<PAGE> PAGE 1
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<PAGE> PAGE 2
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020 A000006 PRESIDENT SECURITIES CO., LTD.
020 C000006 24
020 A000007 KING HOE SECURITIES CO, LTD.
020 C000007 23
020 A000008 CAPITAL SECURITIES CO., LTD.
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022 D000005 0
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022 C000007 42554
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<PAGE> PAGE 3
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025 C000004 E
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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SIGNATURE EDWIN C. LAURENSON
TITLE PRINCIPAL ATTORNEY
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUNE-30-96
<INVESTMENTS-AT-COST> 327,770,395
<INVESTMENTS-AT-VALUE> 378,703,264
<RECEIVABLES> 5,125,005
<ASSETS-OTHER> 1,327,981
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 385,156,250
<PAYABLE-FOR-SECURITIES> 16,487,130
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 994,941
<TOTAL-LIABILITIES> 17,482,071
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 346,204,645
<SHARES-COMMON-STOCK> 33,815,376
<SHARES-COMMON-PRIOR> 33,815,376
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1,633,223)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (60,507,270)
<ACCUM-APPREC-OR-DEPREC> 50,932,869
<NET-ASSETS> 367,674,179
<DIVIDEND-INCOME> 1,551,696
<INTEREST-INCOME> 688,885
<OTHER-INCOME> 0
<EXPENSES-NET> 3,920,762
<NET-INVESTMENT-INCOME> (1,680,181)
<REALIZED-GAINS-CURRENT> (2,649,686)
<APPREC-INCREASE-CURRENT> 60,335,073
<NET-CHANGE-FROM-OPS> 53,142,468
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 53,142,468
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (691,789)
<OVERDIST-NET-GAINS-PRIOR> (57,810,626)
<GROSS-ADVISORY-FEES> 2,243,762
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,920,762
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</TABLE>
THE R.O.C. TAIWAN FUND
EXHIBITS TO
FORM N-SAR
SEMI-ANNUAL REPORT
FOR REGISTERED INVESTMENT COMPANIES
FOR THE PERIOD ENDING
JUNE 30, 1996
<PAGE>
ATTACHMENTS INDEX
The following attachments to Form N-SAR are being filed with the Securities
and Exchange Commission on behalf of The R.O.C. Taiwan Fund (811-5617)
(CIK-83627):
Sub-Item Description Page Number
77C Excerpt from Semi-Annual 4
Report describing results of
vote at Annual Meeting of
Shareholders on Proposal To
Amend Investment Contract with
International Investment Trust
Company Limited (the "Adviser")
Rand Central Trust of China
(the "Custodian") to Reduce the Fees
Payable by the Trust to the Adviser
and the Custodian
Excerpt from Proxy Statement dated 6
April 8, 1996 detailing the reduction
of fees payable under an amended
Investment Contract
Amended and Restated Investment 9
Contract dated June 29, 1996
<PAGE>
ATTACHMENT PURSUANT TO SUB-ITEM 77C
1996 ANNUAL MEETING OF STOCKHOLDERS
On May 31, 1996, the Fund held an annual meeting to:
1. Elect two trustees,
2. Ratify the appointment of KPMG Peat Marwick as the Fund's independent
accountants for 1996, and
3. Consider whether to amend the existing contract with International
Investment
Trust Company Limited (the "Adviser") and the Central Trust of China
(the "Custodian") in order to reduce the fees payable to the Adviser and
the Custodian.
Proxies representing 24,448,242, or 72.30% of the 33,815,376 eligible shares
outstanding, were voted. The results are shown below.
For Withheld
Nominees to the Board of Trustees
Daniel K.L. Chiang 23,824,608 623,633
Raymund A. Kathe 23,822,307 625,934
Messrs. Theodore S.S. Cheng, Pedro-Pablo Kuczynski, Li-Yin Kung, David N.
Laux, Alfred F. Miossi, and Gregory Kuo-Hua Wang, whose terms did not expire
in 1996, are the remaining trustees.
For Against Abstain
KPMG Peat Marwick as independent 23,850,964 30,256 567,021
accountants for 1996
For Against Abstain
Reduction of fees payable to the
Adviser and the Custodian* 23,257,017 39,193 1,152,032
*For Details of Fee Reductions, See Information Attached from Proxy
Statement dated April 8, 1996.
ATTACHMENT PURSUANT TO SUB-ITEM 77C
Excerpt From Proxy Statement
Dated April 8, 1996
III. APPROVAL OF REDUCTION OF ADVISORY FEE
Proposed Fee Reduction
The Adviser, a registered investment adviser in the United States
pursuant to the Investment Advisers Act of 1940, acts as the Trust's
investment adviser and manager for the Trust's assets held in the R.O.C.
pursuant to an Amended and Restated Investment Contract (the "R.O.C.
Investment Contract") dated July 11, 1993 among the Trust, the Adviser and
Central Trust of China, as custodian (the "Custodian"). All compensation
paid to the Adviser by the Trust for the Adviser's service as the Trust's
investment adviser and manager for all of the Trust's assets (including
those held in the United States) is paid under the terms of the R.O.C.
Investment Contract.
For its services to the Trust rendered pursuant to the R.O.C.
Investment Contract, the Adviser and the Custodian receive fees in New
Taiwan Dollars (NT$) at a rate (the "Current Fee Schedule") dependent on
the net asset value ("NAV") of the assets of the Trust held in the R.O.C.
The Adviser receives fees of (a) 1.45% of such NAV of such Trust assets up
to NT$7 billion (approximately US$257 million)(i), (b) 1.30% of such NAV
with respect to such Trust assets in excess of NT$7 billion up to NT$10
billion (approximately US$367 million), (c) 1.15% of such NAV with respect
to such Trust assets in excess of NT$10 billion up to NT$13 billion
(approximately US$477 million) and (d) 1.00% of such NAV with respect to
such Trust assets in excess of NT$13 billion. The fee, which is paid
monthly in arrears, accrues daily and is calculated on each business day on
which the Taiwan Stock Exchange (the "TSE") is open for business. The
Adviser is paid by the Trust directly from assets held pursuant to the
R.O.C. Investment Contract. In addition, pursuant to the Current Fee
Schedule the Trust pays the Custodian a fee of NT$ at the rate of (a) 0.19%
of such NAV with respect to such Trust assets up to NT$7 billion, (b) 0.17%
of such NAV with respect to such Trust assets in excess of NT$7 billion up
to NT$10 billion, (c) 0.15% of such NAV with respect to such Trust assets
in excess of NT$10 billion up to NT$13 billion and (d) 0.13% of such NAV
with respect to such Trust assets in excess of NT$13 billion.
