PRELIMINARY COPIES
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
The Korea Fund, Inc.
345 Park Avenue
New York, New York 10154-0010
May 19, 1997
Mr. John Grzeskiewicz
Division- --------------------------------------------------------------------------------
(Name of Investment Management
SecuritiesRegistrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Korea Fund, Inc. (the "Fund")
Dear Mr. Grzeskiewicz:
In accordanceAct Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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PRELIMINARY COPIES
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with paragraph (a) of Rule 14a-6 under the Securities and Exhange
Act of 1934, enclosed for electronic filing herewith, please find a preliminary copymaterials.
[ ] Check box if any part of the Noticefee 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 Annual Meeting, Proxyits filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration 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/mmpNo.:
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(3) Filing Party:
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(4) Date Filed:
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Preliminary CopyPRELIMINARY COPIES
[LOGO] 345 Park Avenue (at 51st Street)
New York, New York 10154
The Korea Fund, Inc. (800) 349-4281
June 10, 1997September 30, 1999
To the Stockholders:
TheAs you know, the Annual Meeting (the "Meeting") of the Stockholders of The Korea
Fund, Inc. (the "Fund") is to be held at 2:scheduled for 10:00 p.m.a.m., Eastern time, on Tuesday, July 22, 1997,Wednesday,
October 20, 1999, at the offices of Scudder Stevens & Clark,Kemper Investments, Inc., 25th
Floor, 345 Park Avenue (at 51st Street), New York, New York 10154. At the
Meeting, the stockholders will elect three Directors and consider the
ratification of the selection of PricewaterhouseCoopers LLP as the Fund's
independent accountants. In preparation for the Meeting, the Fund mailed to you
a Notice of Meeting, a Proxy Statement and proxy card concerning these matters
on or about September 1, 1999.
Since these materials were mailed to you, approximately one-third of the common
stock of Daewoo Securities Co., Ltd. ("Daewoo") was acquired by a consortium of
Korean banks (the "Transaction"). Daewoo Capital Management Co., Ltd. ("Daewoo
Capital"), a subsidiary of Daewoo, is the Korean sub-adviser to the Fund and
serves pursuant to a sub-advisory agreement which provides that it shall
automatically terminate in the event of an "assignment," as that term is defined
in the Investment Company Act of 1940. The Transaction may constitute such an
"assignment." Accordingly, the Fund's Board of Directors has approved a new
sub-advisory agreement (the "New Sub-Advisory Agreement"), pursuant to which
Daewoo Capital will continue to serve as the Korean sub-adviser to the Fund
after the Transaction. The New Sub-Advisory Agreement requires stockholder
approval. The Board of Directors hereby notifies the stockholders that this
additional item will be considered at the Meeting as "Proposal 3." An Additional
Proxy Statement is attached to inform you about this additional proposal. Your
Fund's Directors recommend that you vote to approve the New Sub-Advisory
Agreement.
Stockholders who are unable to attend this meetingthe Meeting are strongly encouraged to
vote by proxy, which is customary in corporate meetings of this kind. A Proxy Statement regarding the meeting, arevised
proxy card for your vote at the meetingMeeting and an envelope--postage prepaid--inenvelope, postage prepaid, in
which to return your revised proxy card are enclosed. AtPlease sign and return 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 accountantsenclosed revised proxy card at your earliest convenience, even if you have
previously submitted a proxy card.
Thank you for your prompt attention to this matter, 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.we apologize for any
inconvenience.
Respectfully,
/s/Nicholas Bratt /s/Juris Padegs
------------------ -------------------
Nicholas Bratt Juris Padegs
President Chairman of the Board
STOCKHOLDERS ARE URGED TO SIGN THE
PRELIMINARY COPIES
ADDITIONAL 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.
STATEMENT
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.
PROXY STATEMENTANNUAL MEETING OF STOCKHOLDERS
OCTOBER 20, 1999
GENERAL
This Additional Proxy Statement is furnished in connection
with the solicitation of proxies by the Board of Directors of The Korea Fund,
Inc., a Maryland corporation (the "Fund"), for use at the Annual Meeting of
Stockholders, to be held at the offices of Scudder Stevens & Clark,Kemper Investments, Inc.
("Scudder"Scudder Kemper" or the "Investment Manager"), 25th Floor, 345 Park Avenue (at
51st Street), New York, New York 10154, on Tuesday, July 22, 1997Wednesday, October 20, 1999 at 2:10:00
p.m.a.m., Eastern time, and at any adjournments or postponements thereof
(collectively, the "Meeting").
This Additional Proxy Statement the Notice of Annual Meeting and the enclosed revised proxy
card are first being mailed to stockholders on or about June 10, 1997September 30, 1999, or
as soon as reasonably practicable thereafter. The enclosed materials are
provided in addition to the Proxy Statement, the notice of Annual Meeting and
the proxy card that were mailed to stockholders of the Fund on or about
September 1, 1999. In addition to proposals (1) and (2) detailed in the Proxy
Statement, the stockholders will be asked to consider the following proposal (3)
at the Meeting: To approve or disapprove a new Research and Advisory Agreement
with Daewoo Capital Management Co., Ltd., the Korean adviser to the Fund (the
"Korean Adviser"). The new Research and Advisory Agreement is substantially
identical to the prior agreement with the Korean Adviser.
