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Exhibit d(ii)
STATE STREET BANK AND TRUST COMPANY
SUBSCRIPTION RIGHTS DISTRIBUTION AND AGENCY AGREEMENT
This Subscription Rights Distribution and Agency Agreement (the
"Agreement") is made as of March __, 1997 between The Korea Fund, Inc. (the
"Company"), a Maryland corporation and State Street Bank and Trust Company, a
national banking association, as subscription and distribution agent ("Agent").
Certain capitalized terms used herein without definition have the respective
meanings specified therefor in the Prospectus (as defined below).
WHEREAS, the Company proposes to make a subscription offer by
issuing certificates or other evidences of subscription rights, in the form
designated by the Company ("Subscription Certificates"), to shareholders of
record ("Record Date Shareholders") of its Common Stock, par value $0.01 per
share ("Common Stock"), as of a record date specified by the Company (the
"Record Date"), pursuant to which each Record Date Shareholder will receive
transferable rights (the "Rights") to subscribe to purchase shares of Common
Stock, as described in the prospectus (the "Prospectus") included in the Form
N-2 Registration Statement filed by the Company with the Securities and Exchange
Commission on February 28, 1997, as amended by any amendments filed with respect
thereto (the "Registration Statement");
WHEREAS, the Company wishes the Agent to perform certain acts on
behalf of the Company and the Agent is willing so to act, in connection with the
distribution of the Subscription Certificates and the issuance and exercise of
the Rights all upon the terms and conditions set forth herein and in the manner
described in the Prospectus;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements set forth herein, the parties agree as follows:
1. The Company hereby appoints and authorizes the Agent to act on its behalf
in accordance with the provisions hereof, and the Agent hereby accepts
such appointment and agrees to so act.
2. (a) Each Subscription Certificate shall evidence the
Rights of the Record Date Shareholder therein
named to purchase Common Stock upon the terms and
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conditions therein and in the Prospectus set
forth.
(b) Upon the written advice of the Company signed by
its Chairman, President, Secretary or Assistant
Secretary, as to the Record Date, the Agent shall,
from a list of the Company's Shareholders as of
the Record Date to be prepared by the Agent in its
capacity as the Company's Transfer Agent, prepare
and record Subscription Certificates in the names
of the Record Date Shareholders, setting forth the
number of Rights to subscribe to the Company's
Common Stock calculated on the basis of one Right
for each 1.01 shares recorded on the Company's
books in the name of each such Record Date
Shareholder as of the Record Date, rounded to the
nearest whole Right. Fractional Rights will not
be issued. Each Subscription Certificate shall be
dated as of the Record Date. Upon the written
advice as to the effective date of the
Registration Statement, the Agent shall as
promptly as practicable deliver the Subscription
Certificates, together with a copy of the
Prospectus, to all Record Date Shareholders whose
addresses are in the United States.
3. (a) Each Subscription Certificate shall be irrevocable and
shall be fully transferable. The Agent shall maintain
a register of Subscription Certificates and the
holders of record thereof. Each Subscription Certificate
shall entitle the holder to the rights set forth on
the face thereof and set forth in the Prospectus.
(b) A Record Date Shareholder may exercise his Rights
under the Primary Subscription and Over-
Subscription Privilege by delivery to the Agent in
the manner specified in the Prospectus of (i) the
Subscription Certificate with respect thereto,
duly executed by such Record Date Shareholder in
accordance with and as provided by the terms and
conditions of the Subscription Certificate,
together with (ii) the Subscription Price for each
share of Common Stock subscribed for by exercise
of such Rights, in United States dollars in cash,
by check, or money order drawn on a bank in the
continental United States or by postal,
telegraphic, or express money order, in each case
payable to the order of the Company.
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(c) Rights may be exercised at any time after the date
of issuance of the Subscription Certificates with
respect thereto but no later than 5:00 P.M. New
York City Time on such date as the Company shall
designate to the Agent in writing (the "Expiration
Date"). For the purpose of determining the time
of the exercise of any Rights, delivery of any
material to the Agent shall be deemed to occur
when such materials are received at the corporate
office of the Agent specified in the Prospectus.
(d) Notwithstanding the provisions of Section 3(b) and
3(c) regarding delivery of an executed
Subscription Certificate to the Agent prior to
5:00 P.M. New York City Time on the Expiration
Date, if prior to such time the Agent receives
notice of guaranteed delivery by telegram or
otherwise from a bank, trust company or a New York
Stock Exchange member guaranteeing delivery of (i)
full payment for Shares purchased and subscribed
for under the Primary Subscription and the Over-
Subscription Privilege (if any) and (ii) a
properly completed and executed Subscription
Certificate, then such exercise of Primary
Subscription Rights and the Over-Subscription
Privilege shall be regarded as timely, subject,
however, to receipt of the duly executed
Subscription Certificate and full payment for the
Common Stock by the Agent within three business
days after the Expiration Date.
