-----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, CQx4M3nxKBLVbWgrWT7hqD+VNRcGq5c7OwhwDEZLH1JvD6CfIaMObqybwjm3q1N+ 3dhY1CuVcbb11G/7/mMVOw== 0001016843-99-000841.txt : 19990813 0001016843-99-000841.hdr.sgml : 19990813 ACCESSION NUMBER: 0001016843-99-000841 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990923 FILED AS OF DATE: 19990812 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: 0930 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 811-08394 FILM NUMBER: 99685072 BUSINESS ADDRESS: STREET 1: 700 CENTRAL AVE CITY: ST PETERSBURG STATE: FL ZIP: 33701 BUSINESS PHONE: 8138238712 DEF 14A 1 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the registrant [X] Filed by a party other than the registrant [ ] Check the appropriate box: [ ] Preliminary proxy statement [ ] Confidential, for use of the Commission only (as [X] Definitive proxy statement permitted Rule 14a-6(e)(2) [ ] Definitive additional materials [ ] Soliciting material pursuant to 240.14a-11(c) or 240.14a-12 TEMPLETON DRAGON FUND, INC. --------------------------------------------------- (Name of Registrant as Specified in Its Charter) - ------------------------------------------------------------------------ (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of filing fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11(Set forth the amount on which the filing fee is calculated and state how it was determined.) (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [ ] Fee paid previously with preliminary material. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identifying the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount previously paid: (2) Form, schedule or registration statement no.: (3) Filing party: (4) Date filed: [FRANKLIN TEMPLETON LOGO] TEMPLETON DRAGON FUND, INC. IMPORTANT SHAREHOLDER INFORMATION These materials are for the annual meeting of shareholders scheduled for Thursday, September 23, 1999 at 2:00 p.m. Eastern time. They discuss the proposals to be voted on at the meeting, and contain your proxy statement and proxy card. A proxy card is, in essence, a ballot. When you vote your proxy, it tells us how you wish to vote on important issues relating to your fund. If you complete and sign the proxy, we'll vote it exactly as you tell us. If you simply sign the proxy, we'll vote it in accordance with the Directors' recommendations on page 1 of the proxy statement. WE URGE YOU TO SPEND A FEW MINUTES REVIEWING THE PROPOSALS IN THE PROXY STATEMENT. THEN, FILL OUT THE PROXY CARD AND RETURN IT TO US SO THAT WE KNOW HOW YOU WOULD LIKE TO VOTE. WHEN SHAREHOLDERS RETURN THEIR PROXIES PROMPTLY, THE FUND MAY BE ABLE TO SAVE MONEY BY NOT HAVING TO CONDUCT ADDITIONAL MAILINGS. WE WELCOME YOUR COMMENTS. IF YOU HAVE ANY QUESTIONS, CALL FUND INFORMATION AT 1-800/DIAL BEN/registered trademark/ (1-800/342-5236). TELEPHONE AND INTERNET VOTING FOR YOUR CONVENIENCE, YOU MAY BE ABLE TO VOTE BY TELEPHONE OR THROUGH THE INTERNET, 24 HOURS A DAY. IF YOUR ACCOUNT IS ELIGIBLE, A CONTROL NUMBER AND SEPARATE INSTRUCTIONS ARE ENCLOSED. [FRANKLIN TEMPLETON LOGO] TEMPLETON DRAGON FUND, INC. NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS The Annual Meeting ("Meeting") of shareholders of Templeton Dragon Fund, Inc. (the "Fund") will be held at 500 East Broward Boulevard, 12th Floor, Ft. Lauderdale, Florida 33394-3091 on Thursday, September 23, 1999 at 2:00 p.m. Eastern time. During the Meeting, shareholders of the Fund will vote on three proposals: 1. The election of five Directors of the Fund to hold office for the terms specified; 2. The ratification or rejection of the selection of PricewaterhouseCoopers LLP as independent auditors of the Fund for the fiscal year ending December 31, 1999; and 3. The transaction of any other business that may properly come before the Meeting. By order of the Board of Directors, Barbara J. Green SECRETARY August 13, 1999 MANY SHAREHOLDERS HOLD SHARES IN MORE THAN ONE TEMPLETON FUND AND WILL RECEIVE PROXY MATERIAL FOR EACH FUND OWNED. PLEASE SIGN AND PROMPTLY RETURN EACH PROXY CARD IN THE SELF-ADDRESSED ENVELOPE REGARDLESS OF THE NUMBER OF SHARES YOU OWN. JAPANESE SHAREHOLDERS SHOULD BE AWARE THAT JAPAN SECURITIES CLEARING CORPORATION MAY EXERCISE A VOTE ON PROPOSALS 1, 2 AND 3 ON YOUR BEHALF IF YOU DO NOT RETURN A PROXY CARD. TEMPLETON DRAGON FUND, INC. PROXY STATEMENT o INFORMATION ABOUT VOTING WHO IS ELIGIBLE TO VOTE? Shareholders of record at the close of business on June 30, 1999 are entitled to be present and to vote at the Meeting or any adjourned Meeting. Each share of record is entitled to one vote on each matter presented at the Meeting. The Notice of Meeting, the proxy card, and the proxy statement were mailed to shareholders of record on or about August 13, 1999. ON WHAT ISSUES AM I BEING ASKED TO VOTE? You are being asked to vote on three proposals: 1. The election of five nominees to the position of Director; 2. The ratification or rejection of the selection of PricewaterhouseCoopers LLP as independent auditors of the Fund for the fiscal year ending December 31, 1999; and 3. The transaction of any other business that may properly come before the Meeting. HOW DO THE FUND'S DIRECTORS RECOMMEND THAT I VOTE? The Directors unanimously recommend that you vote: 1. FOR the election of the five nominees; 2. FOR the ratification of the selection of PricewaterhouseCoopers LLP as independent auditors of the Fund; and 3. FOR the proxyholders to have discretion to vote on any other business that may properly come before the Meeting. 