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 Sec. 240.14a-11(c) or Sec. 240.14a-12
TEMPLETON GLOBAL INVESTMENT TRUST
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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 transactions applies:
(2) Aggregate number of securities to which transactions 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:
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[LOGO](R)
FRANKLIN(R) TEMPLETON(R)
TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON LATIN AMERICA FUND
IMPORTANT SHAREHOLDER INFORMATION
These materials are for a special shareholders' meeting scheduled for Friday,
November 12, 1999 at 10:00 a.m. Eastern time. They discuss the proposals to be
voted on at the meeting, and contain 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 Trustees' recommendations on page 1
of the proxy statement.
WE URGE YOU TO SPEND A FEW MINUTES REVIEWING THE PROPOSALS IN THE PROXY
STATEMENT. THEN, FILL OUT THE PROXY CARD AND RETURN IT TO US SO THAT WE KNOW HOW
YOU WOULD LIKE TO VOTE. WHEN SHAREHOLDERS RETURN THEIR PROXIES PROMPTLY, THE
FUND MAY BE ABLE TO SAVE MONEY BY NOT HAVING TO CONDUCT ADDITIONAL MAILINGS.
WE WELCOME YOUR COMMENTS. IF YOU HAVE ANY QUESTIONS, CALL FUND INFORMATION AT
1-800/DIAL BEN(R) (1-800/342-5236).
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TELEPHONE AND INTERNET VOTING
FOR YOUR CONVENIENCE, YOU MAY BE ABLE TO VOTE BY TELEPHONE OR THROUGH THE
INTERNET, 24 HOURS A DAY. IF YOUR ACCOUNT IS ELIGIBLE, A CONTROL NUMBER AND
SEPARATE INSTRUCTIONS ARE ENCLOSED.
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PAGE
TEMPLETON GLOBAL INVESTMENT TRUST
on behalf of
TEMPLETON LATIN AMERICA FUND
500 East Broward Boulevard
Fort Lauderdale, FL 33394-3091
Dear Shareholders:
I am writing to request that you consider four matters relating to your
investment in Templeton Latin America Fund (the "Fund"), a series of Templeton
Global Investment Trust (the "Trust"). The Board of Trustees asks that you cast
your vote in favor of:
1. Changing the classification of the Fund from a diversified to a
non-diversified fund;
2. Amending six of the Fund's fundamental investment restrictions;
3. Eliminating five of the Fund's fundamental investment restrictions;
and
4. Granting proxyholders the authority to vote upon any other
business that may properly come before the meeting or any
adjournments thereof.
We have proposed a change to the classification of the Fund from a diversified
to a non-diversified investment company. If approved, the Fund would be
permitted to invest all of its assets in the securities of relatively few
issuers. We have also proposed amending or eliminating certain fundamental
investment restrictions. We believe that the recommended changes will provide
additional investment opportunities for the Fund, as further described in the
attached proxy statement. We urge you to approve these proposals which are
designed to benefit all shareholders by providing the Fund with greater
flexibility in pursuing its investment objectives.
The proxy statement includes a question-and-answer format designed to provide
you with a simpler and more concise explanation of certain issues. Although much
of the information in the proxy statement is technical and required by the
various regulations that govern the Trust, we hope that this format will be
helpful to you.
Your vote is important to the Trust. On behalf of the Trustees, thank you in
advance for considering these issues and for promptly returning your proxy card.
Sincerely,
Mark G. Holowesko
PRESIDENT
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[LOGO](R)
FRANKLIN(R) TEMPLETON(R)
TEMPLETON GLOBAL INVESTMENT
TEMPLETON LATIN AMERICA FUND
NOTICE OF SPECIAL SHAREHOLDERS' MEETING
TO BE HELD ON NOVEMBER 12, 1999
A Special Shareholders' Meeting ("Meeting") of Templeton Latin America Fund (the
"Fund"), a series of Templeton Global Investment Trust (the "Trust"), will be
held at the Trust's offices at 500 East Broward Boulevard, Fort Lauderdale, FL
33394, at 10:00 a.m.
(Eastern time), on Friday, November 12, 1999.
During the Meeting, shareholders of the Fund will vote on the following
proposals and sub-proposals:
1. To change the classification of the Fund from a diversified to
a non-diversified fund, which is fundamental.
2. To approve amendments to certain of the Fund's fundamental
investment restrictions (includes six (6) Sub-Proposals).
(a) To amend the Fund's fundamental investment restriction
regarding borrowing;
(b) To amend the Fund's fundamental investment restriction
regarding underwriting;
(c) To amend the Fund's fundamental investment restriction
regarding lending;
(d) To amend the Fund's fundamental investment restrictions
regarding investments in real estate and commodities;
(e) To amend the Fund's fundamental investment restriction
regarding issuing senior securities; and
(f) To amend the Fund's fundamental investment restriction
regarding industry concentration.
3. To approve the elimination of certain of the Fund's
fundamental investment restrictions.
4. To grant the proxyholders authority to vote upon any other
business that may properly come before the Meeting or any
adjournment(s) thereof.
The Board of Trustees has fixed Wednesday, September 15, 1999 as the record date
for determination of shareholders entitled to vote at the Meeting or any
adjourned Meeting.
Please note that a separate vote is required for each Proposal or Sub-Proposal.
By Order of the Board of Trustees,
Barbara J. Green
Secretary
Fort Lauderdale, Florida
September [], 1999
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PLEASE SIGN AND RETURN YOUR PROXY CARD IN THE SELF-ADDRESSED ENVELOPE REGARDLESS
OF THE NUMBER OF SHARES YOU OWN.
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PAGE
TABLE OF CONTENTS
PAGE
PROXY STATEMENT
Questions and Answers.......................................................
Proposal 1: To Change the Classification of the Fund from Diversified to
Non-Diversified.............................................
Proposal 2: To Approve Amendments to Certain of the Fund's Fundamental
Investment Restrictions (Includes 6 Sub-Proposals)
2a: Borrowing....................................................
2b: Underwriting.................................................
2c: Lending......................................................
2d: Real Estate and Commodities..................................
2e: Issuing Senior Securities....................................
2f: Industry Concentration.......................................
Proposal 3: To Approve the Elimination of Certain of the Fund's Fundamental
Investment Restrictions......................................
Proposal 4: Other Business................................................
EXHIBITS
Exhibit A: Fundamental Investment Restrictions Proposed to be Amended
or Eliminated ..............................................
Exhibit B: Current Fundamental Investment Restrictions Proposed to be
Eliminated.................................................
