THE NEW GERMANY FUND, INC.
31 West 52nd Street
New York, New York 10019
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 13, 2002
----------
To our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of The New
Germany Fund, Inc., a Maryland corporation (the "Fund"), will be held at 3:00
P.M., New York time, on June 13, 2002 at the offices of Deutsche Bank, 31 West
52nd Street, 5th Floor, New York, New York for the following purposes:
1. To elect four Directors.
2. To ratify the selection by the Board of Directors of
PricewaterhouseCoopers LLP as independent accountants for the fiscal
year ending December 31, 2002.
3. To transact such other business as may properly come before the
meeting.
Only holders of record of Common Stock at the close of business on May 10,
2002 are entitled to notice of and to vote at this meeting or any adjournment
thereof.
If you have any questions or need further information, please contact
Morrow & Co., Inc., the Fund's proxy solicitors, at 445 Park Avenue, New York,
New York 10022, or 1-800-662-5200.
By Order of the Board of Directors
Robert R. Gambee
Chief Operating Officer
and Secretary
Dated: May 14, 2002
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE ENCLOSED PROXY
AND PROMPTLY RETURN IT TO THE FUND. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO
THE FUND OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN MAILING IN YOUR
PROXY PROMPTLY.
THE NEW GERMANY FUND, INC.
31 West 52nd Street
New York, New York 10019
Annual Meeting of Stockholders
June 13, 2002
---------------
PROXY STATEMENT
---------------
This proxy statement is furnished by the Board of Directors of The New
Germany Fund, Inc., a Maryland corporation (the "Fund"), in connection with the
solicitation of proxies for use at the Annual Meeting of Stockholders (the
"Meeting") to be held at 3:00 P.M., New York time, on June 13, 2002 at the
offices of Deutsche Bank, 31 West 52nd Street, 5th Floor, New York, New York.
The purpose of the Meeting and the matters to be considered are set forth in the
accompanying Notice of Annual Meeting of Stockholders.
If the accompanying form of Proxy is executed properly and returned,
shares represented by it will be voted at the Meeting in accordance with the
instructions on the Proxy. However, if no instructions are specified, shares
will be voted FOR the election of Directors (Proposal 1) and FOR the
ratification of the appointment by the Board of Directors of
PricewaterhouseCoopers LLP as independent accountants for the Fund (Proposal 2).
A Proxy may be revoked at any time prior to the time it is voted by written
notice to the Secretary of the Fund or a subsequently executed proxy or by
attendance at the Meeting and voting in person.
The close of business on May 10, 2002 has been fixed as the record date
for the determination of stockholders entitled to notice of, and to vote at, the
Meeting. On that date, the Fund had 28,155,543 shares of Common Stock
outstanding and entitled to vote. Each share will be entitled to one vote on
each matter that comes before the Meeting. It is expected that the Notice of
Annual Meeting, Proxy Statement and form of Proxy will first be mailed to
stockholders on or about May 14, 2002.
The Board of Directors of the Fund has nominated four Directors for
election at the Meeting (Proposal 1) and approved the selection of
PricewaterhouseCoopers LLP as independent accountants to the Fund for the fiscal
year ending December 31, 2002, for ratification by the stockholders at the
Meeting (Proposal 2).
A quorum is necessary to hold a valid meeting. If stockholders entitled to
cast one-third of all votes entitled to be cast at the Meeting are present in
person or by proxy, a quorum will be established. The Fund intends to treat
properly executed proxies that are marked "abstain" and broker non-votes
(defined below) as present for the purposes of determining whether a quorum has
been achieved at the Meeting. Under Maryland law, abstentions do not constitute
a vote "for" or "against" a matter and will be disregarded in determining the
"votes cast" on an issue. A "broker non-vote" occurs when a broker holding
shares for a beneficial owner does not vote on a particular matter because the
broker does not have discretionary voting power with respect to that matter and
has not received instructions from the beneficial owner.
1
PROPOSAL 1: ELECTION OF DIRECTORS
The Fund's charter (the "Charter") provides that the Board of Directors be
divided into three classes of Directors serving staggered three-year terms. The
term of office for Directors in Class II expires at the 2002 Annual Meeting,
Class III at the next succeeding Annual Meeting and Class I at the following
succeeding Annual Meeting. Three Class II nominees and one Class I nominee are
proposed in this Proxy Statement for election.
Should any vacancy occur on the Board of Directors, the remaining
Directors would be able to fill such vacancy by the affirmative vote of a
majority of the remaining Directors in office, even if the remaining Directors
do not constitute a quorum. Any Director elected by the Board to fill a vacancy
would hold office until the remainder of the full term of the class of Directors
in which the vacancy occurred and until a successor is elected and qualified. If
the size of the Board is increased, additional Directors will be apportioned
among the three classes to make all classes as nearly equal as possible.
Unless authority is withheld, it is the intention of the persons named in
the accompanying form of proxy to vote each proxy for the election of the
nominees listed below. Each nominee has indicated that he will serve as a
Director if elected, but if any nominee should be unable to serve, proxies will
be voted for any other person determined by the persons named in the form of
proxy in accordance with their discretion.
Information Regarding Directors and Officers
The following table shows certain information about the nominees for
election as Directors and Directors whose terms will continue, including
beneficial ownership of Common Stock of the Fund. Each has served as a Director
of the Fund since the Fund's inception in 1990, except for Mr. Wadsworth, Dr.
Hopp, Mr. Matz, and Mr. Zuhlsdorff, who were elected to the Board on June 19,
1992, June 18, 1993, June 29, 1995 and June 20, 1997, respectively.
