[LOGO]
The Korea Fund, Inc. 345 Park Avenue (at 51st Street)
New York, New York 10154
(800) 349-4281
August 12, 1998
To the Stockholders:
The Annual Meeting of Stockholders of The Korea Fund, Inc. (the "Fund") is
to be held at 11:00 a.m., Eastern time, on Wednesday, October 14, 1998, at the
offices of Scudder Kemper Investments, 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 and
consider the ratification of the selection of PricewaterhouseCoopers LLP as the
Fund's independent accountants. 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>
<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 Kemper
Investments, Inc., 25th Floor, 345 Park Avenue (at 51st Street), New York, New
York 10154, on Wednesday, October 14, 1998 at 11:00 a.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 PricewaterhouseCoopers LLP as the Fund's independent
accountants for the fiscal year ending June 30, 1999.
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 August 3, 1998 are entitled to vote at the meeting or any
adjournments thereof.
By order of the Board of Directors,
Thomas F. McDonough, Secretary
August 12, 1998
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>
<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
Kemper Investments, Inc. ("Scudder Kemper"), 25th Floor, 345 Park Avenue (at
51st Street), New York, New York 10154, on Wednesday, October 14, 1998 at 11:00
a.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 August 12, 1998 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.
Holders of record of the common stock of the Fund at the close of business
on August 3, 1998 (the "Record Date"), will be entitled to one vote per share on
all business of the Meeting and any adjournments. There were 49,999,999 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, 1997 and a copy of the semi-annual report for the six-month
period ended December 31, 1997, 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 I) 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. For election of Directors at the Meeting,
the Board of Directors has approved the nomination of the individuals listed
below.
Class I
- -------
Nominees to serve until 2001 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 June 30, 1998 (1) Class
---------- -------------------------- -------- ----------------- -----
Juris Padegs (66)*+ Chairman of the Board; Advisory 1991 2,140 less than
Managing Director of Scudder Kemper 1/4 of 1%
Investments, Inc. Mr. Padegs serves
on the board of one additional
fund managed by Scudder Kemper.
Chang-Hee Kim (61)* Vice Chairman; President and Chief 1990 -- --
Executive Officer, Daewoo Securities
Co., Ltd. (1984-present); President,
Securities Market Stabilization Fund
(1990-present); Vice Chairman, Korea
Securities Dealers Association
(1990-present); and Vice Chairman,
Korea Listed Companies Association
(1993-present).
Hugh T. Patrick (68) R.D. Calkins Professor of International 1995 17,541 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
Kemper.
</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 II and III 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 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 June 30, 1998 (1) Class
---------- -------------------------- -------- ----------------- -----
Robert J. Callander (67) Director, ARAMARK Corporation, Barnes 1996 2,500 less than
Group, Inc., and Omnicom Group, Inc.; 1/4 of 1%
Member, Council on Foreign Relations;
Managing Director, Metropolitan Opera
Association; Trustee, Drew University;
and Visiting Professor/Executive-in-Resi
dence, Columbia Business School,
Columbia University. Mr. Callander
serves on the boards of certain other
funds managed by Scudder Kemper.
William H. Gleystten, Consultant; Guest Scholar, Brookings 1984 1,006 less than
Jr. (72) Institution; President, The Japan 1/4 of 1%
Society, Inc. (until 1996). Mr.
Gleysteen serves on the boards of
certain other funds managed by Scudder
Kemper.
Tai Ho Lee (75) Chairman, Imjung Research Institute 1984 -- --
(1992-present).
</TABLE>
3
<PAGE>
Class III
- ---------
Directors serving 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 June 30, 1998 (1) Class
---------- -------------------------- -------- ----------------- -----
Sang C. Lee (57) President and Chief Executive Officer, 1988 -- --
Spectron Corporation of America, LLC,
(technology company) (1994-present);
Chairman, International Cooperative
Ventures, Inc., (consulting company)
(1992-present); Chairman of the Boards,
Markwood, Inc. and Hub City, Inc.; and
President, Hyundai Plasma Display
Division of Hyundai Electronics America
(1996-1997).
