-----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, Me/iVQqP6oMnW/IsmLMshcWvZo7m6vmuGu5BwULg6YM2cLeqOAhgSO+B8slBCK2w f13SZ6T+dlO8neBKPeZJgA== 0000919893-96-000004.txt : 19960613 0000919893-96-000004.hdr.sgml : 19960613 ACCESSION NUMBER: 0000919893-96-000004 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960724 FILED AS OF DATE: 19960612 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLETON DRAGON FUND INC CENTRAL INDEX KEY: 0000919893 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 650473580 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-08394 FILM NUMBER: 96580178 BUSINESS ADDRESS: STREET 1: 700 CENTRAL AVE CITY: ST PETERSBURG STATE: FL ZIP: 33701 BUSINESS PHONE: 8138238712 DEF 14A 1 TEMPLETON DRAGON FUND 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 (Name of Registrant as Specified in Its Charter) TEMPLETON DRAGON FUND, INC. (Name of Person(s) Filing Proxy Statement) TEMPLETON DRAGON FUND, INC. Payment of filing fee (Check the appropriate box): [ X ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2), or Item 22(a)(2) of Schedule 14A.. [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] 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: LOGO Franklin Templeton TEMPLETON DRAGON 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 3. 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. TEMPLETON DRAGON FUND, INC. NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS The Annual Meeting ("Meeting") of shareholders of Templeton Dragon Fund, Inc. (the "Fund") will be held at 700 Central Avenue, St. Petersburg, Florida 33701-3628 on Wednesday, July 24, 1996 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, 1997; and 3. The transaction of any other business as may properly come before the Meeting. By order of the Board of Directors, Thomas M. Mistele, Secretary June 12, 1996 - -------------------------------------------------------------------------- MANY SHAREHOLDERS HOLD SHARES IN MORE THAN ONE TEMPLETON FUND AND WILL RECEIVE PROXY MATERIAL FOR EACH FUND OWNED. PLEASE SIGN AND PROMPTLY RETURN EACH PROXY CARD IN THE SELF-ADDRESSED ENVELOPE REGARDLESS OF THE NUMBER OF SHARES YOU OWN. JAPANESE SHAREHOLDERS SHOULD BE AWARE THAT JAPAN SECURITIES CLEARING CORPORATION MAY EXERCISE A VOTE ON YOUR BEHALF IF YOU DO NOT RETURN A PROXY CARD. - --------------------------------------------------------------------------- TEMPLETON DRAGON FUND, INC. PROXY STATEMENT INFORMATION ABOUT VOTING: WHO IS ELIGIBLE TO VOTE? Shareholders of record at the close of business on June 5, 1996 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 June 12, 1996. ON WHAT ISSUES AM I BEING ASKED TO VOTE? You are being asked to vote on three proposals: The election of three nominees to the position of Director; The ratification or rejection of the selection of McGladrey & Pullen, LLP as independent auditors of the Fund for the fiscal year ending March 31, 1997; and 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 recommend that you vote: FOR the election of nominees; FOR the ratification of the selection of McGladrey & Pullen LLP as independent auditors for the Fund; and 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 signed, dated and received by the close of business on Tuesday, July 23, 1996 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 on or before July 23, 1996, or (3) attending the Meeting and voting in person. 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 Messrs. Hines and 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 four Directors are expiring. Harris J. Ashton, Nicholas F. Brady, and S. Joseph Fortunato have been nominated for three-year terms, set to expire at the 1999 annual meeting of shareholders. These terms continue, however, until successors are duly elected and qualified. In addition, 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 approximately 20% and 16% 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 NYSE , Inc. listed holding company (NYSE: BEN). 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 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:
SHARES OWNED BENEFICIALLY PRINCIPAL OCCUPATION AND % OF TOTAL NAME AND OFFICES WITH THE FUND DURING PAST FIVE OUTSTANDING ON YEARS AND AGE DIRECTOR SINCE MAY 31, 1996 - ------------------------------- -------------------------------------- ------------------- ---------------- NOMINEES TO SERVE UNTIL 1999 ANNUAL MEETING OF SHAREHOLDERS: HARRIS J. ASHTON Chairman of the Board, president and 1994 500** DIRECTOR chief executive officer of General Host Corporation (nursery and craft centers); and a director of RBC Holdings (U.S.A.) Inc. (a bank holding company) and Bar-S Foods. Age 63. NICHOLAS F. BRADY* Chairman of Templeton Emerging Markets 1994 0 DIRECTOR Investment Trust PLC; chairman of Templeton Latin America Investment Trust PLC; chairman of Darby Overseas Investments, Ltd. (an investment firm) (1994-present); chairman and director of Templeton Central and Eastern European Fund; director of the Amerada Hess Corporation, Capital Cities/ABC, Inc., Christiana Companies, and the H.J. Heinz Company; Secretary of the United States Department of the Treasury (1988-January, 1993); and chairman of the board of Dillon, Read & Co. Inc. (investment banking) prior to 1988. Age 66. S. JOSEPH FORTUNATO Member of the law firm of Pitney, 1994 100** DIRECTOR Hardin, Kipp & Szuch; and a director of General Host Corporation. Age 63. DIRECTORS SERVING UNTIL 1997 ANNUAL MEETING OF SHAREHOLDERS: JOHN WM. GALBRAITH President of Galbraith Properties, Inc. 1995 0 DIRECTOR (personal investment company); director of Gulf West Banks, Inc. (bank holding company) (1995-present) and Mercantile Bank (1991-1995); vice chairman of Templeton, Galbraith & Hansberger Ltd. (1986-1992); and chairman of Templeton Funds Management, Inc. (1974-1991). Age 74. BETTY P. KRAHMER Director or trustee of various civic 1994 1,000** DIRECTOR associations; formerly, economic analyst, U.S. Government. Age 66. GORDON S. MACKLIN Chairman of White River Corporation 1994 2,000** DIRECTOR (information services); director of Fund America Enterprises Holdings, Inc., MCI Communications Corporation, Fusion Systems Corporation, Infovest Corporation, and MedImmune, Inc.; and formerly held the following positions: chairman of Hambrecht and Quist Group; director of H&Q Healthcare Investors and Lockheed Martin Corporation; and president of the National Association of Securities Dealers, Inc. Age 68. FRED R. MILLSAPS Manager of personal investments 1994 0 DIRECTOR (1978-present); chairman and chief executive officer of Landmark Banking Corporation (1969-1978); financial vice president of Florida Power and Light (1965-1969); vice president of The Federal Reserve Bank of Atlanta (1958-1965); and a director of various other business and nonprofit organizations. Age 67. DIRECTORS SERVING UNTIL 1998 ANNUAL MEETING OF SHAREHOLDERS: F. BRUCE CLARKE Retired; former credit advisor, 1994 0 DIRECTOR National Bank of Canada, Toronto. Age 86. MARTIN L. FLANAGAN* Senior vice president, treasurer and 1994 0 DIRECTOR AND VICE PRESIDENT chief financial officer of Franklin Resources, Inc.; director and executive vice president of Templeton Investment Counsel, Inc.; director, president and chief executive officer of Templeton Global Investors, Inc.; accountant with Arthur Andersen & Company (1982-1983); and a member of the International Society of Financial Analysts and the American Institute of Certified Public Accountants. Age 35. ANDREW H. HINES, JR. Consultant for the Triangle Consulting 1994 0 DIRECTOR Group; chairman of the board and chief executive officer of Florida Progress Corporation (1982-February 1990) and director of various of its subsidiaries; chairman and director of Precise Power Corporation; executive-in-residence of Eckerd College (1991-present); and a director of Checkers Drive-In Restaurants, Inc. Age 73. CHARLES B. JOHNSON* President, chief executive officer, and 1994 0 CHAIRMAN OF THE BOARD AND VICE director of Franklin Resources, Inc.; PRESIDENT chairman of the board and director of Franklin Advisers, Inc. and Franklin Templeton Distributors, Inc.; director of Franklin Administrative Services, Inc., General Host Corporation, and Templeton Global Investors, Inc.; and officer and director, trustee or managing general partner, as the case may be, of most other subsidiaries of Franklin Resources, Inc. Age 63.