Nominees Proposed for Election:
--------------------------------------------------------------------------------
Class II Directors
(Term will Expire in 2002; Nominees for Term Expiring in 2005)
--------------------------------------------------------------------------------
Number of
Portfolios
in Fund Other
Complex(2) Directorships Shares of
Principal Overseen Held by Common Stock
Name, Term of Office Occupation(s) by Director Director Beneficially
Address(1) Position(s) and Length of During Past or Nominee or Nominee Owned at
& Age with Fund Time Served Five Years for Director for Director May 10, 2002(3)
---------- ----------- -------------- ------------- ------------ --------------- ---------------
Non-Interested Directors
John H. Cannon, Director Since 1990. Consultant (since 2002). 1 None. 1,112
60 Vice President and
Treasurer of Footlocker
Inc. (over five years
until 2001).
Peter Zuhlsdorff, Director Since 1997. Managing Director of 1 Chairman of the None.
62 Tenglemann Supervisory Board
Unternehmensgruppe of GfK AG, TV
(since 1998), Deutsche Loonland AG and
Industrie Holding (holding Escada AG; Member
company) (since 1997), and of the Supervisory
PZ Sportpark GmbH (since Board of Merck
1996). KGaA, Deutz AG,
Kaisers Kaffee AG,
and Quelle AG.
2
--------------------------------------------------------------------------------
Class II Directors
(Term will Expire in 2002; Nominees for Term Expiring in 2005)
--------------------------------------------------------------------------------
Number of
Portfolios
in Fund Other
Complex(2) Directorships Shares of
Principal Overseen Held by Common Stock
Name, Term of Office Occupation(s) by Director Director Beneficially
Address(1) Position(s) and Length of During Past or Nominee or Nominee Owned at
& Age with Fund Time Served Five Years for Director for Director May 10, 2002(3)
---------- ----------- -------------- ------------- ------------ --------------- ---------------
Interested Directors(4)
John Bult, 66 Director Since 1990. Chairman of PaineWebber 3 Director of the 2,713
International (financial Germany Fund, Inc.
services) (since 1985). and the Central
European Equity Fund,
Inc.(5); Director of
The France Growth
Fund, Inc. and The
Greater China Fund,
Inc.
--------------------------------------------------------------------------------
Class I Director
(Nominee as Class I Director for Term Expiring in 2004)
--------------------------------------------------------------------------------
Number of
Portfolios
in Fund Other
Complex(2) Directorships Shares of
Principal Overseen Held by Common Stock
Name, Term of Office Occupation(s) by Director Director Beneficially
Address(1) Position(s) and Length of During Past or Nominee or Nominee Owned at
& Age with Fund Time Served Five Years for Director for Director May 10, 2002(3)
---------- ----------- -------------- ------------- ------------ --------------- ---------------
Non-Interested Director
Robert H. Director Since 1992. President, Robert H. 13 Director of the 5,127
Wadsworth, 62(6) Wadsworth Associates, Inc. Germany Fund, Inc.
(consulting firm) (since and the Central
1982); President and European Equity
Trustee, Trust for Fund, Inc.(5)
Investment Managers
(registered investment
company) (since 1999);
Formerly President,
Investment Company
Administration, L.L.C.
(1992-July 2001) and
President, Treasurer and
Director, First Fund
Distributors, Inc.
(1990- January 2002); Vice
President, Professionally
Managed Portfolios
(1992-2002) and Advisors
Series Trust (1997-2002)
(registered investment
companies); President,
Guinness Flight Investment
Funds, Inc. (registered
investment companies)
(1994-1998).
Directors whose term will continue:
--------------------------------------------------------------------------------
Class I Directors
(Term will Expire in 2004)
--------------------------------------------------------------------------------
Number of
Portfolios
in Fund Other
Complex(2) Directorships Shares of
Principal Overseen Held by Common Stock
Name, Term of Office Occupation(s) by Director Director Beneficially
Address(1) Position(s) and Length of During Past or Nominee or Nominee Owned at
& Age with Fund Time Served Five Years for Director for Director May 10, 2002(3)
---------- ----------- -------------- ------------- ------------ --------------- ---------------
Non-Interested Director
Richard Karl Director Since 1990. Consultant (since 2001). 1 None. 8,243
Goeltz, 59 Vice Chairman and Chief
Financial Officer of
American Express Co.
(1996-2000); Group Chief
Financial Officer and
Member of the Board of
Directors of National
Westminster Bank Plc.
(1992-1996).
3
--------------------------------------------------------------------------------
Class I Directors
(Term will Expire in 2004)
--------------------------------------------------------------------------------
Number of
Portfolios
in Fund Other
Complex(2) Directorships Shares of
Principal Overseen Held by Common Stock
Name, Term of Office Occupation(s) by Director Director Beneficially
Address(1) Position(s) and Length of During Past or Nominee or Nominee Owned at
& Age with Fund Time Served Five Years for Director for Director May 10, 2002(3)
---------- ----------- -------------- ------------- ------------ --------------- ---------------
Interested Director(4)
Christian H. Chairman and Since 1990. Director of DWS 3 Director of the None.
Strenger, 58 Director Investment GmbH Germany Fund, Inc.
(investment management) and the Central
(since 1999). Managing European Equity Fund,
Director of DWS - Deutsche Inc.(5);Member of
Gesellschaft fuer the Supervisory
Wertpapiersparen mbH Boards of Fraport
(1991-1999). Chairman of AG and Metro AG.
Deutsche Fund Management,
Inc. (1997-2000).
