|
|
|
2. Principal Risks (continued)
|
|
The Fund is subjected to elements
of risk not typically associated with investments in the U.S., due to
concentrated investments in foreign issuers located in a specific country or
region. Such concentrations will subject the Fund to additional risks
resulting from future political or economic conditions in such country or
region and the possible imposition of adverse governmental laws of currency
exchange restrictions affecting such country or region, which could cause the
securities and their markets to be less liquid and prices more volatile than
those of comparable U.S. companies.
|
|
|
|
The market values of equity
securities, such as common and preferred stock, or equity-related investments
such as options, may decline due to general market conditions which are not
specifically related to a particular company, such as real or perceived
adverse economic conditions, changes in the general outlook for corporate
earnings, changes in interest or currency rates or adverse investor
sentiment. They may also decline due to factors that affect a particular industry
or industries, such as labor shortages or increased production costs and
competitive conditions within an industry. Equity securities and equity
related investments generally have greater market price volatility than fixed
income securities.
|
|
|
|
The Fund is exposed to credit risk,
which is the risk of losing money if the issuer or guarantor of a fixed
income security is unable or unwilling, or is perceived (whether by market
participants, rating agencies, pricing services or otherwise) as unable or unwilling,
to make timely principal and/or interest payments, or to otherwise honor its
obligations. Securities are subject to varying degrees of credit risk, which
are often reflected in credit ratings.
|
|
|
|
The Fund is exposed to counterparty
risk, or the risk that an institution or other entity with which the Fund has
unsettled or open transactions will default. The potential loss to the Fund
could exceed the value of the financial assets recorded in the Fund’s
financial statements. Financial assets, which potentially expose the Fund to
counterparty risk, consist principally of cash due from counterparties and
investments. The Fund’s Sub-Adviser, Allianz Global Investors Capital LLC
(“AGIC” or the “Sub-Adviser”), an affiliate of the Investment Manager, seeks
to minimize the Fund’s counterparty risk by performing reviews of each
counterparty and by minimizing concentration of counterparty risk by
undertaking transactions with multiple customers and counterparties on
recognized and reputable exchanges. Delivery of securities sold is only made
once the Fund has received payment. Payment is made on a purchase once the
securities have been delivered by the counterparty. The trade will fail if
either party fails to meet its obligation.
|
|
|
|
The Fund is party to International
Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master
Agreements”) with select counterparties that govern transactions,
over-the-counter derivatives and foreign exchange contracts entered into by
the Fund and those counterparties. The ISDA Master Agreements contain
provisions for general obligations, representations, agreements, collateral
and events of default or termination. Events of termination include
conditions that may entitle counterparties to elect to terminate early and cause
settlement of all outstanding transactions under the applicable ISDA Master
Agreement. Any election to terminate early could be material to the financial
statements of the Fund.
|
|
|
|
3. Financial
Derivative Instruments
|
|
Disclosure about derivatives and
hedging activities requires qualitative disclosure regarding objectives and
strategies for using derivatives, quantitative disclosure about fair value
amounts of gains and losses on derivatives and disclosure about
credit-risk-related contingent features in derivative agreements. The
disclosure requirements distinguish between derivatives which are accounted
for as “hedges” and those that do not qualify for such accounting. Although
the Fund sometimes uses derivatives for hedging purposes, the Fund reflects
derivatives at fair value and recognizes changes in fair value through the
Fund’s Statement of Operations, and such derivatives do not qualify for hedge
accounting treatment.
|
|
|
|
(a) Option
Transactions
|
|
The Fund writes (sells) call
options on securities and indices to earn premiums, for hedging purposes,
risk management purposes or otherwise as part of its investment strategies.
|
|
|
|
When an option is written, the
premium received is recorded as an asset with an equal liability which is
subsequently marked to market to reflect the market value of the option
written. These liabilities, if any, are reflected as options written in the
Fund’s Statement of Assets and Liabilities. Premiums received from writing
options which expire unexercised are recorded on the expiration date as a
realized gain. The difference between the premium received and the amount
paid on effecting a closing purchase transaction, including brokerage
commissions, is also treated as a realized gain, or if the premium is less
than the amount paid for the closing purchased transactions, as a realized
loss. If a call option written is exercised, the premium is added to the
proceeds from the sale of the underlying security in determining whether
there has been a realized gain or loss. In writing an option, the Fund bears
the market risk of an unfavorable change in the price of the security
underlying the written option. Exercise of a written option could result in
the Fund purchasing a security at a price different from its current market
value. There were no open call options written transactions at February 28,
2011.
|
|
|
|
|
AGIC
International & Premium Strategy Fund
|
Notes to
Financial Statements
|
|
February 28, 2011
|
|
3
. Financial Derivative Instruments
(continued)
The following is a summary of the
fair valuation of the Fund’s derivatives categorized by risk exposure.
The effect of derivatives on the
Fund’s Statement of Operations for the year ended February 28, 2011:
|
|
|
|
|
|
|
|
|
Location
|
|
|
Market
Price
|
|
|
Net realized loss on:
|
|
|
|
|
|
|
|
Call options written
|
|
|
$
|
(643,896
|
)
|
|
|
|
|
|
|
|
|
|
|
Net change in unrealized appreciation/depreciation of:
Call
options written
|
|
|
$
|
(258,358
|
)
|
|
The average daily volume of
derivative activity during the year ended February 28, 2011 was 87,749 call
options written contracts.
4. Investment
Manager/Sub-Adviser
The Fund has an Investment Management Agreement (the
“Agreement”) with the Investment Manager. Subject to the supervision of the
Fund’s Board of Trustees, the Investment Manager is responsible for managing,
either directly or through others selected by it, the Fund’s investment
activities, business affairs and administrative matters. Pursuant to the
Agreement, the Investment Manager receives an annual fee, payable monthly, at
an annual rate of 1.00% of the Fund’s average daily total managed assets. Total
managed assets refer to the total assets of the Fund (including assets
attributable to any borrowings that may be outstanding) minus accrued
liabilities (other than liabilities representing borrowings).
The Investment Manager has retained
the Sub-Adviser to manage the Fund’s investments. Subject to the supervision of
the Investment Manager, the Sub-Adviser is responsible for making all of the
Fund’s investment decisions. The Investment Manager, and not the Fund, pays a
portion of the fees it receives as Investment Manager to the Sub-Adviser in
return for its services.
Effective August 25, 2010, the
Sub-Advisory Agreement between the Investment Manager and Nicholas-Applegate
Capital Management LLC (“NACM”) was novated from NACM to AGIC, the indirect
parent of NACM and an affiliate of the Investment Manager.
The novation coincided with a larger
corporate reorganization transferring the advisory business of NACM and
Oppenheimer Capital LLC (“OCC”) to AGIC. Since 2009, AGIC has assumed a number
of non-advisory functions from both NACM and OCC, and the transaction in August
2010 marked the last step in the full integration of these businesses under a
single name.
5. Investments in
Securities
Purchases and sales of investments, other than short-term
securities for the year ended February 28, 2011, were $62,133,770 and
$78,229,059, respectively.
(a) Transactions in options written
for the year ended February 28, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracts
|
|
|
Premiums
|
|
|
Options outstanding, February 28,
2010
|
|
|
|
239,390
|
|
|
|
$
|
333,292
|
|
|
|
Options written
|
|
|
|
597,185
|
|
|
|
|
1,422,470
|
|
|
|
Options terminated in closing
transactions
|
|
|
|
(96,130
|
)
|
|
|
|
(1,069,743
|
)
|
|
|
Options expired
|
|
|
|
(740,445
|
)
|
|
|
|
(686,019
|
)
|
|
|
Options outstanding, February 28,
2011
|
|
|
|
—
|
|
|
|
$
|
—
|
|
|
6. Income Tax Information
The tax character of dividends paid was:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
February 28, 2011
|
|
|
Year ended
February 28, 2010
|
|
|
Ordinary Income
|
|
|
$
|
4,654,698
|
|
|
|
$
|
9,026,977
|
|
|
|
Return of Capital
|
|
|
|
12,358,906
|
|
|
|
|
8,977,447
|
|
|
20
AGIC
International & Premium Strategy Fund Annual Report | 2.28.11
|
|
|
|
AGIC
International & Premium Strategy Fund
|
Notes to
Financial Statements
|
|
February 28, 2011
|
|
6. Income Tax
Information
(continued)
In accordance with U.S. Treasury
regulations, the Fund elected to defer realized currency losses of $41,853
arising after October 31, 2010. Such losses are treated as arising on March 1,
2011.
For the fiscal year ended February
28, 2011, permanent “book-tax” differences were primarily attributable to the
differing treatment of foreign currency transactions, taxable overdistributions
and gains on the sale of securities classified as Passive Foreign Investment
Companies (“PFICs”). These adjustments were to decrease dividend in excess of
net investment income by $1,002,221, increase accumulated net realized loss by
$133,338 and decrease paid-in-capital in excess of par by $868,883.
The cost basis of portfolio
securities for federal income tax purposes was $213,649,584. Aggregate gross
unrealized appreciation for securities in which there was an excess of value
over tax cost was $112,095; aggregate gross unrealized depreciation for
securities in which there was an excess of tax cost over value was $68,247,836;
and net unrealized depreciation for federal income tax purposes was
$68,135,741. The difference between book and tax cost was attributable to wash
sales.
During the year ended February 28,
2011, the Fund utilized $868,883 of available capital loss carryforwards.
