N-CSR: Certified annual shareholder report of registered management investment companies filed on Form N-CSR
Published on March 11, 2005
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08025
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Global Income Fund, Inc.
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(Exact name of registrant as specified in charter)
11 Hanover Square, New York, NY 10005
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(Address of principal executive offices) (Zip code)
Thomas B. Winmill, President
11 Hanover Square
New York, NY 10005
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(Name and address of agent for service)
Registrant's telephone number, including area code: 1-212-344-6310
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Date of fiscal year end: 12/31
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Date of reporting period: 1/1/04 - 12/31/04
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policy making roles.
Item 1. Report to Shareholders
GLOBAL INCOME [LOGO OF GLOBAL INCOME FUND]
FUND
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ANNUAL REPORT
December 31, 2004
American Stock
Exchange Symbol:
GIF
11 Hanover Square
New York, NY 10005
1-800-278-4353
www.globalincomefund.net
COUNTRY ALLOCATION
[CHART APPEARS HERE]
Germany 18.46%
United Kingdom 11.15%
United States 10.84%
Netherlands 9.89%
France 7.99%
Supranational/Other 7.59%
Australia 6.47%
Austria 4.17%
Canada 4.17%
Sweden 4.07%
Denmark 3.93%
Japan 3.91%
Cyprus 1.97%
Italy 1.97%
Hungary 1.95%
Korea 1.47%
PORTFOLIO ANALYSIS
Currency Diversification Ratings
U.S. Dollar 23% AAA 43%
Euro 57% AA 9%
British Pound 16% A 41%
Australian Dollar 2% BBB 5%
98% [LESSER THAN] BBB 0%
NR 0%
98%
Above are unaudited approximate percentages of total net assets, and may not add
up to 100%, due to leverage or other assets, rounding, and other factors.
American Stock
GLOBAL INCOME FUND Exchange Symbol: GIF
11 Hanover Square, New York, NY 10005
www.globalincomefund.net
January 28, 2005
Fellow Shareholders:
It is a pleasure to submit this 2004 Annual Report for Global Income Fund,
and to welcome our new shareholders who find attractive the Fund's quality
approach to global income investing. Global Income Fund invests primarily in
investment grade fixed income securities issued by governments and corporations
throughout the world.
In 2004, the Fund had a market total return on the American Stock Exchange
of 3.45% on a net asset value total return of 3.57%. With a 19.50% market total
return in the second half of the year, long term shareholders who stood fast in
the face of market volatility were well rewarded, particularly those who
increased their investment through the Fund's rights offering which concluded in
June 2004. As a reminder, in the Fund's rights offering, which was almost three
times oversubscribed, the Fund issued 1,745,315 additional shares of common
stock at a price of $4.05, which compares with a current price of $4.70.
Interestingly, for the three years ended December 31, 2004, the Fund had a
market total return of 23.64%, as compared to the Lehman Brothers Aggregate Bond
Index's return of 19.80% and the S&P 500 return of 11.27%, according to
Morningstar, Inc.
As of year end, the Fund's portfolio was approximately 75% invested in
non-U.S. dollar denominated investment grade fixed income securities, with about
57% in Eurodollars, 16% in British pounds, and 2% in Australian dollars, with
U.S. dollar denominated investments making up the balance. All Fund portfolio
investments were investment grade by actual or deemed rating, or in cash or cash
equivalents.
Market Report
The Federal Reserve Bank initiated its current credit tightening policy on
June 30, 2004, when the federal funds rate stood at 1%. At the next five
consecutive meetings of the Federal Open Market Committee (FOMC) of the Federal
Reserve Bank, the FOMC raised the federal funds rate by 0.25% at each meeting,
bringing it to 2.25% at December 31, 2004. Despite the fact that the growth in
the U.S. economy (GDP) in the fourth quarter slowed to an annualized pace of
3.1%, following a 4% gain in the third quarter, the 2004 annualized growth rate
of 4.4% was the largest U.S. economic gain since 1999. Year over year, job
growth, though moderate, is increasing, consumer confidence is growing, and many
corporate sectors have reported an increase in buying power.
Looking ahead at the fixed income markets, however, we remain somewhat
cautious for many of the same reasons we expressed last year. Manufacturing is
showing signs of strength and demand for consumer goods, especially those deemed
durable goods, is strong, but at the same time workers wages, in the 4th quarter
of 2004, grew at the slowest pace in almost six years. Combining this with the
rising cost of health benefits, the result could lead to a slowdown in consumer
spending. Yet, a move towards "full employment," forcing businesses to raise
salaries to attract workers could possibly result in higher wages, alleviating
some of this problem. The deficit may continue to put pressure on the U.S.dollar
and this pressure could continue until demand for our "cheaper" products
continues to pick up abroad. Middle Eastern conflicts, as well as homeland
security
concerns, we believe, are likely to continue for some time and may well have a
dampening effect on spending, as well as consumer confidence. We expect that the
economy could continue to grow at a slower pace than is reflected by the
improving economic numbers, until more of the "fragility" in the economy is
removed or we find ourselves in a much more robust economy than we are in now.
We think the Federal Reserve will continue to increase rates at a very measured
pace, and closely watch the weekly economic numbers for signs of weakness. If
the economy slows by mid-year 2005, we anticipate the FOMC resisting further
rate increases.
Distribution Policy
The Fund has a managed quarterly distribution policy, which is intended to
provide shareholders with a relatively stable cash flow and reduce or eliminate
the Fund's market price discount to its net asset value per share. Under the
current policy, distributions of approximately 7% of the Fund's net asset value
per share on an annual basis are intended to be paid primarily from ordinary
income and any net capital gains, with the balance representing return of
capital. This policy is subject to regular review at the Board's quarterly
meetings and the amount of the distribution may vary depending on the Fund's net
asset value per share at the time of declaration. Although the distribution rate
may be reduced reflecting lower current interest rates, we continue to believe
shares of the Fund are a sound value and attractive for investors seeking a high
level of income, with capital appreciation as a secondary objective.
Dividend Reinvestment Plan
We believe the Fund's pursuit of its investment objectives by investing
primarily in a global portfolio of investment grade fixed income securities is
attractive for investors seeking a high level of income, with capital
appreciation as a secondary objective. The Fund's Dividend Reinvestment Plan is
a very effective way to also add to your holding because quarterly dividend
distributions are reinvested without charge, which can contribute importantly to
growing your investment over time. For further details, see the description of
the Dividend Reinvestment Plan on page 12. Please call-1-800-937-5449 and an
Investor Service Representative will be happy to assist you.
