-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J+fM+AMUrrdDpOcb66aHUAWKoIQhsr1FtOW+qm4+FqmMydgz5hHldRPo6T9HwqTD XYVPyx5ICtCGpfVSajXWzQ== 0000909226-98-000002.txt : 19980107 0000909226-98-000002.hdr.sgml : 19980107 ACCESSION NUMBER: 0000909226-98-000002 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980217 FILED AS OF DATE: 19980106 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLETON CHINA WORLD FUND INC CENTRAL INDEX KEY: 0000909226 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 593192206 STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 811-07876 FILM NUMBER: 98501408 BUSINESS ADDRESS: STREET 1: BROWARD FINANCIAL CENTRE STREET 2: 500 EAST BROWARD BLVD STE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394-3091 BUSINESS PHONE: 3055277500 MAIL ADDRESS: STREET 1: 500 EAST BROWARD BLVD SUITE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394 DEF 14A 1 DEFINITIVE PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. ______________) Filed by the Registrant /X/ Filed by a party other than the Registrant / / Check the appropriate box: / / Preliminary proxy statement / / Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2)) /X/ Definitive proxy statement / / Definitive additional materials / / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12 TEMPLETON CHINA WORLD 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 transactions applies: (2) Aggregate number of securities to which transactions 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 materials. / / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify 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: TEMPLETON CHINA WORLD 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. 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 don't return their proxies in sufficient numbers, we have to incur the expense of follow-up solicitations, which can cost your fund money. 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 the Fund Information Department at 1-800/DIAL BEN. [GRAPHIC OMITTED] TEMPLETON CHINA WORLD FUND, INC. NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS The Annual Meeting ("Meeting") of shareholders of Templeton China World Fund, Inc. (the "Fund") will be held at 500 E. Broward Boulevard, 12th Floor, Ft. Lauderdale, Florida 33394-3091 on Tuesday, February 17, 1998 at 10:00 A.M. (EST). 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 August 31, 1998; and 3. The transaction of any other business as may properly come before the Meeting. By order of the Board of Directors, Barbara J. Green, Secretary January 5, 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. - -------------------------------------------------------------------------------- TEMPLETON CHINA WORLD FUND, INC. PROXY STATEMENT - - INFORMATION ABOUT VOTING: Who is eligible to vote? Shareholders of record at the close of business on December 19, 1997 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 all matters presented at the Meeting. The Notice of Meeting, the proxy, and the proxy statement were mailed to shareholders of record on or about January 5, 1998. On what issues am I being asked to vote? You are being asked to vote on three proposals: 1. The election of three 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 August 31, 1998; and 3. The transaction of any other business that may properly come before the Meeting. 1 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 for 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. Proxies that are properly signed, dated and received 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, 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 as to any other matters (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 - THE PROPOSALS: 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, and each year the term of office of one class expires. Charles E. Johnson, Andrew H. Hines, Jr., and Charles B. Johnson have been nominated for three-year terms, set to expire at the 2001 Annual Meeting of Shareholders. These terms continue, however, until successors are duly qualified and elected. All of the nominees are currently members of the Board and all of the current Directors are also directors or trustees of other investment companies in the Franklin Group of Funds(R) 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, as of December 19, 1997, 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). The Fund's investment manager and fund administrator are indirect wholly-owned subsidiaries of Resources. There are no family relationships among any of the Directors or nominees for Director other than Charles B. Johnson and Charles E. Johnson, who are father and son. 3 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 will vote in their discretion for another person or other persons who may be nominated as Directors. Listed below, for each nominee and Director, is a brief description of recent professional experience as well as each person's ownership of shares of the Fund and shares of all funds in the Franklin Templeton Group of Funds:
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 on Fund) as of with the Fund Years and Age December 19, 1997 November 18, 1997 - -------------------------------- ------------------------------------ -------------------- ------------------ Nominees to serve until 2001 Annual Meeting of Shareholders: CHARLES E. JOHNSON* Senior vice president and director 0 1,935 Director and Vice President of Franklin Resources, Inc.; senior since 1993 vice president of Franklin Templeton Distributors, Inc.; president and director of Templeton Worldwide, Inc.; president, chief executive officer, chief investment officer and director of Franklin Institutional Services Corporation; chairman and director of Templeton Investment Counsel, Inc.; vice president of 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 37 of the investment companies in the Franklin Templeton Group of Funds. Age 41.
