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:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section.240-14a-11(c) or
Section.240-14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
(Name of Registrant as Specified in its Charter)
FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary material.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
IMPORTANT SHAREHOLDER INFORMATION
We have enclosed important information about your Fund's Annual Shareholders'
Meeting scheduled for Thursday, September 21, 2006 at 2:00 p.m., Pacific time.
These materials discuss the Proposal to be voted on at the meeting, and contain
the Notice of Meeting, 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 Franklin Templeton Limited Duration Income Trust
(the "Fund"). If you complete, sign and return the proxy card, we'll vote it as
you indicated. If you simply sign and date the proxy card, but do not specify a
vote on the proposal listed thereon (the "Proposal"), your proxy will be voted
FOR the Proposal.
WE URGE YOU TO SPEND A FEW MINUTES REVIEWING THE PROPOSAL IN THE PROXY
STATEMENT. THEN, PLEASE FILL OUT AND SIGN THE PROXY CARD AND RETURN IT TO US SO
THAT WE KNOW HOW YOU WOULD LIKE TO VOTE. WHEN SHAREHOLDERS RETURN THEIR PROXY
CARDS PROMPTLY, THE FUND MAY BE ABLE TO SAVE MONEY BY NOT HAVING TO CONDUCT
ADDITIONAL MAILINGS. RETURNING YOUR PROXY CARD DOES NOT PRECLUDE YOU FROM
ATTENDING THE MEETING OR LATER CHANGING YOUR VOTE PRIOR TO ITS BEING CAST.
WE WELCOME YOUR COMMENTS. IF YOU HAVE ANY QUESTIONS, CALL FUND INFORMATION AT
1-800/DIAL BEN(R) (1-800/342-5236).
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, SEPARATE INSTRUCTIONS ARE
ENCLOSED.
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FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
NOTICE OF 2006 ANNUAL SHAREHOLDERS' MEETING
The Annual Shareholders' Meeting (the "Meeting") of Franklin Templeton Limited
Duration Income Trust (the "Fund") will be held at the Fund's offices, One
Franklin Parkway, San Mateo, California 94403, on Thursday, September 21, 2006
at 2:00 p.m., Pacific time.
During the Meeting, shareholders of the Fund will vote on the following
Proposal:
o The election of Charles B. Johnson, Frank W.T. LaHaye, Gordon S. Macklin, and
Frank A. Olson as Trustees of the Fund, to hold office for the terms specified.
The Board of Trustees has fixed July 21, 2006, as the record date for the
determination of shareholders entitled to vote at the Meeting.
By Order of the Board of Trustees,
Karen L. Skidmore
VICE PRESIDENT AND SECRETARY
San Mateo, California
Dated: August 18, 2006
PLEASE SIGN AND PROMPTLY RETURN YOUR PROXY CARD IN THE SELF-ADDRESSED ENVELOPE
REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
This page intentionally left blank.
FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
PROXY STATEMENT
o INFORMATION ABOUT VOTING
WHO IS ASKING FOR MY VOTE?
The Trustees of Franklin Templeton Limited Duration Income Trust (the
"Fund"), in connection with the Fund's Annual Meeting of Shareholders (the
"Meeting"), have requested your vote.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on July 21, 2006, are
entitled to be present and to vote at the Meeting or any adjourned Meeting.
Each common share of beneficial interest, without par value (the "Common
Shares") and each Auction Rate Preferred Share, $25,000 liquidation
preference per share (the "Preferred Shares") of record is entitled to one
vote, and each fractional Common Share and Preferred Share is entitled to a
proportional fractional vote, on each nominee presented at the Meeting on
which such shareholder is entitled to vote. The Notice of Meeting, the proxy
card, and the proxy statement were mailed to shareholders of record on or
about August 21, 2006.
ON WHAT ISSUE AM I BEING ASKED TO VOTE?
You are being asked to vote on one Proposal:
o To elect nominees to the position of Trustee. One of the nominees will be
voted on solely by holders of Preferred Shares, and the remaining three
nominees will be voted on by holders of the outstanding Common Shares and
Preferred Shares voting together as a single class.
HOW DO THE FUND'S TRUSTEES RECOMMEND THAT I VOTE?
The Trustees unanimously recommend that you vote FOR the election of each of
the nominees as Trustees for which you are entitled to vote.
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, 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 the Proposal,
your proxy will be voted as you indicate. If you simply sign, date and return
the proxy card, but don't specify a vote on the Proposal, your shares will be
voted FOR the election of the nominees for Trustee.
MAY I REVOKE MY PROXY?
You may revoke your proxy at any time before it is voted by forwarding a
written revocation or a later-dated proxy to the Fund that is received by the
Fund at or prior to the Meeting, or by attending the Meeting and voting in
person.
WHAT IF MY SHARES ARE HELD IN A BROKERAGE ACCOUNT?
If your shares are held by your broker, then in order to vote in person at
the Meeting, you will need to obtain a "Legal Proxy" from your broker and
present it to the Inspector of Election at the Meeting.
o THE PROPOSAL: ELECTION OF TRUSTEES
HOW ARE NOMINEES SELECTED?
The Board of Trustees of the Fund (the "Board" or the "Trustees") has a
Nominating Committee consisting of Harris J. Ashton, Robert F. Carlson, S.
Joseph Fortunato, Edith E. Holiday, Frank W.T. LaHaye, Gordon S. Macklin,
Chairman, Frank A. Olson, and John B. Wilson, none of whom is an
"interested person" of the Fund as defined by the Investment Company Act of
1940, as amended (the "1940 Act"). Trustees who are not interested persons
of the Fund are referred to as "Independent Trustees," and Trustees who are
interested persons of the Fund are referred to as "Interested Trustees."
The Nominating Committee is responsible for selecting candidates to serve as
Trustees and recommending such candidates (a) for selection and nomination as
Independent Trustees by the incumbent Independent Trustees and the full
Board; and (b) for selection and nomination as Interested Trustees by the
full Board. In considering a candidate's qualifications, the Nominating
Committee generally considers the potential candidate's educational
background, business or professional experience, and reputation. In addition,
the Nominating Committee has established as minimum qualifications for Board
membership as an Independent Trustee (1) that such candidate be independent
from relationships with the Fund's investment manager and other principal
service providers both within the terms and the spirit of the statutory
independence requirements specified under the 1940 Act, (2) that such
candidate demonstrate an ability and willingness to make the considerable
time commitment, including personal attendance at Board meetings, believed
necessary to his or her function as an effective Board member, and (3) that
such candidate have no continuing relationship as a director, officer or
board member of any investment company other than those within the Franklin
Templeton Investments fund complex.