PAGE
TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON LATIN AMERICA FUND
PROXY STATEMENT
QUESTIONS AND ANSWERS
INFORMATION ABOUT VOTING
WHO IS ASKING FOR MY VOTE?
The Trustees of Templeton Global Investment Trust (the "Trust") in connection
with the Special Shareholders' Meeting of Templeton Latin America Fund (the
"Fund"), a series of the Trust to be held Friday, November 12, 1999 (the
"Meeting"), have requested your vote on several matters.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record of the Fund at the close of business on Wednesday,
September 15, 1999 are entitled to vote at the Meeting or any adjourned meeting,
and will be entitled to one vote for each full share and a fractional vote for
each fractinal share that they hold, on each matter presented at the Meeting.
The Notice of Meeting, the proxy card, and the proxy statement were mailed to
shareholders of record on or about September [ ], 1999.
ON WHAT ISSUES AM I BEING ASKED TO VOTE?
You are being asked to vote on the following proposals:
1. To change the classification of the Fund from diversified to non-
diversified;
2. To amend certain of the Fund's fundamental investment restrictions;
3. To eliminate certain of the Fund's fundamental investment restrictions;
and
4. To grant the proxyholders authority to vote upon any other business
that may properly come before the Meeting or any adjournment(s)
thereof.
HOW DO THE TRUSTEES RECOMMEND THAT I VOTE?
The Trustees unanimously recommend that you vote:
1. FOR the change of the classification of the Fund from diversified to
non-diversified;
2. FOR the amendment of each of the Fund's fundamental investment
restrictions proposed to be amended;
3. FOR the elimination of certain of the Fund's fundamental investment
restrictions proposed to be eliminated; and
4. FOR the proxyholders to have discretion to vote on any other business
that may properly come before the Meeting or any adjournment(s) thereof.
HOW DO I ENSURE THAT MY VOTE IS ACCURATELY RECORDED?
You may attend the Meeting and vote in person or you may complete and return the
enclosed proxy card. If you are eligible to vote by telephone or through the
internet, a control number and separate instructions are enclosed.
Proxy cards that are properly signed, dated and received at or prior to the
Meeting will be voted as specified. If you specify a vote for any of the
Proposals 1 through 3, your proxy will be voted as you indicated. If you simply
sign and date the proxy card, but don't specify a vote for any of the Proposals
1 through 3, your shares will be voted IN FAVOR of changing the classification
of the Fund from diversified to non-diversified (Proposal 1), IN FAVOR of
amending certain of the Fund's fundamental investment restrictions
(Sub-Proposals 2a-2f), IN FAVOR of eliminating certain of the Fund's fundamental
investment restrictions (Proposal 3), and/or IN ACCORDANCE with the discretion
of the persons named in the proxy card as to any other matters that properly may
come before the Meeting (Proposal 4).
CAN I REVOKE MY PROXY?
You may revoke your proxy at any time before it is voted by forwarding a written
revocation or later-dated proxy card to the Fund that is received at or prior to
the Meeting, or attending the Meeting and voting in person.
PAGE
THE PROPOSALS
PROPOSAL 1: TO CHANGE THE CLASSIFICATION OF THE FUND FROM DIVERSIFIED TO
NON-DIVERSIFIED
WHAT DOES THE FUND'S CURRENT CLASSIFICATION AS "DIVERSIFIED" MEAN?
The Fund is currently classified as "diversified" pursuant to Section 5(b)(1) of
the Investment Company Act of 1940, as amended ("1940 Act"). This classification
requires the Fund to have an investment policy prohibiting it, as to 75% of its
total assets, from investing more than 5% of the value of its total assets in
the securities of any one issuer (other than securities issued by the U.S.
government, its agencies or instrumentalities or securities of other investment
companies), and to not more than 10% of the outstanding voting securities of
such issuer. Under Section 5(b)(1), the remaining 25% of the Fund's total assets
may be invested without regard to the 5% and 10% limitations. Consistent with
many mutual funds, the Fund, while having claimed diversified status since its
inception and therefore subject to Section 5(b)(1), also has a fundamental
investment restriction summarizing the diversification requirements of the 1940
Act. The text of the restriction, which currently appears in the Fund's
Statement of Additional Information as restriction number 2, appears in Exhibit
A of this proxy statement.
The Fund's investment adviser, Templeton Investment Counsel, Inc. ("Investment
Counsel"), has recommended changing the Fund's classification from "diversified
to "non-diversified." Under the 1940 Act, a change from diversified to
non-diversified status requires a shareholder vote. In addition, elimination of
a fundamental investment requires such a vote. If Proposal 1 is approved by
shareholders, the Fund's status would change and its fundamental investment
restriction regarding diversification would be eliminated.
WHY IS THE BOARD RECOMMENDING A CHANGE TO THE FUND'S CURRENT CLASSIFICATION?
Investment Counsel has described to the Board that in the Latin American region,
investment opportunities are concentrated in a relatively small number of
issuers. In fact, according to Investment Counsel, the diversified nature of the
Fund, which causes it to invest in a greater number of issuers, is impeding the
Fund's ability to fully benefit from the performance of certain securities each
of which comprises a significant percentage of certain regional indices. Thus,
the non-diversified status of the Fund puts it at a competitive disadvantage.
Based on Investment Counsel's recommendation, the Board believes that changing
the Fund to non-diversified may provide additional investment flexibility that,
in light of the Fund's regional focus, would be in the best interests of
shareholders. Although greater investment flexibility would result from a change
to non-diversified status, it should be noted that the Fund intends to continue
to operate in compliance with diversification requirements of the Internal
Revenue Code ("Code") in order to qualify as a regulated investment company
under the Code. These Code requirements require that the Fund limit its
investments so that, at the close of each quarter of its taxable year (i) not
more than 25% of its total assets is invested in the securities (other than U.S.
government securities or the securities of other regulated investment companies)
of any one issuer, and (ii) at least 50% of the value of its total assets is
represented by cash and cash items (including receivables), government
securities and securities of other regulated investment companies, and other
securities for purposes of this calculation limited in respect of any one issuer
to an amount not greater in value than 5% of the value of the Fund's total
assets and to not more than 10% of the outstanding voting securities of the
issuer.
WHAT ARE THE RISKS OF SUCH A CHANGE TO THE FUND'S STATUS?
Changing the Fund to non-diversified involves potential risks, including the
potential that changes in the value of a single issuer's securities may have a
greater effect on the Fund's performance and share price than if the Fund
remained diversified.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU APPROVE PROPOSAL 1
INTRODUCTION TO PROPOSALS 2 AND 3.