4
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 on Fund) as of with the Fund Years and Age December 19, 1997 November 18, 1997 - ---------------------------------- ------------------------------------- -------------------- ------------------ ANDREW H. HINES, JR. Consultant for the Triangle 1,119 (**) 33,992 Director since 1993 Consulting Group; executive-in- residence of Eckerd College (1991-present); formerly, chairman of the board and chief executive officer of Florida Progress Corporation (1982-1990) and director of various of its subsidiaries; and director or trustee of 24 of the investment companies in the Franklin Templeton Group of Funds. Age 74. CHARLES B. JOHNSON* President, chief executive officer 1,000 (**) 2,391,567 Chairman of the Board and director of Franklin since 1995 and Vice President Resources, Inc.; chairman of the since 1993 board and director of Franklin Advisers, Inc., Franklin Investment Advisory Services, Inc., Franklin Advisory Services, Inc. and Franklin Templeton Distributors, Inc.; director of Franklin/ Templeton Investor Services, Inc., and Franklin Templeton Services, Inc.; formerly, director of General Host Corporation (nursery and craft centers); and officer and/or director or trustee, as the case may be, of most of the other subsidiaries of Franklin Resources, Inc. and 53 of the investment companies in the Franklin Templeton Group of Funds. Age 64.
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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 on Fund) as of with the Fund Years and Age December 19, 1997 November 18, 1997 - ------------------------ -------------------------------------- -------------------- ------------------ Directors serving until 2000 Annual Meeting of Shareholders: JOHN WM. GALBRAITH President of Galbraith Properties, 1,609 (**) 1,191,853 Director since 1995 Inc. (personal investment company); director of Gulf West Banks, Inc. (bank holding company) (1995-present); formerly, director of Mercantile Bank (1991-1995), vice chairman of Templeton, Galbraith & Hansberger Ltd. (1986-1992), and chairman of Templeton Funds Management, Inc. (1974-1991); and director or trustee of 22 of the investment companies in the Franklin Templeton Group of Funds. Age 76. BETTY P. KRAHMER Director or trustee of various civic 1,190 (**) 97,228 Director since 1993 associations; formerly, economic analyst, U.S. government; and director or trustee of 23 of the investment companies in the Franklin Templeton Group of Funds. Age 68.
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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 on Fund) as of with the Fund Years and Age December 19, 1997 November 18, 1997 - ------------------------ ------------------------------------ -------------------- ------------------ GORDON S. MACKLIN Chairman of White River 2,000 (**) 229,733 Director since 1993 Corporation (financial services); director of Fund American Enterprises Holdings, Inc., MCI Communications Corporation, CCC Information Services Group, Inc. (information services), MedImmune, Inc. (biotechnology), Shoppers Express (home shopping) and Spacehab, Inc. (aerospace services); formerly, chairman of Hambrecht and Quist Group, director of H&Q Healthcare Investors and president of the National Association of Securities Dealers, Inc.; and director or trustee of 51 of the investment companies in the Franklin Templeton Group of Funds. Age 69. FRED R. MILLSAPS Manager of personal investments 1,049 (**) 248,325 Director since 1993 (1978-present); director of various business and nonprofit organizations; formerly, chairman and chief executive officer of Landmark Banking Corporation (1969-1978), financial vice president of Florida Power and Light (1965-1969) and vice president of The Federal Reserve Bank of Atlanta (1958-1965); and director or trustee of 24 of the investment companies in the Franklin Templeton Group of Funds. Age 68.