Following discussions between the trustees of the Trust who are not
"interested persons" (as defined in the Investment Company Act) of any
party to the R.O.C. Investment Contract (the "Independent Trustees") and
the other trustees (including Mr. Chiang, who also serves as a Director and
Executive Vice President of the
(i) The U.S. Dollar figures in parentheses are based on an exchange rate of
US$1.00=NT$27.27, which was the certified noon buying rate in New York for
cable transfers, as made available by the Federal Reserve, on March 21, 1996.
<PAGE>
2
Adviser), the Board of Trustees, including all of the Independent Trustees,
unanimously resolved at its meeting on February 9, 1996 to approve the
following fee schedule (the "Revised Fee Schedule"), which would reduce the
per annum rate of the fee paid by the Trust to the Adviser to (a) 1.40% of
the NAV of the Trust's assets held in the R.O.C. up to NT$6 billion
(approximately US$220 million), (b) 1.20% of such NAV with respect to such
Trust assets in excess of NT$6 billion up to NT$9 billion (approximately
US$330), (c) 1.00% of such NAV with respect to such Trust assets in excess
of NT$9 billion up to NT$12 billion (approximately US$440 million) and (d)
0.80% of such NAV with respect to such Trust assets in excess of NT$12
billion. In addition, the fees paid by the Trust to the Custodian would be
reduced to (a) 0.16% of such NAV with respect to such Trust assets up to
NT$6 billion, (b) 0.14% of such NAV with respect to such Trust assets in
excess of NT$6 billion up to NT$9 billion, (c) 0.12% of such NAV with
respect to such Trust assets in excess of NT$9 billion up to NT$12 billion
and (d) 0.10% of such NAV with respect to such Trust assets in excess of
NT$12 billion.
No other material changes are proposed to the R.O.C. Investment
Contract, and no change of any kind is proposed in the contract, described
further below, pursuant to which the Adviser manages (without additional
compensation) the Trust's assets held in the United States (the "U.S.
Investment Contract").
The following tables set forth the Current and Revised Fee Schedules
for the Adviser and corresponding information for the Custodian.
Current Fee Schedule
Amount under
management (1000 NT$) Advisory Fee % Custodian Fee %
Up to 7,000,000............ 1.45% 0.19%
7,000,000 to 10,000,000....... 1.30% 0.17%
10,000,000 to 13,000,000..... 1.15% 0.15%
13,000,000 and above.......... 1.00% 0.13%
Revised Fee Schedule
Amount under
management (1000 NT$) Advisory Fee % Custodian Fee %
Up to 6,000,000.................1.40% 0.16%
6,000,000 to 9,000,000....... 1.20% 0.14%
9,000,000 to 12,000,000...... 1.00% 0.12%
12,000,000 and above......... 0.80% 0.10%
<PAGE>
3
The aggregate amount of the Adviser's fee in the 1995 Fiscal Year was
NT$113,304,741 (U.S.$4,154,922). Had the Revised Fee Schedule been in
effect throughout 1995, the Adviser would have received NT$106,978,150
(US$3,922,924), a reduction of NT$6,326,591 (US$231,998), or 5.58%.
The aggregate amount of the Custodian's fee in the 1995 Fiscal Year was
NT$14,843,527 (US$544,317). Had the proposed revised Custodian's fee been
in effect throughout 1995, the Custodian would have received NT$12,280,784
(US$450,340), a reduction of NT$2,562,743 (US$93,977), or 17.27%.
AMENDED AND RESTATED INVESTMENT CONTRACT
AMONG
INTERNATIONAL INVESTMENT TRUST COMPANY LTD.
CENTRAL TRUST OF CHINA
AND
THE R.O.C. TAIWAN FUND
June 29, 1996
<PAGE>
AMENDED AND RESTATED INVESTMENT CONTRACT
WHEREAS, The Taiwan (R.O.C.) Fund (the "Fund") exists pursuant to a
securities investment trust contract, effective September 29, 1983, as twice
supplemented, among International Investment Trust Company Ltd. and the
Central Trust of China (the "Securities Investment Trust Contract"), which
defines the rights and obligations of the unitholders of the Fund; and
WHEREAS, pursuant to an extraordinary resolution adopted on April
18, 1989, the unitholders of the Fund authorized that the Fund be
reorganized pursuant to which The R.O.C. Taiwan Fund, a Massachusetts
business trust and an investment company registered under the United States
Investment Company Act of 1940, as amended (the "Unitholder"), became the
unitholder of the Fund; a Massachusetts business trust is an association of
persons organized by the execution of a declaration of trust under which the
beneficial interest is divided into transferable interests for the purpose
of carrying on a common project for gain; and
WHEREAS, pursuant to such reorganization, an Amended and Restated
Investment Contract superseded the Securities Investment Trust Contract; and
WHEREAS, pursuant to extraordinary resolutions adopted on May 28,
1991, the Unitholder authorized the reduction of the fee payable to
International Investment Trust Company Limited (the "Manager") out of the
assets held in the Fund and the entry into of an Amended and Restated
Investment Contract, dated July 15, 1991 (the "1991 Investment Contract"),
by and among the Unitholder, the Manager and Central Trust of China (the
"Custodian"), pursuant to which such fee reduction was effected; and
WHEREAS, pursuant to resolutions adopted by the Board of Trustees
of the Unitholder on June 2, 1993, the Unitholder authorized the amendment
of the 1991 Investment Contract with respect to certain aspects of the
relationship between the Custodian and the Fund; and
WHEREAS, pursuant to extraordinary resolutions adopted on May 31,
1996, the Unitholder authorized the further reduction of the fees payable to
the Manager and the Custodian out of the assets held in the Fund and the
entry into of a new investment contract in the form hereof;
NOW, THEREFORE, this Amended and Restated Investment Contract is
hereby amended and restated to read in its entirety as follows:
<PAGE>
2
1. Introduction and Policy
1.1 The Taiwan (R.O.C.) Fund (the "Fund") is a securities
investment trust fund established on October 27, 1983 under the laws of the
Republic of China (the "R.O.C."), and reorganized and approved by the
Securities and Exchange Commission (the "R.O.C. SEC") of the Ministry of
Finance of the R.O.C. on May 19, 1989 for the exclusive benefit of The
R.O.C. Taiwan Fund, a Massachusetts business trust (the "Unitholder"), and a
registered investment company under the United States Investment Company Act
of 1940, (the "1940 Act"), on the basis of this amended and restated
securities investment trust contract (the "Amended and Restated Investment
Contract") among International Investment Trust Company Limited (the
"Manager") of 17th Floor, 167 Fu Hsing North Road, Taipei, Taiwan, R.O.C.,
Central Trust of China (the "Custodian") of 49 Wu Chang Street, Section 1,
Taipei, Taiwan, R.O.C., and the Unitholder of c/o Dewe Rogerson, 850 Third
Avenue, New York, New York, 10022, United States of America. This Amended
and Restated Investment Contract, together with relevant laws and
regulations of R.O.C., shall govern the relationship, which is contractual
(the Fund not being a separate legal entity), among the Manager, the
Custodian and the Unitholder.