When the Board has or expects to have a vacancy, the Nominating Committee
receives and reviews information on individuals qualified to be recommended
to the full Board as nominees for election as Trustees, including any
recommendations by "Qualifying Fund Shareholders" (as defined below). Such
individuals are evaluated based upon the criteria described above. To date,
the Nominating Committee has been able to identify, and expects to continue
to be able to identify, from its own resources an ample number of qualified
candidates. The Nominating Committee will, however, review recommendations
from Qualifying Fund Shareholders to fill vacancies on the Board if these
recommendations are submitted in writing and addressed to the Nominating
Committee at the Fund's offices and are presented with appropriate background
material concerning the candidate that demonstrates his or her ability to
serve as a Trustee, including as an Independent Trustee, of the Fund. A
Qualifying Fund Shareholder is a shareholder who (i) has continuously owned
of record, or beneficially through a financial intermediary, shares of the
Fund having a net asset value of not less than two hundred and fifty thousand
dollars ($250,000) during the twenty-four month period prior to submitting
the recommendation; and (ii) provides a written notice to the Nominating
Committee containing the following information: (a) the name and address of
the Qualifying Fund Shareholder making the recommendation; (b) the number of
shares of the Fund which are owned of record and beneficially by such
Qualifying Fund Shareholder and the length of time that such shares have been
so owned by the Qualifying Fund Shareholder; (c) a description of all
arrangements and understandings between such Qualifying Fund Shareholder and
any other person or persons (naming such person or persons) pursuant to which
the recommendation is being made; (d) the name, age, date of birth, business
address and residence address of the person or persons being recommended; (e)
such other information regarding each person recommended by such Qualifying
Fund Shareholder as would be required to be included in a proxy statement
filed pursuant to the proxy rules of the U.S. Securities and Exchange
Commission ("SEC") had the nominee been nominated by the Board; (f) whether
the shareholder making the recommendation believes the person recommended
would or would not be an "interested person" of the Fund, as defined in the
1940 Act; and (g) the written consent of each person recommended to serve as
a Trustee of the Fund if so nominated and elected/appointed.
The Nominating Committee may amend these procedures from time to time,
including the procedures relating to the evaluation of nominees and the
process for submitting recommendations to the Nominating Committee.
The Board has adopted and approved a revised formal written charter for the
Nominating Committee. A copy of the charter was attached as "Appendix A" to
the proxy statement for the 2005 Annual Shareholders' Meeting.
WHO ARE THE NOMINEES AND CURRENT MEMBERS OF THE BOARD OF TRUSTEES?
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. This year, the
terms of four Trustees expire. Charles B. Johnson, Frank W.T. LaHaye, Gordon
S. Macklin, and Frank A. Olson have been nominated for three-year terms, set
to expire at the 2009 Annual Meeting of Shareholders. These terms continue,
however, until successors are duly elected and qualified or until a Trustee's
resignation, retirement, death or removal. All of the nominees are currently
members of the Board and have previously been elected by shareholders, and
Charles B. Johnson is an Interested Trustee. In addition, all of the current
nominees and the Trustees are also directors and/or trustees of other
investment companies in Franklin Templeton Investments.
Pursuant to the Fund's Amended and Restated Agreement and Declaration of
Trust, two of the Trustees are to be elected solely by the holders of the
Preferred Shares, and the remaining Trustees are to be elected by the holders
of the outstanding Common Shares and Preferred Shares voting together as a
single class. This year Charles B. Johnson has been nominated to be elected
solely by the holders of the outstanding Preferred Shares.
Certain Trustees 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 owned approximately 17.5%
and 14.9%, respectively, of its outstanding shares as of June 30, 2006.
Resources, a global investment management organization operating as Franklin
Templeton Investments, is primarily engaged, through its 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). Charles B. Johnson, Chairman of the Board and
Trustee of the Fund, and Rupert H. Johnson, Jr., Senior Vice President and
Trustee of the Fund, who are brothers, are the father and uncle,
respectively, of Gregory E. Johnson, Vice President of the Fund.
Each nominee is currently available and has consented to serve if elected. If
any of the nominees should become unavailable, the persons named as proxies
in the proxy card will vote in their discretion for another person or persons
who may be nominated as Trustees.
Listed below, for each nominee and Trustee, is his or her name, age and
address, as well as position and length of service with the Fund, a brief
description of recent professional experience, the number of portfolios in
the Franklin Templeton Investments fund complex that he or she oversees, and
other directorships held.
NOMINEES FOR INDEPENDENT TRUSTEE TO SERVE UNTIL THE 2009 ANNUAL SHAREHOLDERS'
MEETING:
-----------------------------------------------------------------
NUMBER
OF
PORTFOLIOS
NAME, YEAR IN FUND
OF BIRTH AND LENGTH COMPLEX OTHER
ADDRESS OF TIME OVERSEEN DIRECTORSHIPS
POSITION SERVED BY BOARD HELD
MEMBER*
-----------------------------------------------------------------
Frank W.T. Trustee Since 118 Director, Center
LaHaye (1929) 2003 for Creative
One Franklin Land Recycling
Parkway (redevelopment).
San Mateo,
CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
General Partner, Las Olas L.P. (Asset Management); and
formerly, Chairman, Peregrine Venture Management Company
(venture capital).
-----------------------------------------------------------------
Gordon S. Trustee Since 143 Director,
Macklin 2003 MedImmune, Inc.
(1928) (biotechnology)
One Franklin and
Parkway Overstock.com
San Mateo, (Internet
CA 94403-1906 services); and
FORMERLY,
Director, MCI
Communication
Corporation
(subsequently
known as MCI
WorldCom, Inc.
and WorldCom,
Inc.)
(communications
services)
(1988-2002),
White Mountains
Insurance Group,
Ltd. (holding
company)
(1987-2004),
Spacehab, Inc.
(aerospace
services)
(1994-2003) and
Martek
Bioscience
Corporation
(1998-2006).
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director of various companies; Senior Business Advisor, Martek Biosciences
Corporation (research and development); and FORMERLY, Deputy Chairman, White
Mountains Insurance Group, Ltd. (holding company) (2001-2004); Chairman, White
River Corporation (financial services) (1993-1998) and Hambrecht & Quist Group
(investment banking) (1987-1992); and President, National Association of
Securities Dealers, Inc. (1970-1987).
-----------------------------------------------------------------
Frank A. Trustee Since 102 Director, Hess
Olson (1932) 2005 Corporation
One Franklin (formerly,
Parkway San Amerada Hess
Mateo, CA Corporation)
94403-1906 (exploration and
refining of oil and gas) and
Sentient Jet (private jet
service); and FORMERLY, Director,
Becton Dickinson and Company
(medical technology), Cooper
Industries, Inc. (electrical
products and tools and hardware),
Health Net, Inc. (formerly,
Foundation Health) (integrated
managed care), The Hertz
Corporation, Pacific Southwest
Airlines, The RCA Corporation,
Unicom (formerly, Commonwealth
Edison), UAL Corporation
(airlines) and White Mountains
Insurance Group, Ltd. (holding
company).