We appreciate your support and look forward to serving your investment
needs in the months and years ahead.
Sincerely,
/s/ Thomas B. Winmill /s/ Marion E. Morris
Thomas B.Winmill Marion E.Morris
President Senior Vice President
Portfolio Manager
GLOBAL INCOME FUND, INC. 2
Schedule of Portfolio Investments - December 31,2004
See accompanying notes to financial statements. 3 GLOBAL INCOME FUND, INC.
Schedule of Portfolio Investments - December 31,2004
Note: Par value stated in currency indicated; market value stated in U.S.
dollars.
* 144A securities may be sold to institutional investors only. The total
market value of these securities at December 31, 2004, is $346,454, which
represents 1.0% of total investments.
GLOBAL INCOME FUND, INC. 4 See accompanying notes to financial statements.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004
ASSETS:
Investments at market value
(cost:$33,163,489) (note 1) ........................ $ 36,003,148
Interest receivable ................................. 808,293
Other assets ........................................ 19,120
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Total assets ...................................... 36,830,561
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LIABILITIES:
Note payable ........................................ 59,741
Accrued expenses .................................... 72,115
Accrued management fees ............................. 11,599
Accrued servicing fees .............................. 16,587
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Total liabilities ................................. 160,042
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NET ASSETS: (applicable to 7,377,539 shares
outstanding: 20,000,000 shares of $.01 par value
authorized) .......................................... $ 36,670,519
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NET ASSET VALUE PER SHARE ($36,684,935 /7,377,539
shares outstanding) .................................. $ 4.97
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At December 31, 2004, net assets consisted of:
Paid-in capital ..................................... $ 40,718,432
Accumulated net realized loss on investments and
foreign currencies ................................. (6,940,869)
Net unrealized appreciation on investments and
foreign currencies ................................. 2,892,956
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$ 36,670,519
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STATEMENT OF OPERATIONS
Year Ended December 31, 2004
INVESTMENT INCOME:
Interest (net of foreign tax withheld $11,838) ...... $ 1,167,871
Dividends ........................................... 141,857
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Total investment income ........................... 1,309,728
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EXPENSES:
Investment management (note 3) ...................... 213,755
Accounting and auditing (note 3) .................... 111,184
Legal and compliance (note 3) ....................... 64,380
Directors ........................................... 39,475
Printing ............................................ 23,260
Custodian ........................................... 17,860
Registration ........................................ 16,848
Insurance ........................................... 11,712
Transfer agent ...................................... 11,362
Other ............................................... 5,592
Total operating expenses .......................... 515,428
Loan interest and fees (note 5) ................... 2,287
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Total expenses .................................... 517,715
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Net investment income ........................... 792,013
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCIES:
Net realized gain on investments and foreign
currencies (note 4) ................................ 815,671
Unrealized appreciation on investments and foreign
currencies during the year ......................... 1,355,264
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Net realized and unrealized gain on investments
and foreign currencies ........................... 2,170,935
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Net change in net assets resulting from
operations ....................................... $ 2,962,948
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See accompanying notes to financial statements. 5 GLOBAL INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS For the Years Ended December 31, 2004 and
2003
GLOBAL INCOME FUND, INC. 6 See accompanying notes to financial statements.
Notes to Financial Statements
(1) Global Income Fund, Inc., a Maryland corporation registered under the
Investment Company Act of 1940, as amended, is a non-diversified, closed-end
management investment company, whose shares are listed on the American Stock
Exchange. The Fund's primary and fundamental objective is to provide a high
level of income. The Fund's secondary, non-fundamental, investment objective is
capital appreciation. The Fund pursues its investment objectives by investing
primarily in a global portfolio of investment grade fixed income securities. The
Fund is subject to the risk of price fluctuations of the securities held in its
portfolio which is generally a function of the underlying credit ratings of an
issuer, currency denomination, duration, and yield of its securities, and
general economic and interest rate conditions. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements. With respect to security valuation,
securities traded on a national securities exchange or the Nasdaq National
Market System ("NMS") are valued at the last reported sales price on the day the
valuations are made. Such securities that are not traded on a particular day and
securities traded in the over-the-counter market that are not on NMS are valued
at the mean between the current bid and asked prices. Certain of the securities
in which the Fund invests are priced through pricing services which may utilize
a matrix pricing system which takes into consideration factors such as yields,
prices, maturities, call features and ratings on comparable securities. Bonds
may be valued according to prices quoted by a dealer in bonds which offers
pricing services. If market quotations are not available or deemed reliable,
then such securities are valued as determined in good faith under the direction
of or pursuant to procedures established by the Fund's Board of Directors. Debt
obligations with remaining maturities of 60 days or less are valued at cost
adjusted for amortization of premiums and accretion of discounts. Securities
denominated in foreign currencies are translated into U.S. dollars at prevailing
exchange rates. Forward contracts are marked to market and the change in market
value is recorded by the Fund as an unrealized gain or loss. When a contract is
closed, the Fund records a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time it
was closed. The Fund could be exposed to risk if the counterparties are unable
to meet the terms of the contracts or if the value of the currency changes
unfavorably. Investment transactions are accounted for on the trade date (the
date the order to buy or sell is executed).Interest income is recorded on the
accrual basis. Discounts and premiums on securities purchased are amortized over
the life of the respective securities. Dividends and distributions to
shareholders are recorded on the ex-dividend date. In preparing financial
statements in conformity with accounting principles generally accepted in the
United States of America, management makes estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(2) The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable investment income and net capital gains, if
any, after utilization of any capital loss carryforward, to its shareholders and
therefore no Federal income tax provision is required. At December 31, 2004, the
Fund had an unused capital loss carryforward of approximately $6,940,900 of
which $2,481,600 expires in 2007, $1,708,500 in 2008, $1,381,600 in 2009, and
$1,369,200 in 2011. No capital gain will be distributed until the capital loss
carryforwards have been exhausted. Based on Federal income tax cost of
$33,163,489, gross unrealized appreciation and gross unrealized depreciation
were $2,877,163 and $37,504, respectively, at December 31, 2004. Distributions
paid to shareholders during the year ended December 31, 2004 differ from net
investment income and net gains (losses) from security, foreign currency, and
futures transactions as a result of capital distributions due to the managed
distribution policy of the Fund. These distributions are shown under
"Distributions to Shareholders" in the Statements of Changes in Net Assets.