--------------------------------------------------------------------------------
Class III Directors
(Term will Expire in 2003)
--------------------------------------------------------------------------------
Number of
Portfolios
in Fund Other
Complex(2) Directorships Shares of
Principal Overseen Held by Common Stock
Name, Term of Office Occupation(s) by Director Director Beneficially
Address(1) Position(s) and Length of During Past or Nominee or Nominee Owned at
& Age with Fund Time Served Five Years for Director for Director May 10, 2002(3)
---------- ----------- -------------- ------------- ------------ --------------- ---------------
Non-Interested Directors
Ernst-Ulrich Matz, Director Since 1995. Consultant. Vice 1 Member of the District None.
68(7) Chairman of the Advisory Board of
Supervisory Boards of Gerling-Konzern.
Bopp & Reuther AG Chairman of the
(until 2001). Chief Rumanian Group in the
Financial Officer and German East-West Trade
member of the Board of Committee. Member of
directors of IKWA Advisory Council of
Aktiengesellschaft Peters Associates AG.
(1978 until 2000).
Member of the
Supervisory Boards of
Ex-Cell-O AG (until
2001), ARO SA (until
2000).
Dr. Frank Tromel, Director Since 1990. Deputy Chairman of the 1 None. None.
66(8) Supervisory Board of
DELTON AG (diversified
industrial holding)
(since 2000). Member
(since 2000) and
Vice-President (since
2002) of the German
Accounting Standards
Board; Chairman of the
Board of Managing
Directors of DELTON AG
(1990-1999). Chairman
of the Board of
Managing Directors of
ATLANTA AG
(1987-1990). Member of
the Board of ATLANTA
AG (1977-1987).
Interested Director(4)
Dr. Franz Wilhelm Director Since 1993. Member of the Boards 1 Chairman of the None.
Hopp, 59 of Management of Supervisory Boards of
ERGO Versicherungsgruppe VORSORGE
AG, ERGO Europa Lebensversicherung AG
Beteiligungsgesellschaft and Mediastream AG;
AG and ERGO International Member of the
AG (insurance) (over five Supervisory Boards of
years); Former Member of MEAG Munich ERGO
the Boards of Management of Kapitalanlage-gesellschaft
VICTORIA Holding, VICTORIA mbH, FSB
Lebensversicherung AG, Fonds Service Bank GmbH,
VICTORIA Versicherung AG, VICTORIA Pensionskasse
VICTORIA International, AG, Internationales
VICTORIA Ruckversicherung Immobilieninstitute
AG and D.A.S. GmbH, TMW Immobilien
Versicherungs-AG. AG, Bankhaus Ellwanger
& Geiger and Jenoptik
AG.
4
--------------------------------------------------------------------------------
Executive Officers(9)
--------------------------------------------------------------------------------
Term of Office Shares of Common
Name, Address(1) Position(s) and Length of Principal Occupation(s) Stock Beneficially
& Age with Fund Time Served During Past Five Years Owned at May 10, 2002(3)
---------------- ----------- --------------- ----------------------- --------------------------
Richard T. Hale, President and Year to year Trustee and/or President of None.
56(10) Chief Executive since 2001. each of the investment
Officer companies advised by
Deutsche Asset Management,
Inc. or its affiliates;
Managing Director, Deutsche
Asset Management; Managing
Director, Deutsche Bank
Securities Inc.; Director
and President, Investment
Company Capital Corp.
Hanspeter Ackermann, Chief Investment Year to year President of Deutsche Bank None.
45(10) Officer since 1996. Investment Management Inc.,
Managing Director of
Deutsche Bank Securities
Inc., Managing Director and
Senior International Equity
Portfolio Manager of
Bankers Trust Co., CIO of
The Germany Fund, Inc. and
The New Germany Fund, Inc.;
President and Managing
Partner of Eiger Asset
Management (1993-1996),
Managing Director and CIO
of SBC Portfolio Management
International (1983-1993).
Robert R. Gambee, Chief Operating Year to year Director (since 1992), 1,365
59(10) Officer and Secretary since 1990. First Vice President
(1987-1991) and Vice
President (1978-1986) of
Deutsche Bank Securities
Inc., Director of Deutsche
Bank AG, Director, Bankers
Trust Co., Secretary of
Flag Investors of Flag
Investors Funds, Inc., and
Deutsche Bank Investment
Management, Inc.
(1997-2000).
Joseph Cheung, Chief Financial Year to year Vice President (since None.
43(10) Officer and since 1997. 1996), Assistant Vice
Treasurer President (1994-1996) and
Associate (1991-1994) of
Deutsche Bank Securities
Inc.
--------
(1) Unless otherwise indicated the addresses of all directors and officers is
c/o Deutsche Bank Securities, Inc., 31 W. 52nd Street, NY, NY 10019.
(2) Includes The Germany Fund, Inc. and the Central European Equity Fund,
Inc., which are the other closed-end registered investment companies for
which Deutsche Bank Securities, Inc. acts as manager. It also includes the
following open-end investment companies advised by Investment Capital
Corp, an indirect wholly-owned subsidiary of Deutsche Bank AG : Deutsche
Investors Portfolios Trust, Deutsche Investors Funds, Inc., Deutsche Bank
Alex. Brown Cash Reserve Fund, Inc; Deutsche Flag Investors Communication
Fund, Inc.; Deutsche Flag Investors Series Funds, Inc.; Deutsche Emerging
Growth Fund, Inc.; Deutsche Short-Intermediate Income Fund, Inc.; Deutsche
Flag Investors Value Builder Fund, Inc.; Deutsche Real Estate Securities
Fund, Inc.; and Deutsche Flag Investors Equity Partners Fund, Inc.
Further, it also includes Deutsche Asset Management VIT Funds, which is
advised by Deutsche Asset Management, Inc.
