UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
SPDR SERIES TRUST
SPDR INDEX SHARES FUNDS
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
___________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
___________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
[SPDR LOGO]
AN IMPORTANT MESSAGE FROM SPDR(R) SERIES TRUST AND SPDR(R) INDEX SHARES
FUNDS (EACH A "TRUST" AND TOGETHER WITH THEIR SERIES, THE "SPDR FUNDS")
PRESIDENT, JAMES ROSS
All SPDR Funds Shareholders,
SPDR Funds will hold a Special Meeting of Shareholders on March 19, 2010 at
SSgA Funds Management, Inc.'s ("SSgA FM" or the "Adviser") offices in Boston, MA
(the "Meeting" or "Shareholder Meeting"). This booklet contains a proxy
statement explaining several proposals that the SPDR Funds' Trustees are asking
shareholders to approve at the Meeting. The proposals described in the proxy
statement relate to the following matters:
1. To elect Trustees for all SPDR Funds. Five of the six nominees in
whom we are asking you to place your trust are independent of SPDR
Funds' management, and two nominees are currently members of the
Board of Trustees (the "Board");
2. To approve an investment sub-advisory agreement between the Adviser
and Nuveen Asset Management ("Nuveen" or "Sub-Adviser"), pursuant
to which Nuveen will serve as sub-adviser to the following SPDR
Funds: SPDR Barclays Capital Municipal Bond ETF, SPDR Barclays
Capital California Municipal Bond ETF, SPDR Barclays Capital New
York Municipal Bond ETF, SPDR Barclays Capital Short Term Municipal
Bond ETF, and SPDR S&P VRDO Municipal Bond ETF;
3. To approve a "manager of managers" structure for all SPDR Funds,
which would permit the SPDR Funds to hire and replace sub-advisers
without incurring the expense of a shareholder meeting;
4. To approve eliminating or reclassifying certain fundamental
policies and restrictions for all SPDR Funds, and to update and
standardize your SPDR Funds' investment policies to allow the SPDR
Funds to serve your needs most effectively and efficiently in
today's market environment; and
5. Shareholders also may be asked to vote on such other business as
may properly come before the Meeting.
Your vote is important. Shareholder meetings in the SPDR Funds do not
generally occur with great frequency, so we ask that you take the time to
carefully consider and vote on these important proposals. If you do not cast
your vote at this Shareholder Meeting (or an adjournment thereof), you will not
have the opportunity to vote on these matters unless another shareholder meeting
is held on the same proposals. Please do not hesitate to call the SPDR Funds'
proxy solicitation agent, Broadridge Financial Solutions, Inc., at 877-257-9951
if you have any questions about the proposals under consideration. If you have
any additional questions about the SPDR Funds, please contract your financial
advisor or the SPDR Funds' representatives at 866-787-2257 or visit
www.spdrs.com. Thank you for taking the time to consider these important
proposals and for your investment in the SPDR Funds.
I encourage you to exercise your rights concerning the governance of the
SPDR Funds by reviewing our proxy statement and then voting either through the
Internet, by telephone, or by mail as soon as possible. No matter how many
shares you own, your vote is important.
Sincerely,
/s/ James Ross
James Ross
President
January 25, 2010
<Table>
PRECISE IN A WORLD THAT ISN'T. TM
IMPORTANT INFORMATION ABOUT VOTING
I HAVE ONLY A FEW SHARES--WHY SHOULD I BOTHER TO VOTE?
Because your vote makes a difference. If many shareholders choose not to
vote, the SPDR Funds might not receive enough votes to reach a quorum and
conduct the Shareholder Meeting on Friday, March 19, 2010. If that appears
likely to happen, the SPDR Funds will have to send additional mailings to
shareholders to try to get more votes--a process that would be very costly for
the SPDR Funds and thus for you as a SPDR Fund shareholder.
WHAT'S THE DEADLINE FOR SUBMITTING MY VOTE?
We encourage you to vote as soon as possible to make sure that your SPDR
Fund receives enough votes to act on the proposals. The final opportunity to
cast your vote is at the Shareholder Meeting on March 19, 2010.
WHO GETS TO VOTE?
Any person who owned shares of any SPDR Fund on the "record date," which
was January 6, 2010, even if that person later sold those shares.
HOW DO I VOTE?
You may vote in any of four ways:
1. Through the Internet at www.proxyvote.com;
2. By telephone, with a toll-free call to the phone number indicated
on the enclosed proxy card or voting instruction card;
3. By mail, with the enclosed proxy card or voting instruction card;
and
4. In person at the Shareholder Meeting in Boston, MA, on March 19,
2010.
Vote on the Internet
Log on to:
www.proxyvote.com
Follow the on-screen instructions.
Vote by phone
Call the phone number indicated on your proxy card or voting instruction
card. Follow the recorded instructions available 24 hours each day.
Vote by mail
Vote, sign, and date the proxy card and return in the postage-paid
envelope.
Vote in person
Attend the Shareholder Meeting at SSgA Funds Management, Inc., State Street
Financial Center, One Lincoln Street, Boston, MA 02111 on March 19, 2010.
We encourage you to vote via the Internet or telephone using the 12-digit
control number on the enclosed proxy card or voting instruction card, because
these methods
save the SPDR Funds (and you as a shareholder) the most money (since they
require no return postage). If you would like to change your previous vote, you
may vote again using any of the methods described above.
HOW DO I SIGN THE PROXY CARD?
You should sign your name exactly as it appears on the enclosed proxy card
or voting instruction card. Unless you have instructed us otherwise, either
owner of a joint account may sign the card, but again, the owner must sign the
name exactly as it appears on the card.
IMPORTANT NOTICE
Although we recommend that you read the complete proxy statement, for your
convenience we have provided a brief overview of the proposals. The information
provided under the "Questions and Answers" section below is qualified in its
entirety by reference to the proxy statement.
QUESTIONS AND ANSWERS ABOUT THE SHAREHOLDER MEETING AND PROPOSALS
WHY AM I RECEIVING THIS PROXY STATEMENT?
All SPDR Funds will host the Shareholder Meeting on Friday, March 19, 2010,
at 11:00 a.m. Eastern time, at the offices of SSgA FM, the investment adviser to
the SPDR Funds, at State Street Financial Center, One Lincoln Street, Boston, MA
02111. This meeting of the SPDR Funds is being held so that shareholders can
vote on the following proposals:
1. To elect Trustees for all SPDR Funds. Five out of the six nominees
in whom we are asking you to place your trust are independent of
SSgA FM, and two nominees are currently members of the Board of
Trustees;
2. To approve an investment sub-advisory agreement between the Adviser
and Nuveen, pursuant to which Nuveen will serve as sub-adviser to
the following SPDR Funds: SPDR Barclays Capital Municipal Bond ETF,
SPDR Barclays Capital California Municipal Bond ETF, SPDR Barclays
Capital New York Municipal Bond ETF, SPDR Barclays Capital Short
Term Municipal Bond ETF, and SPDR S&P VRDO Municipal Bond ETF;
3. To approve a "manager of managers" structure for all SPDR Funds,
which would permit the SPDR Funds to hire and replace sub-advisers
without incurring the expense of a shareholder meeting;
4. To approve eliminating or reclassifying certain fundamental
policies and restrictions for all SPDR Funds, and to update and
standardize your SPDR Funds' investment policies to allow the SPDR
Funds to serve your needs most effectively in today's market
environment; and
5. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
WHY AM I BEING ASKED TO ELECT TRUSTEES?
The SPDR Funds are governed by the Investment Company Act of 1940, as
amended (the "1940 Act"). As a general matter, the 1940 Act permits the boards
of trustees or directors of registered investment companies, such as the SPDR
Funds, to fill vacancies without shareholder vote only so long as at least two-
thirds of the trustees would have been elected by shareholders after the
appointments. Prior to December 31, 2009, the Board consisted of four Trustees,
three of whom were elected by shareholders. One of the Trustees, who is not an
"interested person" as defined in the 1940 Act (each, an "Independent Trustee"
and collectively, the "Independent Trustees"), Ms. Peters, resigned from the
Board as of December 31, 2009. As a result of certain banking regulations
effectively prohibiting representatives of the Adviser from holding more than
25% of the seats on an investment company board, the interested Trustee, Mr.
Ross, also resigned effective December 31, 2009. The Board may not fill these
vacancies without obtaining shareholder approval because immediately after
filling these vacancies less than two-thirds of the Trustees would have been
elected by shareholders. In addition, the Board of Trustees has determined to
increase the size of the Board to six Trustees by adding two additional
Independent Trustees.
WHY AM I BEING ASKED TO VOTE ON A NEW INVESTMENT SUB-ADVISORY AGREEMENT WITH
NUVEEN ASSET MANAGEMENT?
The Board of Trustees is also seeking shareholder approval for Nuveen to
act as sub-adviser for certain SPDR Funds. It is proposed that Nuveen will serve
as sub-adviser to the following SPDR Funds: SPDR Barclays Capital Municipal Bond
ETF, SPDR Barclays Capital California Municipal Bond ETF, SPDR Barclays Capital
New York Municipal Bond ETF, SPDR Barclays Capital Short Term Municipal Bond
ETF, and SPDR S&P VRDO Municipal Bond ETF (the "Municipal SPDR Funds").
The Board of Trustees and the Adviser believe that Nuveen will bring
significant municipal securities experience to bear in managing the Municipal
SPDR Funds. Nuveen has extensive experience in managing municipal securities
and, as of September 30, 2009, Nuveen managed more than $68.5 billion in
portfolios of municipal securities for a wide array of mutual funds, closed-end
funds, retail managed accounts and institutional managed accounts. In addition,
Tim Ryan, one of the Municipal SPDR Funds' primary portfolio managers, will join
Nuveen upon the shareholder approval of Nuveen's sub-advisory role, bringing his
extensive experience in managing passive municipal bond strategies. Mr. Ryan's
experience in managing the Municipal SPDR Funds, coupled with Nuveen's
experience in the municipal securities markets, is expected to create a strong
management team for the Municipal SPDR Funds.
The 1940 Act requires shareholder approval of new investment advisory (and
sub-advisory) agreements and, because the Municipal SPDR Funds have not yet
implemented the "manager of managers" structure discussed below, shareholder
approval is required for the proposed sub-advisory agreement with Nuveen.
WHAT IS A "MANAGER OF MANAGERS" STRUCTURE?
A "manager of managers" structure would permit the Board of Trustees of
each Trust to appoint or replace sub-advisers without obtaining shareholder
approval which would otherwise be required by the 1940 Act. Particularly now, at
a time when the Board is recommending the approval of a new sub-adviser for
several SPDR Funds, the Board believes the "manager of managers" structure to be
efficient and effective in managing the SPDR Funds that make use of a sub-
adviser. Using a "manager of managers" structure will enable the SPDR Funds to
avoid the considerable expense of holding shareholder meetings to approve new or
additional sub-advisers.
If shareholders approve the "manager of managers" structure, which would
cover all SPDR Funds in addition to the SPDR Funds indicated above, the SPDR
Funds intend to seek the necessary exemptive relief from the U.S. Securities and
Exchange Commission ("SEC") pursuant to Section 15(a) of the 1940 Act which
provides, in relevant part, that it is unlawful for any person to act as an
investment adviser to a registered investment company except pursuant to a
written contract that has been approved by the vote of a majority of the
company's outstanding voting securities. The exemptive relief would exempt the
SPDR Funds from the requirement to have sub-advisory contracts approved by
shareholder vote. However, before a SPDR Fund can rely on this exemption and
implement the "manager of managers" structure, the SPDR Funds' shareholders must
approve the "manager of managers" structure.
HOW WILL THE IMPLEMENTATION OF THE "MANAGER OF MANAGERS" STRUCTURE AFFECT ME?
The implementation of the "manager of managers" structure will not directly
impact you. You will remain a shareholder of your SPDR Fund just as before and
each SPDR Fund will contract for advisory services as before. However, with the
proposed "manager of managers" structure, the SPDR Funds will receive the
benefit of SSgA FM's investment adviser selection, monitoring and allocation
services and the Board's flexibility in approving additional or replacement sub-
advisers without shareholder approval.
WILL THE IMPLEMENTATION OF A "MANAGER OF MANAGERS" STRUCTURE AFFECT THE SPDR
FUNDS' EXPENSES?
For each SPDR Fund, SSgA FM will be responsible for paying any advisory
fees to the sub-advisers. As a result, the proposed changes will not result in
increased investment advisory fees. Accordingly, implementation of a "manager of
managers" structure will not result in increased fees and expenses for the SPDR
Funds' shareholders.
WHY AM I BEING ASKED TO VOTE FOR CHANGES TO MY FUND'S INVESTMENT POLICIES AND
RESTRICTIONS?
The Board of Trustees believes that it would benefit shareholders of the
SPDR Funds to update the SPDR Funds' fundamental investment policies. Some of
the SPDR Funds' policies are more restrictive than current government
regulations require. The proposed changes in investment policies will benefit
shareholders by allowing the SPDR Funds to adapt more quickly to future changes
in investment opportunities. It is currently expected that the proposed changes
to the investment policies will not have a material impact on the manner in
which the SPDR Funds are managed.
WILL MY VOTE MAKE A DIFFERENCE?
Yes. Your vote is needed to ensure that the proposals can be acted upon.
Additionally, your immediate response on the enclosed proxy card(s) will help
save the costs of any further solicitations for shareholder votes. We encourage
all shareholders to participate in the governance of their SPDR Fund.
HOW DO THE TRUSTEES SUGGEST THAT I VOTE?
After careful consideration, the Trustees of the SPDR Funds, including the
Independent Trustees who comprise a majority of each SPDR Fund's Board of
Trustees, unanimously recommend that you vote "FOR" the proposals.
WHOM DO I CALL IF I HAVE QUESTIONS?
We will be happy to answer your questions about this proxy solicitation.
Please call our proxy solicitation agent, Broadridge Financial Solutions, Inc.
("Broadridge") at 877-257-9951.
HOW CAN I VOTE MY SHARES?
Please refer to your proxy card(s) for instructions on how to vote.
[SPDR LOGO]
SPDR SERIES TRUST
SPDR INDEX SHARES FUNDS
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 19, 2010
NOTICE IS HEREBY GIVEN that a special meeting of shareholders (the
"Meeting") of the
SPDR SERIES TRUST, which includes the following series: SPDR Dow Jones
Total Market ETF, SPDR Dow Jones Large Cap ETF, SPDR Dow Jones Large Cap Growth
ETF, SPDR Dow Jones Large Cap Value ETF, SPDR Dow Jones Mid Cap ETF, SPDR Dow
Jones Mid Cap Growth ETF, SPDR Dow Jones Mid Cap Value ETF, SPDR Dow Jones Small
Cap ETF, SPDR Dow Jones Small Cap Growth ETF, SPDR Dow Jones Small Cap Value
ETF, SPDR DJ Global Titans ETF, SPDR Dow Jones REIT ETF, SPDR KBW Bank ETF, SPDR
KBW Capital Markets ETF, SPDR KBW Insurance ETF, SPDR Morgan Stanley Technology
ETF, SPDR S&P Dividend ETF, SPDR S&P Biotech ETF, SPDR S&P Homebuilders ETF,
SPDR S&P Metals & Mining ETF, SPDR S&P Oil & Gas Equipment & Services ETF, SPDR
S&P Oil & Gas Exploration & Production ETF, SPDR S&P Pharmaceuticals ETF, SPDR
S&P Retail ETF, SPDR S&P Semiconductor ETF, SPDR KBW Regional Banking ETF, SPDR
KBW Mortgage Finance ETF, SPDR Wells Fargo Preferred Stock ETF, SPDR Barclays
Capital 1-3 Month T-Bill ETF, SPDR Barclays Capital TIPS ETF, SPDR Barclays
Capital Short Term Corporate Bond ETF, SPDR Barclays Capital Intermediate Term
Treasury ETF, SPDR Barclays Capital Long Term Treasury ETF, SPDR Barclays
Capital Intermediate Term Credit Bond ETF, SPDR Barclays Capital Long Term
Credit Bond ETF, SPDR Barclays Capital Convertible Bond ETF, SPDR Barclays
Capital Mortgage Backed Bond ETF, SPDR Barclays Capital Aggregate Bond ETF, SPDR
Barclays Capital Municipal Bond ETF, SPDR Barclays Capital California Municipal
Bond ETF, SPDR Barclays Capital New York Municipal Bond ETF, SPDR Barclays
Capital Short Term Municipal Bond ETF, SPDR S&P VRDO Municipal Bond ETF, SPDR DB
International Government Inflation-Protected Bond ETF, SPDR Barclays Capital
Short Term International Treasury Bond ETF, SPDR Barclays Capital International
Treasury Bond ETF and SPDR Barclays Capital High Yield Bond ETF; and
PRECISE IN A WORLD THAT ISN'T. TM
SPDR INDEX SHARES FUNDS, which includes the following series: SPDR DJ STOXX
50 ETF, SPDR DJ EURO STOXX 50 ETF, SPDR S&P Emerging Asia Pacific ETF, SPDR S&P
China ETF, SPDR S&P Emerging Markets ETF, SPDR S&P BRIC 40 ETF, SPDR S&P
Emerging Europe ETF, SPDR S&P Emerging Latin America ETF, SPDR S&P Emerging
Middle East & Africa ETF, SPDR S&P World Ex-US ETF, SPDR S&P International Small
Cap ETF, SPDR Dow Jones International Real Estate ETF, SPDR FTSE/Macquarie
Global Infrastructure 100 ETF, SPDR MSCI ACWI Ex-US ETF, SPDR Russell/Nomura
PRIME Japan ETF, SPDR Russell/Nomura Small Cap Japan ETF, SPDR S&P International
Dividend ETF, SPDR S&P International Mid Cap ETF, SPDR S&P Emerging Markets
Small Cap ETF, SPDR Dow Jones Global Real Estate ETF, SPDR S&P International
Consumer Discretionary Sector ETF, SPDR S&P International Consumer Staples
Sector ETF, SPDR S&P International Energy Sector ETF, SPDR S&P International
Financial Sector ETF, SPDR S&P International Health Care Sector ETF, SPDR S&P
International Industrial Sector ETF, SPDR S&P International Materials Sector
ETF, SPDR S&P International Technology Sector ETF, SPDR S&P International
Telecommunications Sector ETF and SPDR S&P International Utilities Sector ETF.
SPDR SERIES TRUST and SPDR INDEX SHARES FUNDS are each a "Trust" and
together with their series are referred to herein as the "SPDR Funds", unless as
otherwise specified. The Meeting will be held at the offices of SSgA Funds
Management, Inc. ("SSgA FM" or the "Adviser"), the investment adviser to the
SPDR Funds, State Street Financial Center, One Lincoln Street, Boston, MA 02111
at 11:00 a.m. Eastern Time, on March 19, 2010, for the following purposes:
1. To elect Trustees for all SPDR Funds. Five out of the six nominees
in whom we are asking you to place your trust are independent of
SSgA FM, and two nominees are currently members of the Board of
Trustees;
2. To approve an investment sub-advisory agreement between the Adviser
and Nuveen Asset Management ("Nuveen" or "Sub-Adviser"), pursuant
to which Nuveen will serve as sub-adviser to the following SPDR
Funds: SPDR Barclays Capital Municipal Bond ETF, SPDR Barclays
Capital California Municipal Bond ETF, SPDR Barclays Capital New
York Municipal Bond ETF, SPDR Barclays Capital Short Term Municipal
Bond ETF, and SPDR S&P VRDO Municipal Bond ETF;
3. To approve a "manager of managers" structure for all SPDR Funds,
which would permit the SPDR Funds to hire and replace sub-advisers
without incurring the expense of a shareholder meeting;
4. To approve eliminating or reclassifying certain fundamental
policies and restrictions for all SPDR Funds, and to update and
standardize your SPDR Funds' investment policies to allow the SPDR
Funds to serve your needs most effectively in today's market
environment; and
5. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
The proposals are discussed in the attached proxy statement. The Board of
Trustees of each Trust recommends that you vote FOR each applicable proposal.
Shareholders of record at the close of business on January 6, 2010 are
entitled to notice of, and to vote at, the Meeting or any adjournments thereof
even if that shareholder has since sold those shares. You are invited to attend
the Meeting, but if you cannot do so, please vote by telephone, or by logging on
to the Internet to vote electronically. Please refer to the proxy card attached
to the enclosed proxy statement for details. If you are unable to vote by
telephone, or on the Internet, you may also complete and sign the enclosed proxy
card and return it in the accompanying envelope as promptly as possible. Your
vote is important no matter how many shares you own. You can vote easily and
quickly by telephone, Internet, mail or in person at the Meeting.
By Order of the Board of Trustees,
(RYAN M. LOUVAR)
Ryan M. Louvar
Secretary
VOTING IS IMPORTANT TO ENSURE A QUORUM AT THE MEETING. PLEASE CALL OUR
PROXY SOLICITATION AGENT BROADRIDGE FINANCIAL SOLUTIONS, INC. AT 877-257-9951
FOR MORE INFORMATION OR IF YOU HAVE ANY QUESTIONS ABOUT ATTENDING THE MEETING IN
PERSON. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY
SUBMITTING TO THE SECRETARY OF THE TRUST AT THE ADDRESS ABOVE A WRITTEN NOTICE
OF REVOCATION, BY VOTING AGAIN (BY INTERNET, PROXY CARD/VOTING INSTRUCTION CARD
OR TOLL-FREE TELEPHONE) OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
ATTENDANCE AT THE MEETING WILL NOT, BY ITSELF, SERVE TO REVOKE A PROXY.
[SPDR LOGO]
SPDR SERIES TRUST
SPDR INDEX SHARES FUNDS
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
SPECIAL MEETING OF SHAREHOLDERS
MARCH 19, 2010
PROXY STATEMENT
INTRODUCTION
This combined proxy statement is being provided to you on behalf of the
Boards of Trustees of the SPDR SERIES TRUST and SPDR INDEX SHARES FUNDS (each a
"Trust" and together with their series, the "SPDR Funds"). The proxy statement
is divided into five parts:
Part I Overview of the Proposals begins on page 2.
Part II Proposal Details begin on page 3.
Part III Information on the SPDR Funds' Independent Accountants begins on
page 29.
Part IV More on Proxy Voting and Shareholder Meetings begins on page 31.
Part V Fund and Investment Adviser Information begins on page 33.
Please read the proxy statement before voting on the proposals. If you have
questions about the proxy statement, or if you would like additional
information, please call our proxy solicitation agent, Broadridge Financial
Solutions, Inc. toll-free at 877-257-9951. If you have any additional questions
about the SPDR Funds, please contract your financial advisor or the SPDR
representatives at 866-787-2257 or visit www.spdrs.com. This proxy statement was
mailed to shareholders beginning the week of January 25, 2010.
Annual and Semiannual Reports.
Copies of the SPDR Series Trust Annual Report to Shareholders dated June
30, 2009 and the SPDR Index Shares Funds Annual Report to Shareholders dated
September 30, 2009 may be obtained without charge by writing to State Street
Global Markets, LLC, State Street Financial Center, One Lincoln Street, Boston,
Massachusetts 02111, by visiting the Trust's website at www.spdrs.com or by
calling 1-866-787-2257.
PRECISE IN A WORLD THAT ISN'T. TM
PART I: OVERVIEW OF THE PROPOSALS
Shareholders of the SPDR Funds are being asked to vote on a number of
proposals. Not all proposals apply to each SPDR Fund. The table below shows each
proposal and the specific SPDR Funds to which it applies. Only shareholders of
record on January 6, 2010, are entitled to vote on a SPDR Fund's proposals,
whether or not such shareholders still own those shares.
<Table>
<Caption>
SPDR PROPOSALS FUNDS
------------------------------------- -------------------------------
1. Elect Trustees for each Trust. Applies to all SPDR Funds.
2. Approve an investment sub- Applies to SPDR Barclays
advisory agreement between SSgA Capital Municipal Bond ETF,
Funds Management, Inc. ("SSgA SPDR Barclays Capital
FM" or the "Adviser") and California Municipal Bond ETF,
Nuveen Asset Management SPDR Barclays Capital New York
("Nuveen" or "Sub-Adviser"). Municipal Bond ETF, SPDR
Barclays Capital Short Term
Municipal Bond ETF and SPDR S&P
VRDO Municipal Bond ETF.
3. To approve a "manager of Applies to all SPDR Funds.
managers" structure for all
SPDR Funds.
4. Update and standardize the SPDR Applies to all SPDR Funds.
Funds fundamental policies
regarding:
a. Purchasing and selling real
estate;
b. Issuing senior securities
and borrowing money;
c. Making loans;
d. Purchasing and selling
commodities;
e. Concentrating investments
in a particular industry or
group of industries;
f. Underwriting activities;
and
g. Eliminating outdated
fundamental investment
policies not required by
law.