* MESSRS. BRADY, FLANAGAN, AND JOHNSON ARE "INTERESTED PERSONS" AS DEFINED BY THE INVESTMENT COMPANY ACT OF 1940 (THE"1940 ACT"). THE 1940 ACT STIPULATES THAT INTERESTED PERSONS CAN COMPRISE NO MORE THAN 60% OF A FUND'S BOARD OF DIRECTORS. MR. JOHNSON IS AN INTERESTED PERSON DUE TO HIS OWNERSHIP INTEREST IN RESOURCES. MR. FLANAGAN IS AN INTERESTED PERSON DUE TO HIS EMPLOYMENT AFFILIATION WITH RESOURCES, WHEREAS MR. BRADY'S STATUS AS AN INTERESTED PERSON RESULTS FROM HIS BUSINESS AFFILIATIONS WITH RESOURCES AND TEMPLETON GLOBAL ADVISORS LTD. 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 THE CORPORATE GENERAL PARTNER OF DARBY OVERSEAS. IN ADDITION, DARBY OVERSEAS AND TEMPLETON GLOBAL ADVISORS LTD. 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/trustees 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 the fund. Accordingly, the Fund pays the Independent Directors and Mr. Brady an annual retainer of $4,000 and a fee of $350 per meeting of the Board and its committees attended, including the Audit Committee and the Nominating and Compensation Committee. Independent Directors are reimbursed by the Fund for any expenses incurred in attending Board meetings. During the fiscal year ended March 31, 1996, there were four meetings of the Board, three meetings of the Nominating and Compensation Committee and one meeting of the Audit Committee. Each of the Directors then in office attended at least 75% of the total number of meetings of the Board and the Audit Committee throughout the year. There was 100% attendance at the meeting of 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 Templeton Asset Management Ltd. - Hong Kong Branch and its affiliates. Templeton Asset Management Ltd. - Hong Kong Branch or its affiliates pay the salaries and expenses of the Officers. No pension or retirement benefits are accrued as part of Fund expenses. The following table shows the compensation paid to Independent Directors and Mr. Brady by the Fund and by the Franklin Templeton Group of Funds:
NUMBER OF BOARDS AGGREGATE WITHIN THE FRANKLIN TOTAL COMPENSATION FROM COMPENSATION FROM TEMPLETON GROUP OF THE FRANKLIN TEMPLETON NAME OF DIRECTOR THE FUND* FUNDS ON WHICH GROUP OF FUNDS** DIRECTOR SERVES ----------------------- ---------------------- ----------------------- -------------------------- Harris J. Ashton $5,400 56 $327,925 F. Bruce Clarke 6,685 20 83,350 Andrew H. Hines, Jr. 6,752 24 106,325 Hasso-G Von Diergardt-Naglo 5,400 20 77,350 Betty P. Krahmer 5,400 24 93,475 Fred R. Millsaps 6,685 24 104,325 S. Joseph Fortunato 5,400 58 344,745 Gordon S. Macklin 5,467 53 321,525 John Wm. Galbraith 5,050 23 70,100 Nicholas F. Brady 5,400 25 98,225
* For the fiscal year ended March 31, 1996. ** For the calendar year ended December 31, 1995. 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 WITH THE FUND PRINCIPAL OCCUPATION DURING PAST FIVE YEARS AND AGE ----------------------------------- ------------------------------------------ CHARLES B. JOHNSON See Proposal 1, "Election of Chairman and Vice President since Directors". 