TEMPLETON EMERGING MARKETS INCOME FUND INC, DEF 14A, 1997-01-08

TEMPLETON EMERGING MARKETS INCOME FUND INC
DEF 14A, 1997-01-08

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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 240.14a-11(c) or 240.14a-12

(Name of Registrant as Specified in Its Charter)

TEMPLETON EMERGING MARKETS INCOME FUND, INC.

(Name of Person(s) Filing Proxy Statement)

TEMPLETON EMERGING MARKETS INCOME FUND, INC.

Payment of filing fee (Check the appropriate box):

[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2), or Item 22(a)(2) of Schedule 14A.

[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
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 identifying 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

TEMPLETON EMERGING MARKETS 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.

<PAGE>

TEMPLETON EMERGING MARKETS INCOME FUND, INC.

NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS

The Annual Meeting ("Meeting") of shareholders of Templeton Emerging Markets
Income Fund, Inc. (the "Fund") will be held at 500 East Broward Blvd., 12th
Floor, Ft. Lauderdale, Florida 33394-3091 on Tuesday, February 25, 1997 at
10:00 A.M. (EST).

During the Meeting, shareholders of the Fund will vote on three 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; and

3. The transaction of any other business that may properly come before
the Meeting.

By order of the Board of Directors,

Barbara J. Green, Secretary

January 3, 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.

<PAGE>

TEMPLETON EMERGING MARKETS INCOME FUND, INC.

PROXY STATEMENT

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
January 3, 1997.

ON WHAT ISSUES AM I BEING ASKED TO VOTE?

You are being asked to vote on three 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; and

3. The transaction of any other business that may properly come
before the Meeting.

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; and

3. 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, February 24, 1997 will be voted as
specified. If you specify a vote for any of the proposals 1 through 3,
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 the proposals 1 through
3, your shares will be voted in favor of th nominees for Director
(proposal 1), in favor of ratifying the selection of McGladrey &
Pullen, LLP as independent auditors (proposal 2), and/or in accordance
with the discretion of the persons named in the proxy as to any other
matters (proposal 3).

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.

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. John
Wm. Galbraith, Betty P. Krahmer, Gordon S. Macklin, and Fred R.
Millsaps have been nominated for three-year terms, 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(R) 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 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 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 such person's ownership of
shares of the Fund and shares of all funds in the Franklin Templeton
Group of Funds:

<PAGE>

<S> <C> <C> <C>
JOHN WM. GALBRAITH President of Galbraith Properties, Inc. -0- 3,117,233
DIRECTOR SINCE 1995 (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.

BETTY P. KRAHMER Director or trustee of various civic 1,303(**) 75,812
DIRECTOR SINCE 1993 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.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
SHARES OWNED IN THE
BENEFICIALLY FRANKLIN
OWNED IN THE FUND TEMPLETON GROUP
AND % OF TOTAL OF FUNDS
OUTSTANDING AS OF (INCLUDING THE
DECEMBER 15, 1996 FUND) AS OF
NAME AND OFFICES WITH THE FUND PRINCIPAL OCCUPATION DURING PAST DECEMBER 15,
FIVE YEARS AND AGE 1996
- ------------------------------- -------------------------------------- ------------------- -----------------
<S> <C> <C> <C>
GORDON S. MACKLIN Chairman of White River Corporation 5,000(**) 273,717
DIRECTOR SINCE 1993 (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. and director or trustee of 52
of the investment companies in the Franklin
Templeton Group of Funds. Age 68.

FRED R. MILLSAPS Manager of personal investments -0- 445,471
DIRECTOR SINCE 1993 (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.

</TABLE>

<PAGE>

NOMINEE SERVING UNTIL 1999 ANNUAL MEETING OF SHAREHOLDERS:

EDITH E. HOLIDAY Director (1993 - present) of Amerada -0- -0-
DIRECTOR SINCE 1996 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.

DIRECTORS TO SERVING UNTIL 1999 ANNUAL MEETING OF SHAREHOLDERS:

HARRIS J. ASHTON Chairman of the board, president and 500(**) 290,183
DIRECTOR SINCE 1993 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.