</Table>
2
PART II: PROPOSAL DETAILS
PROPOSAL 1 -- ELECT TRUSTEES FOR EACH SPDR FUND
THIS PROPOSAL APPLIES TO ALL SPDR FUNDS.
We are asking shareholders of each SPDR Fund to elect a Board of Trustees
(sometimes referred to as the "Board" or "Boards").
WHO ARE THE NOMINEES TO THE BOARD?
The six people listed below have been nominated for election as SPDR Funds'
Trustees. Mr. Nesvet and Mr. Kelly currently serve as Trustees for all SPDR
Funds. Ms. Boatman, Mr. Churchill and Mr. Verboncoeur are not yet Trustees, but
are nominees for Trustee for all of the SPDR Funds. Mr. Ross served as a Trustee
through December 31, 2009, but resigned effective December 31, 2009, to comply
with a banking regulatory restriction prohibiting representatives from the
Adviser from holding more than 25% of the seats on the Board. Each nominee has
consented to continue serving (or, in the case of Mr. Ross, Ms. Boatman, Mr.
Churchill and Mr. Verboncoeur, begin serving) as a Trustee for the SPDR Funds if
elected by shareholders. If elected, each nominee would oversee a total of at
least 100 SPDR Funds.
The mailing address of the SPDR Fund Trustees and officers is State Street
Financial Center, One Lincoln Street Boston, MA 02111-2900.
TRUSTEES
<Table>
<Caption>
TERM OF OTHER
OFFICE AND PRINCIPAL DIRECTORSHIPS
NAME, ADDRESS AND POSITION(S) LENGTH OF OCCUPATION(S) HELD BY
YEAR OF BIRTH WITH FUNDS TIME SERVED DURING PAST 5 YEARS TRUSTEE
------------------- --------------- ------------------------- ------------------- --------------
INDEPENDENT
NOMINEES
Frank Nesvet Independent Unlimited Chief Executive None
c/o SPDR Series Trustee, Elected: Officer, Libra
Trust/SPDR Index Chairman September 2000 Group,
Shares Funds (SPDR Series Trust) Inc. (1998-present)
State Street (a
Financial Center July 2004 financial services
One Lincoln Street (SPDR Index Shares Funds) consulting
Boston, MA 02111- company).
2900 Born 1943
David M. Kelly Independent Unlimited Retired. Penson
c/o SPDR Series Trustee Elected: Worldwide Inc.
Trust/SPDR Index September 2000 (Director)
Shares Funds (SPDR Series Trust)
State Street
Financial Center July 2004
One Lincoln Street (SPDR Index Shares Funds)
Boston, MA 02111-
2900 Born 1938
</Table>
3
<Table>
<Caption>
TERM OF OTHER
OFFICE AND PRINCIPAL DIRECTORSHIPS
NAME, ADDRESS AND POSITION(S) LENGTH OF OCCUPATION(S) HELD BY
YEAR OF BIRTH WITH FUNDS TIME SERVED DURING PAST 5 YEARS TRUSTEE
------------------- --------------- ------------------------- ------------------- --------------
Bonny Eugenia Independent Unlimited Retired (2005- None
Boatman c/o SPDR Nominee present);
Series Trust/SPDR Managing Director,
Index Shares Funds Columbia
State Street Management Group,
Financial Center Bank of America
One Lincoln Street (1984-2005).
Boston, MA 02111-
2900 Born 1950
Dwight D. Churchill Independent Unlimited Retired (February None
c/o SPDR Series Nominee 2009-
Trust/SPDR Index present); Head of
Shares Funds Fixed Income and
State Street other Senior
Financial Center Management roles,
One Lincoln Street Fidelity
Boston, MA 02111- Investments
2900 Born 1953 (1993-2009).
Carl G. Verboncoeur Independent Unlimited Retired (July 2009- None
c/o SPDR Series Nominee present); Chief
Trust/SPDR Index Executive Officer,
Shares Funds Rydex Investments
State Street (2003-2009).
Financial Center
One Lincoln Street
Boston, MA 02111-
2900 Born 1952
INTERESTED NOMINEE
James E. Ross Interested Unlimited, Elected President, SSgA Select Sector
SSgA Funds Nominee, President: Funds Management, SPDR Trust
Management, Inc. President May 2005, Inc. (2005- (Trustee);
State Street Appointed present); State Street
Financial Center Trustee: Principal, SSgA Master Funds
One Lincoln Street November 2005- Funds (Trustee); and
Boston, MA 02111- December 2009 Management, Inc. State Street
2900 Born 1965 (2001-present); Institutional
Senior Managing Investment
Director, State Trust
Street (Trustee).
Global Advisors
(2006-present);
Principal, State
Street Global
Advisors (2000-
2006).
</Table>
WHY ARE FUND SHAREHOLDERS BEING ASKED TO ELECT TRUSTEES?
The SPDR Funds are governed by the Investment Company Act of 1940, as
amended (the "1940 Act"). As a general matter, the 1940 Act permits the boards
of trustees or directors of registered investment companies, such as the SPDR
Funds, to fill vacancies without shareholder vote only so long as at least two-
thirds of the trustees would have been elected by shareholders after the
appointments. Prior to December 31, 2009, the Board consisted of four Trustees,
three of whom were elected by shareholders. One of the Trustees, who is not an
"interested person" as defined in
4
the 1940 Act (each, an "Independent Trustee" and collectively, the "Independent
Trustees"), Ms. Peters, resigned from the Board as of December 31, 2009. As a
result of certain banking regulations effectively prohibiting representatives of
the Adviser from holding more than 25% of the seats on an investment company
board, the interested Trustee, Mr. Ross, also resigned effective December 31,
2009. The Board may not fill these vacancies without obtaining shareholder
approval because immediately after filling these vacancies less than two-thirds
of the Trustees would have been elected by shareholders. In addition, the Board
of Trustees has determined to increase the size of the Board to six Trustees by
adding two additional Independent Trustees. In addition to Messrs. Nesvet and
Kelly (current Independent Trustees), Mr. Ross, Ms. Boatman, Mr. Churchill and
Mr. Verboncoeur are nominees for Trustee of the SPDR Funds.
HOW MANY OF THE NOMINEES WILL BE "INDEPENDENT" TRUSTEES IF ELECTED?
Five of the six nominees--all but Mr. Ross--will be Independent Trustees if
elected by shareholders. Independent Trustees have no affiliation with SSgA FM
or the SPDR Funds they oversee, apart from any personal investments they choose
to make in the SPDR Funds as private individuals. Independent Trustees play a
critical role in overseeing SPDR Fund operations and representing the interests
of each SPDR Fund's shareholders.
As an officer and employee of the Adviser and/or its parent company for
over 10 years, Mr. Ross is currently the only interested nominee for the SPDR
Funds' Board. Mr. Ross has relevant background, experience and skills,
particularly in those domains critical to the SPDR Funds and their shareholders.
HOW ARE THE BOARDS OF THE SPDR FUNDS STRUCTURED?
The SPDR Funds are grouped into two separate Trusts. Each Trust is made up
of multiple SPDR Funds (which are sometimes called "series" of the Trust). SPDR
Funds (i.e., series) that are part of the same Trust elect their Trustees on a
joint basis.
Part V of this booklet includes a list of SPDR Funds that specifies the
Trust to which each SPDR Fund belongs and provides a variety of other details
about the SPDR Funds.
Currently, the same individuals serve as Trustees of both Trusts. There are
important benefits in having the same members serve on the Board of Trustees of
both Trusts. Service on both Boards gives the Trustees greater familiarity with
operations that are common to all SPDR Funds. Such service also permits the
Trustees to address common issues on a knowledgeable and consistent basis. It
also avoids the substantial additional costs, administrative complexities, and
redundancies that would result from having a different Board of Trustees for
each Trust.
While there are many areas of common interest among the SPDR Funds, the
Trustees recognize that they are responsible for exercising their
responsibilities at all times on a fund-by-fund basis.
5
HOW LONG WILL EACH TRUSTEE SERVE?
If elected, each Trustee will serve until he or she resigns, retires, or is
removed from the Board as provided in the applicable Trust's governing
documents. A Trustee may be removed from the Board by a shareholder vote
representing two-thirds of the total outstanding SPDR Fund shares of a Trust. If
a nominee is unable to accept election, or subsequently leaves the Board before
the next election, the Board of Trustees may, in its discretion, select another
person to fill the vacant position, so long as two-thirds of the remaining
Trustees were elected by shareholders.
WHAT ARE THE BOARD'S RESPONSIBILITIES?
The primary responsibility of the Board of Trustees of each SPDR Fund is to
oversee the management of the SPDR Fund for the benefit of shareholders.
In exercising their oversight responsibilities, the SPDR Funds' Trustees
focus on matters they determine to be vitally important to SPDR Fund
shareholders. This includes not only the management and performance of the SPDR
Funds, but also the operating plans and budgets, strategic plans, and
composition and performance evaluations of the Adviser.
The business acumen, experience, and objective thinking of the SPDR Funds'
Independent Trustees are considered invaluable assets for SSgA FM management
and, ultimately, the SPDR Funds' shareholders. Having management accountable to
a group of independent, highly experienced, and qualified individuals who act
solely on behalf of shareholders makes management more effective in the long
run.
WHAT ARE THE BOARD'S COMMITTEES?
The Board of Trustees of each SPDR Fund has two standing committees.
- AUDIT COMMITTEE. The Board has an Audit Committee consisting of all
Independent Trustees (i.e., Trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust). Helen Peters, who resigned from
the Board as of December 31, 2009, served as Chair. A new Chair will be
selected by the Trustees then in office. The Audit Committee meets with
the respective Trust's independent auditors to review and approve the
scope and results of their professional services; to review the
procedures for evaluating the adequacy of the respective Trust's
accounting controls; to consider the range of audit fees; and to make
recommendations to the Board regarding the engagement of the respective
Trust's independent auditors. The Audit Committee met three (3) times
during the fiscal years ended June 30, 2009 and September 30, 2009 for
SPDR Series Trust and SPDR Index Shares Funds, respectively.
- TRUSTEE COMMITTEE. The Board has established a Trustee Committee
consisting of all Independent Trustees. Mr. Nesvet serves as Chair. The
responsibilities of the Trustee Committee are to: (1) nominate
Independent Trustees;
6
(2) review on a periodic basis the governance structures and procedures
of the SPDR Funds; and (3) review proposed resolutions and conflicts of
interest that may arise in the business of the SPDR Funds and may have an
impact on the investors of the SPDR Funds. The Trustee Committee met six
(6) times during the fiscal year ended June 30, 2009 for SPDR Series
Trust and seven (7) times during the fiscal year ended September 30, 2009
for SPDR Index Shares Funds.
HOW ARE THE TRUSTEES COMPENSATED?
Each SPDR Fund pays its proportionate share of the Independent Trustees'
compensation. The SPDR Funds' sole non-Independent Trustee nominee, Mr. Ross,
received no compensation from the SPDR Funds for his past service. No officer,
director or employee of the Adviser, its parent or subsidiaries receives any
compensation from the Trusts for serving as an officer or Trustee of the Trusts,
other than the Chief Compliance Officer, who serves at the pleasure of the
Independent Trustees. The SPDR Funds compensate their Independent Trustees by
paying, in the aggregate, each Independent Trustee an annual fee of $90,000 plus
$5,000 per in-person meeting attended. An Independent Trustee will receive
$1,250 for each telephonic or video conference meeting attended. The Chair of
the Board receives an additional annual fee of $25,000 and the Chair of the
Audit Committee receives an additional annual fee of $10,000. The Trusts also
reimburse each Independent Trustee for travel and other out-of-pocket expenses
incurred by him/her in connection with attending such meetings and in connection
with attending industry seminars and meetings. Trustee fees are allocated
between each Trust and each of their respective series in such a manner as
deemed equitable, taking into consideration the relative net assets of the
series.
The table below shows the compensation that Independent Trustees received
during the SPDR Series Trust's fiscal year ended June 30, 2009.
<Table>
<Caption>
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS ESTIMATED FROM THE
ACCRUED ANNUAL TRUST AND
AGGREGATE AS PART BENEFITS FUND COMPLEX
NAME OF COMPENSATION OF TRUST UPON PAID TO
INDEPENDENT TRUSTEE FROM THE TRUST EXPENSES RETIREMENT TRUSTEES(1)
------------------------ -------------- ---------- ---------- ------------
Frank Nesvet $92,431 N/A N/A $120,500
David M. Kelly $73,400 N/A N/A $ 95,500
Helen F. Peters(2) $80,456 N/A N/A $104,750
</Table>
--------
(1) The Fund Complex includes the SPDR Series Trust and the SPDR Index Shares
Funds.
(2) Ms. Peters resigned from the Board effective December 31, 2009.
7
The table below shows the compensation that Independent Trustees received
during the SPDR Index Shares Funds' fiscal year ended September 30, 2009.
<Table>
<Caption>
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS ESTIMATED FROM THE
ACCRUED ANNUAL TRUST AND
AGGREGATE AS PART BENEFITS FUND COMPLEX
NAME OF COMPENSATION OF TRUST UPON PAID TO
INDEPENDENT TRUSTEE FROM THE TRUST EXPENSES RETIREMENT TRUSTEES(1)
------------------------ -------------- ---------- ---------- ------------
Frank Nesvet $25,514 N/A N/A $137,000
David M. Kelly $21,755 N/A N/A $116,500
Helen F. Peters(2) $20,702 N/A N/A $112,000
</Table>
--------
(1) The Fund Complex includes the SPDR Series Trust and the SPDR Index Shares
Funds.
(2) Ms. Peters resigned from the Board effective December 31, 2009.
No Trustee or officer is entitled to any pension or retirement benefits
from the Trusts.
DO TRUSTEES OWN FUND SHARES?
Please see Part V of the proxy statement for information on the dollar
range of SPDR Fund shares owned by each Trustee nominee.
WHO ARE THE FUNDS' OFFICERS?
The executive and other officers of the Trust, along with their principal
occupations over the past five years and their affiliations with the Adviser are
listed below. Officers are considered "interested persons" of the SPDR Funds.
Currently, the same individuals serve as officers of both Trusts. In addition to
Mr. Ross, President, they are as follows:
OFFICERS
<Table>
<Caption>
TERM OF
OFFICE AND PRINCIPAL
NAME, ADDRESS AND POSITION(S) LENGTH OF OCCUPATION(S)
YEAR OF BIRTH WITH FUNDS TIME SERVED DURING PAST 5 YEARS
----------------- --------------- -------------------- --------------------
Ellen M. Needham Vice President Unlimited Principal, SSgA
SSgA Funds Elected: Funds Management,
Management, Inc. March 2008 Inc. (1992-
State Street present)*; Managing
Financial Center Director, State
One Lincoln Street Global
Street Advisors (1992-
Boston, MA 02111 present).*
1967
Michael P. Riley Vice President Unlimited Vice President,
SSgA Funds Elected: State Street Global
Management, Inc. February 2005 Advisors (2008-
State Street present); Principal,
Financial Center State Street Global
One Lincoln Advisors (2005-
Street 2008); Assistant
Boston, MA 02111 Vice President,
1969 State Street Bank
and Trust Company
(2000-2004).
</Table>
8
<Table>
<Caption>
TERM OF
OFFICE AND PRINCIPAL
NAME, ADDRESS AND POSITION(S) LENGTH OF OCCUPATION(S)
YEAR OF BIRTH WITH FUNDS TIME SERVED DURING PAST 5 YEARS
----------------- --------------- -------------------- --------------------
Gary L. French Treasurer Unlimited Senior Vice
State Street Bank Elected: President, State
and Trust Company May 2005 Street Bank and
Two Avenue de Trust Company (2002-
Lafayette present).
Boston, MA 02111
1951
Ryan M. Louvar Secretary Unlimited Vice President and
State Street Bank Elected: Senior Counsel,
and Trust Company August 2008 State Street Bank
Four Copley and Trust Company
Place, CPH0326 (2005- present).*
Boston, MA 02116
1972
Mark E. Tuttle Assistant Unlimited Vice President and
State Street Bank Secretary Elected: Counsel, State
and Trust Company August 2007 Street Bank and
Four Copley Trust Company (2007-
Place, CPH0326 present)*; Assistant
Boston, MA 02116 Counsel, BISYS
1970 Group, Inc. (2005-
2007)*; (a financial
services company);
Sole Practitioner,
Mark E. Tuttle
Attorney at Law
(2004-2005).
Matthew Flaherty Assistant Unlimited Assistant Vice
State Street Bank Treasurer Elected: President, State
and Trust Company May 2005 Street Bank and
Two Avenue de Trust (1994-
Lafayette present).*
Boston, MA 02111
1971
Chad C. Hallett Assistant Unlimited Vice President,
State Street Bank Treasurer Elected: State Street Bank
and Trust Company May 2006 and Trust Company
Two Avenue de (2001-present).*
Lafayette
Boston, MA 02111
1969
Laura F. Healy Assistant Unlimited Vice President,
State Street Bank Treasurer Elected: State Street Bank
and Trust Company November 2007 and Trust Company
Two Avenue de (2002-present).*
Lafayette
Boston, MA 02111
1964
Julie B. Piatelli Chief Unlimited Principal and Senior
SSgA Funds Compliance Elected: Compliance Officer,
Management, Inc. Officer August 2007 SSgA Funds
State Street Management, Inc.
Financial Center (2004-present); Vice
One Lincoln President, State
Street Street Global
Boston, MA 02111 Advisors (2004-
1967 present).
</Table>
--------
* Served in various capacities during noted time period.
9
VOTING REQUIREMENTS FOR PROPOSAL 1.
Approval of Proposal 1 with respect to election of a nominee as a Trustee
of a Trust requires the favorable vote of a majority of shares of that Trust
represented in person or by proxy and entitled to vote at the Meeting.
EACH SPDR FUND'S BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH
OF THE NOMINEES LISTED UNDER PROPOSAL 1.
PROPOSAL 2 -- TO APPROVE AN INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN THE
ADVISER, SSGA FUNDS MANAGEMENT, INC. ("SSGA FM" OR THE "ADVISER") AND NUVEEN
ASSET MANAGEMENT ("NUVEEN" OR "SUB-ADVISER"), PURSUANT TO WHICH NUVEEN WILL
SERVE AS SUB-ADVISER.
THIS PROPOSAL APPLIES TO SPDR BARCLAYS CAPITAL MUNICIPAL BOND ETF, SPDR
BARCLAYS CAPITAL CALIFORNIA MUNICIPAL BOND ETF, SPDR BARCLAYS CAPITAL NEW YORK
MUNICIPAL BOND ETF, SPDR BARCLAYS CAPITAL SHORT TERM MUNICIPAL BOND ETF AND SPDR
S&P VRDO MUNICIPAL BOND ETF.
We are asking shareholders to approve an investment sub-advisory agreement
between the Adviser and Nuveen, pursuant to which Nuveen will serve as sub-
adviser to SPDR Barclays Capital Municipal Bond ETF, SPDR Barclays Capital
California Municipal Bond ETF, SPDR Barclays Capital New York Municipal Bond
ETF, SPDR Barclays Capital Short Term Municipal Bond ETF, and SPDR S&P VRDO
Municipal Bond ETF (the "Municipal SPDR Funds").
At its meeting on November 17, 2009, the Board, including all the
Independent Trustees, approved the Sub-Advisory Agreement between the Adviser
and Nuveen, pursuant to which Nuveen will be responsible for managing the assets
of the Municipal SPDR Funds on a day-to-day basis, subject to the oversight of
the Adviser and the Board. Shareholders of the Municipal SPDR Funds are being
asked to approve the Sub-Advisory Agreement.
Currently, SSgA FM serves as the investment adviser to the Municipal SPDR
Funds under an Investment Advisory Agreement by and between the Municipal SPDR
Funds and SSgA FM ("Current Agreement") and continuously reviews, supervises and
administers the Municipal SPDR Funds' investment program, subject to the
oversight of the Board. The Adviser has recommended to the Board that Nuveen be
engaged as a sub-adviser. In this regard, the Board was advised that Nuveen has
extensive experience managing municipal bond portfolios.
The Board of Trustees and the Adviser believe that Nuveen will bring
significant municipal securities experience to bear in managing the Municipal
SPDR Funds. Nuveen has extensive experience in managing municipal securities
and, as of September 30, 2009, Nuveen managed more than $68.5 billion in
portfolios of municipal securities for a wide array of mutual funds, closed-end
funds, retail managed accounts and institutional managed accounts. In addition,
Tim Ryan,
10
one of the Municipal SPDR Funds' primary portfolio managers, will join Nuveen
upon the shareholder approval of Nuveen's sub-advisory role, bringing his
extensive experience in managing passive municipal bond strategies. Mr. Ryan's
experience in managing the Municipal SPDR Funds, coupled with Nuveen's
experience in the municipal securities markets, will create a strong management
team for the Municipal SPDR Funds.
If the Proposal is approved by shareholders, SSgA FM will continue to serve
as the Municipal SPDR Funds' investment adviser. But, rather than managing the
Municipal SPDR Funds' assets directly, as it has in the past, SSgA FM will be
responsible for supervising the activities of Nuveen in managing the assets of
the Municipal SPDR Funds, subject to the oversight of the Board.
DESCRIPTION OF THE SUB-ADVISORY AGREEMENT
A copy of the form of Sub-Advisory Agreement is included as Exhibit A to
this proxy statement. The description of the Sub-Advisory Agreement in this
proxy statement is qualified in its entirety by reference to Exhibit A.
DUTIES UNDER THE SUB-ADVISORY AGREEMENT. Under the Sub-Advisory Agreement,
Nuveen will:
(i) provide supervision of each Municipal SPDR Fund's investments,
furnish a continuous investment program for the Municipal SPDR Funds,
determine from time to time what investments or securities will be
purchased, retained or sold by the Municipal SPDR Funds, and what portion
of the assets will be invested or held uninvested as cash;
(ii) maintain books and records with respect to the Municipal SPDR
Funds securities transactions and keep the Board and the Adviser fully
informed in writing on an ongoing basis as agreed by the Adviser and the
Sub-Adviser of all material facts concerning the investment and
reinvestment of the assets in the Municipal SPDR Funds, the Sub-Adviser and
its key investment personnel and operations providing services with respect
to the Municipal SPDR Funds; make regular and periodic special written
reports of such additional information concerning the same as may
reasonably be requested from time to time by the Adviser or the board, and
the Sub-Adviser will attend meetings with the Adviser and/or the Trustees,
as reasonably requested, to discuss the foregoing;
(iii) in accordance with procedures and methods established by the
Board, which may be amended from time to time, provide assistance in
determining the fair value of all securities and other investments/assets
in the Municipal SPDR Funds, as necessary, and use reasonable efforts to
arrange for the provision of valuation information or a price(s) from a
party(ies) independent of the Sub-Adviser for each security or other
investment/asset in the Municipal SPDR Funds for which market prices are
not readily available, it being understood that the Sub-Adviser shall not
be responsible for determining the value of any such security;
11
(iv) provide any and all material composite performance information,
records and supporting documentation about accounts the Sub-Adviser
manages, if appropriate, which are relevant to the Municipal SPDR Funds and
that have investment objectives, policies, and strategies substantially
similar to those employed by the Sub-Adviser in managing the Municipal SPDR
Funds that may be reasonably necessary, under applicable laws, to allow the
Municipal SPDR Funds or their agent to present information concerning the
Sub-Adviser's prior performance in the Trust's Prospectus and SAI (as
defined in the Sub-Advisory Agreement) and any permissible reports and
materials prepared by the Municipal SPDR Funds or their agent;
(v) cooperate with and provide reasonable assistance to the Adviser,
administrator, custodian and foreign custodians, the transfer agent and
pricing agents and all other agents and representatives of the Trust and
the Adviser, keep all such persons fully informed as to such matters as
they may reasonably deem necessary to the performance of their obligations
to the Trust and the Adviser, provide prompt responses to reasonable
requests made by such persons and maintain any appropriate interfaces with
each so as to promote the efficient exchange of information; and
(vi) The Sub-Adviser shall initially determine and make such
modifications to the identity and number of shares of the Deposit
Securities and the Fund Securities required for a Fund Deposit or
Redemption (as defined in the Sub-Advisory Agreement) for each Municipal
SPDR Fund as may be necessary as a result of rebalancing adjustments and
corporate action events (and may give directions to the Trust's Custodian
with respect to such designation).
