INTERIM INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, dated and effective as of
12:00A.M. EST (New York time)
February 22, 2014 (the "Agreement"), between THE
TAIWAN FUND, INC., a Maryland
corporation (herein referred to as the "Fund"), and
ALLIANZ GLOBAL INVESTORS
U.S. LLC, a Delaware limited liability company
(herein referred to as the "Manager").
WHEREAS, the Fund desires to retain the
Manager to render to it interim
investment advisory and management services, and
the Manager is willing to render such
services on an interim basis in accordance with
Rule 15a-4 of the 1940 Act; and
NOW THEREFORE, in consideration of
the mutual covenants hereinafter
contained, it is hereby agreed by and between the
parties hereto as follows:
1. The Manager hereby undertakes and
agrees, upon the terms and conditions
herein set forth, (i) to make investment decisions
for the Fund, to prepare and make
available to the Fund research and statistical data
in connection therewith and to supervise
the acquisition and disposition of securities by
the Fund, including the selection of brokers
or dealers to carry out the transactions, all in
accordance with the Fund's investment
objectives and policies and in accordance with
guidelines and directions from the Fund's
Board of Directors; (ii) to assist the Fund as it
may reasonably request in the conduct of the
Fund's business, subject to the direction and
control of the Fund's Board of Directors; (iii)
to maintain or cause to be maintained for the Fund
all books, records, reports and any other
information required under the Investment Company
Act of 1940, as amended (the "1940
Act"), and to furnish or cause to be furnished all
required reports or other information
under Taiwan securities laws, to the extent that
such books, records and reports and other
information are not maintained or furnished by the
custodian or other agents of the Fund;
(iv) to assist the Fund's administrator in
providing services such as preparing reports to and
meeting materials for the Fund's Board of
Directors and reports and notices to
stockholders, preparing and making filings with the
Securities and Exchange Commission
(the "SEC") and other regulatory and self-
regulatory organizations, including preliminary
and definitive proxy materials and post-effective
amendments to the Fund's registration
statement on Form N-2 under the Securities Act of
1933, as amended, and the 1940 Act, as
amended from time to time, providing assistance in
certain accounting and tax matters and
investor and public relations, monitoring the
valuation of portfolio securities, assisting in
the calculation of net asset value and calculation
and payment of distributions to
stockholders, and overseeing arrangements with the
Fund's custodian, including the
maintenance of books and records of the Fund; (v)
to assist in such marketing activities
with respect to the Fund as the Fund may reasonably
request, (vi) to vote the Fund's proxies
in accordance with the Fund's proxy voting
policies, which may be amended from time to
time by the Fund's Board of Directors and
communicated to the Manager, and (vii) to pay
the reasonable salaries, fees and expenses of such
of the Fund's officers and employees
(including the Fund's shares of payroll taxes) and
any fees and expenses of such of the
Fund's directors as are directors, officers or
employees of the Manager (and to permit its
directors, officers or employees to so serve if
elected to such positions by the Fund's Board
of Directors); provided, however, that the Fund,
and not the Manager, shall bear travel
expenses (or an appropriate portion thereof) of
directors and officers of the Fund who are
directors, officers or employees of the Manager to
the extent that such expenses relate to
attendance at meetings of the Board of Directors of
the Fund or any committees thereof or
advisers thereto and provided further that such
expenses are incurred in accordance with
the Fund's travel policy in effect at the time.
The Manager shall bear all expenses arising
out of its duties hereunder but shall not be
responsible for any expenses of the Fund other
than those specifically allocated to the Manager in
this paragraph 1. In particular, but
without limiting the generality of the foregoing,
the Manager shall not be responsible,
except to the extent of the reasonable compensation
of such of the Fund's employees as are
directors, officers or employees of the Manager
whose services may be involved, for the
following expenses of the Fund: organization and
certain offering expenses of the Fund
(including out-of-pocket expenses, but not
including overhead or employee costs of the
Manager or of any one or more organizations
retained by the Fund or by the Manager as
Taiwan adviser of the Fund); fees payable to
the Manager and to any adviser or
consultants, including an advisory board, if
applicable; legal expenses; auditing and
accounting expenses; telephone, telex, facsimile,
postage and other communication
expenses; taxes and governmental fees; stock
exchange listing fees; fees, dues and
expenses incurred by the Fund in connection with
membership in investment company
trade organizations; fees and expenses of the
Fund's custodians, subcustodians, transfer
agents and registrars; payment for portfolio
pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any;
expenses of preparing share certificates
and other expenses in connection with the issuance,
offering, distribution, sale or
underwriting of securities issued by the Fund;
expenses of registering or qualifying
securities of the Fund for sale; expenses relating
to investor and public relations; freight,
insurance and other charges in connection with the
shipment of the Fund's portfolio
securities; brokerage commissions or other costs of
acquiring or disposing of any portfolio
securities of the Fund; expenses of preparing and
distributing reports, notices and dividends
to stockholders; costs of stationery; costs of
stockholders' and other meetings; litigation
expenses; or expenses relating to the Fund's
dividend reinvestment and cash purchase plan
(except for brokerage expenses paid by participants
in such plan).