7. Legal Proceedings
In June and September 2004, the Investment Manager and
certain of its affiliates (including PEA Capital LLC (“PEA”), Allianz Global
Investors Distributors LLC and Allianz Global Investors of America, L.P.)
agreed to settle, without admitting or denying the allegations, claims brought
by the Securities and Exchange Commission (“SEC”) and the New Jersey Attorney
General alleging violations of federal and state securities laws with respect
to certain open-end funds for which the Investment Manager serves as investment
adviser. The settlements related to an alleged “market timing” arrangement in
certain open-end funds formerly sub-advised by PEA. The Investment Manager and
its affiliates agreed to pay a total of $68 million to settle the claims. In
addition to monetary payments, the settling parties agreed to undertake certain
corporate governance, compliance and disclosure reforms related to market
timing, and consented to cease and desist orders and censures. Subsequent to
these events, PEA deregistered as an investment adviser and dissolved. None of
the settlements alleged that any inappropriate activity took place with respect
to the Fund.
Since February 2004, the Investment
Manager and certain of its affiliates and their employees have been named as
defendants in a number of pending lawsuits concerning “market timing,” which
allege the same or similar conduct underlying the regulatory settlements
discussed above. The market timing lawsuits have been consolidated in a
multi-district litigation proceeding in the U.S. District Court for the
District of Maryland (the “MDL Court”). After a number of claims in the
lawsuits were dismissed by the MDL Court, the parties entered into a
stipulation of settlement, which was publicly filed with the MDL Court in April
2010, resolving all remaining claims, but the settlement remains subject to the
approval of the MDL Court.
The Investment Manager and the Sub-Adviser
believe that these matters are not likely to have a material adverse effect on
the Fund or on their ability to perform their respective investment advisory
activities relating to the Fund.
8. Subsequent Events
On March 11, 2011, a quarterly dividend of $0.40 per share
was declared to shareholders, payable March 30, 2011 to shareholders of record
on March 21, 2011.
2.28.11 | AGIC International & Premium Strategy Fund Annual Report
21
|
|
|
|
AGIC
International & Premium Strategy Fund
|
F
inancial
Highlights
|
|
For a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
|
|
|
|
|
|
February 28,
2011
|
|
|
February 28,
2010
|
|
|
February 28,
2009
|
|
|
February 29,
2008
|
|
|
February 28,
2007
|
|
Net asset
value, beginning of year
|
|
|
|
$14.26
|
|
|
|
|
$11.23
|
|
|
|
|
$21.75
|
|
|
|
|
$28.52
|
|
|
|
|
$27.35
|
|
|
Investment
Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
|
0.26
|
|
|
|
|
0.31
|
|
|
|
|
0.48
|
|
|
|
|
0.49
|
|
|
|
|
0.33
|
|
|
Net
realized and change in unrealized gain (loss) on investments, call options
written and foreign currency transactions
|
|
|
|
1.84
|
|
|
|
|
4.56
|
|
|
|
|
(8.93
|
)
|
|
|
|
(1.48
|
)
|
|
|
|
4.77
|
|
|
Total from
investment operations
|
|
|
|
2.10
|
|
|
|
|
4.87
|
|
|
|
|
(8.45
|
)
|
|
|
|
(0.99
|
)
|
|
|
|
5.10
|
|
|
Dividends
and Distributions to Shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
|
(0.36
|
)
|
|
|
|
(0.31
|
)
|
|
|
|
(0.46
|
)
|
|
|
|
(0.48
|
)
|
|
|
|
(1.11
|
)
|
|
Net
realized gains
|
|
|
|
(0.11
|
)
|
|
|
|
(0.62
|
)
|
|
|
|
(1.61
|
)
|
|
|
|
(5.29
|
)
|
|
|
|
(2.82
|
)
|
|
Return of
capital
|
|
|
|
(1.25
|
)
|
|
|
|
(0.91
|
)
|
|
|
|
—
|
|
|
|
|
(0.01
|
)
|
|
|
|
—
|
|
|
Total
dividends and distributions to shareholders
|
|
|
|
(1.72
|
)
|
|
|
|
(1.84
|
)
|
|
|
|
(2.07
|
)
|
|
|
|
(5.78
|
)
|
|
|
|
(3.93
|
)
|
|
Net asset
value, end of year
|
|
|
|
$14.64
|
|
|
|
|
$14.26
|
|
|
|
|
$11.23
|
|
|
|
|
$21.75
|
|
|
|
|
$28.52
|
|
|
Market
price, end of year
|
|
|
|
$14.61
|
|
|
|
|
$14.89
|
|
|
|
|
$9.48
|
|
|
|
|
$20.81
|
|
|
|
|
$30.45
|
|
|
Total
Investment Return
(1)
|
|
|
|
10.91
|
%
|
|
|
|
80.96
|
%
|
|
|
|
(48.14
|
)%
|
|
|
|
(14.25
|
)%
|
|
|
|
42.23
|
%
|
|
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of year (000s)
|
|
|
|
$145,633
|
|
|
|
|
$140,359
|
|
|
|
|
$109,823
|
|
|
|
|
$212,627
|
|
|
|
|
$277,930
|
|
|
Ratio of
expenses to average net assets (2)
|
|
|
|
1.27
|
%
|
|
|
|
1.32
|
%
|
|
|
|
1.32
|
%
|
|
|
|
1.25
|
%
|
|
|
|
1.22
|
%
|
|
Ratio of
net investment income to average net assets
|
|
|
|
1.84
|
%
|
|
|
|
2.11
|
%
|
|
|
|
2.70
|
%
|
|
|
|
1.78
|
%
|
|
|
|
1.12
|
%
|
|
Portfolio
turnover
|
|
|
|
47
|
%
|
|
|
|
36
|
%
|
|
|
|
152
|
%
|
|
|
|
179
|
%
|
|
|
|
203
|
%
|
|
|
|
|
(1)
|
Total investment return is calculated assuming a purchase
of a share at the market price on the first day and a sale of a share at the
market price on the last day of each year reported. Income dividends, capital
gain and return of capital distributions, if any, are assumed, for purposes
of this calculation, to be reinvested at prices obtained under the Fund’s
dividend reinvestment plan. Total investment return does not reflect
brokerage commissions or sales charges in connection with the purchase or
sale of Fund shares.
|
|
(2)
|
Inclusive of expenses offset by custody credits earned on
cash balances at the custodian bank (See Note 1(h) in Notes to Financial
Statements).
|
22
AGIC
International & Premium Strategy Fund Annual Report | 2.28.11 |
See accompanying Notes to Financial Statements
|
|
|
|
AGIC International & Premium Strategy
Fund
|
R
eport of Independent
Registered Public
Accounting Firm
|
To the Shareholders
and Board of Trustees of AGIC International & Premium Strategy Fund
In our opinion, the accompanying
statement of assets and liabilities, including the schedule of investments, and
the related statement of operations and of changes in net assets and the
financial highlights present fairly, in all material respects, the financial
position of AGIC International & Premium Strategy Fund (the “Fund”) at
February 28, 2011, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as “financial statements”) are the responsibility of the
Fund’s management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at February 28, 2011 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
April 20, 2011
2.28.11 | AGIC International & Premium Strategy Fund Annual Report
23
|
|
|
|
AGIC
International & Premium Strategy Fund
|
T
ax Information
(unaudited)
|
Subchapter M of the Internal Revenue
Code of 1986, as amended, requires the Fund to advise shareholders within 60
days of the Fund’s tax year ended February 28, 2011 as to the federal tax
status of dividends and distributions received by shareholders during such tax year.
Pursuant to the Jobs and Growth Tax
Relief Reconciliation Act of 2003, the Fund designates 88.40% of ordinary
dividends paid by the Fund during the year ended February 28, 2011 (or the
maximum amount allowable) as Qualified Dividend Income.
Foreign Tax Credit:
The Fund has elected to pass-through
the credit for taxes paid to foreign countries. The gross foreign income
dividend and foreign tax per share paid during the fiscal year ended February
28, 2011 is $0.469004 and $0.041236, respectively.
Shareholders are advised to consult
their tax advisor to determine how this information may apply to their
particular tax situation.
Since the Fund’s tax year is not the
calendar year, another notification will be sent with respect to calendar year
2011. In January 2012, shareholders will be advised on IRS Form 1099 DIV as to
the federal tax status of the dividends and distributions received during
calendar year 2011. The amount that will be reported will be the amount to use
on your 2011 federal income tax return and may differ from the amount which
must be reported in connection with the Fund’s tax year ended February 28,
2011. Shareholders are advised to consult their tax advisers as to the federal,
state and local tax status of the dividend income received from the Fund.
24
AGIC International
& Premium Strategy Fund Annual Report | 2.28.11
|
|
|
|
AGIC International & Premium Strategy
Fund
|
A
nnual Shareholder
|
|
Meeting
Results/Changes
|
|
to
Board of Trustees/Changes to
|
|
Investment
Policy
(unaudited)
|
|
|
Annual Shareholder Meeting Results:
The Fund held its annual meeting of
shareholders on July 21, 2010. Shareholders voted as indicated below:
|
|
|
|
|
|
|
|
|
|
|
|
Affirmative
|
|
Withheld
Authority
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Election of James A. Jacobson – Class II to serve until
2013
|
|
|
8,600,899
|
|
|
104,752
|
|
|
Re-election of R. Peter Sullivan III – Class II to serve
until 2013
|
|
|
8,594,306
|
|
|
111,345
|
|
|
Election of Alan Rappaport – Class III to serve until 2011
|
|
|
8,595,662
|
|
|
109,989
|
|
The other members of
the Board of Trustees at the time of the meeting, namely Paul Belica, Hans E.
Kertess, John C. Maney† and William B. Ogden, IV continued to serve as
Trustees.
Changes to Board of Trustees:
R. Peter Sullivan,
III retired from the Fund’s Board of Trustees effective July 31, 2010.
Effective June 22,
2010, the Fund’s Board of Trustees appointed Alan Rappaport as a Class III
Trustee.
Effective September
21, 2010, the Fund’s Board of Trustees appointed Bradford K. Gallagher as a
Class II Trustee to serve until 2011.
Effective March 7,
2011, the Fund’s Board of Trustees appointed Deborah A. Zoullas as a Class II
Trustee to serve until 2011.
