The Korea Fund, Inc.
345 Park Avenue
New York, New York 10154-0010
May 19, 1997
Mr. John Grzeskiewicz
Division of Investment Management
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Korea Fund, Inc. (the "Fund")
Dear Mr. Grzeskiewicz:
In accordance with paragraph (a) of Rule 14a-6 under the Securities and Exhange
Act of 1934, enclosed for electronic filing herewith, please find a preliminary
copy of the Notice of Annual Meeting, Proxy Statement and Proxy Card in
connection with the meeting of stockholders scheduled for July 22, 1997.
Stockholders of the Fund will be asked to elect three Directors, consider the
ratification of the selection of Coopers & Lybrand L.L.P. as the Fund's
independent accountants, and consider the approval of an amendment to the
Certificate of Incorporation increasing the number of authorized shares of
Commmon Stock of the Fund from 50 million to 200 million.
The proxy materials are scheduled to be mailed to stockholders on or about June
10, 1997. Please contact me at (617) 295-2567 if you have any questions or
concerns.
Sincerely,
/s/Thomas F. McDonough
Thomas F. McDonough
Secretary
TFM/mmp
<PAGE>
Preliminary Copy
345 Park Avenue (at 51st Street)
New York, New York 10154
The Korea Fund, Inc. (800) 349-4281
June 10, 1997
To the Stockholders:
The Annual Meeting of Stockholders of The Korea Fund, Inc. (the "Fund") is
to be held at 2:00 p.m., Eastern time, on Tuesday, July 22, 1997, at the offices
of Scudder, Stevens & Clark, Inc., 25th Floor, 345 Park Avenue (at 51st Street),
New York, New York 10154. Stockholders who are unable to attend this meeting are
strongly encouraged to vote by proxy, which is customary in corporate meetings
of this kind. A Proxy Statement regarding the meeting, a proxy card for your
vote at the meeting and an envelope--postage prepaid--in which to return your
proxy are enclosed.
At the Annual Meeting, the stockholders will elect three Directors,
consider the ratification of the selection of Coopers & Lybrand L.L.P. as the
Fund's independent accountants and consider the approval of an amendment to the
Certificate of Incorporation increasing the number of authorized shares of
Common Stock of the Fund from 50 million to 200 million. In addition, the
stockholders present will hear a report on the Fund. There will be an
opportunity to discuss matters of interest to you as a stockholder.
Your Fund's Directors recommend that you vote in favor of each of the
foregoing matters.
Respectfully,
/s/Nicholas Bratt /s/Juris Padegs
Nicholas Bratt Juris Padegs
President Chairman of the Board
STOCKHOLDERS ARE URGED TO SIGN THE PROXY CARD AND MAIL IT IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE SO AS TO ENSURE A QUORUM AT THE MEETING. THIS IS
IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES.
<PAGE>
THE KOREA FUND, INC.
Notice of Annual Meeting of Stockholders
To the Stockholders of
The Korea Fund, Inc.:
Please take notice that the Annual Meeting of Stockholders of The Korea Fund,
Inc. (the "Fund") has been called to be held at the offices of Scudder, Stevens
& Clark, Inc., 25th Floor, 345 Park Avenue (at 51st Street), New York, New York
10154, on Tuesday, July 22, 1997 at 2:00 p.m., Eastern time, for the following
purposes:
(1) To elect three Directors of the Fund to hold office for a term
of three years or until their respective successors shall have been duly
elected and qualified.
(2) To ratify or reject the action taken by the Board of Directors
in selecting Coopers & Lybrand L.L.P. as the Fund's independent accountants
for the fiscal year ending June 30, 1998.
(3) To approve or disapprove an amendment to the Certificate of
Incorporation of the Fund increasing the number of authorized shares of
Common Stock of the Fund from 50 million to 200 million.
The appointed proxies will vote on any other business as may properly come
before the meeting or any adjournments thereof.
Holders of record of the shares of common stock of the Fund at the close of
business on June 3, 1997 are entitled to vote at the meeting or any adjournments
thereof.
By order of the Board of Directors,
Thomas F. McDonough, Secretary
June 10, 1997
IMPORTANT--We urge you to sign and date the enclosed proxy card and return it in
the enclosed addressed envelope which requires no postage and is intended for
your convenience. Your prompt return of the enclosed proxy card may save the
Fund the necessity and expense of further solicitations to ensure a quorum at
the Annual Meeting. If you can attend the meeting and wish to vote your shares
in person at that time, you will be able to do so.