2. Subject to the prior approval of a
majority of the members of the Fund's
Board of Directors, including a majority of the
Directors who are not "interested persons,"
as defined in the 1940 Act, the Manager may,
through a sub-advisory agreement or other
arrangement, delegate to any other company that it
controls, is controlled by, or is under
common control with, or to specified employees of
any such companies, or to more than
one such company, to the extent permitted by
applicable law, certain of its duties
enumerated in section 1 hereof; provided, that the
Manager shall continue to supervise the
services provided by such company or employees and
any such delegation shall not relieve
the Manager of any of its obligations hereunder.
Subject to the provisions of this Agreement,
the duties of any sub-adviser or
delegate, the portion of portfolio assets of the
Fund that the sub-adviser or delegate shall
manage and the fees to be paid to the sub-adviser
or delegate by the Manager under and
pursuant to any sub-advisory agreement or other
arrangement entered into in accordance
with this Agreement may be adjusted from time to
time by the Manager, subject to the prior
approval of the members of the Fund's Board
of Directors who are not "interested
persons," as defined in the 1940 Act.
3. In the selection of brokers or
dealers and the placing of orders for the
purchase and sale of portfolio investments for the
Fund, the Manager shall seek to obtain
for the Fund the most favorable price and execution
available, except to the extent it may
be permitted to pay higher brokerage commissions
for brokerage and research services as
described below. In using its best efforts to
obtain for the Fund the most favorable price
and execution available, the Manager, bearing in
mind the Fund's best interests at all times,
shall consider all factors it deems relevant,
including by way of illustration, price, the size
of the transaction, the nature of the market for
the security, the amount of the commission,
the timing of the transaction taking into account
market prices and trends, the reputation,
experience and financial stability of the broker or
dealer involved and the quality of service
rendered by the broker or dealer in other
transactions. Subject to such policies as the
Fund's Board of Directors may determine, the
Manager shall not be deemed to have acted
unlawfully or to have breached any duty created by
this Agreement or otherwise solely by
reason of its having caused the Fund to pay a
broker or dealer that provides brokerage and
research services to the Manager an amount of
commission for effecting a portfolio
investment transaction in excess of the amount of
commission another broker or dealer
would have charged for effecting that transaction,
if the Manager determines in good faith
that such amount of commission was reasonable in
relation to the value of the brokerage
and research services provided by such broker or
dealer, viewed in terms of either that
particular transaction or the Manager's overall
responsibilities with respect to the Fund and
to other clients of the Manager as to which the
Manager exercises investment discretion. In
selecting brokers or dealers to execute a
particular transaction and in evaluating the best
overall terms available, the Manager may consider
the brokerage and research services (as
those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided
to the Fund and/or other accounts over which the
Manager or an affiliate exercises
investment discretion. The Fund hereby agrees with
the Manager that any entity or person
associated with the Manager which is a member of a
national securities exchange is
authorized to effect any transaction on such
exchange for the account of the Fund which is
permitted by Section 11(a) of the Securities
Exchange Act of 1934 (the "1934 Act"),
subject to compliance with the 1940 Act and the
rules thereunder.
4. The Fund agrees to pay to the
Manager in United States dollars, as full
compensation for the services to be rendered and
expenses to be borne by the Manager
hereunder, a monthly fee which, on an annual basis,
is equal to 0.85% per annum of the
value of the Fund's average daily net assets up to
and including $150 million of net assets;
0.80% per annum of the value of the Fund's average
daily net assets on the next $150
million of net assets; 0.70% per annum of the value
of the Fund's average daily net assets
in excess thereof. The fees payable to the Manager
shall be computed and accrued daily
and paid monthly. If the Manager shall serve for
less than any whole month, the foregoing
compensation shall be prorated.
The value of the net assets of the
Fund shall be determined pursuant to the
applicable provisions of the valuation policies of
the Fund, as amended from time to time.
5. The Manager agrees that it will
not make a short sale of any capital stock of
the Fund or purchase any share of the capital stock
of the Fund otherwise than for
investment.
6. Nothing herein shall be
construed as prohibiting the Manager from
providing investment advisory services to, or
entering into investment advisory agreements
with, other clients (including other registered
investment companies), including clients
which may invest in securities of Taiwan issuers,
except that without the prior notice to the
Fund, the Manager may not act as the investment
adviser or investment manager to any
other investment company that is listed on the New
York Stock Exchange and that invests
primarily in Taiwan securities, or from utilizing
(in providing such services) information
furnished to the Manager by others as contemplated
by sections 1 and 3 of this Agreement
or by advisers and consultants to the Fund
and others; nor shall anything herein be
construed as constituting the Manager as an agent
of the Fund.
Whenever the Fund and one or more other
accounts or investment companies
advised by the Manager have available funds for
investment, investments suitable and
appropriate for each shall be allocated in
accordance with procedures believed by the
Manager to be equitable to each entity, which
procedures and any amendments thereto
shall be provided to the Fund's Board for review.