WHY IS THE FUND AMENDING OR ELIMINATING CERTAIN OF ITS FUNDAMENTAL INVESTMENT
RESTRICTIONS IN FAVOR OF A STANDARDIZED LIST OF INVESTMENT RESTRICTIONS?
The Fund is subject to certain investment restrictions which govern its
investment activities. Under the 1940 Act, certain investment restrictions are
required to be "fundamental" which means that they can only be changed by a
shareholder vote. An investment company may designate additional investment
restrictions that are fundamental, and it may also adopt "non-fundamental"
restrictions, which may be changed by the Trustees without shareholder approval.
After the Trust was formed, certain legal and regulatory requirements applicable
to mutual funds changed. For example, certain restrictions imposed by state laws
and regulations were preempted by the National Securities Markets Improvement
Act of 1996 ("NSMIA") and therefore are no longer applicable to funds. As a
result of NSMIA, the Fund currently is subject to fundamental investment
restrictions that are either more restrictive than required under current law,
or which are no longer required at all. Accordingly, the Trustees recommend that
the Fund's shareholders approve the amendment or elimination of certain of the
Fund's current fundamental investment restrictions. This will result in the Fund
having a list of fundamental investment restrictions that are standardized with
those of the other funds in the Franklin Templeton Group of Funds. The proposed
standardized restrictions satisfy current federal regulatory requirements and
are written to provide flexibility to respond to future legal, regulatory,
market or technical changes.
By both standardizing and reducing the total number of investment restrictions
that can be changed only by a shareholder vote, the Trustees believe that the
Fund will be able to minimize the costs and delays associated with holding
future shareholder meetings to revise fundamental policies that become outdated
or inappropriate. The Trustees also believe that the investment adviser's
ability to manage the Fund's assets in a changing investment environment will be
enhanced, and that investment management opportunities will increase as a result
of these changes.
The proposed standardized changes will not affect the Fund's investment
objective. Although the proposed changes in fundamental investment restrictions
will provide the Fund greater flexibility to respond to future investment
opportunities, the Board does not anticipate that the changes, individually or
in the aggregate, will result in a material change in the level of investment
risk associated with investment in the Fund. The Board does not anticipate that
the proposed changes will materially affect the manner in which the Fund is
managed.
The Fund's existing investment restrictions, together with the recommended
changes to these restrictions are detailed in Exhibit A. Shareholders are
requested to vote on each Sub-Proposal in Proposal 2 separately.
PROPOSAL 2: TO APPROVE AMENDMENTS TO CERTAIN OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTIONS (THIS PROPOSAL INVOLVES SEPARATE VOTES
ON SUB-PROPOSALS 2A - 2F)
SUB-PROPOSAL 2A: TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
REGARDING BORROWING.
The 1940 Act requires investment companies to impose certain limitations on
borrowing activities. The limitations on borrowing are generally designed to
protect shareholders and their investment by restricting a fund's ability to
subject its assets to the claims of creditors who might have a claim to the
fund's assets that would take precedence over the claims of shareholders. A
fund's borrowing restriction must be fundamental.
Under the 1940 Act, a fund may borrow from banks up to one-third of its total
assets (including the amount borrowed). In addition, a fund may borrow up to 5%
of its total assets for temporary purposes from any person, provided that such
borrowing is privately arranged. Funds typically borrow money to meet
redemptions in order to avoid forced, unplanned sales of portfolio securities.
This technique allows a fund greater flexibility to buy and sell portfolio
securities for investment or tax considerations, rather than for cash flow
considerations.
WHAT EFFECT WILL STANDARDIZATION OF THE CURRENT BORROWING RESTRICTION HAVE ON
THE FUND?
As described in the Fund's current investment restriction 5, the Fund is
presently permitted to borrow up to one-third of its total assets, but it is
limited to borrowing from banks. The proposed restriction would retain the
legally permissible one-third of total assets limitation, but would also permit
the Fund to borrow cash from affiliated investment companies. The Fund, together
with other funds in the Franklin Templeton Group of Funds, has requested an
exemptive order from the U.S. Securities and Exchange Commission ("SEC") that
would permit the Fund to borrow money from affiliated Franklin and Templeton
funds. If this order is approved, the new restriction would permit the Fund,
under certain circumstances, to borrow money from other Franklin and Templeton
funds at rates which are more favorable than those which the Fund would receive
if it borrowed from banks or other lenders.
In addition, the new restriction would help the Fund achieve the goal of
standardizing the language of the investment restrictions among the Franklin
Templeton Group of Funds. Standardization is expected to enable all Franklin and
Templeton funds to operate more efficiently and to more easily monitor
compliance with investment restrictions.
SUB-PROPOSAL 2B: TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
REGARDING UNDERWRITING.
Under the 1940 Act, the Fund's policy concerning underwriting is required to be
fundamental. Under the federal securities laws, a person or company generally is
considered an underwriter if it participates in the public distribution of
securities of OTHER ISSUERS, usually by purchasing the securities from the
issuer with the intention of re-selling the securities to the public. From time
to time, a mutual fund may purchase a security for investment purposes which it
later sells or redistributes to institutional investors or others under
circumstances where the Fund could possibly be considered to be an underwriter
under the technical definition of underwriter contained in the securities laws.
For example, funds often purchase securities in private securities transactions
where a resale could raise a question relating to whether or not the fund is
technically acting as an underwriter. However, recent SEC interpretations
clarify that re-sales of privately placed securities by institutional investors
do not make the institutional investor an underwriter in these circumstances.
The proposed restriction encompasses these SEC positions.
The Fund's current restriction relating to underwriting is combined with
restrictions relating to other issues in investment restriction 3. The adoption
of Sub-Proposal 2b would result in the separation of the Fund's underwriting
restriction from the others currently contained in the Fund's fundamental
investment restriction 3. These restrictions relate to (i) the issuance of
senior securities and (ii) the purchase of securities on margin or selling
short, which are proposed to be amended and eliminated, respectively, in
Sub-Proposals 2e and 3.
WHAT EFFECT WILL STANDARDIZATION OF THE CURRENT UNDERWRITING RESTRICTION HAVE ON
THE FUND?
The proposed restriction relating to underwriting is substantially similar to
the current restriction. However, the proposed underwriting restriction
clarifies that the Fund may sell its own shares without being deemed an
underwriter. Under the 1940 Act, a mutual fund will not be considered an
underwriter if it sells its own shares pursuant to a written distribution plan
that complies with Rule 12b-1 of the 1940 Act.