<PAGE>
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Korea Fund, Inc. (the "Fund") for use
at the Annual Meeting of Stockholders, to be held at the offices of Scudder,
Stevens & Clark, Inc. ("Scudder"), 25th Floor, 345 Park Avenue (at 51st Street),
New York, New York 10154, on Tuesday, July 22, 1997 at 2:00 p.m., Eastern time,
and at any adjournments thereof (collectively, the "Meeting").
This Proxy Statement, the Notice of Annual Meeting and the proxy card are
first being mailed to stockholders on or about June 10, 1997 or as soon as
practicable thereafter. Any stockholder giving a proxy has the power to revoke
it by mail (addressed to the Secretary at the principal executive office of the
Fund, 345 Park Avenue, New York, New York 10154) or in person at the Meeting, by
executing a superseding proxy or by submitting a notice of revocation to the
Fund. All properly executed proxies received in time for the Meeting will be
voted as specified in the proxy or, if no specification is made, for each
proposal referred to in the Proxy Statement.
The presence at any stockholders' meeting, in person or by proxy, of
stockholders entitled to cast a majority of the votes entitled to be cast shall
be necessary and sufficient to constitute a quorum for the transaction of
business. For purposes of determining the presence of a quorum for transacting
business at the Meeting, abstentions and broker "non-votes" will be treated as
shares that are present but which have not been voted. Broker non-votes are
proxies received by the Fund from brokers or nominees when the broker or nominee
has neither received instructions from the beneficial owner or other persons
entitled to vote nor has discretionary power to vote on a particular matter.
Accordingly, stockholders are urged to forward their voting instructions
promptly.
Abstentions and broker non-votes will not be counted in favor of, but will
have no other effect on, the vote for proposals (1) and (2) which require the
approval of a majority of shares voting at the Meeting. Abstentions and broker
non-votes will have the effect of a "no" vote for proposal (3) which requires
the approval of a specified percentage of the outstanding shares of the Fund.
Holders of record of the common stock of the Fund at the close of business
on June 3, 1997 (the "Record Date"), will be entitled to one vote per share on
all business of the Meeting and any adjournments. There were ___ shares of
common stock outstanding on the Record Date.
The Fund provides periodic reports to all stockholders which highlight
relevant information including investment results and a review of portfolio
changes. You may receive an additional copy of the annual report for the fiscal
year ended June 30, 1996 and a copy of the semi-annual report for the six-month
period ended December 31, 1996, without charge, by calling 800-349-4281 or
writing the Fund at 345 Park Avenue, New York, New York 10154.
(1) ELECTION OF DIRECTORS
Persons named in the accompanying proxy card intend, in the absence of
contrary instructions, to vote all proxies in favor of the election of the three
nominees listed below as Directors of the Fund (Class III) to serve for a term
of three years, or until their successors are duly elected and qualified. All
nominees have consented to stand for election and to serve if elected. If any
such nominee should be unable to serve, an event not now anticipated, the
proxies will be voted for such person, if any, as shall be designated by the
Board of Directors to replace any such nominee.
1
<PAGE>
Information Concerning Nominees
The following table sets forth certain information concerning each of the
three nominees as a Director of the Fund. Each of the nominees is now a Director
of the Fund. Unless otherwise noted, each of the nominees has engaged in the
principal occupation listed in the following table for more than five years, but
not necessarily in the same capacity.
Class III
- ---------
Nominees to serve until 2000 Annual Meeting of Stockholders:
<TABLE>
<S> <C> <C> <C> <C>
<CAPTION>
Present Office with the Fund, if any; Shares
Principal Occupation or Year First Beneficially Percent
Employment and Directorships Became a Owned of
Name (Age) in Publicly Held Companies Director March 31, 1997 ^(1) Class
---------- -------------------------- -------- ------------------- -----
Nicholas Bratt (49)*+ President; Managing Director of 1984 2,427 (2) less than
Scudder, Stevens & Clark, Inc. Mr. 1/4 of 1%
Bratt serves on the boards of an
additional 14 funds managed by Scudder.