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 and this Additional Proxy Statement.
Stockholders who have already voted by proxy should complete the enclosed
revised proxy card and mail it in the enclosed addressed, postage prepaid
envelope to the Secretary of the Fund at 345 Park Avenue, New York, New York
10154.
PRELIMINARY COPIES
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 neither 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.
Proposal 3, described in this Additional Proxy Statement,
requires the affirmative vote of a "majority of the outstanding voting
securities" of the Fund. The term "majority of the outstanding voting
securities," as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), and as used in this Additional Proxy Statement, means the
affirmative vote of the lesser of (i) 67% of the voting securities of the Fund
present at the Meeting if more than 50% of the outstanding voting securities of
the Fund are present in person or by proxy or (ii) more than 50% of the
outstanding voting securities of the Fund. Abstentions and brokerwill have the effect of a
"no" vote on Proposal 3. Broker non-votes will have the effect of a "no" vote for proposal (3)on
Proposal 3, which requires the approval of a specified percentage of the
outstanding shares of the Fund, if such vote is determined on the basis of
obtaining the affirmative vote of more than 50% of the outstanding voting
securities of the Fund. Broker non-votes will not constitute "yes" or "no"
votes, and will be disregarded in determining the voting securities "present" if
such vote is determined on the basis of the affirmative vote of 67% of the
voting securities of the Fund present at the Meeting with respect to Proposal 3.
Holders of record of shares of the common stock of the Fund at
the close of business on June 3, 1997August 25, 1999 (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.
According to filings with the Securities and Exchange
Commission on Schedule 13G made in February 1999, Merrill Lynch & Co., on behalf
of Merrill Lynch Asset Management Group, World Financial Center, North Tower,
250 Vesey Street, New York, New York 10381, reported beneficial ownership of
3,082,479 shares, or 6.1% of the Fund's outstanding shares.
PRELIMINARY COPIES
Except as noted above, to the best of the Fund's knowledge, as
of June 30, 1999, no persons owned beneficially more than 5% of the Fund's
outstanding stock.
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 a1999 or an additional copy of the semi-annualsemiannual
report for the six-month period ended December 31, 1996,1998, without charge, by
calling 800-349-4281 or writing the Fund at 345 Park Avenue, New York, New York
10154.
(1) ELECTION
PRELIMINARY COPIES
PROPOSAL 3: APPROVAL OR DISAPPROVAL 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
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:
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.
2
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:
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.
3
Class II
- --------
Directors serving until 1999 Annual Meeting of Stockholders:
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%
- --------------------------
* 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
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,A NEW RESEARCH AND ADVISORY AGREEMENT
WITH THE KOREAN ADVISER
Daewoo Capital Management Co., Ltd., which
is a wholly owned subsidiary of Daewoo
Securities Co., Ltd. ("Daewoo Securities"), or because he
is an Officerthe Korean Adviser to the Fund.
As more fully described below, approximately 32.58% in aggregate of the Fund or both.
+ Messrs. Bratt and Padegs are memberscommon
stock 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 theDaewoo 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,has been acquired 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
Audit Committee
The Board has an Audit Committee, consisting of Messrs. Callander,
Gleysteen, Sang C. Lee, Tai Ho Lee, Nolen and Patrick, the Directors whoSeptember 22, 1999 by nine
Korean banks that are not
interested persons of the Fund, of Scudder, orcreditors of Daewoo Capital Management Co.,
Ltd. ("Noninterested Directors"Securities (the "Transaction"), 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:
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
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.
(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
Compensation Table
for the year ended December 31, 1996
------------------------------------------------------------------------------------------------------------
(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
------------------------------------------------------------------------------------------------------------
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)
------------------------------------------------------------------------------------------------------------
+++ 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,On
July 20, 1999, the Board of Directors of the Fund includingvoted to approve the
continuance of a majorityResearch and Advisory Agreement between Scudder Kemper and the
Korean Adviser (the "Former Sub-Advisory Agreement") that was submitted to
stockholders and approved at a special meeting 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,held on December 17,
1998. Coopers & Lybrand L.L.P. are independent accountants and have
advised the FundThe Former Sub-Advisory Agreement, dated September 7, 1998, provides that
they have no direct financial interest or material
indirect financial interestit shall automatically terminate in the Fund. One or more representativesevent 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"assignment," as that term
is defined in the Fund's annual and semiannual reports.1940 Act. The Fund's financial statements for the
fiscal year ended June 30, 1997 will also be audited by Coopers & Lybrand L.L.P.
8
Required Vote
Ratificationconsummation of the selection of independent accountants requires the
affirmative vote of a majorityTransaction may be deemed to
have constituted an assignment 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.Former Sub-Advisory Agreement and,
therefore, to have caused it to terminate. The Board of Directors has unanimously approved and recommendsbelieves that
it is important for the Fund to continue to have access to the stockholders the adoption of an amendment to the Articles of Incorporationservices of the
Fund which would increaseKorean Adviser. Accordingly, a new Research and Advisory Agreement (the "New
Sub-Advisory Agreement" and, together with the number of authorized shares of Common Stock
from 50,000,000 to 200,000,000. The proposed amendment would be effectuatedFormer Sub-Advisory Agreement,
the "Sub-Advisory Agreements") between Scudder Kemper and the Korean Adviser was
approved 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 eachthe Fund on September 23, 1999 and is now
being proposed for approval by the stockholders of the above named individualsFund as Proposal 3. The
New Sub-Advisory Agreement is serving as a Managing Directorsubstantially identical to the Former Sub-
Advisory Agreement, except for the dates of Scudder.
