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 the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement.
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material under Rule 14a-12.
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2)).
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the 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)(1) 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 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
345 Park Avenue
New York, New York 10154
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 20, 2006
----------
To our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of The Central Europe and Russia Fund, Inc., a Maryland corporation
(the "Fund"), will be held at 2:00 p.m., New York time, on June 20, 2006 at the
offices of Deutsche Bank, 345 Park Avenue, New York, New York 10154 for the
following purposes:
1. To elect three (3) Directors, each to serve for a term of three
years and until their successors are elected and qualify.
2. To ratify the appointment by the Audit Committee and the Board of
Directors of PricewaterhouseCoopers LLP, an independent registered
public accounting firm, as independent auditors for the fiscal year
ending October 31, 2006.
3. To transact such other business as may properly come before the
Meeting or any postponement or adjournment thereof.
Only holders of record of Common Stock at the close of business on May 11,
2006 are entitled to notice of, and to vote at, this Meeting or any postponement
or adjournment thereof.
If you have any questions or need additional information, please contact
Georgeson Shareholder Communications, Inc., the Fund's proxy solicitors, at 17
State Street, New York, New York 10004, or by telephone at 1-866-767-8984.
By Order of the Board of Directors
John Millette
Secretary
Dated: May 17, 2006
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE ENCLOSED
PROXY CARD AND PROMPTLY RETURN IT TO THE FUND. WE ASK YOUR COOPERATION IN
MAILING IN YOUR PROXY CARD PROMPTLY, SO THAT THE FUND CAN AVOID ADDITIONAL
EXPENSES OF SOLICITATION OF PROXIES.
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
345 Park Avenue
New York, New York 10154
ANNUAL MEETING OF STOCKHOLDERS
JUNE 20, 2006
----------
PROXY STATEMENT
----------
This Proxy Statement is furnished by the Board of Directors of The Central
Europe and Russia Fund, Inc. (the "Board of Directors" or "Board"), a Maryland
corporation (the "Fund"), in connection with the solicitation of proxies for use
at the Annual Meeting of Stockholders (the "Meeting") to be held at 2:00 p.m.,
New York time, on June 20, 2006 at the offices of Deutsche Bank, 345 Park
Avenue, New York, New York 10154. The purpose of the Meeting and the matters to
be considered are set forth in the accompanying Notice of Annual Meeting of
Stockholders.
If the accompanying Proxy Card is executed properly and returned, shares
represented by it will be voted at the Meeting, and any postponement or
adjournment thereof, in accordance with the instructions on the Proxy Card.
However, if no instructions are specified, shares will be voted FOR the election
of three (3) directors of the Fund ("Directors") nominated by the Board
(Proposal 1), and FOR the ratification of the appointment by the Audit Committee
and the Board of PricewaterhouseCoopers LLP, an independent public accounting
firm, as independent auditors for the Fund (Proposal 2). A proxy may be revoked
at any time prior to the time it is voted by written notice to the Secretary of
the Fund, by submitting a subsequently executed and dated proxy or by attending
the Meeting and voting in person.
If a stockholder owns shares of the Fund in violation of applicable law,
including the Investment Company Act of 1940, as amended (the "Investment
Company Act"), the Fund may determine that any vote attributable to such shares
shall not be counted, or that such shares will not be counted for quorum
purposes, or both. Under Section 12(d)(1) of the Investment Company Act, the
acquisition of more than 3% of the Fund's common stock by another fund (whether
registered, private or offshore) is unlawful. There is legal uncertainty about
the operation of Section 12(d)(1) and about the Fund's right under federal and
state law to invalidate votes cast by any person whose Fund shares are held in
violation of law. The Fund is prepared, if necessary, to seek judicial
resolution of the uncertainty in any particular case.
The close of business on May 11, 2006 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 14,002,505 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
Annual Meeting, this Proxy Statement and the form of Proxy Card will first be
mailed to stockholders on or about May 17, 2006.
A quorum is necessary to hold a valid meeting. If stockholders entitled to
cast one-third of all votes entitled to be cast at the Meeting are present in
person or by proxy, a quorum will be established. 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.
1
A "broker non-vote" occurs when a broker holding shares for a beneficial owner
does not vote on a particular matter because the broker does not have
discretionary voting power with respect to that matter and has not received
instructions from the beneficial owner.
PROPOSAL 1: ELECTION OF DIRECTORS
The Fund's charter (the "Charter") provides that the Board of Directors be
divided into three classes of Directors serving staggered three-year terms and
until their successors are elected and qualify. The term of office for Directors
in Class III expires at the 2006 Annual Meeting, Class I at the next succeeding
annual meeting and Class II at the following succeeding annual meeting. Three
Class III nominees are proposed in this Proxy Statement for election. The three
Class III nominees, Mr. Christian H. Strenger, Dr. Frank Tromel and Mr. Werner
Walbrol, are the only persons nominated by your Board of Directors for election
at this Meeting and, if elected, each will serve a three-year term of office
until the Annual Meeting of Stockholders in 2009 and until his successor is
elected and qualifies.
Should any vacancy occur on the Board of Directors, the remaining
Directors would be able to fill that vacancy by the affirmative vote of a
majority of the remaining Directors in office, even if the remaining Directors
do not constitute a quorum. Any Director elected by the Board to fill a vacancy
would hold office until the remainder of the full term of the class of Directors
in which the vacancy occurred and until a successor is elected and qualifies. If
the size of the Board is increased, additional Directors will be apportioned
among the three classes to make all classes as nearly equal as possible.
Unless authority is withheld, it is the intention of the persons named in
the accompanying form of Proxy Card to vote each Proxy Card for the election of
our three Class III nominees listed above. Each of our Class III nominees is
currently a member of the Board of Directors. Each Class III nominee has
indicated that he will continue to serve as a Director if elected, but if any
nominee should be unable to serve, proxies will be voted for any other person
determined by the persons named in the form of Proxy Card in accordance with
their discretion. The Board of Directors has no reason to believe that any of
the above nominees will be unable to continue to serve as a Director.
INFORMATION REGARDING DIRECTORS AND OFFICERS
The following tables show certain information about the nominees for
election as Directors and about Directors whose terms will continue, including
beneficial ownership of Common Stock of the Fund and all officers of the Fund.
All directors resident in the United States own Fund shares. Directors who are
German residents would be subject to adverse German tax consequences if they
owned shares of a fund organized outside of Germany, such as the Fund, that is
not subject to German regulation or tax reporting. Each Director has served as a
Director of the Fund since the Fund's inception in 1990, except for Ambassador
Burt, who was elected to the Board on June 30, 2000, Mr. Cannon, who was elected
to the Board on April 23, 2004, Dr. Bock, who was elected to the Board on May 5,
2004 and Dr. Tromel, who was elected to the Board on July 17, 2005.
2
NOMINEES PROPOSED FOR ELECTION:
--------------------------------------------------------------------------------
CLASS III DIRECTORS
(TERM WILL EXPIRE IN 2006; NOMINEES FOR TERM EXPIRING IN 2009)
--------------------------------------------------------------------------------
NUMBER OF SHARES
PORTFOLIOS IN OTHER OF COMMON
FUND COMPLEX(2) DIRECTORSHIPS STOCK
TERM OF PRINCIPAL OVERSEEN BY HELD BY BENEFICIALLY
OFFICE AND OCCUPATION(S) DIRECTOR OR DIRECTOR OR OWNED AT
NAME, ADDRESS(1) POSITION(S) LENGTH OF DURING PAST NOMINEE FOR NOMINEE FOR MARCH 16,
& AGE WITH FUND TIME SERVED FIVE YEARS DIRECTOR DIRECTOR 2006(3)
---------------- ----------- ----------- --------------------------- --------------- --------------------- ------------
NON-INTERESTED DIRECTORS
Dr. Frank Director Since 1990 Deputy Chairman of the 3 Director of The New None
Tromel, 70(4) Supervisory Board of Germany Fund, Inc.
DELTON AG (strategic (since 1990) and The
management holding company European Equity Fund,
operation in the Inc. (formerly The
pharmaceutical, household Germany Fund, Inc.)
products, logistics and (since 2005).(2)
power supply sectors)
(since 2000). Member
(since 2000) and
Vice-President (since
2002) of the German
Accounting Standards
Board; Chairman of the
Board of Managing
Directors of DELTON AG
(1990-1999); Chairman of
the Board of Managing
Directors of ALTANA AG
(management holding
company for the
pharmaceutical and
chemical operation)
(1987-1990) and Member of
the Board (1977-1987).