Dr. Sang C. Lee (56) President, Hyundai Plasma Display 1988 -- --
Division of Hyundai Electronics America;
President and Chief Executive Officer,
Spectron Corporation of America, LLC,
(technology company) (1994-present);
Chairman, International Cooperative
Ventures, Inc., (consulting company)
(1992-present); Chairman of the Boards,
Markwood, Inc., Hub City, Inc., Brocker
Manufacturing, Inc., (portfolio
companies of PITCAIRN GROUP L.P.)
(1989-1992).
Dr. Wilson Nolen (70) Consultant; Trustee, Cultural Institutions 1984 19,112 (3) less than
Retirement Fund, Inc., New York Botanical 1/4 of 1%
Garden, Skowhegan School of Painting and
Sculpture; and Director, Ecohealth, Inc.
(biotechnology company)(until 1996).
Dr. Nolen serves on the boards of an
additional 18 funds managed by Scudder.
</TABLE>
2
<PAGE>
Information Concerning Continuing Directors
The Board of Directors is divided into three classes with each Director
serving for a term of three years. The terms of Classes I and II Directors do
not expire this year. The following table sets forth certain information
regarding the Directors in such classes. Unless otherwise noted, each Director
has engaged in the principal occupation listed in the following table for more
than five years, but not necessarily in the same capacity. Class I Directors
serving until 1998 Annual Meeting of Stockholders:
<TABLE>
<S> <C> <C> <C> <C>
<CAPTION>
Present Office with the Fund, if any; Shares
Principal Occupation or Year First Beneficially Percent
Employment and Directorships Became a Owned of
Name (Age) in Publicly Held Companies Director March 31, 1997 ^(1) Class
---------- -------------------------- -------- ------------------- -----
Juris Padegs (65)*+ Chairman; Advisory Managing Director 1991 1,535 less than
of Scudder, Stevens & Clark, Inc. 1/4 of 1%
Mr. Padegs serves on the board of
one additional fund managed by Scudder.
Change-Hee Kine (60)* Vice Chairman; President and Chief 1990 -- --
Executive Officer, Daewoo Securities
Co., Ltd. (1984-present); Chairman,
The Korea Stock Market Stabilization
Fund; and Vice Chairman, The
Korea Securities Dealers Association.
Hugh T. Patrick (67) R.D. Calkins Professor of International 1995 12,575 less than
Business, Graduate School of Business, 1/4 of 1%
Columbia University; Director, Center
on Japanese Economy and Business,
Columbia University; Co-Director,
APEC Study Center, Columbia University;
and Director, Japan Society.
Mr. Patrick currently serves on the
board of one additional fund managed
by Scudder.
</TABLE>
3
<PAGE>
Class II
- --------
Directors serving until 1999 Annual Meeting of Stockholders:
<TABLE>
<S> <C> <C> <C> <C>
<CAPTION>
Present Office with the Fund, if any; Shares
Principal Occupation or Year First Beneficially Percent
Employment and Directorships Became a Owned of
Name (Age) in Publicly Held Companies Director March 31, 1997 ^(1) Class
---------- -------------------------- -------- ------------------- -----
Robert J. Callender (66) Director, ARAMARK Corporation, Barnes 1996 1,000 --
Group Inc., Beneficial Corporation,
and Omnicom Group, Inc.; Member,
Council on Foreign Relations;
Managing Director, Metropolitan
Opera Association; Trustee,
Drew University; and Visiting
Professor/Executive-in-Residence,
Columbia Business School, Columbia
University (until 1995). Mr. Callander
serves on the boards of an additional
three funds managed by Scudder.
William H. Gleysteen, Consultant; Guest Scholar Brooking 1984 757 less than
Jr. (71) Institution; President, The Japan 1/4 of 1%
Society, Inc. until 1996. Mr.
Gleysteen serves on the boards of an
additional 12 funds managed by
Scudder.
Tai Ho Lee (74) Chairman, Imjung Research Institute 1984 -- --
(1992-present); and President and
Chief Executive Officer, Hanjin
Investment & Securities Co., Ltd.
(1990-1991).
All Directors and Officers as a group 37,406 (4) less than
1/4 of 1%
</TABLE>
- --------------------------
* Directors considered by the Fund and its counsel to be "interested persons"
(which as used in this proxy statement is as defined in the Investment
Company Act of 1940) of the Fund or of the Fund's investment manager or
Korean
4
<PAGE>
adviser. Messrs. Bratt and Padegs are deemed to be interested persons
because of their affiliation with the Fund's investment manager, Scudder,
Stevens & Clark, Inc., or because they are Officers of the Fund or both.
