SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by registrant [X]
Filed by a party other than the registrant[ ]
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
The Germany Fund, Inc.
(Name of Registrant as Specified in Its Charter)
The Germany Fund, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
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[NOTE: THE PROPOSAL DESCRIBED HEREIN REMAINS SUBJECT TO
APPROVAL BY THE FUND'S DIRECTORS.]
THE GERMANY FUND, INC.
31 West 52nd Street
New York, New York 10019
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
_____________, 1996
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To our Stockholders:
Notice is hereby given that a Special Meeting of Stockholders of The
Germany Fund, Inc. (the "Fund") will be held at _____ [A.M./P.M.], New York
time, on ___________, 1996 at the offices of Deutsche Bank, 31 West 52nd Street,
5th Floor, New York, New York for the following purposes:
1. To change the Fund's subclassification under the Investment Company
Act of 1940, as amended, from a diversified to a non-diversified
company.
2. To consider and act upon any other business as may come before the
meeting or any adjournment thereof.
Only holders of record of Common Stock at the close of business on
____________, 1996 are entitled to notice of and to vote at this meeting or any
adjournment thereof.
Robert R. Gambee
Secretary
Dated: ______________, 1996
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.
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THE GERMANY FUND, INC.
31 West 52nd Street
New York, New York 10019
Special Meeting of Stockholders
__________, 1996
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PROXY STATEMENT
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This proxy statement is furnished by the Board of Directors of The Germany
Fund, Inc. (the "Fund") in connection with the solicitation of proxies for use
at a Special Meeting of Stockholders (the "Meeting") to be held at ____ [A.M./
P.M.], New York time, on _________________ at the offices of Deutsche Bank, 31
West 52nd Street, 5th Floor, New York, New York, and any adjournments thereof.
The purpose of the Meeting and the matters to be acted upon are set forth in the
accompanying Notice of Special 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 change in subclassification. 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 ____________, 1996 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 ____________ 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
Special Meeting, Proxy Statement and form of Proxy will first be mailed to
stockholders on or about _______________, 1996.
The change in subclassification (Proposal 1) requires the affirmative vote
of the holders of the lesser of (i) more than 50% of the shares outstanding, or
(ii) 67% or more of the shares present at the Meeting if more than 50% of the
outstanding shares are present at the Meeting. 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. If a proxy is properly executed and returned
accompanied by instructions to withhold authority to vote, it represents a
broker "non-vote" (that is, a proxy from a broker or nominee indicating that
such person has not received instructions from the beneficial owner or other
person entitled to vote shares on a particular matter with respect to which the
broker or nominee does not have discretionary power). Because of the affirmative
vote required for Proposal 1, abstentions and broker non-votes will have the
same effect as votes cast "against" Proposal 1.
The date of this Proxy Statement is _______________, 1996.
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PROPOSAL 1: CHANGE OF SUBCLASSIFICATION UNDER THE 1940 ACT
At present, the Fund is subject to portfolio diversification requirements
imposed by the diversification requirements applicable to regulated investment
companies under the U.S. Internal Revenue Code of 1986 (the "Code"), and by the
Fund's current subclassification under the Investment Company Act of 1940, as
amended (the "1940 Act") as a diversified investment company.
Deutsche Morgan Grenfell/C.J. Lawrence Inc., the Fund's manager (the
"Manager") and Deutsche Asset Management GmbH (the "Investment Adviser"), have
found the diversification requirements of the 1940 Act to be the most
constraining of the two sets of diversification requirements. The Manager, the
Investment Adviser and the Fund's Board of Directors believe that the Fund would
have greater investment flexibility if the Fund changed its subclassification
under the 1940 Act so that the Fund would no longer be subject to the
diversification requirements of the 1940 Act. To this end, the Board of
Directors recommends that the Fund's shareholders approve the change in the
Fund's subclassification under the 1940 Act from a diversified company to a
non-diversified company. The Fund would remain subject to the diversification
requirements applicable to it under the Code.
Under the 1940 Act, a diversified company must have at least 75% of the
value of its total assets represented by cash and cash items (including
receivables), U.S. Government securities, securities of other investment
companies, and other securities limited in respect of any one issuer to an
amount not greater in value than 5% of the value of the total assets of the
investment company, and to not more than 10% of the outstanding voting
securities of such issuer.
Under the Code, to qualify as a regulated investment company, the Fund
must, among other things, diversify its holdings so that, at the end of each
quarter of its taxable year, (i) at least 50% of the market value of the Fund's
total assets is represented by cash (including cash items and receivables), U.S.
Government securities, and other securities, with such other securities limited,
for purposes of this calculation, in respect of any one issuer, to an amount not
greater in value than 5% of the value of the Fund's total assets and to not more
than 10% of the outstanding voting securities of such issuer; and (ii) not more
than 25% of the market value of its total assets is invested in the securities
(other than U.S. Government securities) of any one issuer, or any two or more
issuers that are controlled by the Fund and that are engaged in the same,
similar, or related businesses.