Similarly, opportunities to sell securities
shall be allocated in a manner believed by the
Manager to be equitable. The Fund
recognizes that in some cases this procedure may
adversely affect the size of the position
that may be acquired or disposed of for the Fund.
In addition, the Fund acknowledges that
the persons employed by the Manager to assist in
the performance of the Manager's duties
hereunder will not devote their full time to such
service and nothing contained herein shall
be deemed to limit or restrict the right of the
Manager or any affiliate of the Manager to
engage in and devote time and attention to
other businesses or to render services of
whatever kind or nature.
7. The Manager may rely on
information reasonably believed by it to be
accurate and reliable. Neither the Manager nor its
officers, directors, employees or agents
shall be subject to any liability for any act or
omission, error of judgment or mistake of law,
or for any loss suffered by the Fund, in the course
of, connected with or arising out of any
services to be rendered hereunder, except by reason
of willful misfeasance, bad faith, or
gross negligence on the part of the Manager in the
performance of its duties or by reason of
reckless disregard on the part of the Manager of
its obligations and duties under this
Agreement. Any person, even though also employed
by the Manager, who may be or
become an employee of the Fund and paid by the Fund
shall be deemed, when acting
within the scope of his employment by the Fund, to
be acting in such employment solely
for the Fund and not as an employee or agent of the
Manager.
8. This Agreement shall be in effect
for an initial term until July 21, 2014,
unless sooner terminated. This Agreement may
nevertheless be terminated at any time
without penalty, on 10 days' written notice, by the
Fund's Board of Directors, by vote of
holders of a majority of the outstanding voting
securities of the Fund, or by the Manager.
This Agreement shall automatically be
terminated in the event of its assignment.
Any notice to the Fund or the Manager shall be
deemed given when received by the
addressee.
9. This Agreement may not be
transferred, assigned, sold or in any manner
hypothecated or pledged by either party hereto,
except as permitted under the 1940 Act or
rules and regulations adopted thereunder. It may
be amended by mutual agreement, but
only after authorization of such amendment by the
affirmative vote of (i) the holders of a
majority of the outstanding voting securities
of the Fund, and (ii) a majority of the
members of the Fund's Board of Directors who are
not parties to this Agreement or
interested persons of any party to this Agreement,
or of any entity regularly furnishing
investment advisory services with respect to the
Fund pursuant to an agreement with any
party to this Agreement, cast in person at a
meeting called for the purpose of voting on
such approval.
10. This Agreement shall be construed
in accordance with the laws of the State
of New York, without giving effect to the conflicts
of laws principles thereof, provided,
however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
As used herein, the terms "interested person,"
"assignment," and "vote of a majority of the
outstanding voting securities" shall have the
meanings set forth in the 1940 Act, the rules
and regulations thereunder and interpretations
thereof by the SEC or its staff.
11. This Agreement may be
executed simultaneously in two or more
counterparts, each of which shall be deemed an
original, and it shall not be necessary in
making proof of this Agreement to produce or
account for more than one such counterpart.
12. This Agreement supersedes all
prior investment advisory, management,
and/or administration agreements in effect between
the Fund and the Manager.
13. Each party hereto irrevocably
agrees that any suit, action or proceeding
against either of the Manager or the Fund arising
out of or relating to this Agreement shall
be subject to the jurisdiction of the United States
District Court for the Southern District of
New York or the Supreme Court of the State of New
York, New York County, and each
party hereto irrevocably submits to the
jurisdiction of each such court in connection with
any such suit, action or proceeding. Each party
hereto waives any objection to the laying
of venue of any such suit, action or proceeding in
either such court, and waives any claim
that such suit, action or proceeding has been
brought in an inconvenient forum. Each party
hereto irrevocably consents to service of process
in connection with any such suit, action or
proceeding by mailing a copy thereof by registered
or certified mail, postage prepaid, to its
address as set forth in this Agreement.
14. The Manager represents and
warrants that it is duly registered as an
investment adviser under the U.S. Investment
Advisers Act of 1940 and that Allianz Global
Investors Taiwan Limited ("AGI Taiwan") is duly
licensed by the Taiwan FSC to provide
services under the Collaboration Agreement
between the Manager and AGI Taiwan
relating to the Fund (the "Collaboration
Agreement"), and that the Manager will use its
reasonable efforts to maintain in effect such
registration and license during the term of this
Agreement. The Collaboration Agreement compliances
with the laws and regulations of
the Republic of China.
15. The Fund represents and warrants
that it has full legal right to enter into this
Agreement and to perform the obligations hereunder
and that it has obtained all necessary
consents and approvals to enter into this
Agreement.
IN WITNESS WHEREOF, the parties have
executed this Agreement by their
officers thereunto duly authorized as of the day
and year first written above.
THE TAIWAN FUND,
INC.
By: /s/
Xxxxx X. Xxxxxxxx
Name: Xxxxx X.
Xxxxxxxx
Title:
President
ALLIANZ GLOBAL
INVESTORS U.S. LLC
By: /s/
Xxxxx Xxxx
Name: Xxxxx Xxxx
Title:
Managing Director, Chief Legal Officer
