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-12
FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
IMPORTANT SHAREHOLDER INFORMATION
We have enclosed important information about the Annual Shareholders' Meeting of
Franklin Templeton Limited Duration Income Trust (the "Fund") scheduled for
Thursday, September 24, 2009 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 the Fund. If you complete, sign and return the proxy card, we'll vote it as
you indicated. If you simply sign, date and return the proxy card, but do not
specify a vote on the proposal listed thereon, your proxy will be voted FOR the
election of the nominees to the position of Trustee (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 IN
THE ENCLOSED POSTAGE-PAID ENVELOPE 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
(800) DIAL BEN(R)/(800) 342-5236.
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TELEPHONE AND INTERNET VOTING
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------------------------------------------------------------------------
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 2009 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 24, 2009
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 and Frank A. Olson as
Trustees of the Fund, to hold office for the terms specified.
The Board of Trustees has fixed July 22, 2009, 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, 2009
------------------------------------------------------------------------
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
SHAREHOLDERS' MEETING TO BE HELD ON SEPTEMBER 24, 2009.
------------------------------------------------------------------------
THE FUND'S NOTICE OF 2009 ANNUAL SHAREHOLDERS' MEETING AND PROXY STATEMENT ARE
AVAILABLE ON THE INTERNET AT WWW.PROXYONLINE.COM/FRANKLINTEMPLETON.
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 (the "Board" or 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 22, 2009, 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 18, 2009.
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 for the terms specified. One of
the nominees will be voted on solely by holders of Preferred Shares, and the
remaining two 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. Also, in order to revoke your
proxy, you may need to forward your written revocation or a later-dated proxy
card to your broker rather than to the Fund.
o THE PROPOSAL: ELECTION OF TRUSTEES
HOW ARE NOMINEES SELECTED?
The Board of Trustees of the Fund has a Nominating Committee consisting
of Harris J. Ashton, Robert F. Carlson, Sam Ginn, Edith E. Holiday,
Frank W.T. LaHaye, Frank A. Olson, Larry D. Thompson, 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 and the rules thereunder; (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 U.S. registered
investment company other than those within the Franklin Templeton Investments
fund complex or a closed-end business development company primarily investing in
non-public entities.
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 formal written charter for the
Nominating Committee. A copy of the charter was attached as "Exhibit A" to
the proxy statement for the 2008 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 three Trustees expire. Charles B. Johnson, Frank W.T. LaHaye and
Frank A. Olson have been nominated for three-year terms, set to expire at the
2012 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, whichever is earlier. 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 within the Franklin Templeton
Investments fund complex.
Pursuant to the Fund's Amended and Restated Agreement and Declaration of
Trust, two of the Fund's Trustees are to be elected solely by the holders of
the outstanding 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 by the holders of the outstanding Preferred Shares.
The Interested 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 16.5%
and 16.1%, respectively, of its outstanding shares as of June 30, 2009.
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("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, year of birth
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 2012 ANNUAL SHAREHOLDERS'
MEETING:
-----------------------------------------------------------------
NUMBER
OF
PORTFOLIOS
IN FUND
COMPLEX
NAME, YEAR LENGTH OVERSEEN OTHER
OF BIRTH AND OF TIME BY BOARD DIRECTORSHIPS
ADDRESS POSITION SERVED MEMBER* HELD
-----------------------------------------------------------------
Frank W.T. Trustee Since 112 None
LaHaye (1929) 2003
One Franklin
Parkway
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).
-----------------------------------------------------------------
Frank A. Trustee Since 135 Hess Corporation
Olson (1932) 2005 (exploration and
One Franklin refining of oil
Parkway San and gas) and
Mateo, CA Sentient Jet
94403-1906 (private jet
service).
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 2012 ANNUAL SHAREHOLDERS'
MEETING:
-----------------------------------------------------------------
NUMBER
OF
PORTFOLIOS
IN FUND
COMPLEX
NAME, YEAR LENGTH OVERSEEN OTHER
OF BIRTH AND OF TIME BY BOARD DIRECTORSHIPS
ADDRESS POSITION SERVED MEMBER* HELD
-----------------------------------------------------------------
***Charles Trustee and Since 135 None
B. 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.; Director, Templeton Worldwide, 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 41 of the investment companies in Franklin
Templeton Investments.
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INDEPENDENT TRUSTEES SERVING UNTIL THE 2010 ANNUAL SHAREHOLDERS'
MEETING:
-----------------------------------------------------------------
NUMBER
OF
PORTFOLIOS
IN FUND
COMPLEX
NAME, YEAR LENGTH OVERSEEN OTHER
OF BIRTH AND OF TIME BY BOARD DIRECTORSHIPS
ADDRESS POSITION SERVED MEMBER* HELD
-----------------------------------------------------------------
Harris J. Trustee Since 135 Bar-S Foods
Ashton (1932) 2003 (meat packing
One Franklin 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 135 Hess Corporation
Holiday 2005 (exploration and
(1952) refining of oil
One Franklin and gas), H.J.