PRINCIPAL OCCUPATION DURING PAST 5 YEARS: Chairman Emeritus, The Hertz
Corporation (car rental) (since 2000) (Chairman of the Board (1980-2000) and
Chief Executive Officer (1977-1999)); and FORMERLY, Chairman of the Board,
President and Chief Executive Officer, UAL Corporation (airlines).
-----------------------------------------------------------------
NOMINEE FOR INTERESTED TRUSTEE*** TO SERVE UNTIL THE 2009 ANNUAL
SHAREHOLDERS' MEETING:
-----------------------------------------------------------------
NAME, YEAR POSITION LENGTH NUMBER OTHER
OF BIRTH AND OF TIME OF DIRECTORSHIPS
ADDRESS SERVED PORTFOLIOS HELD
IN FUND
COMPLEX
OVERSEEN
BY BOARD
MEMBER*
-----------------------------------------------------------------
**Charles B. Trustee and Since 143 None
Johnson Chairman of 2003
(1933) the Board
One Franklin
Parkway
San Mateo,
CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Chairman of the Board, Member - Office of the Chairman and
Director, Franklin Resources, Inc.; Vice President, Franklin
Templeton Distributors, Inc.; Director, Fiduciary Trust Company
International; and officer and/or director or trustee, as the
case may be, of some of the other subsidiaries of Franklin
Resources, Inc. and of 42 of the investment companies in
Franklin Templeton Investments.
-----------------------------------------------------------------
INDEPENDENT TRUSTEES SERVING UNTIL THE 2007 ANNUAL SHAREHOLDERS' MEETING:
-----------------------------------------------------------------
NAME, YEAR POSITION LENGTH NUMBER OTHER
OF BIRTH AND OF TIME OF DIRECTORSHIPS
ADDRESS SERVED PORTFOLIOS HELD
IN FUND
COMPLEX
OVERSEEN
BY BOARD
MEMBER*
-----------------------------------------------------------------
Harris J. Trustee Since 143 Director, Bar-S
Ashton (1932) 2003 Foods (meat
One Franklin packing company).
Parkway
San Mateo,
CA 94403-1906-
PRINCIPAL OCCUPATION DURING PAST 5 YEARS: Director of various companies; and
FORMERLY, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and
President, Chief Executive Officer and Chairman of the Board, General Host
Corporation (nursery and craft centers) (until 1998).
-----------------------------------------------------------------
Edith E. Trustee Since 139 Director, Hess
Holiday 2005 Corporation
(1952) (formerly,
One Franklin Amerada Hess
Parkway Corporation)
San Mateo, (exploration and
CA 94403-1906 refining of oil
and gas), H.J.
Heinz Company
(processed foods
and allied
products), RTI
International
Metals, Inc.
(manufacture and
distribution of
titanium),
Canadian
National Railway
(railroad) and
White Mountains
Insurance Group,
Ltd. (holding
company).
PRINCIPAL OCCUPATION DURING PAST 5 YEARS: Director or Trustee of various
companies and trusts; and 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).
-----------------------------------------------------------------
John B. Trustee Since 42 None
Wilson (1959) February
One Franklin 2006
Parkway
San Mateo,
CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President and Founder, Hyannis Port Capital, Inc. (real estate
and private equity investing); serves on private and non-profit
boards; and FORMERLY, Chief Operating Officer and Executive
Vice President, Gap, Inc. (retail) (1996-2000); Chief Financial
Officer and Executive Vice President - Finance and Strategy,
Staples, Inc. (office supplies) (1992-1996); Executive Vice
President - Corporate Planning, Northwest Airlines, Inc.
(airlines) (1990-1992); and Vice President and Partner, Bain &
Company (1986-1990).
-----------------------------------------------------------------
INDEPENDENT TRUSTEES SERVING UNTIL THE 2008 ANNUAL SHAREHOLDERS' MEETING:
-----------------------------------------------------------------
NAME, YEAR POSITION LENGTH NUMBER OTHER
OF BIRTH AND OF TIME OF DIRECTORSHIPS
ADDRESS SERVED PORTFOLIOS HELD
IN FUND
COMPLEX
OVERSEEN
BY BOARD
MEMBER*
-----------------------------------------------------------------
Robert F. Trustee Since 57 None
Carlson 2003
(1928)
One Franklin
Parkway
San Mateo,
CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS: Vice President, senior member and past
President, Board of Administration, California Public Employees Retirement
Systems (CALPERS); and FORMERLY, member and Chairman of the Board, Sutter
Community Hospitals; member, Corporate Board, Blue Shield of California; and
Chief Counsel, California Department of Transportation.
-----------------------------------------------------------------
S. Joseph Trustee Since 143 None
Fortunato 2003
(1932)
One Franklin
Parkway
San Mateo,
CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS: Attorney; and FORMERLY, member of the
law firm of Pitney, Hardin, Kipp & Szuch (until 2002) (Consultant (2003)).
-----------------------------------------------------------------
INTERESTED TRUSTEE*** SERVING UNTIL THE 2008 ANNUAL SHAREHOLDERS' MEETING:
-----------------------------------------------------------------
NAME, YEAR POSITION LENGTH NUMBER OTHER
OF BIRTH AND OF TIME OF DIRECTORSHIPS
ADDRESS SERVED PORTFOLIOS HELD
IN FUND
COMPLEX
OVERSEEN
BY BOARD
MEMBER*
-----------------------------------------------------------------
**Rupert H. Trustee and Since 124 None
Johnson, Jr. Senior Vice 2003
(1940) President
One Franklin
Parkway
San Mateo,
CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice Chairman, Member - Office of the Chairman and Director,
Franklin Resources, Inc.; Vice President and Director, Franklin
Templeton Distributors, Inc.; Director, Franklin Advisers,
Inc.; Senior Vice President, Franklin Advisory Services, LLC;
and officer and/or director or trustee, as the case may be, of
some of the other subsidiaries of Franklin Resources, Inc. and
of 45 of the investment companies in Franklin Templeton
Investments.
-----------------------------------------------------------------
*We base the number of portfolios on each separate series of the U.S. registered
investment companies within the Franklin Templeton Investments fund complex.
These portfolios have a common investment manager or affiliated investment
managers.
**Charles B. Johnson and Rupert H. Johnson, Jr. are considered to be interested
persons of the Trust as defined by the 1940 Act due to their positions as
officers and directors and major shareholders of Franklin Resources, Inc.
(Resources) which is the parent company of the Fund's investment manager.
***Elected solely by the holders of the Fund's outstanding Preferred Shares. All
other Trustees are elected by the holders of the Fund's outstanding Common
Shares and Preferred Shares voting together as a single class.