7 GLOBAL INCOME FUND, INC.
(3) The Fund retains CEF Advisers, Inc. as its Investment Manager. Under the
terms of the Investment Management Agreement, the Investment Manager receives a
management fee, payable monthly, based on the average weekly net assets of the
Fund at the annual rate of 7/10 of 1% of the first $250 million, 5/8 of 1% from
$250 million to $500 million, and 1/2 of 1% over $500 million. This fee is
calculated by determining the average of net assets on each Friday of a month
and applying the applicable rate to such average for the number of days in the
month. Certain officers and directors of the Fund are officers and directors of
the Investment Manager. The Fund reimbursed the Investment Manager $76,025 for
providing at cost certain compliance services of $26,835 and accounting services
of $49,190 for the year ended December 31, 2004.
(4) The Fund has an arrangement with its custodian and transfer agent whereby
interest earned on uninvested cash balances is used to offset a portion of the
Fund's expenses. Purchases and sales of securities other than short term notes
aggregated $33,744,137 and $27,697,404, respectively, for the year ended
December 31, 2004. A forward currency contract is an obligation to purchase or
sell a specific currency for an agreed-upon price at a future date. The Fund
could be exposed to risk if counterparties to the contracts are unable to meet
the terms of their contracts. The Fund had no forward currency contracts
outstanding at December 31, 2004. Realized gains and losses arising from
exchange differences are included in net realized gain on investments and
foreign currencies in the statement of operations.
(5) The Fund may borrow through a committed bank line of credit. At December 31,
2004, there was $59,741 outstanding and the interest rate was at the borrower's
option of (i) overnight federal funds or (ii) LIBOR (30, 60, 90 days), each as
in effect from time to time, plus 0.75% per annum, calculated on the basis of
actual days elapsed for a 360-day year. For the year ended December 31, 2004,
the weighted average interest rate was 1.84% based on the balances outstanding
during the period and the weighted average amount outstanding was $92,279.
(6) The tax character of distributions paid to shareholders for the years ended
December 31, 2004 and 2003 was follows:
2004 2003
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Distributions paid from:
Ordinary income $ 1,607,586 $ 1,215,358
Return of capital 573,375 767,761
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$ 2,180,961 $ 1,983,119
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As of December 31, 2004, the components of distributable earnings on a tax basis
were as follows:
Unrealized appreciation on investments and
foreign currencies $ 2,892,956
Capital loss carryforwards (6,940,869)
-----------
$(4,047,913)
===========
Accounting principles generally accepted in the United States of America require
certain components of net assets be reclassified between financial and tax
reporting. These reclassifications have no effect on net assets or net asset
value per share. For the year ended December 31, 2004, a permanent difference
between book and tax accounting of $1,188,534 have been reclassified from
accumulated net realized loss on investments and foreign currencies to paid-in
capital as a result of the expiration of capital loss carryforward in the
current year.
(7) Regarding concentration of credit risk, investing in securities of foreign
issuers involves special risks which include changes in foreign exchange rates
and the possibility of future adverse political and economic developments which
could adversely affect the value of such securities. Moreover, securities of
many foreign issuers and in foreign markets may be less liquid and their prices
more volatile than those of U.S. issuers and markets.
GLOBAL INCOME FUND,INC. 8
(8) At December 31, 2004 there were 7,377,539 shares of $.01 par value common
stock outstanding (20,000,000 shares authorized). The shares issued and
resulting increase in paid-in capital in connection with reinvestment of
dividends from net investment income during the years ended December 31, 2004
and 2003 were as follows:
Shares issued Increase in paid-in capital
------------- ---------------------------
2004 ........... 66,829 $ 300,947
2003 ........... 90,974 $ 439,788
During June 2004, the Fund issued 1,745,315 shares of common stock in connection
with a rights offering of the Fund's shares. Shareholders of record on May 21,
2004 were issued one non-transferable right for each share owned. The rights
entitled the shareholders to purchase one new share of common stock for every
four rights held. These shares were issued at a subscription price of $4.05. Net
proceeds to the Fund were $6,875,737 after deducting total expenses of
$192,789.The net asset value per share of the Fund's common shareholders was
reduced by approximately $0.21 per share as a result of the share issuance.
9 GLOBAL INCOME FUND,INC.
FINANCIAL HIGHLIGHTS
(a) Total return on market value basis is calculated assuming a purchase of
common stock on the opening of the first day and a sale on the closing of
the last day of each year reported. Dividends and distributions, if any,
are assumed for purposes of this calculation, to be reinvested at prices
obtained under the Fund's dividend reinvestment plan. Generally, total
return on net asset value basis will be higher than total return on market
value basis in years where there is an increase in the discount or a
decrease in the premium of the market value to the net asset value from the
beginning to the end of such years. Conversely, total return on net asset
value basis will be lower than total return on market value basis in
periods where there is a decrease in the discount or an increase in the
premium of the market value to the net asset value from the beginning to
the end of such years. Total return calculated for a period of less than
one year is not annualized. The calculation does not reflect brokerage
commissions, if any.
(b) Ratio after custodian credits was 1.72% and 2.66%, for the years ended
December 31, 2001, and 2000. There were no custodian credits for the years
ended December 31, 2004, 2003 and 2002.
GLOBAL INCOME FUND, INC. 10
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Global Income Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of Global
Income Fund, Inc. including the schedule of portfolio investments as of December
31, 2004 and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the years indicated thereon.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 2004, by correspondence with
the custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Global
Income Fund, Inc. as of December 31, 2004, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the years indicated
thereon, in conformity with accounting principles generally accepted in the
United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
February 15, 2005
11 GLOBAL INCOME FUND, INC.
PRIVACY POLICY
Global Income Fund, Inc. recognizes the importance of protecting the personal
and financial information of its shareholders. We consider each shareholder's
personal information to be private and confidential. This describes the
practices followed by us to protect our shareholders' privacy. We may obtain
information about you from the following sources: (1) information we receive
from you on forms and other information you provide to us whether in writing, by
telephone, electronically or by any other means; (2) information regarding your
transactions with us, our corporate affiliates, or others. We do not sell
shareholder personal information to third parties. We will collect and use
shareholder personal information only to service shareholder accounts. This
information may be used by us in connection with providing services or financial
products requested by shareholders. We will not disclose shareholder personal
information to any nonaffiliated third party except as permitted by law. We take
steps to safeguard shareholder information. We restrict access to nonpublic
personal information about you to those employees and service providers who need
to know that information to provide products or services to you. With our
service providers we maintain physical, electronic, and procedural safeguards to
guard your nonpublic personal information. Even if you are no longer a
shareholder, our Privacy Policy will continue to apply to you. We reserve the
right to modify, remove or add portions of this Privacy Policy at any time.
