PROXY STATEMENT OF PHILLIP GOLDSTEIN, A STOCKHOLDER OF THE NEW
GERMANY FUND, INC., IN OPPOSITION TO THE SOLICITATION BY THE
BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS (To be held on June 21, 2005)
I, Phillip Goldstein, a stockholder of The New Germany Fund, Inc.
(the "Fund"), am sending this proxy statement and the enclosed
GREEN proxy card to stockholders of record as of April 22, 2005
of the Fund. I am soliciting a proxy to vote your shares at the
Annual Meeting of Stockholders of the Fund (the "Meeting").
Please refer to the Fund's proxy soliciting material for
additional information concerning the Meeting and the matters to
be considered by stockholders including the election of
directors.
This proxy statement and the enclosed GREEN proxy card are first
being sent to stockholders of the Fund on or about May --, 2005.
INTRODUCTION
There are three matters that will be voted upon at the Meeting:
(1) the election of four directors; (2) ratification of the
appointment of the independent auditors; and (3) a proposal
recommending that stockholders be afforded an opportunity to
realize net asset value ("NAV") for their shares as soon as
practicable. I am soliciting a proxy to vote your shares FOR the
election of my nominees, and FOR Proposals 2 and 3.
How Proxies Will Be Voted
If you return a GREEN proxy card in the enclosed envelope, your
shares will be voted on each matter as you indicate subject to
the condition set forth in the following paragraph. If you do not
indicate how your shares are to be voted on a matter, they will
be voted FOR the election of my nominees, and FOR Proposals 2 and
3. If you return a GREEN proxy card, you will be granting the
proxy holders discretionary authority to vote on any other
matters that may come before the Meeting including matters
relating to the conduct of the Meeting.
Rule 14a-4(e) of the Securities Exchange Act of 1934 requires
that, subject to reasonable specified conditions, all shares
represented by proxy must be voted. The board of directors has
adopted a bylaw that purports to require nominees to meet onerous
qualifications which my nominees do not meet. Because I believe
these qualifications constitute an improper constraint by the
board on the right of stockholders to elect directors, I have
requested that the board waive them and agree to comply with rule
14a-4(e) by allowing all proxies to be voted as instructed and
counted. Thus far, the board has failed to do so and has failed
to disclose how it will treat my proxies. If, prior to the
Meeting, the board does not irrevocably agree to allow all
proxies to be voted as instructed and counted, the proxy holders
may not attend the Meeting and I intend to file a lawsuit to
require all proxies to be voted as instructed and counted. If
the proxy holders do not attend the Meeting your shares will not
be counted toward a quorum or voted unless and until a court
makes a determination as to how the Fund must treat them. If you
do not believe the foregoing condition is reasonably specified or
you unconditionally want your shares to be represented at the
Meeting even if the board does not agree to allow them to be
voted as you instruct and counted, you should not give me your
proxy.
Voting Requirements
The presence in person or by proxy of at least one-third of the
Fund's outstanding shares shall constitute a quorum. The four
nominees receiving the greatest number of votes cast will be
elected directors. Proposals 2 and 3 each require the
affirmative vote of a majority of the votes cast at the Meeting
for approval. Abstentions and broker non-votes are not treated
as shares voted and thus will have no impact on either proposal.
Revocation of Proxies
You may revoke any proxy prior to its exercise by (i) delivering
a written revocation of your proxy at the Meeting; (ii) executing
and delivering a later dated proxy; or (iii) voting in person at
the Meeting. (Attendance at the Meeting will not in and of itself
revoke a proxy.) There is no limit on the number of times you may
revoke your proxy prior to the Meeting. Only your latest dated
proxy will be counted.
Information Concerning the Soliciting Shareholder
I, Phillip Goldstein, the soliciting stockholder, am an
investment advisor. As of May --, 2005, I, my clients and
clients of my affiliates beneficially owned --------- shares of
the Fund, of which approximately ---------- shares have been
bought in 2005, approximately -------------- shares have been
bought in 2004 and approximately -------------- shares have been
bought in 2003. There have been no sales since January 1, 2003.