1 HOW DO I ENSURE THAT MY VOTE IS ACCURATELY RECORDED? You may attend the Meeting and vote in person or you may complete and return the enclosed proxy card. If you are eligible to vote by telephone or through the internet, a control number and separate instructions are enclosed. Proxy cards that are properly signed, dated and received at or prior to the Meeting will be voted as specified. If you specify a vote for any of the Proposals 1 through 3, your proxy will be voted as you indicated. If you simply sign and date the proxy card, but don't specify a vote for any of the Proposals 1 through 3, your shares will be voted IN FAVOR of the nominees for Director (Proposal 1), IN FAVOR of ratifying the selection of PricewaterhouseCoopers LLP as independent auditors (Proposal 2), and/or IN ACCORDANCE with the discretion of the persons named in the proxy card as to any other matters that legally may come before the Meeting (Proposal 3). CAN I REVOKE MY PROXY? You may revoke your proxy at any time before it is voted by forwarding a written revocation or a later-dated proxy to the Fund that is received at or prior to the Meeting, or attending the Meeting and voting in person. o THE PROPOSALS PROPOSAL 1: ELECTION OF DIRECTORS HOW ARE NOMINEES SELECTED? The Board of Directors of the Fund (the "Board") has a Nominating and Compensation Committee (the "Committee") consisting of Andrew H. Hines, Jr., Edith E. Holiday and Gordon S. Macklin, all of whom are independent directors. The Committee is responsible for the selection and nomination for appointment of candidates to serve as Directors of the Fund. The Committee will review shareholders' nominations to fill vacancies on the Board, if these nominations are submitted in writing and addressed to the Committee at the Fund's offices. However, the Committee expects to be able to identify from its own resources an ample number of qualified candidates. WHO ARE THE NOMINEES AND DIRECTORS? The Board is divided into three classes, each class having a term of three years. Each year the term of office of one class expires. This year, the terms of five Directors are expiring. 2 Harris J. Ashton, Nicholas F. Brady, Frank J. Crothers, S. Joseph Fortunato and Constantine Dean Tseretopoulos have been nominated for three-year terms, set to expire at the 2002 Annual Meeting of Shareholders. These terms continue, however, until successors are duly elected and qualified. All of the nominees are currently members of the Board. In addition, all of the current nominees and Directors are also directors or trustees of other investment companies in the Franklin Group of Funds/registered trademark/ and/or the Templeton Group of Funds (collectively, the "Franklin Templeton Group of Funds"). Certain Directors of the Fund hold director and/or officer positions with Franklin Resources, Inc. ("Resources") and its affiliates. Resources is a publicly owned holding company, the principal shareholders of which are Charles B. Johnson and Rupert H. Johnson, Jr., who own approximately 19% and 15%, respectively, of its outstanding shares. Resources is primarily engaged, through various subsidiaries, in providing investment management, share distribution, transfer agent and administrative services to a family of investment companies. Resources is a New York Stock Exchange, Inc. ("NYSE") listed holding company (NYSE: BEN). Charles E. Johnson, a vice president of the Fund, is the son and nephew, respectively, of brothers Charles B. Johnson, the chairman of the Board and a vice president of the Fund, and Rupert H. Johnson, Jr., a vice president of the Fund. There are no family relationships among any of the Directors or nominees for Director. Each nominee is currently available and has consented to serve if elected. If any of the nominees should become unavailable, the persons named in the proxy card will vote in their discretion for another person or persons who may be nominated as Directors. 3 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.
SHARES BENEFICIALLY OWNED IN THE FRANKLIN FUND SHARES TEMPLETON BENEFICIALLY OWNED GROUP OF FUNDS PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE NAME AND OFFICES DURING PAST FIVE OUTSTANDING SHARES FUND) AS OF WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999 - ----------------------- ------------------------------------- -------------------- --------------- NOMINEES TO SERVE UNTIL 2002 ANNUAL MEETING OF SHAREHOLDERS: HARRIS J. ASHTON Director, RBC Holdings, Inc. 500(**) 1,615,494 DIRECTOR SINCE 1994 (bank holding company) and Bar-S Foods (meat packing company); director or trustee, as the case may be, of 48 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, President, Chief Executive Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998). Age 67.
