SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for use
of the Commission only (as
[X] Definitive proxy statement permitted Rule 14a-6(e)(2)
[ ] Definitive additional materials
[ ] Soliciting material pursuant to 240.14a-11(c) or 240.14a-12
TEMPLETON DRAGON FUND, INC.
---------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11(Set forth the amount on
which the filing fee is calculated and state how it was
determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary material.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identifying the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
[FRANKLIN TEMPLETON LOGO]
TEMPLETON DRAGON FUND, INC.
IMPORTANT SHAREHOLDER INFORMATION
These materials are for the annual meeting of shareholders scheduled for
Thursday, September 23, 1999 at 2:00 p.m. Eastern time. They discuss the
proposals to be voted on at the meeting, and contain your proxy statement and
proxy card. A proxy card is, in essence, a ballot. When you vote your proxy, it
tells us how you wish to vote on important issues relating to your fund. If you
complete and sign the proxy, we'll vote it exactly as you tell us. If you
simply sign the proxy, we'll vote it in accordance with the Directors'
recommendations on page 1 of the proxy statement.
WE URGE YOU TO SPEND A FEW MINUTES REVIEWING THE PROPOSALS IN THE PROXY
STATEMENT. THEN, FILL OUT THE PROXY CARD AND RETURN IT TO US SO THAT WE KNOW
HOW YOU WOULD LIKE TO VOTE. WHEN SHAREHOLDERS RETURN THEIR PROXIES PROMPTLY,
THE FUND MAY BE ABLE TO SAVE MONEY BY NOT HAVING TO CONDUCT ADDITIONAL
MAILINGS.
WE WELCOME YOUR COMMENTS. IF YOU HAVE ANY QUESTIONS, CALL FUND INFORMATION AT
1-800/DIAL BEN/registered trademark/ (1-800/342-5236).
TELEPHONE AND INTERNET VOTING
FOR YOUR CONVENIENCE, YOU MAY BE ABLE TO VOTE BY TELEPHONE OR THROUGH THE
INTERNET, 24 HOURS A DAY. IF YOUR ACCOUNT IS ELIGIBLE, A CONTROL NUMBER AND
SEPARATE INSTRUCTIONS ARE ENCLOSED.
<PAGE>
[FRANKLIN TEMPLETON LOGO]
TEMPLETON DRAGON FUND, INC.
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting ("Meeting") of shareholders of Templeton Dragon Fund, Inc.
(the "Fund") will be held at 500 East Broward Boulevard, 12th Floor, Ft.
Lauderdale, Florida 33394-3091 on Thursday, September 23, 1999 at 2:00 p.m.
Eastern time.
During the Meeting, shareholders of the Fund will vote on three proposals:
1. The election of five Directors of the Fund to hold office for the terms
specified;
2. The ratification or rejection of the selection of PricewaterhouseCoopers
LLP as independent auditors of the Fund for the fiscal year ending December
31, 1999; and
3. The transaction of any other business that may properly come before the
Meeting.
By order of the Board of Directors,
Barbara J. Green
SECRETARY
August 13, 1999
MANY SHAREHOLDERS HOLD SHARES IN MORE THAN ONE TEMPLETON FUND AND WILL
RECEIVE PROXY MATERIAL FOR EACH FUND OWNED. PLEASE SIGN AND PROMPTLY RETURN
EACH PROXY CARD IN THE SELF-ADDRESSED ENVELOPE REGARDLESS OF THE NUMBER OF
SHARES YOU OWN. JAPANESE SHAREHOLDERS SHOULD BE AWARE THAT JAPAN SECURITIES
CLEARING CORPORATION MAY EXERCISE A VOTE ON PROPOSALS 1, 2 AND 3 ON YOUR
BEHALF IF YOU DO NOT RETURN A PROXY CARD.
<PAGE>
TEMPLETON DRAGON FUND, INC.
PROXY STATEMENT
o INFORMATION ABOUT VOTING
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on June 30, 1999 are
entitled to be present and to vote at the Meeting or any adjourned Meeting.
Each share of record is entitled to one vote on each matter presented at
the Meeting. The Notice of Meeting, the proxy card, and the proxy statement
were mailed to shareholders of record on or about August 13, 1999.
ON WHAT ISSUES AM I BEING ASKED TO VOTE?
You are being asked to vote on three proposals:
1. The election of five nominees to the position of Director;
2. The ratification or rejection of the selection of PricewaterhouseCoopers
LLP as independent auditors of the Fund for the fiscal year ending
December 31, 1999; and
3. The transaction of any other business that may properly come before the
Meeting.
HOW DO THE FUND'S DIRECTORS RECOMMEND THAT I VOTE?
The Directors unanimously recommend that you vote:
1. FOR the election of the five nominees;
2. FOR the ratification of the selection of PricewaterhouseCoopers LLP as
independent auditors of the Fund; and
3. FOR the proxyholders to have discretion to vote on any other business that
may properly come before the Meeting.
1
<PAGE>
HOW DO I ENSURE THAT MY VOTE IS ACCURATELY RECORDED?
You may attend the Meeting and vote in person or you may complete and
return the enclosed proxy card. If you are eligible to vote by telephone or
through the internet, a control number and separate instructions are
enclosed.