DURATION AND TERMINATION. Unless terminated earlier, the Sub-Advisory
Agreement will continue in effect for a period more than two years from the date
of the Sub-Advisory Agreement only so long as such continuance is specifically
approved at least annually (i) by the Trustees of the Trust, and (ii) by the
vote of a majority of the Independent Trustees, cast in person at a meeting
called for the purpose of voting on such approval. The Sub-Advisory Agreement
will terminate automatically in the event of its assignment. The Sub-Advisory
Agreement is terminable at any time without penalty by the Trustees of the Trust
or by a vote of a majority of the outstanding voting securities of the Municipal
SPDR Funds, or by the Adviser, in each case, upon sixty (60) days' written
notice to Nuveen. In addition, the Adviser may terminate the Sub-Advisory
Agreement upon breach by Nuveen of any representation or warranty provided for
in the Sub-Advisory Agreement, which shall not have been cured within thirty
(30) days of Nuveen's receipt of written notice of such breach, or by the
Adviser immediately upon written notice to Nuveen if Nuveen becomes unable to
discharge its duties and obligations under the Sub-Advisory Agreement.
LIABILITY AND INDEMNIFICATION. Except as may otherwise be provided by the
1940 Act or any other federal securities law, neither the Sub-Adviser nor any of
its officers, members or employees (its "Affiliates") shall be liable for any
losses,
12
claims, damages, liabilities or litigation (including legal and other expenses)
incurred or suffered by the Adviser or the Municipal SPDR Funds as a result of
any error of judgment or mistake of law by the Sub-Adviser or its Affiliates
with respect to each Municipal SPDR Fund, except that nothing in the Sub-
Advisory Agreement shall limit the liability of the Sub-Adviser or its
Affiliates for, and the Sub-Adviser shall indemnify and hold harmless the
Municipal SPDR Funds, against any and all losses, claims, damages, liabilities
or litigation (including reasonable legal and other expenses) to which any of
the Municipal SPDR Funds may become subject under relevant law or otherwise
arising out of or based on (i) any willful misconduct, bad faith, reckless
disregard or gross negligence of the Sub-Adviser in the performance of any of
its duties or obligations under the Sub-Advisory Agreement or (ii) any untrue
statement of a material fact contained in the Prospectus and SAI, proxy
materials, reports, advertisements, sales literature, or other materials
pertaining to the Municipal SPDR Funds or the omission to state therein a
material fact known to the Sub-Adviser which was required to be stated therein
or necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the Adviser or the
Trust by the Sub-Adviser for use therein.
COMPENSATION. Under the Sub-Advisory Agreement, the Adviser will pay Nuveen
a fee, calculated and paid monthly, based on a percentage of 45% of the advisory
fee paid to the Adviser by the Municipal SPDR Funds, after deducting payments to
fund service providers paid by the Adviser under the unitary fee structure. The
Municipal SPDR Funds will have no responsibility for any fee payable to Nuveen.
DESCRIPTION OF NUVEEN
Nuveen is located at 333 West Wacker Drive, Chicago, IL 60606. Nuveen, a
wholly-owned subsidiary of Nuveen Investments, Inc. ("Nuveen Investments"), is
organized under the laws of the State of Delaware and an investment adviser
registered with the SEC. On November 13, 2007, Nuveen Investments was acquired
by investors led by Madison Dearborn Partners, LLC, which is a private equity
investment firm based in Chicago, Illinois (the "MDP Acquisition"). The investor
group led by Madison Dearborn Partners, LLC includes affiliates of Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"). Merrill Lynch has
since been acquired by Bank of America Corporation. Nuveen has adopted policies
and procedures that address arrangements involving Nuveen and Bank of America
Corporation (including Merrill Lynch) that may give rise to certain conflicts of
interest. Nuveen Investments significantly increased its level of debt in
connection with the MDP Acquisition. Nuveen Investments believes that monies
generated from operations and cash on hand will be adequate to fund debt service
requirements, capital expenditures and working capital requirements for the
foreseeable future. However, Nuveen Investments' ability to continue to fund
these items, to service its debt and to maintain compliance with covenants in
its debt agreements may be affected by general economic, financial, competitive,
legislative, legal and regulatory
13
factors and by its ability to refinance or repay outstanding indebtedness with
scheduled maturities beginning in 2013. In the event that Nuveen Investments
breaches certain of the covenants included in its debt agreements, the breach of
such covenants may result in the accelerated payment of its outstanding debt,
increase the cost of such debt or generally have an adverse effect on the
financial condition of Nuveen Investments.
As of September 30, 2009, Nuveen manages more than $68.5 billion in
portfolios of municipal securities for a wide array of mutual funds, closed-end
funds, retail managed accounts and institutional managed accounts.
Nuveen does not currently provide investment advisory services to any funds
which have investment objectives and strategies comparable to those of the
Municipal SPDR Funds.
PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF NUVEEN. Listed below are the
names and principal occupations of each of the principal executive officers and
directors of Nuveen. Neither the directors nor officers are Trustees or officers
of the Municipal SPDR Funds. The address for each person listed below is c/o
Nuveen Investments, 333 West Wacker Drive, Chicago, IL 60606.
<Table>
<Caption>
POSITIONS/OFFICES PRINCIPAL
NAME HELD WITH NUVEEN OCCUPATION/POSITION
------------------------ ------------------------ ------------------------
John P. Amboian Chief Executive Officer Chief Executive Officer
and Director (since July 2007) and
Director (since 1999) of
Nuveen Investments,
Inc.; Chief Executive
Officer (since 2007) of
Nuveen Investments
Advisors, Inc.;
formerly, President
(1999-2004) of Nuveen
Advisory Corp. and
Nuveen Institutional
Advisory Corp.
Glenn R. Richter Executive Vice President Executive Vice President
and Director and Chief Administrative
Officer of Nuveen
Investments, Inc.;
Executive Vice President
of Nuveen Investments,
LLC, Nuveen Investments
Advisers, Inc., Nuveen
Investments Holdings,
Inc., and NWQ Holdings,
LLC.
</Table>
14
<Table>
<Caption>
POSITIONS/OFFICES PRINCIPAL
NAME HELD WITH NUVEEN OCCUPATION/POSITION
------------------------ ------------------------ ------------------------
John L. MacCarthy Executive Vice Executive Vice President
President, Secretary, (since 2008), formerly,
General Counsel and Senior Vice President
Director (2006-2008), Secretary
and General Counsel
(since 2006) of Nuveen
Investments, Inc.,
Nuveen Investments, LLC
and Nuveen Investments
Holdings, Inc.;
Executive Vice President
(since 2008), formerly,
Senior Vice President
(2006-2008) and
Secretary (since 2006)
of Nuveen Investments
Advisers Inc., NWQ
Holdings, LLC, Nuveen
Investments
Institutional Services
Group LLC, NWQ
Investment Management
Company, LLC, Tradewinds
Global Investors, LLC,
Symphony Asset
Management, LLC, Santa
Barbara Asset
Management, LLC, Nuveen
HydePark Group, LLC and
Nuveen Investment
Solutions, Inc.
William T. Huffman Chief Operating Officer, Chairman, President and
Municipal Fixed Income Chief Executive Officer
(2002-2007) of Northern
Trust Global Advisors,
Inc. and Chief Executive
Officer (2007) of
Northern Trust Global
Investments Limited;
Certified Public
Accountant.
</Table>
TRUSTEES' CONSIDERATIONS
The 1940 Act requires that a fund's sub-advisory agreement must be
specifically approved by the vote of a majority of the independent trustees of
the trust, cast in person at a meeting called for the purpose of voting on such
approval. In connection with such approvals, the fund's trustees must request
and evaluate, and the sub-adviser is required to furnish, such information as
may be reasonably necessary to evaluate the terms of the sub-advisory agreement.
In determining whether to approve a sub-advisory agreement, the board is
required to act solely in the best interests of the fund and the fund's
shareholders in evaluating the terms of the sub-advisory agreement. The board is
required to judge the terms of the arrangement in light of those that would be
reached as a result of arm's length bargaining.
The Board of the Municipal SPDR Funds considered approval of the Sub-
Advisory Agreement after review of materials provided to them at their request
by Nuveen and the Adviser. In deciding whether to approve the Sub-Advisory
Agreement, the Board considered various factors, including (i) the nature,
extent and
15
quality of services expected to be provided by the Sub-Adviser with respect to
the Municipal SPDR Funds under the Sub-Advisory Agreement; and (ii) investment
performance of municipal bond funds managed by Nuveen. The Board was apprised of
the portion of the current advisory fee that the Adviser would pay to the Sub-
Adviser under the Sub-Advisory Agreement and also considered that such fees
would be paid directly by the Adviser and would not result in increased fees
payable by the Municipal SPDR Funds.
The Board considered the background and experience of Nuveen's senior
management and in particular Nuveen's experience in investing in municipal
securities. The Board noted that Nuveen would bring significant municipal
securities experience to bear in managing the Municipal SPDR Funds. The Board
noted that Nuveen has extensive experience in managing municipal securities and,
as of September 30, 2009, Nuveen managed more than $68.5 billion in portfolios
of municipal securities for a wide array of mutual funds, closed-end funds,
retail managed accounts and institutional managed accounts. In addition, the
Board considered that Tim Ryan, one of the Municipal SPDR Funds' primary
portfolio managers, will join Nuveen upon the shareholder approval of Nuveen's
sub-advisory role, bringing his extensive experience in managing passive
municipal bond strategies. The Board concluded that Mr. Ryan's experience in
managing the Municipal SPDR Funds, coupled with Nuveen's experience in the
municipal securities markets, would create a strong management team for the
Municipal SPDR Funds. In addition, the Board received a report from the
Municipal SPDR Funds' chief compliance officer regarding diligence undertaken
with respect to Nuveen's compliance program and related matters.
The Board, including the Independent Trustees voting separately, approved
the Sub-Advisory Agreement after weighing the foregoing factors, none of which
was dispositive in itself. The Board's conclusions with respect to the Sub-
Advisory Agreement were as follows: (a) the nature and extent of the services
expected to be provided by the Nuveen to each Municipal SPDR Fund were adequate
and appropriate; and (b) Nuveen's experience in managing municipal bond funds is
extensive.
VOTING REQUIREMENTS FOR PROPOSAL 2.
Approval of Proposal 2 with respect to a Municipal SPDR Fund requires the
favorable vote of a majority of outstanding voting shares of the applicable
Municipal SPDR Fund as defined by the 1940 Act. If the Proposal is not approved
by shareholders, SSgA FM will continue to manage the assets of the Municipal
SPDR Funds directly pursuant to the Current Agreement and the Board, in
consultation with SSgA FM, will determine the appropriate course of action to
take, which may include submitting an alternative proposal to shareholders at a
future shareholders' meeting.
EACH MUNICIPAL SPDR FUND'S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR"
PROPOSAL 2.
16
PROPOSAL 3 -- TO APPROVE A "MANAGER OF MANAGERS"
STRUCTURE FOR ALL SPDR FUNDS.
THIS PROPOSAL APPLIES TO ALL SPDR FUNDS.
We are asking shareholders of the SPDR Funds to approve a "manager of
managers" structure for all SPDR Funds.
SEC EXEMPTIVE ORDER AND SHAREHOLDER APPROVAL.
Proposal 3 seeks shareholder approval to implement a "manager of managers"
structure for each SPDR Fund. A "manager of managers" structure would permit the
Board of Trustees of the SPDR Funds to appoint or replace sub-advisers WITHOUT
obtaining shareholder approval. Normally, shareholders of a fund must approve
investment advisory agreements (including investment sub-advisory agreements)
for the fund.
If shareholders approve the "manager of managers" structure, which would
cover all SPDR Funds in addition to the SPDR Funds indicated above, the SPDR
Funds intend to seek the necessary exemptive relief from the U.S. Securities and
Exchange Commission ("SEC") pursuant to Section 15(a) of the 1940 Act which
provides, in relevant part, that it is unlawful for any person to act as an
investment adviser to a registered investment company except pursuant to a
written contract that has been approved by the vote of a majority of the
company's outstanding voting securities. The exemptive relief would exempt the
SPDR Funds from the requirement to have sub-advisory contracts approved by
shareholder vote. However, before a SPDR Fund can rely on this exemption and
implement the "manager of managers" structure, the SPDR Fund's shareholders must
approve the "manager of managers" structure.
DESCRIPTION OF THE PROPOSED "MANAGER OF MANAGERS" STRUCTURE.
Under the proposed "manager of managers" structure, each SPDR Fund will be
operated in a manner that is different from many other funds. Most funds operate
under a structure in which a single entity, the fund's adviser, provides
investment advisory services to the fund. Typically, the fund pays an advisory
fee to the fund's adviser and the adviser, in turn, compensates the adviser's
portfolio managers who make specific securities selections for the fund. In
contrast, under the "manager of managers" structure, a SPDR Fund will pay SSgA
FM an advisory fee and SSgA FM, in turn, will hire sub-advisers to provide day-
to-day investment advisory services to the SPDR Fund. Under this structure,
shareholders will have the benefit of SSgA FM's expertise in selecting and
monitoring investment sub-advisers.
SSgA FM will continuously monitor the performance of the sub-advisers and
may from time to time recommend that the Board of Trustees replace one or more
sub-advisers or appoint additional sub-advisers, depending on SSgA FM's
assessment of what combination of sub-advisers it believes would optimize a SPDR
Fund's chances of achieving its investment objective. Should shareholders
approve this proposal, the Board would be able to approve the addition or
termination of sub-advisers without shareholder approval.
17
Any proposal to add or replace sub-advisers would be reviewed as follows.
First, SSgA FM would assess a SPDR Fund's needs and, if it believed additional
or replacement sub-advisers could benefit the SPDR Fund, would systematically
search the relevant universe of available investment sub-advisers. Second, any
recommendations made by SSgA FM would have to be approved by a majority of the
Trustees, including a majority of the Trustees who are not parties to the
investment sub-advisory agreement or "interested persons," as defined under the
1940 Act, of any party to the investment sub-advisory agreement. Finally, any
selections of additional or replacement sub-advisers would have to comply with
conditions contained in any exemptive order issued by the SEC.
The proposed "manager of managers" structure is intended to afford the SPDR
Funds increased management flexibility. With the "manager of managers"
structure, the Trustees will not be required to call a shareholder meeting each
time a new sub-adviser is approved and a SPDR Fund will not incur the
considerable expense of holding shareholder meetings to approve new sub-
advisers.
TRUSTEES' CONSIDERATIONS.
In unanimously approving the "manager of managers" structure for the SPDR
Funds and in recommending that shareholders also approve this structure, the
Trustees considered the flexibility the SPDR Funds will have under a "manager of
managers" structure to implement sub-adviser changes when the Board determines
that such changes are advisable without incurring the considerable costs and
delays of obtaining shareholder approval. Particularly now, at a time when the
Board is recommending the approval of a new sub-adviser for several SPDR Funds,
the Board of Trustees believes the "manager of managers structure" to be
efficient and effective in managing the SPDR Funds that make use of a sub-
adviser.
VOTING REQUIREMENTS FOR PROPOSAL 3.
Approval of Proposal 3 with respect to a SPDR Fund requires the favorable
vote of a majority of outstanding voting shares of that SPDR Fund as defined by
the 1940 Act.
EACH SPDR FUND'S BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
PROPOSAL 3.
PROPOSAL 4 -- TO APPROVE ELIMINATING OR RECLASSIFYING CERTAIN FUNDAMENTAL
POLICIES AND RESTRICTIONS FOR ALL FUNDS AND TO UPDATE AND STANDARDIZE THE SPDR
FUNDS' INVESTMENT POLICIES
THIS PROPOSAL APPLIES TO ALL SPDR FUNDS.
We are asking shareholders of the SPDR Funds to approve eliminating or
reclassifying certain fundamental policies and restrictions for all SPDR Funds,
and to
18
update and standardize the SPDR Funds investment policies. Fundamental policies
are policies that can be changed only by obtaining shareholder approval, which
typically requires a lengthy and costly proxy solicitation. Every SPDR Fund
currently has a set of fundamental policies, but some of the policies differ
from fund to fund, in part because the SPDR Funds have been launched at
different times and the policies have been refined over time, frequently in
response to changes in federal or state regulatory oversight or changes in
investment markets. We propose to adopt a uniform set of updated fundamental
policies for all SPDR Funds that conform to the standards Congress and the SEC
have established for funds as well as emerging best practices in the mutual fund
industry. A table comparing the current fundamental policies to the proposed
fundamental policies is included as Exhibit B to this proxy statement.
The revised fundamental policies are intended to be comprehensive but
simple. This simplicity provides many advantages, as discussed more fully below.
Standardizing the policies across all SPDR Funds will make oversight and
compliance more efficient. Updating and simplifying the policies will make the
SPDR Funds more responsive to changing regulatory and market environments.
WHY CHANGE THE CURRENT POLICIES?
Adopting uniform fundamental policies for all SPDR Funds will simplify the
task of monitoring the SPDR Funds' compliance with the policies. If approved,
the proposal will bring all of the SPDR Funds' fundamental policies into
consistent alignment with the primary federal law that governs funds, the 1940
Act. As part of this process, the SPDR Funds propose to eliminate a number of
existing fundamental policies that reflect regulatory or business conditions,
practices, or requirements that are no longer applicable. The revised policies
will be consistent with the bounds of prudence and safety established by law and
are intended to enhance SSgA FM's and any sub-adviser's ability to manage the
SPDR Funds' assets efficiently and effectively in changing regulatory and market
environments. This flexibility is intended to enable the SPDR Funds to respond
quickly to changing business conditions and to react to regulatory changes such
as amendments to the 1940 Act or new rules, interpretations, and exemptions
implemented by the SEC and other agencies.
Accordingly, the revised fundamental policies refer to the 1940 Act, the
rules thereunder and interpretations by the SEC or members of its staff, as well
as interpretations or actions of other regulatory agencies having jurisdiction
over the SPDR Funds. The revised policies will allow the SPDR Funds the
flexibility to take advantage of future changes in the thinking of regulators
and others without the expense and delay of seeking further shareholder
approvals.
HOW WILL THE UNIFORM POLICIES DIFFER FROM THE EXISTING POLICIES?
The changes fall into two broad categories. First, uniform fundamental
policies required by law will be adopted, standardizing the policies across all
of the SPDR
19
Funds. Second, existing fundamental policies that are outdated and not required
by law will be eliminated.
The revised fundamental policies give the SPDR Funds an increased ability
to engage in certain investment practices, as described in more detail below. If
a particular SPDR Fund takes advantage of that increased ability (to borrow
money, for example), there could be a material increase in the level of
investment risk associated with an investment in that SPDR Fund. Certain of the
increased risks to the SPDR Funds are described below. The actual investment
practices of the SPDR Funds currently are not expected to change as a result of
the revised policies and each SPDR Fund will continue to be managed in
accordance with its Prospectus and Statement of Additional Information ("SAI")
(other than the fundamental policies being changed), as well as any policies or
guidelines that may have been established by the SPDR Funds' Board, Adviser or
sub-adviser(s). A SPDR Fund's investment practices, however, could change in the
future and for various reasons, but any material change in investment practices
would first have to be approved by the Board.
WHAT ARE THE STANDARDIZED FUNDAMENTAL POLICIES THE SPDR FUNDS PROPOSE TO ADOPT?
The 1940 Act requires that every fund adopt policies with respect to
certain activities, and effectively provides that such policies may not be
changed except by a majority vote of shareholders. The activities are:
- Purchasing and selling real estate;
- Issuing senior securities and borrowing money;
- Making loans;
- Purchasing and selling commodities;
- Concentrating investments in a particular industry or group of
industries; and
- Underwriting activities.
Every SPDR Fund currently has a fundamental policy addressing each of the
activities for which it is required to have such a policy. However, different
SPDR Funds frequently have different policies for the same activity. In
addition, many of the SPDR Funds have adopted fundamental policies covering
activities for which a fundamental policy is not required, unnecessarily
restricting the SPDR Funds' ability to respond to changing circumstances. This
proposal, if adopted by shareholders, affords the SPDR Funds an opportunity to
adopt an updated and standardized set of policies for all SPDR Funds.
20
SUBPROPOSAL 4A: TO AMEND THE FUNDAMENTAL POLICY ON PURCHASING AND SELLING REAL
ESTATE.
We are proposing to adopt a revised policy on investing in real estate that
would read as follows:
REAL ESTATE. THE FUND MAY NOT INVEST DIRECTLY IN REAL ESTATE UNLESS THE
REAL ESTATE IS ACQUIRED AS A RESULT OF OWNERSHIP OF SECURITIES OR OTHER
INSTRUMENTS. THIS RESTRICTION SHALL NOT PRECLUDE THE FUND FROM INVESTING IN
COMPANIES THAT DEAL IN REAL ESTATE OR IN INSTRUMENTS THAT ARE BACKED OR SECURED
BY REAL ESTATE.
With two exceptions, the proposed fundamental policy on real estate is
essentially the same as the existing policy for all of the SPDR Funds. The first
exception is that, rather than unconditionally prohibiting the SPDR Funds from
investing directly in real estate, the proposed policy permits them to own real
estate "acquired as a result of ownership of securities or other instruments."
This exception is intended to cover a situation in which a SPDR Fund acquires
real estate unintentionally. Although extremely unlikely, this could happen if,
for example, a SPDR Fund owns shares of a company, such as a real estate
investment trust (REIT), that liquidates, and the SPDR Fund is forced to take
real estate as part of the liquidation. To the extent this should occur, there
is a risk that such real estate could be difficult to value or sell, which could
increase a SPDR Fund's tracking error. In addition, owners of real estate may
be subject to various liabilities, including environmental liabilities. The
second exception is that, with respect to SPDR Series Trust, the current policy
also restricts investments in oil, gas or mineral interests or leases. This
restriction will be eliminated since this portion of the fundamental policy goes
beyond the fundamental policy regarding real estate as required by law.
The second sentence of the proposed policy permits investment in real
estate-related securities (as opposed to real estate itself). The current real
estate policy of every SPDR Fund already permits investment in one or both types
of real estate-related securities.
The SPDR Funds do not intend to change their approach to investing in
response to the proposed modification of the real estate policy.
EACH SPDR FUND'S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" SUBPROPOSAL
4A.
SUBPROPOSAL 4B: TO AMEND THE FUNDAMENTAL POLICY ON ISSUING SENIOR SECURITIES AND
BORROWING MONEY.
We are proposing to adopt a revised policy on issuing senior securities
that would read as follows:
SENIOR SECURITIES AND BORROWING MONEY. THE FUND MAY NOT ISSUE SENIOR
SECURITIES OR BORROW MONEY EXCEPT AS PERMITTED BY THE 1940 ACT OR OTHER
GOVERNING STATUTE, BY THE RULES THEREUNDER, OR BY THE SEC OR OTHER REGULATORY
AGENCY WITH AUTHORITY OVER THE FUND.
21
Somewhat simplified, a "senior security" is any security that gives its
holder a priority claim on a fund's assets or on dividends paid by a fund. A
number of different investment instruments and strategies--forward and futures
contracts, repurchase agreements, short selling, options writing, and certain
derivatives--may involve the issuance of a senior security. The 1940 Act
generally prohibits funds from issuing senior securities, but the SEC takes the
position that instruments and strategies that otherwise might be considered to
involve senior securities will not be considered to do so if the fund uses
certain protective techniques. These techniques include holding an offsetting
position or segregating liquid assets in an amount sufficient to meet the fund's
obligations under the instrument or strategy.
In addition, the 1940 Act imposes certain limitations on the borrowing
activities of funds. These limitations protect shareholders in two ways. First,
when a fund borrows money, its assets potentially become subject to the claims
of the lender. In some cases, those claims could have priority over the claims
of shareholders if all of the fund's assets are liquidated or redeemed. Limits
on borrowing reduce the potential for priority claims. Second, borrowed money
can be used to leverage the fund's portfolio, amplifying its gains and losses.
Limits on borrowing constrain leverage.
Under the 1940 Act, a fund can borrow up to one-third of the value of its
net assets (including the amount borrowed) from banks and may borrow an
additional amount up to 5% of its total assets for temporary purposes from an
unaffiliated lender. The SEC also permits a fund to engage in activities that
the SEC staff considers to be economically equivalent to borrowing, such as
entering into a reverse repurchase agreement or a futures contract, so long as
the fund segregates assets sufficient to cover its obligations under the
instruments.
Current policies typically allow a SPDR Fund to borrow money only for
temporary or emergency purposes, and then in an amount not to exceed 10% of the
SPDR Fund's net assets. Additionally, SPDR Funds are prohibited from making
additional investments whenever outstanding borrowings exceed 5% of net assets.