1.2 The Fund's investment objective is long-term capital
appreciation through investment primarily in publicly traded equity
securities of R.O.C. issuers. The Fund intends to spread risk by investing
in various industries and issuers. The Fund may also invest in debt
securities of R.O.C. issuers (including the R.O.C. government). It is an
investment policy of the Fund that normally at least 70% of the total assets
held in the Fund will be invested in securities of R.O.C. issuers (including
the R.O.C. government). For temporary defensive purposes during periods in
which changes in economic, financial or political conditions make it
advisable, the Trust may ask the Manager to reduce its holdings in equity
securities and increase its holdings in (i) long-term or short-term debt
securities issued by the R.O.C. government, its agencies or
instrumentalities, or other private issuers in the R.O.C., (ii) certificates
of deposit issued by banks or other financial institutions in the R.O.C. or
(iii) cash, or any combination of the foregoing, in each case to the extent
deemed prudent by the Manager.
2. Basic Obligations and Rights
2.1 The Manager shall:
(a) be obliged to manage the investment of the assets
constituting the Fund held by the Custodian for the exclusive benefit of the
Unitholder in good faith and to the best of its ability and without gaining
any advantage for itself or any of its Connected Persons (as defined in
Article 17 below) thereby except as expressly provided in this Amended and
Restated Investment Contract, in accordance with the investment objective
and restrictions as provided in Article 10 below and subject to and in
accordance with any directions or guidelines made or established by the
Unitholder which are not in contravention of the R.O.C. laws and
regulations;
<PAGE>
3
(b) be obliged to account to the Unitholder for any loss in
value of assets held in the Fund where such loss has been caused by its
wilful misfeasance, bad faith or gross negligence in the performance of its
duties or its reckless disregard of its obligations and duties under this
Amended and Restated Investment Contract;
(c) be responsible to the Unitholder for the acts and
omissions of all persons to whom it may delegate any of its functions as
Manager as if they were its own acts and omissions;
(d) promptly report to the R.O.C. SEC and to the Unitholder
any matter which in the opinion of the Manager is an actual or anticipated
breach by the Custodian of any of the provisions of this Amended and
Restated Investment Contract or of any relevant provisions of the laws and
regulations of the R.O.C.;
(e) to the extent permitted by the laws and regulations of
the R.O.C., take such action to enforce the obligations of the Custodian, on
behalf of and for the benefit of the Unitholder, under this Amended and
Restated Investment Contract as it shall think fit or as shall from time to
time be required by the R.O.C. SEC or the Unitholder;
(f) perform its obligations under this Amended and Restated
Investment Contract so as to (i) comply with all laws and regulations of the
R.O.C. and of the United States applicable to the Manager and the Unitholder
and (ii) permit the Unitholder to qualify as a regulated investment company
under the applicable provisions of the United States Internal Revenue Code
of 1986, as amended (the "Code"), and to take such steps as the Unitholder
may deem necessary or desirable pursuant to such provisions of the Code
(including, without limitation, the making of distributions); and
(g) (i) issue certificates in respect of units issued and
cancel certificates in respect of units redeemed and (ii) implement the
procedures for issuing and redeeming units, all in accordance with the
relevant provisions of this Amended and Restated Investment Contract and the
laws and regulations of the R.O.C.
2.2 The Custodian shall:
(a) (i) be responsible absolutely and without qualification
to the Unitholder for the safekeeping of all assets held in the Fund (aside
from the assets which are entrusted to a central securities depository
company for safekeeping in accordance with Article 2.2(e) below) at all
times and of all amounts from time to time set aside out of the assets held
in the Fund and held for the purposes of distribution in accordance with
Article 13 of this Amended and Restated Investment Contract, (ii) shall
indemnify the Unitholder in the event of any loss of such assets and amounts
resulting from a breach of its duties hereunder and (iii) shall insure such
<PAGE>
4
assets and amounts adequately against loss, but the Custodian shall not be
responsible for the willful or negligent default (including non-payment or
failure to deliver securities) by securities brokers or other persons
selected by the Manager and dealt with by the Custodian, unless such default
is contributed to by the Custodian;
(b) comply with the instructions of the Manager on behalf of
the Unitholder given from time to time pursuant to this Amended and Restated
Investment Contract in relation to the disposition of the assets held in the
Fund from time to time and the exercise of rights attaching thereto except
where, in the opinion of the Custodian, to do so would or might involve a
breach of this Amended and Restated Investment Contract or of any relevant
provisions of the laws and regulations of the R.O.C., in which case the
Custodian shall immediately notify the Manager and the Unitholder;
(c) collect and present for payment on a timely basis and
hold as part of the assets held in the Fund all dividends and other payments
and assets which the Fund shall be entitled by applicable law or custom or
otherwise; and
(d) promptly report to the R.O.C. SEC and to the Unitholder
any matter which in the opinion of the Custodian is an actual or anticipated
breach by the Manager of any of the provisions of this Amended and Restated
Investment Contract relating to R.O.C. laws and regulations or of any
relevant provisions of the laws and regulations of the R.O.C.
(e) be at liberty to open an account with a central
securities depository company incorporated with the approval of the Ministry
of Finance (the "Depository Company") and to entrust the Depository Company
with the safekeeping of the securities held in the Fund in accordance with
the Custodian's obligations herein. The safekeeping costs chargeable by the
Depository Company shall be paid by the Custodian, provided, however, that
the Custodian shall not be held responsible for losses to the Fund resulting
from a willful or negligent default by the Depository Company unless the
Custodian contributed to such default, but shall on behalf of the Fund claim
the indemnity for such losses, with the expenses incurred from the claim to
be reimbursed out of the assets held in the Fund. The Custodian shall
monitor and report periodically to the Manager and, if requested, the
Unitholder with regard to any materially adverse change with respect to (1)
the Depository Company's obligation to the Fund to indemnify the Fund and
insure the Fund's assets held through the Depository Company in the event of
loss; (2) the Fund's right that its assets not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the
Depository Company except a claim of payment for their safe custody or
administration; (3) the Fund's right that beneficial ownership of its assets
in the hands of the Depository Company will be freely transferable without
the payment of money or value other than for safe custody or administration;
(4) the adequacy of the Depository Company's records that are maintained to
identify the assets belonging to customers of the Custodian; and (5) the
right of the Fund's public accountants to be
<PAGE>
5
given access to the records or confirmations of the contents of records of
the Depository Company, the Depositary Company being obligated to reply.
