SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant []
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[] Preliminary proxy statement.
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[] 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 NEW GERMANY FUND, INC.
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(Name of Registrant as Specified in Its Charter)
PHILLIP GOLDSTEIN
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Registrant)
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(4) Date Filed:
Opportunity Partners L.P., 60 Heritage Drive, Pleasantville, NY
10570
(914) 747-5262 // Fax: (914) 747-5258//oplp@optonline.net
May 31, 2006
Dear Fellow Shareholder of The New Germany Fund:
Would you like to eliminate the Fund?s value destroying discount
once and for all? We are soliciting your proxy to vote to open-
end the Fund or otherwise afford shareholders an opportunity to
realize net asset value (?NAV?) and to elect directors that will
abide by your wishes. In considering whether to give us your
proxy, you should ask why the incumbent directors --
Unanimously oppose open-ending the Fund?
Misrepresent the degree of shareholder support for open-
ending?
Avoid providing the Fund?s actual long term performance
numbers?
Refuse to have face-to-face discussions with shareholders?
Want to prevent shareholders from nominating directors?
What do shareholders want?
Shareholders were given an opportunity to vote for or against
open-ending in both 2004 and 2005 and those that voted strongly
supported open-ending. At the Fund?s 2004 annual meeting, they
voted as follows: 6,948,617 votes FOR open-ending; 4,451,528
votes AGAINST open-ending; and 239,889 votes TO ABSTAIN. Here
is the board?s spin: ?In 2004, the open-ending proposal received
favorable votes from the holders of only 27% of the outstanding
shares, while the holders of nearly 56% of the Fund's
outstanding shares did not even vote on the proposal, and 17%
voted against it.? In 2005 shareholders supported open-ending
by an even wider margin but according to the board, ?The open-
ending proposal received favorable votes from the holders of
only 14% of shares outstanding, 18% voted against it, and 68%
did not vote.?
Just as the Communists defended the infamous Berlin Wall as a
necessary barrier to keep East Germans from fleeing to a free
and prosperous West Germany, the board has utilized extreme
measures to avoid what it says would be the Fund?s inevitable
demise if it open-ends. By the board?s logic, East Germans were
better off with the Berlin Wall standing than they are today.
The incumbents say open-ending will only result in a short term
gain. That is not true. Open-ending is a permanent solution to
the discount problem that benefits all shareholders. If the
Fund is open-ended, any shareholder can redeem his or her shares
at full NAV at any time ? whether that is tomorrow or thirty
years from now. The fact is that thousands of open-end mutual
funds offer daily liquidity to shareholders at NAV and there is
no good reason to deny us the same opportunity.
Why does the board oppose open-ending?
Why then are the incumbents so hostile to open-ending that they
refuse to even meet with us to discuss it? Frankly, their
?reasoning? seems almost schizophrenic. On the one hand, they
say, ?The Board believes most of the Fund?s stockholders have
invested for the long term.? On the other hand, they fear these
long term shareholders will redeem their shares at NAV as soon
as they can. Why would open-ending the Fund transform a long
term oriented Dr. Jekyll investor into a short term Mr. Hyde?
We think the real reason the incumbents oppose open-ending is
that they are acting as ?yes men? for Deutsche Investment
Management (?Deutsche?), the Fund?s investment manager. As the
manager of a closed-end fund, Deutsche has gotten used to
collecting a steady stream of fee income regardless of its
performance. Unlike the manager of an open-end fund, Deutsche
is insulated from market forces as long as there is a friendly
board of directors to do its bidding because dissatisfied
shareholders cannot redeem their shares. Because its long term
track record is unimpressive, Deutsche is worried that investors
will not buy shares of the Fund at NAV. To entice investors to
buy, there has to be a discount. Thus, Deutsche has concluded
that we must live with a perpetual discount to preserve its
management fees.