Changes to Investment Policy:
On June 29, 2010 the
Fund announced certain changes with respect to the Fund’s option writing
strategy (the “Option Strategy”). Specifically, in implementing the Fund’s
option writing strategies, the Sub-Adviser will “sell” or “write” call options
on stocks held in the Fund’s international equity portfolio and on equity
indexes. When the Fund writes a call option on an individual stock held in the
international equity portfolio, it will generally do so with respect to
approximately 70% of the value of the position, and when it writes a call
option on an equity index, the face or notional amount of the index subject to
the option will generally be equal to approximately 70% of the value of the
corresponding securities in the international equity portfolio. Therefore, if
the Fund determines to write call options on all or substantially all of the
securities held in the international equity portfolio, it is expected that the
Fund will have written call options positions with respect to approximately 70%
of the aggregate value of the international equity portfolio. However, the
extent of the Fund’s use of the Option Strategy will vary depending on market
conditions and other factors, and the Fund may determine from time to time to
write call options (whether they be on individual stocks and/or or on equity
indexes) with respect to only a portion, or none, of the securities held in the
international equity portfolio.
The Fund’s Option
Strategy, to the extent utilized, is designed to generate gains from option
premiums in an attempt to enhance distributions payable to the Fund’s
shareholders and to reduce overall portfolio risk. However, there is no
assurance that the Fund’s Option Strategy will achieve its objectives.
There are various
risks associated with the Option Strategy, including that the Fund forgoes,
during the life of a written call option, the opportunity to profit from
increases in the market value of the underlying security or securities held by
the Fund (in the case of an index option, to the extent the performance of the
index is correlated with the corresponding securities held by the Fund) with
respect to which the option was written above the sum of the premium and the strike
price of the call. Therefore, the Option Strategy generally limits the Fund’s
ability to benefit from the full upside potential of its equity holdings, while
the Fund retains the risk of loss (net of premiums received) should the price
of the Fund’s portfolio securities decline. The use of written call options by
the Fund also potentially involves correlation, liquidity, valuation, tax and
other risks.
2.28.11
|
AGIC International & Premium Strategy Fund Annual
Report
25
|
|
|
|
AGIC International & Premium Strategy
Fund
|
P
rivacy Policy/Proxy Voting
|
|
Policies
& Procedures
|
|
(unaudited)
|
|
|
Privacy Policy:
|
|
|
Our Commitment to You
|
|
We consider customer privacy to be
a fundamental aspect of our relationship with shareholders and are committed
to maintaining the confidentiality, integrity and security of our current,
prospective and former shareholders’ personal information. To ensure our
shareholders’ privacy, we have developed policies that are designed to
protect this confidentiality, while allowing shareholders’ needs to be
served.
|
|
|
|
Obtaining Personal
Information
|
|
In the course of providing
shareholders with products and services, we may obtain non-public personal
information about shareholders, which may come from sources such as account
applications and other forms, from other written, electronic or verbal
correspondence, from shareholder transactions, from a shareholder’s brokerage
or financial advisory firm, financial adviser or consultant, and/or from
information captured on our internet web sites.
|
|
|
|
Respecting Your
Privacy
|
|
As a matter of policy, we do not
disclose any personal or account information provided by shareholders or
gathered by us to non-affiliated third parties, except as required for our
everyday business purposes, such as to process transactions or service a
shareholder’s account, or as otherwise permitted by law. As is common in the
industry, non-affiliated companies may from time to time be used to provide
certain services, such as preparing and mailing prospectuses, reports,
account statements and other information, and gathering shareholder proxies.
We may also retain non-affiliated financial services providers, such as
broker-dealers, to market our shares or products and we may enter into
joint-marketing arrangements with them and other financial companies. We may
also retain marketing and research service firms to conduct research on
shareholder satisfaction. These companies may have access to a shareholder’s
personal and account information, but are permitted to use this information
solely to provide the specific service or as otherwise permitted by law. We
may also provide a shareholder’s personal and account information to their
respective brokerage or financial advisory firm, Custodian, and/or to their
financial advisor or consultant.
|
|
|
|
Sharing
Information with Third Parties
|
|
We reserve the right to disclose or
report personal information to non-affiliated third parties, in limited
circumstances, where we believe in good faith that disclosure is required
under law to cooperate with regulators or law enforcement authorities, to
protect our rights or property or upon reasonable request by any Fund in
which a shareholder has chosen to invest. In addition, we may disclose
information about a shareholder or shareholder’s accounts to a non-affiliated
third party only if we receive a shareholder’s written request or consent.
|
|
|
|
Sharing
Information with Affiliates
|
|
We may share shareholder
information with our affiliates in connection with our affiliates’ everyday
business purposes, such as servicing a shareholder’s account, but our
affiliates may not use this information to market products and services to
you except in conformance with applicable laws or regulations. The
information we share includes information about our experiences and transactions
with a shareholder and may include, for example, a shareholder’s
participation in one of the Funds or in other investment programs, a
shareholder’s ownership of certain types of accounts (such as IRAs), or other
data about a shareholder’s transactions or accounts. Our affiliates, in turn,
are not permitted to share shareholder information with non-affiliated
entities, except as required or permitted by law.
|
|
|
|
Procedures to
Safeguard Private Information
|
|
We take seriously the obligation to
safeguard shareholder non-public personal information. In addition to this
policy, we have also implemented procedures that are designed to restrict
access to a shareholder’s non-public personal information only to internal
personnel who need to know that information in order to provide products or
services to such shareholders. In addition, we have physical, electronic and
procedural safeguards in place to guard a shareholder’s non-public personal
information.
|
|
|
|
Disposal of
Confidential Records
|
|
We will dispose of records, if any,
that are knowingly derived from data received from a consumer reporting
agency regarding a shareholder that is an individual in a manner that ensures
the confidentiality of the data is maintained. Such records include, among
other things, copies of consumer reports and notes of conversations with
individuals at consumer reporting agencies.
|
|
|
|
|
|
|
|
Proxy Voting Policies & Procedures:
|
|
A description of the policies and
procedures that the Fund has adopted to determine how to vote proxies relating
to portfolio securities and information about how the Fund voted proxies
relating to portfolio securities held during the most recent twelve month
period ended June 30 is available (i) without charge, upon request, by
calling the Fund’s shareholder servicing agent at (800) 254-5197; (ii) on the
Fund’s website at www.allianzinvestors.com/closedendfunds; and (iii) on the
Securities and Exchange Commission website at www.sec.gov.
|
26
AGIC International
& Premium Strategy Fund Annual Report
|
2.28.11
|
|
|
|
AGIC International & Premium Strategy
Fund
|
D
ividend Reinvestment Plan
|
|
(unaudited)
|
|
|
Pursuant to the
Fund’s Dividend Reinvestment Plan (the “Plan”), all Shareholders whose shares
are registered in their own names will have all dividends, including any
capital gain dividends, reinvested automatically in additional Shares by BNY
Mellon, as agent for the Shareholders (the “Plan Agent”), unless the
shareholder elects to receive cash. An election to receive cash may be revoked
or reinstated at the option of the shareholder. In the case of record
shareholders such as banks, brokers or other nominees that hold Shares for
others who are the beneficial owners, the Plan Agent will administer the Plan
on the basis of the number of Shares certified from time to time by the record
shareholder as representing the total amount registered in such shareholder’s
name and held for the account of beneficial owners who are to participate in
the Plan. Shareholders whose shares are held in the name of a bank, broker or
nominee should contact the bank, broker or nominee for details. All
distributions to investors who elect not to participate in the Plan (or whose
broker or nominee elects not to participate on the investor’s behalf), will be
paid cash by check mailed, in the case of direct shareholder, to the record
holder by BNY Mellon, as the Fund’s dividend disbursement agent.
Unless you elect (or
your broker or nominee elects) not to participate in the Plan, the number of
Shares you will receive will be determined as follows:
|
|
|
|
(1)
|
If on the payment date the net
asset value of the Shares is equal to or less than the market price per Share
plus estimated brokerage commissions that would be incurred upon the purchase
of Shares on the open market, the Fund will issue new shares at the greater
of (i) the net asset value per Share on the payment date or (ii) 95% of the
market price per Share on the payment date; or
|
|
|
|
|
(2)
|
If on the payment date the net
asset value of the Shares is greater than the market price per Share plus estimated
brokerage commissions that would be incurred upon the purchase of Shares on
the open market, the Plan Agent will receive the dividend or distribution in
cash and will purchase Shares in the open market, on the NYSE or elsewhere,
for the participants’ accounts. It is possible that the market price for the
Shares may increase before the Plan Agent has completed its purchases.
Therefore, the average purchase price per share paid by the Plan Agent may
exceed the market price on the payment date, resulting in the purchase of
fewer shares than if the dividend or distribution had been paid in Shares
issued by the Fund. The Plan Agent will use all dividends and distributions
received in cash to purchase Shares in the open market on or shortly after
the payment date, but in no event later than the ex-dividend date for the
next distribution. Interest will not be paid on any uninvested cash payments.
|
You may withdraw
from the Plan at any time by giving notice to the Plan Agent. If you withdraw
or the Plan is terminated, you will receive a certificate for each whole share
in your account under the Plan and you will receive a cash payment for any
fraction of a share in your account. If you wish, the Plan Agent will sell your
shares and send you the proceeds, minus brokerage commissions.
The Plan Agent
maintains all shareholders’ accounts in the Plan and gives written confirmation
of all transactions in the accounts, including information you may need for tax
records. The Plan Agent will also furnish each person who buys Shares with
written instructions detailing the procedures for electing not to participate
in the Plan and to instead receive distributions in cash. Shares in your
account will be held by the Plan Agent in non-certificated form. Any proxy you
receive will include all Shares you have received under the Plan.
There is no
brokerage charge for reinvestment of your dividends or distributions in Shares.
However, all participants will pay a pro rata share of brokerage commissions
incurred by the Plan Agent when it makes open market purchases.