Proxy cards that are properly signed, dated and received at or prior to the
Meeting will be voted as specified. If you specify a vote for any of the
Proposals 1 through 3, your proxy will be voted as you indicated. If you
simply sign and date the proxy card, but don't specify a vote for any of
the Proposals 1 through 3, your shares will be voted IN FAVOR of the
nominees for Director (Proposal 1), IN FAVOR of ratifying the selection of
PricewaterhouseCoopers LLP as independent auditors (Proposal 2), and/or IN
ACCORDANCE with the discretion of the persons named in the proxy card as to
any other matters that legally may come before the Meeting (Proposal 3).
CAN 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 at
or prior to the Meeting, or attending the Meeting and voting in person.
o THE PROPOSALS
PROPOSAL 1: ELECTION OF DIRECTORS
HOW ARE NOMINEES SELECTED?
The Board of Directors of the Fund (the "Board") has a Nominating and
Compensation Committee (the "Committee") consisting of Andrew H. Hines,
Jr., Edith E. Holiday and Gordon S. Macklin, all of whom are independent
directors. The Committee is responsible for the selection and nomination
for appointment of candidates to serve as Directors of the Fund. The
Committee will review shareholders' nominations to fill vacancies on the
Board, if these nominations are submitted in writing and addressed to the
Committee at the Fund's offices. However, the Committee expects to be able
to identify from its own resources an ample number of qualified candidates.
WHO ARE THE NOMINEES AND DIRECTORS?
The Board is divided into three classes, each class having a term of three
years. Each year the term of office of one class expires. This year, the
terms of five Directors are expiring.
2
<PAGE>
Harris J. Ashton, Nicholas F. Brady, Frank J. Crothers, S. Joseph Fortunato
and Constantine Dean Tseretopoulos have been nominated for three-year
terms, set to expire at the 2002 Annual Meeting of Shareholders. These
terms continue, however, until successors are duly elected and qualified.
All of the nominees are currently members of the Board. In addition, all of
the current nominees and Directors are also directors or trustees of other
investment companies in the Franklin Group of Funds/registered trademark/
and/or the Templeton Group of Funds (collectively, the "Franklin Templeton
Group of Funds").
Certain Directors of the Fund hold director and/or officer positions with
Franklin Resources, Inc. ("Resources") and its affiliates. Resources is a
publicly owned holding company, the principal shareholders of which are
Charles B. Johnson and Rupert H. Johnson, Jr., who own approximately 19%
and 15%, respectively, of its outstanding shares. Resources is primarily
engaged, through various subsidiaries, in providing investment management,
share distribution, transfer agent and administrative services to a family
of investment companies. Resources is a New York Stock Exchange, Inc.
("NYSE") listed holding company (NYSE: BEN). Charles E. Johnson, a vice
president of the Fund, is the son and nephew, respectively, of brothers
Charles B. Johnson, the chairman of the Board and a vice president of the
Fund, and Rupert H. Johnson, Jr., a vice president of the Fund. There are
no family relationships among any of the Directors or nominees for
Director.
Each nominee is currently available and has consented to serve if elected.
If any of the nominees should become unavailable, the persons named in the
proxy card will vote in their discretion for another person or persons who
may be nominated as Directors.
3
<PAGE>
Listed below, for each nominee and current Director, is a brief description
of recent professional experience, and ownership of shares of the Fund and
shares of all funds in the Franklin Templeton Group of Funds.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
BENEFICIALLY OWNED GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING SHARES FUND) AS OF
WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999
- ----------------------- ------------------------------------- -------------------- ---------------
<S> <C> <C> <C>
NOMINEES TO SERVE UNTIL 2002 ANNUAL MEETING OF SHAREHOLDERS:
HARRIS J. ASHTON Director, RBC Holdings, Inc. 500(**) 1,615,494
DIRECTOR SINCE 1994 (bank holding company) and Bar-S
Foods (meat packing company);
director or trustee, as the case may
be, of 48 of the investment
companies in the Franklin
Templeton Group of Funds; and
FORMERLY, President, Chief
Executive Officer and Chairman of
the Board, General Host
Corporation (nursery and craft
centers) (until 1998). Age 67.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
BENEFICIALLY OWNED GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING SHARES FUND) AS OF
WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999
- ----------------------- ----------------------------------- -------------------- ---------------
<S> <C> <C> <C>
NICHOLAS F. BRADY* Chairman, Templeton Emerging 1,000(**) 50,067
DIRECTOR SINCE 1994 Markets Investment Trust PLC,
Templeton Latin America
Investment Trust PLC, Darby
Overseas Investments, Ltd. and
Darby Emerging Markets
Investments LDC (investment
firms) (1994-present); Director,
Templeton Global Strategy Funds,
Amerada Hess Corporation
(exploration and refining of
natural gas), Christiana
Companies, Inc. (operating and
investment companies), and H.J.
Heinz Company (processed foods
and allied products); director or
trustee, as the case may be, of 20
of the investment companies in the
Franklin Templeton Group of
Funds; and FORMERLY, Secretary of
the United States Department of
the Treasury (1988-1993) and
Chairman of the Board, Dillon,
Read & Co., Inc. (investment
banking) (until 1988). Age 69.