Allexecution and termination. The
material terms of the outstanding voting and nonvoting securities of ScudderSub-Advisory Agreements are held
of record by Stephen R. Beckwith, Juris Padegs, Daniel Pierce and Edmond D.
Villani in their capacity as the representatives (the
9
"Representatives")described under "Description
of the beneficial ownersSub-Advisory Agreements" below. A form of such securities, pursuantthe New Sub-Advisory Agreement
is attached hereto as Exhibit A.
The Proxy Statement for the Meeting scheduled for October 20,
1999 was mailed to a
Security Holders' Agreement amongstockholders of the Fund on or about September 1, 1999. The
Korean Adviser and Scudder Kemper became aware of the beneficial ownersTransaction after the
mailing of securities
ofthat Proxy Statement. Accordingly, this Additional Proxy Statement
provides information about the Korean Adviser, the Transaction, and the
Sub-Advisory Agreements.
On September 24, 1999, the Korean Adviser and Scudder and such Representatives. PursuantKemper
submitted an application (the "Application") to the Security Holders'Securities and Exchange
Commission for an order ("Order") under Section 6(c) of the 1940 Act that would
provide exemptive relief from Section 15(a) of the 1940 Act. The Order, if
granted, would permit the implementation, without prior stockholder approval, of
the New Sub-Advisory Agreement. The
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Application requests that the Order cover a period beginning on the date that
the Board of Directors of the Fund approved the New Sub-Advisory Agreement
(September 23, 1999) and ending no later than December 31, 1999 (the "Interim
Period"), and that the Representatives haveOrder permit the rightpayment of all fees earned by the Korean
Adviser under the New Sub-Advisory Agreement during the Interim Period, subject
to reallocate shares amongstockholder approval or disapproval. The Application states that any fees
paid during the beneficial owners from timeInterim Period will not be greater than the fees paid to time. Such reallocationsthe
Korean Adviser under the Former Sub-Advisory Agreement. Prior to approval by the
stockholders of the New Sub-Advisory Agreement, any fees otherwise due under
such sub-advisory agreement will be at net book
valueheld in cash transactions. All Managing Directorsescrow subject to stockholder
approval. If the stockholders of Scudder own voting and
nonvoting stock and all Principals own nonvoting stock. For the fiscal year
ended June 30, 1996, the Fund do not approve the New Sub-Advisory
Agreement, such fees shall be paid Scudder an investment management fee of
$7,516,289.
Korean Adviserto the Fund.
DESCRIPTION OF THE KOREAN ADVISER
The Korean Adviser, an investment adviser registered under the
United
States Investment Advisers Act of 1940, as amended, was organized in February 1988
under the laws of the Republic of Korea. The address of the Korean Adviser is
34-3 Youido-dong, Yongdungpo- gu, Seoul, Korea. The Korean Adviser is wholly
owned by Daewoo Securities. The address of Daewoo Securities Co., Ltd.,is Daewoo
Securities Building, 34-3 Youido-dong, Yongdung
po-gu,Yongdungpo-gu, Seoul, Korea.
Scudder Kemper indicated to the Korean Adviser by letter,
dated March 19, 1999, that it is interested in acquiring up to 100% of the
common stock of the Korean Adviser. While Scudder Kemper and the Korean Adviser
continue to examine a proposed transaction, no definitive agreement exists, and
there can be no assurance as to when or if such a transaction may take place.
The table below sets forth the name, principal occupation and
address of the principal executive officer and each director of the Korean
Adviser.
NAME AND POSITION
WITH KOREAN ADVISER PRINCIPAL OCCUPATION ADDRESS
- ------------------- -------------------- -------
Se-Geun Lee President, Daewoo Capital 17-805 Hyundai Apt.,
President Management Co., Ltd. Mynngil-Dong,
Kangdong-Gu, Seoul,
Korea
Dong-Wook Park Director, Daewoo Capital 707-203 Jungbal Town,
Director Management Co., Ltd. 1004 Madu-Dong, Koyang,
Kyungki Province, Korea
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Ki-Ho Ohm Auditor, Daewoo Capital 327-301 Mokdong
Auditor Management Co., Ltd. New Complex Apt.,
Yangchun-Gu, Seoul,
Korea
THE TRANSACTION
Based on information provided to the largestFund by the Korean
securities firm in termsAdviser, prior to August 30, 1999, the common stock 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.the
parent of the Korean Adviser, was owned approximately 85% by the public and
approximately 15% by Daewoo Corporation and certain affiliates of Daewoo
Corporation, ownwhich are members of the Daewoo Group, a Korean conglomerate or
"chaebol." Like a number of the other chaebols, the Daewoo Group has been
experiencing financial difficulties over the past several months.
