THE 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
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 two 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 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 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 16,574,081 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 two 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.
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 III expires at the 2002 Annual Meeting,
Class I at the next succeeding Annual Meeting and Class II at the following
succeeding Annual Meeting. Two Class III nominees 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 1986, except for Mr. Storr and
Ambassador Burt, who were elected to the Board on June 20, 1997, and June 30,
2000, respectively.
Nominees Proposed for Election:
------------------------------------------------------------------------------------------------------------------------------------
Class III Directors
(Term will Expire in 2002; Nominees for Term Expiring in 2005)
------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios
in Fund Shares of
Complex(2) Common Stock
Term of Overseen by Beneficially
Office and Director or Other Directorships Held Owned at
Name, Address(1) Position(s) Length of Principal Occupation(s) Nominee for by Director or Nominee May 10,
& Age with Fund Time Served During Past Five Years Director for Director 2002(3)
---------------- ----------- ----------- -------------------------- ----------- --------------------------- ------------
Non-Interested Director
Werner Walbrol, Director Since 1986. President and Chief 3 Director of the Central 1,416
64 Executive Officer of the European Equity Fund,
German American Chamber of Inc.(5); Director of TUV
Commerce, Inc. and the Rheinland of North
European American Chamber America, Inc.; President
of Commerce, Inc. (more and Director of German
than five years). American Partnership
Program; Director of AXA
Nordstern Art Insurance
Corporation; Member of the
Advisory Board of Abels &
Grey.
2
------------------------------------------------------------------------------------------------------------------------------------
Class III Directors
(Term will Expire in 2002; Nominees for Term Expiring in 2005)
------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios
in Fund Shares of
Complex(2) Common Stock
Term of Overseen by Beneficially
Office and Director or Other Directorships Held Owned at
Name, Address(1) Position(s) Length of Principal Occupation(s) Nominee for by Director or Nominee May 10,
& Age with Fund Time Served During Past Five Years Director for Director 2002(3)
---------------- ----------- ----------- -------------------------- ----------- --------------------------- ------------
Interested Director(4)
Christian H. Chairman Since 1986. Director of DWS Investment 3 Director of the New None.
Strenger, 58 and GmbH (investment Germany Fund, Inc. and the
Director management) (since 1999). Central European Equity
Managing Director of DWS - Fund, Inc.(5); Member of
Deutsche Gesellschaft fuer the Supervisory Boards of
Wertpapiersparen mbH Fraport AG and Metro AG.
(1991-1999). Chairman of
Deutsche Fund Management,
Inc. (1997-2000).
Directors whose term will continue:
------------------------------------------------------------------------------------------------------------------------------------
Class I Directors
(Term will Expire in 2003)
------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios
in Fund Shares of
Complex(2) Common Stock
Term of Overseen by Beneficially
Office and Director or Other Directorships Held Owned at
Name, Address(1) Position(s) Length of Principal Occupation(s) Nominee for by Director or Nominee May 10,
& Age with Fund Time Served During Past Five Years Director for Director 2002(3)
---------------- ----------- ----------- -------------------------- ----------- --------------------------- ------------
Non-Interested Directors
Edward C. Director Since 1986. Consultant (since 1994). 3 Director of the Central 1,861
Schmults, 71 Senior Vice President - European Equity Fund,
External Affairs and Inc.;(5) Member of the
General Counsel of GTE Boardof Directors of Green
Corporation (1984-1994); Point Financial Corp.;
Deputy Attorney General of Chairman of the Board of
the U.S. Department of Trustees of The Edna
Justice (1981-1984). McConnell Clark
Foundation.
Hans G. Storr, Director Since 1997. Consultant (since 1997). 2 Director of the Central 7,368
70 Chief Financial Officer of European Equity Fund,
Philip Morris Companies, Inc.(5); Advisory Board
Inc. (1979-1996); Member Member of Oerlikon Geartec
of the Board of Directors AG.
of Philip Morris
Companies, Inc.
(1982-1996).
Interested Director(4)
Detlef Bierbaum, Director Since 1986. Partner of Sal. Oppenheim 2 Director of the Central None.
59 Jr. & Cie. KGaA (banking) European Equity Fund,
(since 1991). Inc.(5); Member of the
Supervisory Boards of
ESCADA Aktiengesellschaft
Tertia Handels-
beteiligungsgesellschaft
mbH, Douglas AG, LVM
Landwirtschaft-licher
Versicherungs-verein,
Monega KAG and AXA
Investment Managers.
