TAIWAN FUND INC, DEF 14A, 1999-01-08

TAIWAN FUND INC
DEF 14A, 1999-01-08

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<PAGE> 1
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES

EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, For Use of
the Commission Only (as
permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-2.

THE TAIWAN FUND, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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:

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(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:

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<PAGE> 2

THE TAIWAN FUND, INC.

225 FRANKLIN STREET, BOSTON, MASSACHUSETTS 02110
TELEPHONE 1-800-636-9242

January 8, 1999

Dear Stockholder:

Enclosed you will find a Notice and Proxy Statement for the Annual Meeting
of Stockholders of The Taiwan Fund, Inc. to be held on Friday, February 26,
1999.

The matters on which you, as a stockholder of the Fund, are being asked to
vote are election of the Fund's Directors and ratification of the selection of
PricewaterhouseCoopers LLP as the Fund's independent public accountants. After
reviewing each matter carefully, the Board of Directors recommends that you vote
FOR each of the proposals.

YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
TAKE A FEW MINUTES TO REVIEW THIS MATERIAL, CAST YOUR VOTE ON THE ENCLOSED PROXY
CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOUR PROMPT RESPONSE
IS NEEDED TO AVOID FOLLOW-UP MAILINGS WHICH WOULD INCREASE COSTS PAID BY ALL
STOCKHOLDERS.

Thank you very much for your assistance.

Sincerely,

Benny T. Hu
President
<PAGE> 3

THE TAIWAN FUND, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 26, 1999

To the Stockholders of THE TAIWAN FUND, INC.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of The
Taiwan Fund, Inc. (the "Fund") will be held at the offices of Rogers & Wells
LLP, 200 Park Avenue, 52nd Floor, New York, New York 10166, on Friday, February
26, 1999 at 11:00 A.M., New York time, for the following purposes:

(1) To elect eight directors to serve for the ensuing year.

(2) To ratify or reject the selection of PricewaterhouseCoopers LLP,
as independent public accountants of the Fund for its fiscal year ending
August 31, 1999.

(3) To transact such other business as may properly come before the
meeting or any adjournments thereof.

The Board of Directors has fixed the close of business on December 30, 1998
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting or any adjournments thereof.

You are cordially invited to attend the meeting. Stockholders who do not
expect to attend the meeting in person are requested to complete, date and sign
the enclosed form of proxy and return it promptly in the envelope provided for
that purpose. The enclosed proxy is being solicited by the Board of Directors of
the Fund.

By order of the Board of Directors

HAICHI VICKI HAU
Secretary
January 8, 1999
<PAGE> 4

PROXY STATEMENT
THE TAIWAN FUND, INC.
INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of THE TAIWAN FUND, INC. (the "Fund") for use
at the Annual Meeting of Stockholders, to be held at the offices of Rogers &
Wells LLP, 200 Park Avenue, 52nd Floor, New York, New York 10166, on Friday,
February 26, 1999 at 11:00 A.M., New York time, and at any adjournments thereof.

The approximate date on which this Proxy Statement and the form of proxy
will be mailed to stockholders is January 8, 1999. Any stockholder giving a
proxy has the power to revoke it by mail (addressed to the Secretary of the Fund
c/o the Fund's administrator, State Street Bank and Trust Company, at the Fund's
address at 225 Franklin Street, Boston, Massachusetts 02110) or in person at the
meeting, by executing a superseding proxy or by submitting a notice of
revocation to the Fund. All properly executed proxies received in time for the
meeting will be voted as specified in the proxy or, if no specification is made,
for each proposal referred to in this Proxy Statement. Abstentions and broker
non-votes are each included in the determination of the number of shares present
at the meeting for purposes of determining the presence of a quorum.

The Board of Directors has fixed the close of business on December 30, 1998
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting and at any adjournment thereof. Stockholders on the
record date will be entitled to one vote for each share held, with no shares
having cumulative voting rights. As of the record date, the Fund had outstanding
16,365,572 shares of common stock. To the knowledge of management of the Fund,
no person owned beneficially more than 5% of the Fund's outstanding shares as of
December 30, 1998.

Management of the Fund knows of no business other than that mentioned in
Proposals (1) and (2) of the Notice of Meeting which will be presented for
consideration at the meeting. If any other matter is properly presented, it is
the intention of the persons named in the enclosed proxy to vote in accordance
with their best judgment.

THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT FOR ITS
FISCAL YEAR ENDED AUGUST 31, 1998 TO ANY STOCKHOLDER REQUESTING SUCH REPORT.
REQUESTS FOR THE ANNUAL REPORT SHOULD BE MADE BY WRITING TO THE TAIWAN FUND,
INC., 225 FRANKLIN STREET, BOSTON, MASSACHUSETTS 02110, ATTENTION: ANN CASEY, OR
BY CALLING 1-800-636-9242.

1
<PAGE> 5

(1) ELECTION OF DIRECTORS

Persons named in the accompanying form of proxy intend in the absence of
contrary instruction to vote all proxies for the election of the eight nominees
listed below as directors of the Fund to serve until the next Annual Meeting of
Stockholders (expected to be held in February 2000), or until their successors
are elected and qualified. If any such nominee should be unable to serve due to
an event not now anticipated, the proxies will be voted for such person, if any,
as shall be designated by the Board of Directors, to replace any such nominee.

INFORMATION CONCERNING DIRECTORS AND NOMINEES

The following table sets forth certain information concerning each of the
nominees as a director of the Fund. Each of the nominees is now a director of
the Fund.

<TABLE>
<CAPTION>
PRESENT OFFICE WITH THE FUND, SHARES
PRINCIPAL OCCUPATION OR BENEFICIALLY
EMPLOYMENT DURING PAST FIVE OWNED PERCENT
NAME AND ADDRESS YEARS AND DIRECTORSHIPS IN DIRECTOR DECEMBER 30, OF
OF NOMINEE (AGE) PUBLICLY-HELD COMPANIES SINCE 1998(1) CLASS
---------------- ---------------------------------- -------- ------------ -------
<S> <C> <C> <C> <C>
Shao-Yu Wang (75) Chairman of the Board of Trustees, 1986 None --
4F, 260 Tung Hwa N. Rd. Soochow University (1987-pre-
Taipei, Taiwan, ROC sent); Chairman of the Board of
Trustees, Min Chuan University,
(1986-present); Chairman of the
Board of Trustees, Fu-Dan High
School (1986-present); Chair-
man, China American Petrochemi-
cal Co., Ltd. (1997-present);
Executive Director, China Ameri-
can Petrochemical Co., Ltd.
(1976-present).
*Benny T. Hu (50) President of the Fund; President, 1993 None --
125 Nanking East Road China Development Corporation
Section 5 (1993-present); Chairman, China
Taipei, Taiwan, ROC Securities Investment Trust Cor-
poration (1992-1993); President,
China Securities Investment Trust
Corporation (1985-1992); Chair-
man, Far Eastern Air Transport
Corp. (1995-1998); Executive Di-
rector, Merrill Lynch
International, Inc. (1986-1990);
Executive Vice President,
International Investment Trust
Co., Ltd. (1983-1986); Director,
China Steel Corporation
(1993-present); Director, MITAC
International Corp. (1993-pre-
sent).
David Dean (73) Senior Advisor of the 1991 500 +
8361 B. Greensboro Drive Chiang-Ching- Kuo Foundation
McLean, Virginia 22102 (1990-present); Director, The
American Institute in Taiwan
(1979-1989).
</TABLE>

