Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
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Filed by a party other than the Registrant [ ]
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[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE R.O.C. TAIWAN FUND
..................................................................
(Name of Registrant as Specified In Its Charter)
..................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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on which the filing fee is calculated and state how it was
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[ ] Fee paid previously with preliminary materials.
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[LOGO AND LETTERHEAD OF THE R.O.C. TAIWAN FUND]
June 16, 2003
TIME IS SHORT -- THE ANNUAL MEETING IS RAPIDLY APPROACHING
Dear R.O.C. Taiwan Fund Shareholder:
This is the final letter you will receive from your Board of Trustees in
its fight to protect your investment in The R.O.C. Taiwan Fund (the 'Trust')
from the attempt by Laxey Partners Limited to force the Trust to take actions
that we believe are intended to give Laxey a quick profit at your expense. We
urge you again to sign and return the enclosed WHITE proxy card today.
WE NEED YOUR SUPPORT TO MAKE SURE THAT LAXEY IS SOUNDLY DEFEATED AND THAT
THE TRUST WILL NOT AGAIN BE SUBJECTED TO A COSTLY PROXY FIGHT BY A RAIDER WHO
ADVOCATES PROPOSALS THAT ARE NOT IN YOUR INTEREST.
Please discard Laxey's gold proxy card and support your Board by voting the
enclosed WHITE proxy card 'FOR' the election of Trustees, 'AGAINST' the
conversion proposal and 'AGAINST' Laxey's proposal to terminate the Trust's
investment advisory contract with International Investment Trust Company
('IIT').
By now you should have received from us the Trust's proxy statement and
letters dated June 3 and June 12, plus accompanying materials, explaining our
recommendation and refuting the many distortions in Laxey's proxy statement. In
particular, on June 12 we sent you a press release reporting that INSTITUTIONAL
SHAREHOLDER SERVICES ('ISS'), THE MOST PROMINENT ADVISER TO INSTITUTIONAL
INVESTORS WITH REGARD TO HOW TO VOTE THEIR SHARES CONCERNING PROXY MATTERS, HAS
UNEQUIVOCALLY RECOMMENDED THAT THE TRUST'S SHAREHOLDERS VOTE AS YOUR BOARD OF
TRUSTEES HAS RECOMMENDED.
In addition to Laxey's proxy statement, you have probably also received a
letter from Laxey dated June 11 leveling numerous baseless charges against your
Trustees. While we are sure you are now becoming weary of Laxey's distortions,
we think it important that you know the TRUTH.
FIRST LAXEY DISTORTION: 'Half' of your Board is not independent of IIT, and
the independent Trustees just want to 'maintain the status quo' and 'collect
their Board fees' without representing your interests.
TRUTH: Putting aside Laxey's 'creative' arithmetic (3 out of 8 = 1/2?),
here's what ISS says about this subject in its June 10 report: 'ISS FINDS NO
REASON TO SUSPECT THAT THE BOARD IS 'AFFILIATED' WITH THE ADVISOR . . . [T]he
board contains five independent trustees and fully independent Audit and
Nominating committees. Past share repurchases also demonstrate that the board
has periodically considered alternative measures that could be adopted for the
purpose of seeking to reduce the discount to NAV.'
FURTHERMORE, the Trust's independent Trustees have negotiated three
reductions (the most recent in 2000) in the fees payable to IIT since the
Trust's inception in 1989. And a majority of the Trust's Board has always been
independent, long before the SEC required (in 2002) that a majority of an
investment company's board consist of independent directors or trustees in order
for the company to qualify to use various exemptions from rules that would
otherwise restrict its operations. Finally, the Trust's independent Trustees,
all of whom have substantial backgrounds and significant expertise in either
Taiwanese affairs, investment management or both, are paid modest fees ($10,000
annually plus $1,000 per meeting) to perform an important task that requires
close attention and dedicated judgment.
SECOND LAXEY DISTORTION: Laxey's interests are aligned with your interests
and your Trustees' interests are not.
TRUTH: Laxey's self-acknowledged investment strategy is to take
opportunistic positions in funds that it can force to spend fund assets to allow
Laxey to liquidate its positions at a profit. Your Trustees believe, on the
basis of frequent and detailed consultations with the Trust's shareholders, that
a large majority of you are instead primarily interested in participating in a
disciplined investment strategy focused on Taiwan and China.
Here's what ISS has to say about Laxey's desire to force the Trust to adopt
an interval fund structure: 'A TRANSFORMATION TO AN INTERVAL STRUCTURE SHOULD
NOT BE TAKEN LIGHTLY. IT MIGHT BE DIFFICULT FOR THE FUND TO MAKE TENDER OFFERS
WITHOUT HARMING RETURNS AND THE FUND'S CONTINUING VIABILITY. Further, the fund's
asset size of approximately $143 million means THE LOSS OF ANY ASSETS WOULD BE
FELT DEEPLY. A reduction in assets size would likely raise expense/share and the
mere operation of a repurchase is expensive. Furthermore, repurchases would
likely require the maintenance of some cash in the portfolio.' We could not
agree more!