Automatically
reinvested dividends and distributions are taxed in the same manner as cash
dividends and distributions.
The Fund and the
Plan Agent reserve the right to amend or terminate the Plan. There is no direct
service charge to participants in the Plan; however, the Fund reserves the
right to amend the Plan to include a service charge payable by the
participants. Additional information about the Plan may be obtained from the
Fund’s shareholder servicing agent, BNY Mellon, P.O. Box 43027, Providence, RI
02940-3027, telephone number (800) 254-5197.
2.28.11
|
AGIC International & Premium Strategy Fund Annual
Report
27
|
|
|
|
AGIC International & Premium Strategy
Fund
|
B
oard of Trustees
(unaudited)
|
|
|
|
|
|
|
|
Name, Date of Birth, Position(s) Held
with
Fund, Length of Service, Other Trusteeships/
Directorships Held by Trustee; Number of
Portfolios in Fund Complex/Outside Fund
Complexes Currently Overseen by Trustee
|
|
Principal Occupation(s) During Past 5
Years:
|
|
|
|
|
|
The address of each trustee is 1345
Avenue of the Americas, New York, NY 10105.
|
|
|
|
|
|
|
|
Hans W. Kertess
|
|
President, H. Kertess & Co., a
financial advisory company. Formerly, Managing Director, Royal Bank of Canada
Capital Markets.
|
|
Date of Birth: 7/12/39
|
|
|
Chairman of the Board of Trustees since: 2007
|
|
|
Trustee since: 2005
|
|
|
Term of office: Expected to stand for re-election at 2012 annual
meeting of shareholders.
|
|
|
Trustee/Director of 55 funds in Fund Complex;
|
|
|
|
Trustee/Director of no funds outside of Fund Complex
|
|
|
|
|
|
|
|
Paul Belica
|
|
Retired. Formerly Director, Student
Loan Finance Corp., Education Loans, Inc., Goal Funding, Inc., Goal Funding
II, Inc. and Surety Loan Fund, Inc. Formerly, manager of Stratigos Fund LLC,
Whistler Fund LLC, Xanthus Fund LLC & Wynstone Fund LLC.
|
|
Date of Birth: 9/27/21
|
|
|
Trustee since: 2005
|
|
|
Term of office: Expected to stand for re-election at 2012 annual
meeting of shareholders.
|
|
|
Trustee/Director of 55 funds in Fund Complex
|
|
|
|
Trustee/Director of no funds outside of Fund Complex
|
|
|
|
|
|
|
|
Bradford K. Gallagher
|
|
Founder, Spyglass Investments LLC,
a private investment vehicle (since 2001); Founder, President and CEO of
Cypress Holding Company and Cypress Tree Investment Management Company (since
1995); Trustee, The Common Fund (since 2005); Director, Anchor Point Inc.
(since 1995); Chairman and Trustee, Atlantic Maritime Heritage Foundation
(since 2007); Director, Shielding Technology Inc. (since 2006).
|
|
Date of Birth: 2/28/44
|
|
|
Trustee since: 2010
|
|
|
Term of office: Expected to stand for election at 2011 annual meeting
of shareholders.
|
|
|
Trustee/Director of 55 funds in Fund Complex
|
|
|
Trustee/Director of no funds outside of Fund Complex
|
|
|
Formerly, Chairman and Trustee of Grail Advisors ETF Trust
(2009-2010) and Trustee of Nicholas-Applegate Institutional Funds
(2007-2010).
|
|
|
|
|
|
|
James A. Jacobson
|
|
Retired. Formerly, Vice Chairman
and Managing Director of Spear, Leeds & Kellogg Specialists, LLC, a
specialist firm on the New York Stock Exchange.
|
|
Date of Birth: 2/3/45
|
|
|
Trustee since: 2009
|
|
|
Term of office: Expected to stand for re-election at 2013 annual
meeting of shareholders.
|
|
|
Trustee/Director of 55 funds in Fund Complex
|
|
|
|
Trustee/Director of 16 funds in the Alpine Mutual Funds Complex
|
|
|
|
|
|
|
|
John C. Maney†
|
|
Management Board, Managing Director
and Chief Executive Officer of Allianz Global Investors Fund Management LLC;
Management Board and Managing Director of Allianz Global Investors of America
L.P. since January 2005 and also Chief Operating Officer of Allianz Global
Investors of America L.P. since November 2006.
|
|
Date of Birth: 8/3/59
|
|
|
Trustee since: 2006
|
|
|
Term of office: Expected to stand for re-election at 2011 annual
meeting of shareholders.
|
|
|
Trustee/Director of 80 funds in Fund Complex
|
|
|
Trustee/Director of no funds outside of Fund Complex
|
|
|
|
|
|
|
|
William B. Ogden, IV
|
|
Asset Management Industry
Consultant. Formerly, Managing Director, Investment Banking Division of
Citigroup Global Markets Inc.
|
|
Date of Birth: 1/11/45
|
|
|
Trustee since: 2006
|
|
|
Term of office: Expected to stand for re-election at 2012 annual
meeting of shareholders.
|
|
|
Trustee/Director of 55 Funds in Fund Complex;
|
|
|
|
Trustee/Director of no funds outside of Fund Complex
|
|
|
28
AGIC International
& Premium Strategy Fund Annual Report
|
2.28.11
|
|
|
|
AGIC International & Premium Strategy
Fund
|
Board
of Trustees
(unaudited)
|
|
|
|
|
|
|
|
Name, Date of Birth, Position(s) Held
with
Fund, Length of Service, Other Trusteeships/
Directorships Held by Trustee; Number of
Portfolios in Fund Complex/Outside Fund
Complexes Currently Overseen by Trustee
|
|
Principal Occupation(s) During Past 5
Years:
|
|
|
|
|
|
Alan Rappaport
|
|
Vice Chairman, Roundtable
Investment Partners since 2009; Chairman (formerly President), Private Bank
of Bank of America; Vice Chairman, US Trust (2001-2008).
|
|
Date of Birth: 3/13/53
|
|
|
Trustee since: 2010
|
|
|
Term of office: Expected to stand for re-election at 2011 annual
meeting of shareholders.
|
|
|
Trustee/Director of 55 funds in Fund Complex
|
|
|
Trustee/Director of no funds outside of Fund Complex
|
|
|
|
|
|
|
|
Deborah A. Zoullas
|
|
Advisory Director, Morgan Stanley
& Co., Inc. (since 1996); Director, Helena Rubenstein Foundation (since
1997); Co-Chair Special Projects Committee, Memorial Sloan Kettering (since
2005); Board Member and Member of the Investment and Finance Committees,
Henry Street Settlement (since 2007); Trustee, Stanford University (since
2010). Formerly, Advisory Council, Stanford Business School (2002-2008) and
Director, Armor Holdings, a manufacturing company (2002-2007).
|
|
Date of Birth: 11/13/52
|
|
|
Trustee since: 2011
|
|
|
Term of office: Expected to stand for election at 2011 annual meeting
of shareholders.
|
|
|
Trustee/Director of 51 funds in Fund Complex
|
|
|
Trustee/Director of no funds outside of Fund Complex
|
|
|
|
|
|
|
|
|
|
†
|
Mr. Maney is an “interested person” of the Fund, as defined in
Section 2(a)(19) of the 1940 Act, due to his affiliation with Allianz Global
Investors of America L.P. In addition to Mr. Maney’s positions set forth in
the table above, he holds the following positions with affiliated persons:
Management Board, Managing Director and Chief Operating Officer of Allianz
Global Investors of America LLC; Member – Board of Directors and Chief
Operating Officer of Allianz Global Investors of America Holdings Inc. and
Oppenheimer Group, Inc.; Managing Director and Chief Operating Officer of
Allianz Global Investors NY Holdings LLC; Managing Director and Chief
Operating Officer of Allianz Hedge Fund Partners Holding L.P. and Allianz
Global Investors U.S. Retail LLC; Compensation Committee of NFJ Investment
Group LLC; Management Board of Nicholas-Applegate Holdings LLC; Member –
Board of Directors and Chief Operating Officer of PIMCO Global Advisors
(Resources) Limited; Executive Vice President of PIMCO Japan Ltd.; Chief
Operating Officer of Allianz Global Investors U.S. Holding II LLC; and Member
and Chairman – Board of Directors, President and Chief Operating Officer of
PFP Holdings, Inc. and Managing Director of Allianz Global Investors Capital
LLC.
|
2.28.11
|
AGIC International & Premium Strategy Fund Annual
Report
29
|
|
|
|
AGIC International & Premium Strategy
Fund
|
F
und Officers
(unaudited)
|
|
|
|
|
|
|
|
Name, Date of Birth, Position(s)
Held with Fund
|
|
Principal Occupation(s) During Past 5
Years:
|
|
|
|
|
|
Brian S. Shlissel
|
|
Management Board, Managing Director
and Head of Mutual Fund Services, Allianz Global Investors Fund Management
LLC; President and Chief Executive Officer of 29 funds in the Fund Complex;
President of 50 funds in the Fund Complex and Treasurer, Principal Financial
and Accounting Officer of The Korea Fund, Inc. Formerly, Treasurer, Principal
Financial and Accounting Officer of 51 funds in the Fund Complex.
|
|
Date of Birth: 11/14/64
|
|
|
President & Chief Executive Officer
since: 2005
|
|
|
|
|
|
|
|
|
|
Lawrence G. Altadonna
|
|
Senior Vice President and Director
of Fund Administration, Allianz Global Investors Fund Management LLC;
Treasurer, Principal Financial and Accounting Officer of 80 funds in the Fund
Complex; Assistant Treasurer of The Korea Fund, Inc. Formerly, Assistant
Treasurer of 50 funds in the Fund Complex.