WWW.GLOBALINCOMEFUND.NET
Visit us on the Internet at www.globalincomefund.net. The site provides
information about the Fund including market performance, net asset value (NAV),
dividends, press releases, and shareholder reports. For further information, you
can email us at info@globalincomefund.net. The Fund is a member of the
Closed-End Fund Association (CEFA).Its website address is www.cefa.com. CEFA is
solely responsible for the content of its website.
QUARTERLY HOLDINGS
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available on the SEC's Internet site at http://www.sec.gov and may be
reviewed and copied at the SEC's Public Reference Room. Copies of this
information can be obtained, after paying a duplicating fee, by e-mail request
to publicinfo@sec.gov, or by writing to the SEC's Public Reference Section,
Washington, DC 20549-0102. The Fund's Investment Company Act file number is
811-08025. The Fund makes the information on Form N-Q available to shareholders
upon request free of charge by e-mail request to info@globalincomefund.net or by
calling toll-free 1-800-472-4160.
PROXY VOTING
The Fund's Proxy Voting Guidelines (the "Guidelines") as well as its voting
record for the 12 months ended December 31, 2004, are available without charge,
by calling the Fund collect at 1-212-344-6310 and on the SEC's website at
http://www.sec.gov. The Guidelines are also posted on the Fund's website at
http://www.globalincomefund.net.
DIVIDEND REINVESTMENT PLAN
The Fund has adopted a Dividend Reinvestment Plan (the "Plan"). Under the Plan,
each dividend and capital gain distribution, if any, declared by the Fund on
outstanding shares will, unless elected otherwise by each shareholder by
notifying the Fund in writing at any time prior to the record date for a
particular dividend or distribution, be paid on the payment date fixed by the
Board of Directors or a committee thereof in additional shares. If the Market
Price (as defined below) per share is equal to or exceeds the net asset value
per share at the time shares are valued for the purpose of determining the
number of shares equivalent to the cash dividend or capital gain distribution
(the "Valuation Date"), participants will be issued additional shares equal to
the amount of such dividend divided by the greater of that NAV per share or 95%
of that Market Price per share. If the Market Price per share is less than such
net asset value on the Valuation Date, participants will be issued additional
shares equal to the amount of such dividend divided by the Market Price. The
Valuation Date is the day before the dividend or distribution payment date or,
if that day is not an American Stock Exchange trading day, the next trading day.
For all purposes of the Plan: (a) the Market Price of the shares on a particular
date shall be the average closing market price on the five trading days the
shares traded ex-dividend on the Exchange prior to such date or, if no sale
occurred on any of these days, then the mean between the closing bid and asked
quotations for the shares on the Exchange on such day, and (b) net asset value
per share on a particular date shall be as determined by or on behalf of the
Fund.
GLOBAL INCOME FUND, INC. 12 Unaudited
MANAGED DISTRIBUTIONS
The Board's current policy is to provide investors with a stable quarterly
distribution out of current income, supplemented by realized capital gains, and
to the extent necessary, paid-in capital. The Fund is subject to U.S. corporate,
tax, and securities laws. Under U.S. tax accounting rules, the amount of
distributable net income is determined on an annual basis and is dependent
during the fiscal year on the aggregate gains and losses realized by the Fund
and, to a lesser extent, the actual exchange rate between the U.S. dollar and
the currencies in which Fund assets are denominated. Therefore, the exact amount
of distributable income can only be determined as of the end of the Fund's
fiscal year. Under the U.S. Investment Company Act of 1940, however, the Fund is
required to indicate the source of each distribution to shareholders. The Fund
estimates that distributions for the fiscal period commencing January 1, 2005,
including the distributions paid quarterly, are comprised approximately
two-thirds of net investment income and the balance from paid-in capital. This
estimated distribution composition may vary from quarter to quarter because it
may be materially impacted by future realized gains and losses on securities and
fluctuations in the value of currencies in which Fund assets are denominated. In
January after each fiscal year, a Form 1099 DIV will be sent to shareholders,
which will state the amount and composition of distributions and provide
information with respect to their appropriate tax treatment.
HISTORICAL DISTRIBUTION SUMMARY
Investment Return of
Period Income Capital Total
- ----------------------------------- ---------- --------- --------
2004 .............................. $ 0.245 $ 0.090 $ 0.335
2003 .............................. $ 0.220 $ 0.140 $ 0.360
2002 .............................. $ 0.280 $ 0.220 $ 0.500
2001 .............................. $ 0.360 $ 0.200 $ 0.560
2000 .............................. $ 0.420 $ 0.160 $ 0.580
6 Months Ended 12/31/99 ........... $ 0.230 $ 0.070 $ 0.300
12 Months Ended 6/30/99 ........... $ 0.550 $ 0.130 $ 0.680
12 Months Ended 6/30/98 ........... $ 0.520 $ 0.320 $ 0.840
- --------------------------------------------------------------------------------
STOCK DATA
Price (12/31/04) .................................................... $ 4.82
Net Asset Value (12/31/04) .......................................... $ 4.97
Discount ............................................................ 3.02%
American Stock Exchange Symbol: GIF Newspaper exchange listings appear under an
abbreviation, such as: Glinc
2005 DISTRIBUTION PAYMENT DATES
Declaration Record Payment
- ----------- ------ -------
March 1 March 17 March 31
June 2 June 16 June 30
September 1 September 16 September 30
December 2 December 15 December 30
- --------------------------------------------------------------------------------
RESULTS OF THE ANNUAL MEETING
The Fund's Annual Meeting was held on September 7, 2004 at the offices of the
Fund at 11 Hanover Square, 12th Floor, New York, New York for the purpose of
electing the following directors to serve as follows with the votes received as
set forth below:
Director Class Term Expiring* Votes For Votes Withheld
- ----------------- ----- ------- --------- --------- --------------
James E. Hunt II 5 years 2009 5,204,506 228,705
Bruce B. Huber II 5 years 2009 5,200,027 233,184
John B. Russell III 1 years 2005 5,198,495 234,716
*And until his successor is duly elected and qualifies. Directors whose term of
office continued after the meeting are Peter K. Werner, Thomas B. Winmill, and
Bassett S. Winmill.
Unaudited 13 GLOBAL INCOME FUND, INC.
FUND INFORMATION
Investment Manager Custodian
CEF Advisers, Inc. State Street Bank & Trust Co.
11 Hanover Square 801 Pennsylvania Avenue
New York, NY 10005 Kansas City, MO 64105
Independent Registered Public Stock Transfer Agent and Registrar
Accounting Firm American Stock Transfer & Trust Co.