Mr. Kim is deemed to be an interested person because of his affiliation
with the Fund's Korean adviser, Daewoo Capital Management Co., Ltd., which
is a wholly owned subsidiary of Daewoo Securities Co., Ltd., or because he
is an Officer of the Fund or both.
+ Messrs. Bratt and Padegs are members of the Executive Committee of the
Fund.
(1) The information as to beneficial ownership is based on statements furnished
to the Fund by the Directors. Unless otherwise noted, beneficial ownership
is based on sole voting and investment power.
(2) Mr. Bratt's total includes 1,343 shares held by members of his family as to
which he shares voting and investment power.
(3) Dr. Nolen's total includes 6,375 shares held in trust for his benefit.
(4) Of which 29,688 shares are held with sole investment and voting power and
7,718 shares are held with shared investment or voting power.
Section 16(a) Beneficial Ownership Reporting Compliance.
Section 16(a) of the Securities Exchange Act of 1934 and Section 30(h) of
the Investment Company Act of 1940, as amended (the "1940 Act"), as applied to a
fund, require the fund's officers, directors, investment manager or adviser,
affiliates of the investment manager or adviser, and persons who beneficially
own more than ten percent of a registered class of the fund's outstanding
securities ("Reporting Persons"), to file reports of ownership of the fund's
securities and changes in such ownership with the Securities and Exchange
Commission (the "SEC") and the New York Stock Exchange. Such persons are
required by SEC regulations to furnish the fund with copies of all such filings.
Based solely upon its review of the copies of such forms received by it,
and written representations from certain Reporting Persons that no year-end
reports were required for those persons, the Fund believes that during the
fiscal year ended June 30, 1996, all filing requirements applicable to its
Reporting Persons were complied with except that Forms 3 on behalf of the
following subsidiaries of Scudder, Stevens & Clark, Inc. was filed late: Scudder
Canada Investor Services L.T.D.; Scudder, Stevens & Clark Australia Limited;
Scudder Cayman Ltd.; Scudder, Stevens & Clark Asia Limited.
According to a filing with the SEC on Schedule 13G on February 11, 1997,
BEA Associates, 153 East 53rd Street, New York, New York, reported (and
disclaimed) beneficial ownership of 1,646,673 shares (4.46% of the Fund's
outstanding stock) held in discretionary accounts managed by BEA Associates.
Except as noted above, to the best of the Fund's knowledge, as of March 31,
1997, no other person owned beneficially more than 5% of the Fund's outstanding
shares.
Committees of the Board--Board Meetings
The Board of Directors of the Fund met five times during the fiscal year
ended June 30, 1996. Each Director attended at least 75% of the total number of
meetings of the Board of Directors and of all committees of the Board on which
they served as regular members, except Mr. Bratt and Mr. Tai Ho Lee who each
attended 71% and Mr. Chang-Hee Kim who attended 40% of the meetings of the Board
of Directors and related committees on which each serves.
The Board of Directors, in addition to an Executive Committee, has an Audit
Committee, a Valuation Committee and a Committee on Independent Directors. The
Executive and Valuation Committees consist of regular members, allowing
alternates.
5
<PAGE>
Audit Committee
The Board has an Audit Committee, consisting of Messrs. Callander,
Gleysteen, Sang C. Lee, Tai Ho Lee, Nolen and Patrick, the Directors who are not
interested persons of the Fund, of Scudder, or of Daewoo Capital Management Co.,
Ltd. ("Noninterested Directors"), as defined in the 1940 Act. The Audit
Committee met on October 7, 1996. The Audit Committee reviews with management
and the independent accountants for the Fund, among other things, the scope of
the audit and the controls of the Fund and its agents, reviews and approves in
advance the type of services to be rendered by independent accountants,
recommends the selection of independent accountants for the Fund to the Board
and in general, considers and reports to the Board on matters regarding the
Fund's accounting and bookkeeping practices.
Committee on Independent Directors
The Board has a Committee on Independent Directors consisting of all the
Noninterested Directors. The Committee is charged with the duty of making all
nominations for Noninterested Directors and consideration of other related
matters. Stockholders' recommendations as to nominees received by management are
referred to the Committee for its consideration and action. The Committee most
recently met on April 29, 1997 to consider and to nominate the nominees set
forth above.