Why aren?t the Fund?s directors looking out for us? Seven of
them serve on the boards of at least three funds managed by
Deutsche. One, Robert Wadsworth, who claims to be ?independent?
from Deutsche, serves on the boards of 90 other Deutsche-managed
funds. He was paid $224,260 for his services to these Deutsche
funds in 2005. Do you think he is going to say ?no? to
Deutsche? Richard Burt, another director, collected the
incomprehensible sum of $192,030 in 2005 for serving as a
director on just three Deutsche managed funds. Interestingly,
Mr. Burt, who is a former U.S. ambassador to Germany, has been
labeled a rubber stamp director of Hollinger International
because he allowed Lord Conrad Black to run that company as a
?corporate kleptocracy.? As we said, although open-ending is
good for all shareholders it threatens Deutsche?s fee stream.
Thus, it is predictable that the board would oppose open-ending.
In fact, whenever the interests of Deutsche conflict with those
of shareholders you can be pretty sure the incumbents will side
with their meal ticket, i.e., Deutsche.
You may wonder why Deutsche opposes open-ending the Fund even
though all shareholders would benefit and even though a good
manager of an open-end fund can potentially reap greater
rewards. Here is the reason. While good performance will
eventually attract more assets, there is always the risk of
failure. And, as discussed in more detail below, Deutsche?s
long-term record is hardly a selling point. Like the fat and
lazy plant managers in Communist East Germany that resisted
capitalism, Deutsche understandably fears subjecting its fee
income stream to competition and market discipline. In a
nutshell, this is the reason Deutsche has determined that
shareholders have to suffer with a persistent discount.
What don?t the incumbents want you to know about the Fund?s long
term performance?
The incumbents derisively say our focus on eliminating the
discount is short sighted in light of the Fund?s outstanding
long-term performance. It would be catastrophic, they insist,
if we were ?permitted to wrest control of the Fund . . . to
pursue [our] short-term interests? and deny ?stockholders the
opportunity to achieve long-term investment gains.? Although
the incumbents ramble on endlessly about how important it is to
think about the long term, they never disclose what the Fund?s
long term performance has been over its entire sixteen year
existence. Instead, they say Deutsche?s strategy of seeking
long term gains ?has been remarkably successful over the past
three years? and provide a graph that shows a 300% return for
shareholders that bought shares of the Fund at the beginning of
2003. This three-year performance, they say, proves the Fund?s
long-term investment approach works and urge shareholders to
support the incumbents so that they can look forward to
?continued long term investment gains? as if that is a sure
thing.
However, as Mark Twain quipped, ?There are lies, damned lies,
and statistics.? The oldest statistical trick in the book is to
conveniently select end points to present data that eliminate
any negative inferences that might undermine one?s position.
The incumbents point to their self-serving graph and note that
if the Fund had liquidated in early 2003 shareholders would have
had only $3.12 plus the gain from eliminating the discount but
would have missed out on a subsequent 300% gain. They don?t say
that if the Fund had liquidated in early 1998 the discount would
have been eliminated and shareholders would have had about
$16.50 in cash.
Unlike the incumbents, we don?t claim to be smart enough to know
what the market is going to do in the future. All we know is
that a discount is a constant drag that prevents shareholders
from realizing the full value of their investment whenever they
choose to do so. The decision to eliminate a persistent
discount does not rely on recent performance or predictions of
future performance. We also know that using selective hindsight
is manipulative and dishonest.
Now let us take a hard look at the Fund?s actual long term
performance. The Fund has been operating since January 30,
1990. That is more than sixteen years. From inception through
March 31, 2006, the Fund?s average annual total return based on
market price is 4.17%. To achieve this meager return,
shareholders have been subjected to enormous volatility. In
2000, 2001 and 2002, the Fund lost 14.4%, 33.9%, and 39.5%
respectively on a market basis. Then, in 2003, 2004 and 2005,
the Fund gained 102.4%, 30.5% and 18.9% respectively. The
incumbents take credit for the ?outstanding service? they
provided over the past three good years but are strangely silent
about their responsibility for the bone chilling losses in the
previous three years. How could such painful losses have
occurred under the watchful eyes of directors with such a deep
knowledge of German markets? The incumbents would like you to
forget that shareholders since 1998 (when the NAV was over $16
per) share are still under water.