FRANK J. CROTHERS Chairman, Atlantic Equipment & 0 3,762
DIRECTOR SINCE 1998 Power Ltd.; Vice Chairman,
Caribbean Utilities Co., Ltd.;
President, Provo Power
Corporation; director of various
other business and non-profit
organizations; and director or
trustee, as the case may be, of 11
of the investment companies in the
Franklin Templeton Group of
Funds. Age 55.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
BENEFICIALLY OWNED GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING SHARES FUND) AS OF
WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999
- ----------------------- ------------------------------------- -------------------- ---------------
<S> <C> <C> <C>
S. JOSEPH FORTUNATO Member of the law firm of Pitney, 100(**) 472,398
DIRECTOR SINCE 1994 Hardin, Kipp & Szuch; and
director or trustee, as the case may
be, of 50 of the investment
companies in the Franklin
Templeton Group of Funds.
Age 67.
CONSTANTINE DEAN Physician, Lyford Cay Hospital 0 86,831
TSERETOPOULOS (1987-present); director of various
DIRECTOR SINCE 1998 nonprofit organizations; director or
trustee, as the case may be, of 11
of the investment companies in the
Franklin Templeton Group of
Funds; and FORMERLY, Cardiology
Fellow, University of Maryland
(1985-1987) and Internal Medicine
Intern, Greater Baltimore Medical
Center (1982-1985). Age 45.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
BENEFICIALLY OWNED GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING SHARES FUND) AS OF
WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999
- ------------------------------ ------------------------------------- -------------------- ---------------
<S> <C> <C> <C>
DIRECTORS SERVING UNTIL 2001 ANNUAL MEETING OF SHAREHOLDERS:
MARTIN L. FLANAGAN* Senior Vice President and Chief 1,345(**) 13,203
DIRECTOR AND VICE PRESIDENT Financial Officer, Franklin
SINCE 1994 Resources, Inc.; President and
Director, Franklin Templeton
Services, Inc.; Executive Vice
President and Director, Templeton
Worldwide, Inc. and Templeton
Investment Counsel, Inc.;
Executive Vice President, Franklin
Advisers, Inc.; officer and/or
director of a number of other
subsidiaries of Franklin Resources,
Inc.; and officer and/or director or
trustee, as the case may be, of 52
of the investment companies in the
Franklin Templeton Group of
Funds. Age 39.
ANDREW H. HINES, JR. Consultant, Triangle Consulting 0 48,637
DIRECTOR SINCE 1994 Group; Executive-in-Residence,
Eckerd College (1991-present);
director or trustee, as the case may
be, of 21 of the investment
companies in the Franklin
Templeton Group of Funds; and
FORMERLY, Chairman and Director,
Precise Power Corporation
(1990-1997), Director, Checkers
Drive-In Restaurant, Inc. (1994-
1997), and Chairman of the Board
and Chief Executive Officer,
Florida Progress Corporation
(holding company in the energy
area) (1982-1990) and director of
various of its subsidiaries. Age 76.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
BENEFICIALLY OWNED GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING SHARES FUND) AS OF
WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999
- ---------------------- ------------------------------------- -------------------- ---------------
<S> <C> <C> <C>
EDITH E. HOLIDAY Director, Amerada Hess 100(**) 16,660
DIRECTOR SINCE 1996 Corporation (exploration and
refining of natural gas) (1993-
present), Hercules Incorporated
(chemicals, fibers and resins)
(1993-present), Beverly
Enterprises, Inc. (health care)
(1995-present) and H.J. Heinz
Company (processed foods and
allied products) (1994-present);
director or trustee, as the case may
be, of 24 of the investment
companies in the Franklin
Templeton Group of Funds; and
FORMERLY, Chairman (1995-1997)
and Trustee (1993-1997), National
Child Research Center, 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). Age 47.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
BENEFICIALLY OWNED GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING SHARES FUND) AS OF
WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999
- ---------------------------- ------------------------------------ -------------------- ---------------
<S> <C> <C> <C>
CHARLES B. JOHNSON* President, Chief Executive Officer 14,604(**) 2,203,689
CHAIRMAN SINCE 1995 AND and Director, Franklin Resources,
VICE PRESIDENT SINCE 1994 Inc.; Chairman of the Board and
Director, Franklin Advisers, Inc.,
Franklin Investment Advisory
Services, Inc. and Franklin
Templeton Distributors, Inc.;
Director, Franklin/Templeton
Investor Services, Inc. and
Franklin Templeton Services, Inc.;
officer and/or director or trustee,
as the case may be, of most of the
other subsidiaries of Franklin
Resources, Inc. and of 49 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 66.
DIRECTORS SERVING UNTIL 2000 ANNUAL MEETING OF SHAREHOLDERS:
JOHN WM. GALBRAITH President, Galbraith Properties, 11,614(**) 2,752,567
DIRECTOR SINCE 1995 Inc. (personal investment
company); Director Emeritus, Gulf
West Banks, Inc. (bank holding
company) (1995-present); director
or trustee, as the case may be, of
19 of the investment companies in
the Franklin Templeton Group of
Funds; and FORMERLY, Director,
Mercantile Bank (1991-1995), Vice
Chairman, Templeton, Galbraith &
Hansberger Ltd. (1986-1992), and
Chairman, Templeton Funds
Management, Inc. (1974-1991).