(3) All Directors and Executive Officers as a group (13 persons) owned 18,560
shares which constitutes less than 1% of the outstanding Common Stock of
the Fund. Share numbers in this proxy statement have been rounded to the
nearest whole share.
(4) Indicates "Interested Person", as defined in the Investment Company Act of
1940, as amended (the "1940 Act"). Mr. Bult is an "interested" Director
because of his affiliation with U.B.S. PaineWebber Incorporated, a
registered broker-dealer; and Mr. Strenger is an "interested" Director
because of his affiliation with DWS-Deutsche Gesellschaft fur
Wertpapiersparen mbH ("DWS"), a majority-owned subsidiary of Deutsche Bank
and because of his ownership of Deutsche Bank shares. Dr. Hopp, previously
listed as a non-interested Director, is an "interested" Director because
of his ownership of Deutsche Bank shares for many years. Dr. Hopp has
informed the Fund that he intends to dispose of these holdings.
(5) The Germany Fund, Inc. and The Central European Equity Fund, Inc. are the
other closed-end registered investment companies for which Deutsche Bank
Securities, Inc. acts as manager.
(6) Currently, Mr. Wadsworth serves as Class II Director whose term will
expire at the 2002 Annual Meeting and he is being nominated as a Class I
Director for a term expiring in 2004.
(7) During the period from September 26, 2001 through April 4, 2002, Mr. Matz
beneficially owned shares of Deutsche Bank AG valued at under $50,000 in a
third party-managed discretionary account, and was thereby an interested
person of the Fund during that period.
(8) Mr. Tromel's son has been employed since March 1, 2002 by an indirect
subsidiary of Deutsche Bank AG.
(9) Each officer also serves as an officer of The Germany Fund, Inc. and The
Central European Equity Fund, Inc. The officers of the Fund are elected
annually by the Board of Directors at its meeting following the Annual
Meeting of Stockholders.
(10) Indicates ownership of securities of Deutsche Bank either directly or
through Deutsche Bank's deferred compensation plan.
5
The following table contains additional information with respect to the
beneficial ownership of equity securities by each Director or Nominee in the
Fund and, on an aggregated basis, in any registered investment companies
overseen by the Director or Nominee within the same Family of Investment
Companies as the Fund:
Aggregate Dollar Range of Equity
Securities in All Funds Overseen by
Dollar Range of Equity Director or Nominee in Family of
Name of Director or Nominee Securities in the Fund(1) Investment Companies(1),(2)
-------------------------- ---------------------- -------------------------------
John Bult $10,001 - $50,000 $50,001 - $100,000
John H. Cannon $1-$10,000 $1-$10,000
Richard Karl Goeltz $10,001 - $50,000 $10,001 - $50,000
Dr. Franz Wilhelm Hopp None. None.
Ernst-Ulrich Matz None. None.
Christian H. Strenger None. $50,001 - $100,000
Dr. Frank Tromel None. None.
Robert H. Wadsworth $10,001 - $50,000 $50,001 - $100,000
Peter Zuhlsdorff None. None.
----------
(1) Valuation date is May 10, 2002.
(2) The Family of Investment Companies consists of the Fund, The Germany Fund,
Inc. and The Central European Equity Fund, Inc., which are closed-end
funds and share the same investment adviser and manager and hold
themselves out as related companies.
The Board of Directors presently has an Audit Committee composed of
Messrs. Cannon, Goeltz and Wadsworth. The Audit Committee makes recommendations
to the full Board with respect to the engagement of independent accountants and
reviews with the independent accountants the plan and results of the audit
engagement and matters having a material effect upon the Fund's financial
operations. The Audit Committee met three times during the fiscal year ended
December 31, 2001. In addition, the Board has an Advisory Committee composed of
Messrs. Cannon, Goeltz and Wadsworth. The Advisory Committee makes
recommendations to the full Board with respect to the Management Agreement
between the Fund and Deutsche Bank Securities Inc. ("DBSI") and the Investment
Advisory Agreement between the Fund and Deutsche Asset Management International
GmbH ("DeAM"). The Advisory Committee met once during the past fiscal year. The
Board also has an Executive Committee and a Nominating Committee. During the
past fiscal year, the Executive and Nominating Committees did not meet (the
function of the latter having been served by the full Board in 2001). The
members of the Executive Committee are Messrs. Cannon, Goeltz, Strenger and
Wadsworth. The Executive Committee has the authority to act for the Board on all
matters between meetings of the Board. The members of the Nominating Committee
are Messrs. Cannon, Goeltz, Tromel and Wadsworth. The Nominating Committee makes
recommendations to the full Board with respect to the selection of candidates to
fill vacancies on the Board of Directors intended to be filled by persons not
affiliated with DBSI or DeAM, and the Nominating Committee evaluates the
qualifications of all nominees for directorship pursuant to the director
qualification provisions in the Fund's Bylaws. The Nominating Committee will
consider suggestions from stockholders submitted in writing to the Secretary of
the Fund that comply with the requirements for such proposals contained in the
Fund's bylaws.
During the past fiscal year, the Board of Directors had four regular
meetings, and each incumbent Director attended at least 75% of the aggregate
number of meetings of the Board and meetings of Board Committees on which that
Director served.
6
The Fund pays each of its Directors who is not an interested person of the
Fund, the Investment Adviser or the Manager an annual fee of $7,500 plus $750
for each meeting attended. Each such Director who is also a Director of The
Germany Fund, Inc. or The Central European Equity Fund, Inc. also receives the
same annual and per-meeting fees for services as a Director of each such fund.