2
<PAGE> 6

<TABLE>
<CAPTION>
PRESENT OFFICE WITH THE FUND, SHARES
PRINCIPAL OCCUPATION OR BENEFICIALLY
EMPLOYMENT DURING PAST FIVE OWNED PERCENT
NAME AND ADDRESS YEARS AND DIRECTORSHIPS IN DIRECTOR DECEMBER 30, OF
OF NOMINEE (AGE) PUBLICLY-HELD COMPANIES SINCE 1998(1) CLASS
---------------- ---------------------------------- -------- ------------ -------
<S> <C> <C> <C> <C>
Lawrence J. Lau (54) Director, Stanford Institute for 1998 None --
Stanford University Economic Policy Research at
Landau Economics Stanford University
Building, Room 130 (1997-present); Kwoh- Ting Li
579 Serra Mall Professor of Economic De-
Stanford, CA 94305-6015 velopment, Stanford University
(1992-present).
Joe O. Rogers (50) Director, Business Development, 1986 275 +
P.O. Box 372 Thomson Consulting (June,
Hunt Valley, Maryland 21031 1998-present); President, Rogers
International, Inc.
(1986-present); Partner, PHH
Fantus Consulting (1993-1998);
Partner, Alcalde, Rousselot & Fay
(1992-1993); Director, The China
Fund, Inc. (1992-present);
President, Middendorf Rogers
Martin Group Inc. (1987-1989);
U.S. Executive Director, Asian
Development Bank (1984-1986);
Executive Director, Republican
Conference, U.S. House of
Representatives (1981-1984).
Jack C. Tang (71) Director, Pacific Rim Investments 1989 None --
Suite 1601, Tower 1 Ltd. (1991-present); Chairman
China Hong Kong City Emeritus (1997-present) and
33 Canton Road Chairman and Chief Executive Of-
Tsim Sha Tsu ficer (1987-1997), Tristate Hold-
Kowloon ings Limited; Director,
Hong Kong City MidPacific Air Corporation
(1986-present); Chairman, South
Sea Development Co. Ltd.
(March-September 1992); Chairman
and Managing Director, South Sea
Textile Manufacturing Co., Ltd.
(1971-1992); Director, The Hong
Kong and Shanghai Banking
Corporation (1984-1991);
Chairman, Pacific Rim Investments
Ltd. (1989-1991).
*Gloria Wang (44) Secretary and Treasurer of the 1998 None --
99 Tunhwa South Fund (1994-October 1998);
Road, Section 2 Executive Vice President, China
Taipei, Taiwan, ROC Securities Investment Trust
Corporation (1996-present);
Senior Vice President, China
Securities Investment Trust
Corporation (1993-1995);
Assistant Vice President, China
Securities Investment Trust Cor-
poration (1988-1993).
</TABLE>

3
<PAGE> 7

- ------------
(1) The information as to beneficial ownership is based on statements furnished
to the Fund by the nominees.
+ Less than 1% of the outstanding shares.
* Directors or nominees considered to be "interested persons" (as defined in
the Investment Company Act of 1940, as amended (the "1940 Act")) of the Fund
or of the Fund's investment adviser. Mr. Hu is deemed to be an interested
person because of his affiliation with China Development Corporation, the
principal shareholder of the Fund's investment adviser, China Securities
Investment Trust Corporation (99 Tunhwa S. Road, Section 2, 24th Floor,
Taipei, Taiwan ROC). Ms. Wang is deemed to be an interested person because
of her affiliation with the Fund's investment adviser.

Mr. Harvey H.W. Chang resigned as a director of the Fund effective January
13, 1998. At a meeting of the Board of Directors on April 14, 1998, the Board
increased the number of directors from seven to eight and elected Mr. Michael
Chen and Mr. Lawrence J. Lau as directors of the Fund. Mr. Chen resigned as a
director of the Fund effective October 12, 1998. At a meeting of the Board of
Directors on October 12, 1998, the Board elected Gloria Wang as a director of
the Fund and appointed Mr. S.Y. Wang as the Chairman of the Board of Directors
of the Fund and Ms. Haichi Vicki Hau as the Secretary and Treasurer of the Fund.

The Fund's Board of Directors has an Executive Committee which may exercise
the powers of the Board to conduct the current and ordinary business of the Fund
while the Board is not in session. The current members of the Executive
Committee are Messrs. Rogers and Wang.

The Fund's Board of Directors has an Audit Committee which is responsible
for reviewing financial and accounting matters. The current members of the Audit
Committee are Messrs. Dean, Lau, Rogers, Tang, Wang and Weber.

The Board of Directors of the Fund held three regular meetings during the
fiscal year ended August 31, 1998. In addition, the Audit Committee held four
regular meetings during the fiscal year ended August 31, 1998. Messrs. S.Y. Wang
and Benny T. Hu attended fewer than 75% of the aggregate number of Board
meetings and meetings of committees on which they served.

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Fund's officers and directors, and persons who own
more than ten percent of a registered class of the Fund's equity securities, to
file reports of ownership and changes in ownership with the

4
<PAGE> 8

U.S. Securities and Exchange Commission (the "Commission") and the
New York Stock Exchange, Inc. The Fund believes that its officers and directors
have complied with all applicable filing requirements under Section 16(a) of the
Exchange Act.