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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 on Fund) as of with the Fund Years and Age December 19, 1997 November 18, 1997 - ------------------------ ------------------------------------- -------------------- ------------------ Directors serving until 1999 Annual Meeting of Shareholders: EDITH E. HOLIDAY Director (1993-present) of 0 1,542 Director since 1996 Amerada Hess Corporation and Hercules Incorporated; director of Beverly Enterprises, Inc. (1995-present) and H. J. Heinz Company (1994-present); formerly chairman (1995-1997) and trustee (1993-1997) of 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); and director or trustee of 16 of the investment companies in the Franklin Templeton Group of Funds. Age 45. HARRIS J. ASHTON Director of RBC Holdings Inc. (a 100 (**) 304,319 Director since 1993 bank holding company) and Bar-S Foods (a meat packing company); formerly, chairman of the board, president and chief executive officer of General Host Corporation (nursery and craft centers); and director or trustee of 52 of the investment companies in the Franklin Templeton Group of Funds. Age 65.
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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 on Fund) as of with the Fund Years and Age December 19, 1997 November 18, 1997 - ------------------------ ------------------------------------- -------------------- ------------------ NICHOLAS F. BRADY* Chairman of Templeton Emerging 0 23,314 Director since 1993 Markets Investment Trust PLC; chairman of Templeton Latin America Investment Trust PLC; chairman of Darby Overseas Investments, Ltd. and Darby Emerging Markets Investments LDC (investment firms) (1994-present); chairman and director of Templeton Central and Eastern European Investment Company; director of the Templeton Global Strategy Funds; director of Amerada Hess Corporation, Christiana Companies, and the H.J. Heinz Company; formerly, Secretary of the United States Department of the Treasury (1988-1993) and chairman of the board of Dillon, Read & Co., Inc. (investment banking) prior to 1988; and director or trustee of 23 of the investment companies in the Franklin Templeton Group of Funds. Age 67. S. JOSEPH FORTUNATO Member of the law firm of Pitney, 100 (**) 389,377 Director since 1993 Hardin, Kipp & Szuch; formerly, director of General Host Corporation (nursery and craft centers); and director or trustee of 54 of the investment companies in the Franklin Templeton Group of Funds. Age 65.
9 -------------------- * Nicholas F. Brady, Charles B. Johnson, and Charles E. Johnson are "interested persons" as defined by the Investment Company Act of 1940 (the "1940 Act"). The 1940 Act limits the percentage of interested persons that comprise a fund's board of directors. Charles B. Johnson is an interested person due to his ownership interest in Resources, and Charles E. Johnson is an interested person due to his 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 established Darby Overseas in February 1994, and 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% How often do the Directors meet and what are they paid? The Directors generally meet quarterly to review the operations of the Fund and other funds within the Franklin Templeton Group of Funds. Each fund pays its Independent Directors and Mr. Brady an annual retainer and/or fees for attendance at Board and Committee meetings. This compensation is based on the level of assets in each fund. Accordingly, as of the last scheduled meeting, the Fund paid the Independent Directors and Mr. Brady an annual retainer of $2,500 and a fee of $200 per meeting of the Board and its portion of a flat fee of $2,000 for each Audit Committee meeting and/or Nominating and Compensation Committee meeting attended. Directors are not compensated for any Nominating and Compensation Committee meeting that is held in conjunction with a Board meeting. Independent Directors are reimbursed by the Fund for any expenses incurred in attending Board and Committee meetings. During the fiscal year ended August 31, 1997, there were four meetings of the Board, one meeting of the Audit Committee, and one meeting 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 throughout the 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 Templeton Asset Management Ltd.--Hong Kong Branch, the Fund's investment manager, and its affiliates. Templeton Asset Management Ltd.--Hong Kong Branch, or its affiliates pays the salaries and expenses of the Officers. No pension or retirement benefits are accrued as part of Fund expenses. 10 The following table shows the compensation paid to Independent Directors and Mr. Brady by the Fund and by the Franklin Templeton Group of Funds:
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** - ------------------------- ---------------- -------------------------------- ------------------------ Harris J. Ashton $3,300 52 $339,842 Andrew H. Hines, Jr. $3,314 24 $144,175 Edith E. Holiday $3,300 16 $ 72,875 Betty P. Krahmer $3,300 23 $119,675 Fred R. Millsaps $3,314 24 $144,175 S. Joseph Fortunato $3,300 54 $356,762 Gordon S. Macklin $3,300 51 $332,492 John Wm. Galbraith $3,314 22 $117,675 Nicholas F. Brady $3,300 23 $119,675 -------------------- * For the fiscal year ended August 31, 1997. ** For the calendar year ended December 31, 1997.