Werner Director Since 1990 President and Chief 3 Director of The 3,731
Walbrol, 68 Executive Officer, The Central Europe and
European American Chamber Russia Fund, Inc.
of Commerce, Inc. (since 1990) and The
Formerly, President and European Equity Fund,
Chief Executive Officer, Inc. (formerly The
The German American Germany Fund, Inc.)
Chamber of Commerce, Inc. (since 1986)(2);
(until 2003). Director, TUV
Rheinland of North
America, Inc.
(independent testing
and assessment
services). Director,
The German American
Chamber of Commerce,
Inc. President and
Director,
German-American
Partnership Program
(student exchange
programs). Director,
AXA Art Insurance
Corporation (fine art
and collectible
insurer).
3
--------------------------------------------------------------------------------
CLASS III DIRECTORS
(TERM WILL EXPIRE IN 2006; NOMINEES FOR TERM EXPIRING IN 2009)
--------------------------------------------------------------------------------
NUMBER OF SHARES
PORTFOLIOS IN OTHER OF COMMON
FUND COMPLEX(2) DIRECTORSHIPS STOCK
TERM OF PRINCIPAL OVERSEEN BY HELD BY BENEFICIALLY
OFFICE AND OCCUPATION(S) DIRECTOR OR DIRECTOR OR OWNED AT
NAME, ADDRESS(1) POSITION(S) LENGTH OF DURING PAST NOMINEE FOR NOMINEE FOR MARCH 16,
& AGE WITH FUND TIME SERVED FIVE YEARS DIRECTOR DIRECTOR 2006(3)
---------------- ----------- ----------- --------------------------- --------------- --------------------- ------------
INTERESTED DIRECTOR(4)
Christian H. Director Since 1990 Member of Supervisory 3 Director of The 1,110
Strenger, 62 and Board (since 1999) and European Equity Fund,
Chairman formerly Managing Director Inc. (formerly The
(1991-1999) of DWS Germany Fund, Inc.)
Investment GmbH (since 1986) and The
(investment management), a New Germany Fund,
subsidiary of Deutsche Inc. (since 1990).(2)
Bank AG. Member, Supervisory
Board, Fraport AG
(international
airport business) and
Hermes Focus Asset
Management Europe
Ltd. (asset
management).
DIRECTORS WHOSE TERMS WILL CONTINUE:
--------------------------------------------------------------------------------
CLASS I DIRECTORS
(TERM WILL EXPIRE IN 2007)
--------------------------------------------------------------------------------
NUMBER OF SHARES
PORTFOLIOS IN OTHER OF COMMON
FUND COMPLEX(2) DIRECTORSHIPS STOCK
TERM OF PRINCIPAL OVERSEEN BY HELD BY BENEFICIALLY
OFFICE AND OCCUPATION(S) DIRECTOR OR DIRECTOR OR OWNED AT
NAME, ADDRESS(1) POSITION(S) LENGTH OF DURING PAST NOMINEE FOR NOMINEE FOR MARCH 16,
& AGE WITH FUND TIME SERVED FIVE YEARS DIRECTOR DIRECTOR 2006(3)
---------------- ----------- ----------- --------------------------- --------------- --------------------- ------------
NON-INTERESTED DIRECTORS
Ambassador Director Since 2000 Chairman, Diligence LLC 3 Director of The 2,772
Richard R. Burt, (international information Central Europe and
59 collection and Russia Fund, Inc.
risk-management firm) (since 2000) and The
(since 2002). Chairman, European Equity Fund,
IEP Advisors LLP Inc. (formerly The
(information services Germany Fund, Inc.)
firm) (1998-2001). (since 2000).(2)
Chairman of the Board, Board Member, IGT,
Weirton Steel Corp. Inc. (gaming
(1996-2004). Formerly, technology) (since
Partner, McKinsey & 1995). Board Member,
Company (consulting firm) HCL Technologies,
(1991-1994). U.S. Inc. (information
Ambassador to the Federal technology and
Republic of Germany product engineering)
(1985-1991). (since 1999). Member,
Textron Inc.
International
Advisory Council
(aviation,
automotive,
industrial operations
and finance) (since
1996). Director, UBS
family of mutual
funds (since 1995).
4
--------------------------------------------------------------------------------
CLASS I DIRECTORS
(TERM WILL EXPIRE IN 2007)
--------------------------------------------------------------------------------
NUMBER OF SHARES
PORTFOLIOS IN OTHER OF COMMON
FUND COMPLEX(2) DIRECTORSHIPS STOCK
TERM OF PRINCIPAL OVERSEEN BY HELD BY BENEFICIALLY
OFFICE AND OCCUPATION(S) DIRECTOR OR DIRECTOR OR OWNED AT
NAME, ADDRESS(1) POSITION(S) LENGTH OF DURING PAST NOMINEE FOR NOMINEE FOR MARCH 16,
& AGE WITH FUND TIME SERVED FIVE YEARS DIRECTOR DIRECTOR 2006(3)
---------------- ----------- ----------- --------------------------- --------------- --------------------- ------------
NON-INTERESTED DIRECTORS
John H. Director Since 2004 Consultant (since 2002); 3 Director of The New 271
Cannon, 64 Vice President and Germany Fund, Inc.
Treasurer, Venator (since 1990) and The
Group/Footlocker Inc. European Equity Fund,
(footwear retailer) Inc. (formerly The
(1982-2001). Germany Fund, Inc.)
(since 2004).(2)
Interested Director(4)
Detlef Director Since 1990 Partner of Sal. Oppenheim 2 Director of The None
Bierbaum, 63 Jr. & Cie KGaA (investment European Equity Fund,
management) (over five Inc. (formerly The
years). Germany Fund, Inc.)
(since 1986).(2)
Member of Supervisory
Board, Tertia
Handelsbeteiligungs-
gesellschaft
mbH (electronics
retailer). Member of
Supervisory Board,
Douglas AG
(retailer). Member of
Supervisory Board,
LVM
Landwirtschaftlicher
Versicherungsverein
(insurance). Member
of Supervisory Board,
Monega KAG. Member of
Supervisory Board,
AXA Investment
Managers GmbH
(investment company).
Chairman of
Supervisory Board,
Oppenheim
Kapitalanlagegesellschaft
mbH (investment
company). Chairman of
Administrative Board,
Oppenheim Prumerica
Asset Management
S.a.r.l. (investment
company). Member of
Supervisory Board,
Atradius N.V.
(insurance company).
Member of the
Supervisory Board of
DWS Investment GmbH.
Member of the Board
of Duindee REIT,
Toronto.
5
--------------------------------------------------------------------------------
CLASS II DIRECTORS
(TERM WILL EXPIRE IN 2008)
--------------------------------------------------------------------------------
NUMBER OF SHARES
PORTFOLIOS IN OTHER OF COMMON
FUND COMPLEX(2) DIRECTORSHIPS STOCK
TERM OF PRINCIPAL OVERSEEN BY HELD BY BENEFICIALLY
OFFICE AND OCCUPATION(S) DIRECTOR OR DIRECTOR OR OWNED AT
NAME, ADDRESS(1) POSITION(S) LENGTH OF DURING PAST NOMINEE FOR NOMINEE FOR MARCH 16,
& AGE WITH FUND TIME SERVED FIVE YEARS DIRECTOR DIRECTOR 2006(3)
---------------- ----------- ----------- --------------------------- --------------- --------------------- ------------
NON-INTERESTED DIRECTORS
Dr. Kurt W. Director Since 2004 Member of the Board of 2 Director of The None
Bock, 47 Executive Directors and European Equity Fund,
CFO, BASF Inc. (formerly The
Aktiengesellschaft Germany Fund, Inc.)
(chemicals) (since 2003); (since 2004).(2)
President, Logistics and Member of the
Information Services, BASF Supervisory Boards of
Aktiengesellschaft Wintershall AG (since
(2000-2003); Chief 2003) and Basell N.V.