The Custodian shall not be responsible for any investment loss of
assets held in the Fund and shall have no other responsibilities to the
Manager or the Unitholder other than those provided in this Article 2.2.
2.3 The Unitholder shall have the right at all times to enforce
against the Manager the obligations of the Manager, and against the
Custodian the obligations of the Custodian, under this Amended and Restated
Investment Contract.
2.4 The proper costs incurred by the Manager in enforcing the
obligations of the Custodian shall be borne out of the assets held in the
Fund. The Manager shall be entitled to an indemnity out of the assets held
in the Fund against any claims incurred or suffered by it as a result of its
acting as the Manager under this Amended and Restated Investment Contract
which are not attributable to its wilful misfeasance, bad faith or gross
negligence in the performance of its duties or its reckless disregard of its
obligations and duties under this Amended and Restated Investment Contract
("Disabling Conduct"), but only to the extent that such claims are not borne
by any person other than the Manager, and only to the extent that there has
been (1) a final decision on the merits by a court or other body before whom
the proceeding was brought that the Manager was not liable by reason of
Disabling Conduct or (2) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the Manager was not
liable by reason of Disabling Conduct by (a) the vote of a majority of a
quorum of trustees of the Unitholder who are neither "interested persons" as
defined in Section 2(a)(19) of the 1940 Act nor parties to the proceeding or
(b) an independent legal counsel in a written opinion.
2.5 The Custodian shall be indemnified by the Fund against any
claims incurred or suffered by it as a result of its acting as the Custodian
under this Amended and Restated Investment Contract which are not
attributable to its wilful misfeasance, bad faith or gross negligence in the
performance of its duties or its reckless disregard of its obligations and
duties under this Amended and Restated Investment Contract, but only to the
extent such claims are not borne by any person other than the Custodian.
2.6 The assets held in the Fund will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the
Custodian or its creditors; beneficial ownership of the assets held in the
Fund will be freely transferable to another Custodian without payment of
money or value to the Custodian; the Custodian will maintain adequate
records identifying the assets held in the Fund as being held for the
benefit of the Unitholder; the Unitholder's independent public accountants
will be given access to such records during normal business hours upon
request; and the Manager (acting on behalf of the Unitholder) will receive
periodic reports from the Custodian with respect to the safekeeping of the
assets held
<PAGE>
6
in the Fund, including, but not limited to, notification of any
transfer of assets to or from the Fund.
2.7 The Custodian represents and warrants to the Manager and the
Unitholder that it is a banking institution established under R.O.C. law, is
regulated as such by the R.O.C. government or an agency thereof, and had
shareholder's equity in excess of the New Taiwan Dollar equivalent of
US$200,000,000 as of the close of its fiscal year ended June 30, 1996.
3. Fund Assets
3.1 All assets held in the Fund shall at all times be held by the
Custodian and, where in registered form, shall be registered in the name of
"Special Account for The R.O.C. Taiwan Fund under the Custody of the Central
Trust of China" or in such other name as may be consented to by the R.O.C.
SEC, the Unitholder and the Manager.
3.2 After the reorganization of the Fund, a new certificate
evidencing units of the Fund (the "Units") was issued to the Unitholder to
evidence its acquisition of the entire beneficial interest in the assets
constituting the Fund and to replace the units issued to the unitholders of
the Fund. The number of Units issued to the Unitholder was equal the number
of units thus replaced.
3.3 The provisions of Article 18-2 of the Securities and Exchange
Law of the R.O.C. shall apply to the assets held in the Fund, and such
assets shall not form part of the assets of the Custodian or of the Manager.
To the extent that legitimate claims made by third parties against the
assets constituting the Fund exceed the value of those assets, the
satisfaction of such claims shall be the responsibility of the Unitholder
and not the Manager or Custodian.
3.4 The Custodian shall not dispose of assets held in the Fund
except:
(a) in accordance with instructions received by it from the
Manager in relation to:
(i) the investment or realization of assets for the
account of the Fund;
(ii) the payment or discharge of other amounts or
liabilities properly payable or dischargeable out
of the assets held in the Fund in accordance with
the provisions of this Amended and Restated
Investment Contract;
<PAGE>
7
(iii) the payment of amounts due to the Unitholder by
way of any distribution in accordance with
the provisions of this Amended and Restated
Investment Contract, including but not
limited to any distribution referred to in
Article 2.1(f)(ii) above; or
(iv) the payment of amounts due to the Unitholder upon
due redemption of Units;
(b) to the Unitholder upon liquidation and distribution of
assets held in the Fund; or
(c) as otherwise required by any mandatory provision of law.
4. Units
4.1 Ownership of the assets constituting the Fund by the
Unitholder shall be evidenced by beneficial certificates representing one or
more Units (the "Certificates") in the form approved by the R.O.C. SEC and
signed by the Manager and the Custodian.
4.2 The initial Certificate issued to the Unitholder after the
reorganization indicates the number of Units issued to the Unitholder in
accordance with Article 3.2 above.
4.3 Each Unit issued in accordance with Article 3.2 above
represents the Net Asset Value (as determined in accordance with Article 5
below) per unit of the Fund as of the close of business on May 19, 1989.
4.4 The Manager and the Custodian shall each be responsible for
the maintenance of a record of the number of Units held from time to time by
the Unitholder, in accordance with the relevant provisions of this Amended
and Restated Investment Contract and the laws and regulations of the R.O.C.
4.5 Subsequent to the initial issuance of Units in accordance with
Article 4.3 above, each additional Unit issued shall, subject to Article 7
below, be issued at a price per Unit (the "Net Asset Value per Unit")
calculated, as at the Valuation Date (as defined in Article 5.2 below)
immediately following the date of receipt by the Manager of the application
for the issuance of such additional Unit, by dividing (a) the Net Asset
Value of the Fund by (b) the number of outstanding Units (as determined in
accordance with Article 5.2(g) below).
4.6 Payment for each Unit shall be made in cash to the Custodian
in advance of the issuance of such Unit.
<PAGE>
8
4.7 Units shall not he transferable by the Unitholder except by
redemption in accordance with Article 6 below.
5. Valuation
5.1 The "Net Asset Value" of the Fund shall be the value of the
assets held in the Fund less its liabilities (including such provisions and
allowances for contingencies as the Manager may think appropriate in respect
of the costs and expenses payable out of the assets held in the Fund in
accordance with Article 8 below).