Parkway Heinz Company
San Mateo, (processed foods
CA 94403-1906 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. Lead Trustee 112 None
Wilson (1959) Independent since 2006
One Franklin Trustee and Lead
Parkway Independent
San Mateo, Trustee
CA 94403-1906 since 2008
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); Senior Vice President - Corporate
Planning, Northwest Airlines, Inc. (airlines) (1990-1992); and Vice President
and Partner, Bain & Company (consulting firm) (1986-1990).
-----------------------------------------------------------------
INDEPENDENT TRUSTEES SERVING UNTIL THE 2011 ANNUAL SHAREHOLDERS'
MEETING:
-----------------------------------------------------------------
NUMBER
OF
PORTFOLIOS
IN FUND
COMPLEX
NAME, YEAR LENGTH OVERSEEN OTHER
OF BIRTH AND OF TIME BY BOARD DIRECTORSHIPS
ADDRESS POSITION SERVED MEMBER* HELD
-----------------------------------------------------------------
Robert F. Trustee Since 112 None
Carlson 2003
(1928)
One Franklin
Parkway
San Mateo,
CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Retired; and FORMERLY, Vice President, senior member and President, Board of
Administration, California Public Employees Retirement Systems (CALPERS)
(1971-2008); member and Chairman of the Board, Sutter Community Hospitals;
member, Corporate Board, Blue Shield of California; and Chief Counsel,
California Department of Transportation.
-----------------------------------------------------------------
Sam Ginn Trustee Since 112 Chevron
(1937) 2007 Corporation
One Franklin (global energy
Parkway company) and ICO
San Mateo, Global
CA 94403-1906 Communications
(Holdings) Limited (satellite
company).
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Private investor; and FORMERLY, Chairman of the Board, Vodafone AirTouch, PLC
(wireless company); Chairman of the Board and Chief Executive Officer, AirTouch
Communications (telephone holding company) (1993-1998) and Pacific Telesis
Groups (cellular communications) (1988-1994).
-----------------------------------------------------------------
Larry D. Trustee Since 143 None
Thompson 2007
(1945)
One Franklin
Parkway
San Mateo,
CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Vice President - Government Affairs, General Counsel and Secretary,
PepsiCo, Inc. (consumer products); and FORMERLY, Director, Delta Airlines
(aviation) (2003-2005) and Providian Financial Corp. (credit card provider)
(1997-2001); Senior Fellow of The Brookings Institution (2003-2004); Visiting
Professor, University of Georgia School of Law (2004); and Deputy Attorney
General, U.S. Department of Justice (2001-2003).
-----------------------------------------------------------------
INTERESTED TRUSTEE** SERVING UNTIL THE 2011 ANNUAL SHAREHOLDERS'
MEETING:
-----------------------------------------------------------------
NUMBER
OF
PORTFOLIOS
IN FUND
COMPLEX
NAME, YEAR LENGTH OVERSEEN OTHER
OF BIRTH AND OF TIME BY BOARD DIRECTORSHIPS
ADDRESS POSITION SERVED MEMBER* HELD
-----------------------------------------------------------------
***Rupert H. Trustee and Since 52 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.; Director, Franklin Advisers, Inc. and Templeton Worldwide, 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 43 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.
**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.
***Charles B. Johnson and Rupert H. Johnson, Jr. are considered to be interested
persons of the Trust under the federal securities laws due to their positions as
officers and directors and major shareholders of Franklin Resources, Inc., which
is the parent company of the Fund's investment manager.
Note 1: Charles B. Johnson and Rupert H. Johnson, Jr. are brothers and
the father and uncle, respectively, of Gregory E. Johnson.
Note 2: Officer information is current as of the date of this report. It is
possible that after this date, information about officers may change.
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 trustee of a Franklin fund
(excluding committee fees) in shares of one or more Franklin funds (which may
include the Fund) until the value of
such investments equals or exceeds five times the annual retainer and regular
Board meeting 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. In implementing such policy, a board member's
holdings existing on February 27, 1998 were valued as of such date with
subsequent investments valued at cost.
The following tables provide the dollar range of equity securities beneficially
owned by the board members on June 30, 2009.