Financial Officer, BASF (since 2003). Member
Corporation (1998-2000). of the Advisory
Managing Director, Robert Boards of WINGAS GmbH
Bosch Ltda. (automotive (since 2003), WIEH
and industrial products) GmbH (since 2003),
(1996-1998); Senior Vice Landesbank Baden-
President, Finance and Wurttemberg (since
Accounting, Robert Bosch 2003), Initiative D21
GmbH (1994-1996); Senior (since 2003), DBW
Vice President, Finance, ("Die
Robert Bosch GmbH Betriebswirtschaft")
(1992-1994); Head of (since 2003), and
Technology, Planning and Gesellschaft fur
Controlling, Engineering Unternehmensplanung
Plastics division, BASF (IUP) (since 2004).
Aktiengesellschaft Member of the Boards
(1991-1992); Executive of BASFIN Corporation
Assistant to BASF's Chief (since 2002),
Financial Officer Deutsches
(1987-1991). Rechnungslegungs
Standards Committee
("DRSC") (since
2003),
Schmalenbachgesellschaft
(since 2004), and
Jacob Gould Schurman
Stiftung (since
2004). Member of the
Trustees of
Arbeitskreis
Evangelischer
Unternehmer ("AEU")
(since 2003). Member
of the Advisory
Council of Deutsche
Bank AG (since June
2004). Member of the
Advisory Board of
Gebr. Rochling KG
(since May 2004).
6
--------------------------------------------------------------------------------
CLASS II DIRECTORS
(TERM WILL EXPIRE IN 2008)
--------------------------------------------------------------------------------
NUMBER OF SHARES
PORTFOLIOS IN OTHER OF COMMON
FUND COMPLEX(2) DIRECTORSHIPS STOCK
TERM OF PRINCIPAL OVERSEEN BY HELD BY BENEFICIALLY
OFFICE AND OCCUPATION(S) DIRECTOR OR DIRECTOR OR OWNED AT
NAME, ADDRESS(1) POSITION(S) LENGTH OF DURING PAST NOMINEE FOR NOMINEE FOR MARCH 16,
& AGE WITH FUND TIME SERVED FIVE YEARS DIRECTOR DIRECTOR 2006(3)
---------------- ----------- ----------- --------------------------- --------------- --------------------- ------------
Robert H. Director Since 1990 President, Robert H. 91 Director of The New 5,037
Wadsworth, 66 Wadsworth Associates, Inc. Germany Fund, Inc.
(consulting firm) (May (since 1992) and The
1983 to present). European Equity Fund,
Formerly, President and Inc. (formerly The
Trustee, Trust for Germany Fund, Inc.)
Investment Managers (since 1986) as well
(registered investment as other funds in the
companies) (April Fund Complex as
1999-June 2002). indicated.(7)
President, Investment
Company Administration,
L.L.C. (January 19926-July
2001). President,
Treasurer and Director,
First Fund Distributors,
Inc. (mutual fund
distribution) (June
1990-January 2002). Vice
President, Professionally
Managed Portfolios (May
1991-January 2002) and
Advisors Series Trust
(registered investment
companies) (October
1996-January 2002).
INTERESTED DIRECTOR(4)
John Bult, 70 Director Since 1990 Chairman, PaineWebber 3 Director of The 6,337
International (asset European Equity Fund,
management) (since 1985). Inc. (formerly The
Germany Fund, Inc.)
(since 1986) and The
New Germany Fund,
Inc. (since 1990).(2)
Director of The
Greater China Fund,
Inc. (closed-end
fund).
7
--------------------------------------------------------------------------------
EXECUTIVE OFFICERS(8)
--------------------------------------------------------------------------------
SHARES
OF COMMON
STOCK
BENEFICIALLY
OWNED AT
NAME, ADDRESS(1) POSITION(S) LENGTH OF PRINCIPAL OCCUPATION(S) MARCH 16,
& AGE WITH FUND TIME SERVED DURING PAST FIVE YEARS 2006(3)
---------------- --------------- ----------- --------------------------------------------------------- ------------
Michael President and Since 2006 Director, Deutsche Asset Management and Chief Operating None
Colon, 36 Chief Executive Officer, Deutsche Investment Management Americas, Inc.
Officer (since 2005). Formerly, Chief Operating Officer, Deutsche
Bank Alex. Brown (2002-2004) and Chief Operating Officer
-- Global Equities, Deutsche Bank (1999-2002).
Paul H. Treasurer and Since 2004 Managing Director, Deutsche Asset Management (since 2004). None
Schubert, 43 Chief Financial Formerly, Executive Director, Head of Mutual Fund Services
Officer and Treasurer for UBS Family of Funds at UBS Global Asset
Management (1994-2004); Vice President and Director of
Mutual Fund Finance at UBS Global Asset Management
(1994-1998).
John Millette, Secretary Since 2006 Director, Deutsche Asset Management (since 2002). None
43(9)
Kathleen Sullivan Assistant Since 2003 Director, Deutsche Asset Management (since 2002). None
D'Eramo, 49(9) Treasurer Formerly, Senior Vice President, Zurich Scudder
Investments (2000-2002).
Elisa D. Chief Legal Since 2005 Director, Deutsche Asset Management (since Sept. 2005). None
Metzger, 43 Officer Counsel, Morrison and Foerster LLP (1999-2005).
Philip Chief Compliance Since 2004 Global Head of Asset Management Compliance, Deutsche Asset None
Gallo, 43 Officer Management (since 2003). Formerly, Co-Head of Goldman
Sachs Asset Management Legal (1994-2003).
-------
(1) The mailing address of all directors and officers with respect to Fund
operations is c/o Deutsche Investment Management Americas Inc., 345 Park
Avenue, NYC20-2799, New York, New York 10154.
(2) The Fund Complex includes The European Equity Fund, Inc. (formerly The
Germany Fund, Inc.) and The New Germany Fund, Inc., which are the other
closed-end registered investment companies for which Deutsche Investment
Management Americas Inc. acts as manager. It also includes 159 other open-
and closed-end funds advised by wholly-owned entities of the Deutsche Bank
Group in the United States.
(3) All Directors and Executive Officers as a group (15 persons) owned 18,148
shares, which constitutes less than 1% of the outstanding Common Stock of
the Fund. Share numbers in this Proxy Statement have been rounded to the
nearest whole share.
(4) Dr. Tromel's son has been employed since March 1, 2002 by an indirect
subsidiary of Deutsche Bank AG.
(5) Indicates "Interested Person", as defined in the Investment Company Act.
Mr. Bierbaum is an "interested" Director because of his affiliation with
Sal. Oppenheim Jr. & Cie. KGaA, which engages in brokerage transactions
with the Fund and other accounts managed by the Fund's investment adviser
and manager. Mr. Bult is an "interested" Director because of his
affiliation with PaineWebber International, an affiliate of UBS Securities
L.L.C., a registered broker-dealer. Mr. Strenger is an "interested"
Director because of his affiliation with DWS-Deutsche Gesellschaft fur
Wertpapiersparen mbH ("DWS"), a majority-owned subsidiary of Deutsche Bank
AG, and because of his ownership of Deutsche Bank AG shares.
(6) Inception date of the corporation that was the predecessor to the limited
liability company.
(7) Mr. Wadsworth serves as a Director/Trustee of the following investment
companies: DWS Blue Chip Fund, DWS Equity Trust, DWS High Income Series,
DWS State Tax-Free Income Series, DWS Strategic Income Fund, DWS Target
Fund, Cash Account Trust, Investors Cash Trust, Investors Municipal Cash
Fund, Tax-Exempt California Money Market Fund, DWS Technology Fund, DWS
Balanced Fund, DWS U.S. Government Securities Fund, DWS Value Series Inc.,
DWS Variable Series II, and DWS Money Funds. Mr. Wadsworth also serves as
a Trustee of the following closed-end investment companies: DWS High
Income Trust, DWS Multi-Market Income Trust, DWS Municipal Income Trust,
DWS Strategic Income Trust, and DWS Strategic Municipal Income Trust.
These funds are advised by Deutsche Investment Management Americas Inc., a
wholly-owned subsidiary of Deutsche Bank AG.
(8) Each also serving as an officer of The European Equity Fund, Inc.
(formerly The Germany Fund, Inc.) and The Central Europe and Russia Fund,
Inc. The officers of the Fund are elected annually by the Board of
Directors at its meeting following the Annual Meeting of Stockholders.