OFFICERS OF THE FUND

Mr. Shao-Yu Wang (age 75), a director of the Fund, was elected Chairman of
the Board of Directors of the Fund in October 1998.

Mr. Benny T. Hu (age 50), a director of the Fund, has served as President
of the Fund since 1986.

Ms. Haichi Vicki Hau (age 36), Secretary and Treasurer of the Fund since
October 1998, also serves as a Senior Analyst of the Adviser. Ms. Hau also
served as an Analyst of the Adviser from 1991 to 1994.

Both Mr. Hu and Ms. Hau are considered to be "interested persons" as
defined in the Investment Company Act of 1940, as amended (the "1940 Act") of
the Fund and the Adviser.

TRANSACTIONS WITH AND REMUNERATION OF OFFICERS AND DIRECTORS

The aggregate remuneration, including expenses relating to attendance at
board meetings reimbursed by the Fund, of directors not affiliated with the
Adviser was US$119,500 during the fiscal year ended August 31, 1998. The Fund
currently pays each director that is not affiliated with the Adviser an annual
fee of US$10,000 plus US$1,000 for each directors' meeting and committee meeting
attended.

The Adviser pays the compensation and certain expenses of Ms. Gloria Wang,
a director of the Fund, and of Ms. Haichi Vicki Hau, an employee of the Adviser
who serves as Secretary and Treasurer of the Fund. Ms. Wang and Ms. Hau may
participate in the advisory fees paid by the Fund to the Adviser, although the
Fund makes no direct payments to either of them.

Mr. Lawrence J. Lau serves as a consultant to the Adviser and receives a
monthly fee of approximately US$2,500 for his consulting services. Mr. Lau's
status as a consultant to the Adviser does not render him an "interested person"
of the Fund or the Adviser under the 1940 Act.

5
<PAGE> 9

The following table sets forth the aggregate compensation from the Fund
paid to each director during the fiscal year ended August 31, 1998. The Adviser
and its affiliates do not advise any other U.S. registered investment companies
and therefore the Fund is not considered part of a Fund Complex.

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF DIRECTOR FROM FUND(1)
---------------- ------------
<S> <C>
Shao-Yu Wang..................................... $15,000
Benny T. Hu*..................................... --
Harvey H.W. Chang(2)............................. --
Michael Chen(2).................................. --
David Dean....................................... $17,000
Lawrence J. Lau.................................. --
Joe O. Rogers.................................... $17,000
Jack C. Tang..................................... $16,000
Lawrence Weber................................... $17,000
Gloria Wang*..................................... --
</TABLE>

- ---------------

(1) Includes all compensation paid to directors by the Fund. The Fund's
directors do not receive any pension or retirement benefits as compensation
for their service as directors of the Fund.

(2) Mr. Chang resigned as a director of the Fund effective January 13, 1998. Mr.
Chen who was elected as a director of the Fund by the Board of Directors on
April 14, 1998, resigned effective October 12, 1998. Messrs. Chang and Chen,
who were affiliated with the Adviser and were therefore "interested persons"
of the Fund, did not receive any compensation from the Fund for their
service as directors.

* Mr. Hu and Ms. Wang, who are affiliated with the Adviser and are therefore
"interested persons" of the Fund, do not receive any compensation from the
Fund for their service as directors.

REQUIRED VOTE

The election of each director will require the affirmative vote of a
plurality of the votes of the shares present in person or represented by proxy
at the meeting and entitled to vote for the election of the directors. For this
purpose, votes that are withheld and broker non-votes will have no effect on the
outcome of the elections.

THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF THE EIGHT NOMINEES FOR DIRECTORS.

6
<PAGE> 10

(2) RATIFICATION OR REJECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

At a meeting held October 12, 1998, the Board of Directors of the Fund,
including a majority of the directors who are not interested persons of the
Fund, selected PricewaterhouseCoopers LLP to act as independent certified public
accountants for the Fund for the fiscal year ending August 31, 1999. The Fund
knows of no direct financial or material indirect financial interest of such
firm in the Fund. One or more representatives of PricewaterhouseCoopers LLP are
expected to be present at the meeting and will have an opportunity to make a
statement if they so desire. Such representatives are expected to be available
to respond to appropriate questions from stockholders.