Executive Officers
In addition to Messrs. Bratt, Padegs and Kim, who are Directors and
Officers of the Fund, the following persons are Executive Officers of the Fund:
<TABLE>
<S> <C> <C>
<CAPTION>
Present Office with the Fund; Year First Became
Name (Age) Principal Occupation or Employment (1) an Officer (2)
---------- -------------------------------------- --------------
Jerard K. Hartman (64) Vice President; Managing Director of 1986
Scudder, Stevens & Clark, Inc.
Kun-Ho Hwang (46) Vice President; Managing Director; International 1984
Division of Daewoo Securities Co., Ltd.
Young H. Kim (41) Vice President; President of Daewoo 1995
Securities (America) Inc.
David S. Lee (63) Vice President; Managing Director of 1984
Scudder, Stevens & Clark, Inc.
John J. Lee (39) Vice President; Principal of 1994
Scudder, Stevens & Clark, Inc.
Thomas F. McDonough (50) Vice President, Secretary and Assistant Treasurer; 1984
Principal of Scudder, Stevens & Clark, Inc.
Pamela A. McGrath (43) Vice President and Treasurer; Managing Director of 1990
Scudder, Stevens & Clark, Inc.
Edward J. O'Connell (52) Vice President and Assistant Treasurer; Principal of 1984
Scudder, Stevens & Clark, Inc.
Dong Wook Park (50) Vice President; Director of Daewoo Capital Management 1986
Co., Ltd.
6
<PAGE>
Present Office with the Fund; Year First Became
Name (Age) Principal Occupation or Employment (1) an Officer (2)
---------- -------------------------------------- --------------
Kathryn L. Quirk (44) Vice President and Assistant Secretary; Managing 1991
Director of Scudder, Stevens & Clark, Inc.
</TABLE>
(1) Unless otherwise stated, all the Executive Officers have been associated
with their respective companies for more than five years, although not
necessarily in the same capacity.
(2) The President, Treasurer and Secretary each hold office until his or her
successor has been duly elected and qualified, and all other Officers hold
offices in accordance with the By-Laws of the Fund.
Transactions with and Remuneration of Directors and Officers
The aggregate direct remuneration by the Fund of Directors not affiliated
with Scudder or Daewoo Capital Management Co., Ltd. ("Daewoo") was $123,343,
including expenses, during the fiscal year ended June 30, 1996. Each such
unaffiliated Director currently receives fees paid by the Fund of $750 per
Directors' meeting attended and an annual Director's fee of $6,000. Each
Director also receives $250 per committee meeting attended (other than Audit
Committee meetings and meetings held for the purposes of considering
arrangements between the Fund and the Investment Manager or an affiliate of the
Investment Manager, for which such Director receives a fee of $750). Scudder
supervises the Fund's investments, pays the compensation and certain expenses of
its personnel who serve as Directors and Officers of the Fund and receives a
management fee for its services. Several of the Fund's Officers and Directors
are also officers, directors, employees or stockholders of Scudder and
participate in the fees paid to that firm although the Fund makes no direct
payments to them other than for reimbursement of travel expenses in connection
with the attendance at Directors' and committee meetings.
Daewoo, which acts as Korean Adviser, pays the compensation and certain
expenses of the personnel of Daewoo who serve as Directors or Officers of the
Fund. The Fund will make no direct payments other than for reimbursement of
travel expenses for one director, officer or employee of Daewoo or any of its
affiliates who is not a resident in the United States and travel expenses of any
other director, officer or employee of Daewoo or any of its affiliates who is a
resident in the United States, in connection with the attendance at Board of
Directors and committee meetings.
The following Compensation Table provides, in tabular form, the following
data:
Column (1): All Directors who receive compensation from the Fund.
Column (2): Aggregate compensation received by a Director from the Fund.
Columns (3) and (4): Pension or retirement benefits accrued or proposed to be
paid by the Fund Complex. The Fund does not pay its Directors such benefits.
Column (5): Total compensation received by a Director from the Fund, plus
compensation received from all funds for which a Director serves. The total
number of funds from which a Director receives such compensation is also
provided in column (5). Generally, compensation received by a Director for
serving on the Board of a closed-end fund is greater than the compensation
received by a Director for serving on an open-end fund.