INDEPENDENT BOARD MEMBERS
-------------------------------------------------------------
AGGREGATE
DOLLAR RANGE
OF EQUITY
SECURITIES IN
ALL FUNDS
OVERSEEN BY
THE BOARD
DOLLAR RANGE OF MEMBER IN THE
EQUITY FRANKLIN
SECURITIES IN THE TEMPLETON FUND
NAME OF BOARD MEMBER FUND COMPLEX
-------------------------------------------------------------
Harris J. Ashton None Over $100,000
-------------------------------------------------------------
Robert F. Carlson None Over $100,000
-------------------------------------------------------------
Sam Ginn None Over $100,000
-------------------------------------------------------------
Edith E. Holiday None Over $100,000
-------------------------------------------------------------
Frank W.T. LaHaye None Over $100,000
-------------------------------------------------------------
Frank A. Olson None Over $100,000
-------------------------------------------------------------
Larry D. Thompson None Over $100,000
-------------------------------------------------------------
John B. Wilson None Over $100,000
-------------------------------------------------------------
INTERESTED BOARD MEMBERS
-------------------------------------------------------------
AGGREGATE
DOLLAR RANGE
OF EQUITY
SECURITIES IN
ALL FUNDS
OVERSEEN BY
THE BOARD
DOLLAR RANGE OF MEMBER IN THE
EQUITY FRANKLIN
SECURITIES IN THE TEMPLETON FUND
NAME OF BOARD MEMBER FUND COMPLEX
-------------------------------------------------------------
Charles B. Johnson None Over $100,000
-------------------------------------------------------------
Rupert H. Johnson, Jr. None Over $100,000
-------------------------------------------------------------
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's Independent Trustees constitute the sole
Independent Trustees of 27 funds in the Franklin Templeton Investments fund
complex, for which each Independent Trustee currently is paid a $232,000 annual
retainer, together with a $7,000 per meeting fee for attendance at board
meetings, a portion of which is allocated to the Fund. To the extent held,
compensation may also be paid for attendance at specially held Board meetings.
The Fund's lead independent trustee is paid an annual supplemental retainer of
$25,000 for service to such investment companies, a portion of which is
allocated to the Fund. Trustees who serve on the Audit Committee of the Fund and
such other funds receive a flat fee of $3,000 per Committee meeting attended in
person and $2,000 per telephonic meeting, a portion of which is allocated to the
Fund. John B. Wilson, who serves as chairman of the Audit Committee of the Fund
and such other funds, receives an additional fee of $40,000 per year, a portion
of which is allocated to the Fund. Members of a committee are not separately
compensated for any committee meeting held on the day of a Board meeting.
Independent Trustees are also reimbursed for expenses incurred in connection
with attending Board meetings.
During the fiscal year ended March 31, 2009, there were nine meetings of the
Board, six meetings of the Audit Committee, and one meeting 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 25, 2008.
Certain Interested 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 bring their
experience and talents to, and effectively oversee the management of, several
funds.
NUMBER OF
BOARDS
WITHIN
TOTAL FRANKLIN
COMPENSATION TEMPLETON
FROM FRANKLIN INVESTMENTS
TEMPLETON FUND COMPLEX
AGGREGATE INVESTMENTS ON WHICH
COMPENSATION FUND DIRECTOR
NAME OF TRUSTEE FROM THE FUND(1) COMPLEX(2) SERVES(3)
------------------------------------------------------------------
Harris J. Ashton $ 2,688 $517,760 41
Robert F. Carlson 4,702 318,718 27
Sam Ginn 2,688 300,303 27
Edith E. Holiday 2,688 514,000 41
Frank W.T. LaHaye 4,704 321,000 27
Frank A. Olson 2,753 493,000 41
Larry D. Thompson 2,688 486,765 43
John B. Wilson 2,849 387,060 27
(1) Compensation received for the fiscal year ended March 31, 2009.
(2) Compensation received for the calendar year ended December 31,
2008.
(3) 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. Franklin Templeton
Investments currently includes 45 U.S. registered investment companies, with
approximately 149 U.S. based funds or series.
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 AND POSITION LENGTH OF TIME SERVED
ADDRESS
-----------------------------------------------------------------
**Charles B. Johnson Trustee and Since 2003
(1933) Chairman of
One Franklin Parkway the Board
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Please refer to the table "Nominee for Interested Trustee to serve until the
2012 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
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Please refer to the table "Interested Trustee to serve until the 2011 Annual
Shareholders' Meeting" for additional information about Mr. Rupert H. Johnson,
Jr.
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James M. Davis Chief Since 2004
(1952) Compliance
One Franklin Parkway Officer
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director, Global Compliance, Franklin Resources, Inc.; officer of some of the
other subsidiaries of Franklin Resources, Inc. and of 45 of the investment
companies in Franklin Templeton Investments; and FORMERLY, Director of
Compliance, Franklin Resources, Inc. (1994-2001).
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Laura F. Fergerson Chief Since March 2009
(1962) Executive
One Franklin Parkway Officer
San Mateo, -Finance and
CA 94403-1906 Administration
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice President, Franklin Templeton Services, LLC; officer of 46 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).