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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 SHARES FUND) AS OF WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999 - ----------------------- ----------------------------------- -------------------- --------------- NICHOLAS F. BRADY* Chairman, Templeton Emerging 1,000(**) 50,067 DIRECTOR SINCE 1994 Markets Investment Trust PLC, Templeton Latin America Investment Trust PLC, Darby Overseas Investments, Ltd. and Darby Emerging Markets Investments LDC (investment firms) (1994-present); Director, Templeton Global Strategy Funds, Amerada Hess Corporation (exploration and refining of natural gas), Christiana Companies, Inc. (operating and investment companies), and H.J. Heinz Company (processed foods and allied products); director or trustee, as the case may be, of 20 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, Secretary of the United States Department of the Treasury (1988-1993) and Chairman of the Board, Dillon, Read & Co., Inc. (investment banking) (until 1988). Age 69. FRANK J. CROTHERS Chairman, Atlantic Equipment & 0 3,762 DIRECTOR SINCE 1998 Power Ltd.; Vice Chairman, Caribbean Utilities Co., Ltd.; President, Provo Power Corporation; director of various other business and non-profit organizations; and director or trustee, as the case may be, of 11 of the investment companies in the Franklin Templeton Group of Funds. Age 55.
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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 SHARES FUND) AS OF WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999 - ----------------------- ------------------------------------- -------------------- --------------- S. JOSEPH FORTUNATO Member of the law firm of Pitney, 100(**) 472,398 DIRECTOR SINCE 1994 Hardin, Kipp & Szuch; and director or trustee, as the case may be, of 50 of the investment companies in the Franklin Templeton Group of Funds. Age 67. CONSTANTINE DEAN Physician, Lyford Cay Hospital 0 86,831 TSERETOPOULOS (1987-present); director of various DIRECTOR SINCE 1998 nonprofit organizations; director or trustee, as the case may be, of 11 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, Cardiology Fellow, University of Maryland (1985-1987) and Internal Medicine Intern, Greater Baltimore Medical Center (1982-1985). Age 45.
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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 SHARES FUND) AS OF WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999 - ------------------------------ ------------------------------------- -------------------- --------------- DIRECTORS SERVING UNTIL 2001 ANNUAL MEETING OF SHAREHOLDERS: MARTIN L. FLANAGAN* Senior Vice President and Chief 1,345(**) 13,203 DIRECTOR AND VICE PRESIDENT Financial Officer, Franklin SINCE 1994 Resources, Inc.; President and Director, Franklin Templeton Services, Inc.; Executive Vice President and Director, Templeton Worldwide, Inc. and Templeton Investment Counsel, Inc.; Executive Vice President, Franklin Advisers, Inc.; officer and/or director of a number of other subsidiaries of Franklin Resources, Inc.; and officer and/or director or trustee, as the case may be, of 52 of the investment companies in the Franklin Templeton Group of Funds. Age 39. ANDREW H. HINES, JR. Consultant, Triangle Consulting 0 48,637 DIRECTOR SINCE 1994 Group; Executive-in-Residence, Eckerd College (1991-present); director or trustee, as the case may be, of 21 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, Chairman and Director, Precise Power Corporation (1990-1997), Director, Checkers Drive-In Restaurant, Inc. (1994- 1997), and Chairman of the Board and Chief Executive Officer, Florida Progress Corporation (holding company in the energy area) (1982-1990) and director of various of its subsidiaries. Age 76.
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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 SHARES FUND) AS OF WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999 - ---------------------- ------------------------------------- -------------------- --------------- 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.
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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 SHARES FUND) AS OF WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999 - ---------------------------- ------------------------------------ -------------------- --------------- CHARLES B. JOHNSON* President, Chief Executive Officer 14,604(**) 2,203,689 CHAIRMAN SINCE 1995 AND and Director, Franklin Resources, VICE PRESIDENT SINCE 1994 Inc.; Chairman of the Board and Director, Franklin Advisers, Inc., Franklin Investment Advisory Services, Inc. and Franklin Templeton Distributors, Inc.; Director, Franklin/Templeton Investor Services, Inc. and Franklin Templeton Services, Inc.; officer and/or director or trustee, as the case may be, of most of the other subsidiaries of Franklin Resources, Inc. and of 49 of the investment companies in the Franklin Templeton Group of Funds. Age 66. DIRECTORS SERVING UNTIL 2000 ANNUAL MEETING OF SHAREHOLDERS: JOHN WM. GALBRAITH President, Galbraith Properties, 11,614(**) 2,752,567 DIRECTOR SINCE 1995 Inc. (personal investment company); Director Emeritus, Gulf West Banks, Inc. (bank holding company) (1995-present); director or trustee, as the case may be, of 19 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, Director, Mercantile Bank (1991-1995), Vice Chairman, Templeton, Galbraith & Hansberger Ltd. (1986-1992), and Chairman, Templeton Funds Management, Inc. (1974-1991). Age 78.