We can think of many words to describe the Fund?s long term
performance but ?outstanding? is not one of them. While the
incumbents castigate hedge funds for being impatient, the plain
fact is that no hedge fund could survive with such a poor long-
term record. And any board that was truly independent from
Deutsche would have replaced it long ago as the Fund?s
investment manager. Draw your own conclusion!
?Please be assured that your Board of Directors . . . is the
real advocate for shareholder democracy.?
Yes, that is what the incumbents say. In fact, they are so
committed to shareholder democracy that they will do whatever it
takes to keep any dissenters (known in German boardroom circles
as ?locusts?) from conducting an election contest. For example,
they unilaterally adopted a so-called qualifications bylaw that
precludes virtually all shareholders from serving on the board.
The incumbents say their intentions were strictly honorable and
that if shareholders can?t find any qualified candidates, that
is just a darned shame. Preventing a competitive election was
the furthest thing from their minds. Just for fun, read the
qualifications they established for nominees and see if you
agree:
?Relevant Experience and Country Knowledge? means
experience in business, investment, economic or political
matters of Germany 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 Germany 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 European business operations,
(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 Germany 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 German companies or
securities principally traded in Germany 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 (b) whose principal responsibility
involves or involved providing services involving European
matters for financial or industrial businesses, investment
businesses or vehicles or investment management businesses
as described in (1) - (4) above,
(6) senior official (including ambassador or minister) in
the national government, a government agency or the central
bank of Germany or the United States, in a major
supranational agency or organization of which Germany or
the United States is a member, or in a leading
international trade organization relating to Germany 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.
In a Wall Street Journal article, Robert Wadsworth, our $225,000
per year ?independent? director, defended the qualifications
bylaw by saying that ?the fund believes that it is a good idea.?
Mr. Wadsworth pooh-poohed any suggestion that the qualifications
were hard to meet, saying, ?There are thousands of people who
would be eligible; this isn't narrowly defined.? He did not say
if any shareholders were among those thousands of people. As
one blogger (http://closed-endfunds.blogspot.com/) commented:
It?s not clear if Mr. Wadsworth said this, or if it?s the
article?s author who just decided to write it, but ?the
fund believes it?s a good idea . . .? is a puzzling
sentence. I?m not aware of any mutual funds that have
developed belief systems. Maybe this was supposed to imply
that the fund?s shareholders believe that the directors
should know about Germany. But based on shareholder votes
over the last few years, I don't get the impression that
shareholders are in favor of the director qualifications.
More likely the sentence should have read ?The current
board of directors believes it's a good idea that Deutsche
Asset Management continues to receive a management fee.?
Like the battle to bring down the Berlin Wall, this has been a
long hard battle. The ?real advocates for shareholder
democracy? have used large amounts of shareholder funds to
defend their twisted version of ?democracy.? Fortunately, there
may finally be light at the end of the tunnel. A federal court
rejected the board?s motion to dismiss a shareholder?s legal
challenge to the qualifications bylaw. It said: ?The Court must
assume that . . . the Board's application of the Bylaw together
with the execution of its June 2005 election would impact ?fair
voting procedures.? Moreover, the Court must assume, in the
present context, that the application of the Director
Qualification Bylaw was ?clearly unreasonable.?? In other
words, the bylaw does not pass the giggle test. Now, lawyers
from Sullivan & Cromwell will try to keep a straight face while
they attempt to convince the judge that the primary purpose of
the board?s qualifications bylaw is not to stifle dissent. It
looks to us like a futile cause. But don?t feel bad for S & C.
They can console themselves with the millions of dollars they
will get from shareholders to keep those same shareholders from
exercising their franchise rights. And, even though S & C will
argue that we shareholders have to live with a discount, we
doubt they will offer any discount to provide legal services to
the Fund.
To conclude, we think it is finally time to close the discount.
The annual meeting will be held on June 20, 2006 and we ask you
to promptly vote your proxy online at WWW.PROXYVOTE.COM or by
telephone at 1-800-454-8683. Alternatively, you can mail the
GREEN proxy card in the enclosed envelope but please do it
today. Let?s send a powerful message that the discount must be
eliminated once and for all!