1995 J. MARK MOBIUS Portfolio manager of various Templeton President since 1994 advisory affiliates; managing director of Templeton Asset Management Ltd.; president of International Investment Trust Company Limited (investment manager of Taiwan R.O.C. Fund) (1983-1986); director of Vickers da Costa, Hong Kong (1980-1983). Age 59. RUPERT H. JOHNSON, JR. Executive vice president and director of Vice President since 1996 Franklin Resources, Inc. and Franklin Templeton Distributors, Inc.; president and director of Franklin Advisers, Inc.; director of Franklin Templeton Investor Services, Inc.; and officer and/or director, trustee or managing general partner, as the case may be, of most other subsidiaries of Franklin Resources, Inc.; and an officer and/or director, as the case may be, of various investment companies in the Franklin Templeton Group of Funds. Age 55. HARMON E. BURNS Executive vice president, secretary, and Vice President since 1996 director of Franklin Resources, Inc.; executive vice president and director of Franklin Templeton Distributors, Inc.; executive vice president of Franklin Advisers, Inc.; and an officer and/or director, as the case may be, of other subsidiaries of Franklin Resources, Inc. and of various investment companies in the Franklin Templeton Group of Funds. Age 51. CHARLES E. JOHNSON Senior vice president and director of Vice President since 1996 Franklin Resources, Inc.; senior vice president of Franklin Templeton Distributors, Inc.; president and chief executive officer of Templeton Worldwide, Inc.; president and director of Franklin Institutional Services Corporation; chairman of the board of Templeton Investment Counsel, Inc.; vice president and/or director, as the case may be, for some of the subsidiaries of Franklin Resources, Inc.; and an officer and/or director, as the case may be, of various investment companies in the Franklin Templeton Group of Funds. Age 39. DEBORAH R. GATZEK Senior vice president and general Vice President since 1996 counsel of Franklin Resources, Inc.; senior vice president of Franklin Templeton Distributors, Inc.; vice president of Franklin Advisers, Inc. and officer of various investment companies in the Franklin Templeton Group of Funds. Age 47. MARK G. HOLOWESKO President and director of Templeton Vice President Since 1994 Global Advisors Limited; chief investment officer of global equity research for Templeton Worldwide, Inc.; president or vice president of the Templeton Funds; formerly, investment administrator with Roy West Trust Corporation (Bahamas) Limited (1984-1985). Age 36. MARTIN L. FLANAGAN See Proposal 1, "Election of Vice President since 1994 Directors". SAMUEL J. FORESTER, JR. President of the Templeton Global Bond Vice President since 1994 Managers Division of Templeton Investment Counsel, Inc.; president or vice president of other Templeton Funds; founder and partner of Forester, Hairston Investment Management (1989-1990); managing director (Mid-East Region) of Merrill Lynch, Pierce, Fenner & Smith Inc. (1987-1988); advisor for Saudi Arabian Monetary Agency (1982-1987). Age 47. JOHN R. KAY Vice president of the Templeton Funds; Vice President since 1994 vice president and treasurer of Templeton Global Investors, Inc. and Templeton Worldwide, Inc.; assistant vice president of Franklin Templeton Distributors, Inc.; formerly, vice president and controller of the Keystone Group, Inc. Age 55. THOMAS M. MISTELE Senior vice president of Templeton Secretary since 1994 Global Investors, Inc.; vice president of Franklin Templeton Distributors, Inc.; secretary of the Templeton Funds; formerly, attorney, Dechert Price & Rhoads (1985-1988) and Freehill, Hollingdale & Page (1988); and judicial clerk, U.S. District Court (Eastern District of Virginia) (1984-1985). Age 42. JAMES R. BAIO Certified public accountant; treasurer Treasurer since 1994 of the Templeton Funds; 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). Age 41.