Effective as of April 24, 2002, no Director of all three funds will be paid for
attending more than two funds' board and committee meetings when meetings of the
three funds are held concurrently, and, effective as of January 1, 2002, no such
Director will receive more than the annual fee of two funds. Each of the Fund,
The Germany Fund, Inc. and The Central European Equity Fund, Inc. reimburses the
Directors (except for those employed by the Deutsche Bank group) for travel
expenses in connection with Board meetings. These three funds, together with
Deutsche Investors Portfolios Trust, Deutsche Investors Funds, Inc., Deutsche
Bank Alex. Brown Cash Reserve Fund, Inc., Deutsche Flag Investors Communication
Fund, Inc., Deutsche Flag Investors Series Funds, Inc., Deutsche Emerging Growth
Fund, Inc., Deutsche Short-Intermediate Income Fund, Inc., Deutsche Flag
Investors Value Builder Fund, Inc., Deutsche Real Estate Securities Fund, Inc.,
Deutsche Flag Investors Equity Partners Fund, Inc., and Deutsche Asset
Management VIT Funds, represent the entire Fund Complex within the meaning of
the applicable rules and regulations of the Securities and Exchange Commission.
The following table sets forth the aggregate compensation from the Fund for the
fiscal year ended December 31, 2001, and from the Fund and such other funds for
the year ended December 31, 2001, for each Director who is not an interested
person of the Fund, and for all such Directors as a group:
Aggregate Compensation Total Compensation
Name of Director From Fund From Fund Complex
---------------- ---------------------- -------------------
John H. Cannon $13,500 $ 13,500
Richard Karl Goeltz 12,750 12,750
Dr. Franz Wilhelm Hopp 10,500 10,500
Ernst-Ulrich Matz 10,500 10,500
Dr. Frank Tromel 10,500 10,500
Robert H. Wadsworth 13,500 104,500
Peter Zuhlsdorff 10,500 10,500
------- --------
Total $81,750 $172,750
======= ========
No compensation is paid by the Fund to Directors or officers who are
interested persons of the Fund or of any entity of the Deutsche Bank Group.
The Board unanimously recommends a vote FOR Proposal 1.
Required Vote. Provided a quorum has been established, the affirmative
vote of a plurality of the votes cast at the Meeting is required for the
election of each Director.
PROPOSAL 2: APPOINTMENT OF INDEPENDENT ACCOUNTANTS
A majority of members of the Board of Directors, including a majority of
the members of the Board of Directors who are not "interested" Directors (as
defined in the 1940 Act) of the Fund, have appointed PricewaterhouseCoopers LLP
(the "Firm" or "PwC") as independent accountants for the Fund for the fiscal
year ending December 31, 2002. Based principally on representations from the
Firm, the Fund knows of no direct financial or material indirect financial
interest of such Firm in the Fund. That Firm, or a predecessor firm, has served
as the independent accountant for the Fund since inception.
7
Neither our Charter nor by-laws requires that the stockholders ratify the
selection of PwC as our independent accountants. We are doing so because we
believe it is a matter of good corporate practice. If the stockholders do not
ratify the selection, the Board of Directors and the Audit Committee will
reconsider whether or not to retain PwC, but may retain such independent
accountants. Even if the selection is ratified, the Board of Directors and the
Audit Committee in their discretion may change the appointment at any time
during the year if they determine that such change would be in the best
interests of the Fund and its stockholders. It is intended that the persons
named in the accompanying form of proxy will vote for PwC. A representative of
PwC will be present at the Meeting and will have the opportunity to make a
statement and is expected to be available to answer appropriate questions
concerning the Fund's financial statements.
The Board unanimously recommends a vote FOR Proposal 2.
Required Vote. Provided a quorum has been established, the affirmative
vote of a majority of the votes cast at the Meeting is required for the
ratification of the appointment by the Board of Directors of PwC as independent
accountants for the Fund for the fiscal year ending December 31, 2002.
INFORMATION WITH RESPECT TO THE FUND'S INDEPENDENT ACCOUNTANTS
Audit Fees
The aggregate fees billed by PwC for professional services rendered for
the Audit of the Fund's annual financial statements for the fiscal year ended
December 31, 2001 were $47,500.
Financial Information Systems Design and Implementation Fees
PwC did not render any information technology services to the Fund, DBSI
or DeAM during the fiscal year ended December 31, 2001.
All Other Fees
The aggregate fees billed by PwC for tax services rendered to the Fund,
other than the services described above under "Audit Fees" for the fiscal year
ended December 31, 2001, were $11,733. The aggregate fees billed by PwC for
audit and other services to registered investment companies advised or managed
by companies within the Deutsche Bank group for the fiscal year ended December
31, 2001 were $1,959,750. In addition, the aggregate fees billed by PwC for
services rendered to the U.S. asset management business within the Deutsche Bank
group, including DBSI, for the fiscal year ended December 31, 2001 were
approximately $5,091,880.
8
AUDIT COMMITTEE REPORT
The role of the Audit Committee is to assist the Board in its oversight of
the Fund's financial reporting process. The Board of Directors has determined
that all members of the Committee are "independent," as required by applicable
listing standards of the New York Stock Exchange. The Committee operates
pursuant to an Audit Committee Charter that was last amended and restated by the
Board on April 20, 2001, a copy of which is attached as Exhibit A to this proxy
statement. As set forth in the Audit Committee Charter, management of the Fund
is responsible for the preparation, presentation and integrity of the Fund's
financial statements, the Fund's accounting and financial reporting principles,
and internal controls designed to assure compliance with accounting standards
and applicable laws and regulations. The independent accountants are responsible
for auditing the Fund's financial statements and expressing an opinion as to
their conformity with generally accepted accounting principles.