Wilson Nolen (71)+ Consultant; Trustee, Cultural 1984 35,964 (2) less than
Institutions Retirement Fund, Inc., New 1/4 of 1%
York Botanical Garden, Skowhegan School
of Painting and Sculpture; and Director,
Ecohealth, Inc. (biotechnology company)
(until 1996). Mr. Nolen serves on the
boards of certain other funds managed by
Scudder Kemper.
All Directors and Officers as a group 52,401 (3) 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, as amended (the "1940 Act")] of the Fund or of the
Fund's investment manager or Korean adviser. Mr. Padegs is deemed to be an
interested person because of his affiliation with the Fund's investment
manager, Scudder Kemper Investments, Inc., or because he is an Officer 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. Nolen 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. Nolen's total includes 26,948 shares held with sole investment and
voting power and 9,016 shares held in trust for his benefit.
(3) Of which 18,389 shares are held with sole investment and voting power and
34,012 shares are held with shared investment and voting power.
4
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 and Section 30(h) of
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, 1998, all filing requirements applicable to its
Reporting Persons were complied with.
To the best of the Fund's knowledge, as of June 30, 1998, no 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 seven times during the fiscal year
ended June 30, 1998. Each Director who intends to continue to serve in such
capacity 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. Chang-Hee Kim who attended 43% of the meetings of the Board
of Directors and related committees on which he 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.
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 Kemper, or of Daewoo Capital
Management Co., Ltd. ("Noninterested Directors"), as defined in the 1940 Act.
The Audit Committee met on October 21, 1997. 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 met on
April 28, 1998 to consider and to nominate the nominees set forth above.
5
<PAGE>
Executive Officers
In addition to Messrs. 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)
---------- -------------------------------------- --------------
Nicholas Bratt (50) President; Managing Director of Scudder Kemper 1984
Investments, Inc.
James DiBiase (38) Assistant Treasurer; Senior Vice President of Scudder 1998
Kemper Investments, Inc.
Bruce H. Goldfarb (33) Vice President and Assistant Secretary; Senior Vice 1997
President of Scudder Kemper Investments, Inc. since
February 1997; previously practiced law with the
law firm of Cravath, Swaine & Moore.
Judith A. Hannaway (43) Vice President; Vice President of Scudder Kemper 1997
Investments, Inc. since February 1995; previously a
Senior Vice President in the Investment Banking Group
of Kidder Peabody & Company.
Jerard K. Hartman (65) Vice President; Managing Director of Scudder Kemper 1986
Investments, Inc.
John R. Hebble (40) Treasurer; Senior Vice President of Scudder Kemper 1998
Investments, Inc.
Kun-Ho Hwang (47) Vice President; Managing Director; International 1984
Division of Daewoo Securities Co., Ltd.
Young H. Kim (42) Vice President; President of Daewoo 1995
Securities (America) Inc.
John J. Lee (40) Vice President; Senior Vice President of Scudder Kemper 1994
Investments, Inc.
Thomas F. McDonough (51) Vice President and Secretary; Senior Vice President of 1984
Scudder Kemper Investments, Inc.
Dong Wook Park (51) Vice President; Director of Daewoo Capital Management 1986
Co., Ltd.
Caroline Pearson (36) Assistant Secretary; Senior Vice President of Scudder 1998
Kemper Investments, Inc. since September 1997;
previously practiced law with the law firm of Dechert
Price & Rhoads.
Kathryn L. Quirk (45) Vice President and Assistant Secretary; Managing 1991
Director of Scudder Kemper Investments, 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 successor
has been duly elected and qualified, and all other Officers hold offices in
accordance with the By-Laws of the Fund.
6
<PAGE>
Transactions with and Remuneration of Directors and Officers
The aggregate direct remuneration by the Fund of Directors not affiliated
with Scudder Kemper or Daewoo Capital Management Co., Ltd. ("Daewoo") was
$105,805, including expenses, during the fiscal year ended June 30, 1998. 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
Kemper 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
Kemper 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 and
Scudder.
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, Scudder,
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).