On August 30, 1999, certain members of the Daewoo Group
entered into an agreement with a group of six Korean creditor banks, pursuant to
which such members agreed to transfer their interests in Daewoo Securities to
the creditor banks. As a result of this transfer, the following six creditor
banks jointly acquired ownership of approximately 12.98%14.5% of the outstanding
common stock of Daewoo Securities: Korea Exchange Bank (181, Euljiro 2-ga,
Chung-ku, Seoul, Korea); The Korea Development Bank (10-2, Kwanchul- dong,
Chongro-ku, Seoul, Korea); Cho Hung Bank (14, Namdaemoon-ro 1-ga, Chung-ku,
Seoul, Korea); Hanvit Bank (130, Namdaemoon-ro 2-ga, Chung-ku, Seoul, Korea);
Korea First Bank (100, Kongpyung-dong, Chongro-ku, Seoul, Korea); and Seoul Bank
(10-1, Namdaemoon-ro 2-ga, Chung-ku, Seoul, Korea). Since August 30, 1999, the
following three additional Korean banks have been added to the group of creditor
banks to form a group of nine creditor banks (the "Creditor Banks"): KorAm Bank
(Hanmie Building #1, Gongpyung-dong, Chongro-ku, Seoul, Korea); Hana Bank
(101-1, Euljiro 1-ga, Chung-ku, Seoul, Korea); and Kookmin Bank (9-1,
Namdaemoon-ro 2-ga, Chung-ku, Seoul, Korea). The three additional creditor banks
have no ownership in the common stock 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
10acquired by the six
banks as a result of the August 30, 1999 agreement. On September 7, 1999, Daewoo
Securities conducted a rights issuance pursuant to which each of the Creditor
Banks subscribed on an individual basis to acquire on September 21, 1999 newly
issued shares of common stock of Daewoo Securities. In addition, each of the
Creditor Banks agreed to acquire on an individual basis new shares of common
stock of Daewoo Securities through third-party allotments. Both acquisitions of
new shares closed on September 22, 1999, and resulted in each of the Creditor
Banks acquiring approximately an additional 2% of the outstanding common stock
of Daewoo Securities. Together, the acquisitions by the Creditor Banks of the
common stock of Daewoo Securities are referred to
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as the "Transaction." Upon completion of the Transaction, the Creditor Banks
owned in the aggregate approximately 32.58% of the common stock of Daewoo
Securities.
The Korean Adviser has advised the following BoardFund that the Transaction
will have no effect on Daewoo Securities' ownership of Directors:
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
Brokerage Commissions on Portfolio Transactions
To the maximum extent feasible, Scudder places ordersKorean Adviser. The
portfolio managers for portfolio
transactions through Scudder Investor Services, Inc. (the "Distributor") (a
corporation registeredthe Fund will not change as a broker/dealerresult of the Transaction.
The Creditor Banks have indicated that they will make attempts
to find an investor to purchase their interests in Daewoo Securities.
Accordingly, there can be no assurance that future events in Korea will not
result in a change in the ownership of Daewoo Securities or the Korean Adviser.
DESCRIPTION OF THE SUB-ADVISORY AGREEMENTS
Scudder Kemper acts as the investment adviser to and a subsidiary of Scudder), which in
turn places orders on behalfmanager
and administrator of the Fund pursuant to an Investment Advisory, Management and
Administration Agreement, dated as of September 7, 1998. Each of the
Sub-Advisory Agreements provides that the Korean Adviser shall furnish Scudder
Kemper with issuers, underwriters or other
brokersinformation, investment recommendations, advice and dealers. The Distributor receives no commissions, fees or other
remunerationassistance as
Scudder Kemper from time to time reasonably requests. In addition, each of the
Sub-Advisory Agreements provides that the Korean Adviser shall maintain a
separate staff within its organization to furnish such services exclusively to
Scudder Kemper. For the benefit of the Fund, the Korean Adviser has agreed to
pay the fees and expenses of any directors or officers of such Fund who are
directors, officers or employees of the Korean Adviser or its affiliates, except
that the Fund has agreed to bear certain travel expenses of such director,
officer or employee to the extent such expenses relate to the attendance as a
director at a meeting of the Board of Directors of the Fund.
A form of the New Sub-Advisory Agreement is attached hereto as
Exhibit A. THE NEW SUB-ADVISORY AGREEMENT FOR THE FUND IS SUBSTANTIALLY
IDENTICAL TO THE FORMER SUB-ADVISORY AGREEMENT, EXCEPT FOR THE DATES OF
EXECUTION AND TERMINATION.
In return for this service. Allocationthe services it renders under the Sub-Advisory
Agreements, the Korean Adviser is paid by Scudder Kemper monthly compensation
which, on an annual basis, is equal to 0.2875% of portfolio
transactions will be supervised by Scudder.the value of the Fund's net
assets up to and including $50 million; 0.2750% of such assets on the next $50
million; 0.2500% of such assets on the next $250 million; 0.2375% of such assets
on the next $400 million; and 0.2250% of such assets in
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excess of $750 million. During the fiscal year ended June 30, 1996,1999, the fees
paid by Scudder Kemper to the Korean Adviser, pursuant to the Former
Sub-Advisory Agreement, amounted to $1,234,267.10.