In the performance of its oversight function, the Committee has considered
and discussed the audited financial statements with management and the
independent accountants. The Committee has also discussed with the independent
auditors the matters required to be discussed by Statement on Auditing Standards
No. 61, Communication with Audit Committees, as currently modified or
supplemented. Finally, the Committee has received the written disclosures and
the letter from the independent accountants required by Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees, as
currently in effect, has discussed with the independent accountants the
accountants' independence from the Fund and its management, and has considered
whether the provision of non-audit services to the Fund's investment manager and
adviser and their affiliated persons by the independent accountants is
compatible with maintaining the accountants' independence.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not employed by the Fund for
accounting, financial management or internal control purposes. Members of the
Committee rely without independent verification on the information provided to
them and on the representations made by management and the independent
accountants. Accordingly, the Audit Committee's oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and financial reporting principles and policies, or internal control
and procedures, designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not assure that the audit of
the Fund's financial statements has been carried out in accordance with
generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
the Fund's independent accountants are in fact "independent".
Based upon the reports and discussions described in this report, and
subject to the limitations on the role and responsibilities of the Committee
referred to above and in the Charter, the Committee recommended to the Board
that the audited financial statements be included in the Fund's Annual Report
for the fiscal year ended December 31, 2001.
Submitted by the Audit Committee
of the Fund's Board of Directors
John H. Cannon
Richard Karl Goeltz
Robert H. Wadsworth
9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of May 10, 2002 no person, to the knowledge of management, owned of
record or beneficially more than 5% of the outstanding Common Stock of the Fund,
other than as set forth below:
Amount and Percent of
Name and Address Nature of Outstanding
of Beneficial Owner Beneficial Ownership Common Stock
------------------- -------------------- ------------
SG Cowen Securities Corp.(1) ........... 2,009,881(1) 7.1%
1221 Avenue of the Americas
New York, NY 10020
Wachovia Corp.(1) ...................... 1,948,736(1) 6.9%
One Wachovia Center
Charlotte, NC 28288
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(1) This information is based exclusively on information provided by such
entity on Schedule 13G filed with respect to the Fund on February 14,
2002.
ADDRESS OF INVESTMENT ADVISER AND MANAGER
The principal office of Deutsche Asset Management International GmbH, the
Fund's Investment Adviser, is located at Mainzer Landstrasse 16, D-60325
Frankfurt am Main, Federal Republic of Germany. The corporate office of Deutsche
Bank Securities Inc., the Fund's Manager, is located at 31 West 52nd Street, New
York, New York 10019.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
During the fiscal year ended December 31, 2001 and current year to date
the Fund did not file on a timely basis the following monthly reports on Form 4
(Statement of Changes of Beneficial Ownership of Securities) (the "Monthly
Reports"): on behalf of Mr. Goeltz four Monthly Reports covering five
transactions and on behalf of Messrs. Cannon and Wadsworth five Monthly Reports
covering six and seven transactions, respectively. Each of the covered
transactions were part of an automatic investment program in which the
Director's committee meeting fee is applied to open market purchases of Fund
shares. All filings are now current.
OTHER MATTERS
No business other than as set forth herein is expected to come before the
Meeting, but should any other matter requiring a vote of stockholders properly
come before the meeting, including any question as to an adjournment of the
Meeting, the persons named in the enclosed Proxy will vote thereon according to
their discretion.
STOCKHOLDER PROPOSALS
In order for stockholder proposals otherwise satisfying the eligibility
requirements of Securities Exchange Commission Rule 14a-8 to be considered for
inclusion in the Fund's proxy statement for the 2003 Annual Meeting, the
proposals must be received at The New Germany Fund, Inc., 31 West 52nd Street,
New York, New York, 10019, Attention: Secretary, on or before January 14, 2003.
10
In addition, the Fund's Bylaws currently provide that if a stockholder
desires to bring business (including director nominations) before the 2003
Annual Meeting that is or is not the subject of a proposal timely submitted for
inclusion in the Fund's proxy statement, written notice of such business as
prescribed in the Bylaws must be received by the Fund's Secretary between
January 14, 2003 and February 13, 2003. For additional requirements, the
stockholder may refer to the Bylaws, a current copy of which may be obtained
without charge upon request from the Fund's Secretary. If the Fund does not
receive timely notice pursuant to the Bylaws, the proposal may be excluded from
consideration at the meeting, regardless, of any earlier notice provided in
accordance with Securities Exchange Commission Rule 14a-8.
EXPENSES OF PROXY SOLICITATION
The cost of preparing, assembling and mailing material in connection with
this solicitation will be borne by the Fund. In addition to the use of mails,
proxies may be solicited personally by regular employees of the Fund or the
Manager or by telephone or telegraph. Brokerage houses, banks and other
fiduciaries may be requested to forward proxy solicitation materials to their
principals to obtain authorization for the execution of proxies, and they will
be reimbursed by the Fund for out-of-pocket expenses incurred in this
connection. The Fund has also made arrangements with Morrow & Co., Inc. to
assist in the solicitation of proxies, if called upon by the Fund, at an
estimated fee of $6,000 plus reimbursement of normal expenses.
ANNUAL REPORT DELIVERY
The Fund will furnish, without charge, a copy of its annual report for the
fiscal year ended December 31, 2001 to any stockholder upon request. Such
requests should be directed by mail to The New Germany Fund, Inc., 31 West 52nd
Street, New York, New York 10019 or by telephone to 1-800-GERMANY. Annual
reports are also available on the Fund's web site: www.newgermanyfund.com.
Robert R. Gambee
Chief Operating Officer
and Secretary
Dated: May 14, 2002
STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO HAVE
THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN
IT TO THE FUND.
11
EXHIBIT A
THE NEW GERMANY FUND, INC.