3
------------------------------------------------------------------------------------------------------------------------------------
Class II Directors
(Term will Expire in 2004)
------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios
in Fund Shares of
Complex(2) Common Stock
Term of Overseen by Beneficially
Office and Director or Other Directorships Held Owned at
Name, Address(1) Position(s) Length of Principal Occupation(s) Nominee for by Director or Nominee May 10,
& Age with Fund Time Served During Past Five Years Director for Director 2002(3)
---------------- ----------- ----------- -------------------------- ----------- --------------------------- ------------
Non-Interested Directors
Ambassador Director Since 2000. Chairman, Diligence LLC, 12 Director of the Central 532
Richard R. Burt, formerly IEP Advisors, European Equity Fund,
55 Inc. (information services Inc.(5); Member of the
firm) (since 1998); Board, IGT, Inc.,
Chairman of the Board, Hollinger International,
Weirton Steel Corp. (since Inc. HCL Technologies,
1996); Partner, McKinsey & Inc., Anchor Gaming Corp.;
Company (1991-1994); U.S. Director, Brinson Mutual
Ambassador to the Federal Funds (formerly Mitchell
Republic of Germany Hutchins family of funds);
(1985-1989). and Member Textron
Corporation International
Advisory Council.
Dr. Juergen F. Director Since 1986. Chairman of the Board of 2 Director of the Central None.
Strube, 62(6) Executive Directors of European Equity Fund,
BASF AG (chemicals) (since Inc.;(5) Member of the
1990). Supervisory Boards of
Allianz
Lebensversicherungs-AG,
Bertelsmann AG, BMW AG,
Commerzbank AG,
Hapag-Lloyd AG, Hochtief
AG and Linde AG.
Robert H. Director Since 1986. President, Robert H. 13 Director of the New 1,822
Wadsworth, 62 Wadsworth Associates, Inc. Germany Fund, Inc. and the
(consulting firm) (since Central European Equity
1982); President and Fund, Inc.(5)
Trustee, Trust for
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).
Interested Director(4)
John Bult, 65 Director Since 1986. Chairman of PaineWebber 3 Director of the New 3,013
International (financial Germany Fund, Inc. and the
services) (since 1985). Central European Equity
Fund, Inc.(5); Director of
The France Growth Fund,
Inc. and The Greater China
Fund, Inc.
4
------------------------------------------------------------------------------------------------------------------------------------
Executive Officers(7)
------------------------------------------------------------------------------------------------------------------------------------
Shares of
Common Stock
Term of Beneficially
Office and Owned at
Name, Address(1) Position(s) Length of Principal Occupation(s) May 10,
& Age with Fund Time Served During Past Five Years 2002(3)
---------------- ----------- ----------- ----------------------- ------------
Richard T. Hale, President Year to Trustee and/or President of each of the investment companies advised None.
56(8) and Chief year since by Deutsche Asset Management, Inc. or its affiliates; Managing
Executive 2001. Director, Deutsche Asset Management; Managing Director, Deutsche Bank
Officer Securities Inc.; Director and President, Investment Company Capital
Corp.
Hanspeter Chief Year to President of Deutsche Bank Investment Management Inc., Managing None.
Ackermann, 45(8) Investment year since Director of Deutsche Bank Securities Inc., Managing Director and
Officer 1996. Senior International Equity Portfolio Manager of Bankers Trust Co.,
CIO of The Central European Equity 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. Chief Year to Director (since 1992), First Vice President (1987-1991) and Vice 523
Gambee, 59(8) Operating year since President (1978-1986) of Deutsche Bank Securities Inc., Director of
Officer and 1986. Deutsche Bank AG, Director, Bankers Trust Co., Secretary of Flag
Secretary Investors of Flag Investors Funds, Inc., and Deutsche Bank Investment
Management, Inc. (1997-2000).
Joseph Cheung, Chief Year to Vice President (since 1996), Assistant Vice President (1994-1996) and None.
43(8) Financial year since Associate (1991-1994) of Deutsche Bank Securities Inc.
Officer and 1997.
Treasurer
----------------
(1) Unless otherwise indicated the address of all directors and officers is
c/o Deutsche Bank Securities, Inc., 31 W. 52nd Street, NY, NY 10019.
(2) Includes The Central European Equity Fund, Inc. and The New Germany 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 16,535
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. Bierbaum is an "interested"
Director because of his affiliation with Sal. Oppenheim Jr. & Cie. KGaA,
which is the parent company of a registered broker-dealer; 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.