Very truly yours,
Phillip Goldstein
Fellow GF Shareholder
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 20, 2006)
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
21, 2006 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 31, 2006.
INTRODUCTION
There are five matters that will be voted upon at the Meeting:
(1) the election of three directors; (2) ratification of the
appointment of the independent auditors; (3) a proposal to
terminate the investment advisory agreement between
Deutsche Asset Management International GmbH and the Fund, (4)
a proposal to formalize the right of shareholders to nominate
and elect the Fund?s directors; and (5) a proposal 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, 4 and 5. I am not making a
recommendation regarding Proposal 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. 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 each
proposal except the termination proposal. 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. The board of directors has adopted a bylaw that
requires nominees to meet onerous qualifications which my
nominees do not meet. I believe these qualifications constitute
an improper constraint by the board on the right of stockholders
to elect directors. A lawsuit has been filed challenging
validity of the qualifications bylaw and pending the outcome of
that lawsuit, there is a question as to whether votes for my
nominees will be counted.
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 three
nominees receiving the greatest number of votes cast will be
elected directors. Proposal 3 requires the affirmative vote of
the lesser of (a) 67% or more of the shares present at the
Meeting, if the holders of more than 50% of the outstanding
shares are present or represented by proxy, and (b) more than
50% of the outstanding shares of the Fund. Abstentions and
broker non-votes will have the same effect as votes against the
proposal. Each of the other proposals requires the affirmative
vote of a majority of the votes cast at the Meeting for
approval.
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. Currently, my clients, clients of my
affiliates, and I beneficially own 2,092,372 shares of the Fund,
of which 1,431,951 shares were bought in 2004; 278,600 shares
bought and 5,000 shares sold in 2005; and 704 shares bought and
92,400 sold in 2006.
REASONS FOR THE SOLICITATION
In 2000, the board adopted a bylaw establishing qualifications
for director that serve to perpetuate the board?s control over
the Fund. A class action lawsuit has been filed by shareholders
challenging the validity of that bylaw and the results of last
year?s annual meeting. Recently, a federal judge denied the
Fund?s motion to dismiss the lawsuit, stating: ?The Court must
assume that . . . the Board's application of the Bylaw together
with the execution of its June 2005 election would impact ?fair
voting procedures.? Moreover, the Court must assume, in the
present context, that the application of the Director
Qualification Bylaw was ?clearly unreasonable.?? We are
optimistic that the shareholders will ultimately prevail in the
lawsuit.
Last year, we conducted a proxy contest that, if not for the
board?s refusal to waive the qualifications bylaw, might have
resulted in our slate of directors being elected and our open-
ending proposal being adopted by a 71% to 29% margin. Since
November 2005, we have tried several times to reach out to the
board in an attempt to resolve the litigation and to avert
another proxy contest but the board has adamantly refused to
meet. Faced with the board?s intransigence, we have determined
to pursue another proxy contest.
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. No nominee 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.
Brad Orvieto (49), 10824 NW 2nd Street, Plantation, Florida 33324
Founded Horizon Financial Group, a Financial Planning and
Investment Advisory firm, 1985. Horizon Financial Group merged
with Strategic Asset Management Group, 1997. Mr. Orvieto?s
firm?s practice consists of investment management consulting for
high net worth individuals, municipal and corporate pension
funds and non-profit organizations. He has been a director of
Equus II, a business development company, since 2003.
Lawrence J. Goldstein (70), Santa Monica Partners, L.P., 1865
Palmer Avenue,
Larchmont New York 10538
For the past 24 years Mr. Goldstein has been the President and
founder of SMP Asset Management, LLC, the General Partner of
Santa Monica Partners, LP, and President of Santa Monica
Partners Asset Management LLC, Santa Monica Partners Opportunity
Fund LP, and Santa Monica Partners II LP. These investment
partnerships have a long-term value focus. Mr. Goldstein is a
director of Advanced Processing & Imaging and has served as a
director of many small public companies including American
Locker Group, Inc., FRMO Corp, Initio Inc., SBM Industries, and
Starstruck Ltd.
