Exhibit (d)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this 10th day of May, 2000 between Barclays Global
Fund Advisors, a corporation organized under the laws of the State of California
(the "Adviser"), and iShares Trust, a business trust organized under the laws of
the State of Delaware (the "Trust").
WHEREAS, the Adviser is principally engaged in the business of rendering
investment management services and is registered as an investment adviser under
the Investment Advisers Act of 1940 (the "Advisers Act"); and
WHEREAS, the Trust proposes to engage in the business of an investment
company and is registered as such under the Investment Company Act of 1940 (the
"1940 Act"); and
WHEREAS, the Trust 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 Trust intends initially to offer shares representing interests
in each of the separate series listed on Schedule A attached hereto (each, an
"Initial Fund" and collectively, the "Initial Funds"); and
WHEREAS, the Trust desires to appoint the Adviser to serve as the
investment adviser with respect to each of the Initial Funds; and
WHEREAS, the Trust may, from time to time, offer shares representing
interests in one or more additional series (each, an "Additional Fund" and
collectively, the "Additional Funds"); and
WHEREAS, the Trust may desire to appoint the Adviser as the investment
adviser with respect to one or more of the "Additional Funds" (each such
Additional Fund and Initial Fund being referred to herein individually as a
"Fund" and collectively as the "Funds");
NOW THEREFORE, the parties hereto hereby agree as follows:
1. APPOINTMENT OF ADVISER
The Trust hereby appoints the Adviser to act as investment adviser for the
Initial Funds for the period and on terms set forth herein. The Adviser
accepts such appointment and agrees to render such services for the
compensation set forth herein. In the event that the Trust desires to
retain the Adviser to render
investment advisory services hereunder with respect to an Additional Fund,
and the Adviser is willing to render such services, Schedule A shall be
amended in accordance with Section 8, paragraph b herein, whereupon such
Additional Fund shall become a Fund hereunder.
2. DUTIES OF THE ADVISER
The Adviser, at its own expense shall: (i) furnish continuously an
investment program for each Fund; (ii) manage the investment and
reinvestment of Fund assets; (iii) 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; (iv) make changes on
behalf of the Trust in the investments for each Fund; (v) provide the Trust
with records concerning the Adviser's activities that the Trust is required
to maintain; and (vi) render reports to the Trust's officers and Board of
Trustees concerning the Adviser's discharge of the foregoing
responsibilities. In addition, the Adviser will arrange for other necessary
services, including custodial, transfer agency and administration. The
Adviser shall furnish to the Trust all office facilities, equipment,
services and executive and administrative personnel necessary for managing
the investment program of the Trust for each Fund. The Adviser may at its
expense employ others to provide all or any part of such facilities and
personnel.
The Adviser shall discharge the foregoing responsibilities subject to the
control of the Board of Trustees of the Trust and in compliance with such
policies as the Trustees may from time to time establish, each 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 Trust's Registration Statement on Form N-1A, as such prospectus and
statement of additional information is amended or supplemented from time to
time, and applicable laws and regulations.
3. CERTAIN RECORDS AND REPORTS
Any records required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 under the 1940 Act that are
prepared or maintained by the Adviser (or any sub-adviser) on behalf of the
Trust are the property of the Trust and will be surrendered promptly to the
Trust at its request (the "Records"). The Adviser agrees to preserve the
Records for the periods prescribed in Rule 31a-2 under the 1940 Act. The
Trust and the Adviser agree to furnish to each other, if applicable,
current prospectuses, proxy statements, reports to shareholders, certified
copies of their financial statements, and such other information with
regard to their affairs as each may reasonably request.
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4. ADVISORY FEES
For the services to be provided by the Adviser hereunder with respect to
each Fund, the Trust shall pay to the Adviser a fee at the rate set forth
on Schedule A attached hereto. The Adviser agrees to pay all expenses
incurred by the Trust except for interest, taxes, brokerage expenses and
other expenses connected with the execution of portfolio transactions,
extraordinary expenses, and distribution fees and expenses paid by the
Trust under any distribution plan adopted pursuant to rule 12b-1 under the
1940 Act. 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 8, paragraph b hereunder. All fees
payable hereunder shall be accrued daily and paid as soon as practical
after the last day of each month.