Each of Mr. Colon, Mr. Schubert, Mr. Millette, Mr. Gallo, Ms. D'Eramo and
Ms. Metzger also serve as an officer of the other Funds in the Fund
Complex.
(9) Indicates ownership of securities of Deutsche Bank AG either directly or
through Deutsche Bank's deferred compensation plan.
8
The following table contains additional information with respect to the
beneficial ownership of equity securities by each Director or Nominee in the
Fund and, on an aggregated basis, in any registered investment companies
overseen by the Director or Nominee within the same Family of Investment
Companies as the Fund:
AGGREGATE DOLLAR RANGE OF EQUITY
SECURITIES IN ALL FUNDS OVERSEEN BY
DOLLAR RANGE OF EQUITY DIRECTOR OR NOMINEE IN FAMILY OF
NAME OF DIRECTOR OR NOMINEE SECURITIES IN THE FUND(1) INVESTMENT COMPANIES(1), (2)
--------------------------- ------------------------- -----------------------------------
Detlef Bierbaum None None
Dr. Kurt W. Bock None None
John Bult Over $100,000 Over $100,000
Ambassador Richard R. Burt Over $100,000 Over $100,000
John H. Cannon $10,001 - $50,000 $50,001 - $100,000
Christian H. Strenger $50,001 - $100,000 $50,001 - $100,000
Dr. Frank Tromel None None
Robert H. Wadsworth Over $100,000 Over $100,000
Werner Walbrol Over $100,000 Over $100,000
----------
(1) Valuation date is March 16, 2006. Directors who are German residents would
be subject to adverse German tax consequences if they owned shares of a
fund organized outside of Germany, such as the Fund, that is not subject
to German regulation or tax reporting.
(2) The Family of Investment Companies consists of the Fund, The European
Equity Fund, Inc. (formerly The Germany Fund, Inc.) and The New Germany
Fund, Inc., which are closed-end funds that share the same investment
adviser and manager and hold themselves out as related companies.
The Board of Directors presently has five standing committees including an
audit committee (the "Audit Committee"), an advisory committee (the "Advisory
Committee"), an executive committee (the "Executive Committee"), a nominating
committee (the "Nominating Committee") and a special committee on shareholder
initiatives (the "Special Shareholder Initiatives Committee").
The Audit Committee, comprising Messrs. Cannon, Wadsworth and Walbrol, and
Dr. Tromel operates pursuant to a written charter. The Audit Committee's
organization and responsibilities are contained in the Audit Committee Report,
which is included in this Proxy Statement, and in its written charter. The
members of the Audit Committee are "independent" as required by the independence
standards of Rule 10A-3 under the Securities Exchange Act of 1934. The Board of
Directors has determined that each member of the Audit Committee is financially
literate and has determined that each of Messrs. Cannon and Wadsworth meets the
requirements for an audit committee financial expert under the rules of the
Securities and Exchange Commission ("SEC"). Although the Board has determined
that these individuals meet the requirements for an audit committee financial
expert, their responsibilities are the same as those of the other audit
committee members. They are not auditors or accountants, do not perform "field
work" and are not full-time employees. The SEC has determined that an audit
committee member who is designated as an audit committee financial expert will
not be deemed to be an "expert" for any purpose as a result of being identified
as an audit committee financial expert. The Audit Committee met eight times
during the fiscal year ended October 31, 2005.
9
The Advisory Committee, comprising Messrs. Bierbaum, Wadsworth and
Walbrol, makes recommendations to the full Board with respect to the Management
Agreement between the Fund and Deutsche Investment Management Americas Inc., and
the Investment Advisory Agreement between the Fund and Deutsche Asset Management
International GmbH. The Advisory Committee met two times during the past fiscal
year, in connection with the annual continuance of those agreements.
The Executive Committee, comprising Messrs. Burt, Strenger, Wadsworth and
Walbrol, has the authority to act for the Board on all matters between meetings
of the Board subject to any limitations under applicable state law. During the
past fiscal year the Executive Committee did not meet.
The Special Shareholder Initiatives Committee, comprising Messrs. Bult,
Burt, Cannon, Wadsworth and Walbrol, has the authority to act for the Board on
all matters relating to stockholder initiatives. The Special Shareholder
Initiatives Committee met three times during the past fiscal year.
The Nominating Committee comprises of Messrs. Burt, Wadsworth and Walbrol.
The Board has determined that each of the members of the Nominating Committee is
not an "interested person" as the term is defined in Section 2(a)(19) of the
Investment Company Act. Generally, the Nominating Committee identifies,
evaluates and selects and nominates, or recommends to the Board of Directors,
candidates for the Board or any committee of the Board. To be eligible for
nomination as a Director a person must, at the time of such person's nomination,
have Relevant Experience and Country Knowledge and must not have any Conflict of
Interest, as those terms are defined in the Fund's Bylaws. The relevant portions
of the Fund's Bylaws describing these requirements are included as Annex B. The
Nominating Committee may also take into account additional factors listed in the
Nominating Committee Charter, which generally relate to the nominee's industry
knowledge, business experience, education, ethical reputation, special skills,
ability to work well in group settings and the ability to qualify as an
"independent director."
The Nominating Committee will consider nominee candidates properly
submitted by stockholders in accordance with applicable law, the Fund's Charter
or Bylaws, resolutions of the Board and the qualifications and procedures set
forth in the Nominating Committee Charter (set forth in Annex A) and this proxy
statement. A stockholder or group of stockholders seeking to submit a nominee
candidate (i) must have beneficially owned at least 5% of the Fund's common
stock for at least two years, (ii) may submit only one nominee candidate for any
particular meeting of stockholders, and (iii) may submit a nominee candidate for
only an annual meeting or other meeting of stockholders at which directors will
be elected. The stockholder or group of stockholders must provide notice of the
proposed nominee pursuant to the requirements found in the Fund's Bylaws.
Generally, this notice must be received not less than 90 days nor more than 120
days prior to the first anniversary of the date of mailing of the notice for the
preceding year's annual meeting. Such notice shall include the specific
information required by the Fund's Bylaws. The relevant portions describing
these requirements are included as Annex B. The Nominating Committee will
evaluate nominee candidates properly submitted by stockholders on the same basis
as it considers and evaluates candidates recommended by other sources. The
Nominating Committee met two times during the past fiscal year.
All members on each of the five committees of the Board are not
"interested persons" as the term is defined in the Investment Company Act
(except that Mr. Strenger, an interested person, is a member of the Executive
Committee; Mr. Bierbaum, an interested person, is a member of the Advisory
Committee; and Mr. Bult, an interested person, is a member of the Special
Shareholder Initiatives Committee).
10
During the past fiscal year, the Board of Directors had five regular
meetings. Each incumbent Director who served as a Director during the past
fiscal year, with the exception of Messrs. Bock and Langhammer, attended at
least 75% of the aggregate number of meetings of the Board and meetings of Board
Committees on which that Director served. The Board has a policy that encourages
Directors to attend the Annual Meeting of Stockholders, to the extent that
travel to the Annual Meeting of Stockholders is reasonable for that Director.
Four Directors attended the 2005 Annual Meeting of Stockholders.
To communicate with the Board of Directors or an individual Director of
the Fund, a stockholder must send a written communication to the Fund's
principal office at 345 Park Avenue, NYC20-2799, New York, New York 10154 (c/o
The Central Europe and Russia Fund, Inc.), addressed to (i) the Board of
Directors of the Fund or an individual Director, and (ii) the Secretary of the
Fund. The Secretary of the Fund will direct the correspondence to the
appropriate parties.
