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 RUSSIA 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
O-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:
[GRAPHIC OMITTED]
TEMPLETON RUSSIA FUND, INC.
IMPORTANT SHAREHOLDER INFORMATION
This document announces the date, time and location of the annual shareholders
meeting, identifies the proposals to be voted on at the meeting, and contains
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 2 of the proxy
statement.
We urge you to spend a few minutes with the proxy statement, reviewing the
proposals at hand. Then, fill out your proxy card and return it to us. When
shareholders return their proxies promptly, the Fund may be able to save money
by not having to conduct additional mailings. We want to know how you would
like to vote and welcome your comments. Please take a few minutes with these
materials and return your proxy to us. If you have any questions, call Fund
Information at 1-800/DIAL BEN (R).
- ------------------------------------------------------------------------------
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>
[GRAPHIC OMITTED]
TEMPLETON RUSSIA FUND, INC.
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting ("Meeting") of shareholders of Templeton Russia Fund, Inc.
(the "Fund") will be held at 500 East Broward Boulevard, 12th Floor, Ft.
Lauderdale, Florida 33394-3091 on Tuesday, September 29, 1998 at 10:00 a.m.
(EDT).
During the Meeting, shareholders of the Fund will vote on three proposals:
1. The election of Directors of the Fund to hold office for the terms specified;
2. The ratification or rejection of the selection of McGladrey & Pullen, LLP as
independent auditors of the Fund for the fiscal year ending March 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
July 17, 1998
- ------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
<PAGE>
TEMPLETON RUSSIA FUND, INC.
PROXY STATEMENT
* INFORMATION ABOUT VOTING
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on July 10, 1998 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 July 17, 1998.
ON WHAT ISSUES AM I BEING ASKED TO VOTE?
You are being asked to vote on three proposals:
1. The electi on of six nominees to the position of Director;
2. The ratification or rejection of the selection of McGladrey & Pullen,
LLP as independent auditors of the Fund for the fiscal year ending
March 31, 1999; and
3. The transaction of any other business that may properly come before the
Meeting.
1
<PAGE>
HOW DO THE FUND'S DIRECTORS RECOMMEND THAT I VOTE?
The Directors unanimously recommend that you vote:
1. FOR the election of nominees;
2. FOR the ratification of the selection of McGladrey & Pullen, LLP as
independent auditors of the Fund; and
3. FOR the proxyholders to vote, in their discretion, on any other
business that may properly come before the Meeting.
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 attached proxy card. If you are eligible to vote by telephone or
through the internet, separate instructions are enclosed.
Proxy cards that are properly signed, dated and received at or prior to the
Meeting will be voted as specified. If you specify a vote for 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
McGladrey & Pullen, 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 (1) delivering
a written revocation to the Secretary of the Fund, (2) forwarding to the
Fund a later-dated proxy that is received by the Fund at or prior to the
Meeting, or (3) attending the Meeting and voting
in person.
2
<PAGE>
* THE PROPOSALS
PROPOSAL 1: ELECTION OF DIRECTORS
HOW ARE NOMINEES SELECTED?
The Board of Directors of the Fund (the "Board") established a Nominating
and Compensation Committee (the "Committee") consisting of Andrew H. Hines,
Jr., Edith E. Holiday and Gordon S. Macklin. The Committee is responsible
for the selection, nomination for appointment and election 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 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. Martin L. Flanagan, John Wm.
Galbraith, Andrew H. Hines, Jr., Edith E. Holiday and Charles B. Johnson
have been nominated for terms set to expire at the 2001 annual meeting of
shareholders. Frank J. Crothers has been nominated for a two-year term, set
to expire at the 2000 annual meeting of shareholders. These terms continue,
however, until successors are duly elected and qualified. With the
exception of Mr. Crothers, 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- and the Templeton Group of Funds (the "Franklin Templeton Group
of Funds").
Certain nominees and 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.
3
<PAGE>
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 other
persons who may be nominated as Directors.