Age 78.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
BENEFICIALLY OWNED GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING SHARES FUND) AS OF
WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999
- ----------------------- -------------------------------------- -------------------- ---------------
<S> <C> <C> <C>
BETTY P. KRAHMER Director or trustee of various civic 9,000(***) 137,154
DIRECTOR SINCE 1994 associations; director or trustee, as
the case may be, of 20 of the
investment companies in the
Franklin Templeton Group of
Funds; and FORMERLY, Economic
Analyst, U.S. government. Age 69.
GORDON S. MACKLIN Director, Fund American 2,000(**) 246,141
DIRECTOR SINCE 1994 Enterprises Holdings, Inc. (holding
company), Martek Biosciences
Corporation, MCI WorldCom
(information services),
MedImmune, Inc. (biotechnology),
Spacehab, Inc. (aerospace services)
and Real 3D (software); director
or trustee, as the case may be, of
48 of the investment companies in
the Franklin Templeton Group of
Funds; and FORMERLY, Chairman,
White River Corporation (financial
services) and Hambrecht and
Quist Group (investment banking),
and President, National
Association of Securities Dealers,
Inc. Age 71.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
BENEFICIALLY OWNED GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING SHARES FUND) AS OF
WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999
- ---------------------- ------------------------------------ -------------------- ---------------
<S> <C> <C> <C>
FRED R. MILLSAPS Manager of personal investments 0 1,073,194
DIRECTOR SINCE 1994 (1978-present); director of various
business and nonprofit
organizations; director or trustee,
as the case may be, of 21 of the
investment companies in the
Franklin Templeton Group of
Funds; and FORMERLY, Chairman
and Chief Executive Officer,
Landmark Banking Corporation
(1969-1978), Financial Vice
President, Florida Power and Light
(1965-1969), and Vice President,
Federal Reserve Bank of Atlanta
(1958-1965). Age 70.
</TABLE>
------------------------
* Nicholas F. Brady, Martin L. Flanagan, and Charles B. Johnson are
"interested persons" as defined by the Investment Company Act of 1940, as
amended (the "1940 Act"). The 1940 Act limits the percentage of interested
persons that can comprise a fund's board of directors. Mr. Johnson is an
interested person due to his ownership interest in Resources, his
employment affiliation with Resources and his position with the Fund. Mr.
Flanagan is an interested person due to his employment affiliation with
Resources and his position with the Fund. Mr. Brady's status as an
interested person results from his business affiliations with Resources
and Templeton Global Advisors Limited. Mr. Brady and Resources are both
limited partners of Darby Overseas Partners, L.P. ("Darby Overseas"). Mr.
Brady is Chairman and shareholder of Darby Emerging Markets Investments
LDC, which is the corporate general partner of Darby Overseas. In
addition, Darby Overseas and Templeton Global Advisors Limited are limited
partners of Darby Emerging Markets Fund, L.P. The remaining nominees and
Directors of the Fund are not interested persons (the "Independent
Directors").
** Less than 1%.
*** Less than 1%. Of the shares indicated, Mrs. Krahmer beneficially owns
1,000 shares for her own account. Of the remainder, beneficial ownership
may be attributable to Mrs. Krahmer by virtue of her husband's ownership
of 4,000 shares through a retirement account, and the ownership of 4,000
shares held in trust for the benefit of Mrs. Krahmer's children for which
her husband serves as trustee.
HOW OFTEN DO THE DIRECTORS MEET AND WHAT ARE THEY PAID?
The role of the Directors is to provide general oversight of the Fund's
business, and to ensure that the Fund is operated for the benefit of
shareholders. The Directors anticipate meeting at least five times during
the current fiscal year to review the operations of the Fund and the Fund's
investment performance. The Directors also oversee the services furnished
to the Fund by Templeton Asset Management Ltd.-Hong Kong branch, the Fund's
investment manager (the "Investment Manager"), and various other service
providers. The
11
<PAGE>
Fund currently pays the Independent Directors and Mr. Brady an annual
retainer of $2,000 and a fee of $400 per Board meeting attended. Directors
serving on the Audit Committee of the Fund and other investment companies
in the Franklin Templeton Group of Funds receive a flat fee of $2,000 per
Audit Committee meeting attended, a portion of which is allocated to the
Fund. Members of a committee are not compensated for any committee meeting
held on the day of a Board meeting.
During the fiscal year ended December 31, 1998, there were five meetings of
the Board, one meeting of the Audit Committee, and three meetings of the
Nominating and Compensation Committee. Each of the Directors 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
Director served. There was 100% attendance at the meetings of the Audit
Committee and the Nominating and Compensation Committee.
Certain Directors and Officers of the Fund are shareholders of Resources
and may receive indirect remuneration due to their participation in
management fees and other fees received from the Franklin Templeton Group
of Funds by the Investment Manager and its affiliates. 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.