5.2 The Net Asset Value of the Fund and the Net Asset Value per
Unit shall be calculated by the Manager as at each business day in Taipei (a
"Valuation Date") by reference to (inter alia) the following criteria:
(a) the value of assets held in the Fund, other than cash or
assets (not specified in (i) to (iv) below) considered by the Manager to be
the effective equivalent of cash, shall be determined:
(i) where the assets are listed and dealt in on the
Taiwan Stock Exchange, by reference to the last
dealt price on such Exchange on the relevant
Valuation Date or, if there is no last dealt
price on such Exchange on that date, the last
dealt price on such Exchange immediately before
the relevant Valuation Date;
(ii) where the assets are bonds, debentures or financial
instruments not listed and dealt in on the Taiwan
Stock Exchange, by reference to the valuation
thereof on the relevant Valuation Date or the
latest available valuation by the Stock Brokers'
Association of Taipei, or, if there is no such
valuation, at their par value plus interest
accrued but unpaid to the relevant Valuation
Date;
(iii) where the assets are money market instruments,
at cost plus interest accrued but unpaid
from the date of purchase to the relevant
Valuation Date; and
(iv) in all other cases, by reference to valuation
procedures adopted by the Unitholder and
consistent with guidelines from time to time laid
down by the R.O.C. SEC;
<PAGE>
9
(b) in the case of any interest-bearing investment or other
investment on which income is accruing, not included within (a)(ii) or
(a)(iii) above, there shall be included in the value thereof all interest or
other income accruing up to the Valuation Date;
(c) cash, the effective equivalent of cash, accounts
receivable and accounts prepaid shall be included at the full face or market
value thereof;
(d) there shall be made such allowance (if any) as the
Manager may consider appropriate in the case of any asset that the Manager
considers may not be fully recoverable;
(e) unperformed or partially performed agreements for the
acquisition or disposition of assets shall be valued as if they had been
completely performed;
(f) liabilities shall include the amount of any fee payable
to the Custodian or the Manager in accordance with Article 9 below and
accrued at or accruing to the relevant Valuation Date but remaining unpaid;
(g) the number of outstanding Units shall include Units
scheduled to be redeemed by reference to the relevant Valuation Date but
shall exclude Units scheduled to be issued by reference to that Valuation
Date;
(h) there may be excluded from the value of any assets in
respect of the acquisition or disposition of which brokerage, duties and
other similar costs would be paid out of the assets held in the Fund if such
assets had been acquired or disposed on the relevant Valuation Date an
amount not exceeding the Manager's bona fide estimate of the amount of such
costs which would have been so payable; and
(i) currency conversion between U.S. Dollars and N.T. Dollars
shall be made at the closing exchange rate in the R.O.C. on the relevant
Valuation Date.
If in any respect extraordinary circumstances render it
impracticable or inappropriate to conduct a valuation on the basis
prescribed herein, the Manager shall to the extent necessary follow other
valuation procedures consistent with guidelines from time to time laid down
by the R.O.C. SEC.
6. Redemption of Units
6.1 The Unitholder may (subject to Article 7 below and relevant
laws and regulations of the R.O.C. governing foreign investment and foreign
exchange control) redeem all or any of its Units by delivering the
Certificate(s) in
<PAGE>
10
respect of the relevant Unit(s) together with an
appropriate request for redemption to the Manager at its principal office in
Taipei. The redemption price shall be the Net Asset Value per Unit
(calculated in accordance with Article 4.5 above) as at the next Valuation
Date immediately following the date of receipt by the Manager of the
relevant redemption request and Certificate(s).
6.2 Redemption proceeds shall (subject to Article 7 below) be paid
out not later than five days after the next Valuation Date following the
date of receipt by the Manager of the relevant redemption request and
Certificate(s).
6.3 When the Unitholder requests redemption of only part of the
Units comprised in a Certificate, the Manager shall (subject to Article 7
below), in addition to paying out the redemption proceeds in accordance with
Article 6.2 above, issue a new Certificate in respect of the relevant Units
not redeemed not later than 14 days after the next Valuation Date following
the date of receipt by the Manager of the relevant redemption request and
the relevant Certificate.
7. Suspension of Valuation, Issues, Redemptions and Payments
7.1 The Manager may, subject to R.O.C. SEC approval, temporarily
suspend valuation of the assets held in the Fund and calculation of the Net
Asset Value in the following events:
(a) when the Taiwan Stock Exchange or the R.O.C. foreign
exchange market is closed otherwise than for ordinary holidays;
(b) in the case of breakdown of the means of communication
normally used for the valuation of any material portion of the assets held
in the Fund;
(c) where currency exchange or securities trading is
restricted; or
(d) other special events preventing the acceptance of
redemption requests or payment of redemption price.
7.2 During any period when valuation is suspended, no issuance or
redemption of Units shall be made, and no payment shall be made of any
redemption proceeds payable but unpaid in respect of any Units already
redeemed.
8. Expenses
8.1 The following items shall be the only costs and expenses
payable out of the assets held in the Fund:
<PAGE>
11
(a) the acquisition price and brokerage, stamp duty and
similar direct acquisition costs of assets acquired for the account of the
Fund;
(b) brokerage, stamp duty and similar direct disposition
costs arising on the disposition of assets held in the Fund;
(c) all stamp and similar duties and charges payable from
time to time in respect of assets held in the Fund;
(d) all necessary or appropriate expenses incurred in
relation to the registration of any assets in the name of the Custodian for
the benefit of the Fund;
(e) all necessary or appropriate expenses incurred in the
collection and distribution of income derived from assets held in the Fund;
(f) all fees and expenses of any auditors or legal counsel of
the Fund;
(g) all taxes payable in respect of income (including stock
dividends) of, the holding of or dealings with assets held in, the Fund;
(h) all necessary or appropriate expenses, including postage,
telex and telephone costs, incurred by the Custodian in connection with the
acquisition or disposition of any assets held in the Fund;
(i) any compensation payable to the Manager or the Custodian
in accordance with Article 9 below;
(j) legal fees and expenses incurred in connection with the
interpretation, amendment or enforcement of this Amended and Restated
Investment Contract;
(k) costs relating to the publication of Net Asset Value per
Unit or the Net Asset Value, and the printing, mailing and similar costs for
any regular report sent to the Unitholder;
(l) all attestation fees incurred in connection with the
issuance of Certificates;
(m) all necessary or appropriate expenses incurred by the
Unitholder in connection with its organization and initial receipt of Units,
any public offering of its shares to investors in the United States or
elsewhere, the listing of its shares on any stock exchange, its registration
and operation as a management investment company under the 1940 Act and its
qualification as a regulated investment company under the Code; and
<PAGE>
12
(n) all other necessary or appropriate costs, fees and
expenses incurred by the Manager or the Custodian on behalf of the Fund or
the Unitholder in the course of performing their respective duties
(including indemnification costs, the payment of which is provided for in
Articles 2.2(e), 2.4 and 2.5); provided that the Manager and the Custodian
shall each bear all expenses associated with the performance of its duties
hereunder (including employee salaries and overhead) other than expenses to
be paid out of the assets held in the Fund as specifically provided in this
Article 8, and the Manager shall bear the proper fees and expenses of those
officers and trustees of the Unitholder that are "interested persons" (as
defined in the 1940 Act) of the Manager.