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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 SHARES FUND) AS OF WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999 - ----------------------- -------------------------------------- -------------------- --------------- BETTY P. KRAHMER Director or trustee of various civic 9,000(***) 137,154 DIRECTOR SINCE 1994 associations; director or trustee, as the case may be, of 20 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, Economic Analyst, U.S. government. Age 69. GORDON S. MACKLIN Director, Fund American 2,000(**) 246,141 DIRECTOR SINCE 1994 Enterprises Holdings, Inc. (holding company), Martek Biosciences Corporation, MCI WorldCom (information services), MedImmune, Inc. (biotechnology), Spacehab, Inc. (aerospace services) and Real 3D (software); director or trustee, as the case may be, of 48 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, Chairman, White River Corporation (financial services) and Hambrecht and Quist Group (investment banking), and President, National Association of Securities Dealers, Inc. Age 71.
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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 SHARES FUND) AS OF WITH THE FUND YEARS AND AGE ON JUNE 30, 1999 JUNE 30, 1999 - ---------------------- ------------------------------------ -------------------- --------------- 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.
------------------------ * Nicholas F. Brady, Martin L. Flanagan, and Charles B. Johnson are "interested persons" as defined by the Investment Company Act of 1940, as amended (the "1940 Act"). The 1940 Act limits the percentage of interested persons that can comprise a fund's board of directors. Mr. Johnson is an interested person due to his ownership interest in Resources, his employment affiliation with Resources and his position with the Fund. Mr. Flanagan is an interested person due to his employment affiliation with Resources and his position with the Fund. Mr. Brady's status as an interested person results from his business affiliations with Resources and Templeton Global Advisors Limited. Mr. Brady and Resources are both limited partners of Darby Overseas Partners, L.P. ("Darby Overseas"). Mr. Brady is Chairman and shareholder of Darby Emerging Markets Investments LDC, which is the corporate general partner of Darby Overseas. In addition, Darby Overseas and Templeton Global Advisors Limited are limited partners of Darby Emerging Markets Fund, L.P. The remaining nominees and Directors of the Fund are not interested persons (the "Independent Directors"). ** Less than 1%. *** Less than 1%. Of the shares indicated, Mrs. Krahmer beneficially owns 1,000 shares for her own account. Of the remainder, beneficial ownership may be attributable to Mrs. Krahmer by virtue of her husband's ownership of 4,000 shares through a retirement account, and the ownership of 4,000 shares held in trust for the benefit of Mrs. Krahmer's children for which her husband serves as trustee. HOW OFTEN DO THE DIRECTORS MEET AND WHAT ARE THEY PAID? The role of the Directors is to provide general oversight of the Fund's business, and to ensure that the Fund is operated for the benefit of shareholders. The Directors anticipate meeting at least five times during the current fiscal year to review the operations of the Fund and the Fund's investment performance. The Directors also oversee the services furnished to the Fund by Templeton Asset Management Ltd.-Hong Kong branch, the Fund's investment manager (the "Investment Manager"), and various other service providers. The 11 Fund currently pays the Independent Directors and Mr. Brady an annual retainer of $2,000 and a fee of $400 per Board meeting attended. Directors serving on the Audit Committee of the Fund and other investment companies in the Franklin Templeton Group of Funds receive a flat fee of $2,000 per Audit Committee meeting attended, a portion of which is allocated to the Fund. Members of a committee are not compensated for any committee meeting held on the day of a Board meeting. During the fiscal year ended December 31, 1998, there were five meetings of the Board, one meeting of the Audit Committee, and three meetings of the Nominating and Compensation Committee. Each of the Directors then in office attended at least 75% of the total number of meetings of the Board and the total number of meetings held by all committees of the Board on which the Director served. There was 100% attendance at the meetings of the Audit Committee and the Nominating and Compensation Committee. Certain Directors and Officers of the Fund are shareholders of Resources and may receive indirect remuneration due to their participation in management fees and other fees received from the Franklin Templeton Group of Funds by the Investment Manager and its affiliates. The Investment Manager or its affiliates pay the salaries and expenses of the Officers. No pension or retirement benefits are accrued as part of Fund expenses.