<TABLE>
<CAPTION>
AGGREGATE NUMBER OF BOARDS WITHIN THE TOTAL COMPENSATION FROM
COMPENSATION FRANKLIN TEMPLETON GROUP OF THE FRANKLIN TEMPLETON
NAME OF DIRECTOR FROM THE FUND* FUNDS ON WHICH DIRECTOR SERVES** GROUP OF FUNDS***
- ------------------------- ---------------- ---------------------------------- ------------------------
<S> <C> <C> <C>
Harris J. Ashton $4,550 48 $361,157
Nicholas F. Brady 4,550 20 140,975
Frank J. Crothers 1,200 11 47,700
S. Joseph Fortunato 4,550 50 367,835
John Wm. Galbraith 5,425 19 134,425
Andrew H. Hines, Jr. 5,775 21 208,075
Edith E. Holiday 4,550 24 211,400
Betty P. Krahmer 4,550 20 141,075
Gordon S. Macklin 4,550 48 361,157
Fred R. Millsaps 5,775 21 210,075
Constantine Dean
Tseretopoulos 1,600 11 51,500
</TABLE>
------------------------
* Compensation received for the fiscal year ended December 31, 1998.
** We base the number of boards on the number of registered investment
companies in the Franklin Templeton Group of Funds. This number does not
include the total number of series or funds within each investment
company for which the Board members are responsible. The Franklin
Templeton Group of Funds currently includes 54 registered investment
companies, with approximately 162 U.S. based funds or series.
*** For the calendar year ended December 31, 1998.
The table above indicates the total fees paid to Directors by the Fund
individually and all of the funds in the Franklin Templeton Group of Funds.
These Directors also serve as directors or trustees of other investment
companies in the Franklin Templeton Group of Funds, many of which hold
meetings at different dates and times. The Directors and the
12
<PAGE>
Fund's management believe that having the same individuals serving on the
boards of many of the funds in the Franklin Templeton Group of Funds
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 Directors who can more effectively oversee the
management of the funds.
Board members historically have followed a policy of having substantial
investments in one or more of the funds in the Franklin Templeton Group of
Funds, 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 fees received for serving as a
director or trustee of a Templeton fund in shares of one or more Templeton
funds and one-third of fees received for serving as a director or trustee
of a Franklin fund in shares of one or more Franklin funds until the value
of such investments equals or exceeds five times the annual fees paid to
such board member. Investments in the name of family members or entities
controlled by a board member constitute fund holdings of such board member
for purposes of this policy, and a three year phase-in period applies to
such investment requirements for newly elected board members. In
implementing such policy, a board member's fund holdings existing on
February 27, 1998, are valued as of such date with subsequent investments
valued at cost.
WHO ARE THE EXECUTIVE OFFICERS OF THE FUND?
Officers of the Fund are appointed by the Directors and serve at the
pleasure of the Board. Listed below, for each Executive Officer, is a brief
description of recent professional experience:
<TABLE>
<CAPTION>
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH THE FUND DURING PAST FIVE YEARS AND AGE
- ---------------------------- -------------------------------------------------------------
<S> <C>
CHARLES B. JOHNSON See Proposal 1, "Election of Directors."
CHAIRMAN SINCE 1995 AND
VICE PRESIDENT SINCE 1994
J. MARK MOBIUS Portfolio Manager of various Templeton advisory affiliates;
PRESIDENT SINCE 1994 Managing Director, Templeton Asset Management Ltd.;
officer of eight of the investment companies in the Franklin
Templeton Group of Funds; and FORMERLY, President,
International Investment Trust Company Limited (investment
manager of Taiwan R.O.C. Fund) (1986-1987) and Director,
Vickers da Costa, Hong Kong (1983-1986). Age 62.
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH THE FUND DURING PAST FIVE YEARS AND AGE
- ----------------------------- -----------------------------------------------------------------
<S> <C>
RUPERT H. JOHNSON, JR. Executive Vice President and Director, Franklin Resources,
VICE PRESIDENT SINCE 1996 Inc. and Franklin Templeton Distributors, Inc.; President and
Director, Franklin Advisers, Inc. and Franklin Investment
Advisory Services, Inc.; Senior Vice President, Franklin
Advisory Services, LLC; Director, Franklin/Templeton
Investor Services, Inc.; and officer and/or director or trustee,
as the case may be, of most of the other subsidiaries of
Franklin Resources, Inc. and of 52 of the investment
companies in the Franklin Templeton Group of Funds.
Age 59.
HARMON E. BURNS Executive Vice President and Director, Franklin Resources,
VICE PRESIDENT SINCE 1996 Inc., Franklin Templeton Distributors, Inc. and Franklin
Templeton Services, Inc.; Executive Vice President, Franklin
Advisers, Inc.; Director, Franklin Investment Advisory
Services, Inc. and Franklin/Templeton Investor Services, Inc.;
and officer and/or director or trustee, as the case may be, of
most of the other subsidiaries of Franklin Resources, Inc. and
of 52 of the investment companies in the Franklin Templeton
Group of Funds. Age 54.
CHARLES E. JOHNSON Senior Vice President and Director, Franklin Resources, Inc.;
VICE PRESIDENT SINCE 1996 Senior Vice President, Franklin Templeton Distributors, Inc.;
President and Director, Templeton Worldwide, Inc.; Chairman
and Director, Templeton Investment Counsel, Inc.; Vice
President, Franklin Advisers, Inc.; officer and/or director of
some of the other subsidiaries of Franklin Resources, Inc.;
and officer and/or director or trustee, as the case may be, of
33 of the investment companies in the Franklin Templeton
Group of Funds. Age 43.