Note: Charles B. Johnson and Rupert H. Johnson, Jr. are brothers and the
father and uncle, respectively, of Gregory E. Johnson.
The following tables provide the dollar range of equity securities of the
Fund and of all funds overseen by the Trustees in the Franklin Templeton
Investments fund complex beneficially owned by the Board members as of June
30, 2006.
INDEPENDENT TRUSTEES
------------------------------------------------------------
AGGREGATE DOLLAR
RANGE OF EQUITY
SECURITIES IN ALL
DOLLAR RANGE OF FUNDS OVERSEEN BY
NAME OF BOARD EQUITY THE BOARD MEMBER
MEMBER SECURITIES IN THE IN THE FRANKLIN
FUND TEMPLETON FUND
COMPLEX
------------------------------------------------------------
Harris J. Ashton None Over $100,000
------------------------------------------------------------
Robert F. Carlson None Over $100,000
------------------------------------------------------------
S. Joseph Fortunato None Over $100,000
------------------------------------------------------------
Edith E. Holiday None Over $100,000
------------------------------------------------------------
Frank W.T. LaHaye None Over $100,000
------------------------------------------------------------
Gordon S. Macklin None Over $100,000
------------------------------------------------------------
Frank A. Olson None Over $100,000
------------------------------------------------------------
John B. Wilson None Over $100,000
------------------------------------------------------------
INTERESTED TRUSTEES
------------------------------------------------------------
AGGREGATE DOLLAR
RANGE OF EQUITY
SECURITIES IN
ALL FUNDS
OVERSEEN BY THE
DOLLAR RANGE OF BOARD MEMBER IN
NAME OF BOARD EQUITY SECURITIES IN THE FRANKLIN
MEMBER THE FUND TEMPLETON FUND
COMPLEX
------------------------------------------------------------
Charles B. Johnson None Over $100,000
------------------------------------------------------------
Rupert H. Johnson, None Over $100,000
Jr.
------------------------------------------------------------
HOW OFTEN DO THE TRUSTEES MEET AND WHAT ARE THEY PAID?
The role of the Trustees is to provide general oversight of the Fund's
business, and to ensure that the Fund is operated for the benefit of all
shareholders. The Trustees anticipate meeting at least nine times during the
current fiscal year to review the operations of the Fund and the Fund's
investment performance. The Trustees also oversee the services furnished to
the Fund by Franklin Advisers, Inc., the Fund's investment manager (the
"Investment Manager"), and various other service providers. The Fund pays the
Independent Trustees $1,160 per quarter plus $400 per Board meeting attended.
Effective as of April 1, 2005, the Independent Trustees are paid an
additional flat fee of $5,000 as a general retainer, a portion of which is
allocated to the Fund. Trustees who serve on the Audit Committee of the Fund
and other funds in Franklin Templeton Investments are paid an aggregate per
diem compensation of $2,000, a portion of which is allocated to the Fund, for
attending a meeting of the Audit Committee on a day when a Board meeting is
not held. Members of a committee are not separately compensated for any
committee meeting held on the day of a Board meeting. Fees payable by the
Fund to certain Trustees are subject to reduction resulting from fee caps
adopted by the boards in Franklin Templeton Investments limiting the total
amount of fees payable to trustees who serve on other boards within Franklin
Templeton Investments. Effective as of April 1, 2005, Mr. LaHaye, who serves
as Chairman of the Audit Committee of the Fund, as well as the Audit
Committees of certain other Franklin funds, receives an additional flat fee
of $20,000 per year, a portion of which is allocated to the Fund.
During the fiscal year ended March 31, 2006, there were nine meetings of the
Board, two meetings of the Audit Committee, and nine meetings of the
Nominating Committee. Each Trustee then in office attended at least 75% of
the total number of meetings of the Board and the total number of meetings
held by all committees of the Board on which the Trustee served.
The Fund does not currently have a formal policy regarding Trustees'
attendance at the annual shareholders' meeting. None of the Trustees attended
the Fund's last annual meeting held on September 22, 2005.
Certain Trustees and officers of the Fund are shareholders of Resources and
may receive indirect remuneration due to their participation in the
management fees and other fees received by the Investment Manager and its
affiliates from the funds in Franklin Templeton Investments. The Investment
Manager or its affiliates pay the salaries and expenses of the officers. No
pension or retirement benefits are accrued as part of Fund expenses.
The table below indicates the total fees paid to the Independent Trustees by
the Fund individually and by all of the funds in Franklin Templeton
Investments. These Trustees also serve or have served as directors or
trustees of other funds in Franklin Templeton Investments, many of which hold
meetings at different dates and times. The Trustees and the Fund's management
believe that having the same individuals serving on the boards of many of the
funds in Franklin Templeton Investments enhances the ability of each fund to
obtain, at a relatively modest cost to each separate fund, the services of
high caliber, experienced and knowledgeable Independent Trustees who can more
effectively oversee the management of the funds.
Total Fees
Aggregate Received Number of Boards
Compensation from within Franklin
From the Franklin Templeton Investments
Name of Trustee Fund* Templeton on which
Investments* Each Trustee Serves***
------------------------------------------------------------------
Harris J. Ashton $ 6,702.59 $404,038 42
Robert F. Carlson $10,142.06 $128,795 15
S. Joseph Fortunato $ 6,019.37 $406,036 43
Edith E. Holiday $ 4,346.50 $403,749 41
Frank W.T. LaHaye $ 7,974.16 $221,070 26
Gordon S. Macklin $ 6,051.71 $379,002 42
Frank A. Olson $ 5,509.86 $231,486 29
John B. Wilson**** $ 781.80 N/A 13
*For the fiscal year ended March 31, 2006.
**For the calendar year ended December 31, 2005.
***We base the number of boards on the number of U.S. registered investment
companies in the Franklin Templeton Investments fund complex. This number
does not include the total number of series or funds within each investment
company for which the Board members are responsible.
****Trustee since February 2006.
Board members historically have followed a policy of having substantial
investments in one or more of the funds in Franklin Templeton Investments, as
is consistent with their individual financial goals. In February 1998, this
policy was formalized through adoption of a requirement that each board
member invest one-third of the fees received for serving as a director or
trustee of a Templeton fund in shares of one or more Templeton funds and
one-third of the fees received for serving as a director or trustee of a
Franklin fund in shares of one or more Franklin funds until the value of such
investments equals or exceeds five times the annual fees paid to such board
member. Investments in the name of family members or entities controlled by a
board member constitute fund holdings of such board member for purposes of
this policy, and a three-year phase-in period applies to such investment
requirements for newly elected board members.
WHO ARE THE EXECUTIVE OFFICERS OF THE FUND?