(5) The New 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) During the period from February 2000 through April 12, 2002, Dr. Strube
beneficially owned shares of Deutsche Bank AG valued at under $55,000, and
Dr. Strube was thereby an interested person of the Fund during that
period. Dr. Tessen von Heydebreck, a managing director of Deutsche Bank,
is a member of the supervisory board of BASF AG, Dr. Strube's employer. In
2000 and 2001, Deutsche Bank AG owned more than 5% of the outstanding
shares of BASF AG (between 6% and 7% at reporting points in 2000 and
2001), but as of December 31, 2001, ceased to be the beneficial owner of
more than 5%.
(7) Each officer also serves as an officer of The New 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.
(8) 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 Director or Nominee
Equity Securities in Family of Investment
Name of Director or Nominee in the Fund(1) Companies(1),(2)
--------------------------- ----------------- -----------------------
Detlef Bierbaum None. None.
John Bult $10,001 - $50,000 $50,001 - $100,000
Ambassador Richard R. Burt $1 - $10,000 $10,001 - $50,000
Edward C. Schmults $10,001 - $50,000 $10,001 - $50,000
Hans G. Storr $50,001 - $100,000 Over $100,000
Christian H. Strenger None. $50,001 - $100,000
Dr. Juergen F. Strube None. None.
Robert H. Wadsworth $10,001 - $50,000 $50,001 - $100,000
Werner Walbrol $10,001 - $50,000 $10,001 - $50,000
----------
(1) Valuation date is May 10, 2002.
(2) The Family of Investment Companies consists of the Fund, The New 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. Burt, Schmults, Storr, Wadsworth and Walbrol. 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 four times during the fiscal year
ended December 31, 2001. In addition, the Board has an Advisory Committee
composed of Messrs. Burt, Schmults, Storr, Wadsworth and Walbrol. 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. Strenger, Burt,
Schmults, Storr, Wadsworth and Walbrol. 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. Burt, Wadsworth and Walbrol. 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, with the exception of Messrs. Burt, Storr
and Strube, attended at least 75% of the aggregate number of meetings of the
Board and meetings of Board Committees on which that Director served. Each
incumbent Director, with the exception of Dr. Strube, attended at least 75% of
the number of regular meetings of the Board.
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 New
Germany Fund, Inc. or The Central European Equity Fund, Inc. also receives the
same annual
6
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 Central European Equity Fund, Inc. and The New Germany 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
---------------- ---------------------- -------------------
Richard R. Burt $11,250 $ 85,750
Edward C. Schmults 14,250 47,750
Hans G. Storr 12,000 24,000
Dr. Juergen F. Strube 9,000 18,000
Robert H. Wadsworth 14,250 104,500
Werner Walbrol 15,000 48,750
------- --------
Total $75,750 $328,750
======= ========
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 accountants for the Fund since inception.
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
7
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.
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
accountants 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
8
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 independent
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 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
Ambassador Richard R. Burt
Edward C. Schmults
Hans G. Storr
Robert H. Wadsworth
Werner Walbrol
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
------------------- -------------------- ------------
Mira, L.P.(1) ......................... 1,330,352(1) 8.0%
One Chase Manhattan Plaza, 42nd Floor
New York, NY 10005
----------
(1) This information is based exclusively on information provided by such
person on Schedule 13D dated December 7, 1999 and December 22, 2000. Such
person also reported that (a) as the general partner of Mira, L.P., Zurich
Capital Markets Inc. may be deemed to beneficially own an aggregate of
1,330,352 shares of Common Stock of the Fund and (b) the power to vote and
dispose of the 1,330,352 shares of Common Stock of the Fund held by Mira,
L.P. is shared by Mira, L.P. and Zurich Capital Markets Inc. as its
general partner. To the knowledge of management, no other Schedules 13D or
13G had been filed with respect to the Fund as of May 10, 2002.
9
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 Messrs. Schmults, Storr and Walbrol four Monthly Reports
covering five, five and four transactions, respectively, and; on behalf of
Messrs. Burt and Wadsworth five Monthly Reports covering five and six
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 Germany Fund, Inc., 31 West 52nd Street, New
York, New York, 10019, Attention: Secretary, on or before January 14, 2003.
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.
10
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 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.germanyfund.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 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 GERMANY FUND, INC.
This proxy is solicited on behalf of the Board of Directors.
The undersigned stockholder of The 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 marked
director listed nominees. to the contrary
below. below.
(Instructions: To withhold authority for any individual nominee strike a line
through the nominee's name in the list below.)
Christian H. Strenger
Werner Walbrol
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
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Signature, if held jointly
Dated: , 2002
--------------------------