-----------------------------------------------------------------
Gaston Gardey (1967) Treasurer, Since March 2009
One Franklin Parkway Chief
San Mateo, Financial
CA 94403-1906 Officer and
Chief
Accounting
Officer
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director, Fund Accounting, Franklin Templeton Investments; and officer of 27 of
the investment companies in Franklin Templeton Investments.
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Aliya S. Gordon (1973) Vice Since March 2009
One Franklin Parkway President
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Associate General Counsel, Franklin Templeton Investments; officer of 45 of the
investment companies in Franklin Templeton Investments; and FORMERLY, Litigation
Associate, Steefel, Levitt & Weiss, LLP (2000-2004).
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David P. Goss (1947) Vice Since 2003
One Franklin Parkway President
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Associate General Counsel, Franklin Templeton Investments; officer and/or
director, 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.
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Steven J. Gray (1955) Vice Since August 2009
One Franklin Parkway President
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Associate General Counsel, Franklin Templeton Investments; Vice
President, Franklin Templeton Distributors, Inc.; and officer of 45 of the
investment companies in Franklin Templeton Investments.
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Gregory E. Johnson (1961) Vice President Since 2003
One Franklin Parkway
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director, President and Chief Executive Officer, Franklin Resources, Inc.;
President, Templeton Worldwide, Inc.; Director, Templeton Asset Management Ltd.;
and officer and/or director or trustee, as the case may be, of some of the other
subsidiaries of Franklin Resources, Inc. and of 32 of the investment companies
in Franklin Templeton Investments.
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Christopher J. Molumphy President and Since 2003
(1962) Chief
One Franklin Parkway Executive
San Mateo, CA 94403-1906 Officer -
Investment
Management
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director and Executive Vice President, Franklin Advisers, Inc.; Executive Vice
President, Franklin Templeton Institutional, LLC; and officer of some of the
other subsidiaries of Franklin Resources, Inc. and of six of the investment
companies in Franklin Templeton Investments.
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Robert C. Rosselot Vice President Since August 2009
(1960)
500 East Broward Blvd.
Suite 2100
Fort Lauderdale,
FL 33394-3091
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Associate General Counsel, Franklin Templeton Investments; Assistant
Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton
Investment Counsel, LLC; Vice President, Secretary and Trust Officer, Fiduciary
Trust International of the South; and officer of 45 of the investment companies
in Franklin Templeton Investments.
-----------------------------------------------------------------
Karen L. Skidmore (1952) Vice Since 2006
One Franklin Parkway President and
San Mateo, CA 94403-1906 Secretary
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Associate General Counsel, Franklin Templeton Investments; and officer of
45 of the investment companies in Franklin Templeton Investments.
-----------------------------------------------------------------
Craig S. Tyle (1960) Vice Since 2005
One Franklin Parkway President
San Mateo, CA 94403-1906
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
General Counsel and Executive Vice President, Franklin Resources, Inc.; officer
of some of the other subsidiaries of Franklin Resources, Inc. and of 45 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).
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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 PNC Global Investment Servicing, 4400 Computer Drive,
Westborough, MA 01581.
The Bank of New York Mellon Global Corporate Trust, 101 Barclay Street, 7W, 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, 2009,
are available free of charge. To obtain a copy, please call (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 22, 2009, the Fund had 25,773,772 Common
Shares, 1,200 Preferred Shares Series M, 1,200 Preferred Shares Series W and
1,200 Preferred Shares Series F outstanding, and total net assets of
$322,970,966. The Fund's Common Shares are listed on the NYSE Amex Equities
(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 22, 2009,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 tables:
PREFERRED SHARES:
-------------------------------------------------------------
NAME AND ADDRESS OF AMOUNT AND PERCENT OF
BENEFICIAL OWNER NATURE OF OUTSTANDING
BENEFICIAL PREFERRED SHARES
OWNERSHIP(1)
-------------------------------------------------------------
Citigroup Global
Markets, Inc. 1,686 40.72%
390 Greenwich Street
5th Floor
New York, NY 10013
-------------------------------------------------------------
Oppenheimer & Co. Inc.
125 Broad Street 645 15.58%
New York, NY 10004
-------------------------------------------------------------
UBS Securities LLC
1285 Avenue of the 632 15.27%
Americas
New York, NY 10019
-------------------------------------------------------------
Wells Fargo Advisors,
LLC 463 11.18%
1 North Jefferson
St. Louis, MO 63103
-------------------------------------------------------------
(1) Combined holdings of Series M, Series W and Series F Preferred Shares. The
nature of beneficial ownership is shared voting and dispositive power.