The current limitations on borrowing are more restrictive than those imposed by
law. Funds typically borrow money so that they can cover short-term cash needs
without having to sell portfolio securities at a time when a sale would be
disadvantageous for investment reasons. Typically, such borrowings would be used
to cover large and unexpected redemption orders. While the SPDR Funds do not
intend to change their borrowing activities in response to the modification of
the policy, if this proposal is approved, the SPDR Funds will be permitted by
this fundamental policy to borrow in situations and under circumstances in which
they previously could not do so, although within the bounds of the 1940 Act as
described above. An increased level of borrowing may cause the value of a SPDR
Fund's shares to be more volatile than if the SPDR Fund did not borrow. This is
because borrowing tends to magnify the effect of any increase or decrease in the
value of such SPDR Fund's portfolio holdings. Borrowed money thus creates an
opportunity for greater gains, but also greater losses.
22
There also are costs associated with borrowing money, and these costs would
offset and could eliminate a SPDR Fund's net investment income in any given
period.
The proposed fundamental policy on issuing senior securities is very
similar to the current version of the policy, with two very minor exceptions.
First, the current fundamental policy states that a SPDR Fund may issue senior
securities as permitted for emergency purposes in an amount up to 10% of the
value of the SPDR Fund's total assets, valued at market, less liabilities valued
at the time the borrowing is made. The proposed fundamental policy clarifies
that the SPDR Funds may issue senior securities or borrow money within the
bounds of the law. The current fundamental policies do not reference either the
1940 Act or any other legal authority. The proposed fundamental policy clarifies
that the SPDR Funds may not issue senior securities or borrow money except as
permitted by the 1940 Act or other governing statute. The policy as proposed
adds language clarifying this point. The proposed policy, if adopted, will not
affect the SPDR Funds' existing abilities to engage in the investment strategies
or invest in instruments described above (i.e., forward and futures contracts).
Similarly, the proposed policy, if adopted, will be interpreted not to prevent
collateral arrangements with respect to swaps, options, forward or futures
contracts or other derivatives, or the posting of initial or variation margin.
As a practical matter, the proposed policy will not change how SPDR Funds
invest because the exception is unnecessary when the SPDR Funds use the
protective techniques described above. The SPDR Funds do not intend to change
their approach to issuing senior securities in response to the proposed
modification of the policy.
EACH SPDR FUND'S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" SUBPROPOSAL
4B.
SUBPROPOSAL 4C: TO AMEND THE FUNDAMENTAL POLICY ON MAKING LOANS.
We are proposing to adopt a revised policy on making loans that would read
as follows:
LOANS. THE FUND MAY NOT MAKE LOANS TO ANOTHER PERSON EXCEPT AS PERMITTED BY
THE 1940 ACT OR OTHER GOVERNING STATUTE, BY THE RULES THEREUNDER, OR BY THE SEC
OR OTHER REGULATORY AGENCY WITH AUTHORITY OVER THE FUND.
The 1940 Act does not prohibit a fund from making loans, although the 1940
Act prohibits a fund from lending money or other property to affiliated persons,
which would include any SPDR officer or employee. Under the current version of
the SPDR Funds' fundamental policy on loans, the SPDR Funds are not permitted to
lend any funds or other assets except through the purchase of all or a portion
of an issue of securities or obligations of the type in which it is permitted to
invest (including participation interests in such securities or obligations) and
except that the SPDR Fund may lend its portfolio securities in an amount not to
exceed 33 1/3% of the value of its total assets.
23
Generally, a SPDR Fund can lend money or other property primarily in four
ways: (1) by purchasing bonds and other fixed income instruments, (2) by
entering into a repurchase agreement (which is economically equivalent to a
short-term loan), (3) by lending portfolio securities and (4) through an
interfund lending program permitted under an SEC order. All four practices are
common for funds. While the SPDR Funds could engage in these practices under
both the current fundamental policy and the revised fundamental policy, the
revised fundamental policy is designed to permit the SPDR Funds to alter their
lending policies in connection with changes to the applicable regulations. The
SPDR Funds do not intend to change their lending activities in response to the
proposed modification of the policy.
EACH SPDR FUND'S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" SUBPROPOSAL
4C.
SUBPROPOSAL 4D: TO AMEND THE FUNDAMENTAL POLICY ON PURCHASING AND SELLING
COMMODITIES.
We are proposing to adopt a revised policy on investing in commodities that
would read as follows:
COMMODITIES. THE FUND MAY NOT INVEST IN COMMODITIES EXCEPT AS PERMITTED BY
THE 1940 ACT OR OTHER GOVERNING STATUTE, BY THE RULES THEREUNDER, OR BY THE SEC
OR OTHER REGULATORY AGENCY WITH AUTHORITY OVER THE FUND.
The term "commodity" typically describes physical products -- agricultural
crops such as wheat, corn, and soybeans; base metals such as copper and
aluminum; precious metals such as gold and silver; and energy sources such as
oil and natural gas. In the investment world, however, a commodity can also be
an intangible financial product, the most common being a futures contract. The
only commodities in which the SPDR Funds typically might invest are financial
ones, such as stock and bond futures contracts, stock and bond index futures
contracts, foreign currencies, foreign currency forward contracts, and options
on any of these.
The SPDR Funds' existing commodities policies are more restrictive than
required by federal law and limit the SPDR Funds. The SPDR Funds currently are
confined to specifically identified categories of financial instruments, such as
futures contracts, indexes and options on such futures contracts. The identified
categories do not cover all the types of instruments that could be considered
commodities and do not cover instruments that may be available for investment in
the future and that could assist a SPDR Fund in meeting its objective. This
limitation originally derived from a Commodity Futures Trading Commission rule
that is no longer in effect. The 1940 Act does not prohibit a fund from owning
commodities, whether physical commodities and contracts related to physical
commodities, such as precious metals, oil or grains and related futures
contracts, or financial commodities and contracts related to financial
commodities, such as currencies and, possibly, currency futures. A fund,
however, is limited in the amount of illiquid assets it may purchase, and
certain commodities, especially physical
24
commodities, may be considered to be illiquid. In addition, certain provisions
of the Internal Revenue Code practically limit a fund from taking significant
positions in commodities or commodity-related investments. Accordingly, even
though the SPDR Funds will not be restricted by the revised policy from
purchasing physical or financial commodities and commodity-related instruments,
the SPDR Funds will still be subject to the limitations on the acquisition of
illiquid securities and the provisions of the Internal Revenue Code.
The SPDR Funds do not intend to change their approach to investing in
commodities in response to the proposed modification of the policy.
EACH SPDR FUND'S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" SUBPROPOSAL
4D.
SUBPROPOSAL 4E: TO AMEND THE FUNDAMENTAL POLICY ON CONCENTRATING INVESTMENTS IN
A PARTICULAR INDUSTRY OR GROUP OF INDUSTRIES.
We are proposing to adopt revised policies on industry concentration that
would read as follows:
CONCENTRATION: THE FUND MAY NOT CONCENTRATE ITS INVESTMENTS IN SECURITIES
OF ISSUERS IN THE SAME INDUSTRY, EXCEPT AS MAY BE NECESSARY TO APPROXIMATE THE
COMPOSITION OF THE FUND'S TARGET INDEX.
The 1940 Act requires every fund to have a fundamental investment policy
regarding industry concentration, but does not define what it means to
"concentrate" or what constitutes an "industry." The SEC staff has issued
helpful guidance in this area:
- The SEC staff takes the position that a fund concentrates its investments
if it invests 25% or more of its assets in any particular industry. (For
this purpose, investments do not include certain items such as cash, U.S.
government securities, securities of other investment companies, and
certain tax-exempt securities.)
- A fund may select its own industry classifications so long as they are
reasonable and the companies within a designated industry have similar
primary economic characteristics.
- A fund generally cannot adopt a policy that allows it to concentrate or
not concentrate based on what the Adviser believes is in the best
interests of shareholders. However, a fund can have a policy that allows
it to shift from unconcentrated to concentrated, or the reverse, if (1)
the policy clearly indicates the specific conditions under which the fund
will do so, or (2) the fund is a money market fund and reserves the
ability to concentrate investments in U.S. government securities and
certain instruments issued by domestic banks.
25
The new policy is for index funds that don't generally concentrate, but
contains an exception that permits a SPDR Fund to concentrate as needed to track
its target index. The revision would ensure that all SPDR Funds are able to
invest in accordance with their stated investment objectives and strategies.
The SPDR Funds do not intend to change how they invest in response to the
proposed modification of the concentration policy.
EACH SPDR FUND'S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" SUBPROPOSAL
4E.
SUBPROPOSAL 4F: TO AMEND THE FUNDAMENTAL POLICY ON UNDERWRITING OF SECURITIES.
We are proposing to adopt revised policies on underwriting of securities
that would read as set forth below.
UNDERWRITING: THE FUND MAY NOT ACT AS AN UNDERWRITER OF ANOTHER ISSUER'S
SECURITIES, EXCEPT TO THE EXTENT THAT THE FUND MAY BE DEEMED TO BE AN
UNDERWRITER WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 IN CONNECTION WITH
THE FUND'S PURCHASE AND SALE OF PORTFOLIO SECURITIES.
Under the 1940 Act, the Funds are required to adopt a fundamental policy
regarding underwriting of securities. The SEC staff generally takes the position
that funds should not engage in the business of underwriting securities.
It is proposed that the Funds adopt a more flexible fundamental policy.
While the Funds' current fundamental policy has not affected the Funds'
investments in the past, its replacement with a more flexible fundamental policy
could provide investment flexibility in the future. This would permit the Funds
to adapt to future developments in investment practices and changes in laws and
regulations without the delay and cost of a shareholder meeting. Accordingly,
should shareholders approve this proposal, the fundamental policy set forth
above will take effect.
The SPDR Funds do not intend to change how they invest in response to the
proposed modification of the underwriting policy.
EACH SPDR FUND'S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" SUBPROPOSAL
4F.
SUBPROPOSAL 4G: TO ELIMINATE OUTDATED FUNDAMENTAL POLICIES NOT REQUIRED BY LAW.
WHAT FUNDAMENTAL POLICIES ARE THE FUNDS PROPOSING TO ELIMINATE?
The uniform policies we are proposing to adopt include only those policies
that the 1940 Act requires. This will result in the elimination of existing
fundamental policies not required by law. As a practical matter, the elimination
of these policies is not expected to change how the SPDR Funds operate or
invest, nor is it expected to change the risk profile of any of the SPDR Funds.
Many of the policies relate to
26
instruments or strategies that the SPDR Funds do not use today and do not expect
to use in the future.
We propose to eliminate policies that deal with:
- Pledging, mortgaging, or hypothecating fund assets;
- Purchasing securities on margin;
- Selling securities short; and
- Changing of investment objective without shareholder approval (only
applicable to Equity ETFs, as defined below).
Even after the unnecessary policies are eliminated, the SPDR Funds will
still be limited in regard to many of the activities covered by the policies.
For example, federal law limits the degree to which a fund may sell securities
short, purchase securities on margin, and pledge fund assets. In addition, the
SDPR Funds will continue to be subject to a number of non-fundamental investment
and/or operating policies, as contained in their Prospectus and/or SAI.
Certain of the SPDR Funds, including the SPDR Dow Jones Total Market ETF,
SPDR Dow Jones Large Cap ETF, SPDR Dow Jones Large Cap Growth ETF, SPDR Dow
Jones Large Cap Value ETF, SPDR Dow Jones Mid Cap ETF, SPDR Dow Jones Mid Cap
Growth ETF, SPDR Dow Jones Mid Cap Value ETF, SPDR Dow Jones Small Cap ETF, SPDR
Dow Jones Small Cap Growth ETF, SPDR Dow Jones Small Cap Value ETF, SPDR DJ
Global Titans ETF, SPDR Dow Jones REIT ETF, SPDR KBW Bank ETF, SPDR KBW Capital
Markets ETF, SPDR KBW Insurance ETF, SPDR Morgan Stanley Technology ETF, SPDR
S&P Dividend ETF, SPDR S&P Biotech ETF, SPDR S&P Homebuilders ETF, SPDR S&P
Metals & Mining ETF, SPDR S&P Oil & Gas Equipment & Services ETF, SPDR S&P Oil &
Gas Exploration & Production ETF, SPDR S&P Pharmaceuticals ETF, SPDR S&P Retail
ETF, SPDR S&P Semiconductor ETF, SPDR KBW Regional Banking ETF, SPDR KBW
Mortgage Finance ETF, SPDR DJ STOXX 50 ETF, SPDR DJ EURO STOXX 50 ETF, SPDR S&P
Emerging Asia Pacific ETF, SPDR S&P China ETF, SPDR S&P Emerging Markets ETF,
SPDR S&P BRIC 40 ETF, SPDR S&P Emerging Europe ETF, SPDR S&P Emerging Latin
America ETF, SPDR S&P Emerging Middle East & Africa ETF, SPDR S&P World Ex-US
ETF, SPDR S&P International Small Cap ETF, SPDR Dow Jones International Real
Estate ETF, SPDR MSCI ACWI Ex-US ETF, SPDR Russell/Nomura PRIME Japan ETF, SPDR
Russell/Nomura Small Cap Japan ETF (the "Equity ETFs") currently have a
fundamental restriction which says that the "Fund may not change its investment
objective." SSgA FM is proposing to eliminate the fundamental restriction that
says the SPDR Funds cannot change their investment objective without shareholder
approval. Currently, many of the Equity ETFs have an investment objective to
track a specific index. Eliminating this fundamental restriction would allow
such Equity ETFs to change their investment objective to state that they will
track an index that follows a certain desired objective. The elimination of this
fundamental policy provides these Equity ETFs more flexibility in changing their
index if the portfolio managers and the Board
27
of Trustees believe it's in the shareholders best interest or in response to a
situation where the index is discontinued. Further, certain of the other SPDR
Funds do not have this restriction, so eliminating this restriction would
stream-line and make consistent the fundamental restrictions amongst all the
SPDR Funds.
Further, investors will always know how their SPDR Funds invest because the
SPDR Funds must disclose this information in their Prospectus and SAI. In
addition, the conditions of the exemptive relief on which the SPDR Funds rely to
operate as exchange traded funds require the SPDR Funds to provide their
portfolio holdings on a daily basis. These portfolio holdings are available
online at www.spdrs.com. The Prospectus and SAI for every SPDR Fund is available
without cost online at www.spdrs.com or by calling 1-866-787-2257.
WHY ELIMINATE THESE POLICIES?
As noted above, the 1940 Act requires a fund to adopt fundamental policies
with respect to specific types of activities; however, some of the fundamental
policies are more restrictive than required under the 1940 Act. Some of these
policies were considered best practices at the time the SPDR Funds were
originally launched, but as the industry has evolved, the trend has been to
conform investment company fundamental policies to the actual requirements of
the applicable laws. By eliminating unnecessary fundamental policies, the SPDR
Funds will be able to avoid the costs and delays associated with a shareholder
meeting if, in the future, the Board decides that SPDR Fund shareholders would
benefit from a change in tactics or strategies now governed by those policies or
in order to take advantage of new financial products that would be permitted
under the 1940 Act, but restricted by these policies. Eliminating unnecessary
fundamental policies also will allow the SPDR Funds to respond more quickly to
regulatory and market changes. Finally, eliminating unnecessary fundamental
policies, which vary greatly from fund to fund, is an important step in creating
uniform fundamental policies for all SPDR Funds and realizing the administrative
efficiencies that are expected to result from that uniformity.
EACH SPDR FUND'S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR"
SUBPROPOSAL 4G.
VOTING REQUIREMENTS FOR EACH SUBPROPOSAL 4A-G.
Approval of Subproposals 4A-G, with respect to a SPDR Fund, requires the
favorable vote of a majority of outstanding voting shares of that SPDR Fund as
defined by the 1940 Act. If a Subproposal is not approved by shareholders of a
particular SPDR Fund, that SPDR Fund will remain subject to the current
fundamental policy or policies covered in the Subproposal.
28
PART III: INFORMATION ON THE SPDR FUNDS' INDEPENDENT ACCOUNTANTS
INFORMATION ON THE SPDR INDEX SHARES FUNDS' INDEPENDENT ACCOUNTANTS
SELECTION OF PRICEWATERHOUSECOOPERS AS INDEPENDENT ACCOUNTANTS. The
Independent Trustees of SPDR Index Shares Funds have selected
PricewaterhouseCoopers LLP ("PwC") as independent accountants to audit and
certify the SPDR Index Shares Funds' financial statements. Representatives of
PwC are not expected to be present at the Meeting.
In addition to serving as independent accountants, PwC has provided limited
non-audit services (primarily tax services) to SPDR Index Shares Funds. The
Independent Trustees carefully considered these non-audit services when
evaluating PwC's independence for purposes of its selection as the SPDR Index
Shares Funds' independent accountants. In a letter to the SPDR Index Shares
Funds audit committee dated July 30, 2009, PwC confirmed its status as
independent accountants with respect to SPDR Index Shares Funds within the
meaning of the federal securities laws.
PWC AUDIT REPORTS. PwC's audit report for each SPDR Fund that is a series
of SPDR Index Shares Funds for the last two most recently ended fiscal years did
not contain any adverse opinions or disclaimers of opinion, nor did PwC qualify
or modify such reports as to uncertainty, audit scope, or accounting principles.
Further, there were no disagreements between the SPDR Index Shares Funds and PwC
in three key areas--(1) accounting principles and practices, (2) financial
statement disclosures, and (3) audit scope and procedures--that, if not resolved
to PwC's satisfaction, would have caused the accountants to reference the matter
in their audit reports.
FUND-RELATED AUDIT FEES PAID TO PWC. The SPDR Index Shares Funds paid PwC
the approximate amount shown in the table below as audit fees for the Trust's
last two most recently ended fiscal years.
<Table>
<Caption>
AUDIT FEES
-------------------
TRUST 2009 2008
----- -------- --------
SPDR Index Shares Funds.............. $506,100 $459,900
</Table>
ALL OTHER FEES PAID TO PWC. For the fiscal years ended September 30, 2009,
and September 30, 2008, PwC was paid approximately $240,000 and $240,000,
respectively, for all non-audit services rendered to the SPDR Index Shares
Funds, primarily related to review of federal, state and local income, franchise
and other tax returns. For those same two years, PwC was paid approximately $7.7
million and $7.6 million, respectively, for non-audit services provided to
certain entities in the SPDR Funds' investment company complex. These amounts
primarily related to service auditor's examinations in accordance with the
American Institute of Certified Public Accountants Statement on Audit Standards
No. 70 (SAS 70).
29
INFORMATION ON THE SPDR SERIES TRUST'S INDEPENDENT ACCOUNTANTS
SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS. The Independent
Trustees of SPDR Series Trust have selected Ernst & Young LLP ("E&Y") as
independent accountants to audit and certify the SPDR Series Trust's financial
statements. Representatives of E&Y are not expected to be present at the
Meeting.
In addition to serving as independent accountants, E&Y has provided limited
non-audit services (primarily tax services) to SPDR Series Trust. The
Independent Trustees carefully considered these non-audit services when
evaluating E&Y's independence for purposes of its selection as the SPDR Series
Trust's independent accountants. In a letter to the SPDR Series Trust audit
committee dated May 18, 2009, E&Y confirmed its status as independent
accountants with respect to SPDR Series Trust within the meaning of the federal
securities laws.
E&Y AUDIT REPORTS. E&Y's audit report for each SPDR Fund that is a series
of SPDR Series Trust for the last two most recently ended fiscal years did not
contain any adverse opinions or disclaimers of opinion, nor did E&Y qualify or
modify such reports as to uncertainty, audit scope, or accounting principles.
Further, there were no disagreements between the SPDR Series Trust and E&Y in
three key areas--(1) accounting principles and practices, (2) financial
statement disclosures, and (3) audit scope and procedures--that, if not resolved
to E&Y's satisfaction, would have caused the accountants to reference the matter
in their audit reports.
FUND-RELATED AUDIT FEES PAID TO E&Y. The SPDR Series Trust paid E&Y the
approximate amount shown in the table below as audit fees for the Trust's last
two most recently ended fiscal years.
<Table>
<Caption>
AUDIT FEES
-------------------
TRUST 2009 2008
----- -------- --------
SPDR Series Trust.................... $495,080 $437,000
</Table>
ALL OTHER FEES PAID TO E&Y. For the fiscal years ended June 30, 2009 and
June 30, 2008, E&Y was paid approximately $362,120 and $312,740, respectively,
for all non-audit services rendered to the SPDR Series Trust, primarily related
to the review of year-end distribution requirements, as well as the review and
signing as preparer of all federal, state and excise income tax returns for SPDR
Series Trust. For the calendar years ended 2008 and 2007, E&Y was paid
approximately $8.0 million and $5.4 million respectively, for non-audit services
provided to certain entities in the SPDR Funds' investment company complex.
These amounts primarily related to employee benefit plan and non-statutory
audits, audits of certain foreign-sponsored mutual funds, due diligence
procedures, reports on the processing of transactions by servicing
organizations, expatriate, compliance and corporate tax advisory services and
advisory services related to the BASEL II capital adequacy framework.
30
PART IV: MORE ON PROXY VOTING AND SHAREHOLDER MEETINGS
SHAREHOLDER APPROVAL
VOTES NEEDED TO ELECT TRUSTEES. Shareholders of SPDR Funds that are part of
the same Trust will elect their Trustees on a joint basis. (A list of SPDR Funds
and the Trust of which each SPDR Fund is a series is included in Part V of this
proxy statement.) For each Trust, the nominees receiving the favorable vote of a
majority of shares of that Trust represented in person or by proxy and entitled
to vote at the Meeting will be elected.
VOTES NEEDED TO APPROVE PROPOSALS 2-4. Shareholders of each SPDR Fund will
vote separately on each proposal applicable to that SPDR Fund. For a proposal to
pass for a SPDR Fund, there must be a majority of the outstanding voting
securities of a company, which means that the vote at a shareholder meeting must
be, (A) of 67 per centum or more of the voting securities present at such
meeting, if the holders of more than 50 percent of the outstanding voting
securities are present or represented by proxy; or (B) of more than 50 percent
of the outstanding voting securities of such company, whichever is less. This is
referred to as a Majority Shareholder Vote.
PROXY SOLICITATION METHODS. The SPDR Funds will solicit shareholder proxies
in a variety of ways. All shareholders who are entitled to vote will receive
these proxy materials either by mail or electronically (assuming that applicable
requirements are met). In addition, SSgA FM employees and officers may solicit
shareholder proxies in person, by telephone, by mail, or over the Internet. The
SPDR Funds have also engaged the services of Broadridge Financial Solutions,
Inc. ("Broadridge") to assist in the solicitation of proxies for the Shareholder
Meeting.
PROXY SOLICITATION COSTS. Each SPDR Fund will pay all costs of soliciting
proxies from its shareholders with respect to all items other than the approval
of Nuveen Asset Management as a sub-adviser, including costs relating to the
printing, mailing, and tabulation of proxies. SSgA FM will pay the costs of
solicitation with respect to soliciting proxies for approval of Nuveen Asset
Management as sub-adviser for the Municipal SPDR Funds. Broadridge's
solicitation costs for the SPDR Funds are currently estimated to be
approximately $2.5 million and will be allocated across the SPDR Funds
proportionately, according to a fixed formula. By voting immediately, you can
help your SPDR Fund avoid the considerable expense of a second proxy
solicitation.
QUORUM. Each SPDR Fund must achieve a quorum in order for the Shareholder
Meeting to go forward. This means that a majority of a SPDR Fund's shares must
be represented at the Shareholder Meeting, either in person or by proxy. All
returned proxies count toward a quorum, regardless of how they are voted ("For,"
"Against," or "Abstain"). Unreturned and unsigned proxies will not be counted
toward quorum. The SPDR Funds will count abstentions and broker non-votes toward
establishing a quorum and as votes "Against" proposals 2-4. (A broker non-
31
vote is a proxy received from a broker who holds SPDR Fund shares on behalf of
an investor, but who does not have discretionary power to vote the shares on the
investor's behalf, indicating that the broker has not received instructions from
the investor on the matter at issue.) Signed, dated proxy cards and voting
instruction cards returned to SSgA FM without a choice indicated as to the
applicable proposals shall be voted for proposals 1-4.
ADJOURNMENT. If a quorum is not present or represented at the Shareholder
Meeting, the holders of a majority of the votes present in person or by proxy
and entitled to vote shall have the power to adjourn the meeting from time to
time, if the vote required to approve or reject any proposal described in the
original notice of such meeting is not obtained (with proxies being voted for or
against adjournment, including abstentions and broker non-votes, consistent with
the votes for and against the proposal for which the required vote has not been
obtained). The affirmative vote of the holders of a majority of the shares then
present in person or represented by proxy shall be required to adjourn any
meeting. Any adjourned meeting may be reconvened without further notice or
change in Record Date. At any reconvened meeting at which a quorum shall be
present, any business may be transacted that might have been transacted at the
meeting as originally called.