(e) Within eight Business Days following the
Expiration Date (the "Confirmation Date"), the
Agent shall sent to each shareholder (or, if
shares of Common Stock on the Record Date are held
by Cede & Co. or any other depository or nominee,
to Cede & Co. or such other depository or
nominee), (A) a confirmation showing (i) the
number of Shares acquired pursuant to the Primary
Subscription Rights, (ii) the number of Shares, if
any, acquired pursuant to the Over-Subscription
Privilege, (iii) the per Share and total purchase
price for the Shares, (iv) any amount payable to
the Shareholder pursuant to Section 9, and (v) any
excess to be refunded by the Company to such
Shareholder, in each case based on the
Subscription Price; and (B) a letter explaining
the allocation of shares pursuant to the Over-
Subscription Privilege. Any excess payment to be
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refunded by the Company to a Shareholder, shall be
mailed by the Agent to the Shareholder as promptly
as possible but in no event later than fifteen
Business Days after the Expiration Date, as provided
in Section 5 below.
4. If, after allocation of Shares to persons exercising
Rights in the Primary Subscription, there remain
unexercised Rights, then the Agent shall allot the
Shares issuable upon exercise of such unexercised
Rights (the "Remaining Shares") to persons exercising
the Over-Subscription Privilege, in the amounts of such
Over-Subscriptions. If the number of Shares for which
the Over-Subscription Privilege has been exercised is
greater than the Remaining Shares, the Agent shall
allot the Remaining Shares to the persons exercising
the Over-Subscription Privilege pro rata based solely
on the number of Rights originally issued to them, as
more fully described in the Prospectus. The Agent
shall advise the Company immediately upon the
completion of the allocation set forth above as to the
total number of Shares subscribed and distributable.
5. (a) The Agent will deliver (i) certificates
representing those Shares purchased pursuant to
the Primary Subscription as soon as practicable
after the corresponding Rights have been validly
exercised and full payment for such Shares has
been received and cleared, it being understood
that certificates representing those Shares
purchased by the Dealer Manager upon its exercise
of the corresponding Rights will be delivered to
the Dealer Manager no later than the close of
business on the Business Day following the day
that full payment for such Shares has been
received by the Agent; (ii) certificates
representing those Shares purchased pursuant to
the Over-Subscription Privilege as soon as
practicable after the Expiration Date and after
all allocations have been effected; (iii) in the
case of each holder of Rights whose Rights were
sold pursuant to Section 9, as promptly as
possible but in no event later than fifteen
Business Days after the Expiration Date, proceeds
of such sale (provided, however, that proceeds of
sales on behalf of Record Date Shareholders whose
Subscription Certificates are undeliverable shall
be held by the Agent until they are either claimed
or escheated); (iv) in the case of each Record
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Date Shareholder who subscribed, pursuant to the Over-Subscription
Privilege, for a greater number of Shares than was allotted to such
Record Date Shareholder under Section 4, as promptly as possible but
in no event later than fifteen Business Days after the Expiration
Date, a refund in the amount of the difference between the purchase
price delivered for the Shares subscribed for pursuant to such
Over-Subscription Privilege and the purchase price of the Shares so
allotted under Section 4 (an "Excess Payment"), and the Agent will
deliver to the Company all interest accrued on such Excess Payment;
(v) in the case of Record Date shareholders who are participants in
the Dividend Reinvestment and Cash Purchase Plan, as promptly as
possible but in no event later than fifteen Business Days after the
Expiration Date, account statements reflecting a credit of
uncertificated Shares for their Primary Subscription and
Over-Subscription Shares unless such shareholders have elected to
receive certificates.
6. (a) All proceeds received by the Agent from holders of Rights in
respect of the exercise of Rights shall be held by the Agent, on
behalf of the Company, in a segregated, interest-bearing account
(the "Account") pending disbursement in the manner described in
Section 6(b) below.
(b) The Agent shall deliver all proceeds received in
respect of the exercise of the Rights (including
interest earned thereon) to the Company as
promptly as practicable after full payment in
respect of such exercise has been received and
cleared; provided that the Agent shall not deliver
to the Company proceeds in excess of the aggregate
maximum offering price shown on the Registration
Statement, and any such excess proceeds shall be
held in the Account to fund Excess Payments after
the Expiration Date.
7. The Agent (a) shall supply the Company with a certified list of Record
Date Shareholders and the number of shares owned of record by each and (b)
shall promptly advise the Company as to the date of delivery of and the
number of Common Stock issued pursuant to the exercise of Rights
hereunder.