|
|
Date of Birth: 3/10/66
|
|
|
Treasurer, Principal Financial and
Accounting Officer since: 2005
|
|
|
|
|
|
|
Thomas J. Fuccillo
|
|
Executive Vice President, Chief
Legal Officer and Secretary, Allianz Global Investors Fund Management LLC;
Executive Vice President, Allianz Global Investors of America L.P; Vice
President, Secretary and Chief Legal Officer of 80 funds in the Fund Complex;
Secretary and Chief Legal Officer of The Korea Fund, Inc.
|
|
Date of Birth: 3/22/68
|
|
|
Vice President, Secretary & Chief
Legal Officer since: 2005
|
|
|
|
|
|
|
Scott Whisten
|
|
Senior Vice President, Allianz
Global Investors Fund Management LLC; Assistant Treasurer of 80 funds in the
Fund Complex.
|
|
Date of Birth: 3/13/71
|
|
|
Assistant Treasurer since: 2007
|
|
|
|
|
|
|
|
Richard J. Cochran
|
|
Vice President, Allianz Global
Investors Fund Management LLC, Assistant Treasurer of 80 funds in the Funds
Complex and The Korea Fund, Inc. Formerly, Tax Manager, Teacher Insurance
Annuity Association/College Retirement Equity Fund (TIAA-CREF) (2002-2008).
|
|
Date of Birth: 1/23/61
|
|
|
Assistant Treasurer since: 2008
|
|
|
|
|
|
|
Orhan Dzemaili
|
|
Vice President, Allianz Global
Investors Fund Management LLC; Assistant Treasurer of 80 funds in the Fund
Complex. Formerly, Accounting Manager, Prudential Investments LLC
(2004-2007).
|
|
Date of Birth: 4/18/74
|
|
|
Assistant Treasurer since: 2011
|
|
|
|
|
|
|
Youse E. Guia
|
|
Senior Vice President and Chief
Compliance Officer, Allianz Global Investors of America L.P.; Chief
Compliance Officer of 80 funds in the Fund Complex and of The Korea Fund,
Inc.
|
|
Date of Birth: 9/3/72
|
|
|
Chief Compliance Officer since: 2005
|
|
|
|
|
|
|
Lagan Srivastava
|
|
Vice President, Allianz Global
Investors of America L.P.; Assistant Secretary of 80 funds in the Fund
Complex and of The Korea Fund, Inc.
|
|
Date of Birth: 9/20/77
|
|
|
Assistant Secretary since: 2006
|
|
Officers
hold office at the pleasure of the Board and until their successors are
appointed and qualified or until their earlier resignation or removal.
30
AGIC International & Premium Strategy Fund Annual
Report
|
2.28.11
|
|
|
|
Trustees
|
Fund Officers
|
|
Hans
W. Kertess
|
Brian
S. Shlissel
|
|
Chairman of the
Board of Trustees
|
President &
Chief Executive Officer
|
|
Paul
Belica
|
Lawrence
G. Altadonna
|
|
Bradford
K. Gallagher
|
Treasurer,
Principal Financial & Accounting Officer
|
|
James
A. Jacobson
|
Thomas
J. Fuccillo
|
|
John
C. Maney
|
Vice President,
Secretary & Chief Legal Officer
|
|
William
B. Ogden, IV
|
Scott
Whisten
|
|
Alan
Rappaport
|
Assistant Treasurer
|
|
Deborah
A. Zoullas
|
Richard
J. Cochran
|
|
|
Assistant Treasurer
|
|
|
Orhan
Dzemaili
|
|
|
Assistant Treasurer
|
|
|
Youse
E. Guia
|
|
|
Chief Compliance
Officer
|
|
|
Lagan
Srivastava
|
|
|
Assistant Secretary
|
|
|
|
Investment Manager
|
|
Allianz
Global Investors Fund Management LLC
1345 Avenue of the Americas
New York, NY 10105
|
|
|
|
Sub-Adviser
|
|
Allianz
Global Investors Capital LLC
600 West Broadway, 30th Floor
San Diego, CA 92101
|
|
|
|
Custodian & Accounting Agent
|
|
State
Street Bank & Trust Co.
225 Franklin Street
Boston, MA 02110
|
|
|
|
Transfer Agent, Dividend Paying Agent and
Registrar
|
|
BNY
Mellon
P.O. Box 43027
Providence, RI 02940-3027
|
|
|
|
Independent Registered Public Accounting
Firm
|
|
PricewaterhouseCoopers
LLP
300 Madison Avenue
New York, NY 10017
|
|
|
|
Legal Counsel
|
|
Ropes
& Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199
|
This report,
including the financial information herein, is transmitted to the shareholders
of AGIC International & Premium Strategy Fund for their information. It is
not a prospectus, circular or representation intended for use in the purchase
of shares of the Fund or any securities mentioned in this report.
Notice is
hereby given in accordance with Section 23(c) of the Investment Company Act of
1940, as amended, that from time to time the Fund may purchase its shares in
the open market.
The Fund files
its complete schedule of portfolio holdings with the Securities and Exchange
Commission (“SEC”) for the first and third quarters of its fiscal year on Form
N-Q. The Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and
may be reviewed and copied at the SEC’s Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be obtained
by calling (800) SEC-0330. The information on Form N-Q is also available on the
Fund’s website at www.allianzinvestors.com/closedendfunds.
Information on
the Fund is available at www.allianzinvestors.com/closedendfunds or by calling
the Fund’s shareholder servicing agent at (800) 254-5197.
Receive this report electronically and eliminate paper
mailings. To enroll, go to
www.allianzinvestors.com/edelivery.
AZ604AR_022811
Table of
Contents
|
|
|
|
ITEM 2. CODE OF ETHICS
|
|
|
|
|
(a)
|
As of the end of the
period covered by this report, the registrant has adopted a code of ethics
(the “Section 406 Standards for Investment Companies — Ethical Standards for
Principal Executive and Financial Officers”) that applies to the registrant’s
Principal Executive Officer and Principal Financial Officer; the registrant’s
Principal Financial Officer also serves as the Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any
person upon request, without charge, by calling 1-800-254-5197. The code of
ethics are included as an Exhibit 99.CODE ETH hereto.
|
|
|
|
|
(b)
|
The CODE OF ETHICS PURSUANT TO SECTION 406 OF THE SARBANES-OXLEY ACT OF 2002 FOR PRINCIPAL EXECUTIVE
AND SENIOR FINANCIAL OFFICERS (the “Code”) was updated to remove interested trustees from being subject to
the Code, which is not required under Section 406 of the Sarbanes-Oxley Act of 2002. The Code also was updated to remove
examples of specific conflict of interest situations and to add an annual certification requirement for Covered Officers. In addition, the approval
or ratification process for material amendments to the Code was clarified to include approval by a majority of the independent trustees.
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(c)
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During the period covered
by this report, there were not any waivers or implicit waivers to a provision
of the code of ethics adopted in 2(a) above.
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ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
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The registrant’s Board has
determined that Mr. Paul Belica and James A. Jacobson, members of the Board’s
Audit Oversight Committee are “audit committee financial experts,” and that
they are “independent,” for purposes of this Item.
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.
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ITEM 4.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
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a)
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Audit fees. The aggregate
fees billed for each of the last two fiscal years (the “Reporting Periods”)
for professional services rendered by the Registrant’s principal accountant
(the “Auditor”) for the audit of the Registrant’s annual financial
statements, or services that are normally provided by the Auditor in
connection with the statutory and regulatory filings or engagements for the
Reporting Periods were $50,000 in 2010 and $50,000 in 2011.
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b)
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Audit-Related Fees. There
were no audit-related fees billed for each of the last two fiscal years.
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c)
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Tax Fees. The aggregate
fees billed in the Reporting Periods for professional services rendered by
the Auditor for tax compliance,
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tax service and tax
planning (“Tax Services”) were $13,125 in 2010 and $13,520 in 2011. These
services consisted of review or preparation of U.S. federal, state, local and
excise tax returns and calculation of excise tax distributions.
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d)
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All Other Fees. There were
no other fees billed in the Reporting Periods for products and services
provided by the Auditor to the Registrant.
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e)
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1. Audit Committee
Pre-Approval Policies and Procedures. The Registrant’s Audit Committee has
established policies and procedures for pre-approval of all audit and
permissible non-audit services by the Auditor for the Registrant, as well as
the Auditor’s engagements related directly to the operations and financial
reporting of the Registrant. The Registrant’s policy is stated below.
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AGIC International &
Premium Strategy Fund (the “Fund”)
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AUDIT OVERSIGHT COMMITTEE POLICY FOR PRE-APPROVAL OF SERVICES
PROVIDED BY THE INDEPENDENT ACCOUNTANTS
The Fund’s Audit Oversight
Committee (“Committee”) is charged with the oversight of the Fund’s financial
reporting policies and practices and their internal controls. As part of this
responsibility, the Committee must pre-approve any independent accounting
firm’s engagement to render audit and/or permissible non-audit services, as
required by law. In evaluating a proposed engagement by the independent accountants,
the Committee will assess the effect that the engagement might reasonably be
expected to have on the accountant’s independence. The Committee’s evaluation
will be based on:
a review of the nature of
the professional services expected to provided,
the fees to be charged in
connection with the services expected to be provided,
a review of the safeguards
put into place by the accounting firm to safeguard independence, and
periodic meetings with the
accounting firm.
POLICY FOR AUDIT AND NON-AUDIT SERVICES TO BE PROVIDED TO THE
FUND
On an annual basis, the
Fund’s Committee will review and pre-approve the scope of the audits of the
Fund and proposed audit fees and permitted non-audit (including audit-related)
services that may be performed by the Fund’s independent accountants. At least
annually, the Committee will receive a report of all audit and non-audit
services that were rendered in the previous calendar year pursuant to this
Policy. In addition to the Committee’s
pre-approval of services
pursuant to this Policy, the engagement of the independent accounting firm for
any permitted non-audit service provided to the Fund will also require the
separate written pre-approval of the President of the Fund, who will confirm,
independently, that the accounting firm’s engagement will not adversely affect
the firm’s independence. All non-audit services performed by the independent
accounting firm will be disclosed, as required, in filings with the Securities
and Exchange Commission.
