THE CENTRAL EUROPEAN EQUITY 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
Central European Equity 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 three Directors.
2. To ratify the selection by the Board of Directors of
PricewaterhouseCoopers LLP as independent accountants for the fiscal
year ending October 31, 2002.
3. To act upon, if presented, a stockholder proposal.
4. 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 CENTRAL EUROPEAN EQUITY 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 Central
European Equity 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), FOR the ratification
of the appointment by the Board of Directors of PricewaterhouseCoopers LLP as
independent accountants for the Fund (Proposal 2) and AGAINST the stockholder
proposal (Proposal 3). 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 8,000,363 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 three 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 October 31, 2002, for ratification by the stockholders at the
Meeting (Proposal 2). In addition, there is a stockholder proposal that, if
presented, will be acted on at the Meeting (Proposal 3).
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 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 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 Ambassador Burt, who
was elected to the Board on June 30, 2000.
Nominees Proposed for Election:
--------------------------------------------------------------------------------
Class II Directors
(Term will Expire in 2002; Nominees for Term Expiring in 2005)
--------------------------------------------------------------------------------
Shares of
Number of Common Stock
Portfolios in Fund Beneficially
Term of Office Principal Complex(2) Overseen Other Directorships Owned at
Name, Address(1) Position(s) and Length Occupation(s) During by Director or Held by Director or May 10,
& Age with Fund of Time Served Past Five Years Nominee for Director Nominee for Director 2002(3)
---------------- ---------- -------------- -------------------- -------------------- -------------------- ------------
Non-Interested Director
Dr. Juergen F. Director Since 1990. Chairman of the 2 Director of the None.
Strube, 62(6) Board of Executive Germany Fund,
Directors of BASF AG Inc.;(5) Member of
(chemicals) (since the Supervisory
1990). Boards of Allianz
Lebensversiche-rungs-AG,
Bertelsmann AG, BMW
AG, Commerzbank AG,
Hapag-Lloyd AG,
Hochtief AG and
Linde AG.
2
--------------------------------------------------------------------------------
Class II Directors
(Term will Expire in 2002; Nominees for Term Expiring in 2005)
--------------------------------------------------------------------------------
Shares of
Number of Common Stock
Portfolios in Fund Beneficially
Term of Office Principal Complex(2) Overseen Other Directorships Owned at
Name, Address(1) Position(s) and Length Occupation(s) During by Director or Held by Director or May 10,
& Age with Fund of Time Served Past Five Years Nominee for Director Nominee for Director 2002(3)
---------------- ---------- -------------- -------------------- -------------------- -------------------- ------------
Non-Interested Director
Robert H. Director Since 1990. President, Robert H. 13 Director of the 2,348
Wadsworth, 62 Wadsworth Associates, Germany Fund, Inc.
Inc. (consulting firm) and the New Germany
(since 1982); President Fund, Inc.(5)
and 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 1990. Chairman of PaineWebber 3 Director of the 3,351
International (financial Germany Fund, Inc.
services) (since 1985). and the New Germany
Fund, Inc.;(5)
Director of The
France Growth Fund,
Inc. and The Greater
China Fund, Inc.
Directors whose term will continue:
--------------------------------------------------------------------------------
Class III Directors
(Term will Expire in 2003)
--------------------------------------------------------------------------------
Shares of
Number of Common Stock
Portfolios in Fund Beneficially
Term of Office Principal Complex(2) Overseen Other Directorships Owned at
Name, Address(1) Position(s) and Length Occupation(s) During by Director or Held by Director or May 10,
& Age with Fund of Time Served Past Five Years Nominee for Director Nominee for Director 2002(3)
---------------- ---------- -------------- -------------------- -------------------- -------------------- ------------
Non-Interested Director
Werner Walbrol, Director Since 1990. President and Chief 3 Director of the 1,070
64 Executive Officer of the Germany Fund,
German American Chamber Inc.(5); Director of
of Commerce, Inc. and the TUV Rheinland of
European American Chamber North America, Inc.;
of Commerce, Inc. (more President and
than five years). Director of German
American Partnership
Program; Director of
AXA Nordstern Art
Insurance
Corporation; Member
of the Advisory
Board of Abels &
Grey.
3
--------------------------------------------------------------------------------
Class III Directors
(Term will Expire in 2003)
--------------------------------------------------------------------------------
Shares of
Number of Common Stock
Portfolios in Fund Beneficially
Term of Office Principal Complex(2) Overseen Other Directorships Owned at
Name, Address(1) Position(s) and Length Occupation(s) During by Director or Held by Director or May 10,
& Age with Fund of Time Served Past Five Years Nominee for Director Nominee for Director 2002(3)
---------------- ---------- -------------- -------------------- -------------------- -------------------- ------------
Non-Interested Director
Otto Wolff von Director Since 1990. Director and Chairman of 3 Director of the None.
Amerongen, 83 the Board of Otto Wolff Germany Fund,
Industrieberatung & Inc.;(5) Honorary
Beteiligungen GmbH Chairman of the
(industrial consulting) Association of German
(since 1989). Chairman of Chambers of Industry
the German East-West and Commerce.
Trade Committee (until Chairman of the Board
2000). Chairman of the of Management of the
Supervisory Board of DWA, Otto Wolff Foundation
Deutsche Waggonbau AG (since 1998). Member
(until 1999); Chairman of of the Advisory
the Supervisory Board of Council of Allianz
Allbecon AG, Dusseldorf. Versicherungs-AG
President of the German (until February
Society for East European 1994). Member of the
Studies (until 1999). Advisory Council of
President of the German Creditanstalt-Bankverein
Business Association in (until 1998). Member
the Russian Federation, of the Atlantic
Moscow. Advisory Council of
United Technologies
Corp. (until 1992).
Member of the Board
of Directors of the
German Society for
Foreign Affairs.