Officers of the Fund are appointed by the Trustees and serve at the pleasure
of the Board. Listed below, for each Executive Officer, are his or her name,
year of birth, address, a brief description of his or her recent professional
experience, and his or her position and length of service with the Fund:
-----------------------------------------------------------
NAME, YEAR OF BIRTH POSITION LENGTH OF TIME
AND ADDRESS SERVED
-----------------------------------------------------------
Charles B. Johnson Trustee and Since 2003
(1933) Chairman of the
One Franklin Parkway Board
San Mateo, CA
94403-1906
-----------------------------------------------------------
Please refer to the table "Nominee for Interested Trustee
to serve until the 2009 Annual Shareholders' Meeting" for
additional information about Mr. Charles B. Johnson.
-----------------------------------------------------------
Rupert H. Johnson, Trustee and Since 2003
Jr. (1940) Senior Vice
One Franklin Parkway President
San Mateo, CA
94403-1906
-----------------------------------------------------------
Please refer to the table "Interested Trustee serving
until the 2008 Annual Shareholders' Meeting" for
additional information about Mr. Rupert H. Johnson, Jr.
-----------------------------------------------------------
Harmon E. Burns (1945) Vice President Since 2003
One Franklin Parkway
San Mateo, CA
94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice Chairman, Member - Office of the Chairman and
Director, Franklin Resources, Inc.; Vice President and
Director, Franklin Templeton Distributors, Inc.;
Executive Vice President, Franklin Advisers, Inc.; and
officer and/or director or trustee, as the case may be,
of some of the other subsidiaries of Franklin Resources,
Inc. and of 45 of the investment companies in Franklin
Templeton Investments.
-----------------------------------------------------------
James M. Davis Chief Compliance Since 2004
(1952) Officer
One Franklin Parkway
San Mateo, CA
94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director, Global Compliance, Franklin Resources, Inc.;
officer of 47 of the investment companies in Franklin
Templeton Investments; and FORMERLY, Director of
Compliance, Franklin Resources, Inc. (1994-2001).
-----------------------------------------------------------
Laura Fergerson (1962) Treasurer Since 2004
One Franklin Parkway
San Mateo,
CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS: Vice President, Franklin Templeton
Services, LLC; officer of 31 of the investment companies in Franklin Templeton
Investments; and FORMERLY, Director and member of Audit and Valuation
Committees, Runkel Funds, Inc. (2003-2004); Assistant Treasurer of most of the
investment companies in Franklin Templeton Investments (1997-2003); and Vice
President, Franklin Templeton Services, LLC (1997-2003).
-----------------------------------------------------------
Jimmy D. Gambill Senior Vice Since 2003
(1947) President and
500 East Broward Chief Executive
Blvd. Officer -Finance
Suite 2100 Fort and
Lauderdale, FL Administration
33394-3091
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President, Franklin Templeton Services, LLC; Senior Vice
President, Templeton Worldwide, Inc.; and officer of 47
of the investment companies in Franklin Templeton
Investments.
-----------------------------------------------------------
David P. Goss (1947) Vice President Since 2003
One Franklin Parkway
San Mateo, CA
94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Associate General Counsel, Franklin Templeton
Investments; officer and director of one of the
subsidiaries of Franklin Resources, Inc.; and officer of
47 of the investment companies in Franklin Templeton
Investments.
-----------------------------------------------------------
Barbara J. Green Vice President Since 2003
(1947)
One Franklin Parkway
San Mateo, CA
94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice President, Deputy General Counsel and Secretary,
Franklin Resources, Inc.; Secretary and Senior Vice
President, Templeton Worldwide, Inc.; Secretary, Franklin
Advisers, Inc., Franklin Advisory Services, LLC, Franklin
Investment Advisory Services, LLC, Franklin Mutual
Advisers, LLC, Franklin Templeton Alternative Strategies,
Inc., Franklin Templeton Investor Services, LLC, Franklin
Templeton Services, LLC, Franklin Templeton Distributors,
Inc., Templeton Investment Counsel, LLC, and
Templeton/Franklin Investment Services, Inc.; and officer
of some of the other subsidiaries of Franklin Resources,
Inc. and of 47 of the investment companies in Franklin
Templeton Investments; and FORMERLY, Deputy Director,
Division of Investment Management, Executive Assistant
and Senior Advisor to the Chairman, Counselor to the
Chairman, Special Counsel and Attorney Fellow, U.S.
Securities and Exchange Commission (1986-1995); Attorney,
Rogers & Wells (until 1986); and Judicial Clerk, U.S.
District Court (District of Massachusetts) (until 1979).
-----------------------------------------------------------
Gregory E. Johnson Vice President Since 2003
(1961)
One Franklin Parkway
San Mateo, CA
94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President and Chief Executive Officer, Franklin
Resources, Inc.; Chairman of the Board and Director,
Franklin Templeton Distributors, Inc.; President,
Franklin Agency, Inc.; Vice President and Director,
Franklin Advisers, Inc.; Director, Fiduciary Trust
Company International; and officer and/or director of
some of the other subsidiaries of Franklin Resources, Inc.
-----------------------------------------------------------
Christopher J. President and Since 2003
Molumphy (1962) Chief Executive
One Franklin Parkway Officer -
San Mateo, CA Investment
94403-1906 Management
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Executive Vice President, Franklin Advisers, Inc.; and
officer of six of the investment companies in Franklin
Templeton Investments.
-----------------------------------------------------------
Galen G. Vetter (1951) Chief Financial Since 2004
500 East Broward Officer and
Blvd. Chief
Suite 2100 Fort Accounting
Lauderdale, FL Officer
33394-3091
PRINCIPAL OCCUPATION DURING PAST 5 YEARS: Senior Vice President, Franklin
Templeton Services, LLC; officer of 47 of the investment companies in Franklin
Templeton Investments; and FORMERLY, Managing Director, RSM McGladrey, Inc.
(1999-2004); and Partner, McGladrey & Pullen, LLP (1979-1987 and 1991-2004).
----------------------------------------------------------
Karen L. Skidmore Vice President Vice President
(1952) and Secretary since March 2006
One Franklin Parkway and Secretary
San Mateo, CA since April 2006
94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS: Senior Associate General Counsel,
Franklin Templeton Investments; Vice President and Secretary, Templeton Funds
Annuity Company; and officer of 31 of the investment companies in Franklin
Templeton Investments.
----------------------------------------------------------
Craig S. Tyle (1960) Vice President Since October
One Franklin Parkway 2005
San Mateo, CA
94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
General Counsel and Executive Vice President, Franklin
Resources, Inc.; officer of 47 of the investment
companies in Franklin Templeton Investments; and
FORMERLY, Partner, Shearman & Sterling, LLP (2004-2005);
and General Counsel, Investment Company Institute (ICI)
(1997-2004).