COMMON SHARES:
-------------------------------------------------------------
NAME AND ADDRESS OF AMOUNT AND PERCENT OF
BENEFICIAL OWNER NATURE OF OUTSTANDING
BENEFICIAL PREFERRED SHARES
OWNERSHIP
-------------------------------------------------------------
First Trust Portfolios 2,561,708(1) 9.6%(2)
L.P.
First Trust Advisors
L.P.
The Charger Corporation
1001 Warrenville Road
Lisle, IL 60532
-------------------------------------------------------------
Morgan Stanley
1585 Broadway 1,653,476(3) 6.2%(4)
New York, NY 10036
Van Kampen Funds Inc.
522 Fifth Avenue
New York, NY 10036
-------------------------------------------------------------
(1) The nature of beneficial ownership is shared voting and dispositive power,
as reported on Schedule 13G, filed with the U.S. Securities and Exchange
Commission ("SEC") as of December 31, 2008.
(2) As reported on Schedule 13G, filed with the SEC as of December 31, 2008.
(3)The nature of beneficial ownership is sole voting and dispositive power by
each of Morgan Stanley (parent holding company) and Van Kampen Funds Inc.
(broker dealer and wholly-owned subsidiary), as reported on Schedule 13G,
jointly filed with the SEC as of December 31, 2008.
(4) As reported on Schedule 13G, filed with the SEC as of December 31, 2008.
In addition, to the knowledge of the Fund's management, as of July 22, 2009, 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 law
requires 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, 2009. The Fund believes that all Section 16(a) filing
requirements applicable to its Trustees, officers and 10% shareholders were
complied with during the fiscal year ended March 31, 2009.
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.
AUDIT COMMITTEE
The Board has a standing Audit Committee currently consisting of Messrs.
Carlson, LaHaye, Olson and Wilson (Chairman), all of whom are Independent
Trustees and also are considered to be "independent" as that term is defined by
NYSE Amex Equities' 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 auditing.
SELECTION OF 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 $43,629 for the fiscal year ended March 31, 2009 and $43,615
for the fiscal year ended March 31, 2008.
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 $12,600 for the fiscal year ended March 31, 2009
and
$11,903 for the fiscal year ended March 31, 2008. The services for which 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.
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 ("tax services")
for the fiscal years ended March 31, 2009 and March 31, 2008.
The aggregate 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 were $4,000 for the fiscal year
ended March 31, 2009 and $0 for the fiscal year ended March 31, 2008. The
services for which these fees were paid included tax compliance and advice.
ALL OTHER FEES. The aggregate fees paid to PwC for products and services
rendered by PwC to the Fund not reported in previous paragraphs were $265 for
the fiscal year ended March 31, 2009 and $0 for the fiscal year ended March 31,
2008. The services for which these fees were paid included review of materials
provided to the Fund Board in connection with the investment management contract
renewal process.
The aggregate 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
other than services reported in previous paragraphs were $283,812 for the fiscal
year ended March 31, 2009 and $0 for the fiscal year ended March 31, 2008. The
services for which these fees were paid included review of materials provided to
the Fund Board in connection with the investment management contract renewal
process.
The Fund's Audit Committee is directly responsible for approving the services to
be provided by the auditors, including:
(i) pre-approval of all audit and audit related services;
(ii) pre-approval of all non-audit related services to be provided to the
Fund by the auditors;
(iii) pre-approval of all non-audit related services to be provided by the
auditors to the Fund, to the Investment Manager or to any entity
that controls, is controlled by or is under common control with the
Investment Manager and that provides ongoing services to the Fund
where the non-audit services relate directly to the operations or
financial reporting of the Fund; and
(iv) establishment by the Audit Committee, if deemed necessary or
appropriate, as an alternative to committee pre-approval of services
to be provided by the auditors, as required by paragraphs (ii) and
(iii) above, of policies and procedures to permit such services to
be pre-approved by other means, such as through establishment of
guidelines or by action of a designated member or members of the
committee; provided the policies and procedures are detailed as to
the particular service and the committee is informed of each
service and such policies and procedures do not include delegation
of audit committee responsibilities, as contemplated under the
Securities Exchange Act of 1934, to management; subject, in the case
of (ii) through (iv), to any waivers, exceptions or exemptions that
may be available under applicable law or rules.
None of the services provided to the Fund described in the preceding paragraphs
(other than under "Audit Fees" above) were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
AGGREGATE NON-AUDIT FEES. The aggregate non-audit fees paid to PwC for services
rendered by PwC to the Fund and 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 $300,677 for the fiscal year
ended March 31, 2009 and $11,903 for the fiscal year ended March 31, 2008.
The Audit Committee has considered whether the provision of the non-audit
services that were rendered 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 were not pre-approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining PwC's independence.
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 is attached as "Appendix A" to this
proxy statement.