Interested Director(4)
Christian H. Chairman Since 1990. Director of DWS 3 Director of the 5,000
Strenger, 58 and Investment GmbH Germany Fund, Inc.
Director (investment management) and the New Germany
(since 1999). Managing Fund, Inc.(5); Member
Director of DWS-- of the Supervisory
Deutsche Gesellschaft fur Boards of Fraport AG
Wertpapiersparen mbH and Metro AG.
(1991-1999). Chairman of
Deutsche Fund Management,
Inc. (1997-2000).
--------------------------------------------------------------------------------
Class I Directors
(Term will Expire in 2004)
--------------------------------------------------------------------------------
Shares of
Number of Common Stock
Portfolios in Fund Beneficially
Term of Office Principal Complex(2) Overseen Other Directorships Owned at
Name, Address(1) Position(s) and Length Occupation(s) During by Director or Held by Director or May 10,
& Age with Fund of Time Served Past Five Years Nominee for Director Nominee for Director 2002(3)
---------------- ---------- -------------- -------------------- -------------------- -------------------- ------------
Non-Interested Director
Ambassador Director Since 2000. Chairman, Diligence LLC, 12 Director of the 450
Richard R. Burt, formerly IEP Advisors, Germany Fund,
55 Inc. (information Inc.(5); Member of
services firm) (since the Board, IGT, Inc.,
1998); Chairman of the Hollinger
Board, Weirton Steel International, Inc.
Corp. (since 1996); HCL Technologies,
Partner, McKinsey & Inc., Anchor Gaming
Company (1991-1994); U.S. Corp.; Director,
Ambassador to the Federal Brinson Mutual Funds
Republic of Germany (formerly Mitchell
(1985-1989). Hutchins family of
funds); and Member
Textron Corporation
International
Advisory Council.
4
--------------------------------------------------------------------------------
Class I Directors
(Term will Expire in 2004)
--------------------------------------------------------------------------------
Shares of
Number of Common Stock
Portfolios in Fund Beneficially
Term of Office Principal Complex(2) Overseen Other Directorships Owned at
Name, Address(1) Position(s) and Length Occupation(s) During by Director or Held by Director or May 10,
& Age with Fund of Time Served Past Five Years Nominee for Director Nominee for Director 2002(3)
---------------- ---------- -------------- -------------------- -------------------- -------------------- ------------
Non-Interested Director
Edward C. Director Since 1990. Consultant (since 1994). 3 Director of the 1,328
Schmults, 71 Senior Vice President - Germany Fund,
External Affairs and Inc.;(5) Member of
General Counsel of GTE the Board of
Corporation (1984-1994); Directors of Green
Deputy Attorney General Point Financial
of the U.S. Department of Corp.; Chairman of
Justice (1981-1984). the Board of Trustees
of The Edna McConnell
Clark Foundation.
Interested Director(4)
Detlef Bierbaum, Director Since 1990. Partner of Sal. Oppenheim 2 Director of the None.
59 Jr. & Cie KGaA (banking) Germany Fund,
(since 1991). Inc.(5); Member of
the Supervisory
Boards of ESCADA
Aktiengesellschaft
Tertia
Handelsbeteiligungs-
gesellschaft mbH,
Douglas AG, LVM
Landwirtschaftlicher
Versicherungsverein,
Monega KAG and AXA
Investment Managers.
--------------------------------------------------------------------------------
Executive Officers(7)
--------------------------------------------------------------------------------
Shares of Common
Term of Office Stock Beneficially
Name, Address(1) Position(s) and Length of Principal Occupation(s) Owned at May 10,
& Age with Fund Time Served During Past Five Years 2002(3)
---------------- ---------- ------------- ----------------------- ------------------
Richard T. Hale, President Year to year Trustee and/or President of 1,250
56(8) and Chief since 2001. each of the investment
Executive companies advised by Deutsche
Officer 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 Chief Year to year President of Deutsche Bank None.
Ackermann, 45(8) Investment since 1996. Investment Management Inc.,
Officer 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. Chief Year to year Director (since 1992), First 500
Gambee, 59(8) Operating since 1990. Vice President (1987-1991) and
Officer and Vice President (1978-1986) of
Secretary Deutsche Bank Securities Inc.,
Director of Deutsche Bank AG,
Director of Bankers Trust Co.,
Secretary of Flag Investors of
Flag Investors Funds, Inc.,
and Deutsche Bank Investment
Management, Inc. (1997-2000).
Joseph Cheung, Chief Year to year Vice President (since 1996), None.
43(8) Financial since 1997. Assistant Vice President
Officer and (1994-1996) and Associate
Treasurer (1991-1994) of Deutsche Bank
Securities Inc.
(Footnotes on following page)
5
----------
(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 Germany 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 15,297
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 Germany Fund, Inc. and the New Germany 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 Germany Fund, Inc. and The
New Germany 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.
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)
--------------------------- ------------------------- ----------------------------------
Detlef Bierbaum None. None.
John Bult $50,001 - $100,000 $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
Christian H. Strenger $50,001 - $100,000 $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
Otto Wolff von Amerongen None. $10,001 - $50,000
----------
(1) Valuation date is May 10, 2002.
(2) The Family of Investment Companies consists of the Fund, The Germany Fund,
Inc. and The New Germany Fund, Inc., which are closed-end funds and share
the same investment adviser and manager and hold themselves out as related
companies.
6
The Board of Directors presently has an Audit Committee composed of
Messrs. Burt, Schmults, Storr (whose term as a Director will not continue past
the 2002 Annual Meeting), 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 five times during the fiscal year
ended October 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. Wadsworth, Walbrol and Burt. 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.