REASONS FOR THE SOLICITATION
At the Fund's annual meeting on June 22, 2004, stockholders
approved by a margin of 61% to 39% a proposal requesting the
board of directors to promptly take the steps necessary to open-
end the Fund or otherwise enable stockholders to realize net
asset value for their shares. The board has refused to implement
that proposal. I am submitting a similar proposal (Proposal 3)
this year and intend to nominate candidates for election as
directors that are committed to implementing the proposal if it
is adopted.
PROPOSAL 1: ELECTION OF DIRECTORS
At the Meeting, I intend to nominate the following persons for
election as directors. Each nominee has consented to being named
in this proxy statement and to serve as a director if elected.
None of my nominees has any arrangement or understanding with any
person with respect to employment by or transactions with the
Fund or any affiliate of the Fund. I do not know of any material
conflicts of interest that would prevent any of my nominees from
acting in the best interest of the Fund. Please refer to the
Fund's proxy soliciting material for additional information
concerning the election of directors.
Gerald Hellerman (67), 10965 Eight Bells Lane, Columbia, MD 21044
Principal of Hellerman Associates, a financial and corporate
consulting firm since 1993 ; director of The Mexico Equity and
Income Fund; director and President of Innovative Clinical
Solutions, Ltd., director of Frank's Nursery & Crafts, director
of MVC Capital; director of Brantley Capital Corporation. Mr.
Hellerman is presently serving as Manager-Investment Advisor for
a U.S. Department of Justice Settlement Trust. Mr. Hellerman has
served as a Trustee or Director of Third Avenue Value Trust, a
Trustee of Third Avenue Variable Series Trust, and a Director of
Clemente Strategic Value Fund.
Phillip Goldstein (60), 60 Heritage Drive, Pleasantville, NY
10570
Investment advisor to Opportunity Partners L.P., an activist-
oriented private investment fund, and other clients since 1992.
Mr. Goldstein has been a director of Brantley Capital Corporation
since 2002, The Mexico Equity and Income Fund since 1999 and both
The Emerging Markets Telecommunications Fund and The First Israel
Fund since 2005.
Andrew Dakos (38), 43 Waterford Drive, Montville, NJ 07045
Mr. Dakos has been President of Elmhurst Capital, Inc., an
investment advisory firm, since 2000. Mr. Dakos has also been a
Managing Member of the general partner of Full Value Partners
L.P., an investment partnership, since 2001. In addition, Mr.
Dakos is President & CEO of UVitec Printing Ink Inc., a
manufacturing firm. Mr. Dakos also currently serves as Director
and Chairman of the Audit Committee of The Mexico Equity and
Income Fund Inc., a publicly traded company.
Rajeev Das (36), 68 Lafayette Avenue, Dumont, NJ 07628
Mr. Das has been an analyst at Kimball and Winthrop Inc. the
General Partner of Opportunity Partners L.P. an activist-oriented
private investment fund since 1997 and since September 2004 Mr.
Das has served as portfolio manager of Opportunity Income Plus
L.P. a private investment fund. Mr. Das is currently a director
of the Mexico Equity and Income Fund and a member of its Audit
Committee. Mr. Das holds the CFA designation.
Neither Mr. Hellerman nor Mr. Dakos owns any shares. Mr. Das
beneficially owns 400 shares. I beneficially own 30,344 shares
jointly with my wife and 1,511 in an IRA account. Opportunity
Partners owns of record one share and 685,363 shares in street
name. A representative of Opportunity Partners will appear in
person or by proxy at the annual meeting to nominate the above
persons. I have voting and/or disposal authority for an
additional 1,417,278 shares that are beneficially owned by my
clients (excluding Opportunity Partners). There are no
definitive arrangements or understandings between any of our
nominees and Opportunity Partners or its affiliates. Each
nominee has consented to serve if elected.
PROPOSAL 2: TO RATIFY PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2005
In the absence of contrary instructions, the proxy holders will
vote your shares FOR this proposal.