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8. The Agent shall account promptly to the Company with
respect to Rights exercised and concurrently account
for all monies received and returned by the Agent
with respect to the purchase of Shares of Common
Stock upon the exercise of Rights.
9. The Agent shall use its best efforts to sell, at
current market prices, either to the Dealer Manager or
through the Dealer Manager on the New York Stock
Exchange, on the terms set forth in the Prospectus, (i)
all Rights submitted to it for sale by Record Date
Shareholders in accordance with the Prospectus,
provided such Rights are received by the Agent prior to
the Expiration Date, (ii) all Rights of Record Date
Shareholders whose Subscription Certificates remain
unclaimed as a result of being returned by postal
authorities as undeliverable the fourth Business Day
prior to the Expiration Date, (iii) all Rights of
Foreign Record Date Shareholders in respect of which no
instructions have been received by the Agent by 12:00
noon, New York City time, two Business Days prior to
the Expiration Date, and (iv) all Rights a Record Date
Holder is unable to exercise because such Rights
represent the right to subscribe for less than one
Share. Such sales will be made exclusively either to
or through the Dealer Manager, and the Agent shall
deliver the proceeds of such sales to the respective
Record Date Holders net of commissions charged by the
Dealer Manager. The Agent agrees to inform the Dealer
Manager at reasonable intervals each Business Day
during the Subscription Period (orally, to be followed
by written confirmation) of the matter of Rights
available for sale pursuant to this Section 9.
10. In the event that the Agent does not receive, within
three Business Days after the Expiration Date, any
Certificate or amount due from a holder of Rights as
specified in Section 3(d), then it shall take such
action with respect to such Holder's Rights as may be
instructed by telephone or in writing by the Company
including without limitation (i) applying any payment
actually received by it toward the purchase of the
greatest whole number of Shares of common stock which
could be acquired with such payment, (ii) allocating
the Shares subject to such Rights to Record Date
Shareholders who have exercised their Over-Subscription
Privilege as set forth in Section 4 hereof, but have
not been allocated the full number of shares requested,
and (iii) selling all or a portion of the Shares of
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Common Stock deliverable upon exercise of such Rights
on the open market, and applying the proceeds thereof
to the amount owed.
11. No Subscription Certificate shall entitle a holder of
Rights to vote or receive dividends or be deemed the
holder of Shares of Common Stock for any purpose, nor
shall anything contained in any Subscription
Certificate by construed to confer upon any holder of
Rights any of the rights of a shareholder of the
Company or any right to vote, give or withhold consent
to any action by the Company (whether upon any
recapitalization, issue of stock, reclassification of
stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings or other action affecting
shareholders or receive dividends or otherwise, until
the Rights evidenced thereby shall have been exercised
and the Shares of Common Stock purchasable upon the
exercise thereof shall have become deliverable as
provided in this Agreement and in the Prospectus.
12. If the Agent is requested to issue a new Subscription
Certificate to replace one that has been lost, stolen,
mutilated or destroyed, the Agent may issue a new
Subscription Certificate of like denomination in
substitution for the Subscription Certificate so lost,
stolen, mutilated or destroyed, subject to the
conditions that the party requesting the replacement
Subscription Certificate (i) provides appropriate
indemnification to the Company, (ii) in the case of a
mutilated Subscription Certificate, and (iii) complies
with any such other conditions as the Agent in its
discretion may impose.
13. (a) The Company covenants that all Shares of Common
Stock issued on exercise of Rights set forth in
the Subscription Certificates will be validly
issued, fully paid, nonassessable and free of
preemptive rights (other than the Rights).
(b) The Company shall furnish to the Agent, upon
request, an opinion of counsel satisfactory to the
Agent to the effect that a registration statement
under the Securities Act of 1933, as amended (the
"Act"), is then in effect with respect to its
Shares of Common Stock issuable upon the exercise
of the Rights evidenced by the Subscription
Certificates. Upon written advice to the Agent
that the Securities and Exchange Commission shall
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have issued or threatened to have issued any order
preventing or suspending the use of the Prospectus,
or if for any reason it shall be necessary to amend
or supplement the Prospectus in order to comply with
the Act, the Agent shall cease acting hereunder until
receipt of written instructions from the Company and
such assurances as it may reasonably request that it
may comply with such instruction without violation of
the Act.
14. (a) Any corporation into which the Agent may be merged
or converted or with which it may be consolidated,
or any corporation resulting from any merger,
conversion or consolidation to which the Agent
shall be a party, or any corporation succeeding to
the corporate trust business of the Agent, shall
be the successor to the Agent hereunder without
the execution or filing of any of the parties
hereto, provided that such corporation would be
eligible for appointment as a successor agent. In
case at the time such successor to the Agent shall
succeed to the agency created by this Agreement,
any of the Subscription Certificates shall have
been countersigned but not delivered, any such
successor to the Agent may adopt this
countersignature of the original agent and deliver
such Subscription Certificates so countersigned,
and in case at that time any of the Subscription
Certificates shall not have been countersigned,
any successor to the Agent may countersign such
Subscription Certificates either in the name of
the predecessor Agent or in the name of the
successor Agent, and in all such cases such
Subscription Certificates shall have the full
force provided in the Subscription Certificates
and in this Agreement.