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 New Germany 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 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 (a) the aggregate compensation from the Fund for the fiscal year ended
October 31, 2001, and (b) the total compensation from Fund Complex consisting of
the Fund for its fiscal year ended October 31, 2001, 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:
7
Aggregate Compensation Total Compensation
Name of Director From Fund From Fund Complex
---------------- ---------------------- ------------------
Richard R. Burt $13,500 $ 87,250
Edward C. Schmults 15,000 49,250
Dr. Juergen F. Strube 9,000 18,000
Robert H. Wadsworth 15,750 106,000
Werner Walbrol 16,500 50,250
Otto Wolff von Amerongen 10,500 20,250
------- --------
Total $80,250 $331,000
======= ========
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 October 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 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 October 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
October 31, 2001 were $55,000.
8
Financial Information Systems Design and Implementation Fees
PwC did not render any information technology services to the Fund during
the fiscal year ended October 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 October 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 October 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 October 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 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
9
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 October 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
INFORMATION ABOUT THE INVESTMENT ADVISER AND MANAGER
Adviser
Pursuant to the Investment Advisory Agreement, DeAM, in accordance with
the Fund's stated investment objectives, policies and restrictions, makes
recommendations to the Fund's Manager, DBSI, with respect to the Fund's
investments and, upon instructions given by DBSI as to suitable securities for
investment by the Fund, transmits purchase and sale orders and selects brokers
and dealers to execute portfolio transactions on behalf of the Fund. The
Investment Advisory Agreement was last submitted to a vote of the Fund's
stockholders for approval on June 21, 1991. The Board of Directors, at its
meeting on April 26, 2002, resolved to continue the Investment Advisory
Agreement.
DeAM, a corporation organized under the laws of the Federal Republic of
Germany ("Germany"), was established as a direct wholly-owned subsidiary of
Deutsche Bank AG in 1983. It provides international portfolio management
services to major institutional investors worldwide, including, besides the
Fund, The Germany Fund, Inc. and The New Germany Fund, Inc., closed-end
registered investment companies whose shares are traded on the New York Stock
Exchange ("NYSE").
Deutsche Bank AG is a leading integrated provider of financial services to
institutions and individuals throughout the world. It is organized in Germany
and is a publicly traded entity. Its shares trade on exchanges including the New
York Stock Exchange and Xetra (German Stock Exchange). It is engaged in a wide
range of financial services, including retail, private and commercial banking,
investment banking and insurance. Deutsche Bank AG has combined all of its
investment management businesses to form Deutsche Asset Management which, as of
December 31, 2001, had more than $548 billion in assets under management.
Deutsche Asset Management acts as investment manager to 96 U.S. open- and
closed-end investment companies as of December 31, 2001, which in the aggregate
had approximately $53 billion in assets as of that date.
Pursuant to an agreement entered into in December 31, 2001 with Zurich
Financial Services, Deutsche Bank AG acquired Zurich Scudder Investments Inc.
("Scudder") in April 2002, an investment adviser having substantial assets under
management. As of December 31, 2001, Scudder had assets under management in
excess of $240 billion in addition to over $105 billion in its mutual fund
family. Scudder will for the immediate future
10
remain a separate entity. However, it has been integrated operationally into
Deutsche Asset Management and the investment operations of Scudder have become
part of an integrated global investment operation serving Deutsche Asset
Management's clients worldwide.
DeAM is fully independent and autonomous in making its investment
decisions and in rendering investment advice, but has access to the extensive
research and other resources of the Deutsche Bank group. The members of DeAM's
Investment Strategy Committee are not directors, officers or employees of
Deutsche Bank AG. DeAM's personnel do not discuss their investment decisions or
positions with personnel of Deutsche Bank AG who are managing the investment
portfolios of Deutsche Bank AG. The commercial banking division of Deutsche Bank
AG may have deposit, loan and other commercial banking relationships with
issuers of securities purchased by the Fund, including outstanding loans to such
issuers which may be repaid in whole or in part with proceeds of the securities
purchased by the Fund in primary public offerings. The Fund does not purchase
securities in any primary public offering where, to the knowledge of DeAM, the
proceeds will be used to retire indebtedness to Deutsche Bank AG. The Fund and
Deutsche Bank AG do not act jointly to cause the Fund to make investments which
are designed to benefit other commercial interests of Deutsche Bank AG.
Certain information regarding the principal executive officers of DeAM is
set forth below. DeAM does not have a supervisory board of directors.
Name and Address Principal Occupation
---------------------------- ----------------------------
Hannes-Joerg Baumann Managing Director,
Mainzer Landstrasse 16 DeAM
60325 Frankfurt am Main
Federal Republic of Germany
Herbert Michel Managing Director,
Mainzer Landstrasse 16 DeAM
60325 Frankfurt am Main
Federal Republic of Germany
Dr. Klaus Moessle Deputy Managing Director,
Mainzer Landstrasse 16 DeAM
60325 Frankfurt am Main
Federal Republic of Germany
Manager
DBSI is an indirect wholly-owned subsidiary of Deutsche Bank AG. DBSI is
engaged in the securities underwriting, investment advisory and securities
brokerage business. It is a member of the NYSE and other principal United States
stock exchanges.