REVOKING YOUR PROXY. Your latest vote is the one that counts. Therefore,
you can revoke a prior proxy simply by voting again--over the Internet, with
your proxy card or voting instruction card, or by toll-free telephone call. You
can also revoke a prior proxy by writing to the SPDR Funds' secretary at the
following address: Ryan M. Louvar, State Street Bank and Trust Company, 4 Copley
Place, 5th Floor Boston, MA 02116 or by voting in person at the Shareholder
Meeting. You may revoke your proxy at any time up until voting results are
announced at the Shareholder Meeting.
SHAREHOLDER PROPOSALS. Any shareholder proposals to be included in the
proxy statement for a SPDR Fund's next meeting of shareholders must be received
by the SPDR Fund within a reasonable period of time prior to that meeting. None
of the SPDR Funds currently plans to hold another meeting of shareholders in
2010.
VOTING RIGHTS. Shareholders are entitled to cast one vote for each share
of beneficial interest of a SPDR Fund owned on the Record Date and a fractional
vote for each fractional share of beneficial interest of a SPDR Fund owned on
the Record Date.
NOMINEE ACCOUNTS. Upon request, the SPDR Funds will reimburse nominees for
their reasonable expenses in forwarding proxy materials to beneficial owners of
the SPDR Funds' shares. Please submit invoices for our review to: SPDR Funds,
One Lincoln Street, LCC4N, Boston, MA 02111, Attn: SPDR ETF Fund Administration.
ANNUAL/SEMIANNUAL REPORTS. Copies of the SPDR Funds' Annual Reports to
Shareholders may be obtained without charge by writing to State Street Global
Markets, LLC, the Trusts' principal underwriter at State Street Financial
32
Center, One Lincoln Street, Boston, Massachusetts 02111, or by visiting the SPDR
Funds website at www.spdrs.com or by calling 1-866-787-2257.
OTHER MATTERS. At this point, we know of no other business to be brought
before the Shareholder Meeting. However, if any other matters do come up, we
will use our best judgment to vote on your behalf. If you object to our voting
other matters on your behalf, please tell us so in writing before the
Shareholder Meeting.
PART V: FUND AND INVESTMENT ADVISER INFORMATION
The SPDR Funds' investment adviser is SSgA Funds Management, Inc. ("SSgA
FM" or the "Adviser"). The Adviser's principal address is State Street Financial
Center, One Lincoln Street, Boston, Massachusetts 02111.
SPDR FUND INFORMATION
This section provides certain required information for each of the SPDR
Funds. The SPDR Series Trust appear first followed by the SPDR Index Shares
Funds. The operational SPDR Funds for which proxies are being solicited and
their shares eligible to vote as of the Record Date are:
<Table>
<Caption>
SPDR SERIES TRUST INCLUDES: RECORD DATE SHARES
--------------------------- ------------------
SPDR Dow Jones Total Market ETF............... 2,250,036
SPDR Dow Jones Large Cap ETF.................. 900,000
SPDR Dow Jones Large Cap Growth ETF........... 3,850,027
SPDR Dow Jones Large Cap Value ETF............ 1,850,716
SPDR Dow Jones Mid Cap ETF.................... 950,000
SPDR Dow Jones Mid Cap Growth ETF............. 1,350,000
SPDR Dow Jones Mid Cap Value ETF.............. 400,000
SPDR Dow Jones Small Cap ETF.................. 800,023
SPDR Dow Jones Small Cap Growth ETF........... 1,450,007
SPDR Dow Jones Small Cap Value ETF............ 1,751,051
SPDR DJ Global Titans ETF..................... 1,800,464
SPDR Dow Jones REIT ETF....................... 21,231,617
SPDR KBW Bank ETF............................. 41,452,118
SPDR KBW Capital Markets ETF.................. 2,350,000
SPDR KBW Insurance ETF........................ 4,900,000
SPDR Morgan Stanley Technology ETF............ 4,450,006
SPDR S&P Dividend ETF......................... 26,953,658
SPDR S&P Biotech ETF.......................... 8,000,000
SPDR S&P Homebuilders ETF..................... 45,850,016
SPDR S&P Metals & Mining ETF.................. 17,350,230
SPDR S&P Oil & Gas Equipment & Services ETF... 10,700,000
</Table>
33
<Table>
<Caption>
SPDR SERIES TRUST INCLUDES: RECORD DATE SHARES
--------------------------- ------------------
SPDR S&P Oil & Gas Exploration & Production
ETF......................................... 13,000,000
SPDR S&P Pharmaceuticals ETF.................. 1,700,135
SPDR S&P Retail ETF........................... 15,100,113
SPDR S&P Semiconductor ETF.................... 2,300,000
SPDR KBW Regional Banking ETF................. 19,702,585
SPDR KBW Mortgage Finance ETF................. 100,000
SPDR Wells Fargo Preferred Stock ETF.......... 600,000
SPDR Barclays Capital 1-3 Month T-Bill ETF.... 16,400,461
SPDR Barclays Capital TIPS ETF................ 6,800,225
SPDR Barclays Capital Short Term Corporate
Bond ETF.................................... 600,000
SPDR Barclays Capital Intermediate Term
Treasury ETF................................ 3,600,168
SPDR Barclays Capital Long Term Treasury ETF.. 300,000
SPDR Barclays Capital Intermediate Term Credit
Bond ETF.................................... 1,700,072
SPDR Barclays Capital Long Term Credit Bond
ETF......................................... 700,000
SPDR Barclays Capital Convertible Bond ETF.... 7,000,000
SPDR Barclays Capital Mortgage Backed Bond
ETF......................................... 400,000
SPDR Barclays Capital Aggregate Bond ETF...... 3,800,132
SPDR Barclays Capital Municipal Bond ETF...... 36,702,072
SPDR Barclays Capital California Municipal
Bond ETF.................................... 2,700,128
SPDR Barclays Capital New York Municipal Bond
ETF......................................... 900,010
SPDR Barclays Capital Short Term Municipal
Bond ETF.................................... 38,202,164
SPDR S&P VRDO Municipal Bond ETF.............. 500,000
SPDR DB International Government Inflation-
Protected
Bond ETF.................................... 18,800,483
SPDR Barclays Capital Short Term International
Treasury Bond ETF........................... 3,800,000
SPDR Barclays Capital International Treasury
Bond ETF.................................... 26,200,019
SPDR Barclays Capital High Yield Bond ETF..... 89,023,812
</Table>
<Table>
<Caption>
SPDR INDEX SHARES FUNDS INCLUDE: RECORD DATE SHARES
-------------------------------- ------------------
SPDR DJ STOXX 50 ETF.......................... 1,600,370
SPDR DJ EURO STOXX 50 ETF..................... 4,250,967
SPDR S&P Emerging Asia Pacific ETF............ 7,600,000
SPDR S&P China ETF............................ 8,100,000
SPDR S&P Emerging Markets ETF................. 2,100,000
SPDR S&P BRIC 40 ETF.......................... 17,200,000
SPDR S&P Emerging Europe ETF.................. 5,100,000
SPDR S&P Emerging Latin America ETF........... 2,200,000
</Table>
34
<Table>
<Caption>
SPDR INDEX SHARES FUNDS INCLUDE: RECORD DATE SHARES
-------------------------------- ------------------
SPDR S&P Emerging Middle East & Africa ETF.... 2,100,000
SPDR S&P World Ex-US ETF...................... 4,000,000
SPDR S&P International Small Cap ETF.......... 21,200,000
SPDR Dow Jones International Real Estate ETF.. 28,335,379
SPDR FTSE/Macquarie Global Infrastructure 100
ETF......................................... 1,600,000
SPDR MSCI ACWI Ex-US ETF...................... 11,800,000
SPDR Russell/Nomura PRIME Japan ETF........... 400,000
SPDR Russell/Nomura Small Cap Japan ETF....... 1,950,075
SPDR S&P International Dividend ETF........... 3,801,326
SPDR S&P International Mid Cap ETF............ 700,000
SPDR S&P Emerging Markets Small Cap ETF....... 2,800,000
SPDR Dow Jones Global Real Estate ETF......... 3,100,000
SPDR S&P International Consumer Discretionary
Sector ETF.................................. 200,000
SPDR S&P International Consumer Staples Sector
ETF......................................... 250,000
SPDR S&P International Energy Sector ETF...... 350,000
SPDR S&P International Financial Sector ETF... 400,000
SPDR S&P International Health Care Sector
ETF......................................... 150,000
SPDR S&P International Industrial Sector ETF.. 250,000
SPDR S&P International Materials Sector ETF... 550,000
SPDR S&P International Technology Sector ETF.. 700,000
SPDR S&P International Telecommunications
Sector ETF.................................. 700,000
SPDR S&P International Utilities Sector ETF... 400,000
</Table>
As of December 31, 2009, neither the Independent Trustee nominees
(including the current Independent Trustees) nor their immediate family members
owned beneficially or of record any securities in the Adviser or any person
controlling, controlled by, or under common control with the Adviser.
35
The following table shows, as of December 31, 2009, the amount of equity
securities owned by the nominees in the SPDR Funds that they are nominated to
oversee.
<Table>
<Caption>
AGGREGATE DOLLAR
RANGE OF EQUITY
SECURITIES IN
ALL FUNDS
OVERSEEN OR TO
BE
OVERSEEN BY
DOLLAR RANGE OF DIRECTOR
EQUITY OR NOMINEE IN
SECURITIES IN FAMILY OF
THE INVESTMENT
NAME OF NOMINEE SPDR FUND SPDR FUND COMPANIES
----------------------- ------------------ ---------------- ----------------
INDEPENDENT NOMINEES:
Frank Nesvet None None None
David M. Kelly None None None
Bonny Eugenia Boatman None None None
Dwight D. Churchill None None None
Carl G. Verboncoeur None None None
INTERESTED NOMINEE:
James Ross SPDR Dow Jones $10,001 to Over $100,000
Large Cap ETF $50,000
SPDR Dow Jones Mid $10,001 to
Cap Growth ETF $50,000
SPDR Dow Jones Mid $10,001 to
Cap ETF $50,000
SPDR Dow Jones $10,001 to
Small Cap Growth $50,000
ETF
SPDR Dow Jones $1 - $10,000
REIT ETF
SPDR KBW Capital $10,001 to
Markets ETF $50,000
SPDR S&P Biotech $1 - $10,000
ETF
SPDR S&P Metals & $1 - $10,000
Mining ETF
SPDR Barclays $10,001 to
Capital Short Term $50,000
Municipal Bond ETF
SPDR Barclays $1 - $10,000
Capital High Yield
Bond ETF
SPDR S&P Emerging $1 - $10,000
Asia Pacific ETF
</Table>
36
<Table>
<Caption>
AGGREGATE DOLLAR
RANGE OF EQUITY
SECURITIES IN
ALL FUNDS
OVERSEEN OR TO
BE
OVERSEEN BY
DOLLAR RANGE OF DIRECTOR
EQUITY OR NOMINEE IN
SECURITIES IN FAMILY OF
THE INVESTMENT
NAME OF NOMINEE SPDR FUND SPDR FUND COMPANIES
----------------------- ------------------ ---------------- ----------------
James Ross SPDR S&P Emerging $10,001 to
Latin America ETF $50,000
SPDR S&P World Ex- $1 - $10,000
US ETF
SPDR S&P $1 - $10,000
International
Dividend ETF
</Table>
The Depository Trust Company ("DTC") acts as securities depositary for the
shares. Shares of each SPDR Fund are represented by securities registered in the
name of DTC or its nominee, Cede & Co., and deposited with, or on behalf of,
DTC. Except in limited circumstances, certificates will not be issued for
shares.
DTC, a limited-purpose trust company, was created to hold securities of its
participants (the "DTC Participants") and to facilitate the clearance and
settlement of securities transactions among the DTC Participants in such
securities through electronic book-entry changes in accounts of the DTC
Participants, thereby eliminating the need for physical movement of securities
certificates. DTC Participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations, some of
whom (and/or their representatives) own DTC. More specifically, DTC is owned by
a number of its DTC Participants and by the New York Stock Exchange (the "NYSE")
and the FINRA. Access to the DTC system is also available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a DTC Participant, either directly or indirectly
(the "Indirect Participants").
Beneficial ownership of shares is limited to DTC Participants, Indirect
Participants and persons holding interests through DTC Participants and Indirect
Participants. Ownership of beneficial interests in shares (owners of such
beneficial interests are referred to herein as "Beneficial Owners") is shown on,
and the transfer of ownership is effected only through, records maintained by
DTC (with respect to DTC Participants) and on the records of DTC Participants
(with respect to Indirect Participants and Beneficial Owners that are not DTC
Participants). Beneficial Owners will receive from or through the DTC
Participant a written confirmation relating to their purchase of shares.
Conveyance of all notices, statements and other communications to
Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement
between the Trust and DTC, DTC is required to make available to the Trust upon
request and for a
37
fee to be charged to the Trust a listing of the shares of each SPDR Fund held by
each DTC Participant. The Trust shall inquire of each such DTC Participant as to
the number of Beneficial Owners holding shares, directly or indirectly, through
such DTC Participant. The Trust shall provide each such DTC Participant with
copies of such notice, statement or other communication, in such form, number
and at such place as such DTC Participant may reasonably request, in order that
such notice, statement or communication may be transmitted by such DTC
Participant, directly or indirectly, to such Beneficial Owners. In addition, the
Trust shall pay to each such DTC Participant a fair and reasonable amount as
reimbursement for the expenses attendant to such transmittal, all subject to
applicable statutory and regulatory requirements.
Share distributions shall be made to DTC or its nominee, Cede & Co., as the
registered holder of all shares. DTC or its nominee, upon receipt of any such
distributions, shall credit immediately DTC Participants' accounts with payments
in amounts proportionate to their respective beneficial interests in shares of
each SPDR Fund as shown on the records of DTC or its nominee. Payments by DTC
Participants to Indirect Participants and Beneficial Owners of shares held
through such DTC Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in a "street name," and will be the
responsibility of such DTC Participants.
The Trust has no responsibility or liability for any aspects of the records
relating to or notices to Beneficial Owners, or payments made on account of
beneficial ownership interests in such shares, or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests or for
any other aspect of the relationship between DTC and the DTC Participants or the
relationship between such DTC Participants and the Indirect Participants and
Beneficial Owners owning through such DTC Participants.
DTC may determine to discontinue providing its service with respect to
shares at any time by giving reasonable notice to the Trust and discharging its
responsibilities with respect thereto under applicable law. Under such
circumstances, the Trust shall take action either to find a replacement for DTC
to perform its functions at a comparable cost or, if such a replacement is
unavailable, to issue and deliver printed certificates representing ownership of
shares, unless the Trust makes other arrangements with respect thereto
satisfactory to the Exchange.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Although the SPDR Funds do not have information concerning their beneficial
ownership held in the names of DTC Participants, the names, addresses and
percentage ownership of each DTC Participant that owned of record 5% or more of
the outstanding shares of the SPDR Funds were as follows (except as otherwise
noted
38
below, information is as of October 1, 2009 for SPDR Series Trust and as of
January 1, 2010 for SPDR Index Shares Funds):
SPDR SERIES TRUST
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
SPDR Dow Jones Total Market National Financial Services 29.50%
ETF Corp.
200 Liberty Street
New York, NY 10281
Schwab (Charles) & Co., Inc. 13.52%
101 Montgomery Street
San Francisco, CA 94101
The Northern Trust Company 5.16%
50 South LaSalle Street,
Level A
Chicago, IL 60675
SPDR Dow Jones Large Cap ETF Schwab (Charles) & Co., Inc. 50.01%
101 Montgomery Street
San Francisco, CA 94101
National Financial Services 10.48%
Corp.
200 Liberty Street
New York, NY 10281
Goldman, Sachs & Co 7.57%
180 Maiden Lane
New York, NY 10038
Merrill Lynch, Pierce Fenner 7.12%
& Smith,Inc.
4 World Financial Center
New York, NY 10080
SPDR Dow Jones Large Cap Schwab (Charles) & Co., Inc. 35.19%
Growth ETF 101 Montgomery Street
San Francisco, CA 94101
LPL Financial Corporation 14.41%
9785 Towne Centre Drive
San Diego, CA 92121
Merrill Lynch, Pierce Fenner 10.64%
& Smith,
Inc.
4 World Financial Center
New York, NY 10080
National Financial Services 8.81%
Corp.
200 Liberty Street
New York, NY 10281
SPDR Dow Jones Large Cap Schwab (Charles) & Co., Inc. 23.97%
Value ETF 101 Montgomery Street
San Francisco, CA 94101
</Table>
39
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Merrill Lynch, Pierce Fenner 18.07%
& Smith,
Inc.
4 World Financial Center
New York, NY 10080
National Financial Services 9.97%
Corp.
200 Liberty Street
New York, NY 10281
Pershing, L.L.C. 6.90%
One Pershing Plaza
Jersey City, NJ 07399
LPL Financial Corporation 6.22%
9785 Towne Centre Drive
San Diego, CA 92121
TD Ameritrade, Inc. 5.76%
4211 South 102nd Street
Omaha, NE 68127
SPDR Dow Jones Mid Cap ETF Schwab (Charles) & Co., Inc. 29.90%
101 Montgomery Street
San Francisco, CA 94101
National Financial Services 9.03%
Corp.
200 Liberty Street
New York, NY 10281
Citigroup Global Markets, 7.27%
Inc.
388 Greenwich Street
New York, NY 10013
The Bank of New York Mellon 7.12%
One Wall Street, 5th Floor
New York, NY 10286
UBS Financial Services Inc. 6.04%
1000 Harbor Boulevard
Weehawken, NJ 07086
Merrill Lynch, Pierce Fenner 5.18%
& Smith,
Inc.
4 World Financial Center
New York, NY 10080
SPDR Dow Jones Mid Cap Growth LPL Financial Corporation 33.75%
ETF 9785 Towne Centre Drive
San Diego, CA 92121
National Financial Services 14.46%
Corp.
200 Liberty Street
New York, NY 10281
TD Ameritrade, Inc. 14.26%
4211 South 102nd Street
Omaha, NE 68127
</Table>
40
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Schwab (Charles) & Co., Inc. 7.04%
101 Montgomery Street
San Francisco, CA 94101
SPDR Dow Jones Mid Cap Value Morgan, Keegan & Company, 16.83%
ETF Inc.
50 North Front Street, 4th
Floor
Memphis, TN 38103
Goldman, Sachs & Co. 11.68%
180 Maiden Lane
New York, NY 10038
TD Ameritrade, Inc. 11.36%
4211 South 102nd Street
Omaha, NE 68127
UBS Financial Services Inc. 8.94%
1000 Harbor Boulevard
Weehawken, NJ 07086
Schwab (Charles) & Co., Inc. 7.89%
101 Montgomery Street
San Francisco, CA 94101
Timber Hill L.L.C. 6.90%
Two Pickwick Plaza
Greenwich, CT 06830
JPMorgan Chase Bank, National 6.02%
Association
14201 Dallas Parkway
Dallas, TX 75254
National Financial Services 5.69%
Corp.
200 Liberty Street
New York, NY 10281
SPDR Dow Jones Small Cap ETF National Financial Services 21.52%
Corp.
200 Liberty Street
New York, NY 10281
Schwab (Charles) & Co., Inc. 20.93%
101 Montgomery Street
San Francisco, CA 94101
Pershing, L.L.C. 8.06%
One Pershing Plaza
Jersey City, NJ 07399
TD Ameritrade, Inc. 6.51%
4211 South 102nd Street
Omaha, NE 68127
SPDR Dow Jones Small Cap Schwab (Charles) & Co., Inc. 25.92%
Growth ETF 101 Montgomery Street
San Francisco, CA 94101
</Table>
41
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
LPL Financial Corporation 16.03%
9785 Towne Centre Drive
San Diego, CA 92121
National Financial Services 12.40%
Corp.
200 Liberty Street
New York, NY 10281
TD Ameritrade, Inc. 9.08%
4211 South 102nd Street
Omaha, NE 68127
SPDR Dow Jones Small Cap National Financial Services 15.65%
Value ETF Corp.
200 Liberty Street
New York, NY 10281
Schwab (Charles) & Co., Inc. 15.51%
101 Montgomery Street
San Francisco, CA 94101
TD Ameritrade, Inc. 14.21%
4211 South 102nd Street
Omaha, NE 68127
Wells Fargo Bank, National 7.46%
Association
733 Marquette Avenue South
Minneapolis, MN 55479
Pershing, L.L.C. 5.91%
One Pershing Plaza
Jersey City, NJ 07399
SPDR DJ Global Titans ETF National Financial Services 10.28%
Corp.
200 Liberty Street
New York, NY 10281
Merrill Lynch, Pierce Fenner 10.01%
& Smith,
Inc.
4 World Financial Center
New York, NY 10080
The Northern Trust Company 9.41%
50 South LaSalle Street,
Level A
Chicago, IL 60675
Schwab (Charles) & Co., Inc. 7.90%
101 Montgomery Street
San Francisco, CA 94101
Bank of New York Mellon (The) 7.58%
One Wall Street, 5th Floor
New York, NY 10286
Citigroup Global Markets, 6.64%
Inc.
388 Greenwich Street
New York, NY 10013
</Table>
42
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
SPDR Dow Jones REIT ETF State Street Bank & Trust 24.88%
Company
1776 Heritage Drive
North Quincy, MA 02171
Schwab (Charles) & Co., Inc. 11.16%
101 Montgomery Street
San Francisco, CA 94101
Wachovia Bank, N.A. 10.64%
1525 West W. T. Harris
Boulevard
Charlotte, NC 28288
National Financial Services 7.53%
Corp.
200 Liberty Street
New York, NY 10281
SPDR KBW Bank ETF Morgan Stanley & Co. 10.05%
Incorporated
1 Pierrepont Plaza, 5th Floor
Brooklyn, NY 11201
Schwab (Charles) & Co., Inc. 8.52%
101 Montgomery Street
San Francisco, CA 94101
First Clearing L.L.C. 6.91%
901 East Byrd Street
Richmond, VA 23219
Goldman, Sachs & Co. 5.86%
180 Maiden Lane
New York, NY 10038
Citibank, N.A. 5.84%
3800 Citigroup Center Tampa
Tampa, FL 33610
National Financial Services 5.51%
Corp.
200 Liberty Street
New York, NY 10281
SPDR KBW Capital Markets ETF Citigroup Global Markets, 10.80%
Inc.
388 Greenwich Street
New York, NY 10013
Schwab (Charles) & Co., Inc. 10.15%
101 Montgomery Street
San Francisco, CA 94101
National Financial Services 8.11%
Corp.
200 Liberty Street
New York, NY 10281
Merrill Lynch, Pierce Fenner 6.87%
& Smith,
Inc.
4 World Financial Center
New York, NY 10080
</Table>
43
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Goldman, Sachs & Co. 6.79%
180 Maiden Lane
New York, NY 10038
First Clearing L.L.C. 5.09%
Riverfront Plaza, 901 East
Byrd Street
Richmond, VA 23219
SPDR KBW Insurance ETF Citigroup Global Markets, 18.13%
Inc.
388 Greenwich Street
New York, NY 10013
Pershing, L.L.C. 9.24%
One Pershing Plaza
Jersey City, NJ 07399
J.P. Morgan Clearing Corp. 7.60%
245 Park Avenue
New York, NY 10167
Bank of New York Mellon (The) 7.13%
One Wall Street, 5th Floor
New York, NY 10286
Schwab (Charles) & Co., Inc. 6.51%
101 Montgomery Street
San Francisco, CA 94101
Goldman, Sachs & Co. 6.45%
180 Maiden Lane
New York, NY 10038
SPDR Morgan Stanley First Clearing L.L.C. 27.20%
Technology ETF Riverfront Plaza, 901 East
Byrd Street
Richmond, VA 23219
The Northern Trust Company 21.25%
50 South LaSalle Street,
Level A
Chicago, IL 60675
Schwab (Charles) & Co., Inc. 9.56%
101 Montgomery Street
San Francisco, CA 94101
SPDR S&P Dividend ETF Schwab (Charles) & Co., Inc. 28.87%
101 Montgomery Street
San Francisco, CA 94101
National Financial Services 10.66%
Corp.