----------------------------------------------------------
o ADDITIONAL INFORMATION ABOUT THE FUND
THE INVESTMENT MANAGER. The Investment Manager is Franklin Advisers, Inc., a
California corporation, whose principal address is One Franklin Parkway, San
Mateo, CA 94403. The Investment Manager is a wholly-owned subsidiary of
Resources.
THE ADMINISTRATOR. The administrator of the Fund is Franklin Templeton
Services, LLC ("FT Services"), whose principal address is also One Franklin
Parkway, San Mateo, CA 94403. Under an agreement with the Fund, FT Services
performs certain administrative functions, such as portfolio recordkeeping,
for the Fund. FT Services is an indirect wholly-owned subsidiary of
Resources.
THE TRANSFER AGENT AND CUSTODIAN. The transfer agent, registrar and dividend
disbursement agent for the Common Shares, and shareholder servicing agent
for the Preferred Shares, is PFPC, Inc., 4400 Computer Drive, Westborough,
MA 01850.
Bank of New York, Mutual Funds Division, 90 Washington Street, New York, NY
10286, acts as custodian of the Fund's securities and other assets and serves
as auction agent, transfer agent, registrar, dividend paying agent and
redemption agent for the Preferred Shares.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS. The Fund's last audited
financial statements and annual report for the fiscal year ended March 31,
2006, are 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,
LLC, P.O. Box 997151, Sacramento, CA 95899-9983.
PRINCIPAL SHAREHOLDERS. As of July 21, 2006, the Fund had 26,739,511.167
Common Shares outstanding, 2,534 Preferred Shares Series M, 2,533 Preferred
Shares Series W and 2,533 Preferred Shares Series F outstanding, and total
net assets of $372,886,785.03. The Fund's Common Shares are listed on the
American Stock Exchange ("AMEX") (symbol: FTF). 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 July 21, 2006, there were no
other entities holding beneficially or of record more than 5% of the Fund's
outstanding Common Shares or Preferred Shares, except as shown in the
following table:
PREFERRED SHARES:
----------------------------------------------------------
NAME AND ADDRESS OF AMOUNT AND PERCENT OF
BENEFICIAL OWNER NATURE OF OUTSTANDING
BENEFICIAL PREFERRED SHARES
OWNERSHIP*
----------------------------------------------------------
Citigroup Global 87,925,000 46.3
Markets, Inc.
390 Greenwich Street
5th Floor
New York, NY 10013
----------------------------------------------------------
UBS Securities LLC 34,450,000 18.1
1285 Avenue of the
Americas
New York, NY 10019
----------------------------------------------------------
Wachovia Securities, 24,575,000 12.9
Inc.
Riverfront Plaza
3rd Floor
901 East Byrd Street
Richmond, VA 23219
----------------------------------------------------------
Merrill Lynch, 22,950,000 12.1
Pierce, Fenner &
Smith Inc.
250 Vesey Street
7th Floor
New York, NY
10281-1205
----------------------------------------------------------
Oppenheimer & Co. 20,100,000 10.6
Inc.
125 Broad Street
New York, NY 10004
----------------------------------------------------------
* Combined holdings of Series M, Series W and Series F Preferred Shares. The
nature of beneficial ownership is shared voting and dispositive power.
In addition, to the knowledge of the Fund's management, as of July 21, 2006,
no Trustee of the Fund owned 1% or more of the outstanding Common Shares or
Preferred Shares of the Fund, and the Officers and Trustees of the Fund
owned, as a group, less than 1% of the outstanding Common shares or Preferred
shares of the Fund.
SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. U.S. securities
laws require that the Fund's Trustees, officers and shareholders owning more
than 10% of outstanding Common Shares and Preferred Shares, as well as
affiliated persons of its Investment Manager, report their ownership of the
Fund's Common Shares and Preferred Shares and any changes in that ownership.
Specific due dates for these reports have been established and the Fund is
required to report in this proxy statement any failure to file by these dates
during the fiscal year ended March 31, 2006. All of the filing dates of these
reports were met. In making this disclosure, the Fund relied upon the written
representations of the persons affected and copies of their relevant filings.
CONTACTING THE BOARD OF TRUSTEES.If a shareholder wishes to send a
communication to the Board, such correspondence should be in writing and
addressed to the Board of Trustees at the Fund's offices, One Franklin
Parkway, San Mateo, California 94403. The correspondence will then be given
to the Board for its review and consideration.
o AUDIT COMMITTEE
The Board has a standing Audit Committee currently consisting of Messrs.
LaHaye (Chairman), Carlson, Olson and Wilson, all of whom are Independent
Trustees and also are considered to be "independent" as that term is defined
by the AMEX's listing standards. The Fund's Audit Committee is responsible
for the appointment, compensation and retention of the Fund's independent
registered public accounting firm (auditors), including evaluating their
independence, recommending the selection of the Fund's auditors to the full
Board, and meeting with such auditors to consider and review matters relating
to the Fund's financial reports and internal accounting.
SELECTION OF INDEPENDENT AUDITORS. The Audit Committee and the Board have
selected the firm of PricewaterhouseCoopers LLP ("PwC") as auditors of the
Fund for the current fiscal year. Representatives of PwC are not expected to
be present at the Meeting, but will have the opportunity to make a statement
if they wish, and will be available should any matter arise requiring their
presence.
AUDIT FEES. The aggregate fees paid to PwC for professional services rendered
by PwC for the audit of the Fund's annual financial statements or for
services that are normally provided by PwC in connection with statutory and
regulatory filings or engagements were $28,091 for the fiscal year ended
March 31, 2006 and $23,225 for the fiscal year ended March 31, 2005.
AUDIT-RELATED FEES. The aggregate fees paid to PwC for assurance and related
services rendered by PwC to the Fund that are reasonably related to the
performance of the audit of the Fund's financial statements and are not
reported under "Audit Fees" above were $10,500 for the fiscal year ended
March 31, 2006 and $10,000 for the fiscal year ended March 31, 2005. The
services for which these fees were paid included attestation services.
There were no fees paid to PwC for assurance and related services rendered by
PwC to the Investment Manager and any entity controlling, controlled by or
under common control with the Investment Manager that provides ongoing
services to the Fund that are reasonably related to the performance of the
audit of their financial statements for the fiscal years ended March 31, 2006
and March 31, 2005.
TAX FEES. There were no fees paid to PwC for professional services rendered
by PwC to the Fund for tax compliance, tax advice and tax planning for the
fiscal years ended March 31, 2006 and March 31, 2005.
There were no fees paid to PwC for professional services rendered by PwC to
the Investment Manager and any entity controlling, controlled by or under
common control with the Investment Manager that provides ongoing services to
the Fund for tax compliance, tax advice and tax planning for the fiscal years
ended March 31, 2006 and March 31, 2005.