DEBORAH R. GATZEK Senior Vice President and General Counsel, Franklin
VICE PRESIDENT SINCE 1996 Resources, Inc.; Senior Vice President, Franklin Templeton
Services, Inc. and Franklin Templeton Distributors, Inc.;
Executive Vice President, Franklin Advisers, Inc.; Vice
President, Franklin Advisory Services, LLC and Franklin
Mutual Advisers, LLC; Vice President, Chief Legal Officer
and Chief Operating Officer, Franklin Investment Advisory
Services, Inc.; and officer of 53 of the investment companies
in the Franklin Templeton Group of Funds. Age 50.
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH THE FUND DURING PAST FIVE YEARS AND AGE
- ------------------------------ ----------------------------------------------------------------
<S> <C>
MARK G. HOLOWESKO President, Templeton Global Advisors Limited; Chief
VICE PRESIDENT SINCE 1994 Investment Officer, Global Equity Group; Executive Vice
President and Director, Templeton Worldwide, Inc.; officer of
20 of the investment companies in the Franklin Templeton
Group of Funds; and FORMERLY, Investment Administrator,
RoyWest Trust Corporation (Bahamas) Limited (1984-1985).
Age 39.
MARTIN L. FLANAGAN See Proposal 1, "Election of Directors."
VICE PRESIDENT AND DIRECTOR
SINCE 1994
SAMUEL J. FORESTER, JR. Managing Director, Templeton Worldwide, Inc.; Vice
VICE PRESIDENT SINCE 1994 President and Director, Templeton Global Income Portfolio
Ltd.; Director, Closed Joint-Stock Company Templeton and
Templeton Trust Services Pvt. Ltd.; officer of 10 of the
investment companies in the Franklin Templeton Group of
Funds; and FORMERLY, President, Templeton Global Bond
Managers, a division of Templeton Investment Counsel, Inc.,
Founder and Partner, Forester, Hairston Investment
Management, Inc. (1989-1990), Managing Director (Mid-East
Region), Merrill Lynch, Pierce, Fenner & Smith Inc. (1987-
1988), and Advisor for Saudi Arabian Monetary Agency
(1982-1987). Age 51.
JOHN R. KAY Vice President, Templeton Worldwide, Inc.; Assistant Vice
VICE PRESIDENT SINCE 1994 President, Franklin Templeton Distributors, Inc.; officer of 25
of the investment companies in the Franklin Templeton
Group of Funds; and FORMERLY, Vice President and Controller,
Keystone Group, Inc. Age 59.
ELIZABETH M. KNOBLOCK General Counsel, Secretary and Senior Vice President,
VICE PRESIDENT-COMPLIANCE Templeton Investment Counsel, Inc.; Senior Vice President,
SINCE 1996 Templeton Global Investors Inc.; officer of 24 of the
investment companies in the Franklin Templeton Group of
Funds; and FORMERLY, Vice President and Associate General
Counsel, Kidder Peabody & Co. Inc. (1989-1990), Assistant
General Counsel, Gruntal & Co., Inc. (1988), Vice President
and Associate General Counsel, Shearson Lehman Hutton
Inc. (1988), Vice President and Assistant General Counsel,
E.F. Hutton & Co. Inc. (1986-1988), and Special Counsel,
Division of Investment Management, U.S. Securities and
Exchange Commission (1984-1986). Age 44.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH THE FUND DURING PAST FIVE YEARS AND AGE
- ------------------------ -------------------------------------------------------------
<S> <C>
BARBARA J. GREEN Senior Vice President, Templeton Worldwide, Inc. and
SECRETARY SINCE 1996 Templeton Global Investors, Inc.; officer of 20 of the
investment companies in the Franklin Templeton Group of
Funds; and FORMERLY, Deputy Director, Division of Investment
Management, Executive Assistant and Senior Advisor to the
Chairman, Counselor to the Chairman, Special Counsel and
Attorney Fellow, U.S. Securities and Exchange Commission
(1986-1995), Attorney, Rogers & Wells, and Judicial Clerk,
U.S. District Court (District of Massachusetts). Age 51.
JAMES R. BAIO Certified Public Accountant; Senior Vice President,
TREASURER SINCE 1994 Templeton Worldwide, Inc., Templeton Global Investors, Inc.
and Templeton Funds Trust Company; officer of 21 of the
investment companies in the Franklin Templeton Group of
Funds; and formerly, Senior Tax Manager, Ernst & Young
(certified public accountants) (1977-1989). Age 45.
</TABLE>
PROPOSAL 2: RATIFICATION OR REJECTION OF INDEPENDENT AUDITORS
HOW ARE INDEPENDENT AUDITORS SELECTED?
The Board has a standing Audit Committee consisting of Messrs. Galbraith,
Hines and Millsaps, all of whom are Independent Directors. The Audit
Committee reviews the maintenance of the Fund's records and the safekeeping
arrangements of the Fund's custodian, reviews both the audit and non-audit
work of the Fund's independent auditors, and submits a recommendation to
the Board as to the selection of independent auditors.
WHICH INDEPENDENT AUDITORS DID THE BOARD SELECT?