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 that the audited
financial statements be included in the Fund's Annual Report to Shareholders for
the fiscal year ended March 31, 2009 for filing with the SEC.
AUDIT COMMITTEE
Robert F. Carlson
Frank W.T. LaHaye
Frank A. Olson
John B. Wilson (Chairman)
FURTHER INFORMATION ABOUT VOTING AND THE MEETING
SOLICITATION OF PROXIES. Your vote is being solicited by the Board. The cost of
soliciting these proxies, including the fees of any proxy soliciting agent, is
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 the
broker-dealers are permitted 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 standing for election 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 23, 2010. 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
20, 2010, 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 20, 2010, as described above, may
nonetheless present a proposal at the Fund's 2010 Annual Meeting of Shareholders
if such shareholder notifies the Fund of such proposal in writing at the Fund's
offices not earlier than April 26, 2010 and not later than May 26, 2010. 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 2010 Annual Meeting of Shareholders, the persons designated as proxy
holders for proxies solicited by the Board for the 2010 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 5,
2010. A shareholder proposal may be presented at the 2010 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, 2009
San Mateo, California
"Appendix A"
AUDIT COMMITTEE CHARTER
I. THE COMMITTEE.
The Audit Committee ("Committee") is a committee of, and established by,
the Board of Directors/Trustees of the Fund (the "Board"). The Committee shall
consist of such number of members as set by the Board from time to time and its
members shall be selected by the Board. The Committee shall be comprised
entirely of "independent" members, as defined in Item 3(a)(2) of SEC Form N-CSR
("Disinterested Board members"). Members shall be financially literate. At least
one member of the Committee shall be designated by the Board as an "audit
committee financial expert," as defined in Item 3(b) of SEC Form N-CSR, unless
the Board determines that the Fund does not have an audit committee financial
expert on the Committee.
II. PURPOSES OF THE COMMITTEE.
The function of the Audit Committee is to be directly responsible for
overseeing the Fund's accounting and auditing processes, which shall include the
appointment, compensation, retention and oversight of the work of the Fund's
independent auditors ("auditors") engaged (including resolution of disagreements
between management and the auditors regarding financial reporting) for the
purpose of preparing or issuing an audit report or performing other audit,
review or attest services for the Fund. It is management's responsibility to
maintain appropriate systems for accounting and internal controls. It is the
auditors' responsibility to plan and carry out a proper audit and to report
directly to the Committee.
Consistent with such allocation of functions, the purposes of the
Committee are:
(a) To oversee the Fund's accounting and financial reporting policies and
practices and its internal controls, and to obtain, where it deems appropriate,
reports on internal controls of service providers to the Fund;
(b) To oversee the quality and objectivity of the Fund's financial
statements and the independent audit thereof;
(c) To act as a liaison between the auditors and the Board; and
(d) To consider such other matters as it deems appropriate in carrying out
its purpose and any other matters that may be assigned to it by the Board.
III. POWERS AND DUTIES.
The Committee shall have the following powers and duties to carry out its
purposes:
(a) To select the auditors, subject to approval both by the Board and by
a separate vote of the Disinterested Board members, and, in connection
therewith, to evaluate the independence of the auditors in accordance with
applicable law.
(b) To be directly responsible for approving the services to be provided
by, and the compensation of, the auditors, including:
(i) pre-approval of all audit and audit related services;
(ii) pre-approval of all non-audit related services to be provided to
the Fund by the auditors;
(iii) pre-approval of all non-audit related services to be provided
by the auditors to the Fund's investment adviser or to any entity
that controls, is controlled by or is under common control with the
Fund's investment adviser and that provides ongoing services to the
Fund where the non-audit services relate directly to the operations
or financial reporting of the Fund; and
(iv) establishment by the Committee, if deemed necessary or
appropriate, as an alternative to Committee pre-approval of services
to be provided by the auditors, as required by paragraphs (ii) and
(iii) above, of policies and procedures to permit such services to be
pre-approved by other means, such as through establishment of
guidelines or by action of a designated member or members of the
Committee; provided the policies and procedures are detailed as to
the particular service and the Committee is informed of each service
and such policies and procedures do not include delegation of audit
committee responsibilities, as contemplated under the Securities
Exchange Act of 1934, to management; subject, in the case of (ii)
through (iv), to any waivers, exceptions or exemptions that may be
available under applicable law or rules.
(c) To meet with the auditors, including private meetings, as necessary
to (i) review the arrangements for and scope of the annual audit and any
special audits; (ii) discuss any matters or concerns relating to the Fund's
financial statements, including any recorded and/or unrecorded adjustments to
such statements recommended by the auditors, or other results of audits;
(iii) consider the auditors' comments with respect to the Fund's financial
policies, procedures and internal controls and management's responses
thereto, and (iv) to review the form of opinion the auditors propose to
render.