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 $4,550 48 $361,157 Nicholas F. Brady 4,550 20 140,975 Frank J. Crothers 1,200 11 47,700 S. Joseph Fortunato 4,550 50 367,835 John Wm. Galbraith 5,425 19 134,425 Andrew H. Hines, Jr. 5,775 21 208,075 Edith E. Holiday 4,550 24 211,400 Betty P. Krahmer 4,550 20 141,075 Gordon S. Macklin 4,550 48 361,157 Fred R. Millsaps 5,775 21 210,075 Constantine Dean Tseretopoulos 1,600 11 51,500
------------------------ * Compensation received for the fiscal year ended December 31, 1998. ** We base the number of boards on the number of registered investment companies in the Franklin Templeton Group of Funds. This number does not include the total number of series or funds within each investment company for which the Board members are responsible. The Franklin Templeton Group of Funds currently includes 54 registered investment companies, with approximately 162 U.S. based funds or series. *** For the calendar year ended December 31, 1998. The table above indicates the total fees paid to Directors by the Fund individually and all of the funds in the Franklin Templeton Group of Funds. These Directors also serve as directors or trustees of other investment companies in the Franklin Templeton Group of Funds, many of which hold meetings at different dates and times. The Directors and the 12 Fund's management believe that having the same individuals serving on the boards of many of the funds in the Franklin Templeton Group of Funds enhances the ability of each fund to obtain, at a relatively modest cost to each separate fund, the services of high caliber, experienced and knowledgeable Independent Directors who can more effectively oversee the management of the funds. Board members historically have followed a policy of having substantial investments in one or more of the funds in the Franklin Templeton Group of Funds, as is consistent with their individual financial goals. In February 1998, this policy was formalized through adoption of a requirement that each board member invest one-third of fees received for serving as a director or trustee of a Templeton fund in shares of one or more Templeton funds and one-third of fees received for serving as a director or trustee of a Franklin fund in shares of one or more Franklin funds until the value of such investments equals or exceeds five times the annual fees paid to such board member. Investments in the name of family members or entities controlled by a board member constitute fund holdings of such board member for purposes of this policy, and a three year phase-in period applies to such investment requirements for newly elected board members. In implementing such policy, a board member's fund holdings existing on February 27, 1998, are valued as of such date with subsequent investments valued at cost. WHO ARE THE EXECUTIVE OFFICERS OF THE FUND? Officers of the Fund are appointed by the Directors and serve at the pleasure of the Board. Listed below, for each Executive Officer, is a brief description of recent professional experience:
NAME AND OFFICES PRINCIPAL OCCUPATION WITH THE FUND DURING PAST FIVE YEARS AND AGE - ---------------------------- ------------------------------------------------------------- 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.
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NAME AND OFFICES PRINCIPAL OCCUPATION WITH THE FUND DURING PAST FIVE YEARS AND AGE - ----------------------------- ----------------------------------------------------------------- RUPERT H. JOHNSON, JR. Executive Vice President and Director, Franklin Resources, VICE PRESIDENT SINCE 1996 Inc. and Franklin Templeton Distributors, Inc.; President and Director, Franklin Advisers, Inc. and Franklin Investment Advisory Services, Inc.; Senior Vice President, Franklin Advisory Services, LLC; Director, Franklin/Templeton Investor Services, Inc.; and officer and/or director or trustee, as the case may be, of most of the other subsidiaries of Franklin Resources, Inc. and of 52 of the investment companies in the Franklin Templeton Group of Funds. Age 59. HARMON E. BURNS Executive Vice President and Director, Franklin Resources, VICE PRESIDENT SINCE 1996 Inc., Franklin Templeton Distributors, Inc. and Franklin Templeton Services, Inc.; Executive Vice President, Franklin Advisers, Inc.; Director, Franklin Investment Advisory Services, Inc. and Franklin/Templeton Investor Services, Inc.; and officer and/or director or trustee, as the case may be, of most of the other subsidiaries of Franklin Resources, Inc. and of 52 of the investment companies in the Franklin Templeton Group of Funds. Age 54. CHARLES E. JOHNSON Senior Vice President and Director, Franklin Resources, Inc.; VICE PRESIDENT SINCE 1996 Senior Vice President, Franklin Templeton Distributors, Inc.; President and Director, Templeton Worldwide, Inc.; Chairman and Director, Templeton Investment Counsel, Inc.; Vice President, Franklin Advisers, Inc.; officer and/or director of some of the other subsidiaries of Franklin Resources, Inc.; and officer and/or director or trustee, as the case may be, of 33 of the investment companies in the Franklin Templeton Group of Funds. Age 43. DEBORAH R. GATZEK Senior Vice President and General Counsel, Franklin VICE PRESIDENT SINCE 1996 Resources, Inc.; Senior Vice President, Franklin Templeton Services, Inc. and Franklin Templeton Distributors, Inc.; Executive Vice President, Franklin Advisers, Inc.; Vice President, Franklin Advisory Services, LLC and Franklin Mutual Advisers, LLC; Vice President, Chief Legal Officer and Chief Operating Officer, Franklin Investment Advisory Services, Inc.; and officer of 53 of the investment companies in the Franklin Templeton Group of Funds. Age 50.