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:
Name and Offices Principal Occupation with Fund During Past Five Years and Age - ------------------------------------ --------------------------------------------------------------- CHARLES B. JOHNSON See Proposal 1, "Election of Directors". Chairman of the Board since 1995 and Vice President since 1993 J. MARK MOBIUS Portfolio manager of various Templeton advisory affiliates; President since 1993 managing director of Templeton Asset Management Ltd.; formerly, president of International Investment Trust Company Limited (investment manager of Taiwan R.O.C. Fund) (1986-1987) and director of Vickers da Costa, Hong Kong (1983-1986); and officer of 8 of the investment companies in the Franklin Templeton Group of Funds. Age 61. RUPERT H. JOHNSON, JR. Executive vice president and director of Franklin Resources, Vice President since 1996 Inc. and Franklin Templeton Distributors, Inc.; president and director of Franklin Advisers, Inc.; senior vice president and director of Franklin Advisory Services, Inc. and Franklin Investment Advisory Services, Inc.; director of Franklin/Templeton Investor Services, Inc.; and officer and/or director or trustee, as the case may be, of most other subsidiaries of Franklin Resources, Inc. and 57 of the investment companies in the Franklin Templeton Group of Funds. Age 57.
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Name and Offices Principal Occupation with Fund During Past Five Years and Age - ------------------------------ ---------------------------------------------------------------- HARMON E. BURNS Executive vice president, secretary and director of Franklin Vice President since 1996 Resources, Inc.; executive vice president and director of Franklin Templeton Distributors, Inc. and Franklin Templeton Services, Inc.; executive vice president of Franklin Advisers, Inc.; director of 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 57 of the investment companies in the Franklin Templeton Group of Funds. Age 52. CHARLES E. JOHNSON See Proposal 1, "Election of Directors". Vice President since 1996 DEBORAH R. GATZEK Senior vice president and general counsel of Franklin Vice President since 1996 Resources, Inc.; senior vice president of Franklin Templeton Services, Inc. and Franklin Templeton Distributors, Inc.; vice president of Franklin Advisers, Inc. and Franklin Advisory Services, Inc.; vice president, chief legal officer and chief operating officer of Franklin Investment Advisory Services, Inc.; and officer of 57 of the investment companies in the Franklin Templeton Group of Funds. Age 49. MARK G. HOLOWESKO President and chief investment officer of Templeton Global Vice President since 1993 Advisors Limited; executive vice president and director of Templeton Worldwide, Inc.; formerly, investment administrator with RoyWest Trust Corporation (Bahamas) Limited (1984-1985); and officer of 23 of the investment companies in the Franklin Templeton Group of Funds. Age 37. MARTIN L. FLANAGAN Senior vice president and chief financial officer of Franklin Vice President since 1993 Resources, Inc.; director and executive vice president of Templeton Worldwide, Inc.; director, executive vice president and chief operating officer of Templeton Investment Counsel, Inc.; senior vice president and treasurer of Franklin Advisers, Inc.; treasurer of Franklin Advisory Services, Inc.; treasurer and chief financial officer of Franklin Investment Advisory Services, Inc.; president of Franklin Templeton Services, Inc.; senior vice president of Franklin/Templeton Investor Services, Inc.; and officer and/or director or trustee, as the case may be, of 57 of the investment companies in the Franklin Templeton Group of Funds. Age 37.