200 Liberty Street
New York, NY 10281
Jones (Edward D.) & Co. 7.41%
700 Maryville Centre Drive
St. Louis, MO 63141
First Clearing L.L.C. 5.80%
Riverfront Plaza, 901 East
Byrd Street
Richmond, VA 23219
</Table>
44
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Morgan Stanley & Co. 5.21%
Incorporated/Retail
75 Varick Street
New York, NY 11201
SPDR S&P Biotech ETF Schwab (Charles) & Co., Inc. 12.53%
101 Montgomery Street
San Francisco, CA 94101
National Financial Services 7.25%
Corp
200 Liberty Street
New York, NY 10281
The Bank of New York Mellon 6.40%
One Wall Street, 5th Floor
New York, NY 10286
Citigroup Global Markets, 6.17%
Inc.
388 Greenwich Street
New York, NY 10013
JPMorgan Chase Bank, National 5.77%
Association
14201 Dallas Parkway
Dallas, TX 75254
SPDR S&P Homebuilders ETF Brown Brothers Harriman & Co. 16.89%
525 Washington Blvd.
Jersey City, NJ 07310
Schwab (Charles) & Co., Inc. 7.15%
101 Montgomery Street
San Francisco, CA 94101
Citigroup Global Markets, 7.10%
Inc.
388 Greenwich Street
New York, NY 10013
National Financial Services 6.78%
Corp
200 Liberty Street
New York, NY 10281
Citibank, N.A. 5.69%
3800 Citigroup Center Tampa
Tampa, FL 33610-9122
SPDR S&P Metals & Mining ETF Brown Brothers Harriman & Co. 14.62%
525 Washington Blvd.
Jersey City, NJ 07310
Schwab (Charles) & Co., Inc. 11.60%
101 Montgomery Street
San Francisco, CA 94101
National Financial Services 7.66%
Corporation
200 Liberty Street
New York, NY 10281
</Table>
45
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
SPDR S&P Oil & Gas Equipment Schwab (Charles) & Co., Inc. 18.46%
& Services ETF 101 Montgomery Street
San Francisco, CA 94101
First Clearing L.L.C. 11.05%
Riverfront Plaza, 901 East
Byrd Street
Richmond, VA 23219
National Financial Services 10.28%
Corp.
200 Liberty Street
New York, NY 10281
Citigroup Global Markets, 6.65%
Inc.
388 Greenwich Street
New York, NY 10013
The Bank of New York Mellon 6.47%
One Wall Street, 5th Floor
New York, NY 10286
Morgan Stanley & Co. 5.69%
Incorporated/Retail
75 Varick Street
New York, NY 11201
SPDR S&P Oil & Gas Pershing, L.L.C. 10.96%
Exploration & Production One Pershing Plaza
ETF Jersey City, NJ 07399
Brown Brothers Harriman & Co. 10.94%
525 Washington Blvd.
Jersey City, NJ 07310
Schwab (Charles) & Co., Inc. 10.34%
101 Montgomery Street
San Francisco, CA 94101
Citigroup Global Markets, 9.99%
Inc.
388 Greenwich Street
New York, NY 10013
National Financial Services 5.57%
Corporation
200 Liberty Street
New York, NY 10281
SPDR S&P Pharmaceuticals ETF Brown Brothers Harriman & Co. 17.31%
525 Washington Blvd.
Jersey City, NJ 07310
Merrill Lynch, Pierce Fenner 15.65%
& Smith,
Inc.
4 World Financial Center
New York, NY 10080
Schwab (Charles) & Co., Inc. 10.93%
101 Montgomery Street
San Francisco, CA 94101
</Table>
46
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Citigroup Global Markets, 7.56%
Inc.
388 Greenwich Street
New York, NY 10013
First Clearing L.L.C. 6.11%
Riverfront Plaza, 901 East
Byrd Street
Richmond, VA 23219
Baird (Robert W.) & Co., 5.60%
Incorporated
777 East Wisconsin Avenue
First Wisconsin Center
Milwaukee, WI 53202
SPDR S&P Retail ETF Morgan Stanley & Co. 18.91%
Incorporated
1 Pierrepont Plaza, 5th Floor
Brooklyn, NY 11201
J.P. Morgan Clearing Corp. 12.54%
245 Park Avenue
New York, NY 10167
Citigroup Global Markets, 6.11%
Inc.
388 Greenwich Street
New York, NY 10013
National Financial Services 6.02%
Corporation
200 Liberty Street
New York, NY 10281
Schwab (Charles) & Co., Inc. 5.50%
101 Montgomery Street
San Francisco, CA 94101
State Street Bank & Trust 5.41%
Company
1776 Heritage Drive
North Quincy, MA 02171
SPDR S&P Semiconductor ETF Citigroup Global Markets, 15.01%
Inc.
388 Greenwich Street
New York, NY 10013
First Clearing L.L.C. 11.81%
Riverfront Plaza, 901 East
Byrd Street
Richmond, VA 23219
Schwab (Charles) & Co., Inc. 11.69%
101 Montgomery Street
San Francisco, CA 94101
Merrill Lynch, Pierce Fenner 10.41%
& Smith,
Inc.
4 World Financial Center
New York, NY 10080
National Financial Services 9.35%
Corp
200 Liberty Street
New York, NY 10281
</Table>
47
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Raymond James & Associates, 6.51%
Inc.
880 Carillon Parkway
St. Petersburg, FL 33733
SPDR KBW Mortgage Finance ETF Merrill Lynch, Pierce Fenner 86.12%
& Smith,
Inc.
4 World Financial Center
New York, NY 10080
J.P. Morgan Clearing Corp. 7.64%
245 Park Avenue
New York, NY 10167
Timber Hill L.L.C. 5.52%
Two Pickwick Plaza
Greenwich, CT 06830
SPDR KBW Regional Banking ETF State Street Bank & Trust 14.27%
Company
1776 Heritage Drive
North Quincy, MA 02171
Brown Brothers Harriman & Co. 10.51%
525 Washington Blvd.
Jersey City, NJ 07310
Schwab (Charles) & Co., Inc. 6.16%
101 Montgomery Street
San Francisco, CA 94101
J.P. Morgan Clearing Corp. 5.01%
245 Park Avenue
New York, NY 10167
SPDR Wells Fargo Preferred First Clearing L.L.C. 30.79%
Stock ETF Riverfront Plaza, 901 East
Byrd Street
Richmond, VA 23219
Citigroup Global Markets, 14.77%
Inc.
388 Greenwich Street
New York, NY 10013
National Financial Services 13.46%
Corp
200 Liberty Street
New York, NY 10281
Schwab (Charles) & Co., Inc. 7.20%
101 Montgomery Street
San Francisco, CA 94101
Wells Fargo Investments, 6.44%
L.L.C.
608 Second Avenue South, 5th
Floor
Minneapolis, MN 55479
SPDR Barclays Capital 1-3 Citigroup Global Markets, 17.21%
Month Inc.
T-Bill ETF 388 Greenwich Street
New York, NY 10013
</Table>
48
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Merrill Lynch, Pierce Fenner 11.87%
& Smith,
Inc.
4 World Financial Center
New York, NY 10080
Schwab (Charles) & Co., Inc. 10.27%
101 Montgomery Street
San Francisco, CA 94101
Morgan Stanley & Co. 10.15%
Incorporated/Retail
75 Varick Street
New York, NY 11201
UBS Financial Services Inc. 8.77%
1000 Harbor Boulevard
Weehawken, NJ 07086
National Financial Services, 8.38%
Inc.
200 Liberty Street
New York, NY 10281
TD Ameritrade, Inc. 7.53%
4211 South 102nd Street
Omaha, NE 68127
SPDR Barclays Capital TIPS Schwab (Charles) & Co., Inc. 17.32%
ETF 101 Montgomery Street
San Francisco, CA 94101
National Financial Services, 12.83%
Inc.
200 Liberty Street
New York, NY 10281
Merrill Lynch, Pierce Fenner 10.90%
& Smith,
Inc.
4 World Financial Center
New York, NY 10080
First Clearing L.L.C. 8.48%
Riverfront Plaza, 901 East
Byrd Street
Richmond, VA 23219
UBS Financial Services Inc. 5.89%
1000 Harbor Boulevard
Weehawken, NJ 07086
TD Ameritrade, Inc. 5.82%
4211 South 102nd Street
Omaha, NE 68127
Pershing, L.L.C. 5.14%
One Pershing Plaza
Jersey City, NJ 07399
SPDR Barclays Capital Short State Street Bank and Trust 27.62%
Term Corporate Bond ETF* Company
Two Heritage Drive
North Quincy, MA 02171
</Table>
49
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Citigroup Global Markets Inc. 21.19%
388 Greenwich Street
New York, NY 10013
J.P. Morgan Clearing Corp. 19.19%
245 Park Avenue
New York, NY 10167
Merrill Lynch, Pierce, Fenner 6.92%
& Smith
Incorporated
World Financial Center
New York, NY 10080
National Financial Services 5.10%
LLC
200 Liberty Street
New York, NY 10281
SPDR Barclays Capital TD Ameritrade Clearing, Inc. 46.57%
Intermediate Term Treasury 4211 South 102nd Street
ETF Omaha, NE 68127
Brown Brothers Harriman & Co. 10.49%
525 Washington Blvd.
Jersey City, NJ 07310
Merrill Lynch, Pierce Fenner 10.33%
&
Smith, Inc.
4 World Financial Center
New York, NY 10080
Schwab (Charles) & Co., Inc. 5.63%
101 Montgomery Street
San Francisco, CA 94101
SPDR Barclays Capital Long Merrill Lynch & Co., Inc. 27.14%
Term Treasury ETF 4 World Financial Center
250 Vesey Street
New York, NY 10080
Merrill Lynch, Pierce Fenner 14.96%
&
Smith, Inc.
4 World Financial Center
New York, NY 10080
LPL Financial Corporation 6.68%
9785 Towne Centre Drive
San Diego, CA 92121
National Financial Services 6.15%
Corp
200 Liberty Street
New York, NY 10281
The Bank of New York Mellon 5.87%
One Wall Street, 5th Floor
New York, NY 10286
SPDR Barclays Capital First Clearing L.L.C. 23.94%
Intermediate Term Credit 901 East Byrd Street
Bond ETF Richmond, VA 23219
</Table>
50
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
National Financial Services 11.21%
Corp
200 Liberty Street
New York, NY 10281
Huntington National Bank 11.09%
7 Easton Oval EA4E62
Columbus, OH 43219
Citigroup Global Markets, 10.34%
Inc.
388 Greenwich Street
New York, NY 10013
J.P. Morgan Clearing Corp. 6.46%
245 Park Avenue
New York, NY 10167
TD Ameritrade, Inc. 6.15%
4211 South 102nd Street
Omaha, NE 68127
Merrill Lynch, Pierce Fenner 6.04%
&
Smith, Inc.
4 World Financial Center
New York, NY 10080
Morgan Stanley & Co. 5.00%
Incorporated/Retail
75 Varick Street
New York, NY 11201
SPDR Barclays Capital Long Pershing, L.L.C. 16.93%
Term Credit Bond ETF One Pershing Plaza
Jersey City, NJ 07399
National Financial Services 15.83%
Corp
200 Liberty Street
New York, NY 10281
First Clearing L.L.C. 11.03%
901 East Byrd Street
Richmond, VA 23219
J.P. Morgan Clearing Corp. 9.53%
245 Park Avenue
New York, NY 10167
Merrill Lynch, Pierce Fenner 7.50%
&
Smith, Inc.
4 World Financial Center
New York, NY 10080
Citigroup Global Markets, 6.21%
Inc.
388 Greenwich Street
New York, NY 10013
Schwab (Charles) & Co., Inc. 6.15%
101 Montgomery Street
San Francisco, CA 94101
</Table>
51
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
SPDR Barclays Capital Schwab (Charles) & Co., Inc. 14.90%
Convertible 101 Montgomery Street
Bond ETF San Francisco, CA 94101
National Financial Services 9.10%
Corp
200 Liberty Street
New York, NY 10281
First Clearing L.L.C. 8.98%
901 East Byrd Street
Richmond, VA 23219
Merrill Lynch, Pierce Fenner 8.51%
&
Smith, Inc.
4 World Financial Center
New York, NY 10080
Citigroup Global Markets, 7.63%
Inc.
388 Greenwich Street
New York, NY 10013
State Street Bank & Trust 7.27%
Company
1776 Heritage Drive
North Quincy, MA 02171
Northern Trust Company (The) 6.37%
50 South LaSalle Street,
Level A
Chicago, IL 60675
UBS Financial Services Inc. 5.11%
1000 Harbor Boulevard
Weehawken, NJ 07086
SPDR Barclays Capital J.P. Morgan Clearing Corp. 20.41%
Mortgage Backed Bond ETF 245 Park Avenue
New York, NY 10167
National Financial Services 13.65%
Corp
200 Liberty Street
New York, NY 10281
Schwab (Charles) & Co., Inc. 12.08%
101 Montgomery Street
San Francisco, CA 94101
Citigroup Global Markets, 11.42%
Inc.
388 Greenwich Street
New York, NY 10013
TD Ameritrade, Inc. 11.38%
4211 South 102nd Street
Omaha, NE 68127
First Clearing L.L.C. 6.29%
901 East Byrd Street
Richmond, VA 23219
</Table>
52
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Merrill Lynch, Pierce Fenner 6.02%
&
Smith, Inc.
4 World Financial Center
New York, NY 10080
State Street Bank & Trust 5.82%
Company
1776 Heritage Drive
North Quincy, MA 02171
Pershing, L.L.C. 5.02%
One Pershing Plaza
Jersey City, NJ 07399
SPDR Barclays Capital Merrill Lynch, Pierce Fenner 15.30%
Aggregate &
Bond ETF Smith, Inc.
4 World Financial Center
New York, NY 10080
State Street Bank & Trust 10.83%
Company
1776 Heritage Drive
North Quincy, MA 02171
National Financial Services 9.35%
Corp
200 Liberty Street
New York, NY 10281
Citigroup Global Markets, 8.93%
Inc.
388 Greenwich Street
New York, NY 10013
TD Ameritrade, Inc. 6.04%
4211 South 102nd Street
Omaha, NE 68127
Merrill Lynch & Co., Inc. 5.41%
4 World Financial Center
250 Vesey Street
New York, NY 10080
Pershing, L.L.C. 5.30%
One Pershing Plaza
Jersey City, NJ 07399
SPDR Barclays Capital Merrill Lynch, Pierce Fenner 13.57%
Municipal &
Bond ETF Smith, Inc.
4 World Financial Center
New York, NY 10080
National Financial Services 10.98%
Corp
200 Liberty Street
New York, NY 10281
First Clearing L.L.C. 10.90%
901 East Byrd Street
Richmond, VA 23219
Schwab (Charles) & Co., Inc. 10.59%
101 Montgomery Street
San Francisco, CA 94101
</Table>
53
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Citigroup Global Markets, 10.09%
Inc.
388 Greenwich Street
New York, NY 10013
Pershing, L.L.C. 6.35%
One Pershing Plaza
Jersey City, NJ 07399
UBS Financial Services Inc. 5.91%
1000 Harbor Boulevard
Weehawken, NJ 07086
SPDR Barclays Capital Morgan Stanley & Co. 30.57%
California Municipal Bond Incorporated/Retail
ETF 75 Varick Street
New York, NY 11201
Citigroup Global Markets, 12.98%
Inc.
388 Greenwich Street
New York, NY 10013
Schwab (Charles) & Co., Inc. 9.47%
101 Montgomery Street
San Francisco, CA 94101
First Clearing L.L.C. 9.20%
901 East Byrd Street
Richmond, VA 23219
National Financial Services 8.94%
Corp
200 Liberty Street
New York, NY 10281
UBS Financial Services Inc. 6.08%
1000 Harbor Boulevard
Weehawken, NJ 07086
SPDR Barclays Capital New Citigroup Global Markets, 25.37%
York Municipal Bond ETF Inc.
388 Greenwich Street
New York, NY 10013
National Financial Services 14.03%
Corp
200 Liberty Street
New York, NY 10281
Merrill Lynch, Pierce Fenner 10.63%
&
Smith, Inc.
4 World Financial Center
New York, NY 10080
Morgan Stanley & Co. 9.89%
Incorporated/Retail
75 Varick Street
New York, NY 11201
TD Ameritrade, Inc. 7.94%
4211 South 102nd Street
Omaha, NE 68127
</Table>
54
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Schwab (Charles) & Co., Inc. 6.20%
101 Montgomery Street
San Francisco, CA 94101
Pershing, L.L.C. 5.01%
One Pershing Plaza
Jersey City, NJ 07399
SPDR Barclays Capital Short Merrill Lynch, Pierce Fenner 15.43%
Term Municipal Bond ETF &
Smith, Inc.
4 World Financial Center
New York, NY 10080
National Financial Services 11.91%
Corp
200 Liberty Street
New York, NY 10281
First Clearing L.L.C. 11.32%
901 East Byrd Street
Richmond, VA 23219
Schwab (Charles) & Co., Inc. 10.94%
101 Montgomery Street
San Francisco, CA 94101
UBS Financial Services Inc. 8.66%
1000 Harbor Boulevard
Weehawken, NJ 07086
Bank of America N.A./ GWIM 6.11%
Trust
Operations
414 N. Akard Street, 5th
Floor
Dallas, TX 75201
SPDR S&P VRDO Municipal Bond J.P. Morgan Clearing Corp. 48.57%
ETF 245 Park Avenue
New York, NY 10167
Goldman Sachs Execution & 26.18%
Clearing,
L.P.
30 Hudson Street, 4th Floor
Jersey City, NJ 07302
Merrill Lynch, Pierce Fenner 21.90%
&
Smith, Inc.
4 World Financial Center
New York, NY 10080
SPDR DB International Schwab (Charles) & Co., Inc. 15.95%
Government Inflation- 101 Montgomery Street
Protected Bond ETF San Francisco, CA 94101
National Financial Services 15.17%
Corp
200 Liberty Street
New York, NY 10281
The Bank of New York Mellon 7.63%
One Wall Street, 5th Floor
New York, NY 10286
</Table>
55
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Morgan Stanley & Co. 7.46%
Incorporated/Retail
75 Varick Street
New York, NY 11201
Merrill Lynch, Pierce Fenner 6.87%
&
Smith, Inc.
4 World Financial Center
New York, NY 10080
SPDR Barclays Capital Short National Financial Services 24.24%
Term International Treasury Corp
Bond ETF 200 Liberty Street
New York, NY 10281
Schwab (Charles) & Co., Inc. 15.13%
101 Montgomery Street
San Francisco, CA 94101
Citigroup Global Markets, 10.08%
Inc.
388 Greenwich Street
New York, NY 10013
Pershing, L.L.C. 7.70%
One Pershing Plaza
Jersey City, NJ 07399
TD Ameritrade, Inc. 6.18%
4211 South 102nd Street
Omaha, NE 68127
SPDR Barclays Capital Schwab (Charles) & Co., Inc. 17.43%
International Treasury Bond 101 Montgomery Street
ETF San Francisco, CA 94101
National Financial Services 13.74%
Corp
200 Liberty Street
New York, NY 10281
Citigroup Global Markets, 8.13%
Inc.
388 Greenwich Street
New York, NY 10013
Merrill Lynch, Pierce Fenner 7.10%
&
Smith, Inc.
4 World Financial Center
New York, NY 10080
Pershing, L.L.C. 6.95%
One Pershing Plaza
Jersey City, NJ 07399
SPDR Barclays Capital High First Clearing L.L.C. 11.50%
Yield 901 East Byrd Street
Bond ETF Richmond, VA 23219
National Financial Services 11.14%
Corp
200 Liberty Street
New York, NY 10281
</Table>
56
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
----------------------------- ----------------------------- -------------
Schwab (Charles) & Co., Inc. 9.49%
101 Montgomery Street
San Francisco, CA 94101
State Street Bank & Trust 8.17%
Company
1776 Heritage Drive
North Quincy, MA 02171
</Table>
--------
* Information as of January 1, 2010.
SPDR INDEX SHARES FUNDS
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
---------------------------- ---------------------------- -------------
SPDR DJ STOXX 50 ETF Morgan Stanley & Co. 16.23%
Incorporated/Retail
75 Varick Street
New York, NY 11201
J.P. Morgan Clearing Corp. 8.21%
245 Park Avenue
New York, NY 10167
NBCN, Inc. 8.10%
130 Adelaide Street, West
Suite 1400
Toronto, Ontario, Canada M5H
3P5
UBS Financial Services, Inc. 7.48%
1000 Harbor Boulevard
Weehawken, NJ 07086-6790
National Financial Services 6.84%
LLC
200 Liberty Street
New York, NY 10281
Charles Schwab & Company, 6.40%
Inc.
101 Montgomery Street
San Francisco, CA 94104
ML SFKPG 6.01%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
Pershing, LLC 5.70%
One Pershing Plaza
Jersey City, NJ 07399
Merrill Lynch, Pierce, 5.25%
Fenner & Smith
Incorporated
World Financial Center
New York, NY 10080
SPDR DJ EURO STOXX 50 ETF Brown Brothers Harriman & 11.35%
Co.
525 Washington Blvd.
Jersey City, NJ 07310
JPMorgan Chase Bank, 10.76%
National
Association
14201 Dallas Parkway
Dallas, TX 75254-2916
</Table>
57
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
---------------------------- ---------------------------- -------------
Pershing, LLC 9.85%
One Pershing Plaza
Jersey City, NJ 07399
National Financial Services 7.42%
LLC
200 Liberty Street
New York, NY 10281
Charles Schwab & Company, 7.20%
Inc.
101 Montgomery Street
San Francisco, CA 94104
UBS Financial Services, Inc. 6.49%
1000 Harbor Boulevard
Weehawken, NJ 07086-6790
SPDR S&P Emerging Asia Brown Brothers Harriman & 13.36%
Pacific ETF Co.
525 Washington Blvd.
Jersey City, NJ 07310
Pershing, LLC 9.75%
One Pershing Plaza
Jersey City, NJ 07399
National Financial Services 6.33%
LLC
200 Liberty Street
New York, NY 10281
ML SFKPG 5.69%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
State Street Bank and Trust 5.48%
Company
Two Heritage Drive
North Quincy, MA 02171
Charles Schwab & Company, 5.13%
Inc.
101 Montgomery Street
San Francisco, CA 94104
SPDR S&P China ETF Charles Schwab & Company, 15.51%
Inc.
101 Montgomery Street
San Francisco, CA 94104
National Financial Services 11.39%
LLC
222 Delaware Avenue
Wilmington, DE 19801
ML SFKPG 10.65%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
Brown Brothers Harriman & 6.59%
Co.
525 Washington Blvd.
Jersey City, NJ 07310
Pershing, LLC 5.30%
One Pershing Plaza
Jersey City, NJ 07399
SPDR S&P Emerging Markets State Street Bank and Trust 19.05%
ETF Company
Two Heritage Drive
North Quincy, MA 02171
National Financial Services 14.85%
LLC
200 Liberty Street
New York, NY 10281
</Table>
58
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
---------------------------- ---------------------------- -------------
Citigroup Global Markets 7.36%
Inc.
388 Greenwich Street
New York, NY 10013
Charles Schwab & Company, 6.72%
Inc.
101 Montgomery Street
San Francisco, CA 94104
Pershing, LLC 5.61%
One Pershing Plaza
Jersey City, NJ 07399
Goldman, Sachs & Co 5.30%
180 Maiden Lane
New York, NY 10038
SPDR S&P BRIC 40 ETF Charles Schwab & Company, 17.95%
Inc.
101 Montgomery Street
San Francisco, CA 94104
Brown Brothers Harriman & 17.51%
Co.
525 Washington Blvd.
Jersey City, NJ 07310
National Financial Services 10.61%
LLC
200 Liberty Street
New York, NY 10281
Citigroup Global Markets 8.64%
Inc.
388 Greenwich Street
New York, NY 10013
ML SFKPG 6.63%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
SPDR S&P Emerging Europe ETF Curian Clearing, LLC 10.22%
7601 Technology Way
Denver, CO 80237
Pershing, LLC 9.27%
One Pershing Plaza
Jersey City, NJ 07399
First Clearing L.L.C. 6.97%
Riverfront Plaza
901 East Byrd Street
Richmond, VA 23219
Charles Schwab & Company, 5.85%
Inc.
101 Montgomery Street
San Francisco, CA 94104
National Financial Services 5.74%
LLC
200 Liberty Street
New York, NY 10281
ML SFKPG 5.35%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
State Street Bank and Trust 5.32%
Company
Two Heritage Drive
North Quincy, MA 02171
SPDR S&P Emerging Latin National Financial Services 12.01%
America ETF LLC
200 Liberty Street
New York, NY 10281
</Table>
59
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
---------------------------- ---------------------------- -------------
Charles Schwab & Company, 10.07%
Inc.