(the "Company")
AUDIT COMMITTEE CHARTER
I. Composition of the Audit Committee: The Audit Committee comprises at least
three directors, each of whom shall have no relationship to the Company,
its investment manager, its investment adviser or its custodian (including
sub-custodians) that may interfere with the exercise of his or her
independence from management and the Company and, as to his or her
relationship to the Company, shall otherwise satisfy the applicable
membership requirements under the rules of the New York Stock Exchange,
Inc., as such requirements are interpreted by the Board of Directors in
its business judgment. Copies of the relevant requirements are attached
hereto.
II. Purposes of the Audit Committee: The purposes of the Audit Committee are
to assist the Board of Directors:
1. in its oversight of the Company's accounting and financial reporting
principles and policies and related controls and procedures
maintained by or on behalf of the Company;
2. in its oversight of the Company's financial statements and the
independent audit thereof;
3. in selecting, evaluating and, where deemed appropriate, replacing
the outside auditors (or nominating the outside auditors to be
proposed for stockholder approval in the proxy statement); and
4. in evaluating the independence of the outside auditors.
The function of the Audit Committee is oversight. The management of the
Company, including the service providers so contractually obligated, are
responsible for the preparation, presentation and integrity of the
Company's financial statements. Management and applicable service
providers are responsible for maintaining appropriate accounting and
financial reporting principles and policies and related controls and
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. The outside auditors are responsible for
planning and carrying out a proper audit of the Company's annual financial
statements. In fulfilling their responsibilities hereunder, it is
recognized that members of the Audit Committee are not full-time employees
of the Company and are not, and do not represent themselves to be,
accountants or auditors by profession or experts in the fields of
accounting or auditing, including in respect of auditor independence. As
such, it is not the duty or responsibility of the Audit Committee or its
members to conduct "field work" or other types of auditing or accounting
reviews or procedures or to set auditor independence standards, and each
member of the Audit Committee shall be entitled to rely on (i) the
integrity of those persons and organizations within and outside the
Company from which it receives information, (ii) the accuracy of the
financial and other information provided to the Audit Committee by such
persons or organizations absent actual knowledge to the contrary (which
shall be promptly reported to the Board of Directors), and (iii)
representations made by management as to any information technology,
internal audit and other non-audit services provided by the auditors to
the Company, to the Company's investment manager, investment adviser or
any entity controlling, controlled by or under common control with the
investment manager or investment adviser ("Manager/Adviser Control
Affiliate"), or to the Company's custodian (including sub-custodians).
A-1
The outside auditors for the Company are ultimately accountable to the
Board of Directors (as assisted by the Audit Committee). The Board of
Directors, with the assistance of the Audit Committee, has the ultimate
authority and responsibility to select, evaluate and, where appropriate,
replace the outside auditors (or to nominate the outside auditors to be
proposed for stockholder approval in the proxy statement).
The outside auditors shall submit to the Company annually a formal written
statement delineating all relationships between the outside auditors and
the Company ("Statement as to Independence"), addressing each non-audit
service provided to the Company and at least the matters set forth in
Independence Standards Board No. 1.
The outside auditors shall submit to the Company annually a formal written
statement of the fees billed for each of the following categories of
services rendered by the outside auditors: (i) the audit of the Company's
annual financial statements for the most recent fiscal year; (ii)
information technology consulting services for the most recent fiscal
year, in the aggregate and by each service (and separately identifying
fees for such services relating to financial information systems design
and implementation); and (iii) all other services rendered by the outside
auditors for the most recent fiscal year, in the aggregate and by each
service. The statement as to (ii) and (iii) should include (and separately
disclose) fees billed for the indicated services to (a) the Company, (b)
the Company's investment manager, investment adviser and Manager/Adviser
Control Affiliates that provide services to the Company, (c)
Manager/Adviser Control Affiliates that do not provide services to the
Company, and (d) the custodian (including sub-custodians).
III. Meetings of the Audit Committee: The Audit Committee shall meet as often
as may be required to discuss the matters set forth in Article IV. In
addition, the Audit Committee should meet separately at least annually
with management and the outside auditors to discuss any matters that the
Audit Committee or any of these persons or firms believe should be
discussed privately. The Audit Committee may request any officer or
employee of the Company or any service provider, outside counsel to the
Company or the independent directors or the Company's outside auditors to
attend a meeting of the Audit Committee or to meet with any members of, or
consultants to, the Audit Committee. Members of the Audit Committee may
participate in a meeting of the Audit Committee by means of conference
call or similar communications equipment by means of which all persons
participating in the meeting can hear each other.