ALL OTHER FEES. There were no fees paid to PwC for products and services
rendered by PwC to the Fund not reported in previous paragraphs for the
fiscal years ended March 31, 2006 and March 31, 2005.
There were no fees paid to PwC for products and services rendered by PwC to
the Investment Manager and any entity controlling, controlled by or under
common control with the Investment Manager that provides ongoing services to
the Fund not reported in previous paragraphs for the fiscal years ended March
31, 2006 and March 31, 2005.
AGGREGATE NON-AUDIT FEES. The aggregate fees paid to PwC for non-audit
services to the Fund, to the Investment Manager and any entity controlling,
controlled by, or under common control with the Investment Manager that
provides ongoing services to the Fund were $10,500 for the fiscal year ended
March 31, 2006 and $10,000 for the fiscal year ended March 31, 2005.
The Audit Committee has determined that the provision of the non-audit
services that were rendered to the Investment Manager and certain entities
controlling, controlled by, or under common control with the Investment
Manager is compatible with maintaining PwC's independence.
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES. As of the date of this
proxy statement, the Audit Committee has not adopted pre-approval policies
and procedures. As a result, all such services described above and provided
by PwC must be directly pre-approved by the Audit Committee.
AUDIT COMMITTEE REPORT. The Board has adopted and approved a revised formal
written charter for the Audit Committee, which sets forth the Audit
Committee's responsibilities. A copy of the charter was attached to the proxy
statement for the 2005 Annual Shareholders' Meeting.
As required by the charter, the Audit Committee reviewed the Fund's audited
financial statements and met with management, as well as with PwC, the Fund's
auditors, to discuss the financial statements.
The Audit Committee received the written disclosures and the letter from PwC
required by Independence Standards Board Standard No. 1. The Audit Committee
also received the report of PwC regarding the results of their audit. In
connection with their review of the financial statements and the auditors'
report, the members of the Audit Committee discussed with a representative of
PwC, the independence of PwC, as well as the following: the auditors'
responsibilities in accordance with generally accepted auditing standards;
the auditors' responsibilities for information prepared by management that
accompanies the Fund's audited financial statements and any procedures
performed and the results; the initial selection of, and whether there were
any changes in, significant accounting policies or their application;
management's judgments and accounting estimates; whether there were any
significant audit adjustments; whether there were any disagreements with
management; whether there was any consultation with other accountants;
whether there were any major issues discussed with management prior to the
auditors' retention; whether the auditors encountered any difficulties in
dealing with management in performing the audit; and the auditors' judgments
about the quality of the Fund's accounting principles.
Based on its review and discussions with management and the Fund's auditors,
the Audit Committee did not become aware of any material misstatements or
omissions in the financial statements.
Accordingly, the Audit Committee recommended to the Board of Trustees that
the audited financial statements be included in the Fund's Annual Report to
Shareholders for
the fiscal year ended March 31, 2006 for filing with the U.S. Securities
and Exchange Commission.
AUDIT COMMITTEE
Frank W.T. LaHaye (Chairman)
Robert F. Carlson
Frank A. Olson
John B. Wilson
FURTHER INFORMATION ABOUT VOTING AND THE MEETING
SOLICITATION OF PROXIES. Your vote is being solicited by the Board. 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 their proxies. In
addition, the Fund may retain a professional proxy solicitation firm to
assist with any necessary solicitation of proxies. The Fund expects that the
solicitation would be primarily by mail, but may also include telephone,
telecopy, electronic or oral solicitations. If the Fund does not receive your
proxy by a certain time you may receive a telephone call from a proxy
soliciting agent asking you to vote. If professional proxy solicitors are
retained, it is expected that soliciting fees would be approximately $5,000,
plus expenses. The Fund does not reimburse Trustees and officers of the Fund,
or regular employees and agents of the Investment Manager, involved in the
solicitation of proxies. The Fund intends to pay all costs associated with
the solicitation and the Meeting.
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 Proposal 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. 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
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 or withhold authority on any item are all
counted as shares present and entitled to vote for purposes of determining
whether the required quorum of shares exists. However, because the Proposal
is the only matter currently expected to be presented at the Meeting, the
Fund does not anticipate that there will be any broker non-votes or
abstentions.
REQUIRED VOTE. Provided that a quorum is present, Trustees must be elected by
not less than a plurality of the votes cast of the shares entitled to vote
thereon. All voting rights are non-cumulative, which means that the holders
of more than 50% of the shares voting for the election of Trustees can elect
100% of such Trustees if they choose to do so.
Abstentions and broker non-votes will be treated as votes present at the
meeting, but will not be treated as votes cast. Abstentions and broker
non-votes, therefore, will not be counted for purposes of obtaining approval
of the Proposal. As discussed above, the Fund does not anticipate there will
be any broker non-votes or abstentions.
ADJOURNMENT. Whether or not a quorum is present at the Meeting, the Meeting
may be adjourned from time to time for any reason whatsoever by vote of the
holders of shares entitled to vote holding not less than a majority of the
shares present in person or by proxy at the Meeting, or by the Chairman of
the Board, the president of the Fund in the absence of the Chairman or
certain other authorized officers. The persons named as proxies will vote in
their discretion on questions of adjournment those shares for which proxies
have been received.
SHAREHOLDER PROPOSALS. The Fund anticipates that its next annual meeting will
be held on or about September 26, 2007. Shareholder proposals to be presented
at the next annual meeting must be received at the Fund's offices, One
Franklin Parkway, San Mateo, California 94403, Attention: Secretary no later
than April 23, 2007, in order to be considered for inclusion in the Fund's
proxy statement and proxy card relating to that meeting and presented at that
meeting.
A shareholder of the Fund who has not submitted a written proposal for
inclusion in the Fund's proxy statement by April 23, 2007, as described
above, may nonetheless present a proposal at the Fund's 2007 Annual Meeting
of Shareholders if such shareholder notifies the Fund of such proposal in
writing at the Fund's offices not earlier than April 29, 2007 and not later
than May 29, 2007. If a shareholder fails to give notice within these dates,
then the matter shall not be eligible for consideration at the shareholders'
meeting. If, notwithstanding the effect of the foregoing notice provisions, a
shareholder proposal is acted upon at the 2007 Annual Meeting of
Shareholders, the persons designated as proxy holders for proxies solicited
by the Board for the 2007 Annual Meeting of Shareholders may exercise
discretionary voting power with respect to any shareholder proposal not
received by the Fund at the Fund's offices by July 7, 2007. A shareholder
proposal may be presented at the 2007 Annual Meeting of Shareholders only if
such proposal concerns a matter that may be properly brought before the
meeting under applicable federal proxy rules and state law.