AUDIT SERVICES
The categories of audit
services and related fees to be reviewed and pre-approved annually by the
Committee are:
Annual Fund financial
statement audits
Seed audits (related to new product filings, as required)
SEC and regulatory filings and consents
AUDIT-RELATED SERVICES
The following categories of
audit-related services are considered to be consistent with the role of the
Fund’s independent accountants and services falling under one of these
categories will be pre-approved by the Committee on an annual basis if the
Committee deems those services to be consistent with the accounting firm’s
independence:
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Accounting consultations
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Fund merger support
services
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Other attestation reports
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Comfort letters
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Other internal control
reports
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Individual audit-related
services that fall within one of these categories and are not presented to the
Committee as part of the annual pre-approval process described above, may be
pre-approved, if deemed consistent with the accounting firm’s independence, by
the Committee Chair (or any other Committee member who is a disinterested
trustee under the Investment Company Act to whom this responsibility has been
delegated) so long as the estimated fee for those services does not exceed
$250,000. Any such pre-approval shall be reported to the full Committee at its
next regularly scheduled meeting.
TAX SERVICES
The following categories of
tax services are considered to be consistent with the role of the Fund’s
independent accountants and services falling under one of these categories will
be pre-approved by the Committee on an annual basis if the Committee deems
those services to be consistent with the accounting firm’s independence:
Tax compliance services
related to the filing or amendment of the following:
Federal, state and local
income tax compliance; and, sales and use tax compliance
Timely RIC qualification reviews
Tax distribution analysis and planning
Tax authority examination services
Tax appeals support services
Accounting methods studies
Fund merger support service
Other tax consulting services and related projects
Individual tax services that
fall within one of these categories and are not presented to the Committee as
part of the annual pre-approval process described above, may be pre-approved,
if deemed consistent with the accounting firm’s independence, by the Committee
Chairman (or any other Committee member who is a disinterested trustee under
the Investment Company Act to whom this responsibility has been delegated) so
long as the estimated fee for those services does not exceed $250,000. Any such
pre-approval shall be reported to the full Committee at its next regularly
scheduled meeting.
PROSCRIBED SERVICES
The Fund’s independent
accountants will not render services in the following categories of non-audit
services:
Bookkeeping or other
services related to the accounting records or financial statements of the Funds
Financial information systems design and implementation
Appraisal or valuation services, fairness opinions, or contribution-in-kind
reports
Actuarial services
Internal audit outsourcing services
Management functions or human resources
Broker or dealer, investment adviser or investment banking services
Legal services and expert services unrelated to the audit
Any other service that the Public Company Accounting Oversight Board
determines, by regulation, is impermissible
PRE-APPROVAL OF NON-AUDIT SERVICES PROVIDED TO OTHER ENTITIES
WITHIN THE FUND COMPLEX
The Committee will
pre-approve annually any permitted non-audit services to be provided to Allianz
Global Investors Fund Management LLC or any other investment manager to the
Funds (but not including any sub-adviser whose role is primarily portfolio
management and is sub-contracted by the investment manager) (the “Investment
Manager”) and any entity
controlling, controlled by,
or under common control with the Investment Manager that provides ongoing
services to the Fund (including affiliated sub-advisers to the Fund), provided,
in each case, that the engagement relates directly to the operations and
financial reporting of the Fund (such entities, including the Investment
Manager, shall be referred to herein as the “Accounting Affiliates”).
Individual projects that are not presented to the Committee as part of the
annual pre-approval process, may be pre-approved, if deemed consistent with the
accounting firm’s independence, by the Committee Chairman (or any other
Committee member who is a disinterested trustee under the Investment Company
Act to whom this responsibility has been delegated) so long as the estimated
fee for those services does not exceed $250,000. Any such pre-approval shall be
reported to the full Committee at its next regularly scheduled meeting.
Although the Committee will
not pre-approve all services provided to the Investment Manager and its
affiliates, the Committee will receive an annual report from the Funds’
independent accounting firm showing the aggregate fees for all services
provided to the Investment Manager and its affiliates.
DE MINIMUS EXCEPTION TO REQUIREMENT OF PRE-APPROVAL OF
NON-AUDIT SERVICES
With respect to the
provision of permitted non-audit services to a Fund or Accounting Affiliates,
the pre-approval requirement is waived if:
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(1)
|
The aggregate amount of
all such permitted non-audit services provided constitutes no more than (i)
with respect to such services provided to the Fund, five percent (5%) of the
total amount of revenues paid by the Fund to its independent accountant
during the fiscal year in which the services are provided, and (ii) with
respect to such services provided to Accounting Affiliates, five percent (5%)
of the total amount of revenues paid to the Fund’s independent accountant by
the Fund and the Accounting Affiliates during the fiscal year in which the
services are provided;
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(2)
|
Such services were not
recognized by the Fund at the time of the engagement for such services to be
non-audit services; and
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(3)
|
Such services are promptly
brought to the attention of the Committee and approved prior to the
completion of the audit by the Committee or by the Committee Chairman (or any
other Committee member who is a disinterested trustee under the Investment
Company Act to whom this Committee Chairman or other delegate shall be
reported to the full Committee at its next regularly scheduled meeting.
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e)
|
2. No services were
approved pursuant to the procedures contained in paragraph (C) (7) (i) (C) of
Rule 2-01 of Registration S-X.
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f)
|
Not applicable
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g)
|
Non-audit fees. The
aggregate non-audit fees billed by the Auditor for services rendered to the
Registrant, and rendered to the Adviser, for the 2010 Reporting Period was
$566,790 and the 2011 Reporting Period was $2,711,730.
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h)
|
Auditor Independence. The
Registrant’s Audit Oversight Committee has considered whether the provision
of non-audit services that were rendered to the Adviser which were not
pre-approved is compatible with maintaining the Auditor’s independence.
|
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANT
The Fund has a separately
designated standing audit committee established in accordance with
Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The audit
committee of the Fund is comprised of Paul Belica, Hans W. Kertess, Alan
Rappaport, William B. Ogden, IV, James A. Jacobson, Bradford K. Gallagher and Deborah A.
Zoullas.
ITEM 6. SCHEDULE OF
INVESTMENTS
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(a)
|
The registrant’s Schedule
of Investments is included as part of the report to shareholders filed under
Item 1 of this form.
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(b)
|
Not applicable due to no
such divestments during the period covered since the previous Form N-CSR
filing.
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ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND
PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
.
AGIC International & Premium Strategy
Fund (NAI)
(the “Trust”)
PROXY VOTING POLICY
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1.
|
It is the policy of the Trust that proxies should be voted in the
interest of its shareholders, as determined by those who are in the best
position to make this determination. The Trust believes that the firms and/or
persons purchasing and selling securities for the Trust and analyzing the
performance of the Trust’s securities are in the best position and have the
information necessary to vote proxies in the best interests of the Trust and
its shareholders, including in situations where conflicts of interest may
arise between the interests of shareholders, on one hand, and the interests
of the investment adviser, a sub-adviser and/or any other affiliated person
of the Trust, on the other. Accordingly, the Trust’s policy shall be to
delegate proxy voting responsibility to those entities with portfolio
management responsibility for the Trust.
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2.
|
The Trust delegates the responsibility for voting proxies to Allianz
Global Investors Fund Management LLC (“AGIFM”), which will in turn delegate
such responsibility to the sub-adviser of the particular Trust. AGIFM’s Proxy
Voting Policy Summary is attached as
Appendix A
hereto. Summaries of
the detailed proxy voting policies of the Trust’s current sub-advisers are
set forth in
Appendix B
attached hereto. Such summaries may be revised
from time to time to reflect changes to the sub-adviser’s detailed proxy
voting policies.
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3.
|
The party voting the proxies (i.e., the sub-adviser) shall vote such
proxies in accordance with such party’s proxy voting policies and, to the
extent consistent with such policies, may rely on information and/or
recommendations supplied by others.
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4.
|
AGIFM and the sub-adviser of the Trust with proxy voting authority
shall deliver a copy of its respective proxy voting policies and any material
amendments thereto to
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the applicable Board of the Trust promptly after the adoption or
amendment of any such policies.
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5.
|
The party voting the proxy shall: (i) maintain such records and
provide such voting information as is required for the Trust’s regulatory
filings including, without limitation, Form N-PX and the required disclosure
of policy called for by Item 18 of Form N-2 and Item 7 of Form N-CSR; and
(ii) shall provide such additional information as may be requested, from time
to time, by the Board or the Trust’s Chief Compliance Officer.
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6.
|
This Proxy Voting Policy Statement, the Proxy Voting Policy Summary
of AGIFM and summaries of the detailed proxy voting policies of the
sub-adviser of the Trust with proxy voting authority and how the Trust voted
proxies relating to portfolio securities held during the most recent twelve
month period ending June 30, shall be made available (i) without charge, upon
request, by calling 1-800-254-5197; (ii) on the Trust’s website at
www.allianzinvestors.com; and (iii) on the Securities and Exchange
Commission’s (“SEC’s”) website at http://www.sec.gov. In addition, to the
extent required by applicable law or determined by the Trust’s Chief
Compliance Officer or Board of Trustees, the Proxy Voting Policy Summary of
AGIFM and summaries of the detailed proxy voting policies of each sub-adviser
with proxy voting authority shall also be included in the Trust’s
Registration Statements or Form N-CSR filings.
|
Appendix A
ALLIANZ GLOBAL INVESTORS FUND MANAGEMENT LLC (“AGIFM”)
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1.
|
It is the policy of AGIFM that proxies should be voted in the
interest of the shareholders of the applicable fund, as determined by those
who are in the best position to make this determination. AGIFM believes that
the firms and/or persons purchasing and selling securities for the funds and
analyzing the performance of the funds’ securities are in the best position
and have the information necessary to vote proxies in the best interests of
the funds and their shareholders, including in situations where conflicts of
interest may arise between the interests of shareholders, on one hand, and
the interests of the investment adviser, a sub-adviser and/or any other
affiliated person of the fund, on the other. Accordingly, AGIFM’s policy
shall be to delegate proxy voting responsibility to those entities with
portfolio management responsibility for the funds.