9. Custodian and Management Fees
9.1 The remuneration payable to the Custodian and the Manager,
respectively, out of the assets held in the Fund shall be fees accruing on a
daily basis at the applicable rates as set forth below, accruable on the Net
Asset Value as determined on each Valuation Date, payable in NT$ in arrears
on the last Valuation Date in each calendar month.
9.2 The amount of remuneration payable to the Manager shall be
calculated at the following applicable rates:
Amount of Net Asset Value Percentage Fee
Up to NT$6,000,000,000 1.40%
In excess of NT$6,000,000,000 up to
NT$9,000,000,000 1.20%
In excess of NT$9,000,000,000 up to
NT$12,000,000,000 1.00%
In excess of NT$12,000,000,000 0.80%
<PAGE>
13
9.3 The amount of remuneration payable to the Custodian shall be
calculated at the following applicable rates provided that the minimum
remuneration per annum shall be no less than NT$2,400,000:
Amount of Net Asset Value Percentage Fee
Up to NT$6,000,000,000 0.16%
In excess of NT$6,000,000,000 up to
NT$9,000,000,000 0.14%
In excess of NT$9,000,000,000 up to
NT$12,000,000,000 0.12%
In excess of NT$12,000,000,000 0.10%
10. Objective and Restrictions
10.1 In accordance with the investment objective set forth in Article
1.2 above, the assets held in the Fund shall be invested in securities and
money market instruments denominated in NT$ and in NT$ cash and banking and
similar accounts and, if and when permitted by the laws and regulations of
the R.O.C., in such money market instruments or cash or banking or similar
accounts, denominated in foreign currencies, as may be available in the
R.O.C.
10.2 The Manager shall ensure that the Fund shall not:
(a) invest in equity securities which, at the time the
investment is made, are not listed and traded on the Taiwan Stock Exchange,
except that the Fund may invest in such securities if R.O.C. law is changed
to so permit;
(b) invest in partnership interests;
(c) effect any transaction of securities between the trust
funds under its management;
(d) apply the assets of the Fund to purchase beneficial
certificates issued by the Manager unless the beneficial certificates are
redeemed by investors or repurchased for the purpose of closing the Fund;
(e) invest in securities issued by securities investment trust
funds in the R.O.C.;
(f) borrow money (except to the extent that amounts advanced by
the Manager in connection with the reorganization referred to in the
preamble might be considered borrowing money) or pledge its assets held
pursuant to the Amended and Restated Investment Contract;
<PAGE>
14
(g) engage in short sales of securities, write put and call
options or engage in purchases of securities on margin;
(h) make any loan (other than by bank deposits or by investment
in debt securities or in repurchase agreements) or enter into any guaranty
of any loan;
(i) purchase any security (other than obligations of the United
States government or its agencies or instrumentalities), if as a result of
such purchase (i) as to 75% of the total assets held under the Amended and
Restated Investment Contract (taken at their then current value), more than
5% of the total assets held under the Amended and Restated Investment
Contract (taken at their then current value) would then be invested in the
securities of a single issuer, (ii) as to the remaining 25% of the total
assets held under the Amended and Restated Investment Contract (taken at
their then current value), more than 10% of the total assets held under the
Amended and Restated Investment Contract (taken at their then current value)
would then be invested in the securities of a single issuer (except that the
Fund may invest up to 25% of its assets in obligations of the R.O.C. or its
agencies or instrumen- talities), (iii) more than 10% of the outstanding
equity securities of any issuer (at the time of purchase) would be
beneficially held by the Fund or (iv) 25% or more of the assets held in the
Fund (taken at their then current value) would be invested in a single
industry;
(j) underwrite the issue or sale of any securities;
(k) invest in securities issued by any person (except the
R.O.C. government) who beneficially owns more than 5% of, or takes any
significant active role in the management of, the Manager;
(l) issue senior securities, except as permitted by paragraph
(d) above;
(m) buy or sell real estate or real estate mortgage loans;
(n) buy or sell commodities or commodity contracts, including
futures contracts on a contract market or other futures market, except that
the Fund may invest in currency forward contracts to hedge against currency
fluctuations if R.O.C. law is changed to so permit; or
(o) invest (i) in securities of R.O.C. issuers the issuance of
which has not been approved by or registered with the R.O.C. SEC for
offering to the public or (ii) in unregistered securities of United States
issuers that must be registered before being publicly offered under the
United States Securities Act of 1933.
<PAGE>
15
10.3 The Manager shall ensure that investments of assets held in the
Fund will meet the requirements of section 851(b), (c) and (d) of the Code
and any corresponding future provisions of the Code or any successor
legislation thereto. Subject to the immediately preceding sentence, nothing
in Article 10.2 above shall require the realization of any assets held in
the Fund where any of the restrictions therein is breached as a result of
any event outside the control of the Manager and occurring after such
investment is made (including but not limited to redemptions of Units or
securities, any reorganization or amalgamation of any issuer and the
suspension of any listing), but no further assets shall be acquired for
account of the Fund until the relevant restriction can again be complied
with, except pursuant to the exercise of subscription rights to purchase
securities of an issuer at a time when the Fund's portfolio holdings of
securities of such issuer would otherwise exceed the limits set forth in
Article 10.2(i) above, where after the announcement of such rights and prior
to its exercise, the Manager sells at least the number of securities which
it subsequently purchases through the exercise of the subscription rights.
10.4 To not less than the extent (if any) from time to time required
by the R.O.C. SEC, a proportion of the assets held in the Fund shall be
retained at all times in liquid form in assets of a type specified by the
R.O.C. SEC.
10.5 Cash shall be deposited with the Custodian or such other banks
meeting the requirements set forth in the 1940 Act, or be invested in money
market instruments.
10.6 To the maximum extent possible, all transactions for account of
the Fund shall be carried out through stock exchanges and other officially
designated markets. Subject to any limitations which may be imposed under
R.O.C. laws or regulations or the 1940 Act and any rules and regulations
promulgated thereunder, transactions for account of the Fund may be carried
out through a broker who is a Connected Person (as defined in Article 17
hereof) of the Manager to such extent as the Manager may think fit; provided
that the cost thereof to the Fund is not greater than it would have been had
the transactions been carried out through a broker who was not a Connected
Person of the Manager.
10.7 The Manager may from time to time, with the consent of the
Unitholder and the R.O.C. SEC, adopt further investment restrictions in
order to comply with applicable laws and regulations.
