EX-99.B(d.1)
ADVISORY AGREEMENT
AGREEMENT made as of the th day of ,2001 between Barclays Global Fund
Advisors, a corporation organized under the laws of the State of California (the
"Advisor"), and iShares, Inc., a Maryland corporation (the "Company").
WHEREAS, the Advisor is engaged principally in the business of rendering
investment management services and is registered as an investment advisor under
the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Company engages in the business of an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Company is authorized to issue shares of beneficial interest
in separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Company intends to offer shares representing interests in each
of the separate portfolios identified on Schedule A hereto (each, a "Fund"); and
WHEREAS, the Company desires to appoint the Advisor to serve as the
investment advisor with respect to each Fund; and
WHEREAS, the Company may, from time to time, offer shares representing
interests in one or more additional portfolios (each, an "Additional Fund"); and
WHEREAS, the Company may desire to appoint the Advisor as the investment
advisor with respect to one or more Additional Fund;
NOW THEREFORE, the parties hereto hereby agree as follows:
1. APPOINTMENT OF ADVISOR
a. Fund. The Company hereby appoints the Advisor to act as investment
advisor for the Fund listed on Schedule A for the period and on the
terms herein set forth. The Advisor accepts such appointment and
agrees to render the services herein set forth, for the compensation
herein provided.
b. Additional Fund. In the event the Company desires to retain the
Advisor to render investment advisory services hereunder with respect
to any Additional Fund, it shall so notify the Advisor in writing,
indicating the advisory fee to be payable with respect to the
Additional Fund. If the Advisor is willing to render such services
for such fee and on the terms provided for herein, it shall so notify
the Company in writing, whereupon such Additional Fund shall become a
Fund hereunder.
2. DUTIES OF THE ADVISOR
The Advisor shall be responsible for the general management of the
Company's affairs. The Advisor, at its own expense (subject to the overall
supervision and review of the Board of Directors of the Company), shall (i)
furnish continuously an investment program for each Fund in compliance with
that Fund's investment objective and policies, as set forth in the then-
current prospectus and statement of additional information for such Fund
contained in the Company's Registration Statement on Form N-1A, as such
prospectus and statement of additional information is amended or
supplemented from time to time, (ii) determine what investments shall be
purchased,
held, sold or exchanged for each Fund and what portion, if any, of the
assets of each Fund shall be held uninvested, (iii) make changes on behalf
of the Company in the investments for each Fund and (iv) provide the
Company with records concerning the Advisor's activities that the Company
is required to maintain and render reports to the Company's officers and
Board of Directors concerning the Advisor's discharge of the foregoing
responsibilities. The Advisor shall furnish to the Company all office
facilities, equipment, services and executive and administrative personnel
necessary for managing the investment program of the Company for each Fund.
3. ALLOCATION OF EXPENSES
Subject to Section 4 below, the Company shall be responsible for and pay
all expenses for Company operations and activities.
4. ADVISORY FEE
For the services to be provided by the Advisor hereunder with respect to
each Fund, the Company shall pay to the Advisor an annual gross investment
advisory fee equal to the amount set forth on Schedule A attached hereto.
The Advisor agrees to pay all expenses incurred by the Company except for
(i) expenses of the Fund incurred in connection with the execution of
portfolio securities transactions on behalf of such Fund, (ii) expenses
incurred in connection with any distribution plan adopted by the Company in
compliance with Rule 12b-1 under the 1940 Act, (iii) litigation expenses,
(iv) taxes (including, but not limited to, income, excise, transfer and
withholding taxes), (v) any cost or expense that a majority of the
Directors of the Company who are not "interested persons" (as defined in
the 0000 Xxx) deems to be an extraordinary expense and (vi) the advisory
fee payable to the Advisor hereunder.
Schedule A shall be amended from time to time to reflect the addition
and/or termination of any Fund as a Fund hereunder and to reflect any
change in the advisory fees payable with respect to any Fund duly approved
in accordance with Section 7(b) hereunder. All fees payable hereunder
shall be accrued daily and paid as soon as practicable after the last day
of each calendar quarter.
In the case of commencement or termination of this Agreement with respect
to any Fund during any calendar quarter, the fee with respect to such Fund
for that quarter shall be reduced proportionately based upon the number of
calendar days during which it is in effect, and the fee shall be computed
upon the average daily net assets of such Fund for the days during which it
is in effect.
5. PORTFOLIO TRANSACTIONS
In connection with the management of the investment and reinvestment of the
assets of the Company, the Advisor, acting by its own officers, directors
or employees, is authorized to select the brokers or dealers that will
execute purchase and sale transactions for the Company. In executing
portfolio transactions and selecting brokers or dealers, if any, the
Advisor will use its best efforts to seek on behalf of a Fund the best
overall terms available. In assessing the best overall terms available for
any transaction, the Advisor shall consider all factors it deems relevant,
including the breadth of the market in and the price of the security, the
financial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any (for the specific transaction
and on a continuing basis). In evaluating the best overall terms
available, and in selecting the broker or dealer, if any, to execute a
particular transaction, the Advisor may also consider the brokerage and
research services (as those terms are defined in Section 28(e) of the 0000
Xxx) provided to any Fund of the Company. The Advisor may pay to a broker
or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Advisor determines in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services provided. The Company acknowledges that any such
research may be useful to the Advisor in connection with other accounts
managed by it.