Tait, Weller & Baker 59 Maiden Lane
1818 Market St., Suite 2400 New York, NY 10038
Philadelphia, PA 19103 www.amstock.com
1-800-278-4353
DIRECTORS AND OFFICERS
The following table sets forth certain information concerning the other
Directors currently serving on the Board of the Fund. Each Director who is
deemed to be an "interested person" because he is an "affiliated person" as
defined in the Investment Company Act of 1940, as amended (the "1940 Act"), is
indicated by an asterisk.
GLOBAL INCOME FUND, INC. 14 Unaudited
*He is an "interested person" of the Fund as defined in the 1940 Act due to his
affiliation with the Investment Manager. Bassett S. Winmill is the father of
Thomas B. Winmill.
Messrs. Huber, Hunt, Russell and Werner also serve on the Audit and Nominating
Committees of the Board. Mr.Thomas Winmill also serves on the Executive
Committee of the Board.
The executive officers, other than those who serve as Directors, and their
relevant biographical information are set forth below. Their address of record
is 11 Hanover Square, New York, New York 10005.
Name and Age Principal Occupation During Past 5 years
- ------------------------ -----------------------------------------------------
William G. Vohrer Chief Accounting Officer, Chief Financial Officer,
Born on August 17, 1950 Treasurer and Vice President since 2001. He also is
Chief Accounting Officer, Chief Financial Officer,
Treasurer and Vice President of the other investment
companies in the Investment Company Complex, the
Investment Manager and WCI and its affiliates. From
1999 to 2001, he consulted on accounting matters.
Marion E. Morris Senior Vice President since 2000. She is also a
Born on June 17, 1945 Senior Vice President of the other investment
companies in the Investment Company Complex, the
Investment Manager and WCI and its affiliates. She is
Director of Fixed Income and a member of the
Investment Policy Committee of the Investment Manager.
Previously, she served as Vice President of Salomon
Brothers, The First Boston Corporation, and Cantor
Fitzgerald.
Monica Pelaez Vice President, Secretary and Chief Compliance
Born on November 5, 1971 Officer since 2000. She also is Vice President,
Secretary and Chief Compliance Officer of the other
investment companies in the Investment Company
Complex, the Investment Manager, and WCI and its
affiliates. She is a member of the New York State Bar.
Unaudited 15 GLOBAL INCOME FUND, INC.
================================================================================
This report, including the financial statements herein, is transmitted to the
shareholders of the Fund for their information. The financial information
included herein is taken from the records of the Fund. This is not a
prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in this report. Pursuant to
Section 23 of the Investment Company Act of 1940, notice is hereby given that
the Fund may in the future purchase shares of its own common stock in the
open market. These purchases may be made from time to time, at such times and
in such amounts as may be deemed advantageous to the Fund, although nothing
herein shall be considered a commitment to purchase such shares.
================================================================================
GLOBAL INCOME FUND, INC. 16 Unaudited
GLOBAL INCOME FUND
- ------------------
11 Hanover Square
New York, NY 10005
Printed on recycled paper [GRAPHIC APPEARS HERE]
GIF-AR-12/04
Item 2. Code of Ethics
(a) The registrant has adopted a code of ethics (the "Code") that applies to
its principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a
third party.
(b) No information need be disclosed pursuant to this paragraph.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) (1) The Code is attached hereto as Exhibit 99.CODE ETH.
(2) The text of the Code can be on the registrant's website,
www.globalincomefund.net.
(3) A copy of the Code may be obtained free of charge by calling collect
1-212-344-6310.
Item 3. Audit Committee Financial Expert
The registrant's Board of Directors has determined that it has four "audit
committee financial experts" serving on its audit committee, each of whom are
"independent" Directors: Bruce B. Huber, James E. Hunt, John B. Russell and
Peter K. Werner. Under applicable securities laws, a person who is determined to
be an audit committee financial expert will not be deemed an "expert" for any
purpose, including without limitation for the purposes of Section 11 of the
Securities Act of 1933, as a result of being designated or identified as an
audit committee financial expert. The designation or identification of a person
as an audit committee financial expert does not impose on such person any
duties, obligations, or liabilities that are greater than the duties,
obligations, and liabilities imposed on such person as a member of the audit
committee and Board of Directors in the absence of such designation or
identification.
Item 4. Principal Accountant Fees and Services
(a) Disclose, under the caption Audit Fees, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the
principal accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those
fiscal years.
AUDIT FEES
2003 - $16,250
2004 - $16,500
(b) Disclose, under the caption Audit-Related Fees, the aggregate fees billed
in each of the last two fiscal years for assurance and related services by
the principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not reported
under paragraph (a) of this Item. Registrants shall describe the nature of
the services comprising the fees disclosed under this category.
AUDIT RELATED FEES
2003 - $1,000
2004 - $1,000
Audit-related fees include amounts reasonably related to the performance of
the audit of the registrant's financial statements, including the issuance
of a report on internal controls and review of periodic reporting.
(c) Disclose, under the caption Tax Fees, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the fees
disclosed under this category.
TAX FEES
2003 - $3,250
2004 - $3,500
Tax fees include amounts related to tax compliance, tax planning, and tax
advice.
(d) Disclose, under the caption All Other Fees, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a)
through (c) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
ALL OTHER FEES
2003 - N/A
2004 - $3,500
All other fees relate to the registrant's 2004 rights offering.
(e) (1) The registrant's audit committee has adopted a policy to consider for
pre-approval any non-audit services proposed to be provided by the
auditors to the registrant, and any non-audit services proposed to be
provided by such auditors to the registrant's investment manager, if
any, which have a direct impact on registrant operations or financial
reporting. Such pre-approval of non-audit services proposed to be
provided by the auditors to the registrant is not necessary, however,
under the following circumstances: (1) all such services do not
aggregate to more than 5% of total revenues paid by the registrant to
the auditor in the fiscal year in which services are provided, (2)
such services were not recognized as non-audit services at the time of
the engagement, and (3) such services are brought to the attention of
the Audit Committee, and approved by the Audit Committee, prior to the
completion of the audit.
(2) No services included in (b) - (d) above were approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees proposed to be billed or billed for the most recent
fiscal year and the preceding fiscal year by the registrant's principal
accountant for non-audit services rendered to the registrant, its
investment manager, and any entity controlling, controlled by, or under
common control with the investment manager that provides ongoing services
to the registrant were $38,750 and $41,000, respectively.