In addition to the requirements set forth above, a shareholder must comply
with the following:
1. A shareholder intending to present a proposal must (i) be entitled to
vote at the meeting; (ii) comply with the notice procedures set forth in this
proxy statement; and (iii) have been a shareholder of record at the time the
shareholder's notice was received by the Fund.
2. Each notice regarding nominations for the election of Trustees shall
set forth (i) the name, age, business address and, if known, residence
address of each nominee proposed in such notice; (ii) the principal
occupation or employment of each such nominee; (iii) the number of shares of
the Fund which are beneficially owned by each such nominee; (iv) whether such
shareholder believes each such nominee is or will be an "interested person"
of the Fund (as defined in the 1940 Act); (v) the written and signed consent
of each such person to be nominated, to be named as a nominee and to serve as
a trustee if elected; and (vi) all such other information regarding each such
nominee as would have been required to be included in a proxy statement filed
pursuant to the proxy rules of the SEC had each such nominee been nominated
by the Trustees of the Fund. In addition, the shareholder making such
nomination shall promptly provide any other information reasonably requested
by the Fund.
3. Each notice regarding business proposals shall set forth as to each
matter: (i) a brief description of the business desired to be brought before
the meeting and the reasons for conducting such business at the meeting; (ii)
the name and address, as they appear on the Fund's books, of the shareholder
proposing such business; (iii) the number of shares of the Fund which are
beneficially owned by the shareholder; (iv) any material interest of the
shareholder in such business; and (v) all such other information regarding
each such matter that would have been required to be included in a proxy
statement filed pursuant to the proxy rules of the SEC, had each such matter
been proposed by the Board of Trustees of the Fund.
Submission of a proposal by a shareholder does not guarantee that the
proposal will be included in the Fund's proxy statement or presented at the
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 in accordance with the views of management.
By order of the Board of Trustees,
Karen L. Skidmore
VICE PRESIDENT AND SECRETARY
Dated: August 18, 2006
San Mateo, California
PROXY
FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
ANNUAL SHAREHOLDERS' MEETING - SEPTEMBER 21, 2006
The undersigned hereby revokes all previous proxies for his or her shares and
appoints Craig S. Tyle, Barbara J. Green, David P. Goss and Karen L. Skidmore,
and each of them, proxies of the undersigned with full power of substitution to
vote all shares of Franklin Templeton Limited Duration Income Trust (the
"Trust") that the undersigned is entitled to vote at the Franklin Templeton
Limited Duration Income Trust Annual Shareholders' Meeting to be held at One
Franklin Parkway, San Mateo, CA 94403-1906 at 2:00 p.m. Pacific time on
September 21, 2006, including any postponements or adjournments thereof, upon
any matters that may properly be acted upon at the meeting.
THE BOARD OF TRUSTEES OF FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
SOLICITS THIS PROXY. IT WILL BE VOTED AS SPECIFIED ON THE REVERSE. IF NO
SPECIFICATION IS MADE, THIS PROXY SHALL BE VOTED FOR THE ELECTION OF NOMINEES
FOR TRUSTEE. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING TO BE VOTED
ON, THE PROXY HOLDERS WILL VOTE, ACT AND CONSENT ON THOSE MATTERS IN ACCORDANCE
WITH THE VIEWS OF MANAGEMENT. MANAGEMENT IS NOT AWARE OF ANY SUCH MATTERS.
IMPORTANT: PLEASE SEND IN YOUR PROXY TODAY.
YOU ARE URGED TO DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING IN PERSON. THIS WILL SAVE THE EXPENSE OF
FOLLOW-UP LETTERS TO SHAREHOLDERS WHO HAVE NOT RESPONDED.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
[X] Please mark
votes as in
this example.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL.
Proposal: Election of Three Nominees for Trustee by Holders of Common Shares.
NOMINEES: (01) Frank W.T. LaHaye, (02) Gordon S. Macklin, (03) Frank A. Olson
FOR WITHHOLD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
[ ]
-------------------------------------------------------------------------------
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided above).
MARK HERE IF YOU PLAN TO ATTEND THE MEETING. [ ]
Note: Please sign exactly as your name
appears on the proxy. If signing
for estates, trusts or corporations,
your title or capacity should be
stated. If shares are held jointly, each
holder must sign.
Signature: _____________________________ Date:_________________
Signature:_____________________________ Date:________________
PROXY
FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
ANNUAL SHAREHOLDERS' MEETING - SEPTEMBER 21, 2006
The undersigned hereby revokes all previous proxies for his or her shares and
appoints Craig S. Tyle, Barbara J. Green, David P. Goss and Karen L. Skidmore,
and each of them, proxies of the undersigned with full power of substitution to
vote all shares of Franklin Templeton Limited Duration Income Trust (the
"Trust") that the undersigned is entitled to vote at the Franklin Templeton
Limited Duration Income Trust Annual Shareholders' Meeting to be held at One
Franklin Parkway, San Mateo, CA 94403-1906 at 2:00 p.m. Pacific time on
September 21, 2006, including any postponements or adjournments thereof, upon
any matters that may properly be acted upon at the meeting.
THE BOARD OF TRUSTEES OF FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
SOLICITS THIS PROXY. IT WILL BE VOTED AS SPECIFIED ON THE REVERSE. IF NO
SPECIFICATION IS MADE, THIS PROXY SHALL BE VOTED FOR THE ELECTION OF THE
NOMINEES FOR TRUSTEE. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING TO
BE VOTED ON, THE PROXY HOLDERS WILL VOTE, ACT AND CONSENT ON THOSE MATTERS IN
ACCORDANCE WITH THE VIEWS OF MANAGEMENT. MANAGEMENT IS NOT AWARE OF ANY SUCH
MATTERS.
IMPORTANT: PLEASE SEND IN YOUR PROXY TODAY.
YOU ARE URGED TO DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING IN PERSON. THIS WILL SAVE THE EXPENSE OF
FOLLOW-UP LETTERS TO SHAREHOLDERS WHO HAVE NOT RESPONDED.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
[X] Please mark votes
as in this example.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL.
Proposal: Election of Trustees by Holders of Preferred Shares.
NOMINEES: (01) Frank W.T. LaHaye, (02) Gordon S. Macklin, (03) Frank A. Olson,
(04) Charles B. Johnson*
*THE HOLDERS OF COMMON SHARES MAY NOT VOTE FOR THIS NOMINEE.
FOR WITHHOLD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
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(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided above).
MARK HERE IF YOU PLAN TO ATTEND THE MEETING. [ ]
Note: Please sign exactly as your name
appears on the proxy. If signing
for estates, trusts or corporations,
your title or capacity should be
stated. If shares are held jointly, each
holder must sign.
Signature: _____________________________ Date:_________________
Signature:_____________________________ Date:_________________