Pursuant to the Management Agreement, DBSI is the corporate manager and
administrator of the Fund and, subject to the supervision of the Board of
Directors and pursuant to recommendations made by DeAM, determines suitable
securities for investment by the Fund. It (i) handles the Fund's relationships
with its shareholders, including stockholder inquiries relating to the Fund,
(ii) is responsible for, arranges and monitors compliance with regulatory
requirements and NYSE listing requirements and (iii) negotiates contractual
arrangements with third-party service providers, including, but not limited to,
custodians, transfer agents, auditors and printers. DBSI provides office
facilities and personnel to carry out these services, together with clerical and
bookkeeping services
11
which are not being furnished by the Fund's Custodian or Transfer and
Dividend-Paying Agent. In addition, DBSI (i) determines and publishes the Fund's
net asset value in accordance with its policy as adopted from time to time by
the Board of Directors, (ii) establishes the Fund's operating expense budgets
and authorizes the payment of actual operating expenses incurred, (iii)
calculates the amounts of dividends and distributions to be declared and paid to
the Fund's shareholders, (iv) provides the Board of Directors with financial
analyses and reports necessary for the Board to fulfill its fiduciary
responsibilities, (v) maintains the books and records of the Fund required under
Rule 31a-1(b) under the 1940 Act (other than those being maintained by the
Fund's Custodian and Transfer and Dividend-Paying Agent and Registrar, as to
which DBSI oversees such maintenance), (vi) prepares the Fund's United States
federal, state and local income tax returns, (vii) prepares financial
information for the Fund's proxy statements and quarterly and annual reports to
shareholders and (viii) prepares the Fund's reports to the United States
Securities and Exchange Commission ("SEC"). The Management Agreement was last
submitted to a vote of the Fund's stockholders for approval on June 21, 1991.
The Board of Directors, at its meeting on April 26, 2002, resolved to continue
the Management Agreement.
Besides its role as manager of the Fund, DBSI acts as manager of The
Germany Fund, Inc. and The New Germany Fund, Inc.
Certain information regarding the directors of DBSI is set forth below.
Name and Address Principal Occupation
---------------------------- ----------------------------
E. Robert Cotter Managing Director,
280 Park Avenue Deutsche Bank Securities Inc.
New York, NY 10017
David DiPietro Managing Director,
One South Street Deutsche Bank Securities Inc.
Baltimore, MD 21202
Thomas J. Hughes Managing Director,
280 Park Avenue Deutsche Bank AG New York Branch
New York, NY 10017
Charles von Arentschildt Managing Director,
31 West 52nd Street Deutsche Bank AG New York Branch
New York, NY 10019
Seth H. Waugh Chairman, President and Chief
31 West 52nd Street Executive Officer
New York, NY 10019 Deutsche Bank Securities Inc.
Investment Advisory Agreement, Management Agreement and Fees
Each year, the Board of Directors calls and holds a meeting to decide
whether to renew the Investment Advisory Agreement and the Management Agreement
(copies of which are attached hereto as Exhibits B and C, respectively). In
preparation for the meeting, the Advisory Committee of the Board (consisting
exclusively of non-interested directors) requests and reviews a wide variety of
materials provided by DeAM and DBSI, as well as extensive data provided by third
parties, and the Advisory Committee receives advice from counsel to the
non-interested directors. Upon completion of its review, the Advisory Committee
makes a recommendation to the Board of Directors regarding continuation of the
Investment Advisory Agreement and the Management Agreement.
12
At its meeting on April 25, 2002, the Advisory Committee recommended
continuation of these Agreements. At its meeting on April 26, 2002, the Board of
Directors, including all non-interested members, approved the continuation of
the Investment Advisory Agreement and the Management Agreement. The Advisory
Committee's recommendation and the Board's approval were made after careful
consideration of many different factors including: (i) the performance of the
Fund versus the performance of other funds in the Fund's peer group and in
comparison to relevant market indices, (ii) the investment objective and
policies of the Fund, (iii) the nature, extent and quality of the service
provided by DeAM and DBSI, (iv) the qualifications and experience of investment
personnel of DeAM and DBSI, (v) the excellent reputation and overall financial
condition of DeAM and DBSI, (vi) the access to the extensive research and other
resources of Deutsche Bank group, (vii) the investment advisory fee and
management fee and the fees paid to other advisors and managers, (viii) other
expenses of the Fund and the comparative expense ratios of other similar
closed-end funds, (ix) the profitability of DeAM and DBSI with respect to the
Fund, (x) indirect benefits to affiliates of DeAM and DBSI, such as brokerage,
(xi) the extent to which DeAM and DBSI have realized or will realize economies
of scale as the Fund grows, and (xii) the benefits of continuity in services to
be provided by DeAM and DBSI. After evaluating the investment advisory
relationship and management relationship under such factors, the Advisory
Committee recommended, and the Board, including the non-interested members,
concluded that DeAM and DBSI have and continue to provide superior investment
management services and that the continuation of the Investment Advisory
Agreement and the Management Agreement is in the best interests of the Fund and
its stockholders. Accordingly, the Advisory Committee voted unanimously to
recommend continuation of, and the Board voted unanimously to continue, the
Investment Advisory Agreement and the Management Agreement.
The Investment Advisory Agreement and Management Agreement set forth the
services provided by DeAM and DBSI, respectively, as described above.
During the fiscal year ended October 31, 2001, the Fund paid aggregate
amounts of $407,237 and $775,596 to DeAM and DBSI, respectively, in respect of
fees. In addition, during such period, the Fund paid an aggregate amount of
$25,202 in brokerage commissions to Deutsche Bank AG, which constituted
approximately 8.9% of the Fund's aggregate brokerage commissions.
Summarized below is information about the advisory fees of DeAM and the
management fees of DBSI with respect to the Fund, The Germany Fund and The New
Germany Fund:
The Fund The Germany Fund, Inc. The New Germany Fund, Inc.
-------- ---------------------- --------------------------
Net assets at $127,267,144 $135,771,829 $199,103,140
March 31, 2002
Rate of advisory Annual rate of 0.35% of the Fund's average weekly net assets up to $100 million
fees of DeAM(1) and 0.25% of such assets in excess of $100 million, computed on the basis of net
asset value at the end of each week and payable at the end of each calendar month.