2. RATIFICATION OR REJECTION OF INDEPENDENT AUDITORS: HOW IS AN INDEPENDENT AUDITOR SELECTED? The Board established a standing Audit Committee consisting of Messrs. Clarke, 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 auditor, 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 auditor of the Fund since its inception in 1994, and have examined and reported on the fiscal year end financial statements, dated March 31, 1996, and certain related Securities and Exchange Commissions 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 annual 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. INFORMATION ABOUT THE FUND The Fund's last audited financial statements and annual report, dated March 31, 1996, 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 May 31, 1996 the Fund had 54,007,093 shares outstanding and assets of $865,225,811. The Fund's shares are listed on the New York Stock Exchange (symbol TDF) and on the Osaka Stock Exchange. 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, there are 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 May 31, 1996, 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. 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, 1996. All of these filing requirements were met except that the Initial Statement of Beneficial Ownership of Securities filed on behalf of Samuel J. Forester, Jr., which was inadvertently filed late. 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 amended and restated as of November 23, 1995, Templeton (Hong Kong) manages the investment and reinvestment of Fund resources. Templeton (Hong Kong) is an indirect, wholly-owned subsidiary of Resources. THE BUSINESS MANAGER. The business manager of the Fund is Templeton Global Investors, Inc. ("TGII"), Broward Financial Center, Suite 2100, Ft. Lauderdale, Florida 33394-3091, an indirect, wholly-owned subsidiary of Resources. Pursuant to a business management agreement dated September 20, 1994, TGII performs certain administrative functions for the Fund. In addition, TGII has entered into a Japanese shareholder servicing and administration agreement dated September 28, 1994, with Nomura Capital Management, Inc. ("Nomura"), an affiliate of the initial underwriter, Nomura International (Hong Kong) Limited, under which Nomura performs certain administrative functions in Japan, subject to TGII's supervision. 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 20, 1994. THE CUSTODIAN. The custodian for the Fund is The Chase Manhattan Bank, N.A., 1 Chase Manhattan Plaza, New York, New York 10081, pursuant to a custody agreement dated August 30, 1994. 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, however, does not reimburse Directors, Officers, and regular employees and agents 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, as well as the Japan Securities Clearing Corporation ("JSCC") holding shares of the Fund for its beneficial shareholders, will request voting instructions from their customers, clients and beneficial shareholders. If these instructions are not received by the date specified in the broker-dealer firms' or JSCC's proxy solicitation materials, the Fund understands that the New York Stock Exchange and the Osaka Securities Exchange permit the broker-dealers and JSCC to vote on the items to be considered at the Meeting on behalf of their customers, clients, and beneficial shareholders. In addition, the Fund may request that JSCC vote these shares in favor of all matters presented at the Meeting. Certain broker-dealers may exercise discretion over shares held in their name for which no instructions are received by voting these shares in the same proportion as they vote shares for which they received instructions. QUORUM. A majority of the shares entitled to vote -- present in person or represented by proxy -- constitutes a quorum at the Meeting. The shares over which broker-dealers and JSCC have discretionary voting power, the shares that broker-dealers have declined to vote ("broker non-votes") 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, requires 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. 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 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. 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. SHAREHOLDER PROPOSALS. The Fund anticipates that its next annual meeting will be held in July 1997. Shareholder proposals to be presented at the next annual meeting must be received at the Fund's offices, 700 Central Avenue, St. Petersburg, Florida 33701-3628, no later than February 28, 1997. By order of the Board of Directors, Thomas M. Mistele, Secretary June 12, 1996 TEMPLETON DRAGON FUND, INC. ANNUAL MEETING OF SHAREHOLDERS, JULY 24, 1996 PLEASE VOTE PROMPTLY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints THOMAS M. MISTELE, 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 Dragon Fund, Inc. (the "Fund") to be held at the Fund's offices, 700 Central Avenue, St. Petersburg, Florida 33701-3628, on Wednesday, July 24, 1996 at 10:00 A.M., EDT, 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. , 1996 - -------------------------------------------------- ----------------------- Signature(s) Date PLEASE DATE THIS PROXY AND SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR 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 ON OTHER SIDE) FOLD AND DETACH HERE THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 THROUGH 3. Proposal 1 - Election of Directors FOR all nominees WITHHOLD Nominees: Harris J. listed (except as AUTHORITY Ashton, Nicholas F. marked to the right) to vote for all Brady and S. Joseph nominees listed. Fortunato To withhold authority to vote for any individual nominee, write that nominee's name on the line below. ------------------------------------------------------------ Proposal 2 - Ratification of the selection of McGladrey & Pullen, LLP as independent public accountants for the Fund for the fiscal year ending March 31, 1997. FOR AGAINST ABSTAIN Proposal 3 - In their discretion, the Proxyholders are authorized to vote upon such other matters which may legally come before the Meeting or any adjournments thereof. FOR AGAINST ABSTAIN I PLAN TO ATTEND THE MEETING. (CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE) FOLD AND DETACH HERE -----END PRIVACY-ENHANCED MESSAGE-----