</TABLE>

<PAGE>

NICHOLAS F. BRADY* Chairman of Templeton Emerging Markets -0- 14,626
DIRECTOR SINCE 1993 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.

DIRECTORS SERVING UNTIL 1998 ANNUAL MEETING OF SHAREHOLDERS:

HARMON E. BURNS* Executive vice president, secretary and -0- 992,239
DIRECTOR AND VICE PRESIDENT director of Franklin Resources, Inc.;
SINCE 1993 executive vice president and director
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 60 of the investment
companies in the Franklin Templeton Group of
Funds. Age 51.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
SHARES OWNED IN THE
BENEFICIALLY FRANKLIN
OWNED IN THE FUND TEMPLETON GROUP
AND % OF TOTAL OF FUNDS
OUTSTANDING AS OF (INCLUDING THE
DECEMBER 15, 1996 FUND) AS OF
NAME AND OFFICES WITH THE FUND PRINCIPAL OCCUPATION DURING PAST DECEMBER 15,
FIVE YEARS AND AGE 1996
- ------------------------------- -------------------------------------- ------------------- -----------------
<S> <C> <C> <C>
ANDREW H. HINES, JR. Consultant for the Triangle Consulting 1,000(**) 30,158
DIRECTOR SINCE 1993 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.

CHARLES B. JOHNSON* President, chief executive officer, and 1,000(**) 1,088,337
CHAIRMAN OF THE BOARD SINCE director of Franklin Resources, Inc.;
1993 AND VICE PRESIDENT SINCE chairman of the board and director of
1995 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 63.

</TABLE>

* NICHOLAS F. BRADY, HARMON E. BURNS 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 CAN
COMPRISE A FUND'S BOARD OF DIRECTORS. CHARLES B. JOHNSON IS AN INTERESTED
PERSON DUE TO HIS OWNERSHIP INTEREST IN RESOURCES, AND MR. BURNS IS AN
INTERESTED PERSON DUE TO HIS EMPLOYMENT AFFILIATION WITH 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%.

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 the Fund. Accordingly,
the Fund pays the Independent Directors and Mr. Brady an annual
retainer of $4,000 and a fee of $350 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, a
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.

The following table shows the compensation paid to Independent
Directors and Mr. Brady by the Fund and by the Franklin Templeton Group
of Funds:

NUMBER OF BOARDS
AGGREGATE WITHIN THE FRANKLIN TOTAL COMPENSATION FROM
COMPENSATION FROM TEMPLETON GROUP OF THE FRANKLIN TEMPLETON
NAME OF DIRECTOR THE FUND* FUNDS ON WHICH GROUP OF FUNDS**
DIRECTOR SERVES
----------------------- ---------------------- ----------------------- --------------------------
<S> <C> <C> <C>
Harris J. Ashton $5,750 55 $339,592
F. Bruce Clarke*** 5,893 -0- 69,500
Andrew H. Hines, Jr. 5,960 24 130,525
Hasso-G Von
Diergardt-Naglo**** 2,700 -0- 66,375
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 1,350 15 15,450

</TABLE>

* For the fiscal year ended August 31, 1996.
** For the calendar year ended December 31, 1996.
*** Mr. Clarke resigned as Director on October 20, 1996.
**** Mr. Von Diergardt did not stand for re-election at the
February 20, 1996 shareholders meeting.

<PAGE>

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:

PRINCIPAL OCCUPATION
NAME AND OFFICES WITH FUND DURING PAST FIVE YEARS AND AGE
----------------------------------- ------------------------------------------
<S> <C>

CHARLES B. JOHNSON See Proposal 1, "Election of Directors".
Chairman and Vice President since

1993

GREGORY E. MCGOWAN Director and executive vice president of
President since 1996 Templeton Investment Counsel, Inc.;
executive vice president-international
development and chief international
general counsel of Templeton Worldwide,
Inc.; Templeton Global Investors, 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 Group of Funds. Age 47.

SAMUEL J. FORESTER, JR. Vice president of 10 of the investment
Vice President since 1996 companies 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.

<PAGE>

RUPERT H. JOHNSON, JR. Executive vice president and director of
Vice President since 1996 Franklin 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
investment companies in the Franklin
Templeton Group of Funds. Age 56.