Rate of management Annual rate of 0.65% of Annual rate of 0.65% of Annual rate of 0.65% of
fees of DBSI(1) the Fund's average weekly the Fund's average weekly the Fund's average weekly
net assets up to $100 net assets up to $50 net assets up to $100
million and 0.55% of such million and 0.55% of such million, 0.55% of such
assets in excess of $100 assets in excess of $50 assets in excess of $100
million, computed in each million, computed in each million and up to $500
case on the basis of net case on the basis of net million and 0.50% of such
asset value at the end of asset value at the end of assets in excess of $500
each week and payable at each week and payable at million, computed in each
the end of each calendar the end of each calendar case on the basis of net
month. month. asset value at the end of
each week and payable at
the end of each calendar
month.
----------
(1) Neither DeAM nor DBSI waived, reduced, or otherwise agreed to reduce its
compensation under any applicable contract.
13
Neither DeAM nor DBSI is liable for any error of judgment or for any loss
suffered by the Fund in connection with the matters to which the Investment
Advisory Agreement or the Management Agreement, respectively, relates, except
for any loss resulting from willful misfeasance, bad faith or gross negligence
in the performance of, or from reckless disregard of, its obligations and duties
under the Investment Advisory Agreement or the Management Agreement,
respectively, or a loss resulting from a breach of fiduciary duty with respect
to receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3) of
the 1940 Act).
The Investment Advisory Agreement and the Management Agreement provide
that DeAM and DBSI, respectively, each bears all expenses of all employees and
overhead incurred by it in connection with its duties thereunder. DBSI pays all
salaries and fees of the Fund's directors and officers who are "interested
persons" (as such term is defined in the 1940 Act) of DBSI. The Fund bears all
of its own expenses, including, but not limited to, the following: expenses of
organizing the Fund, fees and out-of-pocket travel expenses of the Fund's
directors who are not "interested persons" (as such term is defined in the 1940
Act) of any other party and other expenses incurred by the Fund in connection
with directors' meeting, interest expense, taxes and governmental fees,
brokerage commissions incurred in acquiring or disposing of the Fund's portfolio
securities, membership dues to professional organizations, premiums allocable to
fidelity bond insurance coverage, expenses of preparing stock certificates,
expenses of registering and qualifying the Fund's shares for sale with the SEC
and in various states and foreign jurisdictions, charges and expenses of the
Fund's legal counsel and independent auditors, Custodian and Transfer and
Dividend-Paying Agent, expenses of obtaining and maintaining stock exchange
listings of the Fund's shares, and the expenses of shareholders' meetings and
preparing and distributing proxies and reports to shareholders.
The services of DeAM and DBSI under the Investment Advisory Agreement and
Management Agreement, respectively, are not deemed to be exclusive, and nothing
in the Investment Advisory Agreement or the Management Agreement prevents any
party, or any affiliate thereof, from providing similar services to other
investment companies and other clients (whether or not their investment
objectives and policies are similar to those of the Fund) or from engaging in
other activities. When other clients of DeAM or DBSI desire to purchase or sell
a security at the same time the security is purchased for or sold by the Fund,
such purchases and sales will, to the extent feasible, be allocated among such
clients and the Fund in a manner believed by DeAM or DBSI, respectively, to be
equitable to such clients. The allocation of securities may adversely affect the
price and quantity of purchases and sales of securities by the Fund.
PROPOSAL 3: STOCKHOLDER PROPOSAL
A beneficial owner (the "proponent") of Common Stock of the Fund has
informed the Fund that it intends to present a proposal for action at the
Meeting. The proponent's name and address and the number of shares owned by it
will be furnished by the Secretary of the Fund upon request.
RESOLVED: The investment advisory agreement between Deutsche Asset
Management International GmbH and the Fund shall be terminated.
My goal is to enable all stockholders of the Fund to realize net asset
value ("NAV") for their shares. The surest way to achieve this is to convert the
Fund to an open-end fund (or to merge it into an existing open-end fund). If the
Fund is open-ended, every stockholder will benefit. For example, if you own
1,000 shares of the Fund, they will be worth about $2,600 more if it open-ends
than if it remains a closed-end fund.
14
I believe that the current investment advisor, Deutsche Asset Management
International GmbH, is the main impediment to open-ending because of its fear
that its management fees may decline if we are able to redeem our shares at NAV.
We need to remove this impediment to increasing the value of our shares. Passage
of this proposal would not result in the immediate open-ending of the Fund but
would give the Board of Directors the chance to quickly hire a new investment
advisor who is amenable to open-ending the fund or to do whatever is necessary
to enhance stockholder value even if that means diminished fees.
The meager measures like buy-backs meant to narrow the Fund's persistent
discount have not accomplished much. The Fund has still one of the highest
discounts among World Equity Funds. We deserve an investment advisor who is more
concerned with increasing stockholder value than its own fees.
OPPOSING STATEMENT OF YOUR BOARD OF DIRECTORS
For the reasons discussed below, your Board of Directors unanimously
recommends that you vote AGAINST this stockholder proposal.
Your Board of Directors believes this proposal is misleading. The "main
impediment" to open-ending the Fund is not its investment adviser. That decision
rests entirely with your independent directors, subject to ratification by
66 2/3% of the stockholders. By law, your independent Directors must apply their
business judgment to look solely after your interests as stockholders. Your
Directors believe the Fund is most effectively continued in its original,
closed-end format. It is improper to suggest the investment adviser controls the
decision. We urge you to keep this important fact in mind in considering our
reasons for voting against the proposal below.
Wrong Means to the Wrong End. This proposal wrongly states that
terminating the investment adviser will lead to open-ending the Fund. It will
not do that, but it could harm your investment. Here are the facts.
If approved by stockholders, this proposal would directly terminate the
investment advisory agreement with your Fund's investment adviser. Your Fund's
investment process would therefore be disrupted since a new adviser would have
to be hired and may have a different investment approach. The Fund would incur
expenses because under the Investment Company Act, a new agreement would require
another stockholder approval.