7
<PAGE>
Compensation Table
for the year ended December 31, 1996
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Pension or Retirement Estimated Total Compensation
Aggregate Benefits Accrued As Annual Benefits From the Fund and
Name of Person, Compensation Part of Fund Upon Fund Complex
Position from the Fund Complex Expenses Retirement Paid to Director
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William H. Gleysteen, Jr., $11,500 $4,888+++ $3,000+++ $135,224
Director (13 funds**)
Dr. Sang C. Lee, $11,500 N/A N/A $11,500
Director (1 fund)
Tai Ho Lee, $10,600 N/A N/A $10,600
Director (1 fund)
Dr. Wilson Nolen, $12,250 N/A N/A $165,608
Director (17 funds**)
Hugh T. Patrick, $12,250 N/A N/A $25,250
Director (2 funds)
Robert W. Lear, $10,098 N/A N/A $33,049
Emeritus Founding Director# (11 funds)
Sidney M. Robbins, $6,000 N/A N/A $6,000
Emeritus Founding Director# (1 fund)
------------------------------------------------------------------------------------------------------------
</TABLE>
+++ Retirement benefits accrued and proposed to be paid as additional
compensation for serving on the Board of The Japan Fund, Inc.
** This does not include membership on the Boards of funds which commenced
operations in 1996.
# An emeritus founding director's compensation is determined by the Board of
Directors in accordance with the By-Laws of the Fund. Mr. Robbins, as
Emeritus Founding Director, receives an annual fee of $6,000. Mr. Lear
became an Emeritus Founding Director effective October 7, 1996 and receives
no additional compensation from the Fund.
Required Vote
Election of each of the listed nominees for Director requires the
affirmative vote of a majority of the votes cast at the Meeting in person or by
proxy. Your Fund's Directors recommend that stockholders vote in favor of each
of the nominees.
(2) RATIFICATION OR REJECTION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
At a meeting held April 29, 1997, the Board of Directors of the Fund,
including a majority of the Noninterested Directors, selected Coopers & Lybrand
L.L.P. to act as independent accountants for the Fund for the fiscal year ending
June 30, 1998. Coopers & Lybrand L.L.P. are independent accountants and have
advised the Fund that they have no direct financial interest or material
indirect financial interest in the Fund. One or more representatives of Coopers
& Lybrand L.L.P. are expected to be present at the Meeting and will have an
opportunity to make a statement if they so desire. Such representatives are
expected to be available to respond to appropriate questions posed by
stockholders or management.
The Fund's financial statements for the fiscal year ended June 30, 1996
were audited by Coopers & Lybrand L.L.P. In connection with its audit services,
Coopers & Lybrand L.L.P. reviewed the financial statements included in the
Fund's annual and semiannual reports. The Fund's financial statements for the
fiscal year ended June 30, 1997 will also be audited by Coopers & Lybrand L.L.P.
8
<PAGE>
Required Vote
Ratification of the selection of independent accountants requires the
affirmative vote of a majority of the votes cast at the Meeting in person or by
proxy. Your Fund's Directors recommend that stockholders ratify the selection of
Coopers & Lybrand L.L.P. as independent accountants.
(3) APPROVAL OR DISAPPROVAL OF AMENDMENT TO
CERTIFICATE OF INCORPORATION INCREASING NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK FROM 50 MILLION TO 200 MILLION
The Fund's Certificate of Incorporation currently provides for a
capitalization of 50,000,000 shares of Common Stock, par value $0.01 per share,
of which ___ were outstanding as of May 31, 1997, leaving a total of ___ shares
of Common Stock available for issuance.
The Board of Directors has unanimously approved and recommends to the
stockholders the adoption of an amendment to the Articles of Incorporation of
the Fund which would increase the number of authorized shares of Common Stock
from 50,000,000 to 200,000,000. The proposed amendment would be effectuated by
amending Article FIFTH to read as follows:
"The total number of shares which the Corporation shall have authority to
issue is two hundred million (200,000,000) shares, all of the one class
called Common Stock of one cent ($0.01) par value, having an aggregate par
value of $2,000,000."
There are presently no plans, arrangements, agreements or understandings
with respect to issuance of any of the additional shares of Common Stock to be
authorized by the above amendment (other than possible issuance under the Fund's
Dividend Reinvestment and Cash Purchase Plan).
The Board of Directors has determined that additional stock should be
available for issuance from time to time as the Board may authorize in
connection with stock dividends or splits, the Dividend Reinvestment and Cash
Purchase Plan, sales to the general public or other corporate purposes.