The Fund's financial statements for the fiscal year ended August 31, 1998
were examined by PricewaterhouseCoopers LLP in connection with its audit
services. PricewaterhouseCoopers LLP audited the financial statements included
in the Fund's annual report for the fiscal year ended August 31, 1998 and
reviewed the Fund's filings with the Commission.

REQUIRED VOTE

The selection of independent certified public accountants is subject to the
ratification or rejection of the stockholders of the Fund at the meeting.
Ratification of the selection of the independent accountants will require the
affirmative vote of a majority of shares present in person or represented by
proxy at the meeting and entitled to vote for the selection of independent
accountants. For this purpose, abstentions will have the effect of a vote
against the selection of independent accountants. Broker non-votes will have no
effect on the vote.

THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT YOU VOTE "FOR" THE
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE FUND'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING AUGUST 31, 1999.

MISCELLANEOUS

Proxies will be solicited by mail and may be solicited in person or by
telephone or telegraph by officers of the Fund or personnel of the Adviser. The
Fund has retained Shareholder Communications Corporation to assist in the proxy
solicitation. The cost of their services is estimated at US$3,500, plus
out-of-pocket expenses. The expenses connected with the solicitation of these
proxies and with any further proxies which may be solicited by the Fund's
officers or Shareholder Communications Corporation in person, by telephone, by
facsimile, or by telegraph will be borne by the Fund. The Fund will reimburse
banks, brokers, and other persons holding the Fund's shares registered in their
names or in the names of their nominees for their

7
<PAGE> 11

expenses incurred in sending proxy material to and obtaining proxies from the
beneficial owners of such shares.

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 arise, the
persons named in the enclosed proxy will vote thereon according to their best
judgment in the interests of the Fund.

STOCKHOLDER PROPOSALS

Any proposal by a stockholder of the Fund intended to be presented at the
Annual Meeting of Stockholders of the Fund to be held in February 2000 must be
received by the Fund at 225 Franklin Street, Boston, Massachusetts 02110 not
later than September 10, 1999.

By order of the Board of Directors,

Haichi Vicki Hau
Secretary
225 Franklin Street
Boston, Massachusetts 02110
January 8, 1999

8
<PAGE> 12

TWNCM-PS-99
<PAGE> 13

PROXY CARD

THE TAIWAN FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - FEBRUARY 26, 1999

The undersigned hereby appoints Lawrence F. Weber, Haichi Vicki Hau and
Laurence E. Cranch, and each of them, the proxies of the undersigned with full
power of substitution to each of them, to vote all shares of The Taiwan Fund,
Inc. which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of The Taiwan Fund, Inc. to be held at the offices of Rogers &
Wells LLP, 200 Park Avenue, 52nd Floor, New York, New York 10166, on Friday,
February 26, 1999 at 11:00 A.M., New York time, and at any adjournments thereof.
The undersigned hereby revokes all proxies with respect to such shares
heretofore given. The undersigned acknowledges receipt of the Proxy Statement
dated January 8, 1999.

UNLESS OTHERWISE SPECIFIED IN THE BOXES PROVIDED, THE UNDERSIGNED'S
VOTE WILL BE CAST FOR ITEMS (1) and (2).

PLEASE VOTE, DATE AND SIGN ON OTHER SIDE
AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.

Please sign exactly as your name(s) appear(s). When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as
such.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

- ------------------------- -------------------------

FRONT OF PROXY CARD

<PAGE> 14

|X| PLEASE MARK VOTES AS IN THIS EXAMPLE

1. The election of directors:

For / / Withhold / / For All Except / /

Nominees:

Shao-Yu Wang, Benny T. Hu, David Dean, Lawrence J. Lau, Joe O.
Rogers, Jack C. Tang, Gloria Wang and Lawrence F. Weber

INSTRUCTION: To withhold authority to vote for any individual nominee, mark the
"For All Except" box and strike a line through that nominee's name in the list
above.

2. Ratification of the selection of PricewaterhouseCoopers LLP as
independent certified public accountants:

For / / Against / / Abstain / /

3. In their discretion on any other business which may properly come
before the meeting or at any adjournments thereof.

Mark box at right if an address change or comment / /
has been noted on the reverse side of this card.

Please be sure to sign and date this Proxy. Date:
--------------------------

- ----------------------------------- -----------------------------------
Stockholder sign here Co-owner sign here

RECORD DATE SHARES:

BACK OF CARD