Each of the Sub-Advisory Agreements further provides that the
Korean Adviser shall not be liable for any act or omission in the course of, in
connection with or arising out of any services to be rendered under such
Sub-Advisory Agreement, except by reason of willful misfeasance, bad faith or
gross negligence on the part of the Korean Adviser in the performance of its
duties, or reckless disregard by the Korean Adviser of its obligations and
duties under such Sub-Advisory Agreement.
The New Sub-Advisory Agreement may be terminated without
penalty upon sixty (60) days' written notice by either the Fund's Board of
Directors or the Korean Adviser, or by vote of a "majority of the outstanding
voting securities of the Fund," and automatically terminates in the event of the
termination of the Fund's currently effective investment advisory, management
and administration agreement with Scudder Kemper or in the event of its
assignment.
The New Sub-Advisory Agreement is dated as of September 23,
1999 and provides that it will be in effect for a term ending on September 23,
2000, and may continue thereafter from year to year if specifically approved at
least annually by the vote of "a majority of the outstanding voting securities"
of the Fund or by the Fund's Board of Directors and, in either event, the vote
of a majority of the Fund's Non-Interested Directors (as defined below) cast in
person at a meeting called for that purpose. In the event that stockholders of
the Fund do not approve the New Sub-Advisory Agreement, it will terminate. In
such event, the Board of Directors will take such action as it deems to be in
the best interests of the Fund and its stockholders.
The Fund's license to invest in Korean securities provides
that, should the Fund appoint a successor manager or Korean Adviser or terminate
the services of the Investment Manager or the Korean Adviser, approval by the
Korean Minister of Finance and Economy would be required. The license provides
that such approval will not be unreasonably withheld.
During the fiscal year ended June 30, 1999, there were no
brokerage commissions on investment transactions paid by the Fund to Daewoo
Securities Co., Ltd.
("Daewoo Securities"Securities.
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BOARD OF DIRECTORS' EVALUATION
At an in-person special meeting held on September 23, 1999,
the Board of Directors, including a majority of the Directors who are not
parties to such agreement or "interested persons" (as defined in the 1940 Act)
(the "Non-Interested Directors"), with respectvoted to approve the New Sub-Advisory
Agreement. The Board of Directors of the Fund considered the Korean Adviser's
position as a leading firm in Korea in developing investment research
capabilities; information submitted by the Korean Adviser as to revenues and
expenses; information relating to the execution of portfolio transactions for
the Fund was
paid $295,613, which amounted to 13.45%by an affiliate of total brokerage commissions paid. The
Fund'sthe Korean Adviser; and various other factors.
During the course of their deliberations, the Non-Interested
Directors considered a variety of factors, including: the nature, quality and
extent of the services furnished by the Korean Adviser is a subsidiaryto the Fund; the
necessity of Daewoo Securities.
Other Mattersthe Korean Adviser's maintaining and enhancing its ability to
retain and attract capable personnel to serve the Fund; the investment advisory
record of the Korean Adviser in providing assistance to the Fund; the license
held by the Fund to invest in Korea; the experience of the Korean Adviser in the
field of investing in Korea; possible economies of scale; the risks assumed by
the Korean Adviser; the advantages and possible disadvantages to the Fund of
having an adviser of the Fund that also serves other investment companies as
well as other accounts; the financial resources of the Korean Adviser and the
continuance of appropriate incentives to assure that the Korean Adviser will
continue to furnish high-quality services to the Fund; and various other
factors.
In addition to the foregoing factors, the Non-Interested
Directors gave careful consideration to the likely impact of the Transaction on
the Korean Adviser's organization. In this regard, the Non-Interested Directors
considered, among other things, the fact that the Transaction does not appear to
alter in any material respect the operation of the Korean Adviser. The Korean
Adviser advised Scudder Kemper that the Transaction would have no material
effect on the Korean Adviser's personnel assigned to the Fund and no material
effect on the Fund or its stockholders. Scudder Kemper also advised the Board of
Directors does not knowthat it would continue monitoring the status of the Transaction and
related events pertaining to the Korean Adviser and its affiliates, and Scudder
Kemper assured the Board of Directors that it would use its best efforts to
advise it of any mattersmaterial events related thereto. Based on the foregoing, the
Non-Interested Directors concluded that the Transaction should cause no
reduction in the quality of services provided to be brought before
the Meeting other than those mentionedFund.
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DIFFERENCES BETWEEN THE FORMER
AND NEW SUB-ADVISORY AGREEMENTS
The New Sub-Advisory Agreement is substantially identical to
the Former Sub-Advisory Agreement, except for the dates of execution and
termination.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT THE STOCKHOLDERS OF THE FUND
VOTE IN FAVOR OF THIS PROPOSAL 3.
ADDITIONAL INFORMATION
All information contained in thisthe Proxy Statement. The appointed
proxies will voteStatement mailed on any other business that properly comes before the Meeting
or
any adjournments thereof in accordance with their best judgment.