The Fund pays each of its Directors who is not an interested person of the
Fund, of the investment adviser or of the manager an annual fee of $7,500 plus
$750 for each Board and Committee meeting attended. Each such Director who is
also a Director of The European Equity Fund, Inc. (formerly The Germany Fund,
Inc.) or The New Germany Fund, Inc. also receives the same annual and
per-meeting fees for services as a Director of each such fund. No Director of
all three funds is paid for attending more than two funds' board and committee
meetings when meetings of the three funds are held concurrently, and no such
Director receives more than the annual fee of two funds. Each of the Fund, The
European Equity Fund, Inc. (formerly The Germany Fund, Inc.) and The New Germany
Fund, Inc. reimburses the Directors (except for those employed by the Deutsche
Bank Group) for travel expenses in connection with Board meetings. These three
funds, together with 159 other open- and closed-end funds advised by
wholly-owned entities of the Deutsche Bank Group in the United States, represent
the entire Fund Complex within the meaning of the applicable rules and
regulations of the SEC. The following table sets forth (a) the aggregate
compensation from the Fund for the fiscal year ended October 31, 2005, and (b)
the total compensation from each fund in the Fund Complex that includes the
Fund, for the 2005 fiscal year of each such fund, (i) for each Director who is
not an interested person of the Fund, and (ii) for all such Directors as a
group:
AGGREGATE COMPENSATION TOTAL COMPENSATION
NAME OF DIRECTOR FROM FUND FROM FUND COMPLEX
---------------- ---------------------- ------------------
Dr. Kurt W. Bock $ 9,750 $ 18,750
Ambassador Richard R. Burt $16,250 $195,030
John H. Cannon $15,000 $ 48,500
Dr. Frank Tromel $ 4,000 $ 20,500
Robert H. Wadsworth $16,750 $224,260
Werner Walbrol $18,000 $ 53,000
------- --------
Total $79,750 $560,040
======= ========
No compensation is paid by the Fund to Directors who are interested
persons of the Fund or of any entity of the Deutsche Bank Group or to officers.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 1.
REQUIRED VOTE. Provided a quorum has been established, the affirmative
vote of a plurality of the votes cast at the Meeting is required for the
election of each Director. For purposes of the election of Directors,
abstentions will have no effect on the result of the vote.
11
PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee has approved PricewaterhouseCoopers LLP (the "Firm" or
"PwC"), an independent registered public accounting firm, as independent
auditors for the Fund for the fiscal year ending October 31, 2006. A majority of
members of the Board of Directors, including a majority of the members of the
Board of Directors who are not "interested" Directors (as defined in the
Investment Company Act) of the Fund, have ratified the appointment of PwC as the
Fund's independent auditors for that fiscal year. Based principally on
representations from the Firm, the Fund knows of no direct financial or material
indirect financial interest of such Firm in the Fund. That Firm, or a
predecessor firm, has served as the independent auditors for the Fund since
inception.
Neither our Charter nor Bylaws requires that the stockholders ratify the
appointment of PwC as our independent auditors. We are doing so because we
believe it is a matter of good corporate practice. If the stockholders do not
ratify the appointment, the Audit Committee and the Board of Directors will
reconsider whether or not to retain PwC, but may retain such independent
auditors. Even if the appointment is ratified, the Audit Committee and the Board
of Directors in their discretion may change the appointment at any time during
the year if they determine that such change would be in the best interests of
the Fund and its stockholders. It is intended that the persons named in the
accompanying form of proxy will vote for PwC. A representative of PwC will be
present at the Meeting and will have the opportunity to make a statement and is
expected to be available to answer appropriate questions concerning the Fund's
financial statements.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 2.
REQUIRED VOTE. Provided a quorum has been established, the affirmative
vote of a majority of the votes cast at the Meeting is required for the
ratification of the appointment by the Audit Committee and the Board of
Directors of PwC as independent auditors for the Fund for the fiscal year ending
October 31, 2006. For purposes of Proposal 2, abstentions will have no effect on
the result of the vote.
INFORMATION WITH RESPECT TO THE FUND'S INDEPENDENT AUDITORS
The following table shows fees paid to PwC by the Fund during the Fund's
two most recent fiscal years: (i) for audit and non-audit services provided to
the Fund, and (ii) for engagements for non-audit services pre-approved by the
Audit Committee for the Fund's manager and investment adviser and certain
entities controlling, controlled by, or under common control with the manager
and investment adviser that provide ongoing services to the Fund (collectively,
the "Adviser Entities"), which engagements relate directly to the operations and
financial reporting of the Fund. The Audit Committee of each board will review,
at least annually, whether PwC's receipt of non-audit fees from the Fund, the
Fund's manager, the Fund's investment adviser and all Adviser Entities is
compatible with maintaining PwC's independence.
AUDIT FEES(1) AUDIT RELATED FEES(2) TAX FEES(3) ALL OTHER FEES(4)
------------- --------------------- ------------------- -----------------
ADVISER ADVISER ADVISER
FUND FUND ENTITIES FUND ENTITIES FUND ENTITIES
------- ---- -------- ------ -------- ---- --------
2005.................... $91,500 $225 $309,400 $6,700 $197,605 -- --
2004.................... $66,500 $185 $453,907 $6,700 -- -- --
----------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees."
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance and tax planning.
(4) "All Other Fees" are the aggregate fees billed for products and services
other than "Audit Fees," "Audit Related Fees" and "Tax Fees."
12
Audit Committee Pre Approval Policies and Procedures. Generally, the Audit
Committee must pre-approve (i) all services to be performed for the Fund by the
Fund's independent auditors and (ii) all non-audit services to be performed by
the Fund's independent auditors for the Fund's investment adviser or any Adviser
Entities with respect to operations and financial reporting of the Fund. The
Chair of the Audit Committee may approve or deny the request to engage the
auditors to provide any fund services or fund-related services that are not
listed on the pre-approved list if the cost associated with the request is
$50,000 or less, or at the Chair's discretion, determine to call a special
meeting of the Audit Committee for the purpose of considering the proposal.
Should the Chair of the Audit Committee be unavailable, any other member of the
Audit Committee may serve as an alternate for the purpose of approving or
denying the request. The auditors shall report to the Audit Committee at each of
its regular meetings all audit or non-audit services to the Fund and all
non-audit services to the Adviser Entities that relate directly to the Fund's
operations and financial reporting initiated since the last such report was
rendered, including a general description of the services and projected fees and
the means by which such services were approved by the Audit Committee. The
engagement of the auditors to provide certain services customarily required by
the Fund in the ordinary course of its operations or by an Adviser Entity in the
ordinary course of its operations is approved by the Audit Committee subject to
pre-determined dollar limits. In all cases where an Adviser Entity engages the
auditors to provide audit or non-audit services not relating to Fund operations
or financial reporting and the projected fees for such engagement exceed
$25,000, the auditors will notify the Audit Committee not later than their next
meeting.
All Non-Audit Fees. The table below shows the aggregate non-audit fees
billed by PwC for services rendered to the Fund and to the Adviser Entities that
provide ongoing services to the Fund, whether or not such engagements relate
directly to the operations and financial reporting of the Fund, for the two most
recent fiscal years for the Fund.
FISCAL YEAR AGGREGATE NON-AUDIT FEES
----------- ------------------------
2005 $ 308,940
2004 $1,160,467
AUDIT COMMITTEE REPORT
The purposes of the Audit Committee are 1) to assist the Board of
Directors in its oversight of (i) the integrity of the Fund's financial
statements; (ii) the Fund's compliance with legal and regulatory requirements;
(iii) the independent auditors' qualifications and independence; and (iv) the
performance of the independent auditors; and 2) to prepare this report. Each
Member of the Audit Committee is "independent," as required by the independence
standards of Rule 10A-3 under the Securities Exchange Act of 1934. The Audit
Committee operates pursuant to a written charter. As set forth in the Audit
Committee Charter, management of the Fund and applicable service providers are
responsible for the preparation, presentation and integrity of the Fund's
financial statements and for the effectiveness of internal control over
financial reporting. Management and applicable service providers are responsible
for maintaining appropriate accounting and financial reporting principles and
policies and internal control over financial reporting and other procedures that
provide for compliance with accounting standards and applicable laws and
regulations. The independent auditors are responsible for planning and carrying
out a proper audit of the Fund's annual financial statements and expressing an
opinion as to their conformity with generally accepted accounting principles.
In the performance of its oversight function, the Audit Committee has
considered and discussed the audited financial statements with management and
the independent auditors of the Fund. The Audit Committee has also discussed
with the independent auditors the matters required to be discussed by Statement
on Auditing Standards No. 61, Communication with Audit Committees, as currently
in effect. The Audit Committee has also considered
13
whether the provision of any non-audit services not pre-approved by the Audit
Committee provided by the Fund's independent auditors to the Fund's investment
adviser, manager or to any entity controlling, controlled by or under common
control with the Fund's investment adviser or manager that provides ongoing
services to the Fund is compatible with maintaining the auditors' independence.