(h) The registrant's audit committee has considered the provision of non-audit
services that were rendered by accountant to the registrant's investment
manager and its affiliates, including, if applicable, any that were not
pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation
S-X, to be compatible with maintaining the independence of the accountant,
taking into account representations from the accountant, in accordance with
Independence Standards Board requirements and the meaning of the Securities
laws administered by the SEC, regarding its independence from the
registrant, its investment manager and the investment manager's affiliates.
Item 5. Audit Committee of Listed Registrants
The registrant has a standing audit committee. The members of the audit
committee are Bruce B. Huber, James E. Hunt, John B. Russell and Peter K.
Werner.
Item 6. Schedule of Investments
Included as part of the report to shareholders filed under Item 1 of this
Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Amended Proxy Voting Policies and Procedures
Foxby Corp.
Global Income Fund, Inc.
Midas Fund, Inc.
Midas Special Equities Fund, Inc.
Tuxis Corporation
Foxby Corp., Global Income Fund, Inc., Midas Fund, Inc., Midas Special Equities
Fund, Inc. and Tuxis Corporation (the "Funds") delegate the responsibility for
voting proxies of portfolio companies held in each Fund's portfolio to
Institutional Shareholder Services, Inc. ("ISS"). The Proxy Voting Guidelines of
ISS are incorporated by reference herein as each Fund's proxy voting policies
and procedures, as supplemented by the terms hereof. Each Fund retains the right
to override the delegation to ISS on a case-by-case basis, in which case the
ADDENDUM -- NON-DELEGATED PROXY VOTING POLICIES AND PROCEDURES supercede the
Proxy Voting Guidelines of ISS in their entirety. In all cases, a Fund's proxies
will be voted in the best interests of the Fund.
With respect to a vote upon which a Fund overrides the delegation to ISS,
to the extent that such vote presents a material conflict of interest between
the Fund and its investment adviser, distributor, or any affiliated person of
the Fund's investment adviser or distributor, the Fund will disclose such
conflict to, and obtain consent from, its Independent Directors, or a committee
thereof, prior to voting the proxy.
January 1, 2004
- --------
1 For the open-end investment companies, Midas Fund, Inc. and Midas Special
Equities Fund, Inc., the investment adviser is Midas Management Corporation and
the distributor is Investor Service Center, Inc. For Foxby Corp. and Global
Income Fund, Inc., the investment adviser is CEF Advisers, Inc. Tuxis
Corporation is internally managed. The closed-end funds, Foxby Corp., Global
Income Fund, Inc. and Tuxis Corporation, do not have a distributor.
2 Each Fund's Independent Directors are those directors who are not interested
persons of the Fund, its investment adviser and distributor.
ADDENDUM --
NON-DELEGATED PROXY VOTING POLICIES AND PROCEDURES
These proxy voting policies and procedures are intended to provide general
guidelines regarding the issues they address. As such, they cannot be
"violated." In each case the vote will be based on maximizing shareholder value
over the long term, as consistent with overall investment objectives and
policies.
BOARD AND GOVERNANCE ISSUES
o Board of Director Composition
Typically, we will not object to slates with at least a majority of independent
directors.
We generally will not object to shareholder proposals that request that the
board audit, compensation and/or nominating committees include independent
directors exclusively.
o Approval of Independent Auditors
We will evaluate on a case-by-case basis instances in which the audit firm has a
significant audit relationship with the company to determine whether we believe
independence has been compromised.
We will review and evaluate the resolutions seeking ratification of the auditor
when fees for financial systems design and implementation substantially exceed
audit and all other fees, as this can compromise the independence of the
auditor.
We will carefully review and evaluate the election of the audit committee chair
if the audit committee recommends an auditor whose fees for financial systems
design and implementation substantially exceed audit and all other fees, as this
can compromise the independence of the auditor.
o Increase Authorized Common Stock
We will generally support the authorization of additional common stock necessary
to facilitate a stock split.
We will generally support the authorization of additional common stock.
o Blank Check Preferred Stock
Blank check preferred is stock with a fixed dividend and a preferential claim on
company assets relative to common shares. The terms of the stock (voting,
dividend and conversion rights) are determined at the discretion of the Board
when the stock is issued. Although such an issue can in theory be used for
financing purposes, often it has been used in connection with a takeover
defense. Accordingly, we will generally evaluate the creation of blank check
preferred stock.
o Classified or "Staggered" Board
On a classified (or staggered) board, directors are divided into separate
classes (usually three) with directors in each class elected to overlapping
three-year terms. Companies argue that such Boards offer continuity in direction
which promotes long-term planning. However, in some instances they may serve to
deter unwanted takeovers since a potential buyer would have to wait at least two
years to gain a majority of Board seats.
We will vote on a case-by-case basis on issues involving classified boards.
o Supermajority Vote Requirements
Supermajority vote requirements in a company's charter or bylaws require a level
of voting approval in excess of simple majority. Generally, supermajority
provisions require at least 2/3 affirmative vote for passage of issues.
We will vote on a case-by-case basis regarding issues involving supermajority
voting.
o Restrictions on Shareholders to Act by Written Consent
Written consent allows shareholders to initiate and carry out a shareholder
action without waiting until the annual meeting or by calling a special meeting.
It permits action to be taken by the written consent of the same percentage or
outstanding shares that would be required to effect the proposed action at a
shareholder meeting.
We will generally not object to proposals seeking to preserve the right of
shareholders to act by written consent.
o Restrictions on Shareholders to Call Meetings
We will generally not object to proposals seeking to preserve the right of the
shareholders to call meetings.
o Limitations, Director Liability and Indemnification
Because of increased litigation brought against directors of corporations and
the increase costs of director's liability insurance, many states have passed
laws limiting director liability for those acting in good faith. Shareholders,
however, often must opt into such statutes. In addition, many companies are
seeking to add indemnification of directors to corporate bylaws.
We will generally support director liability and indemnification resolutions
because it is important for companies to be able to attract the most qualified
individuals to their Boards.
o Reincorporation
Corporations are in general bound by the laws of the state in which they are
incorporated. Companies reincorporate for a variety of reasons including
shifting incorporation to a state where the company has its most active
operations or corporate headquarters, or shifting incorporation to take
advantage of state corporate takeovers laws.
We typically will not object to reincorporation proposals.
o Cumulative Voting
Cumulative voting allows shareholders to cumulate their votes behind one or a
few directors running for the board - that is, cast more than one vote for a
director thereby helping a minority of shareholders to win board representation.
Cumulative voting generally gives minority shareholders an opportunity to effect
change in corporate affairs.
We typically will not object to proposals to adopt cumulative voting in the
election of directors.
o Dual Classes of Stock
In order to maintain corporate control in the hands of a certain group of
shareholders, companies may seek to create multiple classes of stock with
differing rights pertaining to voting and dividends.