11
Miscellaneous
Proxies will be solicited by mail and may be solicited in person or by
telephone or facsimile by Officersabout September 1, 1999 to stockholders of the Fund, including, but not limited
to, information regarding (i) committees of the Board of Directors of the Fund
(including, but not limited to, information regarding the membership and
frequency of meetings of such committees), (ii) compensation received by
Directors and officers of the Fund and (iii) the principal accountant for the
Fund, is hereby incorporated by reference.
The cost of preparing, printing and mailing the enclosed
revised proxy card and this Additional Proxy Statement and all other costs
incurred in connection with the solicitation of proxies, including any
additional solicitation made by letter, telephone or personneltelegraph, will be paid by
the Korean Adviser or its affiliates without any reimbursement from the Fund or
the Investment Manager. In addition to solicitation by mail, certain officers
and representatives of Scudder. Thethe Fund, officers and employees of Scudder Kemper and
certain financial services firms and their representatives, who will receive no
extra compensation for their services, may solicit proxies by telephone, by
telegram or personally.
Shareholder Communications Corporation ("SCC"), 17 State
Street, New York, New York 10004, has retained Corporate Investor Communications, Inc., 111 Commerce Road,
Carlstadt, New Jersey, 07072-2586been engaged to assist in the proxy solicitation.solicitation
of proxies. The cost of their services is estimated at $5,500. The expenses connected$3,500 plus expenses. As
the Meeting date approaches, certain stockholders of the Fund may receive a
telephone call from a representative of SCC if their votes have not yet been
received. Authorization to permit SCC to execute proxies may be granted by
telephonic or electronically transmitted instructions from stockholders of the
Fund. Proxies that are obtained telephonically will be recorded in accordance
with the solicitationprocedures set forth below. The Directors believe that these procedures
are reasonably designed to ensure that the identity of the proxiesstockholder casting
the vote is accurately determined and with any further proxies which may bethat the voting instructions of the
stockholder are accurately determined.
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In all cases where a telephonic proxy is solicited, by the Fund's OfficersSCC
representative is required to ask for each stockholder's full name, address,
social security or Corporate Investor Communications, Inc.employer identification number and title (if the stockholder
is authorized to act on behalf of an entity, such as a corporation), in person, by
telephone or by facsimile will be borne byand the
Fund. The Fund will reimburse
banks, brokersnumber of shares owned, and other persons holdingto confirm that the Fund's shares registered in their
names orstockholder has received the
proxy materials in the names of their nominees,mail. If the information solicited agrees with the
information provided to SCC, then the SCC representative has the responsibility
to explain the process, read the Proposals on each proxy card, and ask for their expenses incurred in sending
proxy materialthe
stockholder's instructions on the Proposals. The SCC representative, although he
or she is permitted to and obtaining proxies fromanswer questions about the beneficial owners of such
shares.
Inprocess, is not permitted to
recommend to the event that sufficient votes in favor ofstockholder how to vote, other than to read any proposalrecommendation
set forth in the Notice of MeetingProxy Statement or this Additional Proxy Statement. SCC will
record the stockholder's instructions on each card. Within 72 hours, the
stockholder will be sent a letter or mailgram confirming his or her vote and
asking the stockholder to call SCC immediately if his or her instructions are
not received by July 22, 1997,correctly reflected in the persons named as
appointed proxies on the enclosed proxy card may propose one or more
adjournments ofconfirmation.
If a stockholder wishes to participate in the Meeting, but
does not wish to permit further solicitation of proxies. Any such
adjournment will requiregive a proxy by telephone, the affirmative vote of the holders of a majority of
the shares presentstockholder may still attend in
person or by proxy atsubmit 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 whichoriginally sent with the Proxy Statement or the
revised proxy card enclosed with this Additional Proxy Statement. Should
stockholders require additional information regarding the proxy or replacement
proxy cards, 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 Proposalsmay contact SCC toll-free at 800-248-2681. Any proposalproxy given by
a stockholder, of the Fund intended to be presentedwhether in writing or by telephone, is revocable until voted at
the 1998 meeting of stockholders ofMeeting. Stockholders who have already voted by proxy should complete the
Fund must be received by Thomas F.
McDonough,enclosed revised proxy card and mail it in the enclosed addressed, postage
prepaid envelope to the Secretary of the Fund c/o Scudder, Stevens & Clark, Inc., at 345 Park Avenue, New York, New
York 10154.
Stockholders of the Fund wishing to submit proposals to be
presented at the 2000 meeting of stockholders of the Fund should send their
written proposals to John Millette, Secretary of the Fund, 345 Park Avenue, New
York, New York 10154 withinby May 3, 2000. The timely submission of a reasonable time beforeproposal does
not guarantee its inclusion.
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The Board of Directors of the solicitationFund is not aware of proxiesany matters
that will be presented for action at the Meeting other than Proposal (1),
Proposal (2) and Proposal (3). Should any other matters requiring a vote of
stockholders arise, the proxy in accompanying form will confer upon the
person(s) entitled to vote the shares represented by such stockholders meeting.proxy the
discretionary authority to vote the shares as to any other such matters in
accordance with their best judgment in the interest of the Fund.