Finally, the Audit Committee has received the written disclosures and the letter
from the independent auditors required by Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees, as currently in effect,
and has discussed with the auditors their independence.
The members of the Audit Committee are not full-time employees of the Fund
and are not performing the functions of auditors or accountants. As such, it is
not the duty or responsibility of the Audit Committee or its members to conduct
"field work" or other types of auditing or accounting reviews or procedures or
to set auditor independence standards. Members of the Audit Committee
necessarily rely on the information provided to them by management and the
independent auditors. Accordingly, the Audit Committee's considerations and
discussions referred to above do not assure that the audit of the Fund's
financial statements has been carried out in accordance with generally accepted
auditing standards, that the financial statements are presented in accordance
with generally accepted accounting principles or that the Fund's auditors are in
fact "independent."
Based upon the reports and discussions described in this report, and
subject to the limitations on the role and responsibilities of the Audit
Committee referred to above and in the Charter, the Audit Committee recommended
to the Board of Directors of the Fund that the audited financial statements of
the Fund be included in the Fund's annual report to stockholders for the fiscal
year ended October 31, 2005.
Submitted by the Audit Committee
of the Fund's Board of Directors
John H. Cannon
Frank Tromel
Robert H. Wadsworth
Werner Walbrol
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of May 12, 2006 no person, to the knowledge of management, owned of
record or beneficially more than 5% of the outstanding Common Stock of the Fund.
ADDRESS OF INVESTMENT ADVISER AND MANAGER
The principal office of Deutsche Asset Management International GmbH, the
Fund's investment adviser, is located at Mainzer Landstrasse 178-190, D-60327
Frankfurt am Main, Federal Republic of Germany. The corporate office of Deutsche
Investment Management Americas Inc., the Fund's manager, is located at 345 Park
Avenue, New York, New York 10154.
14
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Based on a review of reports filed by the Fund's directors and executive
officers, the investment manager, officers and directors of the investment
manager, affiliated persons of the investment manager and beneficial holders of
10% or more of the Fund's outstanding stock, and written representations by the
Reporting Persons that no year-end reports were required for such persons, all
filings required by Section 16(a) of the Securities and Exchange Act of 1934 for
the fiscal year ended December 31, 2005 were timely.
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 properly
come before the Meeting, including any question as to an adjournment of the
Meeting, the persons named in the enclosed Proxy Card will vote thereon
according to their discretion. Abstentions and broker non-votes shall have no
effect on the outcome of a vote to adjourn the Meeting.
STOCKHOLDER PROPOSALS
In order for stockholder proposals otherwise satisfying the eligibility
requirements of SEC Rule 14a-8 to be considered for inclusion in the Fund's
proxy statement for the 2007 Annual Meeting, the proposals must be received at
The Central Europe and Russia Fund, Inc., c/o Deutsche Asset Management, 345
Park Avenue, NYC20-2799, New York, New York 10154, Attention: Secretary, on or
before January 17, 2007.
In addition, the Fund's Bylaws currently provide that if a stockholder
desires to bring business (including director nominations) before the 2007
Annual Meeting that is or is not the subject of a proposal timely submitted for
inclusion in the Fund's proxy statement, written notice of such business as
prescribed in the Bylaws must be delivered to the Fund's Secretary, at the
principal executive offices of the Fund, between January 17, 2007 and February
16, 2007. For additional requirements, the stockholder may refer to the Bylaws,
a current copy of which may be obtained without charge upon request from the
Fund's Secretary. If the Fund does not receive timely notice pursuant to the
Bylaws, the proposal may be excluded from consideration at the meeting,
regardless of any earlier notice provided in accordance with SEC Rule 14a-8.
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 Georgeson Shareholder
Communications, Inc. to assist in the solicitation of proxies, if called upon by
the Fund, at an estimated fee not to exceed $9,500 plus reimbursement of normal
expenses.
15
ANNUAL REPORT DELIVERY
The Fund will furnish, without charge, a copy of its annual report for the
fiscal year ended October 31, 2005 and the most recent semi-annual report, if
any, to any stockholder upon request. Such requests should be directed by mail
to The Central Europe and Russia Fund, Inc., c/o Deutsche Asset Management, 345
Park Avenue, NYC20-2799, New York, New York 10154 or by telephone to
1-800-437-6269. Annual reports are also available on the Fund's web site:
www.germanyfund.com.
John Millette
Secretary
Dated: May 17, 2006
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 CARD AND
RETURN IT TO THE FUND AS SOON AS PRACTICABLE.
16
ANNEX A
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
(THE "FUND")
NOMINATING COMMITTEE CHARTER
(ADOPTED AS OF APRIL 23, 2004)
The Board of Directors (the "Board") of the Fund has adopted this Charter
to govern the activities of the Nominating Committee (the "Committee") of the
Board.
STATEMENT OF PURPOSES AND RESPONSIBILITIES
The primary purposes and responsibilities of the Committee are:
(i) to identify individuals qualified to become members of the
Board in the event that a position is vacated or created;
(ii) to consider all candidates proposed to become members of the
Board, subject to applicable law, the Fund's Articles of
Incorporation or By-laws, resolutions of the Board and the
procedures and policies set forth in this Charter and the
Fund's annual proxy statement;
(iii) to select and nominate, or recommend for nomination by the
Board, candidates for election as Directors;
(iv) in the case of a director nominee to fill a Board vacancy
created by an increase in the size of the Board, to make a
recommendation to the Board as to the class of directors in
which the individual should serve;
(v) to make recommendations to the Board from time to time as to
any changes that the Committee believes to be desirable to the
provisions of the Fund's By-laws regarding minimum standards
and qualifications for service as a Director on the Board or
to any charter of committees of the Board regarding minimum
standards and qualifications for service as a committee
member, and to recommend to the Board, or to set, any
additional standards or qualifications considered necessary or
desirable for service as a Director on the Board or as a
member of a committee of the Board;
(vi) to identify Board members qualified to fill vacancies on any
committee of the Board, taking into account any qualifications
or other criteria set forth in the charter of that committee,
and to recommend that the Board appoint the identified member
or members to that committee;
(vii) to make recommendations to the Board from time to time as to
changes that the Committee believes to be desirable to the
size of the Board or any committee thereof;
(viii) to review with counsel, at least annually, each Director's
affiliations and relationships for purposes of determining
whether such Director is a person who is not an "interested
person" of the Fund, as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended.
(ix) to assist management in the preparation of the disclosure in
the Fund's annual proxy statement regarding the operations of
the Committee; and
(x) to perform any other duties or responsibilities expressly
delegated to the Committee by the Board from time to time
relating to the nomination of Board or committee members.
A-1
ORGANIZATION AND GOVERNANCE
The Committee shall consist solely of three or more members of the Board.
The Committee must consist entirely of Board members who are not "interested
persons" of the Fund, as defined in Section 2(a)(19) of the Investment Company
Act of 1940, as amended ("Independent Directors"). Members shall serve at the
pleasure of the Board and for such term or terms as the Board may determine.
One or more members of the Committee may be designated by the Board as the
Committee's chairperson or co-chairperson, as the case may be.
The Committee shall meet at least once a year at a time and place
determined by the Committee chairperson, with further meetings to occur, or
actions to be taken by unanimous written consent, when deemed necessary or
desirable by the Committee or its chairperson. Members of the Committee may
participate in a meeting of the Committee by means of conference call or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Committee meetings shall be held in accordance with
the Fund's By-laws.
CRITERIA FOR DIRECTOR NOMINEES
To be eligible for nomination as a Director a person must, at the time of
such person's nomination, have Relevant Experience and Country Knowledge, as
defined in the Fund's By-laws, and must not have any Conflict of Interest, as
defined in the Fund's By-laws. Whether a proposed nominee satisfies the
foregoing qualifications shall be determined by the Committee in its sole
discretion. The Committee may also take into account a wide variety of factors
in considering Director candidates, including (but not limited to): (i) the
candidate's knowledge in matters relating to the investment company industry;
(ii) any experience possessed by the candidate as a director or senior officer
of other public or private companies; (iii) the candidate's educational
background; (iv) the candidate's reputation for high ethical standards and
personal and professional integrity; (v) any specific financial, technical or
other expertise possessed by the candidate, and the extent to which such
expertise would complement the Board's existing mix of skills and
qualifications; (vi) the candidate's perceived ability to contribute to the
ongoing functions of the Board, including the candidate's ability and commitment
to attend meetings regularly, work collaboratively with other members of the
Board and carry out his or her duties in the best interests of the Fund; (vii)
the candidate's ability to qualify as an Independent Director; and (viii) such
other criteria as the Nominating Committee determines to be relevant in light of
the existing composition of the Board and any anticipated vacancies or other
factors.