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NAME AND OFFICES PRINCIPAL OCCUPATION WITH THE FUND DURING PAST FIVE YEARS AND AGE - ------------------------------ ---------------------------------------------------------------- MARK G. HOLOWESKO President, Templeton Global Advisors Limited; Chief VICE PRESIDENT SINCE 1994 Investment Officer, Global Equity Group; Executive Vice President and Director, Templeton Worldwide, Inc.; officer of 20 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, Investment Administrator, RoyWest Trust Corporation (Bahamas) Limited (1984-1985). Age 39. MARTIN L. FLANAGAN See Proposal 1, "Election of Directors." VICE PRESIDENT AND DIRECTOR SINCE 1994 SAMUEL J. FORESTER, JR. Managing Director, Templeton Worldwide, Inc.; Vice VICE PRESIDENT SINCE 1994 President and Director, Templeton Global Income Portfolio Ltd.; Director, Closed Joint-Stock Company Templeton and Templeton Trust Services Pvt. Ltd.; officer of 10 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, President, Templeton Global Bond Managers, a division of Templeton Investment Counsel, Inc., Founder and Partner, Forester, Hairston Investment Management, Inc. (1989-1990), Managing Director (Mid-East Region), Merrill Lynch, Pierce, Fenner & Smith Inc. (1987- 1988), and Advisor for Saudi Arabian Monetary Agency (1982-1987). Age 51. JOHN R. KAY Vice President, Templeton Worldwide, Inc.; Assistant Vice VICE PRESIDENT SINCE 1994 President, Franklin Templeton Distributors, Inc.; officer of 25 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, Vice President and Controller, Keystone Group, Inc. Age 59. ELIZABETH M. KNOBLOCK General Counsel, Secretary and Senior Vice President, VICE PRESIDENT-COMPLIANCE Templeton Investment Counsel, Inc.; Senior Vice President, SINCE 1996 Templeton Global Investors Inc.; officer of 24 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, Vice President and Associate General Counsel, Kidder Peabody & Co. Inc. (1989-1990), Assistant General Counsel, Gruntal & Co., Inc. (1988), Vice President and Associate General Counsel, Shearson Lehman Hutton Inc. (1988), Vice President and Assistant General Counsel, E.F. Hutton & Co. Inc. (1986-1988), and Special Counsel, Division of Investment Management, U.S. Securities and Exchange Commission (1984-1986). Age 44.
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NAME AND OFFICES PRINCIPAL OCCUPATION WITH THE FUND DURING PAST FIVE YEARS AND AGE - ------------------------ ------------------------------------------------------------- BARBARA J. GREEN Senior Vice President, Templeton Worldwide, Inc. and SECRETARY SINCE 1996 Templeton Global Investors, Inc.; officer of 20 of the investment companies in the Franklin Templeton Group of Funds; and FORMERLY, Deputy Director, Division of Investment Management, Executive Assistant and Senior Advisor to the Chairman, Counselor to the Chairman, Special Counsel and Attorney Fellow, U.S. Securities and Exchange Commission (1986-1995), Attorney, Rogers & Wells, and Judicial Clerk, U.S. District Court (District of Massachusetts). Age 51. JAMES R. BAIO Certified Public Accountant; Senior Vice President, TREASURER SINCE 1994 Templeton Worldwide, Inc., Templeton Global Investors, Inc. and Templeton Funds Trust Company; officer of 21 of the investment companies in the Franklin Templeton Group of Funds; and formerly, Senior Tax Manager, Ernst & Young (certified public accountants) (1977-1989). Age 45.
PROPOSAL 2: RATIFICATION OR REJECTION OF INDEPENDENT AUDITORS HOW ARE INDEPENDENT AUDITORS SELECTED? The Board has a standing Audit Committee consisting of Messrs. Galbraith, Hines and Millsaps, all of whom are Independent Directors. The Audit Committee reviews the maintenance of the Fund's records and the safekeeping arrangements of the Fund's custodian, reviews both the audit and non-audit work of the Fund's independent auditors, and submits a recommendation to the Board as to the selection of independent auditors. WHICH INDEPENDENT AUDITORS DID THE BOARD SELECT? Upon the recommendation of the Audit Committee, the Board selected the firm of PricewaterhouseCoopers LLP, 333 Market Street, San Francisco, CA 94105, as auditors of the Fund for the current fiscal year. You are being asked to ratify the Board's selection of PricewaterhouseCoopers LLP. Services to be performed by the auditors include examining and reporting on the fiscal year-end financial statements of the Fund and certain related filings with the U.S. Securities and Exchange Commission. McGladrey & Pullen, LLP resigned as auditors of the Fund on August 9, 1999. McGladrey & Pullen, LLP has served as the Fund's auditors from the Fund's inception through the fiscal year ended December 31, 1998. There have not been any disputes or disagreements with McGladrey & Pullen, LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures. H&R Block, a 16 public company, acquired certain assets of McGladrey & Pullen, LLP on August 2, 1999. Following its acquisition by a public company, McGladrey & Pullen, LLP elected to not continue servicing clients in the mutual fund business. As a result, the partners and professional staff who were previously responsible for auditing the Fund's financial statements are now associated with PricewaterhouseCoopers LLP. Neither the firms of PricewaterhouseCoopers LLP and McGladrey & Pullen, LLP nor any of their members have any material direct or indirect financial interest in the Fund. Representatives of PricewaterhouseCoopers LLP