Richard J. Shaker (64),1094 Magothy Circle, Annapolis, MD 21409
Mr. Shaker earned a Ph.D. in mathematics from the University of
Chicago in 1968. He worked at the National Security Agency
from1968-1994 as a mathematician and executive and from 1991 to
1994 as Chief of Mathematical Research. He has been a principal
of Shaker Financial Services, a financial advisory firm since
1995.
None of the above nominees owns any shares of the Fund except
for Mr. Orvieto who owns 1,900 shares. My wife and I jointly
own 29,244 shares in street name and I own 3,011 shares in an
IRA account. I have sole or shared voting and/or disposal
authority for an additional 2,060,117 shares that are
beneficially owned by my clients. There are no definitive
arrangements or understandings between any of our nominees and
me or my 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, 2006
In the absence of contrary instructions, the proxy holders will
vote your shares FOR this proposal.
PROPOSAL 3: THE INVESTMENT ADVISORY AGREEMENT BETWEEN DEUTSCHE
ASSET MANAGEMENT INTERNATIONAL GMBH AND THE FUND SHALL BE
TERMINATED.
In the absence of contrary instructions, the proxy holders will
NOT VOTE your shares on this proposal.
PROPOSAL 4: NOTWITHSTANDING ANY PROVISION OF THE FUND'S BYLAWS
TO THE CONTRARY, AT ANY MEETING OF SHAREHOLDERS (1) ANY
BENEFICIAL OR REGISTERED SHAREHOLDER OF THE FUND SHALL BE
ENTITLED TO MAKE NOMINATIONS FOR THE BOARD OF DIRECTORS AND (2)
THE SHAREHOLDERS MAY VOTE FOR AND ELECT AS DIRECTORS ANY PERSONS
SO NOMINATED.
The purpose of this ?ballot access? proposal is to nullify any
impediments to a democratic election for directors including the
so called qualifications bylaw. In the absence of contrary
instructions, the proxy holders will vote your shares FOR this
proposal.
PROPOSAL 5: 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 $35,000.
DATED: May 30, 2006
PROXY CARD
Proxy Solicited in Opposition to the Board of Directors of The
New Germany Fund, Inc. by Phillip Goldstein for the 2006 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 20, 2006, (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.
(INSTRUCTIONS: Mark votes by placing an ?x? in the appropriate
[ ].)
1. ELECTION OF THREE DIRECTORS
[ ] FOR BRAD ORVIETO [ ] WITHHOLD AUTHORITY
[ ] FOR LAWRENCE J. GOLDSTEIN [ ] WITHHOLD AUTHORITY
[ ] FOR RICHARD J. SHAKER [ ] WITHHOLD AUTHORITY
2. TO RATIFY PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2006
FOR [ ] AGAINST [ ]
ABSTAIN [ ]
3. THE INVESTMENT ADVISORY AGREEMENT BETWEEN DEUTSCHE ASSET
MANAGEMENT INTERNATIONAL GMBH AND THE FUND SHALL BE TERMINATED.
FOR [ ] AGAINST [ ]
ABSTAIN [ ]
4. NOTWITHSTANDING ANY PROVISION OF THE FUND'S BYLAWS TO THE
CONTRARY, AT ANY MEETING OF SHAREHOLDERS (1) ANY BENEFICIAL OR
REGISTERED SHAREHOLDER OF THE FUND SHALL BE ENTITLED TO MAKE
NOMINATIONS FOR THE BOARD OF DIRECTORS AND (2) THE SHAREHOLDERS
MAY VOTE FOR AND ELECT AS DIRECTORS ANY PERSONS SO NOMINATED.
FOR [ ] AGAINST [ ]
ABSTAIN [ ]
5. 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. Subject to the board allowing your
shares to be voted, they will be voted as directed or, if no
direction is made, voted FOR the election of the nominees named
above, FOR Proposals 2, 4 and 5 and will NOT BE VOTED on
Proposal 3. The undersigned hereby acknowledges receipt of the
proxy statement dated May 30, 2006 of Phillip Goldstein and
revokes any proxy previously executed.
SIGNATURE(S)___________________________________ Dated: _______