The proposed restriction also specifically permits the Fund to resell restricted
securities in those instances where there may be a question as to whether the
Fund is technically acting as an underwriter. Furthermore, the proposed
restriction would help the Fund achieve the goal of standardizing the language
of the investment restrictions among the Franklin Templeton Group of Funds. By
separating the proposed underwriting restriction from several other issues, the
investment restrictions on the Fund would be clarified. It is not anticipated
that adoption of the proposed restriction would involve any additional risk as
the proposed restriction would not affect the way the Fund is currently managed.
SUB-PROPOSAL 2C: TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
REGARDING LENDING.
Under the 1940 Act, a fund's policy regarding lending must be fundamental.
Certain investment techniques could, under certain circumstances, be considered
to be loans. For example, if the Fund invests in debt securities, such
investments might be considered to be loans from the Fund to the issuer of the
debt securities. In order to ensure that the Fund may invest in certain debt
securities or repurchase agreements, which could technically be characterized as
the making of loans, the Fund's current fundamental investment restriction
specifically carves out such policies from its prohibitions.
In addition, the Fund's current fundamental investment restriction presently
explicitly permits the Fund to lend its portfolio securities. Securities lending
is a practice that has become common in the mutual fund industry and involves
the temporary loan of portfolio securities to parties who use the securities for
the settlement of securities transactions. The collateral delivered to the Fund
in connection with such a transaction is then invested to provide the Fund with
additional income it might not otherwise have. Securities lending involves
certain risks if the borrower fails to return the securities.
WHAT EFFECT WILL STANDARDIZATION OF THE CURRENT LENDING RESTRICTION HAVE ON THE
FUND?
The proposed restriction would provide the Fund with greater lending
flexibility. While the proposed restriction retains the carve-outs in the
existing restriction, it also would permit the Fund to invest in loan
participations and direct corporate loans which recently have become more common
as investments for investment companies. The proposed restriction also would
provide the Fund additional flexibility to make loans to affiliated investment
companies to the extent permitted by exemptions granted by the SEC. For example,
the Franklin Templeton Group of Funds, including the Fund, has requested an
exemptive order from the SEC (the "Lending Order") that would permit the Fund to
lend cash to other Franklin and Templeton funds. If the Lending Order is
approved, the new restriction would permit the Fund, under certain conditions,
to lend cash to other Franklin or Templeton funds at rates higher than those
which the Fund would receive if the Fund loaned cash to banks through short-term
lendings such as repurchase agreements. The Board anticipates that this
additional flexibility to lend cash to affiliated investment companies would
provide additional investment opportunities, and would enhance the Fund's
ability to respond to changes in market, industry or regulatory conditions.
In addition, the proposed restriction would help the Fund achieve the goal of
standardizing the language of the investment restrictions among the Franklin
Templeton Group of Funds. It is not anticipated that adoption of the proposed
restriction would involve any additional risk, as the proposed restriction would
not affect the way the Fund is currently managed.
SUB-PROPOSAL 2D: TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTIONS
REGARDING INVESTMENTS IN REAL ESTATE AND COMMODITIES.
Under the 1940 Act, a fund's restrictions regarding investments in real estate
and commodities must be fundamental. The Fund's current investment restrictions
relating to real estate and commodities are included in investment restriction
1. This restriction also includes restrictions relating to investment in other
open-end investment companies and investment in oil, gas or other mineral
exploration or development contracts. Adoption of this Sub-Proposal would result
in the creation of an investment restriction relating only to real estate and
commodities investments. The restrictions relating to the other activities
contained in current restriction 1 are proposed to be eliminated in Proposal 3.
WHAT EFFECT WILL STANDARDIZATION OF THE REAL ESTATE AND COMMODITIES RESTRICTIONS
HAVE ON THE FUND?
REAL ESTATE: The proposed investment restriction is designed to standardize the
language of the real estate restriction among the Franklin Templeton Group of
Funds. The proposed restriction also specifically would reference the Fund's
ability to purchase securities of real estate investment trusts ("REITS") to the
extent that an investment in REITS would otherwise meet the Fund's investment
criteria. Investing in REITS has gained in popularity since the early 1990s, and
the number of REITS available for investment also has increased dramatically.
The proposed restriction would also eliminate the current prohibition on the
Fund's investing in mortgages. The Fund's existing restriction would permit an
investment in REITS as well, as REITS are "marketable securities secured by real
estate or interests therein" as recited in existing restriction l. However, the
Fund will continue to be prohibited from directly purchasing or selling real
estate. It is not anticipated that this modification will involve any additional
risk to the Fund as the Fund does not currently and has not in the past invested
in real estate or real estate-related securities.
COMMODITIES: The proposed investment restriction is designed to standardize the
language of the commodities restriction among the Franklin Templeton Group of
Funds. Generally, commodities are considered to be physical commodities such as
wheat, cotton, rice and corn. However, futures contracts, including financial
futures contracts such as those related to currencies, stock indices or interest
rates, are also considered to be commodities. Funds typically invest in such
contracts and options on contracts for hedging or other investment purposes.
The proposed restriction clarifies that the Fund has the flexibility to invest
in financial futures contracts and related options. This authority has been
disclosed in the Fund's statement of additional information and has been
referenced in the current carve-out to investment restriction 1, as well as in
investment restriction 3. Therefore, it is not anticipated that the proposed
restriction would involve any additional risk to the Fund.
SUB-PROPOSAL 2E: TO AMEND THE FUND'S INVESTMENT RESTRICTION REGARDING ISSUING
SENIOR SECURITIES.
Under the 1940 Act, the Fund must have an investment policy describing its
position with respect to senior securities. A "senior security" is an obligation
of a fund with respect to its earnings or assets that takes precedence over the
claims of the fund's shareholders with respect to the same earnings or assets.
The 1940 Act generally prohibits an open-end fund from issuing senior securities
in order to limit the use of leverage. In general, a fund uses leverage when it
borrows money to enter into securities transactions, or acquires an asset
without being required to make payment until a later time.
SEC staff interpretations allow a fund to engage in a number of types of
transactions which might otherwise be considered to create "senior securities"
or "leverage," so long as the fund meets certain collateral requirements
designed to protect shareholders. For example, some transactions that may create
senior security concerns include short sales, certain options and futures
transactions, reverse repurchase agreements and securities transactions that
obligate the fund to pay money at a future date (such as when-issued, forward
commitment or delayed delivery transactions). When engaging in such
transactions, a fund must mark on its or its custodian bank's books, or set
aside money or securities with its custodian bank to meet the SEC staff's
collateralization requirements. This procedure effectively eliminates a fund's
ability to engage in leverage for these types of transactions.