Furthermore, open-ending the Fund could frustrate its basic investment
objective. Open-end funds often must make involuntary portfolio sales to meet
redemption requests. In Central Europe and Russia, where the Fund invests, the
markets are not as liquid as the more mature markets in Western Europe. The
Fund's current closed-end format gives stockholders their liquidity through the
ability to sell their shares on the NYSE rather than through redemptions, and is
better suited to investing in less liquid markets. The Fund can invest for the
long-term and not worry about raising short-term cash to meet redemptions.
The person behind this proposal is seeking to make use of a stockholder
right under the Investment Company Act of 1940 -- the right to terminate
investment advisory agreement -- to achieve the completely unrelated goal of
open-ending your Fund for short-term gain at the expense of remaining
stockholders.
The proposal is the wrong means to the wrong end. It will not cause
open-ending, but it could disrupt your Fund's investment program.
Your Board unanimously recommends a vote AGAINST Proposal 3.
15
Required Vote. Adoption of this proposal requires the affirmative vote of
the holders of a majority of the outstanding shares of the Fund which, as
defined by the 1940 Act, means the vote of (1) 67% or more of the shares present
at the Meeting, if the holders of more than 50% of the outstanding shares are
present or represented by proxy, or (2) more than 50% of the outstanding shares
of the Fund, whichever is less. Abstentions and broker non-votes will have the
same effect as votes against the proposal.
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:
Percent of
Name and Address Amount and Nature Outstanding
of Beneficial Owner of Beneficial Ownership Common Stock
------------------- ----------------------- ------------
MeAG Munich Ergo Kapitalanlage-
gesellschaft mbH(1)
(Munich, Germany) .................. 507,076 6.3%
Harvard Investment Management(1)
(Boston, MA) ....................... 440,501 5.5%
----------
(1) This information is based exclusively on information provided by such
persons on Schedules 13G filed with respect to the Fund on February 14 and
15, 2002. To the knowledge of management, no other Schedules 13D or 13G
had been filed with respect to the Fund as of May 10, 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 October 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. Burt and Schmults three Monthly Reports covering
three and four transactions, respectively; on behalf of Messrs. Storr and
Walbrol four Monthly Reports covering five and four transactions, respectively,
and on behalf of Mr. Wadsworth five Monthly Reports covering six transactions.
Each of the covered transactions was 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.
16
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 Central European Equity 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 $7,500 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 October 31, 2001 to any stockholder upon request. Such
requests should be directed by mail to The Central European Equity Fund, Inc.,
31 West 52nd Street, New York, New York 10019 or by telephone to 1-800-437-6269.
Annual reports are also available on the Fund's web site: www.ceefund.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.
17
EXHIBIT A
THE CENTRAL EUROPEAN EQUITY 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).
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
A-1
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
or Manager/Adviser Control Affiliates or the custodian
(including sub-custodians) is compatible with maintaining the
independence of the outside auditors; and
A-2
(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;
o to discuss with management and the outside auditors
their respective procedures to assess the
representativeness of securities prices provided by
external pricing services;
A-3
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
EXHIBIT B
INVESTMENT ADVISORY AGREEMENT
AGREEMENT dated as of March 6, 1990, between The Future Germany Fund,
Inc., a Maryland corporation ("Fund"), and DB Capital Management International
GmbH, a West German corporation ("CMI").
WHEREAS, the Fund is a non-diversified closed-end management company
registered under the Investment Company Act of 1940, as amended (the "Investment
Company Act");
WHEREAS, the Fund desires to retain CMI to render certain specified
investment advisory services to the Fund; and
WHEREAS, CMI is willing to render such services if and so long as a
certain Management Agreement, dated as of March 6, 1990, between the Fund and
Deutsche Bank Capital Corporation ("DBCC") is entered into and not terminated;
NOW, THEREFORE, the parties agree as follows:
1. Investment Adviser. CMI, in accordance with the Fund's stated
investment objectives, policies and limitations, will make recommendations with
respect to the Fund's investments and, upon instructions given by DBCC as to
suitable securities for investment by the Fund, will transmit purchase and sale
orders and select brokers and dealers to execute portfolio transactions on
behalf of the Fund.
2. Fees and Expenses.
2.1 The Fund will pay CMI an annual advisory fee hereunder of 0.35% of the
Fund's average weekly net assets up to U.S. $100 million and 0.25% of such
assets in excess of U.S. $100 million, computed by DBCC on the basis of net
asset value at the end of each week and payable at the end of each calendar
month.
2.2 CMI shall bear all expenses of its employees and overhead incurred by
it in connection with its duties under this Agreement. The Fund will indemnify
CMI for all taxes (other than income taxes), duties, charges, fees and expenses
(including, without limitation, broker fees, dealer fees, clearing bank fees and
legal fees) CMI incurs in connection with the services provided under this
Agreement. The obligations contained in this clause shall survive the
termination of this Agreement.
2.3 Payments to CMI shall be made in U.S. Dollars to its account with
Deutsche Bank AG, New York branch.
3. Liability.
3.1 Neither CMI nor any of its officers, directors or employees shall be
liable for any error of judgment or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, except (i) that CMI
shall be under a fiduciary duty with respect to receipt of compensation for
services pursuant to Section 36 of the 1940 Act, and shall therefore be liable
for a loss resulting from a breach of such fiduciary duty (in which case any
award of damages shall be limited to the period and the amount set forth in
Section 36(b)(3) of the Investment Company Act), or (ii) a loss resulting from
willful misfeasance, bad faith or gross negligence on its or their part in the
performance of, or from reckless disregard by it or them of its or their
obligations and duties under, this Agreement.
3.2 CMI does not assume responsibility for the acts or omissions of any
other person.
B-1
3.3 CMI shall not be liable for any losses caused by disturbances of its
operations by virtue of force majeure, riot, or damage caused by nature or due
to other events for which it is not responsible (e.g., strike, lock-out or acts
of domestic or foreign authorities).