Since the need for the issuance of shares may not arise at the time of an
annual Stockholder's Meeting of the Fund, approval of the amendment at this time
could possibly avoid the expense and delay of calling a special stockholder's
meeting for such approval in cases where a meeting is not otherwise required.
Required Vote
The affirmative vote of the holders of at least a majority of the
outstanding Common Stock of the Fund is required for the adoption of the
proposed amendment. Your Fund's Directors recommend a vote FOR the proposal.
Investment Manager
Scudder is a Delaware corporation. Daniel Pierce* is the Chairman of the
Board of Scudder. Edmond D. Villani# is President and Chief Executive Officer of
Scudder. Stephen R. Beckwith#, Lynn S. Birdsong#, Nicholas Bratt#, E. Michael
Brown*, Mark S. Casady*, Linda C. Coughlin*, Margaret D. Hadzima*, Jerard K.
Hartman#, Richard A. Holt@, John T. Packard~, Kathryn L. Quirk#, Cornelia M.
Small# and Stephen A. Wohler* are the other members of the Board of Directors of
Scudder. The principal occupation of each of the above named individuals is
serving as a Managing Director of Scudder.
All of the outstanding voting and nonvoting securities of Scudder are held
of record by Stephen R. Beckwith, Juris Padegs, Daniel Pierce and Edmond D.
Villani in their capacity as the representatives (the
9
<PAGE>
"Representatives") of the beneficial owners of such securities, pursuant to a
Security Holders' Agreement among Scudder, the beneficial owners of securities
of Scudder and such Representatives. Pursuant to the Security Holders'
Agreement, the Representatives have the right to reallocate shares among the
beneficial owners from time to time. Such reallocations will be at net book
value in cash transactions. All Managing Directors of Scudder own voting and
nonvoting stock and all Principals own nonvoting stock. For the fiscal year
ended June 30, 1996, the Fund paid Scudder an investment management fee of
$7,516,289.
Korean Adviser
The Korean Adviser, an investment adviser registered under the United
States Investment Advisers Act of 1940, was organized in February 1988 under the
laws of the Republic of Korea. The Korean Adviser is wholly owned by Daewoo
Securities Co., Ltd., Daewoo Securities Building, 34-3 Youido-dong, Yongdung
po-gu, Seoul, Korea, the largest Korean securities firm in terms of paid-in
capital and revenues in 1996 and an underwriter in the Fund's first four public
offerings. Daewoo Securities Co., Ltd. is affiliated with Daewoo Corporation, a
conglomerate headquartered in Seoul, Korea. Daewoo Corporation and certain
affiliates of Daewoo Corporation own approximately 12.98% of Daewoo Securities
Co., Ltd.
- ---------------------------
* Two International Place, Boston, Massachusetts
# 345 Park Avenue, New York, New York
+++ 101 California Street, San Francisco, California
@ Two Prudential Plaza, 180 North Stetson, Suite 5400, Chicago, Illinois
10
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The Korean Adviser has the following Board of Directors:
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Name and Position
with the Korean Adviser Principal Occupation Address
----------------------- -------------------- -------
Jay-Hee Chun President, Kangsun Apt. 604-107
President Daewoo Capital Juyup-dong 50, Koyang City
Management Co., Ltd. Seoul, Korea
Hee Kang Director, Jamsil-dong
Daewoo Capital 72-307, Songpa-gu
Management Co., Ltd. Seoul, Korea
Choon Kuk Lee Director, Jinju Apartment C401
Daewoo Capital Yoido-dong, Yungdungpo-gu
Management Co., Ltd. Seoul, Korea
Segeun Lee Executive Vice President, 34-3 Yoido-dong
Executive Vice Daewoo Capital Yungdungpo-ku
President Management Co., Ltd. Seoul, Korea
Choong Nam Myung Director, Kalhyun-dong
Executive Director Daewoo Capital 521-30 Eunpyung-gu
Management Co., Ltd. Seoul, Korea
Ki-Ho Ohm Auditor, Sinsigagi APT 327-301
Auditor Daewoo Capital Mok-Dong Yangchon-Gu
Management Co., Ltd. Seoul, Korea
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Brokerage Commissions on Portfolio Transactions
To the maximum extent feasible, Scudder places orders for portfolio
transactions through Scudder Investor Services, Inc. (the "Distributor") (a
corporation registered as a broker/dealer and a subsidiary of Scudder), which in
turn places orders on behalf of the Fund with issuers, underwriters or other
brokers and dealers. The Distributor receives no commissions, fees or other
remuneration from the Fund for this service. Allocation of portfolio
transactions will be supervised by Scudder.