IN ADDITION, Laxey claims that your Trustees cannot represent your
interests without owning large numbers of the Trust's shares themselves. But the
Trust is a specialized investment vehicle whose shares do not necessarily have a
place in any
particular individual's portfolio. Your Trustees were chosen, on the basis of
their expertise and background, in order to serve your interests, not to make
money for themselves. They seek to listen to what you want, not, like Laxey, to
make quick profits with no regard for the Trust's long-term stability or even
its continued existence.
THIRD LAXEY DISTORTION: Your Trustees are 'desperate to entrench themselves
and the Adviser,' and their actions to oppose a vote on Laxey's termination
proposal and to amend the Trust's By-laws 'fl[y] in the face of shareholder
democracy' and were contrary to 'information on submitting shareholder proposals
contained in the Trust's 2002 proxy material.'
TRUTH: As we have explained before -- and could be easily demonstrated by
examining the Trust's founding Declaration of Trust -- the By-law amendment that
Laxey persists in attacking had no effect whatever on the rights of the Trust's
shareholders to require proposals to be submitted to a vote. And contrary to
Laxey's claims, the Trust's 2002 proxy statement stated explicitly that a
shareholder's submission of a proposal would not automatically confer a right to
have that proposal presented for a vote at this year's Annual Meeting.
But here's where Laxey really shows its colors. Laxey well knows that the
classic method for a dissident to influence corporate policy is to try to
persuade its fellow shareholders to elect an opposition slate of director (or,
in the Trust's case, trustee) candidates. And Laxey well knows that the Trust
has taken none of the kinds of actions that have been adopted by a number of
closed-end fund boards of directors to restrict the ability of dissident
shareholders to nominate alternative director or trustee candidates -- by, for
instance, amending their funds' By-laws to establish director qualifications
that a dissident's candidates would be highly unlikely to meet. What we believe
LAXEY ALSO KNOWS, AND WON'T TELL YOU, is that it has no interest in trying to
elect trustees and participate in the management of the Trust. Why? Because
LAXEY wants to take a profit and get out, and COULDN'T CARE LESS ABOUT THE
TRUST'S FUTURE.
Still, Laxey claims your Trustees couldn't have had any motive except
entrenchment in arguing to the SEC staff that the termination proposal did not
have to be put to a shareholder vote. In conclusion, we again turn to ISS to
refute this claim:
'While ISS understands it may be difficult for a shareholder to effect
change, and that the advisor may be one of the few areas where a tangible
influence can be felt, THERE REALLY SEEMS TO BE NO DIRECT LINKAGE BETWEEN THE
DISCOUNT, THE BOARD, OR THE ADVISOR. Further, while the Investment Company Act
of 1940 very clearly delineates the relationship between the board and the
advisor, there is insufficient evidence to support [Laxey's] belief that the
advisor is an impediment to open-ending the fund. IT IS THEREFORE DIFFICULT TO
JUSTIFY THE DISRUPTION IN THE INVESTMENT PROGRAM THAT A TERMINATION OF THE
ADVISORY AGREEMENT WOULD PORTEND.'
With these words from a truly independent third party, we rest our case.
THE ANNUAL MEETING IS ON JUNE 24. NOW IS THE TIME TO ACT!
We again urge you to give your Board and IIT the opportunity to continue to
serve your interests by discarding Laxey's gold proxy card and, if you have not
already voted on a WHITE proxy card, returning only the WHITE proxy card
included with this letter and voting 'FOR' the election of Trustees, 'AGAINST'
the conversion proposal and 'AGAINST' Laxey's proposal to terminate the Trust's
investment advisory contract with IIT. Even if you have already returned Laxey's
gold proxy card, you can change your vote by returning the enclosed WHITE proxy
card. We urge you to act promptly. If you have any questions or need assistance
in voting your proxy, please call our proxy solicitors, MacKenzie Partners,
Inc., toll-free at 1-800-322-2885 or collect at 212-929-5500.
We thank you for your continued support.
Your Board of Trustees
The Trust and its Trustees and executive officers may be deemed to be
participants in the solicitation of proxies from the Trust's shareholders with
respect to the matters described in this letter. To the extent that any
publication is quoted in this letter, the Trust has used reasonable efforts to
verify the source and accuracy of the quote but has not sought or obtained the
consent of the quoted source for the use of such quote as proxy soliciting
material.
IF YOU HAVE ANY QUESTIONS OR NEED HELP VOTING YOUR SHARES, PLEASE CALL:
[MACKENZIE LOGO]
105 Madison Avenue
New York, New York 10016
email: proxy@mackenziepartners.com
Call collect: (212) 929-5500
OR TOLL FREE: (800) 322-2885
Facsimile: (212) 929-0308