By order of the Board of Directors,
Thomas F. McDonoughJohn Millette
Secretary
345 Park Avenue
New York, New York 10154
September 30, 1999
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EXHIBIT A
FORM OF NEW SUB-ADVISORY AGREEMENT
RESEARCH AND ADVISORY AGREEMENT
SCUDDER KEMPER INVESTMENTS, INC.
345 PARK AVENUE
NEW YORK, NEW YORK 10154
September __, 1999
Daewoo Capital Management Co., Ltd.
34-3 Youido-dong
Yongdungpo-gu
Seoul, Korea
Dear Sirs:
We have entered into an Investment Advisory, Management and Administration
Agreement (the "Management Agreement") dated as of September 7, 1998 with The
Korea Fund, Inc., a Maryland corporation (the "Fund"), pursuant to which we act
as investment adviser to and manager of the Fund. A copy of the Management
Agreement has been previously furnished to you. In furtherance of such duties to
the Fund, and with the approval of the Fund, we wish to avail ourselves of your
investment advisory services. Accordingly, with the acceptance of the Fund, we
hereby agree with you as follows for the duration of this Agreement:
1. You agree to furnish to us such information, investment
recommendations, advice and assistance as we shall from time to time
reasonably request. In that connection, you agree to continue to
maintain a separate staff within your organization to furnish such
services exclusively to us. In addition, for the benefit of the Fund,
you agree to pay the fees and expenses of any directors or officers of
the Fund who are directors, officers or employees of you or of any of
your affiliates, except that the Fund shall bear travel expenses of one
(but not more than one) director, officer or employee of you or of any
of your affiliates who is not a resident in the United States to the
extent such expenses relate to his attendance as a director at meetings
of the Board of Directors of the Fund in the United States and shall
also bear the travel expenses of any other director, officer or
employee of you or of any of your affiliates who is a resident in the
United States to the extent such expenses relate
A-1
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to his attendance as a director at meetings of the Board of Directors
outside of the United States.
2. We agree to pay in United States dollars to you, as
compensation for the services to be rendered by you hereunder, a
monthly fee which, on an annual basis, is equal to 0.2875% per annum of
the value of the Fund's net assets up to and including $50 million;
0.2750% per annum of the value of the Fund's net assets on the next $50
million of assets; 0.2500% per annum of the value of the Fund's net
assets on the next $250 million of assets; 0.2375% per annum of the
value of the Fund's net assets on the next $400 million of assets; and
0.2250% per annum of the value of the Fund's net assets in excess of
$750 million. For purposes of computing the monthly fee, the value of
the net assets of the Fund shall be determined as of the close of
business on the last business day of each month; provided, however,
that the fee for the period from the end of the last month ending prior
to termination of this Agreement, for whatever reason, to the date of
termination shall be based on the value of the net assets of the Fund
determined as of the close of business on the date of termination and
the fee for such period through the end of the month in which such
proceeds are received shall be prorated according to the proportion
which such period bears to a full monthly period. Each payment of a
monthly fee shall be made by us to you within the fifteen days next
following the day as of which such payment is so computed.
The value of the net assets of the Fund shall be determined
pursuant to applicable provision of the Certificate of Incorporation
and By-laws of the Fund.
We agree to work with you, in order to make our relationship
as productive as possible for the benefit of the Fund, to further the
development of your ability to provide the services contemplated by
Section 1. To this end we agree to work with you to assist you in
developing your research techniques, procedures and analysis. We have
furnished you with informal memoranda, copies of which are attached to
this Agreement, reflecting our understanding of our working procedures
with you, which may be revised as you work with us pursuant to this
Agreement. We agree not to furnish, without your consent, to any person
other than our personnel and directors and representatives of the Fund
any tangible research material that is prepared by you, that is not
publicly available, and that has been stamped or otherwise clearly
indicated by you as being confidential.
3. You agree that you will not make a short sale of any
capital stock of the Fund, or purchase any share of the capital stock
of the Fund otherwise than for investment.
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4. Your services to us are not to be deemed exclusive and you
are free to render similar services to others, except as otherwise
provided in Section 1 hereof.
5. Nothing herein shall be construed as constituting you an
agent of us or of the Fund.
6. You represent and warrant that you are registered as an
investment adviser under the U.S. Investment Advisers Act of 1940, as
amended. You agree to maintain such registration in effect during the
term of this Agreement.
7. Neither you nor any affiliate of yours shall receive any
compensation in connection with the placement or execution of any
transaction for the purchase or sale of securities or for the
investment of funds on behalf of the Fund, except that you or your
affiliates may receive a commission, fee or other remuneration for
acting as broker in connection with the sale of securities to or by the
Fund, if permitted under the U.S. Investment Company Act of 1940, as
amended (the "1940 Act").
8. We and the Fund agree that you may rely on information
reasonably believed by you to be accurate and reliable. We and the Fund
further agree that neither you nor your officers, directors, employees
or agents shall be subject to any liability for any act or omission in
the course of, connected with or arising out of any services to be
rendered hereunder except by reason of willful misfeasance, bad faith
or gross negligence in the performance of your duties or by reason of
reckless disregard of your obligations and duties under this Agreement.