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Name and Offices Principal Occupation with Fund During Past Five Years and Age - ------------------------------ --------------------------------------------------------------- JOHN R. KAY Vice president and treasurer of Templeton Worldwide, Inc.; Vice President since 1994 assistant vice president of Franklin Templeton Distributors, Inc.; formerly, vice president and controller of the Keystone Group, Inc.; and officer of 27 of the investment companies in the Franklin Templeton Group of Funds. Age 57. ELIZABETH M. KNOBLOCK General counsel, secretary and a senior vice president of Vice President-Compliance Templeton Investment Counsel, Inc.; senior vice president of since 1996 Templeton Global Investors, Inc.; formerly, vice president and associate general counsel of Kidder Peabody & Co. Inc. (1989-1990), assistant general counsel of Gruntal & Co., Inc. (1988), vice president and associate general counsel of Shearson Lehman Hutton Inc. (1988), vice president and assistant general counsel of E.F. Hutton & Co. Inc. (1986-1988), and special counsel of the Division of Investment Management of the U.S. Securities and Exchange Commission (1984-1986); and officer of 23 of the investment companies in the Franklin Templeton Group of Funds. Age 42. BARBARA J. GREEN Senior vice president of Templeton Worldwide, Inc.; senior Secretary since 1996 vice president of Templeton Global Investors, Inc.; formerly, deputy director of the Division of Investment Management, executive assistant and senior advisor to the chairman, counsellor 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); and secretary of 23 of the investment companies in the Franklin Templeton Group of Funds. Age 50. JAMES R. BAIO Certified public accountant; treasurer of Franklin Mutual Treasurer since 1994 Advisers, Inc.; senior vice president of Templeton Worldwide, Inc., Templeton Global Investors, Inc. and Templeton Funds Trust Company; formerly, senior tax manager with Ernst & Young (certified public accountants) (1977-1989); and treasurer of 24 of the investment companies in the Franklin Templeton Group of Funds. Age 43.
13 2. RATIFICATION OR REJECTION OF INDEPENDENT AUDITORS: How is an independent auditor 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 generally 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 an independent auditor. Which independent auditor did the Board of Directors 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 1993, and has examined and reported on the fiscal year-end financial statements dated August 31, 1997, 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. 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 as specified. Proxies reflecting no specification will be voted in accordance with the judgment of the persons named in the proxy. 14 - - INFORMATION ABOUT THE FUND The Fund's last audited financial statements and annual report, dated August 31, 1997, 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 December 19, 1997, the Fund had 20,383,772 shares outstanding and net assets of $206,198,830. The Fund's shares are listed on the NYSE (symbol: TCH). 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 December 19, 1997, 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 December 19, 1997, 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. Section 16(a) Beneficial Ownership Reporting Compliance. U.S. securities laws require that the Fund's shareholders owning more than 10% of outstanding shares, Directors and Officers, as well as affiliated persons of its investment manager, report their ownership of the Fund's shares and any changes in that ownership. During the fiscal year ended August 31, 1997, the filing dates for these reports were met. In making this disclosure, the Fund relied upon the written representations of the persons affected and copies of their relevant filings. The Investment Manager. The investment manager of the Fund is Templeton Asset Management Ltd.--Hong Kong Branch ("Templeton (Hong Kong)"), a Singapore company with a branch office at Two Exchange Square, Hong Kong. Pursuant to an investment management agreement dated September 9, 1993 and last amended and restated as of November 23, 1995, Templeton (Hong Kong) manages the investment and reinvestment of Fund assets. Templeton (Hong Kong) is an indirect, wholly-owned subsidiary of Resources. 15 The Fund Administrator. The administrator of the Fund is Franklin Templeton Services, Inc. ("FT Services"), 777 Mariners Island Blvd., San Mateo, California 94403-7777, an indirect, wholly-owned subsidiary of Resources. Pursuant to an administration agreement dated October 1, 1996, FT Services performs certain administrative functions for the Fund. In addition, FT Services and the Fund have entered into a sub-administration agreement dated October 1, 1996 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 its address is P.O. Box 9011, Princeton, New Jersey 08543. 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, pursuant to a service agreement dated September 7, 1993. The Custodian. The custodian for the Fund is The Chase Manhattan Bank, 1 Chase Manhattan Plaza, New York, New York 10081, pursuant to a custody agreement dated September 7, 1993. - 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 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 and clients. If these instructions are not received by the date specified in the broker-dealer firms' proxy solicitation materials, the Fund understands that the NYSE permits the broker-dealers to vote on behalf of their customers and clients. 