In any 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
Fund assets pursuant to this Agreement, the Adviser, acting by its own
officers, directors or employees, is authorized to select the brokers or
dealers (including brokers and dealers that are affiliated with the Adviser
or the Trust's principal underwriter) that will execute purchase and sale
transactions for the Trust. In executing portfolio transactions and
selecting brokers or dealers, if any, the Adviser will use its best efforts
to seek on behalf of a Fund the best overall terms available, as described
from time to time, in the Trust's Registration Statement. In assessing the
best overall terms available for any transaction, the Adviser 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
Adviser 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 Trust. The Adviser 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 the transaction if, but only if,
the Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided. The
Trust acknowledges
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that any such research may be useful to the Adviser in connection with
other accounts managed by it. Brokerage transactions for the Trust may be
effected through affiliates of the Adviser if approved by the Board of
Trustees, subject to applicable rules and regulations. The Adviser will
promptly communicate to the officers and the Trustees of the Trust such
information relating to Fund transactions as they may reasonably request.
6. LIABILITY OF ADVISER
Neither the Adviser nor its officers, directors, employees, agents,
affiliated persons or controlling persons or assigns shall be liable for
any error of judgment or mistake of law or for any loss suffered by the
Trust or its shareholders in connection with the matters to which this
Agreement relates; provided that no provision of this Agreement shall be
deemed to protect the Adviser against any liability to the Trust or its
shareholders resulting from any willful misfeasance, bad faith or gross
negligence in the performance of its duties or obligations hereunder, the
reckless disregard of its duties or obligations hereunder, or breach of its
fiduciary duty to the Trust, any Fund or its shareholders.
7. FORCE MAJEURE
Notwithstanding any other provision of this Agreement, Adviser shall not be
liable for any loss suffered by the Trust or its shareholders caused
directly or indirectly by circumstances beyond Adviser's reasonable control
including, without limitation, government restrictions, exchange or market
rulings, suspensions of trading, acts of civil or military authority,
national emergencies, labor difficulties, fires, earthquakes, floods or
other catastrophes, acts of God, wars, riots or failures of communication
or power supply.
8. DURATION, TERMINATION AND AMENDMENT
a. DURATION. This Agreement shall become effective with respect to each
Initial Fund on the date hereof and, with respect to any Additional
Fund, on the date Schedule A is amended to reflect such Additional
Fund in accordance with paragraph b below. Unless terminated in
accordance with this Section 8, the Agreement shall remain in full
force and effect for two years from the date hereof with respect to
each Initial 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 specifically approved at least annually (i) by
either the Board of Trustees of the Trust 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
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Trustees of the Trust 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. If the shareholders of any Fund fail to approve the
Agreement as provided herein, the Adviser may continue to serve
hereunder in the manner and to the extent permitted by the 1940 Act
and rules and regulations thereunder. The foregoing requirement that
continuance of this Agreement be "specifically approved at least
annually" shall be construed in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
b. AMENDMENT. Any amendment to this Agreement shall become effective
with respect to a Fund upon approval of the Adviser, the Board of
Trustees of the Trust, including a majority of the Trustees of the
Trust 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, if
required under the 1940 Act, a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the Fund.
c. APPROVAL, AMENDMENT OR TERMINATION BY A FUND. Any approval, amendment
or termination of this Agreement with respect to a Fund will not
require the approval of any other Fund or the approval of a majority
of the outstanding voting securities of the Trust, unless such
approval is required by applicable law.
d. AUTOMATIC TERMINATION. This Agreement shall automatically and
immediately terminate in the event of its "assignment" (as defined in
the 1940 Act).
e. TERMINATION. This Agreement may be terminated with respect to any
Fund at any time, without payment of any penalty, by vote of the Board
of Trustees of the Trust or by vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of that Fund, or by the
Adviser, in each case on not less than 30 days' nor more than 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.
9. SERVICES NOT EXCLUSIVE
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to
others so long as its services hereunder are not impaired thereby. The
Adviser shall be deemed to be an independent contractor and shall, unless
otherwise expressly provided or
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authorized, have no authority to act for or represent the Trust in any way
or otherwise be deemed an agent of the Trust.