7
<PAGE>
Compensation Table
for the year ended December 31, 1997
<TABLE>
<S> <C> <C> <C> <C> <C>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Aggregate Compensaton
Aggregate Annual as a Director/Trustee of
Compensation Estimated the Fund and Other
as a Director of the Fund Pension or Annual Funds
Retirement Benefits Benefits
Name of Person, Paid by Paid by Accrued As Part of Upon Paid by Paid by
Position Fund Scudder** Fund Expenses Retirement Funds Scudder**
----------------------------------------------------------------------------------------------------------------
Robert J. Callander, $15,250 $1,500 N/A N/A $52,284 $4,500
Director (4 funds)
William H. Gleysteen, $15,250 $1,500 $2,400+ $3,000+ $136,150 $19,850
Jr., Director (14 funds*)
Sang C. Lee, $14,500 $1,500 N/A N/A $14,500 $1,500
Director (1 fund)
Tai Ho Lee, $11,650 $750 N/A N/A $11,650 $750
Director (1 fund)
Wilson Nolen, $15,500 $1,500 N/A N/A $189,548 $25,300
Director (21 funds*)
Hugh T. Patrick, $15,500 $0 N/A N/A $27,750 $0
Director (2 funds)
Robert W. Lear, $0 $0 N/A N/A $14,121 $1,650
Emeritus Founding (7 funds)
Director#
Sidney M. Robbins, $6,000 $0 N/A N/A $6,000 $0
Emeritus Founding (1 fund)
Director#
----------------------------------------------------------------------------------------------------------------
</TABLE>
* This does not include membership on the Boards of funds which commenced
operations in 1998.
** During 1997 Scudder, Stevens & Clark, Inc. ("Scudder") voluntarily agreed
to pay the fees and expenses of Directors relating to special meetings held
for the purpose of considering the proposed alliance between Scudder and
Zurich Insurance Company, which was consummated on December 31, 1997.
+ Retirement benefits accrued and proposed to be paid as additional
compensation for serving on the Board of the Japan Fund, Inc.
# 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.
8
<PAGE>
(2) RATIFICATION OR REJECTION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
At a meeting held July 22, 1998, the Board of Directors of the Fund,
including a majority of the Noninterested Directors, selected
PricewaterhouseCoopers LLP to act as independent accountants for the Fund for
the fiscal year ending June 30, 1999. Effective July 1, 1998, Coopers & Lybrand
L.L.P. and Price Waterhouse LLP merged to become PricewaterhouseCoopers LLP.
PricewaterhouseCoopers LLP 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 PricewaterhouseCoopers LLP
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, 1998
were audited by PricewaterhouseCoopers LLP.
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
PricewaterhouseCoopers LLP as independent accountants.
Investment Manager
Scudder Kemper Investments, Inc. (the "Investment Manager") is a Delaware
corporation. Rolf Hueppi* is the Chairman of the Board and Director, Edmond D.
Villani# is the President, Chief Executive Officer and Director, Stephen R.
Beckwith# is the Treasurer and Chief Financial Officer, Kathryn L. Quirk# is the
General Counsel, Chief Compliance Officer and Secretary, Lynn S. Birdsong# is a
Corporate Vice President and Director, Cornelia M. Small# is a Corporate Vice
President and Director, Laurence Cheng* is a Director and Marcus Rohrbasser* is
a Director of the Investment Manager. The principal occupation of each of Edmond
D. Villani, Stephen R. Beckwith, Kathryn L. Quirk, and Cornelia M. Small is
serving as a Managing Director of the Investment Manager; the principal
occupation of Rolf Hueppi, Laurence Cheng and Marcus Rohrbasser is serving as an
officer of Zurich Insurance Company ("Zurich").
- ------------------------
* Mythenquai 2, Zurich, Switzerland
# 345 Park Avenue, New York, New York
The outstanding voting securities of the Investment Manager are held of
record 36.63% by Zurich Holding Company of America ("ZHCA"), a subsidiary of
Zurich; 32.85% by ZKI Holding Corp. ("ZKIH") a subsidiary of Zurich; 20.86% by
Stephen R. Beckwith, Lynn S. Birdsong, Kathryn L. Quirk, Cornelia M. Small and
Edmond D. Villani in their capacity as representatives (the "Management
Representatives") of the Investment Manager's management holders and retiree
holders pursuant to a Second Amended and Restated Security Holders Agreement
(the "Security Holders Agreement") among the Investment Manager, Zurich, ZHCA,
ZKIH, the Management Representatives, the management holders, the retiree
holders and Edmond D. Villani, as trustee of Scudder Kemper Investments, Inc.
