iShares Makes A Plea To Shareholders For A Vote On Investment Advisory Agreement
iShares has issued a plea to the shareholders of a few of their funds asking them to vote on an investment advisory agreement. They have had to adjourn their meeting for a 3rd time due to insufficient votes to proceed with their first two meetings. This agreement was required to approve a new investment advisory agreement for each of the 179 iShares Funds in connection with BlackRock, Inc.’s acquisition of Barclays Global Investors. It appears the lack of votes only applies to 15 of the 179 shares. According to the letter investors need to, “Act Now to Avoid Interruption to Your iShares Fund – Further Delay May Result in the Closure and Liquidation of Your Fund.” The meeting has been adjourned until November 30, 2009.
This Q&A ONLY applies to shareholders of the following iShares Funds who held shares as of August 25, 2009:
iShares MSCI Brazil Index Fund (EWZ)
iShares MSCI EMU Index Fund (EZU)
iShares MSCI Germany Index Fund (EWG)
iShares MSCI Mexico Investable Market Index Fund (EWW)
iShares MSCI Pacific ex-Japan Index Fund (EPP)
iShares MSCI South Korea Index Fund (EWY)
iShares S&P Europe 350 Index Fund (IEV)
iShares S&P Global 100 Index Fund (IOO)
iShares S&P Global Consumer Discretionary Sector Index Fund (RSI)
iShares S&P Global Consumer Staples Sector Index Fund (KXI)
iShares S&P Global Financials Sector Index Fund (IXG)
iShares S&P Global Industrials Sector Index Fund (EXI)
iShares Dow Jones U.S. Medical Devices Index Fund (IHI)
iShares FTSE China (HK Listed) Index Fund (FCHI)
iShares FTSE/Xinhua China 25 Index Fund (FXI)
To vote your shares, please call 1-866-450-8471. Representatives are available Monday through Friday 9:30 AM to 12:00 Midnight (EST), Saturday from 10:00 AM to 9:00 PM (EST), and Sunday from 12:00 Noon to 6:00 PM (EST). If you are an institutional shareholder or a shareholder located outside the U.S. and need assistance in voting your shares, please call +1 646-378-4860 (international collect calls are accepted). You may also vote by internet, as further detailed below.
Questions posed and answered on the iShares letter:
Q. Why is shareholder participation critical to avoid the potential closure and liquidation of certain iShares Funds?
A. A Special Meeting of Shareholders (the “Special Meeting”) was called for November 4, 2009 to approve a new investment advisory agreement for each of the 179 iShares Funds in connection with BlackRock, Inc.’s acquisition of Barclays Global Investors, N.A. (the “BlackRock Transaction”), including Barclays Global Fund Advisors, adviser to the iShares exchange traded funds (the “iShares Funds”). As a result of the BlackRock Transaction, shareholder approval of a new investment advisory agreement for each iShares Fund is required (the “New Advisory Agreement Proposal”) because the current investment advisory agreement will terminate upon the completion of the BlackRock Transaction.
To date, shareholders in 164 iShares Funds have voted overwhelmingly to approve the New Advisory Agreement Proposal.
However, due to a lack of sufficient shareholder participation, shareholders in 15 iShares Funds have not yet approved the New Advisory Agreement Proposal (the “Adjourned iShares Funds”) (see list above). After repeated attempts, the Special Meeting has been adjourned a third time (the “Third Adjourned Special Meeting”) with regard to the Adjourned iShares Funds to provide additional time for shareholders to vote on certain proposals, including the New Advisory Agreement Proposal.
If, for a particular Adjourned iShares Fund, sufficient votes to act on the New Advisory Agreement Proposal are not received and shareholders fail to approve the New Advisory Agreement Proposal at the Third Adjourned Special Meeting, the meeting will be adjourned further with regard to those iShares Funds to allow for additional time to solicit sufficient votes on the proposal(s). If sufficient votes are not received to take action on the proposal(s), the Board of Directors/Trustees of the iShares Funds (the “Board of the iShares Funds”) will take such action it deems necessary and in the best interests of those Adjourned iShares Funds and their shareholders, including closing and liquidating such Adjourned iShares Fund.
Q. Why should shareholders vote now?
A. Shareholders should act now to avoid additional adjournments and to avoid further solicitation and further communication with shareholders, and allow the Third Adjourned Special Meeting to be held to consider the proposals.
Q. How have other shareholders of the Adjourned iShares Funds voted on the New Advisory Agreement Proposal?
A. Of those votes cast already, shareholders have voted overwhelmingly in support of the New Advisory Agreement Proposal. However, due to a lack of shareholder participation in the vote, sufficient votes have not been cast to allow the Adjourned iShares Funds to reach a quorum and hold the Third Adjourned Special Meeting. Shareholder participation is crucial regardless of how a particular shareholder votes (“FOR”, “AGAINST” or “ABSTAIN”) with regard to a proposal. Reaching quorum is the main challenge in passing the New Advisory Agreement Proposal.
Q. Has the Board of the iShares Funds provided a recommendation to shareholders on how they should vote on the proposals at the Third Adjourned Special Meeting?
A. Yes, the Board of the iShares Funds has unanimously approved each proposal and recommends that shareholders vote in favor of each proposal, including the New Advisory Agreement Proposal.
Q. Have any independent proxy advisory firms provided a recommendation to shareholders on how they should vote on the proposals at the Third Adjourned Special Meeting?
A. Yes, RiskMetrics Group’s ISS Governance Services Unit and Glass-Lewis & Co., two independent proxy advisory firms, recommend that shareholders vote in favor of each proposal, including the New Advisory Agreement Proposal.
Q. How can shareholders vote?
A. Shareholders may vote in a variety of ways. We believe the fastest and most convenient way for shareholders to vote is by calling a Live Operator at Broadridge, our proxy solicitor, at 1-866-450-8471. To vote by Live Operator, shareholders will not be required to provide the multiple “control” numbers located on each of the proxy cards they receive. Broadridge representatives are available Monday through Friday, 9:30 a.m. to 12:00 midnight (Eastern time), Saturday, 10:00 a.m. to 9:00 p.m. (Eastern time). Shareholders may also vote by mail, by telephone using an automated system, by the internet (www.proxyvote.com), or in person, all as further detailed in the Joint Proxy Statement received by shareholders.
Institutional shareholders and shareholders located outside the U.S. who need assistance in voting their shares should call +1 646-378-4860 (international collect calls are accepted).
Q. What if a shareholder or financial adviser has additional questions?
A. Shareholders can visit www.iShares.com or call 1-800-iShares. Financial advisers can contact their iShares Representative.
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