and McGladrey & Pullen, LLP are not expected to be present at the Meeting, but will have the opportunity to make a statement if they wish, and will be available should any matter arise requiring their presence. PROPOSAL 3: OTHER BUSINESS The Directors know of no other business to be presented at the Meeting. However, if any additional matters should be properly presented, proxies will be voted or not voted as specified. Proxies reflecting no specification will be voted in accordance with the judgment of the persons named in the proxy. Because the Fund did not have notice of any such matters before June 15, 1999, the persons named as proxies may exercise their discretionary voting power with respect to any matter presented at the Meeting. o INFORMATION ABOUT THE FUND THE INVESTMENT MANAGER. The Investment Manager of the Fund is Templeton Asset Management Ltd.-Hong Kong branch, a Singapore company with a branch office at Two Exchange Square, Hong Kong. Pursuant to an investment management agreement, the Investment Manager manages the investment and reinvestment of Fund assets. The Investment Manager is an indirect, wholly owned subsidiary of Resources. THE ADMINISTRATOR. The administrator of the Fund is Franklin Templeton Services, Inc. ("FT Services") with offices at 777 Mariners Island Boulevard, San Mateo, California 94403-7777. FT Services is an indirect, wholly owned subsidiary of Resources. Pursuant to an administration agreement, FT Services performs certain administrative functions for the Fund. In addition, FT Services has entered into a Japanese shareholder servicing and administration agreement with Nomura Asset Management U.S.A. Inc. ("NAM-USA"), formerly Nomura Capital Management, Inc., under which NAM-USA performs certain administrative functions in Japan, subject to FT Services' supervision. NAM-USA is an affiliate of Nomura International (Hong Kong) Limited, an initial underwriter of the Fund's 17 shares. NAM-USA has offices at 180 Maiden Lane, 26th Floor, New York, New York 10038. THE TRANSFER AGENT. The transfer agent, registrar and dividend disbursement agent for the Fund is ChaseMellon Shareholder Services, L.L.C., 85 Challenger Road, Overpeck Centre, Ridgefield Park, New Jersey 07660. THE CUSTODIAN. The custodian for the Fund is The Chase Manhattan Bank, MetroTech Center, Brooklyn, New York 11245. OTHER MATTERS. The Fund's last audited financial statements and annual report, dated December 31, 1998, are available free of charge. To obtain a copy, please call 1-800/DIAL BEN/registered trademark/ or forward a written request to Franklin/Templeton Investor Services, Inc., P.O. Box 33030, St. Petersburg, Florida 33733-8030. As of June 30, 1999, the Fund had 52,859,893 shares outstanding and net assets of $679,912,611. The Fund's shares are listed on the NYSE (Symbol: TDF) and on the Osaka Stock Exchange (Symbol: 8683). From time to time, the number of shares held in "street name" accounts of various securities dealers for the benefit of their clients may exceed 5% of the total shares outstanding. To the knowledge of the Fund's management, as of June 30, 1999, there were no other entities holding beneficially or of record more than 5% of the Fund's outstanding shares. In addition, to the knowledge of the Fund's management, as of June 30, 1999, no nominee or Director of the Fund owned 1% or more of the outstanding shares of the Fund, and the Officers and Directors of the Fund owned, as a group, less than 1% of the outstanding shares of the Fund. o FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDERS MEETING SOLICITATION OF PROXIES. The cost of soliciting proxies, including the fees of a proxy soliciting agent, is borne by the Fund. The Fund reimburses brokerage firms and others for their expenses in forwarding proxy material to the beneficial owners and soliciting them to execute proxies. In addition, the Fund may retain a professional proxy solicitation firm to assist with any necessary solicitation of proxies. The Fund expects that the solicitation would be primarily by mail, but also may include telephone, telecopy or oral solicitations. If the Fund does not receive your proxy by a certain time you may receive a telephone call from Shareholder Communications Corporation asking you to vote. If professional proxy solicitors are retained, it is expected that soliciting fees would be approximately $3,500, plus 18 expenses. The Fund does not reimburse Directors and Officers of the Fund, or regular employees and agents of the Investment Manager involved in the solicitation of proxies. The Fund intends to pay all costs associated with the solicitation and the Meeting. VOTING BY BROKER-DEALERS. The Fund expects that, before the Meeting, broker-dealer firms holding shares of the Fund in "street name" for their customers, as well as the Japan Securities Clearing Corporation ("JSCC") holding shares of the Fund for its beneficial owners, will request voting instructions from their customers and beneficial owners. If these instructions are not received by the date specified in the broker-dealer firms' or JSCC's proxy solicitation materials, the Fund understands that NYSE Rules permit broker-dealers and JSCC to vote on the proposals to be considered at the Meeting on behalf of their customers and beneficial owners. Certain broker-dealers may exercise discretion over shares held in their name for which no instructions are received by voting these shares in the same proportion as they vote shares for