Listed below, for each nominee and current Director, is a brief description
of recent professional experience.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE JUNE 19, 1998 JUNE 16, 1998
- ------------------------------- ------------------------------------- -------------------- --------------------
<S> <C> <C> <C>
NOMINEES TO SERVE UNTIL 2001 ANNUAL MEETING OF SHAREHOLDERS:
MARTIN L. FLANAGAN* Senior Vice President and Chief 0 2,803
Director and Vice President Financial Officer, Franklin
since 1994 Resources, Inc.; Executive Vice
President and Director, Templeton
Worldwide, Inc.; Executive Vice
President, Chief Operating Officer
and Director, Templeton
Investment Counsel, Inc.;
Executive Vice President and
Chief Financial Officer, Franklin
Advisers, Inc.; Chief Financial
Officer, Franklin Advisory
Services, Inc. and Franklin
Investment Advisory Services, Inc.;
President and Director, Franklin
Templeton Services, Inc.; Senior
Vice President and Chief Financial
Officer, Franklin/Templeton
Investor Services, 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 53 of the investment
companies in the Franklin
Templeton Group of Funds.
Age 38.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE JUNE 19, 1998 JUNE 16, 1998
- ------------------------- ------------------------------------- -------------------- -----------------------
<S> <C> <C> <C>
JOHN WM. GALBRAITH President, Galbraith Properties, 1,134(**) 1,243,462
Director since 1995 Inc. (personal investment
company); Director, Gulf West
Banks, Inc. (bank holding
company) (1995-present); director
or trustee, as the case may be, of
20 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 76.
ANDREW H. HINES, JR. Consultant for the Triangle 0 36,725
Director since 1994 Consulting Group; Executive-in-
Residence of Eckerd College
(1991-present); director or trustee,
as the case may be, of 22 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 75.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE JUNE 19, 1998 JUNE 16, 1998
- ------------------------ ------------------------------------- -------------------- -----------------------
<S> <C> <C> <C>
EDITH E. HOLIDAY Director, Amerada Hess 100(**) 2,431
Director since 1996 Corporation (crude oil and
natural gas refining)
(1993-present), Hercules
Incorporated (chemicals, fibers and
resins) (1993-present), Beverly
Enterprises, Inc. (health care)
(1995-present) and H.J. Heinz
Company (packaged foods and
allied products) (1994-present);
director or trustee, as the case may
be, of 25 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 46.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE JUNE 19, 1998 JUNE 16, 1998
- ----------------------------- -------------------------------------- -------------------- -------------------
<S> <C> <C> <C>
CHARLES B. JOHNSON* President, Chief Executive Officer 50,000(**) 1,474,371
Chairman since 1995 and and Director, Franklin Resources,
Vice President since 1994 Inc.; Chairman of the Board and
Director, Franklin Advisers, Inc.,
Franklin Advisory Services, 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 50 of the
investment companies in the
Franklin Templeton Group of
Funds; and FORMERLY, Director,
General Host Corporation
(nursery and craft centers).
Age 65.
NOMINEE TO SERVE UNTIL 2000 ANNUAL MEETING OF SHAREHOLDERS:
FRANK J. CROTHERS Chairman, Atlantic Equipment & 0 11,351
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 5 of
the investment companies in the
Franklin Templeton Group of
Funds. Age 54.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE JUNE 19, 1998 JUNE 16, 1998
- -------------------------------- -------------------------------------- --------------------- ------------------
<S> <C> <C> <C>
DIRECTORS SERVING UNTIL 2000 ANNUAL MEETING OF SHAREHOLDERS:
HARMON E. BURNS* Executive Vice President and 0 5,719,973
Director since 1994 and Vice Director, Franklin Resources, Inc.,
President since 1996 Franklin Templeton Distributors,
Inc. and Franklin Templeton
Services, Inc.; Executive Vice
President, Franklin Advisers, Inc.;
Director, Franklin/Templeton
Investor 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 53 of the investment
companies in the Franklin
Templeton Group of Funds.
Age 53.
BETTY P. KRAHMER Director or trustee of various civic 500(**) 105,043
Director since 1994 associations; director or trustee, as
the case may be, of 21 of the
investment companies in the
Franklin Templeton Group of
Funds; and FORMERLY, Economic
Analyst, U.S. government. Age 68.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE JUNE 19, 1998 JUNE 16, 1998
- ------------------------ ------------------------------------ -------------------- ---------------------
<S> <C> <C> <C>
GORDON S. MACKLIN Director, Fund American 2,500(**) 458,864
Director since 1994 Enterprises Holdings, Inc., MCI
Communications Corporation,
MedImmune, Inc. (biotechnology),
Spacehab, Inc. (aerospace services)
and Real 3D (software); director
or trustee, as the case may be, of
49 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 70.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE JUNE 19, 1998 JUNE 16, 1998
- ------------------------ ------------------------------------- -------------------- -----------------------
<S> <C> <C> <C>
FRED R. MILLSAPS Manager of personal investments 0 700,551
Director since 1994 (1978-present); director of
various business and nonprofit
organizations; director or trustee,
as the case may be, of 22 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 69.