Upon the recommendation of the Audit Committee, the Board selected the firm
of PricewaterhouseCoopers LLP, 333 Market Street, San Francisco, CA 94105,
as auditors of the Fund for the current fiscal year. You are being asked to
ratify the Board's selection of PricewaterhouseCoopers LLP. Services to be
performed by the auditors include examining and reporting on the fiscal
year-end financial statements of the Fund and certain related filings with
the U.S. Securities and Exchange Commission.
McGladrey & Pullen, LLP resigned as auditors of the Fund on August 9, 1999.
McGladrey & Pullen, LLP has served as the Fund's auditors from the Fund's
inception through the fiscal year ended December 31, 1998. There have not
been any disputes or disagreements with McGladrey & Pullen, LLP on any
matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedures. H&R Block, a
16
<PAGE>
public company, acquired certain assets of McGladrey & Pullen, LLP on
August 2, 1999. Following its acquisition by a public company, McGladrey &
Pullen, LLP elected to not continue servicing clients in the mutual fund
business. As a result, the partners and professional staff who were
previously responsible for auditing the Fund's financial statements are now
associated with PricewaterhouseCoopers LLP.
Neither the firms of PricewaterhouseCoopers LLP and McGladrey & Pullen, LLP
nor any of their members have any material direct or indirect financial
interest in the Fund.
Representatives of PricewaterhouseCoopers LLP and McGladrey & Pullen, LLP
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.
PROPOSAL 3: OTHER BUSINESS
The Directors know of no other business to be presented at the Meeting.
However, if any additional matters should be properly presented, proxies
will be voted or not voted as specified. Proxies reflecting no
specification will be voted in accordance with the judgment of the persons
named in the proxy. Because the Fund did not have notice of any such
matters before June 15, 1999, the persons named as proxies may exercise
their discretionary voting power with respect to any matter presented at
the Meeting.
o INFORMATION ABOUT THE FUND
THE INVESTMENT MANAGER. The Investment Manager of the Fund is Templeton
Asset Management Ltd.-Hong Kong branch, a Singapore company with a branch
office at Two Exchange Square, Hong Kong. Pursuant to an investment
management agreement, the Investment Manager manages the investment and
reinvestment of Fund assets. The Investment Manager is an indirect, wholly
owned subsidiary of Resources.
THE ADMINISTRATOR. The administrator of the Fund is Franklin Templeton
Services, Inc. ("FT Services") with offices at 777 Mariners Island
Boulevard, San Mateo, California 94403-7777. FT Services is an indirect,
wholly owned subsidiary of Resources. Pursuant to an administration
agreement, FT Services performs certain administrative functions for the
Fund. In addition, FT Services has entered into a Japanese shareholder
servicing and administration agreement with Nomura Asset Management U.S.A.
Inc. ("NAM-USA"), formerly Nomura Capital Management, Inc., under which
NAM-USA performs certain administrative functions in Japan, subject to FT
Services' supervision. NAM-USA is an affiliate of Nomura International
(Hong Kong) Limited, an initial underwriter of the Fund's
17
<PAGE>
shares. NAM-USA has offices at 180 Maiden Lane, 26th Floor, New York, New
York 10038.
THE TRANSFER AGENT. The transfer agent, registrar and dividend
disbursement agent for the Fund is ChaseMellon Shareholder Services,
L.L.C., 85 Challenger Road, Overpeck Centre, Ridgefield Park, New Jersey
07660.
THE CUSTODIAN. The custodian for the Fund is The Chase Manhattan Bank,
MetroTech Center, Brooklyn, New York 11245.
OTHER MATTERS. The Fund's last audited financial statements and annual
report, dated December 31, 1998, are available free of charge. To obtain a
copy, please call 1-800/DIAL BEN/registered trademark/ or forward a written
request to Franklin/Templeton Investor Services, Inc., P.O. Box 33030, St.
Petersburg, Florida 33733-8030.
As of June 30, 1999, the Fund had 52,859,893 shares outstanding and net
assets of $679,912,611. The Fund's shares are listed on the NYSE (Symbol:
TDF) and on the Osaka Stock Exchange (Symbol: 8683). 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 June 30,
1999, there were no other entities holding beneficially or of record more
than 5% of the Fund's outstanding shares.
In addition, to the knowledge of the Fund's management, as of June 30,
1999, no nominee or Director of the Fund owned 1% or more of the
outstanding shares of the Fund, and the Officers and Directors of the Fund
owned, as a group, less than 1% of the outstanding shares of the Fund.
o FURTHER INFORMATION ABOUT VOTING AND
THE SHAREHOLDERS MEETING
SOLICITATION OF PROXIES. The cost of soliciting proxies, including the
fees of a 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 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 also may include
telephone, telecopy or oral solicitations. If the Fund does not receive
your proxy by a certain time you may receive a telephone call from
Shareholder Communications Corporation asking you to vote. If professional
proxy solicitors are retained, it is expected that soliciting fees would be
approximately $3,500, plus
18
<PAGE>
expenses. The Fund does not reimburse Directors 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, as well as the Japan Securities Clearing Corporation ("JSCC")
holding shares of the Fund for its beneficial owners, 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' or JSCC's proxy solicitation materials, the Fund understands that
NYSE Rules permit broker-dealers and JSCC to vote on the proposals 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 these shares in
the same proportion as they vote shares for which they received
instructions.