6. LIABILITY OF ADVISOR
Neither the Advisor nor its officers, directors, employees, agents or
controlling persons or assigns shall be liable for any error of judgment or
mistake of law or for any loss suffered by the Company or its shareholders
in connection with the matters to which this Agreement relates; provided,
however, that no provision of this Agreement shall be deemed to protect the
Advisor against any liability to the Company or its shareholders to which
it might otherwise be subject by reason of any willful misfeasance, bad
faith or gross negligence in the performance of its duties or the reckless
disregard of its obligations and duties under this Agreement.
7. DURATION AND TERMINATION OF THIS AGREEMENT
a. Duration. This Agreement shall become effective with respect to each
Fund on the date hereof and, with respect to any Additional Fund, on
the date specified in the written notice received by the Company from
the Advisor in accordance with paragraph 1(b) hereof that the Advisor
is willing to serve as Advisor with respect to such Fund. Unless
terminated as herein provided, this Agreement shall remain in full
force and effect for two years from the date hereof with respect to
each Fund and, with respect to each Additional Fund, for two years
from the date on which such Fund becomes a fund hereunder. Subsequent
to such initial periods of effectiveness, this Agreement shall
continue in full force and effect for periods of one year thereafter
with respect to each Fund so long as such continuance with respect to
such Fund is approved at least annually (i) by either the Directors of
the Company or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of such Fund, and (ii), in
either event, by the vote of a majority of the Directors of the
Company who are not parties to this Agreement or "interested persons"
(as defined in the 0000 Xxx) of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
b. Amendment. Any amendment to this Agreement shall become effective
with respect to a Fund upon approval of the Advisor and of a majority
of Directors who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of any such party, cast in
person at a meeting called for the purpose of voting such approval and
a majority of the outstanding voting securities (as defined in the
0000 Xxx) of that Fund.
c. Termination. This Agreement may be terminated with respect to any
Fund at any time, without payment of any penalty, by vote of the
Directors or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of that Fund, or by the
Advisor, in each case on sixty (60) days' prior written notice to the
other party; provided, that a shorter notice period shall be permitted
for a Fund in the event its shares are no longer listed on a national
securities exchange.
d. Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its "assignment" (as defined in
the 1940 Act).
e. Approval, Amendment or Termination by a Fund. Any approval, amendment
or termination of this Agreement by the holders of a "majority of the
outstanding voting securities" (as defined in the 0000 Xxx) of any
Fund shall be effective to continue, amend or terminate this Agreement
with respect to any such Fund notwithstanding (i) that such action has
not been approved by the holders of a majority of the outstanding
voting securities of any other Fund affected thereby, and (ii) that
such action has not been
approved by the vote of a majority of the outstanding voting
securities of the Company, unless such action shall be required by any
applicable law or otherwise.
8. SERVICES NOT EXCLUSIVE
The services of the Advisor to the Company hereunder are not to be deemed
exclusive, and the Advisor shall be free to render similar services to
others so long as its services hereunder are not impaired thereby.
9. MISCELLANEOUS
a. "iShares" Name. The Company shall, at the request of the Advisor,
stop all use of the "iShares" name in the event that the Advisor or
its affiliates is no longer the Company's investment advisor.
b. Notice. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other party
at such address as such other party may designate in writing for the
receipt of such notices.
c. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
d. Applicable Law. This Agreement shall be construed in accordance with
and governed by the laws of New York.
e. Execution by Counterpart. This Agreement may be executed in any
number of counterparts, all of which together shall constitute one
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
iSHARES, INC.
By: _____________________________
Name:
Title:
BARCLAYS GLOBAL FUND ADVISORS
By:_____________________________
Name:
Title:
Schedule A
Advisory Fee *for the Category I Funds:
0.59% per annum of the aggregate net assets of the Category I Funds less than or
equal to $7.0 billion plus 0.54% per annum of the aggregate net assets of the
Category I Funds between $7.0 billion and $11.0 billion plus 0.49% per annum of
the aggregate net assets of the Category I Funds in excess of $11.0 billion
Category I Funds:
iShares MSCI Australia Index Fund
iShares MSCI Austria Index Fund
iShares MSCI Belgium Index Fund
iShares MSCI Canada Index Fund
iShares MSCI EMU Index Fund
iShares MSCI France Index Fund
iShares MSCI Germany Index Fund
iShares MSCI Hong Kong Index Fund
iShares MSCI Italy Index Fund
iShares MSCI Japan Index Fund
iShares MSCI Malaysia Index Fund
iShares MSCI Mexico (Free) Index Fund
iShares MSCI Netherlands Index Fund
iShares MSCI Singapore (Free) Index Fund
iShares MSCI Spain Index Fund
iShares MSCI Sweden Index Fund
iShares MSCI Switzerland Index Fund
iShares MSCI United Kingdom Index Fund
iShares MSCI USA Index Fund
Advisory Fee for Category II Funds:
0.74% per annum of the aggregate net assets of the Category II Funds less than
or equal to $2 billion plus 0.69% per annum of the aggregate net assets of the
Category II Funds between $2 billion and $4 billion plus 0.64% per annum of the
aggregate net assets of the Category II Funds greater than $4 billion
Category II Funds:
iShares MSCI Brazil Index Fund
iShares MSCI Greece Index Fund
iShares MSCI Indonesia Index Fund
iShares MSCI Korea Index Fund
iShares MSCI Portugal Index Fund
iShares MSCI South Africa Index Fund
iShares MSCI Thailand Index Fund
iShares MSCI Taiwan Index Fund
iShares MSCI Turkey Index Fund
Advisory Fee for Category III Funds:
0.05% per annum of the aggregate net assets of the Category III Funds
Category III Funds
iShares MSCI Pacific Ex-Japan Index Fund