11. Duration, Changes in Manager
and Custodian and Termination
11.1 Subject to the provisions of this Amended and Restated
Investment Contract, the Fund is established for an unspecified period.
<PAGE>
16
11.2 The Fund shall terminate if:
(a) the R.O.C. SEC by notice in writing to the Manager and the
Custodian so requires;
(b) the Manager notifies the Unitholder, the Custodian and the
R.O.C. SEC that in its opinion further operation of the Fund in accordance
with this Amended and Restated Investment Contract is illegal, impracticable
or inadvisable having regard solely to the interests of the Unitholder; or
(c) the Unitholder is adjudicated a bankrupt.
11.3 This Amended and Restated Investment Contract shall become
effective in accordance with Article 19 below and shall continue in effect
until the second anniversary of the date upon which this Amended and
Restated Investment Contract is executed by the Unitholder; provided that a
majority of the Unitholder's Trustees as a whole shall annually review the
continuance of the arrangements with the Custodian under this Amended and
Restated Investment Contract as consistent with the best interests of the
Unitholder and its shareholders.
11.4 (a) If not sooner terminated this Amended and Restated
Investment Contract shall continue in effect for successive periods of 12
months each after the second anniversary of the date upon which this Amended
and Restated Investment Contract is executed by the Unitholder; provided
that each such continuance shall be specifically approved annually by (i)
the vote of a majority of the Trustees of the Unitholder who are not parties
to this Amended and Restated Investment Contract or "interested persons" (as
defined in the 1940 Act) of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (ii) either (x) the
vote of a majority of the outstanding voting securities of the Unitholder or
(y) the vote of a majority of the Unitholder's Trustees as a whole. The
Unitholder shall notify the Manager and the Custodian of the continuance (or
discontinuance) annually.
(b) Notwithstanding Article 11.4(a) above, this Amended and
Restated Investment Contract may be terminated at any time by the
Unitholder, without the payment of any penalty, upon a vote of a majority of
the Trustees as a whole, or a majority of the outstanding voting securities
of the Unitholder, upon 60 days written notice to the Manager and the
Custodian.
(c) As used in this Article 11.4, the phrase "majority of the
outstanding voting securities" shall have the meaning set forth in the 1940
Act.
(d) This Amended and Restated Investment Contract shall
automatically terminate in the event of its assignment (as defined in the
1940 Act). Any transfer or other disposition (other than by redemption in
accordance with Article
<PAGE>
17
6 above) of any of the Units by the Unitholder shall
also constitute an assignment of this Amended and Restated Investment
Contract.
11.5 (a) The R.O.C. SEC may order that a new Manager or
Custodian be appointed within six months if the R.O.C. SEC considers that
the Manager or the Custodian, as the case may be, is incapable of carrying
out its functions properly.
(b) The Manager or the Custodian may be removed by the
Unitholder upon 60 days notice to the other parties hereto.
(c) If either the Manager or the Custodian goes into
liquidation or bankruptcy or if its permit to act as Manager or Custodian
has been revoked, it shall be deemed to have been forthwith removed as
Manager or Custodian, as the case may be.
(d) If the Manager or Custodian is removed, or resigns in
accordance with Article 11.5(e) below, the Unitholder may appoint a new
Manager or Custodian and, subject to Article 16 below, enter into a new
investment contract containing substantially the same terms and conditions
as this Amended and Restated Investment Contract, and this Amended and
Restated Investment Contract shall automatically terminate. The appointment
of a new Manager shall be approved by the Custodian and by the R.O.C. SEC,
and the appointment of a new Custodian shall be approved by the Manager and
by the R.O.C. SEC, provided that if the R.O.C. SEC has, in the circumstances
specified in the Regulations Governing the Administration of Securities
Investment Trust Funds (effective August 10, 1983), as from time to time
amended, required the appointment of a new Manager or a new Custodian and
the Unitholder has not appointed a new Manager or a new Custodian within
three months after the R.O.C. SEC has so required, the R.O.C. SEC may
require the liquidation and distribution of the assets held in the Fund as
provided in Article 11.6 below.
(e) The Manager or the Custodian may resign at any time by
giving 60 days notice to the other parties hereto. If, at the end of such
60-day period, no appointment of a replacement has been made and approved
and the Fund must be terminated, the Manager or the Custodian which has
resigned shall discharge such responsibilities hereunder as may be required
for the liquidation and distribution of the assets held in the Fund in
accordance with Article 11.6 below.
11.6 Upon the termination of this Amended and Restated Investment
Contract, the Manager shall, within three months after the effective date of
termination, liquidate the assets held in the Fund at reasonable prices,
satisfy any liabilities relating to the Fund and distribute the available
balance, if any, to the Unitholder.
<PAGE>
18
12. Accounts and Statements
12.1 The Manager shall maintain in its principal office in Taipei
sufficient accounts and records to enable a complete and accurate view to be
formed of the assets and liabilities and the income and expenditures of the
Fund, all transactions for account of the Fund and amounts received by the
Fund in respect of the issuance of Units and paid out by the Fund on
redemptions of Units and by way of distributions.
12.2 The Manager shall prepare financial statements of the Fund (a)
for each annual accounting period commencing immediately after the end of
the preceding period and ending on December 31 in each year (the "Final
Statements"), and (b) as at and for each calendar month ending on the last
day of such calendar month, such financial statement to be in such
respective form and containing such information as may be required by the
R.O.C. SEC.
12.3 The Manager shall:
(a) cause the Final Statements to be audited by a person or
firm authorized under the laws of the R.O.C. and the regulations of the
R.O.C. SEC (the "Auditors");
(b) submit each Final Statement together with such report as
the Manager may intend to make in relation thereto to the Unitholder and the
Auditors' report thereon to the R.O.C. SEC for comment and approval within
two months after the end of the relevant accounting period;
(c) comply with such requirements as the R.O.C. SEC may make in
relation to each such Final Statement and report within two weeks after the
date on which such requirements are made;
(d) send to the Unitholder and to the R.O.C. SEC copies of all
Final Statements and monthly statements; and
(e) assist and cooperate with the Unitholder in preparing such
reports and statements, including, without limitation, the calculation of
the net asset value of the Unitholder, as may be required of the Unitholder
under the 1940 Act, the United States Securities Exchange Act of 1934 (the
"1934 Act"), the rules and regulations promulgated under the 1934 Act and
1940 Act, and the rules and regulations of the New York Stock Exchange, or
such other stock exchanges on which the securities of the Unitholder may be
listed.
12.4 The Manager shall sign and the Custodian shall countersign all
Final Statements.