QUORUM. A majority of the shares entitled to vote--present in person or
represented by proxy--constitutes a quorum at the Meeting. The shares over
which broker-dealers and JSCC have discretionary voting power, the shares
that represent "broker non-votes" (I.E., shares held by brokers or nominees
as to which (i) instructions have not been received from the beneficial
owners or persons entitled to vote and (ii) the broker or nominee does not
have discretionary voting power on a particular matter), and the shares
whose proxies reflect an abstention on any item are all counted as shares
present and entitled to vote for purposes of determining whether the
required quorum of shares exists.
METHODS OF TABULATION. Proposal 1, the election of Directors, requires the
affirmative vote of the holders of a plurality of the Fund's shares present
and voting on the Proposal at the Meeting. Proposal 2, ratification of the
selection of the independent auditors, requires the affirmative vote of a
majority of the Fund's shares present and voting on the Proposal at the
Meeting. Proposal 3, for the proxyholders to have discretion to vote on any
other business that may properly come before the Meeting, requires the
affirmative vote of a majority of the Fund's shares present and voting on
the Proposal at the Meeting. Abstentions and broker non-votes will be
treated as votes not cast and, therefore, will not be counted for purposes
of obtaining approval of each Proposal.
ADJOURNMENT. In the event that a quorum is not present at the Meeting, the
Meeting will be adjourned to permit further solicitation of proxies. In the
event that a quorum is present, but sufficient votes have not been received
to approve one or more of the Proposals, the persons named as proxies may
propose one or more adjournments of the Meeting to permit
19
<PAGE>
further solicitation of proxies with respect to those Proposals. The
persons named as proxies will vote in their discretion on questions of
adjournment those shares for which proxies have been received that grant
discretionary authority to vote on matters that may properly come before
the Meeting.
SHAREHOLDER PROPOSALS. The Fund anticipates that its next annual meeting
will be held in August 2000. Shareholder proposals to be presented at the
next annual meeting must be received at the Fund's offices, 500 East
Broward Boulevard, Ft. Lauderdale, Florida 33394-3091, Attn: Secretary, no
later than April 15, 2000 in order to be included in the Fund's proxy
statement and proxy card relating to that meeting and presented at the
meeting. Submission of a proposal by a shareholder does not guarantee that
the proposal will be included in the proxy statement. A shareholder who
wishes to make a proposal at the 2000 annual meeting of shareholders
without including the proposal in the Fund's proxy statement should notify
the Fund, at the Fund's offices, of such proposal by June 29, 2000. If a
shareholder fails to give notice by this date, then the persons named as
proxies in the proxies solicited by the Board for the 2000 annual meeting
of shareholders may exercise discretionary voting power with respect to any
such proposal.
By order of the Board of Directors,
Barbara J. Green
SECRETARY
August 13, 1999
20
<PAGE>
TLTDF PROXY 8/99
<PAGE>
TEMPLETON DRAGON FUND, INC.
ANNUAL MEETING OF SHAREHOLDERS - SEPTEMBER 23, 1999
The undersigned hereby revokes all previous proxies for his/her shares and
appoints BARBARA J. GREEN, JAMES R. BAIO and BRUCE S. ROSENBERG, and each of
them, proxies of the undersigned with full power of substitution to each of
them, to vote all shares of Templeton Dragon Fund, Inc. (the "Fund") that the
undersigned is entitled to vote at the Fund's Annual Meeting to be held at 500
East Broward Blvd., 12th Floor, Ft. Lauderdale, Florida at 2:00 p.m., Eastern
time, on the 23rd day of September 1999, including any adjournments thereof,
upon the matters set forth below.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT WILL BE VOTED AS
SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY SHALL BE VOTED FOR PROPOSALS
1 (INCLUDING ALL NOMINEES FOR DIRECTORS) AND 2, AND WITHIN THE DISCRETION OF THE
PROXYHOLDERS AS TO ANY OTHER MATTER PURSUANT TO PROPOSAL 3.
(CONTINUED, AND TO BE SIGNED ON THE OTHER SIDE)
FOLD AND DETACH HERE
<PAGE>
PLEASE MARK YOUR VOTES AS INDICATED IN THIS EXAMPLE [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 THROUGH 3.
Proposal 1 - Election of Directors.
Nominees: Harris J. Ashton, Nicholas F. Brady, Frank J. Crothers, S.
Joseph Fortunato and Constantine Dean Tseretopoulos
WITHHOLD
FOR all nominees AUTHORITY
listed (except as to vote for all
marked to the right) nominees listed
[ ] [ ]
To withhold authority to vote for any indivdual nominee, write that nominee's
name on the line below.
------------------------------------------------------------------------
Proposal 2 - Ratification of the selection of PricewaterhouseCoopers LLP as
independent auditors for the Fund for the fiscal year ending
December 31, 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Proposal 3 - In their descretion, the Proxyholders are authorized to vote
upon such other matters that may legally come before the Meeting
or any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
YES NO
I PLAN TO ATTEND THE MEETING. [ ] [ ]
SIGNATURE(S): DATE: ,1999
------------------------------------------------ --------
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THE PROXY. IF SIGNING FOR ESTATES,
TRUSTS OR CORPORATIONS, TITLE OR CAPACITY SHOULD BE STATED. IF SHARES ARE HELD
JOINTLY, EACH HOLDER MUST SIGN.
FOLD AND DETACH HERE