Executive Defined Contribution Plan Trust (the "Trust"); and 9.66% by the Trust.
There are no outstanding non-voting securities of the Investment Manager.
9
<PAGE>
In connection with a transaction effective December 31, 1997, pursuant to
which Zurich acquired a two-thirds interest in Scudder for $866.7 million in
cash and the businesses of Scudder and Zurich's subsidiary, Zurich Kemper
Investments, Inc., were combined to form Scudder Kemper, Mr. Padegs sold 92.6%
of his holdings in Scudder to Zurich for cash. Pursuant to the Security Holders
Agreement (which was entered into in connection with the Scudder-Zurich
transaction), the Board of Directors of the Investment Manager consists of four
directors designated by ZHCA and ZKIH and three directors designated by the
Management Representatives.
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 17.3% of Daewoo Securities
Co., Ltd.
The Korean Adviser has the following Board of Directors:
<TABLE>
<S> <C> <C>
<CAPTION>
Name and Position
with the Korean Adviser Principal Occupation Address
----------------------- -------------------- -------
Segeun Lee President and Chief Executive Hyundai APT 17-805
Executive Vice Officer, Myungil-Dong, Kangdong-Gu
President Daewoo Capital Seoul, Korea
Management Co., Ltd.
Ki-Ho Ohm Auditor, Sinsigagi APT 327-301
Auditor Daewoo Capital Mok-Dong Yangchon-Gu
Management Co., Ltd. Seoul, Korea
Dong-Wook Park Executive Director Jeongbal-Maeul APT 707-203
Madu-Dong, Koyang City
Kyungki Province, Korea
</TABLE>
Brokerage Commissions on Portfolio Transactions
To the maximum extent feasible, Scudder Kemper places orders for portfolio
transactions through Scudder Investor Services, Inc., Two International Place,
Boston, Massachusetts 02110 (the "Distributor") (a corporation registered as a
broker/dealer and a subsidiary of Scudder Kemper), 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. In selecting brokers and dealers with which to place
portfolio transactions for the Fund, Scudder Kemper will not consider sales of
shares of funds advised by Scudder Kemper, although it may place such
transactions with brokers and dealers that sell shares of funds advised by
Scudder Kemper. Allocation of portfolio transactions will be supervised by
Scudder Kemper.
10
<PAGE>
During the fiscal year ended June 30, 1998, Daewoo Securities Co., Ltd.
("Daewoo Securities"), with respect to portfolio transactions for the Fund, was
paid $29,218, which amounted to 5.32% 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.
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 Kemper.
The Fund has retained Shareholder Communications Corporation, 17 State Street,
New York, New York 10004 to assist in the proxy solicitation. The cost of their
services is estimated at $3,500. The expenses connected with the solicitation of
the proxies and with any further proxies which may be solicited by the Fund's
Officers or Shareholder Communications Corporation, 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 October 14, 1998, 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
1999 meeting of stockholders of the Fund must be received by Thomas F.
McDonough, Secretary of the Fund, c/o Scudder Kemper Investments, Inc., at 345
Park Avenue, New York, New York 10154, not later than April 14, 1999.
By order of the Board of Directors,
Thomas F. McDonough
Secretary
345 Park Avenue
New York, New York 10154
August 12, 1998
11
<PAGE>
<PAGE>
PROXY THE KOREA FUND, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders--October 14, 1998
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 Kemper Investments, Inc.,
25th Floor, 345 Park Avenue (at 51st Street), New York, New York 10154, on
October 14, 1998 at 11:00 a.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.
<TABLE>
<S> <C>
<CAPTION>
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: Class I: Juris Padegs, Chang-Hee Kim and Hugh T. Patrick
(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 PricewaterhouseCoopers LLP as independent accountants: FOR /__/ AGAINST /__/ ABSTAIN /__/
<PAGE>
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 PROMTPLY IN ENCLOSED ENVELOPE
NO POSTAGE IS REQUIRED
Please sign exactly as your name or names appear. Signature: Date:
When signing as attorney, executor, administrator, trust- ------------------ ------------------
ee or guardian, please give your full title as such. Signature: Date:
------------------- ------------------
</TABLE>