DIRECTORS SERVING UNTIL 1999 ANNUAL MEETING OF SHAREHOLDERs:
HARRIS J. ASHTON Director, RBC Holdings, Inc. (a 1,000(**) 861,572
Director since 1994 bank holding company) and Bar-S
Foods (a meat packing company);
director or trustee, as the case may
be, of 49 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). Age 66.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE JUNE 19, 1998 JUNE 16, 1998
- ------------------------ ----------------------------------- -------------------- -----------------------
<S> <C> <C> <C>
NICHOLAS F. BRADY* Chairman, Templeton Emerging 1,000(**) 37,305
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); Chairman
and Director, Templeton Central
and Eastern European Investment
Company; Director, Templeton
Global Strategy Funds, Amerada
Hess Corporation (crude oil and
natural gas refining), Christiana
Companies, Inc. (operating and
investment companies), and H.J.
Heinz Company (packaged foods
and allied products); director or
trustee, as the case may be, of 21
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) prior to 1988. Age 68.
S. JOSEPH FORTUNATO Member of the law firm of Pitney, 1,000(**) 359,946
Director since 1994 Hardin, Kipp & Szuch; director or
trustee, as the case may be, of 51
of the investment companies in
the Franklin Templeton Group of
Funds; and FORMERLY, Director,
General Host Corporation
(nursery and craft centers).
Age 65.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE JUNE 19, 1998 JUNE 16, 1998
- ------------------------ ------------------------------------- -------------------- -----------------------
<S> <C> <C> <C>
CONSTANTINE DEAN Physician, Lyford Cay Hospital 0 75,334
TSERETOPOULOS (1987-present); director of various
Director since 1997 nonprofit organizations; director or
trustee, as the case may be, of 5 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 44.
<FN>
- -----------------------------
* Nicholas F. Brady, Harmon E. Burns, Martin L. Flanagan, and Charles B.
Johnson are "interested persons" of the Fund 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. Messrs. Burns and Flanagan are interested persons
due to their employment affiliation with Resources. 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%.
</FN>
</TABLE>
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., the Fund's investment
manager (the "Investment Manager"), and various other service providers.
The Fund currently pays the Independent Directors and Mr. Brady an annual
retainer of $2,000 and a fee of $100 per Board meeting attended. Directors
serving on the audit committee of the Fund and other
12
<PAGE>
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 the Nominating and Compensation
Committee are not compensated for any committee meeting that is held in
conjunction with a Board meeting.
During the fiscal year ended March 31, 1998, there were four meetings of
the Board, one meeting of the Audit Committee, and two meetings of the
Nominating and Compensation Committee. Each of the Directors then in office
attended at least 73% of the total number of meetings of the Board. There
was 100% attendance at all committee meetings during the fiscal year.
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>
The following table shows the compensation paid to Directors by the Fund
and by the Franklin Templeton Group of Funds:
<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 $1,875 49 $344,642
Nicholas F. Brady 1,875 21 119,675
S. Joseph Fortunato 1,875 51 361,562
John Wm. Galbraith 2,005 20 117,675
Andrew H. Hines, Jr. 2,105 22 144,175
Edith E. Holiday 1,875 25 72,875
Betty P. Krahmer 1,875 21 119,675
Gordon S. Macklin 1,875 49 337,292
Fred R. Millsaps 2,105 22 144,175
Constantine Dean
Tseretopoulos 1,525 5 33,775
<FN>
- ----------------------------
* Compensation received for the fiscal year ended March 31, 1998, which
was prior to the adoption of the current fee compensation referred to
above.
** 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 55 registered investment
companies, with approximately 170 U.S. based funds or series.
*** For the calendar year ended December 31, 1997.
</FN>
</TABLE>
13
<PAGE>
The table above indicates the total fees paid to Directors by all of the
funds in the Franklin Templeton Group of Funds and by the Fund
individually. 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
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.
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 of Templeton Asset Management Ltd.;
officer of 8 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 61.
