SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE TO
(Rule 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
Templeton Dragon Fund, Inc.
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(Name of Subject Company (Issuer))
Templeton Dragon Fund, Inc. (Issuer)
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(Names of Filing Persons (Identifying Status as Offeror, Issuer or Other Person))
Common Stock
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(Title of Class of Securities)
88018T101
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(CUSIP Number of Class of Securities)
Barbara J. Green, Esq.
Templeton Dragon Fund, Inc.
Broward Financial Centre
500 E. Broward Blvd., Suite 2100
Ft. Lauderdale, FL 33394-3091
Tel (954) 527-7500
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(Name, Address and Telephone Numbers of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)
COPY TO:
Bruce G. Leto, Esq.
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Tel (215) 564-8000
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee*
not applicable not applicable
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* As the filing contains only preliminary communications made before the
commencement of the tender offer, no filing fee is required.
[_] Check the box if any part of the fee is offset as provided by Rule 0-11(a)
(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
Amount Previously Paid: Not applicable Filing Party: Not applicable
Form or Registration No.: Not applicable Date Filed: Not applicable
[X] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which
the statement relates:
[_] third-party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[_] going-private transaction subject to Rule 13e-3.
[_] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: [_]
TEMPLETON VIETNAM AND SOUTHEAST ASIA FUND, INC. AND TEMPLETON
DEVELOPING MARKETS TRUST ANNOUNCE PROPOSED REORGANIZATION
TEMPLETON VIETNAM AND SOUTHEAST ASIA FUND, INC. AND TEMPLETON DRAGON FUND, INC.
ANNOUNCE THAT PROPOSED REORGANIZATION WILL NOT PROCEED
MARCH 19, 2002 -- PRESS RELEASE Q's AND A's
EXCERPTS RELATING TO DRAGON FUND TENDER OFFER:
Q: Why did I not receive my March distribution from the Dragon Fund?
A: As announced in a press release issued on January 4, 2002 and Dragon Fund's
Annual Report dated December 31, 2001, effective January 4, 2002, Dragon
Fund's Board of Directors discontinued the Dragon Fund's managed
distribution program, in part, to facilitate compliance with the
requirements that would have applied if the proposed Dragon Fund/Vietnam
Fund merger were to qualify as a tax-free reorganization. Despite the fact
that the Dragon Fund/Vietnam Fund merger will not proceed, the Board
believes that the discontinuance of the Dragon Fund's managed distribution
program remains appropriate in view of the Board's commitment to continue
the Dragon Fund's tender offer program. Specifically, if the managed
distribution program were to remain in effect any increased sale of
portfolio securities necessary to meet the cash needs of the two programs
could result in a greater proportion of any distribution under the managed
distribution program being treated as ordinary income as opposed to a
tax-free return of capital.
Q: Does this mean that shareholders will no longer receive distributions?
A: Discontinuation of the managed distribution policy means that shareholders
will no longer be receiving quarterly distributions under the program
(either by check or in additional shares of Dragon Fund for shareholders
participating in the Fund's dividend reinvestment and cash purchase plan).
However, Dragon Fund will continue to distribute dividends of net
investment income, if any, annually.
Q: Will the managed distribution policy be re-implemented in the future?
A: The Dragon Fund Board may recommend similar programs in the future,
depending upon market conditions and regulatory and tax considerations. Of
course there can be no assurance that they will do so.
Q: What was the managed distribution policy?
A: In July 1998, the Dragon Fund Board of Directors approved the
implementation of a managed distribution policy under which approximately
10% of the Fund's average net asset value would be distributed to Fund
shareholders on an annual basis. Under this distribution policy, the Fund
made quarterly distributions to Fund shareholders equal to 2.5% of the
Fund's net asset value at the close of the NYSE on the Friday prior to each
distribution's declaration date. If the total amount distributed exceeded
the Fund's aggregate net investment income and net realized capital gains
with respect to a given year, the excess amount distributed generally
constituted a return of capital to shareholders. The Fund was granted an
order from the Securities and Exchange Commission on February 9, 1999 that
permitted the Fund to use realized capital gains when making the quarterly
distributions, which began under this policy on September 15, 1998.
Q: When was the last distribution under the managed distribution policy?
A: The Dragon Fund's last distribution pursuant to the managed distribution
policy was paid on December 24, 2001 to shareholders of record on December
13, 2001.
* * * * *
Dragon Fund shareholders are advised to read the tender offer statement when it
is available as it will contain important information. The tender offer
statement, when it is available, and other documents filed by Dragon Fund with
the SEC, including Dragon Fund's most recent annual report, will be available
for free at the SEC's web site (www.sec.gov) or by calling Dragon Fund at
1-800-342-5236.
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