HARMON E. BURNS See Proposal 1, "Election of Directors".
Vice President since 1996

CHARLES E. JOHNSON Senior vice president and director of
Vice President since 1996 Franklin 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.; vice
president and/or director, as the case
may be, of other subsidiaries of
Franklin Resources, Inc.; and an 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
Vice President since 1996 counsel of 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.

MARK G. HOLOWESKO President and director of Templeton
Vice President Since 1993 Global 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.

</TABLE>

<PAGE>

PRINCIPAL OCCUPATION
NAME AND OFFICES WITH FUND DURING PAST FIVE YEARS AND AGE
----------------------------------- ------------------------------------------
<S> <C>

MARTIN L. FLANAGAN Senior vice president, treasurer and
Vice President since 1993 chief 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
an officer and/or director or trustee of 61 of the
investment companies in the Franklin Templeton Group
of Funds. Age 36.

DOUGLAS LEMPEREUER Vice President of Templeton Global Bond
Vice President since 1993 Managers, a division of Templeton Investment
Counsel, Inc.; portfolio manager for various
global fixed income Templeton Funds; formerly,
analyst and assistant director of Colonial
Management Associates (1985-1988) and director of
Standish, Ayer & Wood, Inc. (1977-1984); and
officer of 3 of the investment companies
in the Franklin Templeton Group of Funds. Age 47.

JOHN R. KAY Vice president and treasurer of
Vice President since 1994 Templeton 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.
</TABLE>

<PAGE>

PRINCIPAL OCCUPATION
NAME AND OFFICES WITH FUND DURING PAST FIVE YEARS AND AGE
----------------------------------- ------------------------------------------
<S> <C>

ELIZABETH M. KNOBLOCK General counsel, secretary and a senior
Vice President-Compliance vice president of Templeton Investment
since 1996 Counsel, Inc.; 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), and
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.

BARBARA J. GREEN Senior vice president of Templeton
Secretary since 1996 Worldwide, Inc. 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
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
Treasurer since 1994 president 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.

</TABLE>

2. RATIFICATION OR REJECTION OF INDEPENDENT AUDITORS:

HOW IS AN INDEPENDENT AUDITOR SELECTED?

The Board 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 auditor of the Fund since its
inception in 1993 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.

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. OTHER BUSINESS:

The Directors know of no other business to be presented at the Meeting.
However, if any additional matters should be properly presented,
proxies will be voted as specified. Proxies reflecting no specification
will be voted in accordance with the judgment of the persons named in
the proxy.

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 47,605,757 shares outstanding and
assets of $642,199,652. The Fund's shares are listed on the NYSE
(symbol: TEI). 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.

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
September 23, 1993 and amended and restated as of May 25 1995, TICI
manages the investment and reinvestment of Fund resources. 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 a administration agreement dated October 1,
1996, FTSI 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 September 17, 1993.

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 September 17, 1993 and amended July 5, 1996.

THE SHAREHOLDER SERVICING AGENT. The shareholder servicing agent for
the Fund is PaineWebber Inc. ("PaineWebber"), an affiliate of the
initial underwriter of the Fund's shares. Pursuant to a shareholder
servicing agreement, PaineWebber provides certain services to the Fund
including statistical information and analysis, ongoing efforts to
publicize the Fund's shares and making information available to
investors.

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. The Fund, however, does not reimburse Directors, Officers, and
regular employees and 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 the items to be considered at the Meeting on
behalf of their customers and clients. In addition, certain
broker-dealers may exercise discretion over shares held in their name
for which no instructions are received by voting these shares in the
same proportion as they vote shares for which they received
instructions.

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 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 at the Meeting.
Proposal 3, the transaction of any other business, is expected to
require the affirmative vote of a majority of the Fund's shares present
and voting at the Meeting. Abstentions and 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 and 3.

SIMULTANEOUS MEETINGS. The Meeting is to be held at the same time as
the meetings of shareholders of certain other Templeton Funds. It is
anticipated that all 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 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.

<PAGE>

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 September 5, 1997.

By order of the Board of Directors,

Barbara J. Green, Secretary

January 3, 1997