10. MISCELLANEOUS
a. 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.
b. 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.
c. APPLICABLE LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of
the State of Delaware, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
d. EXECUTION BY COUNTERPART. This Agreement may be executed in any
number of counterparts, all of which together shall constitute one
agreement.
e. SURVIVAL AFTER TERMINATION. The rights and obligations set forth in
Paragraphs 5 and 7 shall survive the termination of this Agreement.
f. PERMISSIBLE INTERESTS. Trustees, officers, agents and shareholders of
the Trust are or may be interested in the Adviser (or any successor
thereof) as directors, partners, officers, agents, shareholders or
otherwise; directors, partners, officers, agents and shareholders of
the Adviser are or may be interested in the Trust as Trustees,
officers, agents, shareholders or otherwise; and the Adviser (or any
successor thereof) is or may be interested in the Trust as a
shareholder or otherwise.
PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION (THE
"COMMISSION") IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE CLIENTS,
THIS DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE
COMMISSION. THE COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING
IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING
ADVISOR DISCLOSURE.
CONSEQUENTLY, THE COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM
OR THIS DOCUMENT.
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IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed as of the date first set forth above.
iSHARES TRUST
By: /s/ Xxxxxx Most
Name: Xxxxxx Most
Title: President
BARCLAYS GLOBAL FUND ADVISORS
By: /s/ Xxxxxxx Xxxxxx
-------------------------
Name: Xxxxxxx Xxxxxx
-----------------------
Title: Chairman
----------------------
By: /s/ Xxx Xxxxxxxxx
-----------------------
Name: Xxx Xxxxxxxxx
-----------------------
Title: Managing Director
----------------------
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Schedule A
to the
Investment Advisory Agreement dated May 10, 2000
between
iShares Trust
and
Barclays Global Fund Advisors
Pursuant to Section 4, the Trust shall pay the Adviser compensation at the
following annual rates:
Fund Annual Fee
---- ----------
iShares S&P 500 Index Fund 0.09%
iShares Xxxxxxx 1000 Index Fund 0.15%
iShares Dow Xxxxx U.S. Internet Index Fund 0.60%
iShares Dow Xxxxx U.S. Technology Sector Index Fund 0.60%
iShares S&P MidCap 400 Index Fund 0.20%
iShares S&P 000/XXXXX Xxxxxx Index Fund 0.18%
iShares S&P 500/BARRA Value Index Fund 0.18%
iShares S&P SmallCap 600 Index Fund 0.20%
iShares Xxxxxxx 1000 Growth Index Fund 0.20%
iShares Xxxxxxx 1000 Value Index Fund 0.20%
iShares Xxxxxxx 2000 Index Fund 0.20%
iShares Xxxxxxx 3000 Index Fund 0.20%
iShares Dow Xxxxx U.S. Financial Sector Index Fund 0.60%
iShares Dow Xxxxx U.S. Telecommunications Sector Index Fund 0.60%
iShares S&P Europe 350 Index Fund 0.60%
iShares S&P/TSE 60 Index Fund 0.50%
iShares Dow Xxxxx U.S. Total Market Index Fund 0.20%
iShares Dow Xxxxx U.S. Basic Materials Sector Index Fund 0.60%
iShares Dow Xxxxx U.S. Consumer Cyclical Sector Index Fund 0.60%
iShares Dow Xxxxx U.S. Consumer Non-Cyclical Sector Index Fund 0.60%
iShares Dow Xxxxx U.S. Energy Sector Index Fund 0.60%
iShares Dow Xxxxx U.S. Healthcare Sector Index Fund 0.60%
iShares Dow Xxxxx U.S. Industrial Sector Index Fund 0.60%
iShares Dow Xxxxx U.S. Utilities Sector Index Fund 0.60%
iShares Dow Xxxxx U.S. Chemicals Index Fund 0.60%
iShares Dow Xxxxx U.S. Financial Services Index Fund 0.60%
iShares Dow Xxxxx U.S. Real Estate Index Fund 0.60%
iShares S&P MidCap 000/XXXXX Xxxxxx Index Fund 0.25%
iShares S&P MidCap 400/BARRA Value Index Fund 0.25%
iShares S&P SmallCap 000/XXXXX Xxxxxx Index Fund 0.25%
iShares S&P SmallCap 600/BARRA Value Index Fund 0.25%
iShares Xxxxxxx 2000 Growth Index Fund 0.25%
iShares Xxxxxxx 2000 Value Index Fund 0.25%
iShares Xxxxxxx 3000 Growth Index Fund 0.25%
iShares Xxxxxxx 3000 Value Index Fund 0.25%
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