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.; Senior Vice President and
Director, Franklin Advisory Services, Inc. and Franklin
Investment Advisory Services, Inc.; 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 53 of the
investment companies in the Franklin Templeton Group of
Funds. Age 57.
HARMON E. BURNS See Proposal 1, "Election of Directors."
Director since 1994 and
Vice President since 1996
14
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH THE FUND DURING PAST FIVE YEARS AND AGE
- ------------------------------------- ------------------------------------------------------------------
<S> <C>
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.; President,
Chief Executive Officer, Chief Investment Officer and
Director, Franklin Institutional Services Corporation;
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
34 of the investment companies in the Franklin Templeton
Group of Funds. Age 42.
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, Inc.; 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 49.
MARK G. HOLOWESKO President and Chief Investment Officer, Templeton Global
Vice President since 1994 Advisors Limited; Executive Vice President and Director,
Templeton Worldwide, Inc.; officer of 21 of the investment
companies in the Franklin Templeton Group of Funds; and
FORMERLY, Investment Administrator, RoyWest Trust
Corporation (Bahamas) Limited (1984-1985). Age 38.
MARTIN L. FLANAGAN See Proposal 1, "Election of Directors."
Director and Vice President since
1994
SAMUEL J. FORESTER, JR. Vice President of 10 of the investment companies in the
Vice President since 1994 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 50.
15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH THE FUND DURING PAST FIVE YEARS AND AGE
- ------------------------------ -----------------------------------------------------------------
<S> <C>
JOHN R. KAY Vice President and Treasurer, Templeton Worldwide, Inc.;
Vice President since 1994 Assistant Vice 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 57.
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 21 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 of
the Division of Investment Management, U.S. Securities and
Exchange Commission (1984-1986). Age 43.
BARBARA J. GREEN Senior Vice President, Templeton Worldwide, Inc. and
Secretary since 1996 Templeton Global Investors, Inc.; officer of 21 of the
investment companies in the Franklin Templeton Group of
Funds; and FORMERLY, Deputy Director of the 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 50.
JAMES R. BAIO Certified Public Accountant; Treasurer, Franklin Mutual
Treasurer since 1994 Advisers, Inc.; Senior Vice President, Templeton Worldwide,
Inc., Templeton Global Investors, Inc. and Templeton Funds
Trust Company; officer of 22 of the investment companies in
the Franklin Templeton Group of Funds; and FORMERLY, Senior
Tax Manager, Ernst & Young (certified public accountants)
(1977-1989). Age 44.
</TABLE>
16
<PAGE>
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?
For the current fiscal year, the Board selected as auditors the firm of
McGladrey & Pullen, LLP, 555 Fifth Avenue, New York, New York 10017.
McGladrey & Pullen, LLP has been the auditors of the Fund since its
inception in 1994, and has examined and reported on the fiscal year-end
financial statements, dated March 31, 1998, and certain related Securities
and Exchange Commission filings. Neither the firm of McGladrey & Pullen,
LLP nor any of its members have any material direct or indirect financial
interest in the Fund.
Representatives of McGladrey & Pullen, LLP are not expected to be present
at the Meeting, but have been given 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
3named in the proxy.
17
<PAGE>
* INFORMATION ABOUT THE FUND
The Fund's last audited financial statements and annual report, dated March
31, 1998, are available free of charge. To obtain a copy, please call
1-800/DIAL BEN- or forward a written request to Franklin/Templeton Investor
Services, Inc., P.O. Box 33030, St. Petersburg, Florida 33733-8030.
As of July 10, 1998, the Fund had 5,407,737 shares outstanding and net
assets of $75,975,880. The Fund's shares are listed on the NYSE (Symbol:
TRF). 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 16, 1998, 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 19, 1998,
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,
1.40% of the outstanding shares of the Fund.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. U.S. securities
laws require that the Fund's Directors, Officers and shareholders owning
more than 10% of outstanding shares, as well as affiliated persons of its
Investment Manager, report their ownership of the Fund's shares and any
changes in that ownership. Specific due dates for these reports have been
established, and the Fund is required to report in this proxy statement any
failure to file by these dates during the fiscal year ended March 31, 1998.
To the best of the Fund's knowledge, all of these filing requirements were
met.
THE INVESTMENT MANAGER. The Investment Manager of the Fund is Templeton
Asset Management Ltd. ("Asset Management"), a Singapore company with an
office at 7 Temasek Boulevard, #38-03, Suntec Tower One, Singapore.
