The Corporation's By-Laws and all amendments thereto (such
By-Laws, as presently in effect and as they shall from time to time be
amended, are herein called the "By-Laws");
(c) Resolutions of the Corporation's Board of Directors authorizing
the appointment of Legg Mason Fund Adviser, Inc. ("Manager") as the
manager, the Adviser as investment adviser and Western Asset Global
Management, Ltd. as investment subadviser, respectively, and approving the
Management Agreement between the Manager and the Fund dated May 1, 1995
(the "Management Agreement"), the Investment Advisory Agreement between the
Manager and the Adviser, dated May 1, 1995 ("Advisory Agreement"), and this
Agreement;
(d) The Corporation's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended, and the 1940 Act (File No. 33-56672) as
filed with the Securities and Exchange Commission most recently, including
all exhibits thereto, relating to shares of common stock of the Fund, par
value $.001 per share (herein called "Shares") and all amendments thereto;
(e) The Fund's most recent prospectus (such prospectus, as presently
in effect and all amendments and supplements thereto are herein called the
"Prospectus"); and
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(f) The Fund's most recent statement of additional information (such
statement of additional information, as presently in effect and all
amendments and supplements thereto are herein called the "Statement of
Additional Information").
The Adviser will furnish Western Asset Global from time to time with copies
of all amendments of or supplements to the foregoing.
3. INVESTMENT SUBADVISORY SERVICES. (a) Subject to the supervision of
the Corporation's Board of Directors and the Adviser, Western Asset Global
shall as requested by the Adviser regularly provide the Fund with
investment research, advice, management and supervision and shall furnish a
continuous investment program for the Fund's portfolio of securities
consistent with the Fund's investment objective, policies, and limitations
as stated in the Fund's current Prospectus and Statement of Additional
Information. Western Asset Global shall as requested by the Adviser
determine from time to time what securities will be purchased, retained or
sold by the Fund, and shall implement those decisions, all subject to the
provisions of the Corporation's Articles of Incorporation and By-Laws, the
1940 Act, the applicable rules and regulations of the Securities and
Exchange Commission and other applicable federal and state law, as well as
the investment objective, policies, and limitations of the Fund. Western
Asset Global will as requested by the Adviser place orders pursuant to
investment determinations for the Fund either directly with the issuer or
with any broker or dealer. In placing orders with brokers and dealers,
Western Asset Global will attempt to obtain the best net price and the most
favorable execution of its orders; however, Western Asset Global may, in
its discretion, purchase and sell portfolio securities from and to brokers
who provide the Fund with research, analysis, advice and similar services,
and Western Asset Global may pay to these brokers, in return for research
and analysis, a higher commission than may be charged by other brokers. In
no instance will portfolio securities be purchased from or sold to Western
Asset Global or any affiliated person thereof except in accordance with the
rules, regulations or orders promulgated by the Securities and Exchange
Commission pursuant to the 1940 Act. Western Asset Global shall also
perform such other functions of management and supervision as may be
requested by the Adviser or Manager and agreed to by Western Asset Global.
(b) Western Asset Global will as requested by the Adviser or Manager
oversee the maintenance of all books and records with respect to the
securities transactions of the Fund in accordance with all applicable
federal and state laws and regulations, and will furnish the Board of
Directors of the Corporation with such periodic and special reports as the
Board or the Adviser or Manager reasonably may request.
(c) The Corporation hereby authorizes any entity or person associated
with Western Asset Global which is a member of a national securities
exchange to effect any transaction on the exchange for the account of the
Corporation which is permitted by Section 11(a) of the Securities Exchange
Act of 1934, and the Corporation hereby consents to the retention by such
person associated with Western Asset Global of compensation for such
transactions, whether in accordance with Rule 11a2-2(T)(a)(2)(iv) or
otherwise.
4. SERVICES NOT EXCLUSIVE. Western Asset Global's services hereunder
are not deemed to be exclusive, and Western Asset Global shall be free to
render similar services to others. It is understood that persons employed
by Western Asset Global to assist in the performance of its duties
hereunder might not devote their full time to such service. Nothing herein
contained shall be deemed to limit or restrict the right of Western Asset
Global or any affiliate of Western Asset Global to engage in and devote
time and attention to other businesses or to render services of whatever
kind or nature.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule
31a-3 under the 1940 Act, Western Asset Global hereby agrees that all books
and records which it maintains for the Fund are property of the Fund and
further agrees to surrender promptly to the Fund or its agents any of such
A-2
<PAGE>
records upon the Fund's request. Western Asset Global further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act, any
such records required to be maintained by Rule 31a-1 under the 1940 Act.
6. EXPENSES. During the term of this Agreement, Western Asset Global
will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Fund.
7. COMPENSATION. For the services which Western Asset Global will
render to the Adviser and the Fund under this Agreement, the Adviser will
pay Western Asset Global a fee, computed daily and paid monthly, at an
annual rate equal to 0.20% of the Fund's average daily net assets. Fees due
to Western Asset Global hereunder shall be paid promptly to Western Asset
Global by Western Asset following its receipt of fees from the Fund. If
this Agreement is terminated as of any date not the last day of a calendar
month, a final fee shall be paid promptly after the date of termination and
shall be based on the percentage of days of the month during which the
contract was still in effect.