The Fund's current investment restriction relating to senior securities is
combined with restrictions relating to other issues. The adoption of
Sub-Proposal 2e would result in the separation of the Fund's senior securities
restriction from the underwriting restriction, which is currently contained in
fundamental investment restriction 3, which is set forth in its entirety in
Exhibit A, and which is proposed to be amended in Sub-Proposal 2b. Current
restriction 3 also contains a restriction relating to the purchase of securities
on margin and short sales. The restriction relating to the purchase of
securities on margin is proposed to be eliminated as part of Proposal 3. The
restriction on short sales, included in current investment restriction 3, would
be carved out of the new senior securities restriction, as further described
below.
WHAT EFFECT WILL STANDARDIZATION OF THE RESTRICTION REGARDING ISSUING SENIOR
SECURITIES HAVE ON THE FUND?
The proposed restriction would permit the Fund to engage in permissible types of
leveraging transactions. Essentially, the proposed restriction clarifies the
Fund's ability to engage in those investment transactions (such as repurchase
transactions and short sales) which, while appearing to raise senior security
concerns, have been interpreted as not constituting the issuance of senior
securities under the federal securities laws provided that certain regulatory
conditions are met.
Finally, the proposed investment restriction is designed to standardize the
language regarding issuing senior securities among the Franklin Templeton Group
of Funds. By separating the proposed senior securities restriction from several
other issues, the restrictions on the Fund will also be clarified. The Board
does not anticipate that any additional risk to the Fund will occur as a result
of amending the current restriction and making it fundamental because the Fund
has no present intention of changing its current investment policies or engaging
in transactions that may be interpreted as issuing senior securities which it
previously was not permitted to do.
SUB-PROPOSAL 2F: TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
REGARDING CONCENTRATION OF THE FUND'S INVESTMENTS IN THE SAME INDUSTRY.
Under the 1940 Act, a fund's policy of concentrating its investments in
securities of companies in the same industry must be fundamental. Under the
federal securities laws, a mutual fund "concentrates" its investments if it
invests more than 25% of its "net" assets (exclusive of certain items such as
cash, U.S. government securities, securities of other investment companies, and
tax-exempt securities) in a particular industry or group of industries. A fund
is not permitted to concentrate its investments in a particular industry unless
it so states.
WHAT EFFECT WILL STANDARDIZATION OF THE CURRENT RESTRICTION REGARDING INDUSTRY
CONCENTRATION HAVE ON THE FUND?
The Fund's existing fundamental restriction 7 recites the Fund's concentration
policy, stating that the Fund may not invest more than 25% of its total assets
in a single industry. The new restriction would help the Fund achieve the goal
of standardizing the language of the investment restrictions among the Franklin
Templeton Group of Funds. The new restriction provides the Fund with added
flexibility because, consistent with the 1940 Act, it exempts from the 25%
limitation (i) securities issued or guaranteed by the U.S. government or any of
its agencies or instrumentalities, and (ii) the securities of other investment
companies. It also recites the current federal securities law requirement with
respect to concentration that limits investments to "net" assets as opposed to
"total" assets. This investment flexibility will help the Fund respond to future
legal, regulatory, market or technical changes. However, adoption of the
proposed restriction is not expected to change materially the way in which the
Fund is currently managed as the Fund does not intend to begin concentrating in
shares of the U.S. government or any of its agencies or instrumentalities or of
other investment companies.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU APPROVE SUB-PROPOSALS 2A-2F
PROPOSAL 3: TO APPROVE THE ELIMINATION OF CERTAIN OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTIONS
WHICH FIVE (5) FUNDAMENTAL INVESTMENT RESTRICTIONS IS THE BOARD RECOMMENDING
THAT THE FUND ELIMINATE?
Several of the Fund's fundamental investment restrictions were originally
drafted in response to state laws and regulations, which, due to NSMIA, are no
longer in accordance with SEC staff positions since the positions have either
changed or are no longer relevant to the Fund. Since NSMIA eliminated the
states' ability to substantively regulate investment companies, the Fund is no
longer legally required to include all or certain portions of current
restrictions 1, 3, 6 and 8 among its fundamental investment restrictions.
Investment Counsel has recommended, and the Board has determined, that certain
of these current fundamental investment restrictions should be eliminated.
The exact wording of the restrictions proposed to be eliminated (referred to in
this Proposal 3 as the "Restrictions"), has been compiled in Exhibit B, which is
entitled, "Current Fundamental Investment Restrictions Proposed to be
Eliminated," for ease of reference.
INVESTMENT IN OTHER INVESTMENT COMPANIES:
One aspect of the Fund's current investment restriction number 1 limits the
Fund's ability to invest in other open-end investment companies except in
connection with a merger, consolidation, acquisition or reorganization. This
restriction, which is inconsistent with the 1940 Act provisions in this regard,
was originally included in the Fund's fundamental investment restrictions in
response to various state law requirements. Under NSMIA, however, the Fund is no
longer legally required to retain such a policy as a fundamental restriction
Upon elimination of this restriction, the Fund would remain subject to the 1940
Act restrictions (or any exemption from such restrictions) on a fund's ability
to invest in other open-end funds. The 1940 Act restrictions state that a fund
may not purchase more than 3% of another fund's total outstanding voting stock,
commit more than 5% of its assets to the purchase of another fund's securities,
or have more than 10% of its total assets invested in securities of all other
funds.
Elimination of this restriction should not have an impact on the day to day
management of the Fund as the Fund does not intend to begin pursuing its
investment objective through the purchase of other open-end investment company
securities. Elimination of the restriction would, however, permit the Fund to
invest cash held at the end of the day in money market funds. The Fund, together
with other funds in the Franklin Templeton Group of Funds, has obtained an
exemptive order from the SEC (the "Cash Sweep Order") to permit the Franklin and
Templeton funds to invest their uninvested cash balances in one or more Franklin
or Templeton money market funds. Eliminating the Fund's current restriction
would permit the Fund to take advantage of the investment opportunities
presented by the Cash Sweep Order, since the Cash Sweep Order contemplates
relief from the 1940 Act restrictions relating to the permissible percentage
investment in other invested companies in these limited circumstances.
OIL, GAS AND MINERAL INTERESTS:
One aspect of the Fund's current fundamental investment restriction number 1
limits the Fund's ability to buy or sell interests in oil, gas or mineral
exploration or development programs. This restriction was originally included in
the Fund's fundamental restrictions in response to various state law
requirements, but under NSMIA, the Fund is no longer legally required to retain
such policies as fundamental restrictions.
As a general matter, elimination of this fundamental restriction should not have
an impact on the day to day management of the Fund as the Fund has not
previously, nor does it currently intend to engage in these types of
investments.