4. Services Not Exclusive. It is understood that the services of CMI are
not deemed to be exclusive, and nothing in this Agreement shall prevent CMI or
any of its affiliates from providing similar services to other investment
companies and other clients (whether or not their investment objectives and
policies are similar to those of the Fund) or from engaging in other activities.
When other clients of CMI desire to purchase or sell a security at the same time
such security is purchased or sold for the Fund, such purchases and sales will,
to the extent feasible, be allocated among the Fund and such clients in a manner
believed by CMI to be equitable to such clients.
5. Notice. Any notice or other communication required to be given pursuant
to this Agreement shall be in writing or by telex and shall be effective upon
receipt. Notices and communications shall be given (1) to the Fund at 31 West
52nd Street, New York, New York 10019, Attention: Secretary; and (2) to CMI at
Taunusanlage 12, D-6000 Frankfurt am Main 1, Attention: Managing Director,
Investment Policy Committee.
6. Miscellaneous.
6.1 This Agreement is effective March 6, 1990, and shall continue in
effect until the earlier of March 5, 1992 or the first annual meeting of the
Fund's stockholders after the effective date of the Fund's Registration
Statement on Form N-2 filed with the Securities and Exchange Commission. If
approved at such meeting, and unless sooner terminated, this Agreement shall
continue in effect for successive periods of twelve months after such date,
provided that each such continuance shall be approved as required by the
Investment Company Act. The annual approval of the continuance of this Agreement
shall be confirmed to CMI by the Fund in writing. Notwithstanding the foregoing,
this Agreement may be terminated by the Fund in the manner prescribed by the
Investment Company Act, without the payment of any penalty, at any time upon not
less than sixty days' prior written notice to CMI, or by CMI upon not less than
sixty days' written notice to the Fund.
This Agreement shall automatically terminate (i) in the event of its
assignment (as defined in the Investment Company Act) by either party, or (ii)
upon termination of the Management Agreement dated as of March 6, 1990, between
the Fund and DBCC.
6.2 This Agreement shall be construed in accordance with the laws of the
Federal Republic of Germany.
6.3 The captions in this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
6.4 If any provisions of this Agreement shall be held or made invalid, in
whole or in part, the other provisions of this Agreement shall remain in force.
Invalid provisions shall, in accordance with the intent and purpose of this
Agreement, be replaced by such valid provisions which in their economic effect
come as close as legally possible to such invalid provisions.
6.5 Nothing herein shall be construed as constituting CMI an agent of the
Fund.
6.6 CMI shall be entitled to rely on any notice or other communication
believed by it to be genuine and correct and to have been sent to it by or on
behalf of the Fund.
B-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE FUTURE GERMANY FUND, INC.
By: /s/ R. GAMBEE
---------------------------------
Name: R. Gambee
Title: VP, Secy, Treas.
DB CAPITAL MANAGEMENT
INTERNATIONAL GmbH
By: /s/ M. TINTELNOT
---------------------------------
Name: M. Tintelnot
Title: Managing Director
B-3
EXHIBIT C
MANAGEMENT AGREEMENT
AGREEMENT dated as of March 6, 1990, between The Future Germany Fund,
Inc., a Maryland corporation (the "Fund"), and Deutsche Bank Capital
Corporation, a New York corporation ("Deutsche Bank Capital").
WHEREAS, the Fund is a non-diversified closed-end management company
registered under the Investment Company Act of Investment Company, as amended
(the "Investment Company Act");
WHEREAS, the Fund desires to retain Deutsche Bank Capital to render
certain specified management services to the Fund; and
WHEREAS, Deutsche Bank Capital is willing to render such services if and
so long as the Investment Advisory Agreement, dated as of March 6, 1990, between
the Fund and DB Capital Management International GmbH ("CMI") is entered into
and not terminated;
NOW, THEREFORE, the parties agree as follows:
1. Manager. Deutsche Bank Capital shall be the corporate manager and
administrator of the Fund and, subject to the supervision of the Board of
Directors of the Fund and pursuant to recommendations made by CMI, will
determine suitable securities for investment by the Fund. It will handle the
Fund's relationships with its shareholders including responding to shareholder
inquiries relating to the Fund, be responsible for, arrange and monitor
compliance with regulatory requirements and compliance with New York Stock
Exchange listing requirements and negotiate contractual arrangements with
third-party service providers, including, but not limited to, custodians,
transfer agents, auditors and printers. Deutsche Bank Capital will also provide
office facilities and personnel adequate to perform these services, together
with those ordinary clerical and bookkeeping services which are not being
furnished by the Fund's custodian or transfer and dividend paying agent.
Deutsche Bank Capital will also determine and publish the Fund's net asset value
in accordance with the Fund's policy as adopted from time to time by the Board
of Directors; establish the Fund's operating expense budgets and authorize the
payment of actual operating expenses incurred; calculate the amount of dividends
and distributions to be declared and paid to the Fund's shareholders; provide to
the Board of Directors those financial analyses and reports necessary for the
Board to fulfill their fiduciary responsibilities; maintain the books and
records of the Fund required under Rule 31a-1 under the Investment Company Act
(other than those being maintained by the Fund's custodians and transfer and
dividend paying agent, as to which Deutsche Bank Capital will oversee such
maintenance); prepare the Fund's U.S. federal, state and local income tax
returns; prepare the financial information for the Fund's proxy statements and
quarterly and annual reports to shareholders; and prepare the Fund's reports to
the Securities and Exchange Commission.
2. Fees. The Fund will pay Deutsche Bank Capital an annual management fee
hereunder of .65% of the Fund's average weekly net assets up to U.S. $100
million and .55% of such assets in excess of U.S. $100 million, computed on the
basis of net asset value at the end of each week and payable at the end of each
calendar month.