Pursuant to an investment management agreement, Asset Management manages
the investment and reinvestment of Fund assets. Asset Management is an
indirect, wholly-owned subsidiary of Resources.
18
<PAGE>
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 and the Fund have entered into a
sub-administration agreement with Princeton Administrators, L.P.
("Princeton"), pursuant to which Princeton performs, subject to FT
Services' supervision, various administrative functions for the Fund.
Princeton is an affiliate of Merrill Lynch, Pierce, Fenner & Smith Inc., an
initial underwriter of the Fund's shares, and Princeton's address is P.O.
Box 9011, Princeton, New Jersey 08543-9011.
THE TRANSFER AGENT. The transfer agent, registrar and dividend disbursement
agent for the Fund is ChaseMellon Shareholder Services, L.L.C., 120 Broadway,
New York, New York 10271.
THE CUSTODIAN. The custodian for the Fund is The Chase Manhattan Bank, 1
Chase Manhattan Plaza, New York, New York 10081.
19
<PAGE>
* FURTHER INFORMATION ABOUT VOTING AND
THE SHAREHOLDERS MEETING
SOLICITATION OF PROXIES. The cost of soliciting proxies, including the fees
of a proxy soliciting agent, are borne by the Fund. The Fund reimburses
brokerage firms and others for their expenses in forwarding proxy material to
the beneficial owners and soliciting them to execute proxies. The Fund does
not reimburse Directors and Officers of the Fund, and regular employees and
agents of the Investment Manager involved in the solicitation of proxies.
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 and clients, will request voting instructions from their
customers, clients and beneficial owners. If these instructions are not
received by the date specified in the broker-dealer firms' proxy
solicitation materials, the Fund understands that NYSE Rules permit the
broker-dealers to vote on the items to be considered at the Meeting on
behalf of their customers, clients, and the 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 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, the transaction of any other business, 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 Proposals 1, 2, and 3.
20
<PAGE>
SIMULTANEOUS MEETINGS. The Meeting is to be held at the same time as the
meeting of Templeton Emerging Markets Appreciation Fund, Inc. It is
anticipated that both meetings will be held simultaneously. If any
shareholder at the Meeting objects to the holding of a simultaneous meeting
and moves for an adjournment of the Meeting to a time promptly after the
simultaneous meeting, the persons named as proxies will vote in favor of
such adjournment.
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 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 other matters that may properly come before the
Meeting.
SHAREHOLDER PROPOSALS. The Fund anticipates that its next annual meeting
will be held in September, 1999. 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, no later than March
19, 1999.
By order of the Board of Directors,
Barbara J. Green
Secretary
July 17, 1998
21
<PAGE>
PROXY
TEMPLETON RUSSIA FUND, INC.
ANNUAL MEETING OF SHAREHOLDERS - SEPTEMBER 29, 1998
The undersigned hereby appoints BARBARA J. GREEN, JAMES R. BAIO and JOHN R.
KAY, and each of them, proxies of the undersigned with full power of
substitution to vote for share of Templeton Russia Fund, Inc. (the "Fund") which
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 10:00 a.m.., EDT,
on the 29th day of September 1998, including any adjournment thereof, upon the
matters set forth below and revokes all previous proxies for his shares.
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 SIGN ON REVERSE SIDE SEE REVERSE SIDE
FOLD AND DETACH HERE
<PAGE>
X PLEASE MARK YOUR VOTES AS INDICATED IN THIS EXAMPLE
1 - Election of Directors
Nominees: Frank J. Crothers, Martin L. Flanagan, John Wm. Galbraith, Andrew H.
Hines, Jr., Edith E.Holiday and Charles B. Johnson.
FOR all nominees WITHHOLD
listed (except as AUTHORITY
marked to the right) to vote for all
nominees listed
above
[ ] [ ]
To withhold authority to vote for any indivdual nominee, write that nominee's
name on the line below.
------------------------------------------------------------------------
2 - Ratification of the selection of McGladrey & Pullen, LLP, as independent
auditors for the Fund for the fiscal year ending March 31, 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3- In their descretion, the Proxyholders are authorized to vote upon such other
matters which may legally come before the Meeting or any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
YES NO
I PLAN TO ATTEND THE MEETING. [ ] [ ]
Signature(s): Date: ,1998
------------------------------------------------ --------
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 holders must sign.
FOLD AND DETACH HERE