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2.
|
AGIFM, for each fund for which it acts as investment adviser,
delegates the responsibility for voting proxies to the sub-adviser for the
respective fund.
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3.
|
The party voting proxies (e.g., the sub-adviser) vote the proxies in
accordance with their proxy voting policies and, to the extent consistent
with their policies, may rely on information and/or recommendations supplied
by others.
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4.
|
AGIFM and each sub-adviser of a fund will deliver a copy of their
respective proxy voting policies and any material amendments thereto to the
board of the relevant fund promptly after the adoption or amendment of any
such policies.
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5.
|
The party voting the proxy will: (i) maintain such records and
provide such voting information as is required for such funds’ regulatory
filings including, without limitation, Form N-PX and the required disclosure
of policy called for by Item 18 of Form N-2 and Item 7 of Form N-CSR; and
(ii) will provide additional information as may be requested, from time to
time, by the funds’ respective boards or chief compliance officers.
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6.
|
Summaries of the proxy voting policies for AGIFM and each sub-adviser
of a fund advised by AGIFM and how each fund voted proxies relating to
portfolio securities held during the most recent twelve month period ended
June 30 will be available (i) without charge, upon request, by calling
1-800-254-5197; (ii) on the Allianz Global Investors Distributors Web site at
www.allianzinvestors.com; and (iii) on the Securities and Exchange
Commission’s (“SEC’s”) website at http://www.sec.gov. In addition, to the
extent required by applicable law or determined by the relevant fund’s board
of directors/trustees or chief compliance officer, summaries of the detailed
proxy voting policies of AGIFM, each sub-adviser and each other entity with
proxy voting authority for a fund advised by AGIFM shall also be included in
the Registration Statement or Form N-CSR filings for the relevant fund.
|
Appendix B
Allianz Global
Investors Capital (“AGI Capital”)
Description of
Proxy Voting Policy and Procedures
AGI Capital typically votes proxies as part of its discretionary
authority to manage accounts, unless the client has explicitly reserved the
authority for itself. When voting proxies, AGI Capital seeks to make voting
decisions solely in the best interests of its clients and to enhance the
economic value of the underlying portfolio securities held in its clients’
accounts.
AGI Capital has adopted written Proxy Policy Guidelines and Procedures
(the “Proxy Guidelines”) that are reasonably designed to ensure that the firm
is voting in the best interest of its clients. The Proxy Guidelines reflect AGI
Capital’s general voting positions on specific corporate governance issues and
corporate actions. AGI Capital has retained an independent third party service
provider (the “Proxy Provider”) to assist in the proxy voting process by
implementing the votes in accordance with the Proxy Guidelines as well as
assisting in the administrative process. In certain circumstances, a client may
request in writing that AGI Capital vote proxies for its account in accordance
with a set of guidelines which differs from the Proxy Guidelines. In that case,
AGI Capital will vote the shares held by such client accounts in accordance
with their direction which may be different from the vote cast for shares held
on behalf of other client accounts that vote in accordance with the Proxy
Guidelines.
AGI Capital will generally refrain from voting proxies on foreign
securities that are subject to share blocking restrictions. Certain countries
require the freezing of shares for trading purposes at the
custodian/sub-custodian bank level in order to vote proxies to ensure that
shareholders voting at meetings continue to hold the shares through the actual
shareholder meeting. However, because AGI Capital cannot anticipate every proxy
proposal that may arise (including a proxy proposal that an analyst and/or
portfolio manager believes has the potential to significantly affect the
economic value of the underlying security, such as proxies relating to mergers
and acquisitions), AGI Capital may, from time to time, instruct the Proxy
Provider to cast a vote for a proxy proposal in a share blocked country.
The Proxy Guidelines also provide for oversight of the proxy voting
process by a Proxy Committee. The Proxy Committee meets at a minimum on an
annual basis and when necessary to address potential conflicts of interest. AGI
Capital may have conflicts of interest that can affect how it votes its
client’s proxies. In order to ensure that all material conflicts of interest
are addressed appropriately while carrying out AGI Capital’s obligation to vote
proxies, the Proxy Committee is responsible for developing a process to
identify proxy voting issues that may raise conflicts of interest between AGI
Capital and its clients and to resolve such issues. Any deviations from the
Proxy Guidelines will be documented and maintained in accordance with Rule
204-2 under the Investment Advisers Act.
The Proxy Committee monitors the outsourcing of voting obligations to
the Proxy Provider and AGI Capital’s proxy voting recordkeeping practices;
adheres to a process for resolution of voting issues that require a
case-by-case analysis; and, to the extent the Proxy Guidelines do not cover
potential proxy voting issues, determines a process for voting such issues.
In accordance with the Proxy Guidelines, AGI Capital may review
additional criteria associated with voting proxies and evaluate the expected
benefit to its clients when making an overall determination on how or whether
to vote a proxy. Upon receipt of a client’s written request, AGI Capital may
also vote proxies for that client’s account in a particular manner that may
differ from the Proxy Guidelines. In addition, AGI Capital may refrain from
voting a proxy on behalf of its clients’ accounts due to de-minimis holdings,
immaterial impact on the portfolio, items relating to non-U.S. issuers (such as
those described below), non-discretionary holdings not covered by AGI Capital,
timing issues related to the opening/closing of accounts, securities lending
issues (see below), contractual arrangements with clients and/or their
authorized delegate, the timing of receipt of information, or where
circumstances beyond its control prevent it from voting. These issues may
include, but are not limited to: (i) proxy statements and ballots being written
in a foreign language, (ii) untimely notice of a shareholder meeting, (iii)
requirements to vote proxies in person, (iv) restrictions on foreigner’s
ability to exercise votes, (v) restrictions on the sale of securities for a
period of time in proximity to the shareholder meeting, or (vi) requirements to
provide local agents with power of attorney to facilitate the voting
instructions. Such proxies are voted on a best-efforts basis.
If a client has decided to participate in a securities lending program,
AGI Capital will defer to the client’s determination and not attempt to recall
securities on loan solely for the purpose of voting routine proxies as this
could impact the returns received from securities lending and make the client a
less desirable lender in the marketplace. If the participating client requests,
AGI Capital will use reasonable efforts to notify the client of proxy measures
that AGI Capital deems material.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES
.
(a)(1)
Allianz
Global Investors Capital (“AGI Capital” or the “Investment Adviser”)
As
of April 28, 2011, the following individuals constitute the team that has
primary responsibility for the day-to-day implementation of the AGIC
International & Premium Strategy Fund (NAI), with Mr. Ghosh serving as the
lead portfolio manager:
Steven
Tael, Ph.D., CFA
Vice President, Portfolio Manager, Systematic
Mr. Tael has been a
portfolio manager since March 2006. Mr. Tael joined AGI Capital via a
predecessor affiliate in 2005 and is a member of the Global Systematic Large
Cap Team. Previously, he worked at Mellon Capital Management in San Francisco,
where his experience included quantitative model building, model product and
portfolio management. Earlier he co-developed a global portfolio risk reporting
system for Advisory Systems Engineer for Bank of America and was Director of
Information Technologies at AffiniCorp USA. Mr. Tael has a Ph.D. in applied
mathematics and statistics from State University of New York, Stony Brook, and
a B.S. and M.A. in mathematics from the University of California, Santa
Barbara. He has over fifteen years of relevant experience.
Kunal
Ghosh
Senior Vice
President, Portfolio Manager, Systematic
Mr. Ghosh has been a portfolio manager since July 2006. Mr. Ghosh
joined AGI Capital via a predecessor affiliate in 2006 and is head of the Systematic team. Prior to joining the firm, Mr. Ghosh
was a research associate and then portfolio manager for Barclays Global
Investors, where his experience included building and implementing models for
portfolio management. Previously he was a quantitative analyst for the Cayuga
Hedge Fund. Mr. Ghosh earned his M.B.A. in finance from Cornell University, his
M.S. in Material Engineering from the University of British Columbia, and his
B.Tech from Indian Institute of Technology. He has over eight years of relevant
experience.
Michael E.
Yee
Senior Vice President
, Portfolio Manager
Mr.
Yee has been a co-portfolio manager since November 2008 and has portfolio
management, trading and research responsibilities for the Income and Growth
Strategies team. He has been a member of the team since 1999. Mr. Yee was
previously an analyst for the Global/Systematic team, held positions in global
and domestic portfolio administration areas, and in client services. Prior to
joining AGI Capital via a predecessor affiliate in 1995, he worked as a
financial consultant for Priority One Financial/Liberty Foundation. Mr. Yee
holds an M.B.A. from San Diego State University and a B.S. from the University
of California at San Diego. He has over seventeen years of investment industry
experience.
(a)(2)
The following summarizes information regarding each of the accounts,
excluding the Funds managed by portfolio managers as of February 28, 2011
including accounts managed by a team, committee, or other group that includes
the portfolio managers.
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Other
Registered
Investment Companies
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Other
Accounts
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Other Pooled
Investment Vehicles
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PM
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#
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AUM($million)
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#
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AUM($million)
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#
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AUM($million)
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Steven Tael,
PhD, CFA*
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5
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$278.4
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22
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$441.6
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8
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$838.7
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Kunal Ghosh*
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5
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$278.4
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22
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$441.6
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8
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$838.7
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Michael E. Yee**
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8
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$4,403.8
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11
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$1,546.5
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6
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$623.4
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*Of
these “Other Accounts,” one account totaling $27.6 million in assets pay an advisory
fee that is based in part on the performance of the account; and of these
“Other Pooled Investment Vehicles,” two accounts totaling $570.4 million in
assets pay an advisory fee that is based in part on the performance of the
accounts.