3. Expenses. Deutsche Bank Capital shall bear all expenses of its
employees and overhead incurred in connection with its duties under this
Agreement and shall pay all salaries and fees of the Fund's directors and
officers who are interested persons (as defined in the Investment Company Act)
of Deutsche Bank Capital. The Fund will bear all of its own expenses, including
expenses of organizing the Fund; fees of the Fund's directors who are not
interested persons (as defined in the Investment Company Act) of any other
party; out-of-pocket travel expenses for all directors who are not interested
persons (as defined in the Investment Company Act) of any other party and other
expenses incurred by the Fund in connection with meetings of directors; interest
expense; taxes
C-1
and governmental fees; brokerage commissions and other expenses incurred in
acquiring or disposing of the Fund's portfolio securities; expenses of preparing
stock certificates; expenses of registering and qualifying the Fund's shares for
sale with the Securities and Exchange Commission and in various states and
foreign jurisdictions; charges and expenses of the Fund's legal counsel and
independent auditors; custodian, dividend paying and transfer agent expenses;
expenses of obtaining and maintaining stock exchange listings of the Fund's
shares; and the expenses of shareholders' meetings and of the preparation and
distribution of proxies and reports to shareholders.
4. Liability.
4.1 Neither Deutsche Bank Capital nor any of its officers, directors or
employees shall be liable for any error of judgment or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
(i) that Deutsche Bank Capital shall be under a fiduciary duty with respect to
receipt of compensation for services pursuant to Section 36 of the Investment
Company Act and shall therefore be liable for a loss resulting from a breach of
such fiduciary duty (in which case any award of damages shall be limited to the
period and the amount set forth in Section 36(b)(3) of the Investment Company
Act) or (ii) a loss resulting from willful misfeasance, bad faith or gross
negligence on its or their part in the performance of, or from reckless
disregard by it or them of its or their obligations and duties under, this
Agreement.
4.2 Deutsche Bank Capital does not assume responsibility for the acts or
omissions of any other person.
5. Services Not Exclusive. It is understood that the services of Deutsche
Bank Capital are not deemed to be exclusive, and nothing in this Agreement shall
prevent Deutsche Bank Capital, or any of its affiliates from providing similar
services to other investment companies and other clients (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities. When other clients of Deutsche Bank Capital desire
to purchase or sell a security at the same time such security is purchased or
sold for the Fund, such purchases and sales will, to the extent feasible, be
allocated among the Fund and such clients in a manner believed by Deutsche Bank
Capital to be equitable to such clients.
6. Notice. Any notice or other communication required to be given pursuant
to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to Deutsche Bank Capital at 31 West 52nd
Street, New York, New York 10019, Attention: Office of Funds Administration; and
(2) to the Fund at 31 West 52nd Street, New York, New York 10019, Attention:
Secretary.
7. Miscellaneous.
7.1 This Agreement is effective March 6, 1990, and shall continue in
effect until the earlier of March 5, 1992 or the first annual meeting of Fund's
stockholders after the effective date of the Fund's Registration Statement on
Form N-2 filed with the Securities and Exchange Commission. If approved at such
meeting, and unless sooner terminated, this Agreement shall continue in effect
for successive periods of twelve months after such date, provided that each such
continuance shall be approved as required by the Investment Company Act. The
annual approval of the continuance of this Agreement shall be confirmed to
Deutsche Bank Capital by the Fund in writing. Notwithstanding the foregoing,
this Agreement may be terminated by the Fund in the manner prescribed by the
Investment Company Act, without the payment of any penalty, at any time upon not
less than sixty days' prior written notice to Deutsche Bank Capital, or by
Deutsche Bank Capital upon not less than sixty days' written notice to the Fund.
This Agreement shall automatically terminate (i) in the event of its assignment
(as defined in the Investment Company Act) by either party, or (ii) upon
termination of the Investment Advisory Agreement, dated as of March 6, 1990,
between the Fund and CMI.
C-2
7.2 This Agreement shall be construed in accordance with the laws of the
State of New York.
7.3 The captions in this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
7.4 If any provisions of this Agreement shall be held or made invalid in
whole or in part, the other provisions of this Agreement shall remain in force.
Invalid provisions shall, in accordance with the intent and purpose of this
Agreement, be replaced by such valid provisions which in their economic effect
come as close as legally possible to such invalid provisions.
7.5 Nothing herein shall be construed as constituting Deutsche Bank
Capital an agent of the Fund.
7.6 Deutsche Bank Capital shall be entitled to rely on any notice or
communication believed by it to be genuine and correct and to have been sent to
it by or on behalf of the Fund.
C-3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE FUTURE GERMANY FUND, INC.
By: /s/ R. GAMBEE
---------------------------------
Name: R. Gambee
Title: VP, Secy, Treas.
DEUTSCHE BANK CAPITAL CORPORATION
By: /s/ KELLER
---------------------------------
Name: M. Keller
Title: EVP Equities Dept.
C-4
[LOGO]
PROXY
THE CENTRAL EUROPEAN EQUITY FUND, INC.
This proxy is solicited on behalf of the Board of Directors.
The undersigned stockholder of The Central European Equity 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, "AGAINST" Proposal 3 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 to
director listed nominees. the contrary below.
below.
(Instructions: To withhold authority for any individual nominee, strike a line
through the nominee's name in the list below.)
Dr. Juergen F. Strube
Robert H. Wadsworth
John Bult
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 October 31, 2002
|_| FOR |_| AGAINST |_| ABSTAIN
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "AGAINST" PROPOSAL 3
3. To approve a stockholder proposal to terminate the Investment Advisory
Agreement with the Fund's investment adviser, Deutsche Asset Management
International GmbH.
|_| FOR |_| AGAINST |_| ABSTAIN
4. 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