497 1 ishsup.txt SAI SUPPLEMENT ISHARES TRUST SUPPLEMENT DATED OCTOBER 1, 2001 to the STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 1, 2001 THE INFORMATION IN THIS SUPPLEMENT UPDATES THE INFORMATION IN, AND SHOULD BE READ IN CONJUNCTION WITH, THE STATEMENT OF ADDITIONAL INFORMATION OF ISHARES TRUST DATED AUGUST 1, 2001 (THE "SAI"). ON NOVEMBER 15, 2001, A MEETING OF SHAREHOLDERS OF EACH SERIES OF ISHARES TRUST (THE "TRUST") WILL BE HELD. SHAREHOLDERS WHO OWNED ISHARES AS OF THE CLOSE OF BUSINESS ON SEPTEMBER 13, 2001 WILL BE ELIGIBLE TO VOTE ON THE ELECTION OF A SLATE OF TRUSTEES TO SERVE ON THE BOARD OF TRUSTEES OF THE TRUST. AT A MEETING HELD ON AUGUST 15, 2001, THE BOARD OF TRUSTEES APPROVED THE NOMINATION OF NATHAN MOST, RICHARD K. LYONS, GEORGE G.C. PARKER, JOHN B. CARROLL, AND W. ALLEN REED TO SERVE AS TRUSTEES OF THE TRUST. MESSRS. MOST, LYONS AND PARKER ARE EACH CURRENTLY TRUSTEES OF THE TRUST. BY UNANIMOUS WRITTEN CONSENT, THE BOARD OF TRUSTEES APPROVED THE NOMINATION OF GARRETT F. BOUTON, CHAIRMAN OF THE BOARD OF DIRECTORS OF BARCLAYS GLOBAL FUND ADVISORS ("BGFA") AND DIRECTOR OF BARCLAYS GLOBAL INVESTORS ("BGI"), TO SERVE AS TRUSTEE OF THE TRUST. MESSRS. CARROLL AND REED, ALONG WITH MR. MOST, ARE EACH CURRENTLY DIRECTORS OF ISHARES INC., A SEPARATE INVESTMENT COMPANY AFFILIATED WITH THE TRUST. IF SHAREHOLDERS OF EACH SERIES APPROVE THE NEW SLATE OF TRUSTEES, THEN THE TRUSTEES' BIOGRAPHICAL INFORMATION APPEARING IN THE TABLE THAT BEGINS ON PAGE 37 OF THE SAI WILL BE REPLACED WITH THE FOLLOWING: PRINCIPAL OCCUPATIONS AND AFFILIATIONS NAME (AGE) ADDRESS POSITION DURING THE PAST FIVE YEARS ------------------ -------- -------------------------------------- *Nathan Most (87) Trustee, President & Chairman of the Board, P.O. Box 193 President, iShares, Inc. (formerly known as WEBS Burlingame, CA 94011-0193 Treasurer, Index Fund, Inc.) (since 1996); Principal Consultant to BGI, American Stock Financial Exchange and the Hong Kong Stock Officer Exchange; Formerly Senior Vice President American Stock Exchange (New Product Development) (1976-1996) Richard K. Lyons (39) Trustee Professor, University of California, 350 Barrows Hall Berkeley: Haas School of Business Haas School of Business (since 1993); Member, Council on UC Berkeley Foreign Relations Consultant: IMF Berkeley, CA 94720 World Bank, Federal Reserve Bank, European Commission and United Nations Board of Directors: Matthews International Funds George G.C. Parker (60) Trustee Associate Dean for Academic Affairs, Graduate School of Director of MBA Program, Professor, Business, Stanford Stanford University: Graduate School University of Business (since 1988); Board of 521 Memorial Way Directors: Affinity Group, Bailard, Room K301 Biehl and Kaiser, Inc., California Stanford, CA 94305 Casualty Group of Insurance Companies, Continental Airlines, Inc., Community First Financial Group, Dresdner/RCM Mutual Funds, H. Warshow & Sons, Inc. John B. Carroll (65) Trustee Retired Vice President of Investment 520 Main Street Management (from 1984-2000) of GTE Ridgefield, CT 06877 Corporation; Advisory Board member of Ibbotson Assoc. (since 1998); former Trustee and Member of the Executive Committee (since 1991) of The Common Fund, a non-profit organization; Member of the Investment Committee (since 1988) of the TWA Pilots Annuity Trust Fund; former Vice Chairman and Executive Committee Member (since 1992) of the Committee on Investment of Employee Benefit Assets of the Financial Executive Institute; and Member (since 1986) of the Pension Advisory Committee of the New York Stock Exchange. 1 W. Allen Reed (54) Trustee President, CEO and Director (since General Motors Investment 1994) of General Motors Investment Management Corp. Management Corporation; Director (from 767 Fifth Avenue 1995 to 1998) of Taubman Centers, Inc. New York, NY 10153 (a real estate investment trust); since 1992 of FLIR Systems (an imaging technology company); Director (since 1994) of General Motors Acceptance Corporation; Director (since 1994) of GMAC Insurance Holdings, Inc.; Director (since 1995) of Global Emerging Markets Fund; Director (since 2000) of Temple Inland Industries; Member (since 2001) of the Pension Managers Advisory Committee of the New York Stock Exchange; Member (since 1995) of the New York State Retirement System Advisory Board; Chairman (since 1995) of the Investment Advisory Committee of Howard Hughes Medical Institute. *Garrett F. Bouton (56) Trustee Managing Director and Chief Executive Barclays Global Investors Officer (since 2000) for BGI's Global 45 Fremont Street Individual Investor Business; Chairman San Francisco, CA 94105 of the Board of Directors (since 1998) of BGFA; Director (since 1998) of BGI; Director of various Barclays subsidiaries (since 1997); Global H. R. Director (since 1996) for BGI. * Messrs. Most and Bouton are each deemed to be an "interested person" (as defined in the 1940 Act) of the Trust and the Funds. IF SHAREHOLDERS OF EACH SERIES APPROVE THE NEW SLATE OF TRUSTEES, THEN THE TRUSTEES' COMPENSATION INFORMATION APPEARING ON PAGE 38 OF THE SAI WILL BE REPLACED WITH THE FOLLOWING: The table below sets forth the compensation paid to each Trustee during the fiscal year ended April 30, 2001: AGGREGATE PENSION OR ESTIMATED RETIREMENT TOTAL ESTIMATED COMPENSATION BENEFITS ACCRUED ESTIMATED ANNUAL COMPENSATION FROM THE AS PART OF TRUST BENEFITS UPON FROM THE FUND NAME OF TRUSTEE TRUST EXPENSES RETIREMENT AND FUND COMPLEX --------------- ----- -------- ---------- ---------------- Nathan Most* $ 54,000 Not Applicable. Not Applicable. $114,000 Richard K. Lyons $ 54,000 Not Applicable. Not Applicable. $ 54,000 George G.C. Parker $ 54,000 Not Applicable. Not Applicable. $ 54,000 Thomas E. Flanigan** $ 39,000 Not Applicable. Not Applicable. $ 39,000 Garrett F. Bouton $ 0 Not Applicable. Not Applicable. $ 0 John B. Carroll* $ 0 Not Applicable. Not Applicable. $ 40,000 W. Allen Reed* $ 0 Not Applicable. Not Applicable. $ 40,000 * Messrs. Most, Carroll and Reed serve as Directors of iShares, Inc., an investment company with 28 investment portfolios also advised by BGFA. ** Mr. Flanigan resigned from the Board of Trustees on November 15, 2000. ------------------------------------------------------------------------------- PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE 2