Therefore, assuming the Fund were fully invested in equities, under the
Code, the Fund would be permitted to invest in as few as twelve companies, as of
the end of any quarter. While the relatively greater concentration in securities
of fewer issuers that would be permitted to the Fund would reduce
diversification of risk and could result in greater fluctuation in the prices of
the Fund's portfolio securities, it would also reflect the German securities
market, in that securities of relatively few companies account for a greater
share of the capitalization of the market than is the case in the United States.
For example, the Deutsche Aktienindex (the "DAX Index"), the widely followed
stock index of the 30 largest German companies (by market capitalization and
stock exchange turnover) compiled by the Frankfurt stock exchange and the index
which the Manager and the Investment Adviser view as the most important for
measuring Fund performance, includes 7 stocks that comprise over 5% of the DAX
Index (excluding the stock of Deutsche Bank A.G., in which the Fund is
prohibited from investing under the 1940 Act and which represents 6.9% of the
DAX Index). The privatization and listing of Deutsche Telekom, which the Manager
and Investment Adviser believe would likely become an over-5% component of the
DAX Index and which is anticipated to occur later this year, would exacerbate
this problem.
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The 1940 Act diversification requirements in effect prevent the Fund from
taking over-5% positions in more than 4 stocks. The Fund might wish to take more
of these over-5% positions either to replicate the DAX Index (excluding Deutsche
Bank stock) or to overweight certain of the larger component stocks relative to
their DAX Index weightings, or to take a significant position in another stock
regarded as especially attractive.
If the Proposal is adopted, the Board of Directors will adopt a policy
limiting the Fund's investment in the securities of any single issuer to not
more than 15% of the Fund's total assets. Although this policy would be
non-fundamental (i.e., changeable by the Board of Directors without a
stockholder vote), the Board of Directors is not aware of any circumstance in
which it would seek to modify the policy.
The Board unanimously recommends a vote FOR Proposal 1.
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Required Vote. The affirmative vote of the holders of the lesser of: (i)
more than 50% of the shares outstanding, or (ii) 67% or more of the shares
present at the Meeting if more than 50% of the outstanding shares are present at
the Meeting.
ADDRESS OF INVESTMENT ADVISER AND MANAGER
The principal office of the Investment Adviser is located at Bockenheimer
Landstrasse 42, 60323 Frankfurt am Main, Federal Republic of Germany. The
corporate office of the Manager is located at 31 West 52nd Street, New York, New
York 10019.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of ___________, 1996, no person, to the knowledge of management, owned
of record or beneficially more than 5% of the outstanding Common Stock of the
Fund.
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 arise,
including any question as to an adjournment of the Meeting, the persons named in
the enclosed Proxy will vote thereon according to their best judgment in the
interests of the Fund.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Fund's Annual Meeting
of Stockholders in 1997 must be received by the Fund on or before January 10,
1997, in order to be included in the Fund's proxy statement and form of proxy
relating to that meeting.
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EXPENSES OF PROXY SOLICITATION
The cost of preparing, assembling and mailing material in connection with
this solicitation will be borne by the Fund. In addition to the use of mails,
proxies may be solicited personally by regular employees of the Fund or the
Manager or by telephone or telegraph. Brokerage houses, banks and other
fiduciaries may be requested to forward proxy solicitation materials to their
principals to obtain authorization for the execution of proxies, and they will
be reimbursed by the Fund for out-of-pocket expenses incurred in this
connection. The Fund has also made arrangements with Morrow & Co., Inc. to
assist in the solicitation of proxies, if called upon by the Fund, at an
estimated fee of $6,500 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 December 31, 1995 to any stockholder upon request. Such
requests should be directed by mail to The Germany Fund, Inc., 31 West 52nd
Street, New York, New York 10019 or by telephone to 1-800-GERMANY.
Robert R. Gambee
Secretary
Dated: _______________, 1996
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.
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Attachment A
PROXY THE GERMANY FUND, INC.
31 West 52nd Street
New York, New York 10019
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert R. Gambee and Joseph Cheung as
Proxies, each with the power of substitution, and hereby authorizes each of them
to represent and to vote, as designated below, all the shares of common stock of
The Germany Fund, Inc. (the "Fund") held of record by the undersigned on
___________, 1996 at a Special Meeting of Stockholders to be held on __________,
1996 or any adjournment thereof.
1. TO CHANGE THE FUND'S SUBCLASSIFICATION UNDER THE INVESTMENT COMPANY
ACT OF 1940, AS AMENDED, FROM A DIVERSIFIED TO A NON-DIVERSIFIED
COMPANY.
[ ] APPROVE [ ] DISAPPROVE [ ] ABSTAIN
2. TO CONSIDER AND ACT UPON ANY OTHER BUSINESS AS MAY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
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This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR Proposal 1.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please provide the full name
of the corporation and the signature of the authorized officer signing on its
behalf.
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Name (please print)
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Name of Corporation (if applicable)
(By) (Date) 1996
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(Signature)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY USING THE ENCLOSED ENVELOPE.