101 Montgomery Street
San Francisco, CA 94104
Pershing, LLC 9.63%
One Pershing Plaza
Jersey City, NJ 07399
ML SFKPG 9.10%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
Brown Brothers Harriman & 8.66%
Co.
525 Washington Blvd.
Jersey City, NJ 07310
First Clearing L.L.C. 7.54%
Riverfront Plaza
901 East Byrd Street
Richmond, VA 23219
TD Ameritrade Clearing, Inc. 5.15%
4211 South 102nd Street
Omaha, NE 68127
SPDR S&P Emerging Middle Brown Brothers Harriman & 22.03%
East & Africa ETF Co.
525 Washington Blvd.
Jersey City, NJ 07310
J.P. Morgan Clearing Corp. 10.34%
245 Park Avenue
New York, NY 10167
ML SFKPG 8.75%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
National Financial Services 8.46%
LLC
200 Liberty Street
New York, NY 10281
Charles Schwab & Company, 6.39%
Inc.
101 Montgomery Street
San Francisco, CA 94104
Bank of America N.A./ GWIM 5.88%
Trust
Operations
414 N. Akard Street, 5th
Floor
Dallas, TX 75201
SPDR S&P World ex-US ETF ML SFKPG 25.10%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
National Financial Services 18.82%
LLC
200 Liberty Street
New York, NY 10281
UBS Financial Services LLC 9.74%
1000 Harbor Boulevard
Weehawken, NJ 07086
Pershing, LLC 9.67%
One Pershing Plaza
Jersey City, NJ 07399
</Table>
60
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
---------------------------- ---------------------------- -------------
Charles Schwab & Company, 6.97%
Inc.
101 Montgomery Street
San Francisco, CA 94104
TD Ameritrade Clearing, Inc. 5.44%
4211 South 102nd Street
Omaha, NE 68127
SPDR S&P International Small Charles Schwab & Company, 13.18%
Cap ETF Inc.
101 Montgomery Street
San Francisco, CA 94104
Pershing, LLC 11.98%
One Pershing Plaza
Jersey City, NJ 07399
SEI Private Trust Company 11.87%
1 Freedom Valley Drive
Oaks, PA 19456
State Street Bank and Trust 10.06%
Company
Two Heritage Drive
North Quincy, MA 02171
National Financial Services 9.76%
LLC
200 Liberty Street
New York, NY 10281
Brown Brothers Harriman & 5.38%
Co.
525 Washington Blvd.
Jersey City, NJ 07310
SPDR Dow Jones International Wells Fargo Bank, N.A. 22.02%
Real Estate ETF 733 Marquette Avenue South
Minneapolis, MN 55479
Charles Schwab & Company, 14.88%
Inc.
101 Montgomery Street
San Francisco, CA 94104
National Financial Services 7.80%
LLC
200 Liberty Street
New York, NY 10281
TD Ameritrade Clearing, Inc. 6.05%
4211 South 102nd Street
Omaha, NE 68127
SPDR FTSE/Macquarie Global Charles Schwab & Company, 10.82%
Infrastructure 100 ETF Inc.
101 Montgomery Street
San Francisco, CA 94104
ML SFKPG 8.90%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
National Financial Services 8.32%
LLC
200 Liberty Street
New York, NY 10281
Goldman, Sachs & Co 7.55%
180 Maiden Lane
New York, NY 10038
Citigroup Global Markets 6.11%
Inc.
388 Greenwich Street
New York, NY 10013
</Table>
61
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
---------------------------- ---------------------------- -------------
Pershing, LLC 5.29%
One Pershing Plaza
Jersey City, NJ 07399
UBS Financial Services, Inc.
1000 Harbor Boulevard 5.16%
Weehawken, NJ 07086-6790
SPDR MSCI ACWI ex-US ETF Charles Schwab & Company, 13.66%
Inc.
101 Montgomery Street
San Francisco, CA 94104
National Financial Services 10.66%
LLC
200 Liberty Street
New York, NY 10281
Brown Brothers Harriman & 7.87%
Co.
525 Washington Blvd.
Jersey City, NJ 07310
Fiduciary - SSB 7.47%
1776 Heritage Drive, 5th
Floor
Quincy, MA 02171
SEI Private Trust Company 7.07%
1 Freedom Valley Drive
Oaks, PA 19456
The Bank of New York Mellon 6.92%
One Wall Street, 5th Floor
New York, NY 10286
The Northern Trust Company 6.06%
50 South LaSalle Street
Chicago, IL 60675
SPDR Russell/Nomura PRIME Goldman, Sachs & Co. 42.48%
Japan ETF 180 Maiden Lane
New York, NY 10038
J.P. Morgan Clearing Corp. 18.85%
245 Park Avenue
New York, NY 10167
Merrill Lynch, Pierce, 15.62%
Fenner & Smith
Incorporated
World Financial Center
New York, NY 10080
SPDR Russell/Nomura Small Citibank, N.A. 15.03%
Cap Japan ETF 3800 Citigroup Center Tampa
Tampa, FL 33610
The Bank of New York Mellon 11.22%
One Wall Street, 5th Floor
New York, NY 10286
Charles Schwab & Company, 8.53%
Inc.
101 Montgomery Street
San Francisco, CA 94104
The Northern Trust Company 8.01%
50 South LaSalle Street
Chicago, IL 60675
J.P. Morgan Clearing Corp. 6.89%
245 Park Avenue
New York, NY 10167
</Table>
62
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
---------------------------- ---------------------------- -------------
National Financial Services 5.12%
LLC
200 Liberty Street
New York, NY 10281
SPDR S&P International ML SFKPG 14.76%
Dividend ETF
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
National Financial Services 11.15%
LLC
200 Liberty Street
New York, NY 10281
Charles Schwab & Company, 10.49%
Inc.
101 Montgomery Street
San Francisco, CA 94104
Pershing, LLC 7.12%
One Pershing Plaza
Jersey City, NJ 07399
First Clearing L.L.C. 6.20%
Riverfront Plaza
901 East Byrd Street
Richmond, VA 23219
Brown Brothers Harriman & 6.13%
Co.
525 Washington Blvd.
Jersey City, NJ 07310
Morgan Stanley & Co. 5.96%
Incorporated/Retail
75 Varick Street
New York, NY 11201
Citigroup Global Markets 5.80%
Inc.
388 Greenwich Street
New York, NY 10013
SPDR S&P International Mid Charles Schwab & Company, 25.16%
Cap ETF Inc.
101 Montgomery Street
San Francisco, CA 94104
National Financial Services 10.73%
LLC
200 Liberty Street
New York, NY 10281
Citigroup Global Markets 10.18%
Inc.
388 Greenwich Street
New York, NY 10013
First Clearing L.L.C. 8.26%
Riverfront Plaza
901 East Byrd Street
Richmond, VA 23219
Morgan Stanley & Co. 6.96%
Incorporated/Retail
75 Varick Street
New York, NY 11201
SPDR S&P Emerging Markets TD Ameritrade Clearing, Inc. 20.23%
Small Cap ETF 4211 South 102nd Street
Omaha, NE 68127
National Financial Services 16.68%
LLC
200 Liberty Street
New York, NY 10281
</Table>
63
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
---------------------------- ---------------------------- -------------
Charles Schwab & Company, 11.55%
Inc.
101 Montgomery Street
San Francisco, CA 94104
ML SFKPG 9.69%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
SPDR Dow Jones Global Real Raymond James & Associates, 17.92%
Estate ETF Inc.
880 Carillon Parkway
St. Petersburg, FL 33733
National Financial Services 15.36%
LLC
200 Liberty Street
New York, NY 10281
Charles Schwab & Company, 10.69%
Inc.
101 Montgomery Street
San Francisco, CA 94104
Morgan Stanley & Co. 6.48%
Incorporated/Retail
75 Varick Street
New York, NY 11201
First Clearing L.L.C. 5.54%
Riverfront Plaza
901 East Byrd Street
Richmond, VA 23219
Citigroup Global Markets 5.39%
Inc.
388 Greenwich Street
New York, NY 10013
SPDR S&P International Merrill Lynch, Pierce, 45.68%
Consumer Discretionary Fenner & Smith
Sector ETF Incorporated
World Financial Center
New York, NY 10080
ML SFKPG 11.52%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
Brown Brothers Harriman & 10.00%
Co.
525 Washington Blvd.
Jersey City, NJ 07310
LPL Financial Corporation 6.93%
9785 Towne Centre Drive
San Diego, CA 92121
National Financial Services 6.51%
LLC
200 Liberty Street
New York, NY 10281
SPDR S&P International Morgan Stanley & Co. 22.02%
Consumer Staples Sector Incorporated/Retail
ETF 75 Varick Street
New York, NY 11201
State Street Bank and Trust 20.00%
Company
Two Heritage Drive
North Quincy, MA 02171
Brown Brothers Harriman & 18.24%
Co.
525 Washington Blvd.
Jersey City, NJ 07310
</Table>
64
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
---------------------------- ---------------------------- -------------
UBS Financial Services, Inc. 11.37%
1000 Harbor Boulevard
Weehawken, NJ 07086-6790
National Financial Services 6.06%
LLC
200 Liberty Street
New York, NY 10281
SPDR S&P International Goldman Sachs Execution & 19.80%
Energy Sector ETF Clearing, L.P.
30 Hudson Street, 4th floor
Jersey City, NJ 07302
National Financial Services 16.64%
LLC
200 Liberty Street
New York, NY 10281
Citigroup Global Markets 12.17%
Inc.
388 Greenwich Street
New York, NY 10013
J.P. Morgan Clearing Corp. 8.69%
245 Park Avenue
New York, NY 10167
Charles Schwab & Company, 8.55%
Inc.
101 Montgomery Street
San Francisco, CA 94104
ML SFKPG 5.75%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
SPDR S&P International Merrill Lynch, Pierce, 21.14%
Financial Sector ETF Fenner & Smith
Incorporated
World Financial Center New
York, NY 10080
ML SFKPG 14.17%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
Brown Brothers Harriman & 10.76%
Co.
525 Washington Blvd.
Jersey City, NJ 07310
Citigroup Global Markets 10.48%
Inc.
388 Greenwich Street
New York, NY 10013
National Financial Services 10.10%
LLC
200 Liberty Street
New York, NY 10281
J.P. Morgan Clearing Corp. 8.64%
245 Park Avenue
New York, NY 10167
SPDR S&P International Goldman Sachs Execution & 31.68%
Health Care Sector ETF Clearing, L.P.
30 Hudson Street, 4th Floor
Jersey City, NJ 07302
J.P. Morgan Clearing Corp. 15.80%
245 Park Avenue
New York, NY 10167
</Table>
65
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
---------------------------- ---------------------------- -------------
National Financial Services 13.30%
LLC
200 Liberty Street
New York, NY 10281
Charles Schwab & Company, 11.84%
Inc.
101 Montgomery Street
San Francisco, CA 94104
UBS Financial Services, Inc. 7.32%
1000 Harbor Boulevard
Weehawken, NJ 07086-6790
SPDR S&P International Pershing, LLC 17.61%
Industrial Sector ETF One Pershing Plaza
Jersey City, NJ 07399
National Financial Services 13.33%
LLC
200 Liberty Street
New York, NY 10281
Goldman Sachs Execution & 11.40%
Clearing, L.P.
30 Hudson Street, 4th floor
Jersey City, NJ 07302
Goldman, Sachs & Co. 10.87%
180 Maiden Lane
New York, NY 10038
J.P. Morgan Clearing Corp. 9.66%
245 Park Avenue
New York, NY 10167
UBS Financial Services, Inc. 8.44%
1000 Harbor Boulevard
Weehawken, NJ 07086-6790
Citigroup Global Markets 6.16%
Inc.
388 Greenwich Street
New York, NY 10013
SPDR S&P International National Financial Services 20.86%
Materials Sector ETF LLC
200 Liberty Street
New York, NY 10281
ML SFKPG 14.94%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
LPL Financial Corporation 14.14%
9785 Towne Centre Drive
San Diego, CA 92121
State Street Bank and Trust 9.09%
Company
Two Heritage Drive
North Quincy, MA 02171
Charles Schwab & Company, 6.36%
Inc.
101 Montgomery Street
San Francisco, CA 94104
SPDR S&P International Pershing, LLC 61.48%
Technology Sector ETF One Pershing Plaza
Jersey City, NJ 07399
State Street Bank and Trust 7.14%
Company
Two Heritage Drive
North Quincy, MA 02171
</Table>
66
<Table>
<Caption>
PERCENTAGE OF
SPDR FUND NAME AND ADDRESS OWNERSHIP
---------------------------- ---------------------------- -------------
National Financial Services 6.00%
LLC
200 Liberty Street
New York, NY 10281
SPDR S&P International Pershing, LLC 57.55%
Telecommunications Sector One Pershing Plaza
ETF Jersey City, NJ 07399
Charles Schwab & Company, 14.31%
Inc.
101 Montgomery Street
San Francisco, CA 94104
J.P. Morgan Clearing Corp. 7.07%
245 Park Avenue
New York, NY 10167
SPDR S&P International Charles Schwab & Company, 35.36%
Utilities Sector ETF Inc.
101 Montgomery Street
San Francisco, CA 94104
J.P. Morgan Clearing Corp. 11.86%
245 Park Avenue
New York, NY 10167
Goldman, Sachs & Co. 10.82%
180 Maiden Lane
New York, NY 10038
Merrill Lynch, Pierce, 9.52%
Fenner & Smith
Incorporated
World Financial Center
New York, NY 10080
National Financial Services 8.81%
LLC
200 Liberty Street
New York, NY 10281
ML SFKPG 5.13%
101 Hudson Street, 8th Fl.
Jersey City, NJ 07302
</Table>
67
EXHIBIT A:
FORM OF
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT, dated as of [ ], by and between SSgA Funds Management,
Inc., a Massachusetts corporation (the "ADVISER"), and Nuveen Asset Management,
a Delaware corporation (the "SUB-ADVISER").
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("ADVISERS ACT");
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated July 1, 2004 with the SPDR Series Trust ("TRUST") an investment company
registered under the Investment Company Act of 1940, as amended ("INVESTMENT
COMPANY ACT");
WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Advisers Act;
WHEREAS, the Board of Trustees of the Trust (the "BOARD") and the Adviser
desire to retain the Sub-Adviser to render investment advisory and other
services to the portfolio(s) specified in Appendix A hereto, each a series of
the Trust (each a "FUND" and collectively, the "FUNDS"), in the manner and on
the terms hereinafter set forth;
WHEREAS, the Adviser has the authority under the Investment Advisory
Agreement with the Trust to select sub-advisers for each Fund of the Trust; and
WHEREAS, the Sub-Adviser is willing to furnish such services to the Adviser
and each Fund;
NOW, THEREFORE, the Adviser and the Sub-Adviser agree as follows:
1. APPOINTMENT OF THE SUB-ADVISER
(a) The Adviser hereby appoints the Sub-Adviser to act as an investment
adviser for each Fund, subject to the supervision and oversight of the Adviser
and the Board, and in accordance with the terms and conditions of this
Agreement. The Sub-Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation specified in Appendix A hereto.
(b) In the event that the Trust establishes one or more series in addition
to the Funds with respect to which the Adviser desires to retain the Sub-Adviser
to render investment advisory services hereunder, the Adviser shall so notify
the Sub-Adviser in writing, indicating the advisory fee to be payable to the
Sub-Adviser with respect to each additional Fund. If the Sub-Adviser is willing
to render such services, it shall so notify the Adviser in writing, whereupon
each such additional Fund shall become a Fund hereunder. In such event, a
writing signed by both the Adviser and the
A-1
Sub-Adviser shall be annexed hereto as a part hereof indicating that each such
additional Fund has become a Fund hereunder and reflecting the agreed-upon fee
schedule for each such additional Fund.
2. SERVICES TO BE RENDERED BY THE SUB-ADVISER
(a) Subject to the supervision of the Adviser and the Board and consistent
with its fiduciary duties to each Fund, the Sub-Adviser shall manage the
investment operations and determine the composition of the assets assigned to
the Sub-Adviser by the Adviser ("portfolio") of each Fund, including the
purchase, retention and disposition of the securities and other instruments held
by the Fund, in accordance with such Fund's investment objective and policies as
stated in the then-current prospectus ("PROSPECTUS") and Statement of Additional
Information ("SAI") for such Fund contained in the Trust's Registration
Statement on Form N-1A (the "REGISTRATION STATEMENT"), as such Prospectus and
SAI are amended or supplemented from time to time. As part of the services it
will provide hereunder, the Sub-Adviser shall:
(i) provide supervision of each Fund's investments, furnish a
continuous investment program for the Funds, determine from time to time
what investments or securities will be purchased, retained or sold by the
Funds, and what portion of the assets will be invested or held uninvested
as cash;
(ii) maintain books and records with respect to the Trust's securities
transactions and keep the Board and the Adviser fully informed on an
ongoing basis as agreed by the Adviser and the Sub-Adviser of all material
facts concerning the investment and reinvestment of the assets in the
Funds, the Sub-Adviser and its key investment personnel and operations
providing services with respect to the Fund; make regular and periodic
special written reports of such additional information concerning the same
as may reasonably be requested from time to time by the Adviser or the
Board, and the Sub-Adviser will attend meetings with the Adviser and/or the
Trustees, as reasonably requested, to discuss the foregoing;
(iii) in accordance with procedures and methods established by the
Board, which may be amended from time to time, provide assistance in
determining the fair value of all securities and other investments/assets
in the Funds, as necessary, and use reasonable efforts to arrange for the
provision of valuation information or a price(s) from a party(ies)
independent of the Sub-Adviser for each security or other investment/asset
in the Fund for which market prices are not readily available, it being
understood that the Sub-Adviser shall not be responsible for determining
the value of any such security;
(iv) provide any and all material composite performance information,
records and supporting documentation about accounts the Sub-Adviser
manages, if appropriate, which are relevant to the Fund and that have
investment objectives, policies, and strategies substantially similar to
those employed by
A-2
the Sub-Adviser in managing the Fund that may be reasonably necessary,
under applicable laws, to allow the Fund or its agent to present
information concerning the Sub-Adviser's prior performance in the Trust's
Prospectus and SAI (as hereinafter defined) and any permissible reports and
materials prepared by the Fund or its agent;
(v) cooperate with and provide reasonable assistance to the Adviser,
the Trust's administrator, the Trust's custodian and foreign custodians,
the Trust's transfer agent and pricing agents and all other agents and
representatives of the Trust that the Adviser and Sub-Adviser shall agree,
and the Adviser upon request from such person, shall keep all such persons
fully informed as to such matters as they may reasonably deem necessary to
the performance of their obligations to the Trust and the Adviser, provide
prompt responses to reasonable requests made by such persons and maintain
any appropriate interfaces with each so as to promote the efficient
exchange of information; and
(vi) the Sub-Adviser shall initially determine and make such
modifications to the identity and number of shares of the Deposit
Securities and the Fund Securities required for a Fund Deposit or
Redemption for each Fund as may be necessary as a result of rebalancing
adjustments and corporate action events (and may give directions to the
Trust's Custodian with respect to such designation) (capitalized terms have
the meaning set forth in the Funds' prospectus).
(b) In furnishing services hereunder, the Sub-Adviser shall be subject to,
and shall perform its responsibilities in accordance with the following: (i) the
Trust's Agreement and Declaration of Trust, as the same may be hereafter
modified and/or amended from time to time ("TRUST DECLARATION"); (ii) the By-
Laws of the Trust, as the same may be hereafter modified and/or amended from
time to time ("BY-LAWS"); (iii) the Prospectus and SAI of the Trust filed with
the Securities and Exchange Commission ("SEC") and delivered to the Sub-Adviser,
as the same may be hereafter modified, amended and/or supplemented; (iv) the
Investment Company Act, the Advisers Act, the applicable provisions of the
Internal Revenue Code of 1986, as amended, and the Commodities Exchange Act and
the rules under each, and all other federal and state laws or regulations
applicable to the Trust and the Fund(s); (v) the terms and conditions of
exemptive and no-action relief granted to the Trust as amended from time to
time; (vi) the Trust's policies and procedures adopted from time to time by the
Board; and (vii) the written instructions of the Adviser. Prior to the
commencement of the Sub-Adviser's services hereunder, the Adviser shall provide
the Sub-Adviser with current copies of the Trust Declaration, By-Laws,
Prospectus and SAI and other relevant policies and procedures adopted by the
Board and by applicable exemptive and no action relief. The Adviser undertakes
to provide the Sub-Adviser with copies or other written notice of any
amendments, modifications or supplements to any such above-mentioned document.
(c) In furnishing services hereunder, the Sub-Adviser will not consult with
any other investment adviser to (i) the Fund, (ii) any other Fund of the Trust
or (iii) any
A-3
other investment company under common control with the Trust concerning
transactions of the Fund in securities or other assets. (This shall not be
deemed to prohibit the Sub-Adviser from consulting with any of its affiliated
persons concerning transactions in securities or other assets. This also shall
not be deemed to prohibit the Sub-Adviser from consulting with any of the other
covered advisers concerning compliance with paragraphs (a) and (b) of Rule 12d3-
1 under the Investment Company Act.)
(d) The Sub-Adviser, at its expense, will furnish: (i) all necessary
facilities and personnel, including salaries, expenses and fees of any personnel
required for the Sub-Adviser to faithfully perform its duties under this
Agreement; and (ii) administrative facilities, including bookkeeping, and all
equipment necessary for the efficient conduct of the Sub-Adviser's duties under
this Agreement.
(e) The Sub-Adviser will select brokers and dealers to effect all portfolio
transactions subject to the conditions set forth herein which may include
brokers and dealers affiliated with the Sub-Adviser if and as permitted by
applicable law. The Sub-Adviser will place all necessary orders with brokers,
dealers, or issuers, and will negotiate brokerage commissions, if applicable.
The Sub-Adviser is directed at all times to seek to execute transactions for
each Fund (i) in accordance with any written policies, practices or procedures
that may be established by the Board or the Adviser from time to time and which
have been provided to the Sub-Adviser or (ii) as described in the Trust's
Prospectus and SAI. In placing any orders for the purchase or sale of
investments for each Fund, in the name of the Fund or its nominees, the Sub-
Adviser shall seek to achieve for the Fund "best execution", considering all of
the circumstances, and shall maintain records adequate to demonstrate compliance
with this requirement. In no instance will portfolio securities be purchased
from or sold to the Sub-Adviser, or any affiliated person thereof, except in
accordance with the Investment Company Act, the Advisers Act and the rules under
each, and all other federal and state laws or regulations applicable to the
Trust and the Fund.
(f) Subject to the appropriate policies and procedures approved by the
Board, the Sub-Adviser may, to the extent consistent with the safe harbor set
forth in Section 28(e) of the Securities Exchange Act of 1934, as amended
("EXCHANGE ACT"), cause each Fund to pay a broker or dealer that provides
brokerage or research services to the Adviser, the Sub-Adviser or the Fund an
amount of commission for effecting a portfolio transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Sub-Adviser determines, in good faith, that such amount
of commission is reasonable in relationship to the value of such brokerage or
research services provided viewed in terms of that particular transaction or the
Sub-Adviser's overall responsibilities to the Fund or its other advisory
clients. To the extent consistent with Section 28(e) and the Board, the Sub-
Adviser shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of such action.
Subject to seeking best execution, the Board or the Adviser may authorize, but
not require, the Sub-Adviser to effect transactions in portfolio securities
through
A-4
broker-dealers in a manner that will help generate resources to pay the cost of
certain expenses that the Trust is required to pay or for which the Trust is
required to arrange payment.
(g) On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Fund(s) as well as other clients of
the Sub-Adviser and its affiliates, the Sub-Adviser to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be purchased or sold to attempt to obtain a more
favorable price or lower brokerage commissions and efficient execution.
Allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Sub-Adviser in the manner which
the Sub-Adviser considers to be the most equitable and consistent with its
fiduciary obligations to each Fund and to its other clients over time. The
Adviser agrees that the Sub-Adviser and its affiliates may give advice and take
action in the performance of their duties with respect to any of their other
clients that may differ from advice given, or the timing or nature of actions
taken, with respect to the Fund. The Adviser also acknowledges that the Sub-
Adviser and its affiliates are fiduciaries to other entities, some of which have
the same or similar investment objectives (and will hold the same or similar
investments) as the Fund, and that the Sub-Adviser will carry out its duties
hereunder together with its duties under such relationships. Nothing in this
Agreement shall be deemed to confer upon the Sub-Adviser any obligation to
purchase or to sell or to recommend for purchase or sale for the Fund any
investment that the Sub-Adviser, its affiliates, officers or employees may
purchase or sell for its or their own account or for the account of any client,
if in the sole and absolute discretion of the Sub-Adviser it is for any reason
impractical or undesirable to take such action or make such recommendation for
the Fund.