**Of
these “Other Pooled Investment Vehicles,” two accounts totaling $383.6 million
in assets pay an advisory fee that is based in part on the performance of the
accounts.
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Like other investment professionals with multiple clients, a
Portfolio Manager for a Fund may face certain potential conflicts of interest
in connection with managing both the Fund and other accounts at the same
time. The paragraphs below describe some conflicts faced by investment
professionals at most major financial firms.
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The Investment Adviser has adopted compliance policies and procedures
that address certain of these potential conflicts. The management of accounts
with different advisory fee rates and/or fee structures, including accounts
that pay advisory fees based on account performance (“performance fee
accounts”) may raise potential conflicts of interest by creating an incentive
to favor higher-fee accounts. These potential conflicts may include, among
others:
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•
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The most attractive investments could be allocated to higher-fee
accounts or performance fee accounts.
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•
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The trading of higher-fee accounts could be favored as to timing
and/or execution price. For example, higher-fee accounts could be permitted
to sell securities earlier than other accounts when a prompt sale is desirable
or to buy securities at an earlier and more opportune time.
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•
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The investment management team could focus their time and efforts
primarily on higher-fee accounts due to a personal stake in compensation.
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When the Investment Adviser considers the purchase or sale of a
security to be in the best interests of a Fund as well as other accounts, the
Investment Adviser’s trading desk may, to the extent permitted by applicable
laws and regulations, aggregate the securities to be sold or purchased. Aggregation
of trades may create the potential for
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unfairness to a Fund or another account if one account is favored
over another in allocating the securities purchased or sold—for example, by
allocating a disproportionate amount of a security that is likely to increase
in value to a favored account. The Investment Adviser considers many factors
when allocating securities among accounts, including the account’s investment
style, applicable investment restrictions, availability of securities,
available cash and other current holdings. The Investment Adviser
attempts to allocate investment opportunities among accounts in a fair and
equitable manner. However, accounts are not assured of participating equally
or at all in particular investment allocations due to such factors as noted
above.
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“Cross trades,” in which one Investment Adviser account sells a
particular security to another account (potentially saving transaction costs
for both accounts), may also pose a potential conflict of interest when cross
trades are effected in a manner perceived to favor one client over another.
For example, if the Investment Adviser crosses a trade between performance
fee account and a fixed fee account that result in a benefit to the
performance fee account and a detriment to the fixed fee account. The
Investment Adviser has adopted compliance procedures that provide that all
cross trades are to be made at an independent current market price, as
required by law.
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Another potential conflict of interest may arise from the different
investment objectives and strategies of a Fund and other accounts. For
example, another account may have a shorter-term investment horizon or
different investment objectives, policies or restrictions than a Fund.
Depending on another account’s objectives or other factors, a Portfolio
Manager may give advice and make decisions that may differ from advice given,
or the timing or nature of decisions made, with respect to a Fund. In
addition, investment decisions are subject to suitability for the particular
account involved. Thus, a particular security may not be bought or sold for
certain accounts even though it was bought or sold for other accounts at the
same time. More rarely, a particular security may be bought for one or more
accounts managed by a Portfolio Manager when one or more other accounts are
selling the security (including short sales). There may be circumstances when
purchases or sales of portfolio securities for one or more accounts may have
an adverse effect on other accounts. The Investment Adviser maintains trading
policies designed to provide portfolio managers an opportunity to minimize
the effect that short sales in one portfolio may have on holdings in other
portfolios.
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A Portfolio Manager who is responsible for managing multiple accounts
may devote unequal time and attention to the management of those accounts. As
a result, the Portfolio Manager may not be able to formulate as complete a
strategy or identify equally attractive investment opportunities for each of
those accounts as might be the case if he or she were to devote substantially
more attention to the management of a single fund. The effects of this
potential conflict may be more pronounced where funds and/or accounts
overseen by a particular Portfolio Manager have different investment
strategies.
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A Fund’s Portfolio Manager(s) may be able to select or influence the
selection of the broker/dealers that are used to execute securities
transactions for the Fund. In addition to executing trades, some brokers and
dealers provide the Investment Adviser with brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act
of 1934), which may result in the payment of higher brokerage fees than might
have otherwise be available. These services may be more beneficial to certain
funds or accounts than to others. In order to be assured of continuing to
receive services considered of value to its clients, the Investment
Adviser has adopted a brokerage allocation policy embodying the concepts of
Section 28(e) of the Securities Exchange Act of 1934. The Investment Adviser
allocates the payment of brokerage commissions is subject to the requirement
that the Portfolio Manager determine in good faith that the commissions are
reasonable in relation to the value of the brokerage and research services
provided to the Fund.
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A Fund’s Portfolio Manager(s) may also face other potential conflicts
of interest in managing a Fund, and the description above is not a complete
description of every conflict that could be deemed to exist in managing both
the Funds and other accounts. In addition, a Fund’s Portfolio Manager may also
manage other accounts (including their personal assets or the assets of family
members) in their personal capacity. The Investment Adviser’s investment
personnel, including each Fund’s Portfolio Manager, are subject to restrictions
on engaging in personal securities transactions pursuant to the Allianz Global
Investors of America L.P.’s Codes of Ethics, which contain provisions and
requirements designed to identify and address conflicts of interest between
personal investment activities and the interests of the Funds. The Code of
Ethics is designed to ensure that the personal securities transactions,
activities and interests of the employees of the Investment Adviser will not
interfere with (i) making decisions in the best interest of advisory clients
(including the Funds) or (ii) implementing such decisions while, at the same
time, allowing employees to invest for their own accounts.
(a) (3)
As of February 28, 2011 the following explains the compensation
structure of each individual who shares primary responsibility for day-to-day
portfolio management of the Fund:
AGI Capital’s
compensation plan is designed specifically to be aligned with the interests of
our clients. We aim to provide rewards for exceptional investment performance
and build an enduring firm with a long-term culture of shared success. To that
end, in addition to competitive base salaries, we offer both short- and
long-term incentive plans.
Compensation and Investment Performance
Short-term incentive pools for investment teams are
annual discretionary bonuses funded by the firm’s revenue and allocated based
on the performance of the strategies and the teams. The percentage allocated to
an investment team is adjusted to reflect performance relative to the benchmark
over a one-, three-, and five-year period (the timeframe may vary depending on
the strategy). The team pools are then subjectively allocated to team
members based
on individual contributions to client accounts. This revenue sharing
arrangement directly aligns compensation with investment performance.
Long-Term Incentive Plan
A Long-Term Incentive Plan provides rewards to certain
key staff and executives of AGI Capital and the other Allianz Global Investors
companies to promote long-term growth and profitability. The Plan is based on
the firm’s operating earnings growth of both AGI Capital and Allianz Global
Investors, has a three-year vesting schedule and is paid in cash upon vesting.
Ownership
Managing Directors at AGI Capital are provided with an
interest that shares in the future growth and profitability of AGI Capital.
Each unit is designed to deliver an annual distribution and a value based on the
growth in profits. The plan has a five-year vesting schedule.
The long-term
components of our compensation structure are designed to link successful
investment performance and longer-term company performance with participant
pay, further motivating key employees to continue making important
contributions to the success of our business.
Overall, we
believe that competitive compensation is essential to retaining top industry
talent. With that in mind, we continually reevaluate our compensation policies
against industry benchmarks. Our goal is to offer portfolio managers and
analysts compensation and benefits in the top quartile for comparable
experience, as measured by industry benchmarks surveyed by independent firms
including McLagan Partners.
(a)(4)
The
following summarizes the dollar range of securities the portfolio manager for
the Fund beneficially owned of the Fund that he managed as of February 28,
2011.
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AGIC International & Premium Strategy Fund
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PM Ownership
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Steven Tael
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$1 - $10,000
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Kunal Ghosh
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$1 - $10,000
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Michael Yee
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$0
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ITEM 9. PURCHASES OF EQUITY
SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED COMPANIES
- NONE
ITEM 10. SUBMISSION OF MATTERS
TO A VOTE OF SECURITY HOLDERS
There have been no material
changes to the procedures by which shareholders may recommend nominees to the
Fund’s Board of Trustees since the Fund last provided disclosure in response to
this item.
ITEM 11. CONTROLS AND PROCEDURES
(a) The registrant’s
President and Chief Executive Officer and Treasurer, Principal
Financial & Accounting Officer have concluded that the registrant’s
disclosure controls and procedures (as defined in Rule 30a-2(c) under the
Act (17 CFR 270.30a-3(c))), as amended are effective based on their evaluation
of these controls and procedures as of a date within 90 days of the filing
date of this document.
(b) There were no
significant change in the registrant’s internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)))
that occurred during the second fiscal quarter of the period covered by this
report that has materially affected, or is reasonably likely to materially
affect, the registrants control over financial reporting.
Table of Contents
ITEM 12. EXHIBITS
(a)
(1) Exhibit 99.CODE ETH — Code of Ethics
(a) (2) Exhibit 99
Cert. — Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
(a)(3) Not applicable
(b) Exhibit 99.906
Cert. — Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
Signature
Pursuant to
the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
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(Registrant)
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AGIC International & Premium Strategy Fund
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By
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/s/ Brian S.
Shlissel
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President
and Chief Executive Officer
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By
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/s/ Lawrence
G. Altadonna
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Treasurer,
Principal Financial & Accounting Officer
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Pursuant to
the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates indicated.
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By
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/s/ Brian S.
Shlissel
|
|
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President
and Chief Executive Officer
|
|
|
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By
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/s/ Lawrence
G. Altadonna
|
|
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Treasurer,
Principal Financial & Accounting Officer
|
Nicholas Applegate (NYSE:NAI)
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