9. This Agreement shall remain in effect until September __,
2000 and shall continue in effect thereafter, but only so long as such
continuance is specifically approved at least annually by the
affirmative vote of (i) a majority of the members of the Fund's Board
of Directors who are not interested persons of the Fund, you or us,
cast in person at a meeting called for the purpose of voting on such
approval, and (ii) a majority of the Fund's Board of Directors or the
holders of a majority of the outstanding voting securities of the Fund.
This Agreement may nevertheless be terminated at any time, without
penalty, by the Fund's Board of Directors or by vote of holders of a
majority of the outstanding voting securities of the Fund, upon 60
days' written notice delivered or sent by registered mail, postage
prepaid, to you, at your address given above or at any other address of
which you shall have notified us in writing, or by you upon 60 days'
written notice to us and to the Fund, and shall automatically be
terminated in the event of its assignment or of the termination (due
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to assignment or otherwise) of the Management Agreement, provided that
an assignment to a corporate successor to all or substantially all of
your business or to a wholly owned subsidiary of such corporate
successor which does not result in a change of actual control or
management of your business shall not be deemed to be an assignment for
purposes of this Agreement. Any such notice shall be deemed given when
received by the addressee.
10. This Agreement may not be transferred, assigned, sold or
in any manner hypothecated or pledged by either party hereto. It may be
amended by mutual agreement, but only after authorization of such
amendment by the affirmative vote of (i) the holders of a majority of
the outstanding voting securities of the Fund; and (ii) a majority of
the members of the Fund's Board of Directors who are not interested
persons of the Fund, you or us, cast in person at a meeting called for
the purpose of voting on such approval.
11. Any notice hereunder shall be in writing and shall be
delivered in person or by facsimile (followed by mailing such notice,
air mail postage paid, the day on which such facsimile is sent):
Addressed
If to Scudder Kemper Investments, Inc., to:
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, NY 10154
Attention: President
(Facsimile No. 212-319-7813)
If to Daewoo Capital Management Co., Ltd., to:
Daewoo Capital Management Co., Ltd.
34-3 Youido-dong
Yongdungpo-gu
Seoul, Korea
Attention: Chairman
(Facsimile No. 011-822-784-0826)
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or to such other address as to which the recipient shall have informed
the other party.
Notice given as provided above shall be deemed to have been given, if
by personal delivery, on the day of such delivery, and, if by facsimile
and mail, on the date on which such facsimile and confirmatory letter
are sent.
12. This Agreement shall be construed in accordance with the
laws of the State of New York, provided, however, that nothing herein
shall be construed as being inconsistent with the 1940 Act. As used
herein the terms "interested person," "assignment" and "vote of a
majority of the outstanding voting securities" shall have the meanings
set forth in the 1940 Act.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart hereof and return the same to us.
Very truly yours,
SCUDDER KEMPER INVESTMENTS, INC.
By:
-----------------------------------
Title:
The foregoing agreement is hereby accepted as of the date first above written.
DAEWOO CAPITAL MANAGEMENT CO., LTD.
By:
-----------------------------------
Title:
THE KOREA FUND, INC.
By:
-----------------------------------
Title:
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PLEASE VOTE YOUR PROXY TODAY!
YOUR VOTE IS IMPORTANT!
PLEASE SIGN AND RETURN PROMPTLY IN THE ENCLOSED POSTAGE PAID
ENVELOPE.
[LOGO]
PROXY THE KOREA FUND, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 20, 1999
The undersigned stockholder of The Korea Fund, Inc., a Maryland
corporation (the "Fund"), hereby appoints Juris Padegs, Kathryn L. Quirk and
Bruce H. Goldfarb, and each of them, as proxies for the undersigned, with full
power of substitution in each of them, to attend the Annual Meeting of
Stockholders of the Fund (the "Meeting"), 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 20, 1999 at 10:00 a.m., Eastern
time, and at any adjournments or postponements thereof, to cast on behalf of the
undersigned all votes that the undersigned is entitled to cast at the Meeting
and otherwise to represent the undersigned at the Meeting with all powers
possessed by the undersigned if personally present at the Meeting.
Unless otherwise specified in the squares provided, the undersigned's
vote will be cast FOR each numbered item listed below.
The Board members of the Fund, including those who are not affiliated
with the Fund or Scudder Kemper Investments, Inc., recommend that you vote FOR
these items.
Item 1. The election of Directors:
FOR all nominees listed below [ ]
(except as marked to the contrary below)
WITHHOLD AUTHORITY [ ]
to vote for all nominees listed below
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Nominees: Class II: Robert J. Callander, Tai Ho Lee and Kesop Yun
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
-------------------------------------------------
Item 2. Ratification of the selection of PricewaterhouseCoopers LLP
as independent accountants for the fiscal year ending June 10, 1997
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PROXY THE KOREA FUND, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders -- July 22, 1997
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 /_/
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:
------------------ --------------
30,
2000:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Item 3. To approve a new Research and Advisory Agreement between Scudder
Kemper Investments, Inc. and Daewoo Capital Management Co., Ltd.:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The proxies are authorized to vote in their discretion on any other business
which may properly come before the meeting and any adjournment thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as your name or names appear. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as
such.
-----------------------------------
Signature(s) of Stockholder(s) Dated __________, 1999
-----------------------------------
Signature(s) of Stockholder(s) Dated __________, 1999
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