OFFER TO PURCHASE FOR CASH
UP TO 2,996,371 OF THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK
OF
THE KOREA FUND, INC.
AT 98% OF NET ASSET VALUE PER SHARE
BY
THE KOREA FUND, INC.
THE OFFER TO PURCHASE WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON FEBRUARY
16, 2006, UNLESS THE OFFER IS EXTENDED.
THIS OFFER IS SUBJECT TO IMPORTANT TERMS AND CONDITIONS, INCLUDING THE
CONDITIONS OUTLINED IN THE OFFER TO PURCHASE DATED JANUARY 19, 2006 AND IN THE
LETTER OF TRANSMITTAL DATED JANUARY 19, 2006.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We are enclosing herewith the material listed below relating to the offer
of The Korea Fund, Inc., a non-diversified, closed-end management investment
company incorporated under the laws of the state of Maryland (the "Fund"), to
purchase up to 2,996,371 (approximately 10%) of its issued and outstanding
shares of common stock, par value $0.01 per share (the "Shares"). As of January
17, 2006, 29,963,705 Shares were outstanding. The offer is to purchase Shares
for cash, at a price equal to 98% of the net asset value per Share determined as
of the close of the regular trading session of the New York Stock Exchange, the
principal market in which the Shares are traded, on the business day after the
day the offer expires. The offer is being made upon the terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal (which, together, constitute the "Offer").
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible. No fees or commission will be payable to the Fund in
connection with the Offer. However, brokers, dealers or other persons may charge
shareholders a fee for soliciting tenders for Shares pursuant to the Offer. The
Fund will also, upon request, reimburse you for reasonable and customary mailing
and handling expenses incurred by you in forwarding any of the enclosed
materials to your clients. The Fund will pay all transfer taxes on its purchase
of Shares, subject to Instruction 7, "Stock Transfer Taxes," of the Letter of
Transmittal. HOWEVER, BACKUP WITHHOLDING AT A 28% RATE MAY BE REQUIRED UNLESS
EITHER AN EXEMPTION IS PROVED OR THE REQUIRED TAXPAYER IDENTIFICATION
INFORMATION AND CERTIFICATIONS ARE PROVIDED. SEE SECTION 14, "CERTAIN UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES," OF THE OFFER TO PURCHASE AND
INSTRUCTION 12, "BACKUP WITHHOLDING," OF THE LETTER OF TRANSMITTAL.
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. The Offer to Purchase dated January 19, 2006;
2. The Letter of Transmittal for your use and to be provided to your
clients;
3. Notice of Guaranteed Delivery;
4. Form of letter to clients that may be sent to your clients for
whose accounts you hold Shares registered in your name (or in the name of
your nominee); and
5. Return envelope addressed to The Colbent Corporation (the
"Depositary").
The Offer is not being made to, nor will the Fund accept tender of Shares
from, or on behalf of, owners of Shares in any jurisdiction in which the making
of the Offer or its acceptance would not comply with the securities or "blue
sky" laws of that jurisdiction.
As described in the Offer to Purchase under Section 4, "Procedures for
Tendering Shares," tenders may be made without the concurrent deposit of stock
certificates if: (a) such tenders are made by or through a broker or dealer that
is a member firm of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office, branch, or agency in the United States; and (b)
certificates for Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at a Book-Entry Transfer Facility (as
defined in the Letter of Transmittal)), together with a properly completed and
duly executed Letter of Transmittal, and all other documents required by the
Letter of Transmittal, are received by the Depositary prior to 5:00 p.m.,
Eastern time, on the third NYSE trading day after the date of receipt by the
Depositary of a properly completed and duly executed Notice of Guaranteed
Delivery.
AS DESCRIBED IN THE OFFER, THE FUND WILL, IF THE OFFER IS COMPLETED,
PURCHASE ALL SHARES FROM SHAREHOLDERS WHO OWN BENEFICIALLY OR OF RECORD AN
AGGREGATE OF NOT MORE THAN 99 SHARES AND TENDER ALL OF THEIR SHARES. IF SUCH A
TENDER IS MADE BY A BROKER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE FOR
BENEFICIAL OWNER(S) OF SHARES WITH RESPECT TO WHICH IT IS THE RECORD HOLDER,
SUCH BROKER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST REPRESENT AND
WARRANT IN THE LETTER OF TRANSMITTAL THAT IT BELIEVES, BASED UPON
REPRESENTATIONS MADE TO IT BY SUCH BENEFICIAL OWNER(S), THAT EACH SUCH PERSON
OWNS NOT MORE THAN 99 SHARES AND IS TENDERING ALL OF SUCH SHARES.
NEITHER THE FUND NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER ANY SHARES.
For additional information or copies of the enclosed material, please
contact Georgeson Shareholder Communications Inc. (the "Information Agent") at
(212) 440-9800 or (800) 843-0369.
Very truly yours,
The Korea Fund, Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE KOREA FUND, INC., THE INFORMATION AGENT, OR
THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS OR
USE ANY MATERIAL ON THEIR BEHALF WITH RESPECT TO THE OFFER, OTHER THAN THE
MATERIAL ENCLOSED HEREWITH AND THE STATEMENTS SPECIFICALLY SET FORTH IN SUCH
MATERIAL.
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