SECURITIES ON MARGIN AND SHORT SALES:
One aspect of the Fund's current fundamental investment restriction number 3
limits the Fund's ability to purchase securities on margin or sell securities
short. This restriction was originally included in response to the various state
law requirements which specifically required funds to have policies in this
regard. As discussed earlier in the introduction, under NSMIA the Fund is no
longer required by state law to retain fundamental policies regarding these
types of investment activities.
As a general matter, elimination of this fundamental restriction relating to
purchasing securities on margin or selling securities short should not have an
impact on the day to day management of the Fund, since the 1940 Act prohibitions
on these types of transactions would continue to apply to the Fund. Under SEC
interpretations, the Fund's ability to sell securities short raises senior
security issues. Accordingly, the Fund's ability to sell securities short is
addressed in the proposed restriction relating to issuing senior securities
(described in Sub-Proposal 2e). Under the proposed restriction, the Fund would
be permitted to sell securities short to the extent permitted by the 1940 Act,
and any rule or exemptive order granted by the SEC. The Fund's ability to
purchase securities on margin also raises senior security issues and is
similarly prohibited under the 1940 Act. Elimination of the restriction,
therefore, would not affect the Fund's ability to purchase on margin.
The Fund's current investment restriction relating to the purchase of securities
on margin and short sales is combined with restrictions relating to other
issues. The adoption of Proposal 3 would result in the elimination of the Fund's
prohibition against the purchase of securities on margin and short sales
presently contained in this restriction. The other issues covered by this
restriction, namely, the restrictions relating to underwriting, are proposed to
be amended in Sub-Proposal 2b, and the restriction relating to senior securities
and short sales are proposed to be amended in Sub-Proposal 2e.
MORTGAGE, PLEDGE AND HYPOTHECATE ASSETS:
The Fund's current fundamental investment restriction number 6 limits the Fund's
ability to mortgage, pledge or hypothecate its assets in many instances. This
restriction was originally included in response to state law requirements, but
under NSMIA, the Fund is no longer legally required to retain such policies as
fundamental restrictions. The activities addressed in this restriction arguably
raise senior security issues. The proposed senior security restriction described
in Sub-Proposal 2e would adequately address these issues. The carve-outs
contained in current restriction 6 would not be specifically retained, although
it is now widely accepted that the activities described in the carve-outs do not
create senior security issues for a fund.
As a general matter, elimination of this fundamental restriction should not have
an impact on the day-to-day management of the Fund as the Fund has not
previously, nor does it currently intend to mortgage, pledge or hypothecate its
assets beyond what it would be permitted to do under its present restrictions.
JOINT AND JOINT AND SEVERAL TRADING ACCOUNTS:
The Fund's current fundamental investment restriction number 8 limits the Fund's
ability to participate on a joint or a joint and several basis in any trading
account in securities. This restriction was originally included in response to
the various state law requirements to which mutual funds used to be subject, but
under NSMIA, the Fund is no longer legally required to retain such a policy as a
fundamental restriction.
As a general matter, elimination of this fundamental restriction relating to
participating in a securities trading account should not have an impact on the
day-to-day management of the Fund, since the 1940 Act prohibitions on these
types of transactions would continue to apply to the Fund. Joint transactions
are generally prohibited under the 1940 Act, and the Fund would continue to
remain subject to the conditions imposed on joint transactions by the 1940 Act
and any exemptions granted by the SEC. Finally, the Fund has not previously, nor
does it currently intend to engage in this investment activity.
WHY IS THE BOARD RECOMMENDING THAT THE RESTRICTIONS BE ELIMINATED, AND WHAT
EFFECT WILL SUCH ELIMINATION HAVE ON THE FUND?
The Board has determined that eliminating the Restrictions is consistent with
the federal securities laws and will conform the Fund's list of fundamental
investment restrictions with standardized investment restrictions adopted by
other Franklin and Templeton funds. By both standardizing and reducing the total
number of investment restrictions that can be changed only by a shareholder
vote, the Board believes that the Fund will be able to minimize the costs and
delays associated with holding future shareholder meetings to revise fundamental
policies that become outdated or inappropriate. The Board believes that
eliminating the Restrictions is in the best interest of the Fund's shareholders
as it will provide the Fund with increased flexibility to pursue its investment
goals.
WHAT ARE THE RISKS, IF ANY, IN ELIMINATING THE RESTRICTIONS?
The Board does not anticipate that eliminating the Restrictions will result in
any additional risk to the Fund. Although many of the Fund's current
Restrictions, as drafted, are no longer legally required, the Fund's ability to
invest in these five areas will continue to be subject to the limitations of the
1940 Act, and any exemptive orders granted under the 1940 Act. Further, the Fund
has no current intention to change its present investment practices as a result
of eliminating these Restrictions.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU APPROVE PROPOSAL 3
PROPOSAL 4: OTHER BUSINESS
The Trustees do not intend to bring any matters before the Meeting other than
Proposals 1, 2, and 3 and are not aware of any other matters to be brought
before the Meeting by others. If any other matters do properly come before the
Meeting, the persons named in the enclosed proxy will use their best judgment in
voting on such matters.
INFORMATION ABOUT THE FUND
THE INVESTMENT MANAGER. Templeton Investment Counsel, Inc. ("Investment
Counsel"), 500 East Broward Boulevard, Fort Lauderdale, Florida, 33394-3091
serves as the Fund's investment manager. Investment Counsel is wholly owned by
Franklin Resources, Inc. ("Resources").
THE FUND ADMINISTRATOR. Franklin Templeton Services, Inc. ("FT Services"), whose
principal address is 777 Mariners Island Blvd., San Mateo, CA 94404, provides
certain administrative services and facilities for the Fund. FT Services is a
wholly owned subsidiary of Resources and is an affiliate of Investment Counsel
and the Fund's principal underwriter.
THE UNDERWRITER. The underwriter for the Fund is Franklin Templeton
Distributors, Inc., 100 Fountain Parkway, P.O. Box 33030, St. Petersburg,
Florida 33733-8030.
THE TRANSFER AGENT. The transfer agent, registrar and dividend disbursement
agent for the Fund is Franklin/Templeton Investor Services, Inc., 100 Fountain
Parkway, P.O. Box 33030, St. Petersburg, Florida 33733-8030.
THE CUSTODIAN. The Chase Manhattan Bank, MetroTech Center, Brooklyn, NY 11245,
acts as custodian of the Fund's securities and other assets.