During the fiscal year ended June 30, 1996, Daewoo Securities Co., Ltd.
("Daewoo Securities"), with respect to portfolio transactions for the Fund, was
paid $295,613, which amounted to 13.45% of total brokerage commissions paid. The
Fund's Korean Adviser is a subsidiary of Daewoo Securities.
Other Matters
The Board of Directors does not know of any matters to be brought before
the Meeting other than those mentioned in this Proxy Statement. The appointed
proxies will vote on any other business that properly comes before the Meeting
or any adjournments thereof in accordance with their best judgment.
11
<PAGE>
Miscellaneous
Proxies will be solicited by mail and may be solicited in person or by
telephone or facsimile by Officers of the Fund or personnel of Scudder. The Fund
has retained Corporate Investor Communications, Inc., 111 Commerce Road,
Carlstadt, New Jersey, 07072-2586 to assist in the proxy solicitation. The cost
of their services is estimated at $5,500. The expenses connected with the
solicitation of the proxies and with any further proxies which may be solicited
by the Fund's Officers or Corporate Investor Communications, Inc., in person, by
telephone or by facsimile will be borne by the Fund. The Fund will reimburse
banks, brokers and other persons holding the Fund's shares registered in their
names or in the names of their nominees, for their expenses incurred in sending
proxy material to and obtaining proxies from the beneficial owners of such
shares.
In the event that sufficient votes in favor of any proposal set forth in
the Notice of Meeting are not received by July 22, 1997, the persons named as
appointed proxies on the enclosed proxy card may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of the holders of a majority of
the shares present in person or by proxy at the session of the Meeting to be
adjourned. The persons named as appointed proxies on the enclosed proxy card
will vote in favor of such adjournment those proxies which they are entitled to
vote in favor of the proposal for which further solicitation of proxies is to be
made. They will vote against any such adjournment those proxies required to be
voted against such proposal. The costs of any such additional solicitation and
of any adjourned session will be borne by the Fund.
Stockholder Proposals
Any proposal by a stockholder of the Fund intended to be presented at the
1998 meeting of stockholders of the Fund must be received by Thomas F.
McDonough, Secretary of the Fund, c/o Scudder, Stevens & Clark, Inc., at 345
Park Avenue, New York, New York 10154, within a reasonable time before the
solicitation of proxies for such stockholders meeting.
By order of the Board of Directors,
Thomas F. McDonough
Secretary
345 Park Avenue
New York, New York 10154
June 10, 1997
12
<PAGE>
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<CAPTION>
reliminary Copy
PROXY THE KOREA FUND, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders -- July 22, 1997
<C> <C>
The undersigned hereby appoints Juris Padegs, Chang-Hee Kim and Hugh T. Patrick and each of them, the proxies for
the undersigned, with the power of substitution to each of them, to vote all shares of The Korea Fund, Inc. which
the undersigned is entitled to vote at the Annual Meeting of Stockholders of The Korea Fund, Inc. to be held at
the offices of Scudder, Stevens & Clark, Inc., 25th Floor, 345 Park Avenue (at 51st Street), New York, New York 10154,
on June 22, 1997 at 2:00 p.m., Eastern time, and at any adjournments thereof.
Unless otherwise specified in the squares provided, the undersigned's vote will be cast FOR each numbered item listed below.
1. The election of Directors;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) /_/ to vote for all nominees listed below /_/
Nominees: Nicholas Bratt, Dr. Sang C. Lee and Dr. Wilson Nolen
(INSTRUCTION To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.)
2. Ratification of the selection of Coopers & Lybrand L.L.P. as independent accountants; FOR /_/ AGAINST /_/ ABSTAIN /_/
<PAGE>
3. Approval of an amendment to the Certificate of Incorporation increasing the FOR /_/ AGAINST /_/ ABSTAIN /_/
number of authorized shares of common stock of the Fund from 50 million to
200 million
The Proxies are authorized to vote upon such other business as may properly come
before the Meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT /_/
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
NO POSTAGE IS REQUIRED
Please sign exactly as your name or names appear. Signature: Date:
When signing as attorney, executor, administrator, ------------------ --------------
trustee or guardian, please give your full title as such.
Signature: Date:
------------------ --------------
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