(b) In case at any time the name of the Agent shall be
changed and at such time any of the Subscription
Certificates shall have been signed but not
delivered, the Agent may adopt the signature under
its prior name and deliver Subscription
Certificates so signed, and in case at that time
any of the Subscription Certificates either in its
prior name or in its changed name, and in all such
cases such Subscription Certificates shall have
the full force provided in the Subscription
Certificates and this Agreement.
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15. The Company agrees to pay to the Agent from time to
time, on demand of the Agent, reasonable compensation
for all services rendered by it hereunder and also its
reasonable expenses and other disbursements incurred in
the administration and execution of this Agreement and
the exercise and performance of its duties hereunder,
all as set forth in the Rights Subscription Fee
Schedule attached hereto.
16. The Agent undertakes the duties and obligations imposed
by this Agreement upon the following terms and
conditions:
(a) Whenever in the performance of its duties under
this Agreement the Agent shall deem it necessary
or desirable that any fact or matter be proved or
established, prior to taking or suffering any
action hereunder, such fact or matter (unless
other evidence in respect thereof is herein
specifically prescribed) may be deemed to be
conclusively proved and established by a
certificate signed by the Chairman of the Board or
President or a Vice President or the Secretary or
Assistant Secretary or the Treasurer of the
Company delivered to the Agent, and such
certificate shall be full authorization to the
Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement
in reliance upon such certificate.
(b) The Agent shall not be responsible for and the
Company shall indemnify and hold the Agent
harmless from and against any and all losses,
damages, costs, charges, counsel fees, payments,
expenses and liability arising out of or
attributable to all actions of the Agent or its
agents or subcontractors required to be taken
pursuant to this Agreement, provided that such
actions are taken in good faith and without
negligence, willful misconduct, or material breach
of this Agreement.
(c) Nothing herein shall preclude the Agent from acting in any other
capacity for the Company or for any other legal entity.
(d) The Agent is hereby authorized and directed to
accept instructions with respect to the
performance of its duties hereunder from any
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officer referred to in subsection (a) above of the
Company and to apply to any such officer of the
Company for advice or instructions in connection
with its duties, and shall be indemnified and not
liable for any action taken or suffered by it in
good faith in accordance with instructions of such
officer.
(e) The Agent shall be indemnified and shall incur no
liability for or in respect of any action taken,
suffered, or omitted by it in reliance upon any
Subscription Certificate or certificate for Common
Stock, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement
or other paper or document that it reasonably
believes to be genuine and to be signed, executed
and, where necessary, verified or acknowledged, by
the proper person or persons.
(f) Neither party to this Agreement shall be liable to
the other party for consequential damages under any
provision of this Agreement or for any consequential
damages arising out of any act or failure to act
hereunder.
17. The Agent may, without the consent or concurrence of
the shareholders in whose names Subscription
Certificates are registered, by supplemental agreement
or otherwise, concur with the Company in making any
changes or corrections in a Subscription Certificate
that it shall have been advised by counsel (who may be
counsel for the Company) and are appropriate to cure
any ambiguity or to correct any defective or
inconsistent provision or clerical omission or mistake
or manifest error therein or herein contained, and
which shall not be inconsistent with the provisions of
the Subscription Certificate except insofar as any such
change may confer additional rights upon the holders of
Rights.
18. (a) Except as provided in Section c below, neither
this Agreement nor any rights or obligations
hereunder may be assigned by either party without
the written consent of the other party.
(b) This Agreement shall inure to the benefit of and
be binding upon the parties and their respective
permitted successors and assigns.
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(c) The Agent may, without further consent on the part
of the Company subcontract for the performance
hereof with (i) Boston Financial Data Services,
Inc. a Massachusetts Corporation ("BFDS") which is
duly registered as a transfer agent pursuant to
Section 17(c)(1) of the Securities Exchange Act of
1934 or (ii) the current third party vendor
utilized by BFDS; provided, however, that the
Agent shall be as fully responsible to the Company
for the acts and omissions of any agent or
subcontractor as it is for its own acts and
omissions.
19. All covenants and provisions of this Agreement by or for the benefit of
the Company or the Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
20. The validity, interpretation and performance of this
Agreement shall be governed by the law of the
Commonwealth of Massachusetts.
STATE STREET BANK THE KOREA FUND, INC.
AND TRUST COMPANY
By: By:
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Vice President Title:
Dated: Dated:
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