IDENTIFICATION OF NOMINEES
In identifying potential nominees for the Board, the Committee may
consider candidates recommended by one or more of the following sources: (i) the
Fund's Directors, (ii) the Fund's officers, (ii) the Fund's investment manager,
investment adviser or their affiliates, (iv) the Fund's stockholders (see below)
and (v) any other source the Committee deems to be appropriate. The Committee
will not consider self-nominated candidates or candidates nominated by members
of a candidate's family, including such candidate's spouse, children, parents,
siblings, uncles, aunts, grandparents, nieces and nephews. The Committee may,
but is not required to, retain a third party search firm at the Fund's expense
to identify potential candidates.
A-2
CONSIDERATION OF CANDIDATES RECOMMENDED BY STOCKHOLDERS
The Committee will consider nominee candidates properly submitted by
stockholders in accordance with applicable law, the Fund's Articles of
Incorporation or By-laws, resolutions of the Board and the qualifications and
procedures set forth in this Charter and the Fund's annual proxy statement,
including the requirements that a stockholder or group of stockholders seeking
to submit a nominee candidate (i) must have beneficially owned at least 5% of
the Fund's common stock for at least two years, (ii) may submit only one nominee
candidate for any particular meeting of stockholders, and (iii) may submit a
nominee candidate for only an annual meeting or other meeting of stockholders at
which directors will be elected. The Committee will evaluate nominee candidates
properly submitted by stockholders on the same basis as it considers and
evaluates candidates recommended by other sources.
DELEGATION TO SUBCOMMITTEE
The Committee may, in its discretion, delegate all or a portion of its
duties and responsibilities to a subcommittee of the Committee.
RESOURCES AND AUTHORITY OF THE COMMITTEE
The Committee shall have the resources and authority appropriate to
discharge its duties and responsibilities, including the authority to select,
retain, terminate and approve the fees and other retention terms of special
counsel or other experts or consultants, as it deems appropriate, without
seeking approval of the Board or management. With respect to consultants or
search firms used to identify director candidates, this authority shall be
vested solely in the Committee.
A-3
ANNEX B
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
EXCERPTS OF BY-LAWS
ARTICLE II
Section 13. Advance Notice of Stockholder Nominees for Director and Other
Stockholder Proposals. (a) Annual Meetings of Stockholders. (1) Nominations of
persons for election to the Board of Directors and the proposal of business to
be considered by the stockholders may be made at an annual meeting of
stockholders (i) pursuant to the Corporation's notice of meeting, (ii) by or at
the direction of the Board of Directors or (iii) by any stockholder of the
Corporation who was a stockholder of record both at the time of giving of notice
provided for in this Section 13(a) and at the time of the annual meeting, who is
entitled to vote at the meeting and who complied with the notice procedures set
forth in this Section 13(a).
(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (iii) of paragraph
(a)(1) of this Section 13, the stockholder must have given timely notice
thereof in writing to the Secretary of the Corporation and such other
business must otherwise be a proper matter for action by the stockholders.
To be timely, a stockholder's notice shall be delivered to the Secretary
at the principal executive offices of the Corporation not less than 90
days nor more than 120 days prior to the first anniversary of the date of
mailing of the notice for the preceding year's annual meeting; provided,
however, that in the event that the date of mailing of the notice for the
annual meeting is advanced or delayed by more than 30 days from the first
anniversary of the date of mailing of the notice for the preceding year's
annual meeting, notice by the stockholder to be timely must be so
delivered not earlier than the 120th day prior to the date of mailing of
the notice for such annual meeting and not later than the close of
business on the later of the 90th day prior to the date of mailing of the
notice for such annual meeting or the tenth day following the day on which
disclosure of the date of mailing of the notice for such meeting is first
made. In no event shall the public announcement of a postponement or
adjournment of an annual meeting commence a new time period for the giving
of a stockholder's notice as described above. Such stockholder's notice
shall set forth (i) as to each person whom the stockholder proposes to
nominate for election or reelection as a director, (A) the name, age,
business address and residence address of such person, (B) the class and
number of shares of stock of the Corporation that are beneficially owned
by such person, (C) all other information relating to such person that is
required to be disclosed in solicitations of proxies for election of
directors in an election contest (even if an election contest is not
involved), or is otherwise required, in each case pursuant to Regulation
14A (or any successor provision) under the Exchange Act or pursuant to the
Investment Company Act and the rules thereunder (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected), and (D) a statement specifying which of
clauses (1)-(7) of the definition of "Relevant Experience and Country
Knowledge" in Article III, Section 3 of the Bylaws the person being
nominated satisfies, information relating to such person sufficient to
support a determination that the person satisfies the specified clause or
clauses of the definition and a representation that the person does not
have a "Conflict of Interest" as defined in Article III, Section 3 of the
Bylaws; (ii) as to any other business that the stockholder proposes to
bring before the meeting, a description of the business desired to be
brought before the meeting, the reasons for conducting such business at
the meeting and any material interest in such business of such stockholder
(including any anticipated benefit to the stockholder therefrom) and of
each beneficial owner, if any, on whose behalf the proposal is made; and
(iii) as to the stockholder giving the notice and each beneficial owner,
if any, on whose behalf the
B-1
nomination or proposal is made, (x) the name and address of such
stockholder, as they appear on the Corporation's stock ledgers and a
current name and address, if different, and of such beneficial owner, and
(y) the class and number of shares of each class of stock of the
Corporation which are owned beneficially and of record by such stockholder
and owned beneficially by such beneficial owner.
(3) Notwithstanding anything in this subsection (a) of this Section
13 to the contrary, in the event the Board of Directors increases or
decreases the maximum or minimum number of directors in accordance with
Article III, Section 2 of these Bylaws, and there is no public
announcement of such action at least 100 days prior to the first
anniversary of the date of mailing of the preceding year's annual meeting,
a stockholder's notice required by this Section 13(a) shall also be
considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the tenth day following the day on which such public
announcement is first made by the Corporation.
(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which directors are to be elected (i) pursuant to the
Corporation's notice of meeting, (ii) by or at the direction of the Board of
Directors or (iii) provided that the Board of Directors has determined that
directors shall be elected at such special meeting, by any stockholder of the
Corporation who is a stockholder of record both at the time of giving of notice
provided for in this Section 13 and at the time of the special meeting, who is
entitled to vote at the meeting and who complied with the notice procedures set
forth in this Section 13. In the event the Corporation calls a special meeting
of stockholders for the purpose of electing one or more directors to the Board
of Directors, any such stockholder may nominate a person or persons (as the case
may be) for election as a director as specified in the Corporation's notice of
meeting, if the stockholder's notice required by paragraph (a)(2) of this
Section 13 shall be delivered to the Secretary at the principal executive
offices of the Corporation not earlier than the 120th day prior to such special
meeting and not later than the close of business on the later of the 90th day
prior to such special meeting or the tenth day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement of a postponement or adjournment of a
special meeting commence a new time period for the giving of a stockholder's
notice as described above.
(c) General. (1) Only such persons who are nominated in accordance with
the procedures set forth in this Section 13 and Article III, Section 3 of these
Bylaws shall be eligible to serve as directors and only such business shall be
conducted at a meeting of stockholders as shall have been brought before the
meeting in accordance with the procedures set forth in this Section 13. The
chairman of the meeting shall have the power and duty to determine whether a
nomination or any business proposed to be brought before the meeting was made or
proposed, as the case may be, in accordance with the procedures set forth in
this Section 13 and, if any proposed nomination or business is not in compliance
with this Section 13, to declare that such defective nomination or proposal be
disregarded.