IV. Duties and Powers of the Audit Committee: To carry out its purposes, the
Audit Committee shall have the following duties and powers:
1. with respect to the outside auditor,
(i) to provide advice to the Board of Directors in selecting,
evaluating or replacing outside auditors;
(ii) to review the fees charged by the outside auditors for audit
and non-audit services;
(iii) to ensure that the outside auditors prepare and deliver
annually a Statement as to Independence (it being understood
that the outside auditors are responsible for the accuracy and
completeness of this Statement), to discuss with the outside
auditors any relationships or services disclosed in this
Statement that may impact the objectivity and independence of
the Company's outside auditors and to recommend that the Board
of Directors take appropriate action in response to this
Statement to satisfy itself of the outside auditors'
independence;
(iv) if applicable, to consider whether the outside auditors'
provision of (a) information technology consulting services
relating to financial information systems design and
implementation and (b) other non-audit services to the
Company, the Company's investment manager, investment adviser
A-2
or Manager/Adviser Control Affiliates or the custodian
(including sub-custodians) is compatible with maintaining the
independence of the outside auditors; and
(v) to instruct the outside auditors that the outside auditors are
ultimately accountable to the Board of Directors and Audit
Committee;
2. with respect to financial reporting principles and policies and
related controls and procedures,
(i) to advise management and the outside auditors that they are
expected to provide or cause to be provided to the Audit
Committee a timely analysis of significant financial reporting
issues and practices;
(ii) to consider any reports or communications (and management's
responses thereto) submitted to the Audit Committee by the
outside auditors required by or referred to in SAS 61 (as
codified by AU Section 380), as may be modified or
supplemented, including reports and communications related to:
o deficiencies noted in the audit in the design or
operation of related controls;
o consideration of fraud in a financial statement audit;
o detection of illegal acts;
o the outside auditor's responsibility under generally
accepted auditing standards;
o significant accounting policies;
o management judgments and accounting estimates;
o adjustments arising from the audit;
o the responsibility of the outside auditor for other
information in documents containing audited financial
statements;
o disagreements with management;
o consultation by management with other accountants;
o major issues discussed with management prior to
retention of the outside auditor;
o difficulties encountered with management in performing
the audit; and
o the outside auditor's judgments about the quality of the
entity's accounting principles;
(iii) to meet with management and/or the outside auditors:
o to discuss the scope of the annual audit;
o to discuss the audited financial statements;
o to discuss any significant matters arising from any
audit or report or communication referred to in item
2(ii) above, whether raised by management or the outside
auditors, relating to the Company's financial
statements;
o to review the form of opinion the outside auditors
propose to render to the Board of Directors and
shareholders;
o to discuss allocations of expenses between the Company
and other entities;
o to discuss the Company's compliance with Subchapter M of
the Internal Revenue Code of 1986, as amended;
A-3
o to discuss with management and the outside auditors
their respective procedures to assess the
representativeness of securities prices provided by
external pricing services;
o to discuss with outside auditors their conclusions as to
the reasonableness of procedures employed to determine
the fair value of securities for which readily available
market quotations are not available, management's
adherence to such procedures and the adequacy of
supporting documentation;
o to discuss significant changes to the Company's auditing
and accounting principles, policies, controls,
procedures and practices proposed or contemplated by the
outside auditors or management; and
o to inquire about significant risks and exposures, if
any, and the steps taken to monitor and minimize such
risks; and
(iv) to discuss with the Company's legal advisors any significant
legal matters that may have a material effect on the financial
statements; and
3. with respect to reporting, recommendations and other matters,
(i) to provide advice to the Board of Directors in selecting the
principal accounting officer of the Company;
(ii) to prepare any report or other disclosures, including any
recommendation of the Audit Committee, required by the rules
of the Securities and Exchange Commission to be included in
the Company's annual proxy statement;
(iii) to review this Charter at least annually and recommend any
changes to the full Board of Directors; and
(iv) to report its activities to the full Board of Directors on a
regular basis and to make such recommendations with respect to
the above and other matters as the Audit Committee may deem
necessary or appropriate.
V. Resources and Authority of the Audit Committee: The Audit Committee shall
have the resources and authority appropriate to discharge its
responsibilities, including the authority to engage outside auditors for
special audits, reviews and other procedures and to retain special counsel
and other experts or consultants.
A-4
[LOGO]
PROXY THE NEW GERMANY FUND, INC.
This proxy is solicited on behalf of the Board of Directors
The undersigned stockholder of The New Germany Fund, Inc, a Maryland
corporation (the "Fund"), hereby appoints Richard T. Hale, Robert R. Gambee and
Joseph Cheung, or either of them, as proxies for the undersigned, with full
power of substitution in each of them, to attend the Annual Meeting of the
Stockholders of the Fund to be held at 3:00 P.M., New York time, on June 13,
2002 at the offices of Deutsche Bank, 31 West 52nd Street, 5th Floor, New York,
New York, and any adjournment or postponement thereof, to cast on behalf of the
undersigned all votes that the undersigned is entitled to cast at such meeting
and otherwise to represent the undersigned at the meeting with all powers
possessed by the undersigned if personally present at the meeting. The
undersigned hereby acknowledges receipt of the Notice of the Annual Meeting of
Stockholders and of the accompanying Proxy Statement and revokes any proxy
heretofore given with respect to such meeting.
The votes entitled to be cast by the undersigned will be cast as
instructed below. If this Proxy is executed but no instruction is given, the
votes entitled to be cast by the undersigned will be cast "FOR" each of the
nominees for director, "FOR" Proposal 2, as described in the Proxy Statement and
in the discretion of the Proxy holder on any other matter that may properly come
before the meeting or any adjournment or postponement thereof.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES
1. |_| FOR each of the |_| WITHHOLD AUTHORITY |_| FOR all nominees
nominees for as to all listed except as
director listed below. nominees. marked to the
contrary below.
(Instructions: To withhold authority for any individual nominee,
strike a line through the nominee's name in the list below.)
John A. Bult
John H. Cannon
Robert H. Wadsworth
Peter Zuhlsdorff
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 2
2. To ratify the selection by the Board of Directors of
PricewaterhouseCoopers LLP as independent accountants for the fiscal year
ending December 31, 2002
|_| FOR |_| AGAINST |_| ABSTAIN
3. To vote and otherwise represent the undersigned on any other matter that
may properly come before the meeting or any adjournment or postponement
thereof in the discretion of the Proxy holder.
Please sign here exactly as name appears on the records of the Fund and
date. If the shares are held jointly, each holder should sign. When signing as
an attorney, executor, administrator, trustee, guardian, officer of a
corporation or other entity or in another representative capacity, please give
the full title under signature(s).
------------------------------------
Signature
------------------------------------
Signature, if held jointly
Dated: , 2002
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