(h) The Sub-Adviser will maintain all accounts, books and records with
respect to each Fund as are required of an investment adviser of a registered
investment company pursuant to the Investment Company Act and Advisers Act and
the rules thereunder and shall file with the SEC all forms pursuant to Section
13 of the Exchange Act, with respect to its duties as are set forth herein.
(i) The Sub-Adviser will, unless and until otherwise directed by the
Adviser or the Board and consistent with seeking the best interests of each
Fund, exercise (or not exercise in its discretion) all rights of security
holders with respect to securities held by each Fund, including, but not limited
to: voting proxies, converting, tendering, exchanging or redeeming securities;
acting as a claimant in class action litigation (including litigation with
respect to securities previously held); and exercising rights in the context of
a bankruptcy or other reorganization. Unless the Adviser or the Board gives
written instructions to the contrary, the Sub-Adviser shall vote all proxies
solicited by or with respect to the issuers of securities in which assets of the
Fund may be invested in accordance with the Sub-Adviser's proxy voting
guidelines, a copy of which has been provided to the Adviser.
A-5
3. COMPENSATION OF THE ADVISER
The Adviser shall pay the Sub-Adviser an advisory fee with respect to each
Fund as specified in Appendix A to this Agreement.
4. LIABILITY AND INDEMNIFICATION
(a) Except as may otherwise be provided by the Investment Company Act or
any other federal securities law, neither the Sub-Adviser nor any of its
officers, members or employees (its "AFFILIATES") shall be liable for any
losses, claims, damages, liabilities or litigation (including legal and other
expenses) incurred or suffered by the Adviser or the Trust as a result of any
error of judgment or mistake of law by the Sub-Adviser or its Affiliates with
respect to each Fund, except that nothing in this Agreement shall operate or
purport to operate in any way to exculpate, waive or limit the liability of the
Sub-Adviser for, and the Sub-Adviser shall indemnify and hold harmless the
Trust, the Adviser, all affiliated persons thereof (within the meaning of
Section 2(a)(3) of the Investment Company Act) and all controlling persons (as
described in Section 15 of the Securities Act of 1933, as amended ("1933 ACT"))
(collectively, "ADVISER INDEMNITEES") against any and all losses, claims,
damages, liabilities or litigation (including reasonable legal and other
expenses) to which any of the Adviser Indemnitees may become subject under the
1933 Act, the Investment Company Act, the Advisers Act, or under any other
statute, or common law or otherwise arising out of or based on (i) any willful
misconduct, bad faith, reckless disregard or gross negligence of the Sub-Adviser
in the performance of any of its duties or obligations hereunder or (ii) any
untrue statement of a material fact relating to the Sub-Adviser contained in the
Prospectus and SAI, proxy materials, reports, advertisements, sales literature,
or other materials pertaining to the Fund or the omission to state therein a
material fact known to the Sub-Adviser which was required to be stated therein
or necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the Adviser or the
Trust by the Sub-Adviser Indemnitees (as defined below) expressly for use
therein and provided that the Adviser gave the Sub-Adviser a reasonable advance
opportunity to review and comment on all such Fund materials that relate to the
Sub-Adviser.
(b) Except as may otherwise be provided by the Investment Company Act or
any other federal securities law, the Adviser and the Trust shall not be liable
for any losses, claims, damages, liabilities or litigation (including legal and
other expenses) incurred or suffered by the Sub-Adviser as a result of any error
of judgment or mistake of law by the Adviser with respect to each Fund, except
that nothing in this Agreement shall operate or purport to operate in any way to
exculpate, waive or limit the liability of the Adviser for, and the Adviser
shall indemnify and hold harmless the Sub-Adviser, all affiliated persons
thereof (within the meaning of Section 2(a)(3) of the Investment Company Act)
and all controlling persons (as described in Section 15 of the 1933 Act)
(collectively, "SUB-ADVISER INDEMNITEES") against any and all losses, claims,
damages, liabilities or litigation (including reasonable legal and other
A-6
expenses) to which any of the Sub-Adviser Indemnitees may become subject under
the 1933 Act, the Investment Company Act, the Advisers Act, or under any other
statute, at common law or otherwise arising out of or based on (i) any willful
misconduct, bad faith, reckless disregard or gross negligence of the Adviser in
the performance of any of its duties or obligations hereunder or (ii) any untrue
statement of a material fact contained in the Prospectus and SAI, proxy
materials, reports, advertisements, sales literature, or other materials
pertaining to the Fund(s) or the omission to state therein a material fact known
to the Adviser that was required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon information furnished to the Adviser or the Trust by the Sub-
Adviser Indemnitees expressly for use therein and provided that the Adviser gave
the Sub-Adviser a reasonable advance opportunity to review and comment on all
such Fund materials that relate to the Sub-Adviser.
5. REPRESENTATIONS OF THE ADVISER
The Adviser represents, warrants and agrees that:
(a) The Adviser has been duly authorized by the Board to delegate to
the Sub-Adviser the provision of investment services to each Fund as
contemplated hereby.
(b) The Adviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the Investment
Company Act, the Advisers Act or other law, regulation or order from
performing the services contemplated by this Agreement; (iii) to the best
of its knowledge, has met and will seek to continue to meet for so long as
this Agreement is in effect, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform the services
contemplated by this Agreement; and (iv) will promptly notify the Sub-
Adviser of the occurrence of any event that would disqualify the Adviser
from serving as investment manager of an investment company pursuant to
Section 9(a) of the Investment Company Act or otherwise. The Adviser will
also promptly notify the Sub-Adviser if it is served or otherwise receives
notice of any action, suit, proceeding, inquiry or investigation, at law or
in equity, before or by any court, public board or body, regulatory agency,
involving the affairs of the Fund(s), provided, however, that routine
regulatory examinations shall not be required to be reported by this
provision.
6. REPRESENTATIONS OF THE SUB-ADVISER
The Sub-Adviser represents, warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered (or shall qualify
for an exemption from registration) for so long as this Agreement remains
in effect;
A-7
(ii) is not prohibited by the Investment Company Act, the Advisers Act or
other law, regulation or order from performing the services contemplated by
this Agreement; (iii) to the best of its knowledge, has met and will seek
to continue to meet, for so long as this Agreement remains in effect, any
other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency necessary
to be met in order to perform the services contemplated by this Agreement;
(iv) has the authority to enter into and perform the services contemplated
by this Agreement; and (v) will promptly notify the Adviser of the
occurrence of any event that would substantially impair the Sub-Adviser's
ability to fulfill its commitment under this Agreement or disqualify the
Sub-Adviser from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the Investment Company Act or otherwise. The
Sub-Adviser will also promptly notify each Fund and the Adviser if it is
served or otherwise receives notice of any action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court,
public board or body, involving the affairs of the Fund(s), provided,
however, that routine regulatory examinations shall not be required to be
reported by this provision.
(b) The Sub-Adviser has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the Investment Company Act and
Rule 204A-1 under the Advisers Act and will provide the Adviser and the
Board with a copy of such code of ethics, together with evidence of its
adoption. Within forty-five days of the end of the last calendar quarter of
each year that this Agreement is in effect, and as otherwise requested, the
president, Chief Operating Officer, compliance officer or a vice-president
of the Sub-Adviser shall certify to the Adviser that the Sub-Adviser has
complied with the requirements of Rule 17j-1 and Rule 204A-1 during the
previous year and that there has been no material violation of the Sub-
Adviser's code of ethics or, if such a material violation has occurred,
that appropriate action was taken in response to such violation. Upon the
written request of the Adviser, the Sub-Adviser shall permit the Adviser,
its employees or its agents to examine the reports required to be made to
the Sub-Adviser by Rule 17j-1(c)(1) and Rule 204A-1(b) and all other
records relevant to the Sub-Adviser's code of ethics but only to the extent
such reports and/or records relate to the provision of services hereunder.
(c) The Sub-Adviser has adopted and implemented and will maintain (a)
in accordance with Rule 206(4)-7 under the Advisers Act, policies and
procedures reasonably designed to prevent violation by the Sub-Adviser and
its supervised persons (as such term is defined by the Advisers Act) of the
Advisers Act and the rules thereunder; and (b) to the extent that the Sub-
Adviser's activities or services could affect the Fund(s), policies and
procedures reasonably designed to prevent violation of the federal
securities laws (as such term is defined in Rule 38a-1 under the Investment
Company Act) by the Fund(s) and the Sub-Adviser.
A-8
(d) The Sub-Adviser has provided the Trust and the Adviser with a copy
of its Form ADV, which as of the date of this Agreement is its Form ADV as
most recently filed with the SEC and promptly will furnish a copy of all
material amendments to the Trust and the Adviser at least annually. Such
amendments shall reflect those material changes in the Sub-Adviser's
organizational structure, professional staff or other significant
developments affecting the Sub-Adviser's services hereunder, which are
required by the Advisers Act.
(e) The Sub-Adviser will notify the Trust and the Adviser of any
assignment of this Agreement or change of control of the Sub-Adviser, as
applicable, and any changes in the key personnel who are either the
portfolio manager(s) of the Fund(s) or senior management of the Sub-Adviser
with management responsibilities relating to the services hereunder, in
each case prior to or promptly after, such change. The Sub-Adviser agrees
to bear all reasonable expenses of the Trust, if any, arising out of an
assignment or change in control of the Sub-Adviser.
(f) The Sub-Adviser will notify the Adviser immediately upon detection
of (a) any material failure to manage the Fund(s) in accordance with the
Fund(s)' stated investment objectives and policies or any applicable law;
or (b) any material breach of any of the Fund(s)' or the Sub-Adviser's
policies, guidelines or procedures related to the Fund(s).
(g) The Sub-Adviser agrees to maintain an appropriate level of errors
and omissions or professional liability insurance coverage.
(h) The Sub-Adviser agrees that neither it, nor any of its affiliates,
will knowingly in any way refer directly or indirectly to its relationship
with the Trust, the Fund(s), the Adviser or any of their respective
affiliates in offering, marketing or other promotional materials without
the express written consent of the Adviser, except as required by rule,
regulation or upon the request of a governmental authority. However, the
Sub-Adviser may use the performance of the Fund in its composite
performance. Notwithstanding the foregoing, nothing in this Agreement shall
be interpreted to prevent the Sub-Adviser from referring to the names of
the Fund(s) managed by the Sub-Adviser, currently intended to be named as
"SPDR(R) Nuveen [Index Name] ETF."
7. NON-EXCLUSIVITY
The services of the Sub-Adviser to the Adviser, the Fund(s) and the Trust
are not to be deemed to be exclusive, and the Sub-Adviser shall be free to
render investment advisory or other services to others and to engage in other
activities, provided the Sub-Adviser furnishes in its Form ADV adequate
disclosure of possible conflicts of interest and implements procedures designed
to mitigate or eliminate such conflicts. It is understood and agreed that the
directors, officers, and employees of the Sub-Adviser are not prohibited from
engaging in any other business activity or
A-9
from rendering services to any other person, or from serving as partners,
officers, directors, trustees, or employees of any other firm or corporation.
8. SUPPLEMENTAL ARRANGEMENTS
The Sub-Adviser may from time to time employ or associate itself with any
person it believes to be particularly suited to assist it in providing the
services to be performed by such Sub-Adviser hereunder, provided that no such
person shall perform any services with respect to the Fund(s) that would
constitute an assignment or require a written advisory agreement pursuant to the
Investment Company Act. Any compensation payable to such persons shall be the
sole responsibility of the Sub-Adviser, and neither the Adviser nor the Trust
shall have any obligations with respect thereto or otherwise arising under the
Agreement.
9. REGULATION
Each party agrees to provide reasonable cooperation to the other party in
furtherance of this Agreement, including without limitation providing relevant
information, reports, or other materials pursuant to a request or requirement of
regulatory and administrative bodies having jurisdiction the party seeking such
cooperation.
10. RECORDS
The records relating to the services provided under this Agreement shall be
the property of the Trust and shall be under its control; however, the Trust
shall furnish to the Sub-Adviser such records and permit it to retain such
records (either in original or in duplicate form) as it shall reasonably require
in order to carry out its business. In the event of the termination of this
Agreement, such other records shall promptly be returned to the Trust by the
Sub-Adviser free from any claim or retention of rights therein, provided that
the Sub-Adviser may retain any such records that are required by law or
regulation or reasonably required in order to carryout its business. The Sub-
Adviser shall keep confidential any information obtained in connection with its
duties hereunder and is either identified as confidential or by its nature or
means of receipt would be considered confidential and disclose such information
only if the Trust has authorized such disclosure or if such disclosure is
expressly required or requested by applicable federal or state regulatory
authorities, or otherwise required by law.
11. DURATION OF AGREEMENT
This Agreement shall become effective upon the date first above written,
provided that this Agreement shall not take effect unless it has first been
approved: (i) by a vote of a majority of those trustees of the Trust who are not
"interested persons" (as defined in the Investment Company Act) of any party to
this Agreement ("INDEPENDENT TRUSTEES"), cast in person at a meeting called for
the purpose of voting on such approval, and (ii) by vote of a majority of the
Fund's outstanding securities. This Agreement shall continue in effect for a
period more than two years from the date of its execution only so long as such
continuance is specifically
A-10
approved at least annually by the Board provided that in such event such
continuance shall also be approved by the vote of a majority of the Independent
Trustees cast in person at a meeting called for the purpose of voting on such
approval.
12. ASSIGNMENT AND TERMINATION OF AGREEMENT
This Agreement may be terminated at any time, without the payment of any
penalty by the Adviser or the Sub-Adviser on sixty (60) days' written notice to
the other party. This Agreement will automatically terminate, without the
payment of any penalty, (i) in the event of its assignment (as defined in the
Investment Company Act), or (ii) in the event the Investment Management
Agreement between the Adviser and the Trust is assigned (as defined in the
Investment Company Act) or terminates for any other reason. This Agreement will
also terminate upon written notice to the other party that the other party is in
material breach of this Agreement, unless the other party in material breach of
this Agreement cures such breach to the reasonable satisfaction of the party
alleging the breach within thirty (30) days after written notice.
Notwithstanding the foregoing, no assignment shall be deemed to result from
any changes in the directors, officers or employees of such Sub-Adviser except
as may be provided to the contrary in the Investment Company Act or the rules or
regulations thereunder.
13. AMENDMENTS TO THE AGREEMENT
Except to the extent permitted by the Investment Company Act or the rules
or regulations thereunder or pursuant to no-action relief granted by the SEC
Staff or exemptive relief granted by the SEC, this Agreement may be amended by
the parties only if such amendment, if material, is specifically approved by the
vote of a majority of the outstanding voting securities of a Fund and by the
vote of a majority of the Independent Trustees cast in person at a meeting
called for the purpose of voting on such approval. The required shareholder
approval shall be effective with respect to the Fund if a majority of the
outstanding voting securities of the Fund vote to approve the amendment,
notwithstanding that the amendment may not have been approved by a majority of
the outstanding voting securities of any other Fund affected by the amendment or
all the Funds of the Trust.
Any change, waiver, discharge or termination of a provision of this
Agreement, whether or not such change is deemed to be material, may be made only
by an instrument in writing signed by both the Adviser and the Sub-Adviser.
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties with respect to each Fund.
This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts shall
together constitute one and the same document.
A-11
15. HEADINGS
The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
16. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the address listed below of each applicable party in
person or by registered or certified mail or a private mail or delivery service
providing the sender with notice of receipt or such other address as specified
in a notice duly given to the other parties. Notice shall be deemed given on the
date delivered or mailed in accordance with this paragraph.
<Table>
For: SPDR Series Trust
Ryan Louvar, Secretary
State Street Bank and Trust Company
Four Copley Place, CPH0326
Boston, MA 02116
For: SSgA Funds Management, Inc.
Attn: Chief Compliance Officer
State Street Financial Center
1 Lincoln Street
Boston, MA 02111
For: Nuveen Asset Management
333 West Wacker Drive
Chicago IL 60606
Attn: Legal Department
</Table>
17. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.
18. TRUST AND SHAREHOLDER LIABILITY
The Adviser and the Sub-Adviser are hereby expressly put on notice of the
limitation of shareholder liability as set forth in the Trust Declaration and
agree that obligations assumed by the Trust pursuant to this Agreement shall be
limited in all cases to the Trust and its assets, and if the liability relates
to one or more series, the obligations hereunder shall be limited to the
respective assets of the Fund. The Adviser and the Sub-Adviser further agree
that they shall not seek satisfaction of any such obligation from the
shareholders or any individual shareholder of the Fund(s), nor from the Trustees
or any individual Trustee of the Trust.
A-12
19. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the Commonwealth of Massachusetts. To the extent
that the laws of the Commonwealth of Massachusetts, or any of the provisions in
this Agreement, conflict with applicable provisions of the Investment Company
Act, the latter shall control.
20. INTERPRETATION
Any question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of the
Investment Company Act shall be resolved by reference to such term or provision
of the Investment Company Act and to interpretations thereof, if any, by the
United States courts or, in the absence of any controlling decision of any such
court, by rules, regulations or orders of the SEC validly issued pursuant to the
Investment Company Act. Specifically, the terms "vote of a majority of the
outstanding voting securities," "interested persons," "assignment," and
"affiliated persons," as used herein shall have the meanings assigned to them by
Section 2(a) of the Investment Company Act. In addition, where the effect of a
requirement of the Investment Company Act reflected in any provision of this
Agreement is relaxed by a rule, regulation or order of the SEC, whether of
special or of general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
21. RIGHTS OF FUND
The Trust is hereby expressly made a third-party beneficiary of this
Agreement and shall have the full right to enforce any and all provisions of
this Agreement for its benefit and to proceed directly against the Sub-Adviser
for any breach of any provision of this Agreement or for any loss, damage,
claim, liability arising due to any act or omission on the part of the Sub-
Adviser to the same extent as if the Fund itself were a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first mentioned above.
NUVEEN ASSET MANAGEMENT
By:
Name: [ ]
Title: [ ]
SSgA FUNDS MANAGEMENT, INC.
By:
Name: [ ]
Title: [ ]
A-13
APPENDIX A
SUB-ADVISER COMPENSATION
The Adviser shall pay the Sub-Adviser, upon receipt of an invoice, a
monthly fee for its services for the Funds listed below in the amount of 45% of
the advisory fee paid by the Fund to the Adviser set forth below after deducting
payments to fund service providers and fund expenses.
<Table>
<Caption>
FUND ADVISORY FEE
-------------------------------------------------- ------------
SPDR Barclays Capital Municipal Bond ETF (TFI).... 20bps
SPDR Barclays Capital California Municipal Bond
ETF (CXA)....................................... 20bps
SPDR Barclays Capital New York Municipal Bond ETF
(INY)........................................... 20bps
SPDR Barclays Capital Short Term Municipal Bond
ETF (SHM)....................................... 20bps
SPDR S&P VRDO Municipal Bond ETF (VRD)............ 20bps
</Table>
A-14
EXHIBIT B:
TABLE COMPARING CURRENT FUNDAMENTAL POLICIES TO
PROPOSED FUNDAMENTAL POLICIES
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED FUNDAMENTAL
PROPOSAL 4 POLICY* POLICY
------------------------ ------------------------ ------------------------
Subproposal 4A: To amend SPDR Series Trust: The The Fund may not invest
the fundamental policy Fund may not purchase, directly in real estate
on purchasing and hold or deal in real unless the real estate
selling real estate. estate, or oil, gas or is acquired as a result
mineral interests or of ownership of
leases, but the Fund may securities or other
purchase and sell instruments. This
securities that are restriction shall not
issued by companies that preclude the Fund from
invest or deal in such investing in companies
assets. that deal in real estate
or in instruments that
SPDR Index Shares Funds: are backed or secured by
The Fund may not real estate.
purchase, hold or deal
in real estate, but the
Fund may purchase and
sell securities that are
issued by companies that
invest or deal in real
estate assets.
Subproposal 4B: To amend The Fund may not issue The Fund may not issue
the fundamental policy senior securities or senior securities or
on issuing senior borrow money, except borrow money except as
securities and borrowing borrowings from banks permitted by the 1940
money. for temporary or Act or other governing
emergency purposes in an statute, by the Rules
amount up to 10% of the thereunder, or by the
value of the Fund's SEC or other regulatory
total assets (including agency with authority
the amount borrowed), over the Fund.
valued at market, less
liabilities (not
including the amount
borrowed) valued at the
time the borrowing is
made, and the Fund will
not purchase securities
while borrowings in
excess of 5% of the
Fund's total assets are
outstanding, provided,
that for purposes of
this restriction, short-
term credits necessary
for the clearance of
transactions are not
considered borrowings
(this limitation on
purchases does not apply
to acceptance by the
Fund of a deposit
principally of
securities included in
the Index for creation
of Creation Units).
</Table>
B-1
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED FUNDAMENTAL
PROPOSAL 4 POLICY* POLICY
------------------------ ------------------------ ------------------------
Subproposal 4C: To amend The Fund may not lend The Fund may not make
the fundamental policy any funds or other loans to another person
on making loans. assets except through except as permitted by
the purchase of all or a the 1940 Act or other
portion of an issue of governing statute, by
securities or the rules thereunder, or
obligations of the type by the SEC or other
in which it is permitted regulatory agency with
to invest (including authority over the Fund.
participation interests
in such securities or
obligations) and except
that the Fund may lend
its portfolio securities
in an amount not to
exceed 33 1/3% of the
value of its total
assets.
Subproposal 4D: To amend The Fund may not invest The Fund may not invest
the fundamental policy in commodities or in commodities except as
on purchasing and commodity contracts, permitted by the 1940
selling commodities. except that the Fund may Act or other governing
transact in exchange statute, by the Rules
traded futures contracts thereunder, or by the
on securities, indexes SEC or other regulatory
and options on such agency with authority
futures contracts and over the Fund.
make margin deposits in
connection with such
contracts.
Subproposal 4E: To amend The Fund may not The Fund may not
the fundamental policy concentrate its concentrate its
on concentrating investments in an investments in
investments in a industry (i.e., hold 25% securities of issuers in
particular industry or or more of its total the same industry,
group of industries. assets in the securities except as may be
of a particular industry necessary to approximate
or group of industries), the composition of the
except that the Fund Fund's target index.
will concentrate to
approximately the same
extent that its
underlying Index
concentrates in the
securities of such
particular industry or
group of industries. For
purposes of this
limitation, securities
of the U.S. government
(including its agencies
and instrumentalities),
repurchase agreements
collateralized by U.S.
government securities,
and securities of state
or municipal governments
and their political
subdivisions are not
considered to be issued
by members of any
industry.
</Table>
B-2
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED FUNDAMENTAL
PROPOSAL 4 POLICY* POLICY
------------------------ ------------------------ ------------------------
Subproposal 4F: To amend The Fund may not act as The Fund may not act as
the fundamental policy an underwriter of an underwriter of
on underwriting of securities of other another issuer's
securities. issuers, except to the securities, except to
extent the Fund may be the extent that the Fund
deemed an underwriter in may be deemed to be an
connection with the sale underwriter within the
of securities in its meaning of the
portfolio. Securities Act of 1933
in connection with the
Fund's purchase and sale
of portfolio securities.
Subproposal 4G: To The Fund may not: Each of these policies
eliminate outdated will be eliminated.
fundamental policies not - Pledge, hypothecate,
required by law. mortgage or
otherwise encumber
its assets, except
to secure permitted
borrowings (the
deposit of
underlying
securities and other
assets in escrow and
collateral
arrangements with
respect to initial
or variation margin
for futures
contracts or options
contracts will not
be deemed to be
pledges of the
Fund's assets).
- Purchase securities
on margin, except
for such short-term
credits as are
necessary for the
clearance of
transactions, except
that a Fund may make
margin deposits in
connection with
transactions in
options, futures and
options on futures.
- Sell securities
short.
- With respect to
Equity ETFs (as
defined in the proxy
statement), change
its investment
objective.
</Table>
--------
* The current fundamental policies set forth in the table are the same for
SPDR Series Trust and SPDR Index Shares Funds except as noted.
B-3
SPDR SERIES TRUST
SPDR INDEX SHARES FUNDS
INVESTMENT ADVISER
SSgA Funds Management, Inc.
State Street Financial Center
One Lincoln Street
Boston, MA 02111
DISTRIBUTOR
State Street Global Markets, LLC
One Lincoln Street
Boston, MA 02111
CUSTODIAN, ADMINISTRATOR AND TRANSFER AGENT
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
Fund Shares are distributed by State Street Global Markets, LLC, a wholly-owned
subsidiary of State Street Corporation.
State Street Global Markets, LLC is a member of FINRA and SIPC.