TEMPLETON RUSSIA FUND INC, DEF 14A, 1999-08-12

TEMPLETON RUSSIA FUND INC
DEF 14A, 1999-08-12

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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 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 RUSSIA FUND, INC.

IMPORTANT SHAREHOLDER INFORMATION

These materials are for the annual meeting of shareholders scheduled for
Thursday, September 23, 1999 at 10:00 a.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 RUSSIA FUND, INC.

NOTICE OF 1999 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 Thursday, September 23, 1999 at 10:00 a.m.
Eastern time.

During the Meeting, shareholders of the Fund will vote on three proposals:

1. The election of four 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 March 31,
2000; 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.

<PAGE>

TEMPLETON RUSSIA 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 four 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 March
31, 2000; 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 four 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 four Directors are expiring. Harris J. Ashton, Nicholas F. Brady,
S. Joseph Fortunato and Constantine Dean

2
<PAGE>

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 other
persons who may be nominated as Directors.

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.

3
<PAGE>

HARRIS J. ASHTON Director, RBC Holdings, Inc. 1,000(**) 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
FUND SHARES FRANKLIN
BENEFICIALLY OWNED TEMPLETON
AND % OF TOTAL GROUP OF FUNDS
PRINCIPAL OCCUPATION OUTSTANDING (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE SHARES ON FUND) AS OF
WITH THE FUND YEARS AND AGE 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.

S. JOSEPH FORTUNATO Member of the law firm of Pitney, 1,000(**) 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.
</TABLE>

5
<PAGE>

DIRECTORS SERVING UNTIL 2001 ANNUAL MEETING OF SHAREHOLDERS:

MARTIN L. FLANAGAN* Senior Vice President and Chief 0 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.
</TABLE>

6
<PAGE>

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FUND SHARES FRANKLIN
BENEFICIALLY OWNED TEMPLETON
AND % OF TOTAL GROUP OF FUNDS
PRINCIPAL OCCUPATION OUTSTANDING (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE SHARES ON FUND) AS OF
WITH THE FUND YEARS AND AGE JUNE 30, 1999 JUNE 30, 1999
- ------------------------ ------------------------------------- ------------------- ---------------
<S> <C> <C> <C>
JOHN WM. GALBRAITH President, Galbraith Properties, 1,000(**) 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.

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
FUND SHARES FRANKLIN
BENEFICIALLY OWNED TEMPLETON
AND % OF TOTAL GROUP OF FUNDS
PRINCIPAL OCCUPATION OUTSTANDING (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE SHARES ON FUND) AS OF
WITH THE FUND YEARS AND AGE 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
FUND SHARES FRANKLIN
BENEFICIALLY OWNED TEMPLETON
AND % OF TOTAL GROUP OF FUNDS
PRINCIPAL OCCUPATION OUTSTANDING (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE SHARES ON FUND) AS OF
WITH THE FUND YEARS AND AGE JUNE 30, 1999 JUNE 30, 1999
- ----------------------------- ------------------------------------ ------------------- ---------------
<S> <C> <C> <C>
CHARLES B. JOHNSON* President, Chief Executive Officer 50,000(**) 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:

HARMON E. BURNS* Executive Vice President and 0 514,009
DIRECTOR SINCE 1994 AND Director, Franklin Resources, Inc.,
VICE PRESIDENT SINCE 1996 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.
</TABLE>

9
<PAGE>

BETTY P. KRAHMER Director or trustee of various civic 500(**) 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 2,500(**) 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
FUND SHARES FRANKLIN
BENEFICIALLY OWNED TEMPLETON
AND % OF TOTAL GROUP OF FUNDS
PRINCIPAL OCCUPATION OUTSTANDING (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE SHARES ON FUND) AS OF
WITH THE FUND YEARS AND AGE 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, Harmon E. Burns, 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. Messrs. Burns and Flanagan are interested persons due to their
employment affiliation with Resources and their positions 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 of the Fund (the "Independent Directors").
** Less than 1%.

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

11
<PAGE>

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 March 31, 1999, there were five meetings of
the Board, two meetings of the Audit Committee, and two 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 $2,500 48 $361,157
Nicholas F. Brady 2,500 20 140,975
Frank J. Crothers 1,400 11 47,700
S. Joseph Fortunato 2,500 50 367,835
John Wm. Galbraith 2,720 19 134,425
Andrew H. Hines, Jr. 2,720 21 208,075
Edith E. Holiday 2,500 24 211,400
Betty P. Krahmer 2,500 20 141,075
Gordon S. Macklin 2,500 48 361,157
Fred R. Millsaps 2,720 21 210,075
Constantine Dean
Tseretopoulos 2,500 11 51,500
</TABLE>
------------------------
* Compensation received for the fiscal year ended March 31, 1999.
** 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 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

12
<PAGE>

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 See Proposal 1, "Election of Directors."
DIRECTOR SINCE 1994 AND
VICE PRESIDENT SINCE 1996

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.

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.
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH THE FUND DURING PAST FIVE YEARS AND AGE
- ------------------------------ ----------------------------------------------------------------
<S> <C>
MARTIN L. FLANAGAN See Proposal 1, "Election of Directors."
DIRECTOR AND VICE PRESIDENT
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.

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.
</TABLE>
15
<PAGE>

<TABLE>
<CAPTION>
NAME AND OFFICES PRINCIPAL OCCUPATION
WITH THE FUND DURING PAST FIVE YEARS AND AGE
- ------------------------ ------------------------------------------------------------
<S> <C>
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 March 31, 1999. 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 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.

16
<PAGE>

Representatives of PricewaterhouseCoopers LLP and McGladrey and 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 2, 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., a Singapore company with an office at 7 Temasek
Boulevard, #38-03, Suntec Tower One, Singapore. 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 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., 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.

17
<PAGE>

OTHER MATTERS. The Fund's last audited financial statements and annual
report, dated March 31, 1999, 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 5,415,714 shares outstanding and net
assets of $73,914,417. 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 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 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 will request voting instructions from their customers and
beneficial owners. If these instructions are not received by the date
specified in the broker-dealer firms' proxy solicitation materials, the
Fund understands that NYSE Rules permit the broker-dealers to vote on the
proposals to

18
<PAGE>

be considered at the Meeting on behalf of their customers 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, 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.

SIMULTANEOUS MEETINGS. The Meeting is to be held at the same time as the
annual meeting of shareholders 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

19
<PAGE>

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 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

<PAGE>

TLTRF PROXY 8/99

<PAGE>

TEMPLETON RUSSIA 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 Russia 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 10:00 a.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, 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 March 31, 2000.

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