(d) To receive and consider reports from the auditors:
(i) as required by generally accepted accounting standards; and
(ii) annually and by update as required by SEC Regulation S-X,
regarding: (w) all critical accounting policies and practices of
the Fund to be used; (x) alternative treatments within generally
accepted accounting principles for policies and practices related
to material items that have been discussed with management of the
Fund, including ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred by the
auditors; (y) other material written communications between the
auditors and management of the Fund, such as any management letter
or schedule of unadjusted differences; and (z) all non-audit
services provided to any entity in an investment company complex,
as defined in SEC Regulation S-X, that were not pre-approved by the
Committee pursuant to SEC Regulation S-X.
(e) To consider the effect upon the Fund of any changes in accounting
principles or practices proposed by management or the auditors.
(f) To investigate improprieties or suspected improprieties in Fund
operations.
(g) In considering the independence of the auditors, to request from the
auditors a written statement, and other reports as necessary, describing all
relationships between the auditors and the Fund, the Fund's investment
adviser and service providers, and other entities advised or serviced by,
including any entities controlling, controlled by or under common control
with, the investment adviser or any other service providers to the Fund; to
obtain and consider periodic reports from the auditors regarding whether the
provision of non-audit services is compatible with maintaining the auditor's
independence; and to request from the auditors a certificate that they are
independent auditors under the Federal securities laws and are in compliance
with all standards adopted by the Independence Standards Board.
(h) To review the experience and qualifications of the senior members of
the auditors' team and the quality control procedures of the auditors.
(i) To require that the auditors regularly provide timely information to
the Committee with respect to new rules and pronouncements by applicable
regulatory and accounting standards agencies, along with an explanation of
how such developments may affect the Fund's financial statements and
accounting principles and practices.
(j) To review, at such times and in the manner deemed appropriate by the
Committee, the results of the annual audit and financial statements, and the
report of the auditors' audit of the Fund's annual financial statements,
including footnotes and any significant audit findings.
(k) To consider management's evaluation of the Fund's disclosure
controls and procedures in connection with certifications of the Fund's Chief
Executive Officer - Finance and Administration and Chief Financial Officer
concerning (i) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Fund's ability to record,
process, summarize and report financial data and have identified for the
Fund's auditors any material weaknesses in internal controls; and (ii) any
fraud, whether or not material, that involves management or other employees
who have a significant role in the Fund's internal controls, and for any
other purposes the Committee deems appropriate.
IV. OTHER FUNCTIONS AND PROCEDURES OF THE COMMITTEE.
(a) The Committee shall meet at least twice each year or more
frequently, in open or executive sessions. The Committee shall meet as
frequently as circumstances require with (i) the auditors as provided in III
(c) above; and (ii) management's internal audit department to review and
discuss internal audit functions and reports. The Committee may invite
members of management, the auditors, counsel, advisers and others to attend
its meetings as it deems appropriate. The Committee shall have separate
sessions with the auditors, management and others, as and when it deems
appropriate.
(b) The Committee shall establish procedures for (i) the receipt,
retention and treatment of complaints received by the Fund or the Fund's
adviser regarding accounting, internal accounting controls, or accounting
matters; and (ii) the confidential, anonymous submission by employees of the
Fund or the Fund's adviser of concerns regarding questionable accounting or
auditing matters.
(c) The Committee shall have the authority to engage special counsel,
experts and advisers as and when it determines necessary to carry out its
duties and the Fund must provide for appropriate funding, as determined by
the Committee, for payment of (i) compensation to any auditors engaged for
the purpose of preparing or issuing an audit report or performing other
audit, review or attest services for the Fund; (ii) compensation to any
advisers employed by the Committee; and (iii) ordinary administrative
expenses of the Committee that are necessary or appropriate in carrying out
its duties.
(d) The Committee shall have unrestricted access to the Fund's
management and management of the Fund's adviser, including, but not limited
to, their chief executive officer(s), chief financial officer(s), internal
auditors and any other executives and financial officers.
(e) The Committee shall report its activities to the Board and make such
recommendations as the Committee may deem necessary or appropriate.
(f) The Committee shall review this Charter annually, or more frequently
if it chooses, and recommend any changes to the Board.
(g) The Chair of the Committee shall meet periodically on an
informal basis with the Chairpersons of the Audit Committees of other Funds
within the Franklin/Templeton/Mutual Series complex to share information and
discuss items of mutual interest and shall report back to the Committee on
any issues of substance discussed at such periodic meetings. In addition, the
Committee shall meet jointly with Audit Committees of other Funds within the
Franklin/Templeton/Mutual Series complex as may be appropriate to attend
presentations and review proposals and other matters of common concern to all
such Audit Committees.