THE AUDITORS. PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York,
NY 10036, serves as independent auditors for the Fund.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS. The Fund's last audited
financial statements and annual report, for the fiscal year ended March 31,
1999, is available free of charge. To obtain a copy, please call 1-800/DIAL
BEN(R) or forward a written request to Franklin/Templeton Investor Services,
Inc., 100 Fountain Parkway, P.O. Box 33030, St. Petersburg, Florida 33733-8030.
PRINCIPAL SHAREHOLDERS. As of September 15, 1999, there were 1,614,724.028
outstanding shares of Templeton Latin America Fund - Class A; 421,295.333
outstanding shares of Templeton Latin America Fund - Class C and 66,662.032
outstanding shares of Templeton Latin America Fund - Advisor Class and total net
assets of $17,994,500.37. 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
Trust's management, as of September 15, 1999, there were no other entities
holding beneficially or of record more than 5% of the Fund's outstanding shares.
In addition, to the knowledge of the Trust's management, as of September 15,
1999, no Trustee of the Trust owned 1% or more of the outstanding shares of the
Fund, and the Officers and Trustees of the Trust owned, as a group, less than 1%
of the outstanding shares of the Fund.
FURTHER INFORMATION ABOUT VOTING AND THE MEETING
SOLICITATION OF PROXIES. The cost of soliciting these proxies will be 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 Trust, on behalf of the Fund, has engaged Shareholder
Communications Corporation to solicit proxies from brokers, banks, other
institutional holders and individual shareholders for an approximate fee,
including out-of-pocket expenses, ranging between $_____ and $______. The Fund
expects that the solicitation will be primarily by mail, but also may include
telephone, telecopy or oral solicitations. The Fund does not reimburse Trustees
and officers of the Trust, or regular employees and agents of Investment Counsel
involved in the solicitation of proxies. The Fund intends to pay all costs
associated with the solicitation and the Meeting.
In addition to solicitations by mail, some of the executive officers and
employees of the Trust, Investment Counsel and its affiliates, without extra
compensation, may conduct additional solicitations by telephone, personal
interviews and other means.
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 will request voting instructions from their customers and beneficial
owners. If these instructions are not received by the date specified in the
broker-dealer firms' proxy solicitation materials, the Fund understands that New
York Stock Exchange Rules permit the broker-dealers to vote on the items to be
considered at the Meeting on behalf of their customers and beneficial owners.
Certain broker-dealers may exercise discretion over shares held in their name
for which no instructions are received by voting those shares in the same
proportion as they vote shares for which they received instructions.
QUORUM. One third of the shares entitled to vote, present in person or
represented by proxy, constitutes a quorum at the Meeting. The shares over which
broker-dealers have discretionary voting power, the shares that represent
"broker non-votes" (i.e., shares held by brokers or nominees as to which: (i)
instructions have not been received from the beneficial owners or persons
entitled to vote; and (ii) the broker or nominee does not have discretionary
voting power on a particular matter), and the shares whose proxies reflect an
abstention on any item are all counted as shares present and entitled to vote
for purposes of determining whether the required quorum of shares exists.
REQUIRED VOTE. Provided that a quorum is present, approval of proposals 1, 2,
and 3, which would adopt the change of the Fund's classification from
diversified to non-diversified, and amendments to, or elimination of,
fundamental investment restrictions, require the affirmative vote of the lesser
of: (i) more than 50% of the outstanding voting securities of the Fund, or (ii)
67% or more of the voting securities of the Fund present at the Meeting, if the
holders of more than 50% of the outstanding voting securities are present or
represented by proxy. Approval of proposal 4, for the proxyholders to have
discretion to vote on the transaction of any other business that may properly
come before the Meeting, requires the affirmative vote of a majority of the
Fund's shares present and voting on the Proposal 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 each Proposal.
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY. The Trust is not
required, and does not intend, to hold regular annual meetings of shareholders.
Shareholders wishing to submit proposals for consideration for inclusion in a
proxy statement for the next meeting of shareholders should send their written
proposals to the Trust's offices, 500 East Broward Boulevard, Fort Lauderdale,
Florida 33394, Attn: Secretary, so they are received within a reasonable time
before any such meeting. No business other than the matters described above is
expected to come before the Meeting, but should any other matter requiring a
vote of shareholders arise, including any question as to an adjournment or
postponement of the Meeting, the persons named on the enclosed proxy card will
vote on such matters according to their best judgment in the interests of the
Fund.
By order of the Board of Trustees,
Barbara J. Green
SECRETARY
Dated: ___________, 1999
Fort Lauderdale, Florida
PAGE
EXHIBIT A
FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED TO BE AMENDED OR ELIMINATED
<TABLE>
<CAPTION>
PROPOSAL OR
SUB-PROPOSAL RESTRICTION CURRENT INVESTMENT RESTRICTION PROPOSED INVESTMENT RESTRICTION
<S> <C> <C> <C>
2d Real estate and commodities 1. Invest in real estate or mortgages 4. Purchase or sell real estate
on real estate (although the fund[] and commodities, except that
may invest in marketable securities the fund may purchase or sell
secured by real estate or interests securities of real estate
therein); invest in other open-end investment trusts, may
investment companies (except in purchase or sell currencies,
connection with a merger, consolidation, may enter into futures
acquisition or reorganization); invest contracts on securities,
in interests (other than publicly issued currencies, and other indices
debentures or equity stock interests) in or any other financial
oil, gas or other mineral exploration or instruments, and may purchase
development programs; or purchase or sell and sell options on such
commodity contracts (except futures futures contracts.
contracts as described in [the] fund's
Prospectus).
1 Diversification 2. Purchase any security (other than Proposed to be eliminated.
obligations of the U.S. government,
its agencies or instrumentalities) if,
as a result, as to 75% of [the] Fund's
total assets (a) more than 5% of the
Fund's total assets would then be invested
in securities of any single issuer, or
(b) the Fund would then own more than 10%
of the votingsecurities of any single
issue...
2b, 2e Underwriting; Senior Securities 3. Act as an underwriter; issue senior 2. Act as an underwriter except
securities except as set forth in to the extent the fund may be
investment restriction 6 below; or deemed to be an underwriter when
purchase on margin or sell short, except disposing of securities it
that [the] fund may make margin payments owns or when selling its own
in connection withfutures, options and shares.
currency transactions. 5. Issue securities senior to the
fund's presently authorized
shares of beneficial interest.