16 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 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 at the Meeting. Proposal 3, the transaction of any other business, is expected to require the affirmative vote of a majority of the Fund's shares present and voting 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. Simultaneous Meetings. The Meeting is to be held at the same time as the meetings of shareholders of Templeton Emerging Markets Fund, Inc., Templeton Global Income Fund, Inc., Templeton Global Governments Income Trust, and Templeton Emerging Markets Income Fund, Inc. It is anticipated that all 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. If a sufficient number of votes in favor of the proposals contained in the Notice of Annual Meeting and Proxy Statement is not received by the time scheduled for the Meeting, the persons named in the proxy may propose one or more adjournments of the Meeting to a date not more than 120 days after the original record date to permit further solicitation of proxies with respect to any such proposals. Any proposed adjournment requires the affirmative vote of a majority of shares present at the Meeting. Abstentions and broker non-votes will not be voted for or against any adjournment to permit further solicitation of proxies. Proxies will be voted as specified. Those proxies reflecting no specification will be voted in accordance with the judgment of the persons named in the proxy. 17 Shareholder Proposals. The Fund anticipates that its next annual meeting will be held in February, 1999. Shareholder proposals to be presented at the next annual meeting must be received at the Fund's offices, 500 E. Broward Blvd., Ft. Lauderdale, Florida 33394-3091, no later than September 8, 1998. By order of the Board of Directors, Barbara J. Green, Secretary January 5, 1998 18 APPENDIX A TEMPLETON CHINA WORLD FUND, INC. ANNUAL MEETING OF SHAREHOLDERS, FEBRUARY 17, 1998 PLEASE VOTE PROMPTLY This Proxy is Solicited on behalf of the Board of Directors The undersigned hereby appoints BARBARA J. GREEN, JAMES R. BAIO, and JOHN R. KAY, and each of them, with full power of substitution, as proxies to vote for and in the name, place and stead of the undersigned at the Annual Meeting of Shareholders of Templeton China World Fund, Inc.(the "Fund") to be held at the Fund's offices, 500 East Broward Blvd., Ft. Lauderdale, Florida 33394-3091, on Tuesday, February 17, 1998 at 10:00 A.M., EST, and at any adjournment thereof, according to the number of votes and as fully as if personally present. This Proxy when properly executed will be voted in the manner (or not voted) as specified. If no specification is made, the Proxy will be voted FOR all nominees for Director in Proposal 1, and in favor of Proposal 2, and within the discretion of the Proxyholders as to Proposal 3. Please date this Proxy and sign exactly as your name appears hereon. If more than one owner is registered as such, all must sign. If signing as attorney, executor, trustee or any other representative capacity, or as a corporate officer, please give full title. (Continued, and to be signed on the other side) FOLD AND DETACH HERE - --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- [X] PLEASE MARK YOUR BALLOT AS INDICATED IN THIS EXAMPLE. The Board of Directors Recommends a vote FOR Proposals 1 through 3. Proposal 2--Ratification of the FOR AGAINST ABSTAIN selection of McGladrey & Pullen, [ ] [ ] [ ] Proposal 1 -- Election of Directors LLP as independent auditors for the FOR all nominees WITHHOLD Fund for the fiscal year ending listed (except as AUTHORITY August 31, 1998. Nominees: marked to the right) to vote for all Charles E. Johnson, nominees listed Andrew H. Hines, Jr., and [ ] [ ] Charles B. Johnson. To withhold authority to vote for any Proposal 3--In their discretion, the FOR AGAINST ABSTAIN individual nominee, write that nominee's Proxyholders are authorized to vote [ ] [ ] [ ] name on the line below. upon such other matters which may legally come before the Meeting or ________________________________________ any adjournments thereof. I PLAN TO ATTEND THE MEETING [ ] Date: _____________ Please make sure to sign and date this Proxy using black or blue ink. _____________________________________________________________________ _____________________________________________________________________ Shareholder sign in the box above. _____________________________________________________________________ _____________________________________________________________________ Co-Owner (if any) sign in the box avove - ----------------------------------------------------------------------------------------------------------------------------------- PLEASE DETACH AT PERFORATION
TEMPLETON CHINA WORLD FUND, INC. - -------------------------------------------------------------------------------- IMPORTANT PLEASE SEND IN YOUR PROXY ... TODAY! YOU ARE URGED TO DATE AND SIGN THE ATTACHED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. THIS WILL HELP SAVE THE EXPENSE OF FOLLOW-UP LETTERS TO SHAREHOLDERS WHO HAVE NOT RESPONDED. - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----