which they received instructions. QUORUM. A majority of the shares entitled to vote--present in person or represented by proxy--constitutes a quorum at the Meeting. The shares over which broker-dealers and JSCC have discretionary voting power, the shares that represent "broker non-votes" (I.E., shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote and (ii) the broker or nominee does not have discretionary voting power on a particular matter), and the shares whose proxies reflect an abstention on any item are all counted as shares present and entitled to vote for purposes of determining whether the required quorum of shares exists. METHODS OF TABULATION. Proposal 1, the election of Directors, requires the affirmative vote of the holders of a plurality of the Fund's shares present and voting on the Proposal at the Meeting. Proposal 2, ratification of the selection of the independent auditors, requires the affirmative vote of a majority of the Fund's shares present and voting on the Proposal at the Meeting. Proposal 3, for the proxyholders to have discretion to vote on any other business that may properly come before the Meeting, requires the affirmative vote of a majority of the Fund's shares present and voting on the Proposal at the Meeting. Abstentions and broker non-votes will be treated as votes not cast and, therefore, will not be counted for purposes of obtaining approval of each Proposal. ADJOURNMENT. In the event that a quorum is not present at the Meeting, the Meeting will be adjourned to permit further solicitation of proxies. In the event that a quorum is present, but sufficient votes have not been received to approve one or more of the Proposals, the persons named as proxies may propose one or more adjournments of the Meeting to permit 19 further solicitation of proxies with respect to those Proposals. The persons named as proxies will vote in their discretion on questions of adjournment those shares for which proxies have been received that grant discretionary authority to vote on matters that may properly come before the Meeting. SHAREHOLDER PROPOSALS. The Fund anticipates that its next annual meeting will be held in August 2000. Shareholder proposals to be presented at the next annual meeting must be received at the Fund's offices, 500 East Broward Boulevard, Ft. Lauderdale, Florida 33394-3091, Attn: Secretary, no later than April 15, 2000 in order to be included in the Fund's proxy statement and proxy card relating to that meeting and presented at the meeting. Submission of a proposal by a shareholder does not guarantee that the proposal will be included in the proxy statement. A shareholder who wishes to make a proposal at the 2000 annual meeting of shareholders without including the proposal in the Fund's proxy statement should notify the Fund, at the Fund's offices, of such proposal by June 29, 2000. If a shareholder fails to give notice by this date, then the persons named as proxies in the proxies solicited by the Board for the 2000 annual meeting of shareholders may exercise discretionary voting power with respect to any such proposal. By order of the Board of Directors, Barbara J. Green SECRETARY August 13, 1999 20 TLTDF PROXY 8/99 TEMPLETON DRAGON FUND, INC. ANNUAL MEETING OF SHAREHOLDERS - SEPTEMBER 23, 1999 The undersigned hereby revokes all previous proxies for his/her shares and appoints BARBARA J. GREEN, JAMES R. BAIO and BRUCE S. ROSENBERG, and each of them, proxies of the undersigned with full power of substitution to each of them, to vote all shares of Templeton Dragon Fund, Inc. (the "Fund") that the undersigned is entitled to vote at the Fund's Annual Meeting to be held at 500 East Broward Blvd., 12th Floor, Ft. Lauderdale, Florida at 2:00 p.m., Eastern time, on the 23rd day of September 1999, including any adjournments thereof, upon the matters set forth below. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY SHALL BE VOTED FOR PROPOSALS 1 (INCLUDING ALL NOMINEES FOR DIRECTORS) AND 2, AND WITHIN THE DISCRETION OF THE PROXYHOLDERS AS TO ANY OTHER MATTER PURSUANT TO PROPOSAL 3. (CONTINUED, AND TO BE SIGNED ON THE OTHER SIDE) FOLD AND DETACH HERE PLEASE MARK YOUR VOTES AS INDICATED IN THIS EXAMPLE [X] THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 THROUGH 3. Proposal 1 - Election of Directors. Nominees: Harris J. Ashton, Nicholas F. Brady, Frank J. Crothers, S. Joseph Fortunato and Constantine Dean Tseretopoulos WITHHOLD FOR all nominees AUTHORITY listed (except as to vote for all marked to the right) nominees listed [ ] [ ] To withhold authority to vote for any indivdual nominee, write that nominee's name on the line below. ------------------------------------------------------------------------ Proposal 2 - Ratification of the selection of PricewaterhouseCoopers LLP as independent auditors for the Fund for the fiscal year ending December 31, 1999. FOR AGAINST ABSTAIN [ ] [ ] [ ] Proposal 3 - In their descretion, the Proxyholders are authorized to vote upon such other matters that may legally come before the Meeting or any adjournments thereof. FOR AGAINST ABSTAIN [ ] [ ] [ ] YES NO I PLAN TO ATTEND THE MEETING. [ ] [ ] SIGNATURE(S): DATE: ,1999 ------------------------------------------------ -------- PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THE PROXY. IF SIGNING FOR ESTATES, TRUSTS OR CORPORATIONS, TITLE OR CAPACITY SHOULD BE STATED. IF SHARES ARE HELD JOINTLY, EACH HOLDER MUST SIGN. FOLD AND DETACH HERE -----END PRIVACY-ENHANCED MESSAGE-----