PROPOSAL 3: A RECOMMENDATION THAT STOCKHOLDERS OF THE FUND BE
AFFORDED AN OPPORTUNITY TO REALIZE NET ASSET VALUE FOR THEIR
SHARES AS SOON AS PRACTICABLE
Open-ending the Fund or a self-tender offer will allow
stockholders to realize NAV for their shares. However, either
action may also have adverse effects such as increasing the
Fund's expense ratio or the percentage of assets held in illiquid
investments. If adopted, this proposal will not be binding on
the board. Moreover, if my nominees, who are committed to its
implementation if it is adopted by stockholders, are elected,
they will constitute a minority of the board. In the absence of
contrary instructions, the proxy holders will vote your shares
FOR this proposal.
THE SOLICITATION
I, Phillip Goldstein, the soliciting shareholder, am making this
solicitation. Persons affiliated with or employed by me or my
affiliates may assist me in the solicitation of proxies. Banks,
brokerage houses and other custodians, nominees and fiduciaries
will be requested to forward this proxy statement and the
enclosed GREEN proxy card to the beneficial owners of shares for
whom they hold shares of record. I will reimburse these
organizations for their reasonable out-of-pocket expenses.
Initially, I will bear all of the expenses related to this proxy
solicitation. Because I believe that all shareholders will
benefit from this solicitation, I intend to seek reimbursement of
my expenses from the Fund. Shareholders will not be asked to
vote on the reimbursement of my solicitation expenses which I
estimate will be $50,000. There is no arrangement or
understanding involving me or any of my affiliates relating to
future employment by or any future transactions with the Fund or
any of its affiliates.
DATED: May --, 2005
PROXY CARD
Proxy Solicited in Opposition to the Board of Directors of The
New Germany Fund, Inc. by Phillip Goldstein for the Annual
Meeting of Shareholders
The undersigned hereby appoints Rajeev Das, Andrew Dakos and
Phillip Goldstein and each of them, as the undersigned's proxies,
with full power of substitution, to attend the Annual Meeting of
Shareholders of The New Germany Fund, Inc. (the "Fund") on June
21, 2005, (the "Meeting"), and any adjournment or postponement
thereof, and to vote on all matters that may come before the
Meeting and any such adjournment or postponement the number of
shares that the undersigned would be entitled to vote if present
in person, as specified below subject to the board, prior to the
Meeting, irrevocably agreeing to allow all proxies to be voted as
instructed and counted. If this condition is not met, the proxy
holders may not attend the Meeting and Mr. Goldstein may file a
lawsuit to require all proxies to be voted as instructed and
counted. If the proxy holders do not attend the Meeting your
shares will not be counted toward a quorum or voted unless and
until a court so orders. The undersigned expressly (1)
understands this condition as set forth in the proxy statement
dated May --, 2005 of Phillip Goldstein and (2) agrees that this
condition is reasonably specified.
(INSTRUCTIONS: Mark votes by placing an "x" in the appropriate [
].)
1. ELECTION OF TWO DIRECTORS
[ ] FOR GERALD HELLERMAN [ ] WITHHOLD AUTHORITY
[ ] FOR PHILLIP GOLDSTEIN [ ] WITHHOLD AUTHORITY
[ ] FOR ANDREW DAKOS [ ] WITHHOLD AUTHORITY
[ ] FOR RAJEEV DAS [ ] WITHHOLD AUTHORITY
2. TO RATIFY PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2005
FOR [ ] AGAINST [ ]
ABSTAIN [ ]
3. A RECOMMENDATION THAT STOCKHOLDERS OF THE FUND BE AFFORDED AN
OPPORTUNITY TO REALIZE NET ASSET VALUE FOR THEIR SHARES AS SOON
AS PRACTICABLE
FOR [ ] AGAINST [ ]
ABSTAIN [ ]
Please sign and date below. Your shares will be voted as
directed subject to the board, prior to the Meeting, irrevocably
agreeing to allow all proxies to be voted as instructed and
counted. If no direction is made, this proxy will be voted FOR
the election of the nominees named above in Proposal 1 and FOR
Proposals 2 and 3. The undersigned hereby acknowledges receipt
of the proxy statement dated May --, 2005 of Phillip Goldstein
and revokes any proxy previously executed. (Important - Please
be sure to enter date.)
SIGNATURE(S)__________________________ Dated: _______________