<PAGE>
19
12.5 The Auditors' report on the Final Statements of the Fund shall
be in the form required by the R.O.C. SEC and where relevant shall indicate
the extent to which such a report cannot be given and the reasons therefor.
13. Distributions
13.1 Distributions of income in respect of each accounting period
ended December 31 will be made to the Unitholder not later than March 31 in
the next following year. Distributions to the Unitholder may be made out of
income, realized capital gains, proceeds from the sale of dividends, or such
other items as may from time to time be permitted under the laws and
regulations of the R.O.C. The Manager in conjunction with the auditors
shall determine what is income and what is capital, except that stock
dividends and gains (realized or unrealized) on investments shall not be
regarded as income and realized discounts on debt securities and money
market instruments may be regarded as income. Costs and expenses payable
out of the assets held in the Fund may be set against income or capital as
the Manager in conjunction with the Auditors may determine; provided that
the allocation of such costs and expenses to income or to capital shall be
consistent from year to year. Where expenses are set against capital, they
may be amortized on a straight line basis over a period not exceeding five
years.
13.2 The aggregate amount of each distribution shall be credited to a
separate account in the name of the Custodian, and such amount shall
thereupon cease to form part of the assets held in the Fund, but interest
earned on such amount pending distribution to the Unitholder shall be paid
into and form part of the assets held in the Fund.
14. Currency
The accounts and records of the Fund shall be maintained in NT$.
Payments into the Fund upon issuance of the Units and out of the Fund on the
redemption of Units or by way of distributions shall be made in NT$. The
Net Asset Value and the Net Asset Value per Unit of the Fund shall be
calculated in NT$. The financial statements of the Fund shall be prepared
in NT$.
15. Information and Notices
15.1 There shall be held available for inspection by any person
without charge at the principal office of the Manager in Taipei at all
reasonable business hours copies of:
(a) this Amended and Restated Investment Contract, as from time
to time amended;
(b) the current sales prospectus (if any) in relation to shares
of the Unitholder; and
<PAGE>
20
(c) all final and monthly statements, together with any
relevant Auditors' reports and reports of the Manager in relation thereto,
for the two latest annual accounting periods of the Fund, and all accounts
and records for such periods in relation to the matters referred to in
Article 12.1 above.
15.2 All notices to the Unitholder shall be sent by hand, by airmail
or by telex or facsimile transmission to its registered address and shall
become effective upon receipt by the Unitholder.
15.3 The Manager shall at all times maintain an office or offices in
Taipei and shall notify the Unitholder in accordance with Article 15.2 above
of any change in the address of its principal office in Taipei.
16. Amendments
This Amended and Restated Investment Contract may be amended only
with the prior written agreement of the Unitholder, the Manager and the
Custodian, and subject to any approval required by applicable United States
and R.O.C. laws and regulations, including but not limited to the approval
of the R.O.C. SEC.
17. Connected Persons
For the purpose of this Amended and Restated Investment Contract, a
person is a "Connected Person" of another if:
(a) together with any person acting in concert with it in this
connection, it owns or otherwise controls for its own account, directly or
indirectly, an interest, whether or not a voting interest, of more than 5%
(or, in the case of an interest of the Custodian, 10%) of that other; or
(b) it is a director or supervisor, or takes any significant
active role in the management, of that other.
18. Governing Law, Jurisdiction and Language
18.1 The Fund, this Amended and Restated Investment Contract and the
Certificates shall be governed by, and this Amended and Restated Investment
Contract and the Certificates shall be construed in accordance with, the
laws of the R.O.C.
18.2 Any dispute arising out of or in respect of the Fund, this
Amended and Restated Investment Contract or the Certificates shall be
subject to the non-exclusive jurisdiction of the courts of the R.O.C. having
original jurisdiction and, in the case of any action against the Manager or
the Custodian, any court having original jurisdiction in the place where the
Manager or the Custodian has its principal office.
<PAGE>
21
18.3 The governing language of this Amended and Restated Investment
Contract shall be Chinese, but documents issued in relation to the Fund may
be in either the Chinese or the English language.
19. Effective Date
This Amended and Restated Investment Contract shall become effective
upon the day of the approval thereof by the R.O.C. SEC. Subsequent
amendments to this Amended and Restated Investment Contract shall be
effected in the same manner.
<PAGE>
22
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Investment Contract to be executed as of the date set forth below.
INTERNATIONAL INVESTMENT TRUST COMPANY LTD.
By /s/ Howard R.S. Ho
Name: Howard R.S. Ho
Title: President
CENTRAL TRUST OF CHINA
By /s/ Richard M.C. Tsai
Name: Richard M.C. Tsai
Title: President
THE R.O.C. TAIWAN FUND
By /s/ Daniel K.L. Chiang
Name: Daniel K.L. Chiang
Title: President and Chief Executive Officer
"The R.O.C. Taiwan Fund" (the "Unitholder") means and refers to the
Trustees from time to time serving under a Declaration of Trust of the
Unitholder dated May 8, 1989, a copy of which is on file with the Secretary
of The Commonwealth of Massachusetts. The execution of this contract has
been authorized by the Trustees of the Unitholder and this contract has been
executed on behalf of the Unitholder by an authorized officer of the
Unitholder acting as such and not individually, and neither such
authorization by such Trustees nor such execution by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the assets and
property of the Unitholder as provided in the Declaration of Trust.
June 29, 1996
<PAGE>
TABLE OF CONTENTS
Page
1. Introduction and Policy . . . . . . . . . . . . . . . 1
2. Basic Obligations and Rights. . . . . . . . . . . . . 2
3. Fund Assets . . . . . . . . . . . . . . . . . . . . . 5
4. Units . . . . . . . . . . . . . . . . . . . . . . . . 6
5. Valuation . . . . . . . . . . . . . . . . . . . . . . 7
6. Redemption of Units . . . . . . . . . . . . . . . . . 9
7. Suspension of Valuation, Issues, Redemptions and Payments10
8. Expenses. . . . . . . . . . . . . . . . . . . . . . .10
9. Custodian and Management Fees . . . . . . . . . . . .12
10. Objective and Restrictions. . . . . . . . . . . . . .12
11. Duration, Changes in Managerand Custodian and Termination15
12. Accounts and Statements . . . . . . . . . . . . . . .17
13. Distributions . . . . . . . . . . . . . . . . . . . .18
14. Currency. . . . . . . . . . . . . . . . . . . . . . .19
15. Information and Notices . . . . . . . . . . . . . . .19
16. Amendments. . . . . . . . . . . . . . . . . . . . . .20
17. Connected Persons . . . . . . . . . . . . . . . . . .20
18. Governing Law, Jurisdiction and Language. . . . . . .20
19. Effective Date. . . . . . . . . . . . . . . . . . . .21
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