We will vote on a case-by-case basis dual classes of stock. However, we will
typically not object to dual classes of stock.
o Limit Directors' Tenure
In general, corporate directors may stand for re-election indefinitely.
Opponents of this practice suggest that limited tenure would inject new
perspectives into the boardroom as well as possibly creating room for directors
from diverse backgrounds; however, continuity is important to corporate
leadership and in some instances alternative means may be explored for injecting
new ideas or members from diverse backgrounds into corporate boardrooms.
Accordingly, we will vote on a case-by-case basis regarding attempts to limit
director tenure.
o Minimum Director Stock Ownership
The director share ownership proposal requires that all corporate directors own
a minimum number of shares in the corporation. The purpose of this resolution is
to encourage directors to have the same interest as other shareholders.
We normally will not object to resolutions that require corporate directors to
own shares in the company.
EXECUTIVE COMPENSATION
o Disclosure of CEO, Executive, Board and Management Compensation
On a case-by-case basis, we will support shareholder resolutions requesting
companies to disclose the salaries of top management and the Board of Directors.
o Compensation for CEO, Executive, Board and Management
We typically will not object to proposals regarding executive compensation if we
believe the compensation clearly does not reflect the current and future
circumstances of the company.
o Formation and Independence of Compensation Review Committee
We normally will not object to shareholder resolutions requesting the formation
of a committee of independent directors to review and examine executive
compensation.
o Stock Options for Board and Executives
We will generally review the overall impact of stock option plans that in total
offer greater than 25% of shares outstanding because of voting and earnings
dilution.
We will vote on a case-by-case basis option programs that allow the repricing of
underwater options.
In most cases, we will oppose stock option plans that have option exercise
prices below the marketplace on the day of the grant.
Generally, we will support options programs for outside directors subject to the
same constraints previously described.
o Employee Stock Ownership Plan (ESOPs)
We will generally not object to ESOPs created to promote active employee
ownership. However, we will generally oppose any ESOP whose purpose is to
prevent a corporate takeover.
o Changes to Charter or By-Laws
We will conduct a case-by-case review of the proposed changes with the voting
decision resting on whether the proposed changes are in shareholder's best
interests.
o Confidential Voting
Typically, proxy voting differs from voting in political elections in that the
company is made aware of shareholder votes as they are cast. This enables
management to contact dissenting shareholders in an attempt to get them to
change their votes.
We generally will not object to confidential voting.
o Equal Access to Proxy
Equal access proposals ask companies to give shareholders access to proxy
materials to state their views on contested issues, including director
nominations. In some cases they would actually allow shareholders to nominate
directors. Companies suggest that such proposals would make an increasingly
complex process even more burdensome.
In general, we will not oppose resolutions for equal access proposals.
o Golden Parachutes
Golden parachutes are severance payments to top executives who are terminated or
demoted pursuant to a takeover. Companies argue that such provisions are
necessary to keep executives from "jumping ship" during potential takeover
attempts.
We will not object to the right of shareholders to vote on golden parachutes
because they go above and beyond ordinary compensation practices. In evaluating
a particular golden parachute, we will examine if considered material total
management compensation, the employees covered by the plan, and the quality of
management and all other factors deemed pertinent.
MERGERS AND ACQUISITIONS
o Mergers, Restructuring and Spin-offs
A merger, restructuring, or spin-off in some way affects a change in control of
the company's assets. In evaluating the merit of each issue, we will consider
the terms of each proposal. This will include an analysis of the potential
long-term value of the investment.
On a case by case basis, we will review management proposals for merger or
restructuring to determine the extent to which the transaction appears to offer
fair value and other proxy voting policies stated are not violated.
o Poison Pills
Poison pills (or shareholder rights plans) are triggered by an unwanted takeover
attempt and cause a variety of events to occur which may make the company
financially less attractive to the suitor. Typically, directors have enacted
these plans without shareholder approval. Most poison pill resolutions deal with
putting poison pills up for a vote or repealing them altogether.
We typically will not object to most proposals to put rights plans up for a
shareholder vote. In general, poison pills will be reviewed for the additional
value provided to shareholders, if any.
o Anti-Greenmail Proposals
Greenmail is the payment a corporate raider receives in exchange for his/her
shares. This payment is usually at a premium to the market price, so while
greenmail can ensure the continued independence of the company, it discriminates
against other shareholders.
We generally will support anti-greenmail provisions.
o Opt-Out of State Anti-takeover Law
A strategy for dealing with anti-takeover issues has been a shareholder
resolution asking a company to opt-out of a particular state's anti-takeover
laws.
We generally will not object to bylaws changes requiring a company to opt out of
state anti-takeover laws. Resolutions requiring companies to opt into state
anti-takeover statutes generally will be subject to further review for
appropriateness.
o Other Situations
In the event an issue is not addressed in the above guidelines, we will
determine on a case-by-case basis any proposals that may arise from management
or shareholders. To the extent that a proposal from management does not infringe
on shareholder rights, we will generally support management's position. We may
also elect to abstain or not vote on any given matter.
January 1, 2004
ISS Proxy Voting Guidelines Summary
Following is a concise summary of ISS's proxy voting policy guidelines.
1. Auditors
Vote CASE-BY-CASE on shareholder proposals on auditor rotation, taking into
account these factors:
o Tenure of the audit firm
o Establishment and disclosure of a renewal process whereby the auditor is
regularly evaluated for both audit quality and competitive price
o Length of the rotation period advocated in the proposal
o Significant audit-related issues
2. Board of Directors
Voting on Director Nominees in Uncontested Elections
Generally, vote CASE-BY-CASE. But WITHHOLD votes from:
o Insiders and affiliated outsiders on boards that are not at least majority
independent
o Directors who sit on more than six boards
o Compensation Committee members if there is a disconnect between the CEO's pay
and performance
Classification/Declassification of the Board
Vote AGAINST proposals to classify the board.
Vote FOR proposals to repeal classified boards and to elect all directors
annually.
Independent Chairman (Separate Chairman/CEO)
Vote FOR shareholder proposals asking that the chairman and CEO positions be
separated (independent chairman), unless the company has a strong countervailing
governance structure, including a lead director, two-thirds independent board,
all independent key committees, and established governance guidelines.
Majority of Independent Directors/Establishment of Committees
Vote FOR shareholder proposals asking that a majority or more of directors be
independent unless the board composition already meets the proposed threshold by
ISS's definition of independence.
Open Access (shareholder resolution)
Vote CASE-BY-CASE basis, taking into account the ownership threshold proposed in
the resolution and the proponent's rationale.