8. LIMITATIONS OF LIABILITY. Western Asset Global will not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Adviser or by the Fund in connection with the performance of this
Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting
from willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations or duties under this Agreement.
9. DEFINITIONS. As used in this Agreement, the terms "securities" and
"net assets" shall have the meanings ascribed to them in the Articles of
Incorporation of the Corporation; and the terms "assignment," "interested
person," and "majority of the outstanding voting securities" shall have the
meanings given to them by Section 2(a) of the 1940 Act, subject to such
exemptions as may be granted by the Securities and Exchange Commission by
any rule, regulation or order.
10. DURATION AND TERMINATION. This Agreement will become effective May
1, 1997, provided that it shall have been approved by the Corporation's
Board of Directors and by the shareholders of the Fund in accordance with
the requirements of the 1940 Act and, unless sooner terminated as provided
for herein, shall continue in effect until May 1, 1999. Thereafter, if not
terminated, this Agreement shall continue in effect for successive annual
periods, provided that such continuance is specifically approved at least
annually (i) by the Corporation's Board of Directors or (ii) by a vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities
of the Fund, provided that in either event the continuance is also approved
by a majority of the Corporation's Directors who are not interested persons
(as defined in the 1940 Act) of the Corporation or of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty, by
vote of the Corporation's Board of Directors, by vote of a majority (as
defined in the 1940 Act) of the outstanding voting securities of the Fund,
by the Adviser or by Western Asset Global on not less than 60 days' notice
to the Fund and/or the other party(ies) and will be terminated immediately
upon any termination of the Management Agreement with respect to the Fund,
the Investment Advisory Agreement between the Manager and the Adviser, or
upon the mutual written consent of Western Asset Global, the Adviser, and
the Fund. Termination of this Agreement with respect to the Fund shall in
no way affect continued performance with regard to any other portfolio of
the Corporation. This Agreement will automatically and immediately
terminate in the event of its assignment.
11. FURTHER ACTIONS. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the
purposes hereof.
A-3
<PAGE>
12. AMENDMENTS. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no material amendment of this
Agreement shall be effective until approved by vote of the holders of a
majority of the Fund's outstanding voting securities.
13. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter hereof. The
captions in this Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. Should any part of this Agreement be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement
shall be binding and shall inure to the benefit of the parties hereto and
their respective successors.
14. GOVERNING LAW. This Agreement shall be construed in accordance
with the 1940 Act and the laws of the State of California. To the extent
that the applicable laws of the State of California conflict with the
applicable provisions of the 1940 Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below on the day and year first
above written.
[SEAL] WESTERN ASSET MANAGEMENT COMPANY
________________________________
Attest:
By: By:
_____________________ _________________________________
[SEAL] WESTERN ASSET GLOBAL MANAGEMENT, LTD.
Attest:
By: By:
_____________________ _________________________________
A-4
<PAGE>
LEGG MASON GLOBAL TRUST, INC.
GLOBAL GOVERNMENT TRUST
PROXY FOR MEETING OF SHAREHOLDERS, WEDNESDAY, APRIL 30, 1997
The undersigned shareholder(s) of Legg Mason Global Government Trust ("Fund"), a
series of the Legg Mason Global Trust, Inc. hereby appoints as proxies Marie K.
Karpinski and Kathi D. Bair, and each of them (with power of substitution), to
vote all shares of Legg Mason Global Government Trust which the undersigned is
entitled to vote, at the Meeting of Shareholders to be held on Wednesday, April
30, 1997 at 111 South Calvert Street, Baltimore, Maryland, at 1:00 p.m. eastern
time and at any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF LEGG MASON GLOBAL
TRUST, INC. The persons named will vote the Shares represented by this proxy in
accordance with the choices made on this card. IF NO CHOICE IS INDICATED AS TO
ANY ITEM, THIS PROXY WILL BE VOTED AFFIRMATIVELY ON THESE MATTERS. THIS PROXY
WILL NOT BE VOTED UNLESS IT IS DATED AND SIGNED EXACTLY AS INSTRUCTED ON THE
REVERSE.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Meeting.
- --------------------------------------------------------------------------------
PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
Please sign this Proxy exactly as your name appears on the books of the
Fund. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this
signature should be that of an authorized officer who should state his or
her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_____________________________________ _______________________________________
_____________________________________ _______________________________________
_____________________________________ _______________________________________
<PAGE>
<TABLE>
<S> <C>
[X] PLEASE MARK VOTES FOR AGAINST ABSTAIN
AS IN THIS EXAMPLE 1.) To approve a Subadvisory Agreement [ ] [ ] [ ]
between Western Asset Management
Company and Western Asset Global
Management, Ltd. and to amend the
current Investment Advisory Agreement
expressly to permit subadvisory
arrangements.
FOR AGAINST ABSTAIN
2.) To ratify the selection of Coopers & [ ] [ ] [ ]
Lybrand L.L.P. as the Fund's
independent accountants for the fiscal
year ending December 31, 1997
_______________
Please be sure to sign and date this Proxy. Date Mark box at right if comments or address change have [ ]
_____________________________________________________________ been noted on the reverse side of this card.
_____Shareholder sign here____________Co-owner sign here_____ RECORD DATE SHARES:
</TABLE>