ADDITIONAL STATEMENT FOR CLOSED-END FUNDS ONLY
The Committee shall comply with rules of the New York Stock Exchange, Inc.
and the U.S. Securities and Exchange Commission applicable to closed-end funds,
including (i) the preparation of the Audit Committee Disclosure Report required
to be included in the Fund's annual proxy statement; and (ii) the review and
discussion of Fund financial statements and management policies in accordance
with applicable Corporate Governance Rules of the New York Stock Exchange, Inc.
Reviewed and Approved by Audit Committees February 24, 2009
PROXY - FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
------------------------------------------------------------------------
ANNUAL SHAREHOLDERS' MEETING - SEPTEMBER 24, 2009
PROXY SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND
The undersigned hereby revokes all previous proxies for his or her shares of
Franklin Templeton Limited Duration Income Trust (the "Fund") and appoints Craig
S. Tyle, 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 the Fund that
the undersigned is entitled to vote at the Fund's Annual Shareholders' Meeting
(the "Meeting") to be held at One Franklin Parkway, Building 920, San Mateo, CA
94403-1906 at 2:00 p.m., Pacific time, on September 24, 2009, including any
postponements or adjournments thereof, upon the matter set forth on the reverse
side, and instructs them to vote upon any other matters that may properly be
acted upon at the Meeting.
THE BOARD OF TRUSTEES OF THE FUND 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 FOR THE TERMS SPECIFIED IN THE PROXY
STATEMENT. 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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
------------------------------------------------------------------------
SEE REVERSE SIDE
------------------------------------------------------------------------
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE UPPER
PORTION IN THE ENCLOSED ENVELOPE.
------------------------------------------------------------------------
ANNUAL MEETING PROXY CARD
PREFERRED
------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
WILL BE VOTED "FOR" THE PROPOSAL.
Please mark your votes as indicated in this example.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE BELOW PROPOSAL.
A. ELECTION OF TRUSTEES
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL.
1. Proposal: Election of Three Nominees for Trustees by Holders of
Preferred Shares.
FOR WITHHOLD
01 - Charles B. Johnson* [ ] [ ]
02 - Frank W.T. LaHaye [ ] [ ]
03 - Frank A. Olson [ ] [ ]
Mark here if you plan to attend the Meeting. [ ]
*THE HOLDERS OF COMMON SHARES MAY NOT VOTE FOR THIS NOMINEE.
B. AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR
YOUR INSTRUCTIONS TO BE EXECUTED.
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, any one holder must sign.
SIGNATURE
---------------------------------
SIGNATURE (JOINT OWNERS)
---------------------------------
DATE (MM/DD/YYYY) PLEASE PRINT DATE BELOW
---------------------------------
PROXY - FRANKLIN TEMPLETON LIMITED DURATION INCOME TRUST
------------------------------------------------------------------------------
ANNUAL SHAREHOLDERS' MEETING - SEPTEMBER 24, 2009
PROXY SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND
The undersigned hereby revokes all previous proxies for his or her shares of
Franklin Templeton Limited Duration Income Trust (the "Fund") and appoints Craig
S. Tyle, 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 the Fund that
the undersigned is entitled to vote at the Fund's Annual Shareholders' Meeting
(the "Meeting") to be held at One Franklin Parkway, Building 920, San Mateo, CA
94403-1906 at 2:00 p.m., Pacific time, on September 24, 2009, including any
postponements or adjournments thereof, upon the matter set forth on the reverse
side, and instructs them to vote upon any other matters that may properly be
acted upon at the Meeting.
THE BOARD OF TRUSTEES OF THE FUND 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 FOR THE TERMS SPECIFIED IN THE PROXY
STATEMENT. 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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
------------------------------------------------------------------------------
SEE REVERSE SIDE
------------------------------------------------------------------------------
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE UPPER PORTION IN THE
ENCLOSED ENVELOPE.
------------------------------------------------------------------------------
ANNUAL MEETING PROXY CARD
------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
WILL BE VOTED "FOR" THE PROPOSAL.
Please mark your votes as |
indicated in this
example.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE BELOW PROPOSAL.
A. ELECTION OF TRUSTEES
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL.
1. Proposal: Election of Two Nominees for Trustee by Holders of Common
Shares.
FOR WITHHOLD
01 - Frank W.T. LaHaye [ ] [ ]
02 - Frank A. Olson [ ] [ ]
Mark here if you plan to attend the Meeting. [ ]
B. AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR
YOUR INSTRUCTIONS TO BE EXECUTED.
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, any one holder must sign.
SIGNATURE
---------------------------------
SIGNATURE (JOINT OWNERS)
---------------------------------
DATE (MM/DD/YYYY) PLEASE PRINT DATE BELOW
---------------------------------