(2) For purposes of this Section 13, (a) the "date of mailing of the
notice" shall mean the date of the proxy statement for the solicitation of
proxies for election of directors and (b) "public announcement" shall mean
disclosure (i) in a press release reported by the Dow Jones News Service,
Associated Press or comparable news service or (ii) in a document publicly
filed by the Corporation with the Securities and Exchange Commission
pursuant to the Exchange Act or the Investment Company Act.
B-2
(3) Notwithstanding the foregoing provisions of this Section 13, a
stockholder shall also comply with all applicable requirements of state
law and of the Exchange Act and the Investment Company Act and the rules
and regulations thereunder with respect to the matters set forth in this
Section 13. Nothing in this Section 13 shall be deemed to affect any right
of stockholders to request inclusion of proposals in, nor the right of the
Corporation to omit a proposal from, the Corporation's proxy statement
pursuant to Rule 14a-8 (or any successor provision) under the Exchange
Act.
ARTICLE III
Section 3. Qualifications. Directors need not be stockholders. Each
Director shall hold office until the earlier of: (a) the expiration of his term
and his or her successor shall have been elected and qualifies, (b) his or her
death, (c) his or her resignation, or (d) his or her removal. To be eligible for
nomination as a director a person must, at the time of such person's nomination,
(a) have Relevant Experience and Country Knowledge (as defined below), (b) not
have any Conflict of Interest (as defined below) and (c) not be over 72 years of
age; provided that clause (c) shall not apply to any person who was a Director
on October 15, 1999 or to any person whom the Nominating Committee (or in the
absence of such a Committee, the Board of Directors) determines to except from
that clause on the basis that the person's prior public or government service or
other broad-based activities in the business community make it essential that
the Corporation continue to receive the benefit of the person's services as a
Director. The determination described in the previous sentence shall be made on
or before the time of nomination. Whether a proposed nominee satisfies the
foregoing qualifications shall be determined by the Nominating Committee or, in
the absence of such a Committee, by the Board of Directors, each in its sole
discretion.
For purposes of the following definitions of Relevant Experience and
Country Knowledge and Conflict of Interest, the term "Specified Country" means
any one or more of the following countries: Czech Republic, Hungary, Germany,
Poland or Russia.
"Relevant Experience and Country Knowledge" means experience in business,
investment, economic or political matters of a Specified Country or the United
States, through service for 10 of the past 20 years (except where a shorter
period is noted) in one or more of the following principal occupations:
(1) senior executive officer or partner of a financial or industrial
business headquartered in a Specified Country and that has annual
revenues of at least the equivalent of US $500 million,
(2) senior executive officer or partner of a financial or industrial
business headquartered in the United States that has annual revenues
of at least the equivalent of US $500 million and whose management
responsibilities include supervision of business operations in a
Specified Country or other European country,
(3) director (or the equivalent) for 5 of the past 10 years of one or
more investment businesses or vehicles (including this Corporation)
a principal focus of which is investment in one or more Specified
Countries and that have at least the equivalent of US $250 million
in combined total assets of their own,
(4) senior executive officer or partner of an investment management
business having at least the equivalent of US $500 million in
securities of companies in one or more Specified Counties or
securities principally traded in one or more Specified Countries
under discretionary management for others,
(5) senior executive officer or partner of a business consulting,
accounting or law firm having at least 100 professionals and whose
principal responsibility involves or involved providing services
involving matters relating to a Specified Country or other European
country for financial or industrial businesses, investment
businesses or vehicles or investment management businesses as
described in (1) - (4) above,
B-3
(6) senior official (including ambassador or minister) (i) in the
national government, a government agency or the central bank of a
Specified Country or the United States, (ii) in a major
supranational agency or organization of which a Specified Country or
the United States is a member, or (iii) in a leading international
trade organization relating to a Specified Country or the United
States, in each case in the area of finance, economics, trade or
foreign relations, or
(7) current director or senior officer (without regard to years of
service) of an investment manager or adviser of the Corporation, or
of any entity controlling or under common control with an investment
manager or adviser of the Corporation.
For purposes of clauses (1)-(5) of the preceding sentence and clauses (1)-(2) of
the next paragraph, the term "financial or industrial business" includes a
financial or industrial business unit within a larger enterprise; the term
"investment businesses or vehicles" includes an investment business unit or
investment vehicle within a larger enterprise; the term "investment management
business" includes an investment management business unit within a larger
enterprise; and the term "investment vehicle" includes an investment vehicle
within a larger enterprise; but in each case only to the extent the unit
satisfies the revenue, asset and other requirements specified for the business
or vehicle in clauses (1)-(5) of the preceding sentence or clauses (1)-(2) of
the next paragraph.
"Conflict of Interest" means the presence of a conflict with the interests
of the Corporation or its operations through any of the following:
(1) current position (a) as a director, officer, partner or employee of
another investment vehicle a significant (i.e., 25% or more of total
assets) focus of which is securities of companies in one or more
Specified Countries or securities principally traded in markets of
one or more Specified Countries and that does not have the same
investment adviser as the Corporation or an investment adviser
affiliated with an investment adviser of the Corporation, and (b)
having direct and regular responsibilities relating to that
investment vehicle,
(2) current position as (a) a director, officer, partner or employee of
the sponsor (or equivalent) of an investment vehicle described in
the previous point and (b) having direct and regular
responsibilities relating to that investment vehicle, or
(3) current position as an official of a governmental agency or
self-regulatory body having responsibility for regulating the
Corporation or the markets in which it proposes to invest.
B-4
CEE[LOGO]
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
--------------------------------------------------------------------------------
PROXY
THE CENTRAL EUROPE AND RUSSIA FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned stockholder of The Central Europe and Russia Fund, Inc., a
Maryland corporation (the "Fund"), hereby appoints John Millette, Patricia Rosch
Carrington and Elisa Metzger, or any of them, as proxies for the undersigned,
with full power of substitution in each of them, to attend the Annual Meeting of
the Stockholders of the Fund to be held at 2:00 p.m., New York time, on June 20,
2006 at the offices of Deutsche Bank, 345 Park Avenue, New York, New York 10154,
and any adjournment or postponement thereof, to cast on behalf of the
undersigned all votes that the undersigned is entitled to cast at such meeting,
and otherwise to represent the undersigned at the meeting with all powers
possessed by the undersigned if personally present at the meeting. The
undersigned hereby acknowledges receipt of the Notice of the Annual Meeting of
Stockholders and of the accompanying Proxy Statement, the terms of each of which
are incorporated by reference herein, and revokes any proxy heretofore given
with respect to such meeting.
THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS INSTRUCTED
BELOW. IF THIS PROXY IS EXECUTED BUT NO INSTRUCTION IS GIVEN, THE VOTES ENTITLED
TO BE CAST BY THE UNDERSIGNED WILL BE CAST "FOR" EACH OF THE NOMINEES FOR
DIRECTOR AND "FOR" PROPOSAL 2, AS DESCRIBED IN THE PROXY STATEMENT AND IN THE
DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE
---------------- ----------------
SEE REVERSE SIDE SEE REVERSE SIDE
---------------- ----------------
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
--------------------------------------------------------------------------------
|X| Please mark
votes as in
this example.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
NOMINEES AND "FOR" PROPOSAL 2.
--------------------------------------------------------------------------------
1. Election of Directors.
Mr. Christian Strenger
Dr. Frank Tromel
Mr. Werner Walbrol
FOR each of WITHHOLD FOR all
the nominees AUTHORITY nominees except
for director as to all listed as marked to the
listed nominees contrary
|_| |_| |_|
(Instructions: To withhold authority for any individual nominee, strike a line
through the nominee's name in the list above.)
2. To ratify the appointment by the Audit Committee and the Board of Directors
of PricewaterhouseCoopers LLP, an independent public accounting firm, as
independent auditors for the fiscal year ending October 31, 2006.
FOR AGAINST ABSTAIN
|_| |_| |_|
3. To vote and otherwise represent the undersigned on any other matter that may
properly come before the meeting or any adjournment or postponement thereof
in the discretion of the Proxy holder.
Date _______________________ , 2006
___________________________________
Signature
___________________________________
Signature, if held jointly
Please sign here exactly as your
name appears in the records of the
Fund and date. If the shares are
held jointly, each holder should
sign. When signing as an attorney,
executor, administrator, trustee,
guardian, officer of a corporation
or other entity or in any other
representative capacity, please
give the full title under
signature(s).