Except that this restriction
shall not be deemed to prohibit
the fund from (a) making any
permitted borrowings, loans,
mortgages or pledges, (b)
entering into options, futures
contracts, forward contracts,
repurchase transactions, or
reverse repurchase transactions,
or (c) making short sales of
securities to the extent
permitted by the 1940 Act and
any rule or order thereunder, or
U.S. Securities and Exchange
Commission staff interpretations
thereof
2c Lending 4. Loan money, except that [the] 3. Make loans to other persons
fund may (a) purchase a portion of an except (a) through the lending
issue of publicly distributed bonds, of its portfolio securities, (b)
debentures, notes and other evidences through the purchase of debt
of indebtedness, (b) enter into securities, loan participations
repurchase agreements and (c) lend and/or engaging in direct
its portfolio securities. corporate loans in accordance
with its investment objective and
policies, and (c) to the extent
the entry into a repurchase
is deeemed to be a loan. The
fund may also make loans to
affiliated investment companies
to the extent permitted by the
1940 Act or any exemptions
therefrom which may be granted
by the U.S. Securities and
Exchange Commission.
2a Borrowing
5. Borrow money, except 1. Borrow money, except that the
borrow money from banks fund mayor affiliated investment
that [it] may borrow money companies to the extent pre-
from banks in an amount mitted by the 1940 Act, or any
not exceeding 33 1/3% of the exemptions therefrom which may be
value of its total assets granted by the U.S. Securities
(including the amount and Exchange Commission, or for
borrowed). temporary or emergency purposes
and then in an amount not ex-
ceeding 33 1/3% of the value of
the fund's total assets
(incuding the amount borrowed).
3 Purchase Securities on 6. Mortgage, pledge or hypothecate Proposed to be eliminated.
Margin/Mortgage/ its assets (exceptas may be necessary
Pledge and Hypothecate Assets in connection with permitted borrowings);
provided, however, this does not
prohibit escrow, collateral or margin
arrangements in connection with its use
of options, futures contracts and
options on future [sic] contracts.
2f Concentration 7. Invest more than 25% of its total 6. Concentrate (invest more than
assets in a single industry. 25% of its net assets) in
securities of issuers in a
particular industry (other than
securities issued or guaranteed
by the U.S. government or any of
its agencies or instrumentalities
or securities of other investment
companies).
3 Joint and Joint and Several 8. Participate on a joint or a joint Proposed to be eliminated.
Trading Accounts and several basis in any trading
account in securities.
</TABLE>
PAGE
EXHIBIT B
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED TO BE ELIMINATED
All or a part of each of the following five (5) current fundamental investment
restrictions of the Fund have been proposed to be eliminated:
<TABLE>
<CAPTION>
SUBJECT CURRENT INVESTMENT RESTRICTION STATES THAT THE FUND MAY NOT:
<S> <C>
Other Investment 1. Invest in other open-end investment companies (except in
Companies connection with a merger, consolidation, acquisition or
reorganization).
Oil/Gas/Mineral 1...invest in interests (other than publicly issued debentures
Interests or equity stock interests) in oil, gas or other mineral
exploration or development programs.
Purchase Securities 3...purchase on margin or sell short...
on Margin
Purchase Securities on 6. Mortgage, pledge or hypothecate its assets (except
Margin/Mortgage/ as may be necessary in connection with permitted
Pledge and borrowings); provided, however, this does not prohibit
Hypothecate Assets escrow, collateral or margin arrangements in connection with
its use of options, futures contracts and options on future
[sic] contracts.
Joint and Joint 8. Participate on a joint or a joint and several basis
and Several in any trading account in securities.
Trading Accounts
</TABLE>
PAGE
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR
PROXY TODAY
Please detach at perforation before mailing.
PROXY PROXY
SPECIAL SHAREHOLDERS' MEETING OF
TEMPLETON LATIN AMERICA FUND
NOVEMBER 12, 1999
The undersigned hereby revokes all previous proxies for his or her shares and
appoints Barbara J. Green, James R. Baio, and Bruce S. Rosenberg, and each of
them, proxies of the undersigned with full power of substitution to vote all
shares of Templeton Latin America Fund (the "Fund") that the undersigned is
entitled to vote at the Fund's Special Meeting to be held at 500 East Broward
Boulevard, Fort Lauderdale, FL 33394 at 10:00 a.m., Eastern time on November 12,
1999, including any adjournments thereof, upon such business as may properly be
brought before the Meeting.
IMPORTANT: PLEASE SEND IN YOUR PROXY TODAY.
YOU ARE URGED TO DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY. THIS WILL SAVE
THE EXPENSE OF FOLLOW-UP LETTERS TO SHAREHOLDERS WHO HAVE NOT RESPONDED.
IMPORTANT: PLEASE SIGN AND MAIL IN YOUR PROXY...TODAY
(Please see reverse side)
PAGE
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
PLEASE SIGN AND PROMPTLY RETURN IN THE ACCOMPANYING ENVELOPE. NO POSTAGE
REQUIRED IF MAILED IN THE U.S.
Please detach at perforation before mailing.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TEMPLETON
GLOBAL INVESTMENT TRUST (THE "TRUST"), ON BEHALF OF ITS SERIES, TEMPLETON LATIN
AMERICA FUND (THE "FUND"). IT WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, THIS PROXY SHALL BE VOTED IN FAVOR OF PROPOSALS 1, 2 (INCLUDING ALL SUB
PROPOSALS), 3, AND 4. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING
ABOUT WHICH THE PROXYHOLDERS WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN THE PROXYHOLDERS TO VOTE IN ACCORDANCE WITH
THE VIEWS OF MANAGEMENT ON SUCH MATTERS. MANAGEMENT IS NOT AWARE OF ANY SUCH
MATTERS.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF PROPOSALS
1 - 4.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. To change the classification of the Fund from [] [] []
a diversified to a non-diversified fund, which is
fundamental.
2. To approve amendments to certain of the Fund's
fundamental investment restrictions (includes six
(6) Sub Proposals).
2.a. To amend the Fund's fundamental investment
restriction regarding borrowing. [] [] []
2.b. To amend the Fund's fundamental investment
restrictin regarding underwriting. [] [] []
2.c. To amend the Fund's fundamental investment
restriction regarding lending. [] [] []
2.d. To amend the Fund's fundamental investment
restrictions regarding investments in real
estate and commodities. [] [] []
2.e. To amend the Fund's fundamental investment
restriction regarding issuing senior
securities. [] [] []
2.f. To amend the Fund's fundamental investment
restriction regarding industry concentration. [] [] []
3. To approve the elimination of certain of the Fund's
fundamental investment restriction. [] [] []
4. To grant the proxyholders authority to vote upon
any other business that may properly come before
the Meeting or any adjournment(s) thereof. [] [] []
</TABLE>
IMPORTANT: PLEASE SIGN AND MAIL IN YOUR PROXY...TODAY