3. Shareholder Rights
Shareholder Ability to Act by Written Consent
Vote against proposals to restrict or prohibit shareholder ability to take
action by written consent. Vote for proposals to allow or make easier
shareholder action by written consent.
Shareholder Ability to Call Special Meetings
Vote against proposals to restrict or prohibit shareholder ability to call
special meetings. Vote for proposals that remove restrictions on the right of
shareholders to act independently of management.
Supermajority Vote Requirements
Vote AGAINST proposals to require a supermajority shareholder vote.
Vote FOR proposals to lower supermajority vote requirements.
Cumulative Voting
Vote against proposals to eliminate cumulative voting. Vote proposals to restore
or permit cumulative voting on a case-by-case basis relative to the company's
other governance provisions.
Confidential Voting
Vote FOR shareholder proposals requesting that corporations adopt confidential
voting, use independent vote tabulators and use independent inspectors of
election. In proxy contests, support confidential voting proposals only if
dissidents agree to the same policy that applies to management.
4. Proxy Contests
Voting for Director Nominees in Contested Elections
Votes in a contested election of directors must be evaluated on a CASE-BY-CASE
basis, considering the factors that include the long-term financial performance,
management's track record, qualifications of director nominees (both slates),
and an evaluation of what each side is offering shareholders.
Reimbursing Proxy Solicitation Expenses
Vote CASE-BY-CASE. Where ISS recommends in favor of the dissidents, we also
recommend voting for reimbursing proxy solicitation expenses.
5. Poison Pills
Vote for shareholder proposals that ask a company to submit its poison
pill for shareholder ratification. Review on a case-by-case basis shareholder
proposals to redeem a company's poison pill and management proposals to ratify a
poison pill.
6. Mergers and Corporate Restructurings
Vote CASE-BY-CASE on mergers and corporate restructurings based on such features
as the fairness opinion, pricing, strategic rationale, and the negotiating
process.
7. Reincorporation Proposals
Proposals to change a company's state of incorporation should be evaluated on a
CASE-BY-CASE basis, giving consideration to both financial and corporate
governance concerns, including the reasons for reincorporating, a comparison of
the governance provisions, and a comparison of the jurisdictional laws.
Vote FOR reincorporation when the economic factors outweigh any neutral or
negative governance changes.
8. Capital Structure
Common Stock Authorization
Votes on proposals to increase the number of shares of common stock authorized
for issuance are determined on a CASE-BY-CASE basis using a model developed by
ISS.
Vote AGAINST proposals at companies with dual-class capital structures to
increase the number of authorized shares of the class of stock that has superior
voting rights.
Vote FOR proposals to approve increases beyond the allowable increase when a
company's shares are in danger of being delisted or if a company's ability to
continue to operate as a going concern is uncertain.
Dual-class Stock
Vote AGAINST proposals to create a new class of common stock with superior
voting rights.
Vote FOR proposals to create a new class of nonvoting or
subvoting common stock if:
o It is intended for financing purposes with minimal or no dilution to current
shareholders
o It is not designed to preserve the voting power of an insider or significant
shareholder
9. Executive and Director Compensation
ISS applies a quantitative methodology, but for Russell 3000 companies will also
apply a pay-for-performance overlay in assessing equity-based compensation
plans.
Vote AGAINST a plan if the cost exceeds the allowable cap.
Vote FOR a plan if the cost is reasonable (below the cap) unless either of the
following conditions apply:
o The plan expressly permits repricing without shareholder approval for listed
companies; or
o There is a disconnect between the CEO's pay and performance (an increase in
pay and a decrease in performance), the main source for the pay increase is
equity-based, and the CEO participates in the plan being voted on.
Management Proposals Seeking Approval to Reprice Options
Votes on management proposals seeking approval to reprice options are evaluated
on a CASE-BY-CASE basis giving consideration to the following:
o Historic trading patterns
o Rationale for the repricing
o Value-for-value exchange
o Option vesting
o Term of the option
o Exercise price
o Participation
Employee Stock Purchase Plans
Votes on employee stock purchase plans should be determined on a CASE-BY-CASE
basis.
Vote FOR employee stock purchase plans where all of the following apply:
o Purchase price is at least 85 percent of fair market value
o Offering period is 27 months or less, and
o Potential voting power dilution (VPD) is 10 percent
or less.
Vote AGAINST employee stock purchase plans where any of the opposite
conditions obtain.
Shareholder Proposals on Compensation
Generally vote CASE-BY-CASE, taking into account company performance, pay level
versus peers, pay level versus industry, and long term corporate outlook. But
generally vote FOR shareholder proposals that:
o Advocate performance-based equity awards (indexed options, premium-priced
options, performance-vested awards), unless the proposal is overly restrictive
or the company already substantially uses such awards
o Call for a shareholder vote on extraordinary benefits contained in
Supplemental Executive Retirement Plans (SERPs).
10. Social and Environmental Issues
These issues cover a wide range of topics, including consumer and public safety,
environment and energy, general corporate issues, labor standards and human
rights, military business, and workplace diversity.
In general, vote CASE-BY-CASE. While a wide variety of factors goes into each
analysis, the overall principal guiding all vote recommendations focuses on how
the proposal will enhance the economic value of the company.
Vote:
o FOR proposals for the company to amend its Equal Employment Opportunity (EEO)
Statement to include reference to sexual orientation, unless the change would
result in excessive costs for the company.
o AGAINST resolutions asking for the adopting of voluntary labeling of
ingredients or asking for companies to label until a phase out of such
ingredients has been completed.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not required at this time.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors made or implemented
after the registrant last provided disclosure in response to the requirements of
Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item.
Item 11. Controls and Procedures
(a) The Principal Executive Officer and Principal Financial Officer have
concluded that the registrant's disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances
that material information relating to the registrant is made known to them by
the appropriate persons, based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this report.
(b) There were no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of the evaluation referenced in (a)(i) above.
Item 12. Exhibits
(a)(1) Code of Ethics for Principal Executive and Senior Financial Officers
attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940(17 CFR 270.360a-2) attached hereto as Exhibits
EX-31 and EX-32.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Global Income Fund, Inc.
By: /s/ Thomas B. Winmill
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Thomas B. Winmill, President
Date: March 11, 2005
By: /s/ William G. Vohrer
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William G. Vohrer, Treasurer
Date: March 11, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By: /s/ Thomas B. Winmill
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Thomas B. Winmill, President
Date: March 11, 2005
By: /s/ William G. Vohrer
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William G. Vohrer, Treasurer
Date: March 11, 2005